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Operator
Good day and welcome to the Ideal Power first quarter 2022 results conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Carolyn Capaccio of LHA. Please go ahead, ma'am.
Carolyn Capaccio
Thank you, operator, and good afternoon, everyone. Thank you for joining Ideal Power's first quarter 2022 conference call. With me on the call are Dan Berdar, President and Chief Executive Officer, and Tim Burns, Chief Financial Officer. Ideal Power's first quarter 2022 financial results 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 filings for a list of associated risks. And we would also refer you to the company's website for more supporting industry information. Now I'll turn the call over to Ideal Power's President and CEO, Dan Berdar. Dan?
Dan Berdar
Thank you, Carolyn. Good afternoon, everyone, and welcome to our first quarter 2022 financial results conference call. I'll begin by giving you an update on our progress and achievements on our strategy to commercialize our BTRAN semiconductor technology. Then I'll review our plans and key priorities for 2022 for BTRAN commercialization. Then Tim Burns, our CFO, will take you through the numbers, after which we'll take your questions. Let's get started. It's only been two months since our last call. The first quarter was successful and productive as we made significant advancements along our 2022 roadmap to commercialize B-TRAN as a disruptive, highly efficient, bi-directional energy control semiconductor technology. It solves immediate needs in our target electric vehicle, EV charging, renewable energy, energy storage, UPS for data centers, and solid-state circuit breaker end markets. This is a very busy and exciting time at Ideal Power, and we're happy to update you on our progress as we remain on track to achieve our goals for 2022. Let's begin with our test and evaluation program. Since the year began, we expanded our roster of participants in the V-TRAN test and evaluation program. These new participants include a Fortune 1000 global semiconductor manufacturer that serves a variety of commercial and military sectors, This OEM will evaluate BTRAN for its low losses and bidirectional capability initially for test and measurement equipment applications. We also added an established aerospace and defense systems contractor interested in evaluating BTRAN for solid-state circuit breakers, with whom we're jointly pursuing additional government grants. Also, as we mentioned on our last call, a leading manufacturer of commercial electric vehicles, EV powertrain components, and EV charging infrastructure. They'll test and evaluate VTRAN for use in power conversion applications and their commercial EVs, initially for the DC-to-DC converter, with other EV and EV charging applications potentially to follow. This is our third announcement in the EV space. We also added a space applications system developer that will evaluate VTRAN for solid-state circuit breaker applications. The lower thermal management requirements and fewer devices needed with B-TRAN are advantageous given the size and efficiency constraints of their target applications. And finally, universities that hold connections to large commercial businesses where they officially function in the role of testing and evaluation of new technologies such as B-TRAN for large commercial OEM organizations. These program participants are all looking to incorporate innovative, advanced technologies and new approaches into their product offerings to improve performance, increase efficiency, and lower cost. And they all have the technical resources to commit to evaluating a cutting-edge technology and the improvements and capabilities it can create for them in their product designs. This interest in new technologies was clearly demonstrated in March when we exhibited B-TRAN at the Applied Power Electronics Conference in Houston. The prevailing focus during the conference in recent years has been wide-gap materials, but this year the significant theme of the conference was focused on bidirectional applications such as electric vehicles, vehicle-to-grid, microgrids, and renewables paired with energy storage. This is the result of the two macro trends driving growth in the industry, the adoption of both EVs and renewable energy. Our exhibition and presentation at the conference resulted in us adding several medium and large companies to our target markets in our pipeline, two of which recently joined our test and evaluation program in the weeks following the conference. Our technology was well received, and our presentation, entitled Operation and Characterization of Low-Loss Bidirectional Junction Transistor, BTRAN, won an APEC 2022 Outstanding Presentation Award. It's great to see our team and technology receive such recognition from the technical community. Further, we exhibited V-TRAN at the Power Conversion and Intelligent Motion Conference in Nuremberg, Germany last week. V-TRAN was again well received for its compelling benefits of bidirectional capability and low losses. Our team engaged with potential customers from e-mobility, energy storage, industrial motor drive, and solid-state circuit breaker applications, as well as potential collaborators in the power device, module packaging, driver, intelligent power module, and semiconductor manufacturing spaces. With at least one test and evaluation agreement in place in each of our target markets and a large pipeline of potential additional collaborations, we're well positioned to evaluate VTRAN's capabilities across our target end markets. These collaborations will provide the ongoing information to drive the features and performance of our commercial product offerings. Over time, our ongoing engagements will likely result