Newsfilter article unlocker

Hello, ladies and gentlemen, and welcome to the Ideal Power Business Update conference call. At this time, all participants are in a listen-only mode. At the end of management's remarks, there will be a question-and-answer session. Investors can submit their questions anytime within the meeting webcast by typing them into the Q&A button on the left side of your viewing screen. As a reminder, this event is being recorded. Before we begin, I'd like to remind everyone that statements made on the call and webcast, including those regarding future financial results and company prospects, are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to the company's SEC filings for a list of associated risks. We would also refer you to the Company's website for more supporting company information. With me on the call today is David Somo, President and Chief Executive Officer, and Tim Burns, Chief Financial Officer. Now I'll turn the call over to David and Tim. Thank you, Jeff, and thank you everyone for joining us today. I appreciate the opportunity to be able to present a company update on Ideal Power to you. My name is David Somo, President, CEO of Ideal power. As many of you know, I joined the company in November of last year, following my predecessor's retirement. Next to me is Tim Burns, our chief financial officer. My background is about 35 years in the semiconductor industry, including 12 years each at On Semiconductor and AMD in executive roles. During that time, while early in my career, having been an engineer working on product development and applications, I spent the last 25 years specifically focused on driving worldwide sales, marketing, business development. And that was a key factor in the board electing to bring me in in November of last year to help accelerate the commercialization of our B-Tran products into the market. Tim has been with us for 13 years now, and I'd like to introduce the rest of the leadership team here at iPower. First, Mark Russell, who I brought in as chief commercial officer in December of last year. Mark is a 25-year semiconductor industry veteran with stops at Infineon, MicroSemi, and Semtech, leading worldwide sales, marketing, and business development. Together, he will help me drive the commercialization of B-Tran in the market. In January of this year, I brought in Clay Beltran as our Chief Operating Officer. Clay is a 30-year industry veteran in semiconductors, having run global manufacturing operations, supply chain, and quality for companies like Diodes and Semi. So with Clay, he will be focused on ensuring that our products are ready to support our customers' commercialization. From a capital perspective, and these numbers are as of year end, we had 8.5 million shares outstanding for options and warrants, and these are pre-funded warrants. There's no actual warrants outstanding. There were about 2 million, so that means about 10.5 million shares on a fully diluted basis. Our cash balance at year end was $6.1 million, and here actually just yesterday, we completed an offering where we raised net proceeds of $12.6 million, and that's an estimate after fees and expenses. From a balance sheet perspective, we have a clean balance sheet with no debt, as well as the clean capital structure. Since joining Ideal Power, I've often been asked what were my reasons for electing to come in and join the team. I thought I'd be helpful to share during my 12 years at On Semiconductor running corporate strategy in M&A, I developed a playbook with specific criteria around how I evaluate semiconductor companies for their potential success in the industry. The first criteria is around technology and products. Does the company have unique and differentiated products that helps to solve customer system challenges? And is it widely protected so others cannot quickly follow with products competing with them? Second, do they have access to large and growing markets to be able to sell their products? Third, from a customer perspective, dothey have accessto market maker customers who can adopt their products and help validate them in the market? And then finally, in an operating model? Do they have an asset-light model that as revenue scales, they have strong fall-through leverage to the bottom line? Ideal Power checks each one of these boxes. Our B-Trend solutions are based on a proprietary technology that has compelling advantages relative to conventional solutions. From a market perspective, we're addressing large, high-growth secular markets that include data centers, energy storage, and renewable systems, as well as other industrial power systems. We have broadening engagements that are also deepening with the number of customers worldwide and currently have a qualified sales opportunity funnel of just under $200 million. In addition, I'm in discussions with a small number of strategic customers who have expressed interest in potential strategic investment in Ideal Power to deepen the relationship between the companies. And finally, from an operating model perspective, we're a fabulous business using outside manufacturing for our products, and we have strong operating leverage as we grow revenue with the company to fall through to the bottom line. As some of you who have been with us for some time know, Ideal Power has been through three stages of development. Initially, the company started