Ideal Power Inc.

You are currently on hold for the ideal power third quarter 2020 results conference call. At this time, we are assembling today's audience and plan to be underway shortly. We appreciate your patience and please remain on the line. Please stand by. We're about to begin. Good day and welcome to the Ideal Power Third Quarter 2020 Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Carolyn Cappuccino of LAJ. Please go ahead.

Thank you very much, and good afternoon, everyone. Thank you for joining Ideal Power's Third Quarter 2020 Conference Call. With me on the call are Dan Verdara, President and Chief Executive Officer, and Tim Burns, Chief Financial Officer. Ideal Power's third quarter 2020 press release is available on the company's website at idealpower.com. Before we begin, I'd like to remind everyone that statements made on the call and webcast, including those regarding future financial results and industry 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 filing for a list of associated risks. We would also refer you to the company's website for more supporting industry information. Now I will turn the call over to Ideal Towers President and CEO, Dan Bodar. Dan?

Thank you, Carolyn. Good afternoon, everyone, and welcome to our third quarter 2020 conference call. I'll begin by giving you an update on our progress with our U.S. Navy-sponsored program and our accomplishments in our B-train commercialization strategy and summarize our focus for the remainder of 2020. Then Tim Burns, our CFO, will take you through the numbers. Our work with the United States Naval Sea Systems Command, or NAVSEA, under our partnership with Diversified Technologies, is moving along on schedule. We've recently completed the first major milestone in the program. We received wafers from the first fabrication run conducted by Teledyne and are now testing them to determine which dye we will package into BTRAN devices. This first wafer fabrication run under the program incorporates results of the analysis and device simulation work we've been performing to optimize the device design. As a reminder on this program, In the second quarter, we signed a $1.2 million contract to partner with Diversified Technologies on the development and demonstration of a BTRAN-enabled direct current circuit breaker as part of the US Navy's strategic focus on ship electrification. The contract is funded under the Department of Defense's Rapid Innovation Fund, the intent of which is to accelerate the commercialization of high-value, high-impact technologies for NAVSEA. The project's objective is to demonstrate A VTRAN-enabled, high-efficiency, 12-kilovolt medium-voltage direct current circuit breaker for the U.S. Navy with the subsequent objective of introducing a family of medium-voltage DC circuit breaker products, incorporating VTRANs for sale to military and industrial markets. This is a high-priority initiative in the Navy, as ship electrification can significantly enhance the energy efficiency of ship operations and improve their operational flexibility and operating costs. Distributed power on ships makes them less vulnerable to attack by lowering their noise signature and enhancing their stealth capabilities. And B-TRAN technology offers substantial size, heat, and loss reduction over continuously conducting semiconductor devices, such as IGBTs, without using complex, large, and heavy liquid cooling systems. After the reefers are tested, the next step is to dice and then package B-TRAN dye for testing and characterization. for dyes from the initial and now completed wafer run will utilize our current lab-based packaging design. The results from this testing will incorporate it into the device design and manufacturing process improvements for subsequent runs. Over the two-year program, we plan a total of five runs over six quarters, aiming for optimized device delivery in late 2021 with a final demonstration of a 12 kilovolt MVDC breaker in early 2022. The purpose of performing multiple wafer fabrication runs in the program is to assess the tradeoffs between maximum theoretical device performance and its manufacturability. As we make changes to the design to enhance performance, it can adversely affect the device yield from a given wafer fabrication run. As the various runs progress, we anticipate the device performance and device wafer yield to increase as we converge on an optimized design for performance and manufacturability. The second major milestone in the NAVSEA program is completing the next fabrication run with Teledyne. This is slated to begin shortly and will finish in the first quarter of 2021. Also under the NAVSEA program, we're collaborating with the University of Texas at Austin's Microelectronic Research Center for a new packaging design. The packaging design will be utilized for dyes from future laser runs under the program. The new packaging design improves upon the lab-based packaging that we had used previously and are using for the first vapor run. The device packaging design is intended to provide the electrical connections, form factor, and thermal management required to incorporate a semiconductor device into an end-user product design. The new packaging design will encapsulate the B-TRAN dye into a package similar to what is commonly available for commercial IGBTs. To help facilitate B-TRAN adoption, Our objective with the new design is to offer a package device that is physically similar to those commonly found in the IGBT market. UT Austin's initial design of the package is complete and prototypes are being made. We're collaborating with packaging assembly firms as well to get their feedback on the suitability of the design for high volume manufacturing. Feedback from the packaging assembly firms and the first build with the new design will be incorporated into the final packaging design to be delivered under the NFC program. Additionally, we developed a new high-power test rig that allows packaged B-Tran devices to be tested at high-voltage, high-current conditions as part of the device characterization required under the NASC program. The rig enables us to test and characterize package parts, generate the conduction and switching data we need for a product data sheet, and confirm the performance margins built into the design. Overall, we're on schedule with NASC and have undergone multiple project reviews received positive feedback. We're