in a variety of VTRAN-based modules customized towards specific applications, as is common in the traditional power semiconductor market. Now let's move on to our work with the United States Navy. As we've discussed previously, Ideal Power is collaborating with Diversified Technologies, or DTI, on a project for the Naval Sea Systems Command, or NAVSEA, on the development and demonstration of a BTRAN-enabled direct current solid-state circuit breaker. This program is supported by the Department of Defense's Rapid Innovation Fund, which invests to accelerate the commercialization of high-value, high-impact technologies and is part of the U.S. Navy's strategic focus on chip electrification. Our project with DTI for NAVSEA is intended to develop and demonstrate a DTRAN-enabled high-efficiency 12 kilovolt medium voltage direct current solid state circuit breaker for the U.S. Navy, with subsequent objective of introducing a family of medium voltage DC circuit breaker products, incorporating DTRAN for sale to military, industrial, and utility markets. Initial wafers from the latest fabrication run completed by one of our domestic fabrication partners are ready for dicing and packaging into devices, which will then be tested for delivery to DTI. We'll continue to provide program and technical support through the demonstration of the BTRAN-enabled DC solid-state breaker later this year and keep you apprised of our progress within the limitations of our NAVSEA confidentiality restrictions. Let's move now to our work with the Department of Energy and our submissions for other government funding opportunities. In the first quarter, we announced that we delivered on our project commitments and provided our final report under a Phase 1 Small Business Innovation Research, or SBIR, grant funded by the Department of Energy. This project is our second collaboration with VTI, and the SBIR grant will potentially fund the development of a VTRAN-based, low-loss, 13.8 kilovolt alternating current solid state breaker intended to be used in medium voltage power distribution in renewable energy and microgrid applications. connected to the utility power grid. The VTRAN-based solid-state circuit breaker is expected to limit fault energy by orders of magnitude compared to conventional mechanical circuit breakers due to its much faster speed of operation. Phase 1 of the project focused on the simulation, device design, and the design of a multi-die module packaging concept, leveraging our current die design to allow VTRANs to be assembled in series or parallel configurations for a higher voltage or current rating capability. We conducted a comprehensive semiconductor device optimization, optimized the B-TRAN device design and wafer layout for potential fabrication in phase two, accommodating a multi-die packaging design, and with the assistance of a world-class packaging firm, completed a conceptual multi-die packaging design with double-sided cooling, assessing both the thermal performance and inductance. Our simulations and design analysis confirms the ability of B-TRAN multi-die modules to interrupt AC power efficiently and quickly. Last month, we collaborated with DTI on the submission of an SBIR Phase II grant proposal to move ahead with the development and demonstration of a 13.8 kV alternating current solid-state circuit breaker. If we receive the Phase II grant, DTI would build and test a full 50 megawatt 13.8 kV alternating current solid-state circuit breaker using multi-die BTRAN packages. As the 13.8 kV level is commonly found in utility distribution networks, the resulting breaker design can be applied directly to existing utility transmission and distribution systems as well as micro-brits. Following that demonstration, DTI would have the ability to sell the breaker to utility, industrial, military customers and license the breaker design to others for sale to end users. We would also expect to partner with other circuit breaker companies so they can design and bring their own VTRAN-based products to market. We look forward to hearing back from the Department of Energy on our Phase 2 application, and we'll keep you updated. We expect to leverage the valuable knowledge we now have in designing and packaging multiple devices in parallel and in series configurations for applications such as electric vehicles, as well as for other commercial applications going forward. Our solid-state circuit breaker projects with the U.S. Navy and Department of Energy have raised the visibility of B-TRAN as enabling technology for low-loss, fast-acting circuit breakers. Two of the most recent additions to our test and evaluation program are customers specifically looking for better semiconductor solutions for circuit breaker applications. While the addressable IGBT market is large and growing rapidly, we expect there will continue to be new market segments not currently served by conventional semiconductors, such as solid-state circuit breakers, that are enabled due to the low-loss bidirectional capability of our technology. We continue to seek opportunities to participate in government-funded programs that support technology development, particularly for future commercial applications. In the first quarter, we submitted several proposals and content papers for government funding opportunities, including proposals with three new partners. These new partners include a system integrator, a firm with packaging and driver expertise, and a university contracted to act as a technology evaluator for large commercial products OEM. Depending on the proposal, we could either be the prime or subcontractor if awarded funding under one or more of these submissions. These proposals cover several applications, including solid-state circuit breakers, current source inverters, and