actually doing power converter systems design, and it was during that stage that they realized they were missing a critical ingredient for their solutions in a highly efficient bi-directional semiconductor switch. That started phase two, iPower 2.0 for the company, which was the design, development, and customer sampling and validation of the B-Tran products. And now we're entering the iPower 3.0 development phase, which is focused on commercializing our B-Trans solutions. For those who are not familiar with us, I'll spend a moment talking about what is B-TRAN. It's a proprietary bidirectional semiconductor power switch that leverages the economies of scale inherent in the silicon semiconductor industry established over the past several decades. The uniqueness to our product and what makes it bidirectional in nature is that we actually build a device on both sides of the wafer, making it inherently bidire directional in its ability to conduct and block current and voltages. There are three fundamental advantages to the B-Tran technology. The first is in its bidirectional capability, whereas competitors require multiple devices to be able to conduct in both directions. We can do this with a single device. Second, it has very low conduction losses for applications that are typically on and continuously conducting. That translates to lower power consumption, lower energy use, and ultimately for end users such as data centers, lower energy costs. And third, by using fewer components to enable these capabilities, we enable smaller, lower-cost system solutions for our customers. so taking a look at the advantages of our b-tran technology compared to conventional solutions like igbts that have been around for a long time now in silicon carbide feds i wanted to pair those first at the top right you can see in the diagram the uniqueness for bi-directional applications is that with a single B-Tran, we can enable current conduction in both directions, where the other conventional solutions both require about four devices to be able to enable bidirectional capabilities. Among several other advantages, we also have ultra-low conduction losses. And as compared to even newer technologies like silicon carbide FETs, As you can see on the bottom left, we're able to reduce the conduction losses and power consumption by more than 50% in applications that use B-TRAN. There are a number of other advantages that I discussed on the prior page and alluded to, specifically fewer components leading to smaller systems with lower overall system cost. From a commercialization perspective, there are three different forms of B-TRAN that we are engaged in with customers today. The first is at the top, the B-Tran discrete device, which is rated 1200 volts, 75 amps. Our lead customers today are using this device to develop their first systems with B-tran. The second, for customers who want to go to higher current rating, they can either elect to use multiple discrete BTRAN devices or they can select a Simcool module, which has four BTRANS inside of it and increases the current rating to 200 amps today, and we anticipate going higher in the future. And finally, for power module makers, as well as large customers who may want to develop their custom packaging to fit in their specific systems designs, we also will be making available B-Tran in a known good die format, which means that we electrically test it and guarantee its operation in die form for customers to be able to integrate in their own packaging. Now, I'd like to talk about the markets for B-TRAN and the opportunity we see in front of us. First, I'll help with the decoding of this slide so you understand what we're referring to. In green, you'll see what we refer to as static applications, which are always on typically conducting applications. That is a SAM that we are able to access with today's products. and includes applications like solid-state circuit breakers, EV contactors and battery disconnect units, EV charging stations, and static transfer switches. Today, with our current products, that represents a SAM, or serviceable available market, of just over three and a half billion, growing to $6.6 billion in 2030. In addition, we're working on new methodologies for operating and driving our B-Tran devices. Those provide for what is called soft switching and reduces switching losses in the device. This opens up what we refer to as future or switching applications that include systems like inverters and motor drives. Together, as we open up those new applications, it effectively doubles the SAM that we can address with B-TRAN from about $6.6 billion growing to more than $14 billion in 2030. I'd briefly like to touch on what the lower power losses mean from an end market perspective. If you take today's data centers, and as they continue to scale up in power from 10 megawatt to 100 megawatts, even gigawatt data centers now, they consume an enormous amount of power, which is placing a tremendous strain on the antiquated power grids that are there to supply these data centers. They also are hugely expensive to operate. Even a tiny reduction in power of one to two percent in the data center can generate substantial savings on a single data center of hundreds of thousands of dollars annually to cumulatively up to a billion dollars across data centers. Our B-Tran device, with its ultra-low conduction losses, improves