very excited about the progress being made under the program and the positive impact it's already having on our validation and commercialization efforts. During the third quarter, we also made strong progress toward readiness to begin engineering prototype sampling. As we discussed with you on our last call, we're also collaborating with the University of Texas at Austin's Microelectronic Research Center on the development of a new B-Tran driver The design and fabrication of an initial version of the driver is complete. As a double-sided device, BTRAN requires a unique driver specialized to control and coordinate the operation of both sides simultaneously. The new driver was designed by a talented postdoc under the close supervision of Dr. Alex Wong, the leader of the Microelectronics Research Center and a world-renowned expert in power semiconductor devices and power electronics. This initial driver will be used in conjunction with our new high-power test rig to generate the data we need to create a data sheet required by prospective end users and for our own characterization of devices. Once our testing is completed in the next few weeks, the University of Texas will develop a second version of the driver using our feedback. It will remove some of the features that were added purely for our debugging purposes. It will also make changes to reduce the physical size of the driver and add some additional operating capabilities to the programming of the driver. The packaging design for the device developed for NAVSEA that I referred to earlier will also be able to be used for our engineering sampling program, and coupled with a package B-TRAN with a specially designed driver accelerates potential end users' ability and willingness to assess the technology as the hurdle of driver development is removed. When we have a packaged device including a driver and data sheet in hand, we can begin generating both increased awareness of B-TRAN in the technical community and increased interest in the sampling program. We've received multiple inquiries from potential customers interested in the sampling program, and for many of them, providing a data sheet is the next step in that process. Providing samples to end users and getting their feedback on the device, the driver design, and driver feature set and priorities will allow us to determine requirements across targeted applications that future commercial BTRAN-enabled devices are likely to need. We can then incorporate this feature set into an intelligent module design. Looking at the BTRAN patent estate, we currently have 57 issued BTRAN patents, one more than last quarter, with 21 of those issued outside the United States, up from 20, and 25 pending patents, Our geographic coverage includes North America, China, Japan, and Europe, with potential to expand coverage into South Korea and India. For the remainder of the year, we remain focused on our two parallel paths in phase two of our commercialization strategy. First, working toward a full-scale demonstration of an application where B-TRAN is the enabling technology for NAVSEA. And second, preparing to launch our engineering sampling program. Our partnership with Diversified Technologies offers ideal power a significant, potentially catalytic opportunity as we further quantify the performance characteristics of B-TRAN power semiconductor technology versus conventional power switches, higher efficiency, lower cooling requirements, fewer components, and smaller size, and its potential game changer for distributed DC networks across a wide variety of military, industrial, and utility applications, including medium to high-voltage DC transmission and distribution systems, microgrid, and electric generation related to renewable solar and wind energy. Similarly, the NAVSEA program catalyzes both our military and non-military commercialization efforts by putting us on the map for other military and government customers who are often early new technology adopters and may help fund a significant portion of the development costs and steps necessary for commercialization. As we move to phase three commercialization, which focuses on establishing strategic development and commercial partnerships building commercial momentum and laying the foundation for future B-trend revenue streams. The first segments we will target for initial commercial sales in the $5.4 billion IGBT market, a market forecasted to grow to $9.4 billion by 2025, are the data center, UPS, renewable energy, and electric vehicle charging markets, all markets that feature relatively shorter technology evaluation periods and development processes and immediate power switching needs. Our exit from Phase 2 commercialization and into Phase 3 commercialization will vary based on target customers and applications, as we'll continue to add potential customers and applications to the engineering sampling program over time, while simultaneously commercializing BTRAN from initial target markets and applications. The timeline for these phases will also vary as prospective customers. Even those with similar applications have different technology evaluation cycles and design periods for incorporating new technologies into their products. One note on COVID-19. We and our fabrication, collaboration, and device packaging partners are carefully observing safety protocols and best practices, including wearing masks, practicing social distancing, and following all recommended guidelines to keep our team safe. Thus far, we've managed well through the pandemic, and our supply chain remains intact. We'll continue to be vigilant, working to stay on our development and commercialization timeline while keeping our team safe. In all, we believe that Ideal Power's technology is potentially transformational in its unique bidirectional switching capability and its ability to solve immediate needs being experienced in power electronics with bidirectionality, lower switching and conduction losses, lower user costs, and improved and more compact thermal management. We're moving ahead very well, hitting our milestones, and maintaining strong momentum toward our commercialization goals. with results that have been gratifying and with a different technology that addresses, differentiated technology that addresses a large and growing market. Now I'd like to hand the call over to our Chief Financial Officer, Tim Burns, for review of the quarter. Tim?