modules for electric vehicles. Our development activities also made significant progress during the quarter. Teldenine has been a valuable fabrication partner and will continue to work with them as part of our government-funded development projects. Since the year began, we further built out our roster of production partners to ensure we have sufficient capability to support our ongoing development activities and prepare for anticipated higher volume fabrication demand in 2023. We completed the qualification process of a second domestic semiconductor fabrication partner. This partner brings bipolar fabrication experience, supporting our ongoing development activities, as well as silicon carbide fabrication experience, potentially making them a good partner for pursuing government funding opportunities while supporting our longer-term technology roadmap to develop the silicon carbide B-tran. Additionally, as we discussed on our last call, we recently began the qualification of a non-domestic production-level fabrication partner. This fabricator will initially be conducting engineering short loops, an evaluation program involving a subset of process production steps to enable us to assess their process capability limitations and key fabrication steps that are crucial to making a high-performing double-sided device. If the short loops are successful, the next step will be a full process flow engineering run later this year. A fabrication partner capable of high-volume production will drive improved quality, faster runs, and higher wafer output per run compared to our current development fabricators, while helping to ensure sufficient supply capacity for large customers and mitigating supply chain risk. On the packaging side, our world-class packaging partner completed design work and trial mechanical builds and is now packaging its first B-Tran devices to support device testing, followed by the packaging of devices for our test and evaluation program. We also completed a pilot run with a domestic packaging firm to support the NAVSEA program. This firm will support not only the NAVSEA program, but also other potential future government-funded development projects and programs. Now let's review our roadmap for 2022. Our objective for this year remains to introduce our first commercial products by year-end, realizing the potential of V-TRAN's unique advantages of bidirectional switching capability, lower switching and conduction losses, improved and more compact thermal management requirements, and lower user costs for OEM products in our target markets. We've made strong progress to date, and to recap, our key steps for this year are, first, we're working closely with the growing number of participants in our V-TRAN test and evaluation program, will be providing package devices paired with a driver to facilitate and accelerate their evaluation process. These customers will share their testing results with us and provide application-specific feedback on the design and operation of the package devices and driver, the feature set they require, and their priorities for individual applications. We'll incorporate their feedback into our commercial product offerings. This will allow us to determine common requirements across applications for our initial commercial products. And as our test and evaluation program will remain an ongoing aspect of our sales and marketing process, we'll continue to work to add additional potential customers to it. Second, as our test and evaluation program progresses, we're preparing to engage a third party to support our design efforts for our initial commercial product. This effort is intended to run in parallel with the test and evaluation program, with the device design iterating and evolving through the incorporation of feedback from program participants. Our intention is to offer a module rather than a discrete device as our first commercial product. This should accelerate B-TRAN commercialization and adoption by solving the hurdles we know customers will face with respect to bidirectional driver and packaging optimization, saving customers from having to design these themselves. We'll be ready to design custom modules for potential customers, such as those looking to apply B-TRAN in electric vehicles and solid-state circuit breaker use cases where multiple BTRAN die may be needed to be combined into a single package, either in series or in parallel, to accommodate higher voltages and currents. Again, we expect our multi-die design from the Department of Energy SBIR program to become a commercial product for the solid-state circuit breaker market if we're awarded phase two of the program. Third, we'll continue to collaborate with BTI on our BTRAN-enabled solid-state circuit breaker projects, specifically for NAVSEA, delivery of optimized package devices for incorporation into the demonstration of a 12 kilovolt MVDC breaker later this year. Subsequent to the demonstration, an objective of this program is for DTI to introduce a family of medium voltage DC circuit breaker products, incorporating DTRAN for sale to military, industrial, and utility markets. And under the DOE SBIR grant, if in collaboration with DTI, we're awarded a phase two grant the completion of the build-out and testing of a 50-megawatt 13.8 kV alternating current solid-state circuit breaker incorporating B-trans. Fourth, we'll work toward completing the qualification run of a high-volume production wafer fabricator to assess their potential to support our plans for commercial sales. Our intent is to have a high-volume wafer fab ready to support our volume requirements for 2023 and beyond. Lastly, we continue to work on submitting additional proposals for government funding. As I mentioned with respect to the proposals already