power efficiency in applications where it's used, like circuit breakers, transfer switches, and battery disconnect units that contributes to reducing the power consumption in these data centers, now i'd like to talk about the applications that we are first addressing with our b-trans solutions in lead customers these are the static applications that i referred to previously represented here in the data center that includes the battery disconnect unit solid-state circuit breakers, and static transfer switches. On average, B-TRAN has approximately $180 of content per each system that it's used in, and across the number of racks that are used in data centers worldwide, that represents about a $600 million, or $800 million, Sam, sorry, Small slide, difficult to read. For electric vehicles, we on average in static always-on conducting applications have an opportunity in EV contactors, which are part typically of the battery disconnect unit. That over 20 million vehicles that are sold this year, that represents about a $1.8 billion SAM for our B-Tran devices in the market. By 2030, we expect that to grow to about $2.4 billion. And then in EV charging, we are able to address circuit protection and the battery disconnect unit inside these systems, which represent on average per B-Trans system about $60 of content, $50, excuse me, over 12 million chargers. That's about $600 million of opportunity growing to about $2.4 billion in 2030. These represent numbers only pertaining to the static applications that I referenced earlier and do not yet include the BTRAN future element, which are the switching applications, which could enable us to play in other areas like traction inverters, onboard chargers, and higher voltage DC-DC conversion. Now I'd like to share a case study with a lead customer in solid-state circuit breakers. The customer's prototype system on the right side of the slide was built with a silicon carbide MOSFET rated for 400 volts, 20 amps, and conducted in only one direction. As we engaged with the customer, they asked us to use our BTRAN technology to first make it bidirectional and then secondly be able to increase the current rating of the product within that same enclosure. In retrofitting on the bottom left, our reference design for their enclosure, we were able to make the product bidirectional, as well as quadruple the current capability from 20 amps to 80 amps, while also increasing the voltage rating in the system from 400 volts up to a potential of 800 volts. Now I'd like to talk about customers, in particular two areas. One, Stellantis, where we have received a PO from them in the second half of last year with specific deliverables, of which we've completed one, and the remainder are expected to be completed by this summer. This includes things like automotive reliability testing for our device to demonstrate its capability to survive in a harsh environment like automotive. In addition, as we complete these deliverables were working with Stellantis towards an EV contactor program for their electric vehicle fleet. Then recently, during my visit to Asia in the second half of January, I signed two new agreements with customers for the development of BTRAN-enabled solutions. Lazen is the first customer in circuit breaking, and it's their system that I was referring to on the prior slide. They are a leading circuit protection solutions provider and systems integrator in Asia that also sells in to the North America and European markets. Their products go into data centers, renewable energy and energy storage systems, EVs, and other industrial markets. The agreement reached with Lazen is for them to develop a portfolio of BTRAN-enabled solutions in circuit protection in areas like BDU or EV contactors for their customers worldwide. Now I'd like to talk about our sales funnel and prospects for customers getting systems to market with BTRan. Today, as I mentioned at the outset, we have just under $200 million of qualified sales opportunities in our funnel at different stages. This is typical progression where new opportunities, once qualified, where you know the specific project, you know, the application, You understand the specifications and how B-Tran fits into it, as well as their development schedule and timeline and forecast. That goes into the top of funnel. As we go through more of the technical interactions, it continues down to where they're actually testing our products in their systems to qualify them. And then once complete, they can begin to deliver solutions to market. it. The customers in here include Lazen, as well as another Asia power module maker that I signed an LOI with for the development of a family of power modules with B-Tran in it. This is a firm that already does IGBT and silicon carbide modules today. They saw compelling value in B-tran and are interested in developing solutions based on it. Stellantis is in there as well, as other automotive OEM in Tier 1s, as well as Fortune 500 power management market leaders. In addition to those opportunities in the funnel, we're in discussions with tens of customers that once we further understand the details of their projects and how B-TRAN fits to their specifications, I would expect many of those to migrate into the funnel and work their way through. In summary, I want to close with detailing the strategic priorities for the company. One is we need to