submitted, we have the potential to be the prime or subcontractor on these proposals. We expect to collaborate with various OEMs and universities on submitting proposals as funding opportunities become available. Looking at the B-TRAN patent estate, we currently have 67 issued patents with 29 of those issued outside of the United States and 25 pending B-TRAN patents. In April, we added to the geographic breadth of our patent portfolio with the issuance of our first patent in India. Our current geographic coverage includes North America, China, Japan, South Korea, India, and Europe, and these, along with the United States, represent all of our high priority geographies for patent coverage. In all, the first quarter was very productive, and our momentum continued into the second quarter. We're making strong progress toward commercialization and are very excited about our prospects for B-TRAN as a disruptive technology over the coming years. Despite the global uncertainties that businesses must deal with today, such as supply chain disruptions, COVID pandemic, high inflation, and rising interest rates, we remain on track to introduce our first commercial product by the end of the year. We're increasingly excited by new customer and collaboration opportunities that were being created as a result of our government-funded solid-state circuit breaker projects. With multiple years of cash on the balance sheet, a talented and highly motivated team, a strong IP portfolio, and world-class fabrication and packaging partners, we're fortunate to be able to remain focused on executing our commercialization strategy, delivering on our 2022 objectives, and realizing the potential of our technology. We'll keep you updated on our progress as we hit each milestone on our roadmap. Now, I'd like to hand the call over to Chief Financial Officer Tim Burns. for review of our first quarter 2022 financial results.
Carolyn
Tim? Thank you, Dan. I will review first quarter 2022 financial results. In the first quarter, we recorded $125,000 in grant revenue with offsetting cost of grant revenue as we continued our work on the Navy-funded NAVSEA program and completed our work under the DOE-funded SBIR Phase I grant. we expect almost all of the remaining grant revenue under the NAVSEA program to be recognized in the next one to two quarters. If our SBIR Phase 2 application is approved, we potentially expect revenue under this program to begin in the fourth quarter. We also continue to pursue additional government funding opportunities that, if awarded, could result in initial revenue as early as the second half of 2022. Consistent with our expectations, operating expenses were $1.9 million in the first quarter of 2022, compared to $924,000 in the first quarter of 2021. Research and development in sales and marketing expenses trended higher on additional wafer fabrication runs and higher personnel costs for employees added over the course of the last year to support both development activities and the test and evaluation program, as well as higher third-party development costs. The incremental growth in expenses was planned as we increase our development and commercialization efforts in advance of introducing our initial commercial product by the end of the year. General administrative expenses increased this quarter on higher investor relations spending and board search and placement fees as we added two independent directors to our board. Operating expenses were also impacted by higher non-cash stock-based compensation expense. Our development and commercialization plans for the balance of 2022 include additional larger wafer fabrication runs, including a qualifying run with a high-volume production wafer fabricator, third-party testing of the B-TRAN, adding more engineering and front-end talent, supporting our test and evaluation program, designing and introducing our initial commercial products, and other B-TRAN commercialization activities with potential new customers and partners. We continue to expect some quarter-to-quarter variability in operating expenses, particularly our research and development spending, through the timing of semiconductor fabrication runs and other development activities, as well as the potential impact of additional government funding. We expect general and administrative expense to be relatively flat over the remainder of the year, despite the impact of inflation on the cost of services. Net loss in the first quarter of 2022 was $1.9 million, compared to $924,000 in the first quarter of 2021. First quarter 2022 cash used in operating and investing activities, which is net of the cost reimbursement under the NAVSEA program, was $1.4 million, up from $874,000 in the first quarter of 2021, and from $1.3 million in the fourth quarter of 2021. This is consistent with the expectations we provided on our year-end call. We continue to invest in both sales and marketing and research and development and continue to expect a cash burn for full year 2022 of approximately $7 million with a second quarter 2022 cash burn of $1.7 million to $1.8 million. Cash and cash equivalents totaled $21.7 million at March 31st, 2022. Given our planned cash burn, which remains modest, our balance sheet gives us ample liquidity to fund multiple years of operations and to be a well-capitalized partner for the broad spectrum of companies that are either already participating or that we expect to participate in the testing and evaluation of our BTRAN technology. As of March 31st, we had 5,903,797 shares outstanding and 1,040,248 worn outstanding. including 595,982 stock options and restricted stock units outstanding, and looted shares outstanding at March 31st totaled 7.5 million shares. At this time, I'd like to open up the call for questions. Operator?
Operator
Thank you. If you'd like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll take our first question from the line of David Williams with Benchmark. Please go ahead. Your line is now open.
David Williams
Hey, good afternoon, and congrats on the progress.
spk06
Thanks, David.
David Williams
Forgive me, I jumped on a bit late here, so if you discussed this and I missed it, my apologies, but I guess as you kind of think about your commercial revenue, when do you think that falls in? I know before we thought we'd have first commercial sales in 4Q. Is that still on track, and is there anything there that's been poster pulled?
Dan Berdar
Yeah, you know, the Q4 of this year is still an opportunity for our first initial revenue. 2023 is really when we're going to start to see revenue just because of the timeframe that it takes to actually get through these evaluation cycles and get through design cycles. But it'll be modest. We also think there's opportunity for non-recurring engineering dollars with some of the customers we're working at that want us to do some work that is specific for them for products they would ultimately use in their OEM products.
David Williams
Okay, fantastic. And I know you touched on this a bit in your script, but just kind of given the test and evaluation program ramps, you added a few this quarter. What types of applications are these being tested for? Maybe just a little more color into that. And then are you seeing new use cases developed or maybe traction areas not previously thought of to be an opportunity?
Dan Berdar
Yeah, you know, the one thing that is actually a little bit of a surprise to us is, you know, we initially pursued the solid state circuit breaker concept in the project that we proposed to the Navy. We've got several players now that are in our program that it is a specific interest of theirs. from very large players to universities to commercial companies that have been kind of just patiently waiting for there to be a better solution because solid-state circuit breakers can be applied in electric vehicles. They can be applied in utility and distribution systems, protecting data centers, protecting renewable energy installation. So the popularity of the solid-state circuit breaker, I think, catches us a little bit by surprise. And then we have a couple other folks that are in our program that are looking at Um, some unique applications that we hadn't been thinking about some things that are power control sort of applications that are, um, really all about getting fast acting devices to protect equipment, little different than circuit breakers, but really power control devices. So then as you think about the applications, you know, the ones that we're seeing that there's sort of the most interest in, it's obviously electric vehicles with several portions of the EVs, you know, the drive train, the DC to DC charger and the onboard charger. We're seeing a lot of interest in EV charging solutions as people look at mobile EV charging solutions and stationary ones, particularly those that might incorporate buffer batteries. And then the interest in renewable energy coupled with energy storage where you need bidirectionality is another one that seems to be pretty popular with the folks that are in the program.
David Williams
Perfect. And then as you – Just when you're – how has your customer reception been when engaging with prospective customers and the prototypes as you're sampling? And have you seen that change at all in terms of those types of customers beyond maybe what you just spoke to?
Dan Berdar
We're seeing it's really good. We're finding that we're, you know, as the visibility of VTRAN is growing, as people are learning about the projects, rather than us just reaching out to the targets that are on our list, we're starting to see more and more inbounds. So our business development guys are having to screen out a little bit of folks that we think it makes sense to spend time with and some that maybe it's too small where we really have to think about what's the opportunity cost if we were to get tied up with some of the smaller companies that are out there that would need a lot of technical support. So just happy to see that there's more inbound. And the last couple of conferences, the Applied Power Electronics Conference and then also at the Power Control Conference here last week, Just a lot of people seeking us out, wanting to learn more, to think about how they can incorporate B-Tran into some of their potential products. So it's nice to see the recognition rising and us not having to pursue everybody directly but have them start to look to us as a way to collaborate.
David Williams
Great. And then maybe just one last one for me. Just on the custom driver, any color around that? And, again, forgive me if I missed this, but just kind of curious how that is going and maybe what the reception has been around the custom driver.