continue to add new opportunities to the sales funnel. We have a good start today, but we need to continuously expand new opportunities into the funnel. In addition, those opportunities that are in the funnel, we want to aggressively work with our customers to convert to design-ins, and revenue on the earliest possible schedule. This includes things like signing additional customer development agreements with our customers as part of those programs. I expect that we'll see initial sales orders for our products from lead customers later this year and then ramping into 2027. And we need to continue to execute with the customers to make that happen. In addition, we'll focus on completing the remaining deliverables under the Stellantis purchase order and continue to advance opportunities with other automotive OEMs in Tier 1s for automotive products. And finally, for the very small number of large multinational customers, where I've started discussions with the strategic investment considerations, I want to continue to see those through with customers as we would welcome one or more of our leading worldwide customers to deepen the engagement with B-Tran and Ideal Power. With that, I'll wrap it up. Thank you for your time and for listening to us today and turn it back over to Jeff. All right. Thanks, David. And yeah, we had several questions that have been submitted and we encourage you to continue to submit your questions. I'll go ahead and start with the first submitted question is which markets are closest to adopting and what are the main drivers to revenue? Yeah, so the initial markets I expect to be data centers and then energy storage and renewable energy installations. They typically have the shortest product development cycle that can be 18 to 24 months, remembering that we already have been sampling B-Tran for more than 18 months to date. So the lead customers that we've been working with are far along in that process, which is why I expect we would see initial sales orders this year. We'll continue to work automotive. We have not given up on that, but it takes time for those to convert through development to revenue. And so our focus is both getting revenue as early as possible in those markets where they adopt new technology faster, like data center, and then continue to work more broad industrial and automotive applications that can substantially increase future revenues for the company. Okay, thank you. And also I wanted to now turn it over to Casey Ryan with West Park Capital. Casey? uh thanks jeff hi uh david and tim great to see you thank you for this update actually it's very interesting um so i wanted to ask one thing about automotive i know that broadly the industry's had you know sort of a slowdown and sort of re-evaluation in the eb space um but one of the things we've been hearing is that you know bill of materials and pasta you know continue to be an issue. Can B-Tran solutions maybe replace silicon carbide or other parts and actually help solve some of those bill of material cost issues for future EVs? Yeah, thanks for the question, Casey. And absolutely. As I indicated earlier, if you think about applications like EV contact or battery disconnect unit in the EVs, there's typically multiple EV contactors in each vehicle. And today there are multiple components in each one of those contactors. By inherently being able to conduct bidirectionally, B-Tran significantly can reduce the number of components used and reduce the size of the systems as well as reduce the overall systems cost. So I think both from reducing the power consumption, which can contribute towards extended range, and reducing the cost through the use of fewer components, we can help the EV manufacturers in both ways. Okay, terrific. That's very helpful. The other thing that was really illuminating was your sharing of the sales funnel and pipeline. And I'm interested in that top zone, which I realize is the sort of identified opportunities. If we look out into 27, say 12 months from today, could that number be sort of in the billions, even if it's $1 billion? I mean, substantially larger than what that $55 million is today? Well, I won't go into specific numbers, KC, but I'll tell you, I expect and the reason I'm here at the company to leverage my commercial background together with Mark and the team we have is to continue to grow that top of funnel. I expect to continuously grow it. Certainly, $1 billion is a great goal to have. We'll work on getting it there as early as we possibly can as we continue the customer engagements. But we want to be certain we're putting only qualified opportunities into the funnel and do have some rigor around it before they go in so we can focus our resources and also helping those customers get their products to market. Understood. Okay, terrific. not sure maybe we lost casey well i'm sorry casey if you could repeat that question sure uh david i was really interested in the idea of a partner uh who might make an investment in the company which is fine but i'm curious just sort of what the shape of that looks like like that partner is sort of persisted in one vertical like data center or electric or auto or if it's a sort of industry agnostic. Yeah, I think it certainly would be in two potential areas from the discussions I'm in today. In Alcopa, those are early discussions, but actually they've approached us about a