Dan Berdar
Well, the driver that we are bringing out, it's fairly complicated because we wanted to make sure we had a driver that could pretty much do everything for everybody. So it has more features than the commercial version of it would have. And I think what we're finding is people are appreciating the fact that If they're thinking about BTRAM for multiple different applications, there's a driver that can kind of do it all for them, and then we can start to parse out what needs to be in a driver for individual applications as a result of their testing. What we are seeing, though, is the folks that want to do their own driver, and electric vehicle folks are a perfect example of it, they like having a driver to start with because the things you have to think about in terms of how you control a bidirectional device, we've already spent a lot of time working on And one of the things that's been exciting for us is we had a great postdoc at UT Austin who developed the initial version of this driver, and he's now joined us. So we have him as an ongoing source of all the thought that went into all the use cases and all the things the driver is going to be capable of doing that he can speak to customers about, why we made certain design decisions, and what the pros and cons of it are.
Operator
Thank you. We'll take our next question from the line of Oren Hirschman with IGA Investment Partners. Please go ahead. Your line is now open.
spk06
Hi. Congratulations on a lot of progress. I dialed in and dropped late. I apologize. I dialed in and dropped late. Can you go through, and you may have answered it, so I apologize. Can you go through what you think is going to be the first one or two or three products released, and are they going to be a standard product? I'm a little confused on that, or a family standard product?
Dan Berdar
Yeah, the first one is going to be a module. It'll either be a module that includes the driver, a simplified version of the driver that we have, or it may be a multi-die module also because we're finding that there's increased interest in that where it could be used for things like the solid-state circuit breaker application where they want to put multiple dies together to achieve either a higher current rating or a higher voltage rating. And the electric vehicle folks are interested in multi-die versions of a module as well. So it'll be something coming out of our current effort here with solid-state circuit breaker activities or an adaption of the engineering prototypes that would be useful for any power converter application, things like renewable energy or energy storage.
spk06
Is that product going to be in a form where it's customized enough for a mainstream use or it's going to be have, you know, almost for an initial usage, like almost overkill in terms of capabilities and has to be almost dummy down for most customers. How should we view that?
Dan Berdar
We're really going to target something that will really hit a mainstream opportunity that does not have the long design cycles like EV, physical power converter application, where we're going to take what we've got, The die itself will be packaged in a form that the industry would recognize, and it will be a simpler version of the driver that takes a lot of the features and capability out that you don't need for all the applications we currently have it covered. So it will be smaller, simpler, really targeting initial applications that don't have the long design cycles of EVs.
spk06
Okay. And if you can just reiterate once again those initial applications and whether the customers that you've been in tests with are really the lead customers there to start?
Dan Berdar
Yeah, it'll be things like solar coupled with energy storage or standalone energy storage or EV charging.
spk06
And are the initial customers the same ones that have actually been going through tests right now or not necessarily or them plus more?
Dan Berdar
Well, the testing with those customers hasn't started yet. After we finish our deliveries to NAVSEA, we'll be delivering the prototypes for the customers in the program. We've been engaged with them really going through bringing them up to speed technically on the technology, on the driver design, and them bringing us up to speed on their application and how they're thinking about using it. So when they get parts, everybody will be able to hit the ground running with the evaluations.
spk06
Okay, great. Thank you very much. Thanks, Warren.
Operator
Once again, if you'd like to ask a question, please press star one. We'll take our next question from the line of Don Selinsky with Winslow Asset Group. Please go ahead. Your line is open.
Don Selinsky
Good afternoon. Thanks for taking my questions. Don? How are you doing today? How about yourself? Good, good. Congratulations on the APEC Presentation Award. Good job.
Dan Berdar
Yeah, thank you. It's nice to have the industry actually acknowledge what the team did. Good work.
Don Selinsky
Yeah, fantastic. In regards to that APEC presentation, the technical data, was that real-world manufactured B-Tran devices, or were you still talking about simulations? Because it seemed like that was actual dye that were tested and then compared to simulations. Can you clarify that?
Dan Berdar
It was actual dye compared to simulations.
Don Selinsky
Wow, congrats to come that close to your simulated models. That's fantastic. Another question that came to mind was you had mentioned on a previous call that you were talking to a major auto company about maybe a large number of device samples. It would be a custom project and maybe result in some development revenue. Could you just maybe give us an update on what's going on there?