potential investment here at Ideal Power. On one hand, it's more industrial type products. So it would be more related to industrial power systems, data center, energy storage, and grid applications. The other side is from automotive. And there's some interest from both. And I would think it could be beneficial for the company in deepening a very small number of customers who could invest so that we also don't have any limitations or restrictions on who we can engage with going forward in time okay understood um these are really helpful just one small question i was pretty interested in the example product you showed uh the solid state circuit breaker um for that kind of product because i feel like that product is actually fairly close to maybe being out in the market um what's the dollar content for for ideal power i I mean, is it in, you know, tens of dollars or hundreds of dollars, or I'm just looking for sort of some general idea. Yeah, if you go back to the slide I showed earlier around circuit breakers, kind of data center, it's tens of thousands of dollars of content. Typically, there are different ratings on those. The higher the current rating, the more devices you need in it. So it's a range, but it's tons of dollars typically. Okay. Well, thank you. I'll sort of clear the floor, but this has been a very detailed and very helpful update. So we're looking forward to the progress throughout the year. Thank you. Thanks, Casey. All right. Thank you, Casey, our next submitted question is, can you tell us more about the roadmap to commercial revenue and when? Yeah, I think I addressed that earlier in the presentation. So really, if I look at our lead customers, which are in circuit breaking and power modules specifically, those that are furthest ahead, customers furthest head in their development and commercialization process, are expecting to complete their development qualification around the end of summertime frame. I would say end of Q3, and then they'll begin selling those solutions to their customers, which would be from Q4 onwards. And that's where I commented that I would expect our sales orders to begin later this year and then ramping into 2027. Okay, thank you. Are there opportunities for NRE revenue in 2026? Yeah, actually, great question. And I think those customers that are earlier in process, not already committed to develop products. As we achieve that commitment, they absolutely could be NRE programs, and we are focused on working to deliver additional NRE engagements and development programs with customers. Thanks. How do you see the markets evolving, and what's most exciting about the ideal power opportunities? Yeah, the one I'm most excited about today is really there's a combination there. It's data center because of the substantial capital investment going into the data centers worldwide. They are having a hard time keeping up with the demand as the hyperscalers continue to stand those up, as well as co-located data centers, enterprise, edge, and so forth. So with that, it's also transitioning architectures and the move from 400-volt AC single-phase to three-phase AC to 800-volt DC data centers really is fundamentally changing the architecture and driving the adoption of solid-state circuit breakers, which is ideal fit for BTRAN product. Tied together to these are energy storage and battery backup systems and grid applications. So those have the most exciting potential. They have shorter product development and commercialization schedules than automotive does, and they're growing rapidly. Thanks. In solid-state circuit breaker, which companies are competitors, and what is Ideal Power's value differentiator? yeah and so if you think about the market we are selling to the companies that develop the circuit breakers so all of them are potential customers to us our competition is really coming from silicon carbide devices and those would be companies like my former one on semi and infinion and they have silicon carbid in portfolios the disadvantage they have is they cannot conduct bidirectional, and they have higher conduction losses inherent in those devices. It's also built on newer materials, wide bandgap materials that have not yet been through a decades-long learning curve on driving costs down and achieving economies of scale. So the fact that we can manufacture our products on the silicon substrates that have been part of the industry for multiple decades is another advantage to us from a cost perspective, together with the low conduction losses, bidirectional capability, and having fewer devices, which leads to smaller, lower cost system solutions for customers. Thank you. How does Ideal Powers show proof of the D-Train value in your markets? Yeah, good question. So customers are always of the mindset of show me. The example that I showed on one of the earlier slides of how we retrofitted our reference design into the customer's case is one way in which we do that. So we give, we sell the customer as reference designs that they can use to be able to validate the performance of the device. That's the power consumption, the ability to conduct in both directions. And then without getting into too many technical details, they want to look at short circuit protection for circuit breakers. How do you control the slope? How do you manage the turn on and turn off? They're able to do this with the reference design