Dan Berdar
Well, you know, in terms of engaging with them, we're increasingly understanding why car designs take so long. Automobile manufacturers, they're slow. We're still engaged with that customer. They have a program that they've been working on. You know, for them, when you think about it, I mean, they do things at very large scale. So, Their development work and their programs to evaluate technology are pretty in-depth with a lot of resources, a lot of rules that they've got to follow in terms of how they structure programs, how they get funded. So it's been a long process with them, but I think we're getting there with them. It's just I wish they could move more quickly, but it's just the nature of the industry.
Don Selinsky
Well, I mean, I realize that the – automotive sector is going to be your longest adoption cycle just from the nature of that business. So that does make sense. And so it looks like the solid-state circuit breakers would be kind of the low-hanging fruit. Is that accurate?
Dan Berdar
Yeah, it is. We continue to be surprised by the number of companies that want to do something on the solid-state circuit breaker side, companies that have good power electronics products, do other things like power converters and so forth, and view the solid-state circuit breaker just kind of a logical extension of their capability, which is a pleasant surprise. And I think there will probably be some other ones as BTRAN becomes just more widely known in the technical community.
Don Selinsky
Well, fantastic. Thanks for taking my questions, and congratulations on all the progress, and look forward to hearing more in the future.
Dan Berdar
Thanks, Don.
Operator
We'll take our last question from the line of Kelly Thurman, private investor. Please go ahead. Your line is now open.
Kelly Thurman
Hey, Dan and Tim. Thanks for taking my question. I was wondering as far as scaling up on the circuit breakers for especially the Navy, do you guys see any issues at all scaling up to a large run on those once an order is placed?
Dan Berdar
No, we don't, because part of the way we've approached this is the actual die itself is going to be the same regardless of the application, because we really wanted to make sure that the changes were dealt with either in the packaging of the die or in the driver. So if we had to make a lot of devices for a circuit breaker or for a power converter or one of the EV guys, if they want to test something for a traction drive, In terms of what we would do with the wafer fab, it's the exact same wafers that we would run, and the changes all happen in how they get priced up and packaged.
Kelly Thurman
Okay, and next question. Are you guys going to have any kind of formal announcement about the companies that you picked up at these conferences?
Dan Berdar
Our hope is that as we get a little bit further with them, particularly those where we're going to do a program where they might be funding something, we'll be able to announce them.
Kelly Thurman
Okay, and last question. Are any IGBT companies interested in testing BTRAN, and how are you going to handle that when that situation occurs?
Dan Berdar
We do have a semiconductor company that is actually in our test and evaluation program. They have some specific applications they're interested in. They're not one of the giant players. But, you know, our approach is going to be we want to be able to collaborate with these guys because the large end user customers, like the automobile folks, are going to want to have an alternate source of supply other than just a small company like Ideal Power. So if we think of somebody where there's a good fit, we would want to explore some kind of a collaboration where we can leverage the front end of the industry they've already built with sales and service and support and distribution networks and potentially even license the technology to them where they can leverage the scale that they have in wafer fab.
Kelly Thurman
And final question is, when do you think the circuit breaker for the Navy will be finalized where they'll actually be able to purchase a large quantity of them?
Dan Berdar
It's going to be part of a program with the Navy because the Navy is looking for the family of products that BGI needs to propose to them at the end of that program. We think the Navy program is great because it's great validation, but we think the alternating current circuit breaker that we're doing at the Department of Energy is going to be a much quicker opportunity for products. It's really the market that's here today. The utility and distribution network is alternating current. The customers that are coming to us that want to partner to do, you know, evaluations for circuit breakers, they're thinking alternating current. So we think that's actually the quicker opportunity for product revenue.
Kelly Thurman
All right, thanks for taking my question. Thanks, Kelly.
Operator
There are no further questions at this time, Mr. Bredar. I'd like to turn the conference back to you for any additional or closing remarks.
Dan Berdar
I just want to thank everybody for joining us on the call today. We will be participating in the HC Wainwright Global Investment Conference in May, and we look forward to giving you another update on our second quarter call. Have a great day, everyone.
Operator
This concludes today's call. Thank you for your participation. You may now disconnect.
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