tools that we provide to them. Thank you. Our next question is, are there any other companies developing a bi-directional power switch in your markets? So if you go back, there's no one in a similar device that can address the power range that we're able to do with B-Tran. And the reason they cannot is we have 100 patents granted and another 78 patents in flight on the bi-directional nature of our device in operation of a bi- directional device. So it's very difficult for others to be able to follow us. There is gallium nitride, which is used typically in 650 volt and below applications. So it's more at a kind of CPU board level. And that's an area we don't go down to with our device. We're focused on higher power applications, typically at 800 volts and above. Thank you. What are your thoughts on the company's capital raise completed yesterday? yeah and i'll take this one jeff um we're actually very happy with the raise it was a clean deal so it was common stock only uh there were pre-funded warrants but those are common stock equivalents they're not what you think of when you have to add warrant coverage to a deal these were effectively paid for except for the par value a fraction of a cent at closing uh we were excited that it was led by some of our largest investors. Also, insiders did participate. David himself participated in the transaction. You can see the details of that on the Form 4 we filed earlier this morning. And it's great to be in a position where we have a strong balance sheet because you never want to be In a situation where you're explaining to customers where your future funding is coming from. If you can show a healthy balance sheet that takes that off the table and isn't impediment to sales. So overall, we think this is great for the business and we can really now focus on commercialization. Thank you. Any other comments about the opportunities with Stellantis? No, probably nothing further to say at this time. I want to see us execute against the deliverables of the PO here, and that's what we're focused in on. And then as we get through that process, I think I would say everything is looking very good. We obviously are working with them towards an EV contactor program that can be important to the company and really help us commercialize and scale B-Tran solutions in the market and EV contactors. And so we're going to stay focused on executing and meeting the deliverables to move this along. Thank you. Do you have any concerns that your Chinese business partner might try to steal your IP or any other companies? Yeah, that's actually a really good question. Having done business in China for probably 30 of the 35 years I've been in the industry, I kind of understand the landscape well. A couple of things. One, the patent landscape in China has become much stronger. Companies like Huawei today actually are highly inventive. They want to be able to protect their patents and legal jurisdiction around patents has become mucho mejor, incluso para empresas internacionales. companies. But more importantly, we don't share all the details of our product. The key ingredients are really around how we manufacture uniquely a bidirectional device on both sides of the wafer. And that would be, we do not patent that because we do NOT want to disclose any of the details around how WE make that happen. And so it would be extremely difficult for somebody to follow us in doing a device that has inherent bidirectional capability like B-Tran in silicon. Yeah, and I would just add to that, none of our fabrication or packaging occurs in China. So we're selling into China, but in terms of the important IP that goes around the technology, that's all happening outside of China. Okay, thanks. Another question about Stellantis. Any comments about the deliverables timing under the Stellantis PO? I'll give a bit more clarity there. I don't want to go into specific details, but we're doing a custom packaged product for them that the next deliverable is kind of out in the end of March. And after that, in the May timeframe are the next couple of deliverables together, which gives them product they can use to test in their systems. And then we also need to complete the automotive reliability testing that's in process. Okay, thank you. Please provide any color on where we stand with manufacturing. Okay, I'll start that and Tim can add to it. But on the manufacturing side, we have two foundries that we use, one in Europe, one in Asia. we then have that's for the fabrication of our devices and then we used an osat or outsourced assembly and test partner for the packaging of our device is where we're not selling die level product they are in good shape with their products they are ready to support the commercialization of b-tran and we are then working looking out in time two years down the road or so to ensure that we have competitive cost structure in the manufacturing footprint foundry and packaging partners anything that no thank you what is the current rating of power switching switch use for EV inverters and how thinking about other companies when they announce like a single you know die module but the rating they're announcing how does how should the investors think about that yeah so I actually have significant experience with that area and it varies by customer depending on the battery pack it's 400 volt battery pack 800 volt how many kilowatt hours but typically what you see is where they're using power modules or in some cases doing this discreetly and packaging into the inverter with die they use multiple die and so there isn't a device that can go off and necessarily conduct it a thousand amps but you can put multiple die together to be able to do that in parallel and modules in general that's what they do they can be anywhere from four to as many as 16 die in a single module in a power integrated module that could be used in a inverter application and there could be multiple inverters used in that application okay what um any um any any information about your pursuit on data center sorry can you repeat that yeah any information on your pursuit for data center business and data centers yeah really leading with the customers who service data center so a company like lazin who has data center customers as they adopt our products and that is the initial target market for them and they have the relationships with those data centers to be able to sell in the products. And so they're kind of the OEM to the data center for B-Tran to make its way to market. Okay. How many total shares are outstanding after the raise? Yeah, so the exact numbers are in the final prospectus supplement that we filed yesterday. But overall, on a common stock basis, it's roughly 12 million shares outstanding. What that does not include is there's just over now 2 million pre-funded warrants that are outstanding. Those are common stock equivalents. So those are actually included in a company's EPS calculation. And then if you want to get to fully diluted shares, you also need to add in what I believe is about 1.5 million shares for employee equity awards that have not vested. Thank you. Can you quantify the extended range for EVs and the cost savings for EVS? Yeah, difficult to do because there are many factors that are determining the range. B-Tran being in contactors can be one of the range contributing and power reduction for extending the range, but it really depends on the system architecture, how many are in each EV and so forth. So it certainly contributes. Difficult to quantify it, though, just down to B-Tran. From a cost in density perspective, I refer to power density here, which just means smaller size. By using fewer components, they get to smaller size and they get to lower cost because they're buying fewer components. So overall, it helps certainly in the reducing the size and the power as well as the cost where B-Tran is used compared to conventional solutions. Thank you. So we have several questions that have been submitted and continue to be submitted. So again, click on that ask a question button and we look forward to answering your question. You talked about the sales funnel. Investors are asking about the word backlog. Can you give some comment on that? And also, what's the thinking on the direct sales force and plans to add okay so first i'll take the sales funnel and backlog so the sales funnel shows the multiple stages you go through in a typical design win process for our products they start early discussions then it gets into detailed technical specifications review then it gets into actual customer product development test and qualification then it goes to design in where the customer has confirmed use of your products, and then they give you PO, which becomes backlog when you receive the purchase order. So that's where I indicated earlier that my expectation is we'll see additional sales orders later this year for applications like data center and energy systems from our lead customers that would become backlogged for us later this year. From a sales perspective, we actually have scaled some, but we're going to leverage manufacturer rep networks. So what that looks like today is we have direct sales in Asia. We have direct cells in the US and I'm in the process of adding direct sales. In Europe, to be able to support customers, for example, Stellantis, who has operations across Detroit, Italy, France, and you need to support them in each of the regions, as well as there are many large industrial power companies throughout Europe. In addition to that, we are using a rep or distributor network that can sell our products and becomes a multiplier to our sales organization. And they actually are managed together with our sales organisation. For example, as we work with them, the opportunities they identify and we agree are qualified opportunities, then we'll make their way into the sales funnel. And we manage the distributors reps just like we do our own direct sales people, which is to have some rigor around continuous reviews of the opportunities to ensure we're progressing them. If there are any issues that we address them quickly and timely and keep these moving so we can work to convert them towards systems that are released to market and revenue for the company. So, it'll be our sales plus expanded or multiplied by a third-party rep distributor network. Thank you. What is the update on the auto-qualification testing? Yeah, I mentioned that earlier. We're in the midst of testing now, and we will expect to complete that this summer. That is the plan. Thank you. Which is aligned to the Christalantis program schedule. Okay, thank you. Well, we're out of time, and we appreciate your questions, and thank you for joining us on the call today, and have a great day. Thank you, Rick.