Ideal Power Inc.

Good morning, ladies and gentlemen, and welcome to the Ideal Power second quarter 2025 results 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. Analysts who publish research may ask questions on the phone line. For analysts to ask those questions on the phone line, please press star one to enter the queue. As a reminder, this event is being recorded. I would now like to turn the conference over to Jeff Christensen. Please go ahead.

Thank you, Kelly. And good morning, everyone. Thank you for joining the Ideal Power's second quarter 2025 results conference call. With me on the call are Dan Berdar, President and Chief Executive Officer, and Tim Burry, Chief Financial Officer. Ideal Power's second quarter 2025 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 company prospects, are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results that differ materially from those described in the call. Please refer to the company's FCC filings for a list of associated risk. We would also refer you to the company's website for more supporting company information. Now I'd like to turn the call over to Ideal Power's President and CEO, Dan Berdard. Dan? Thank you, Jeff.

I appreciate everyone joining us today. I'm eager to share an update on our progress since the start of the second quarter. I'll begin with the key highlights since the beginning of the second quarter and discuss the most significant developments with additional context to highlight their significance. Afterwards, I'll turn things over to Tim to discuss our financial results. We look forward to your questions after our prepared remarks. First, we shipped updated solid-state circuit breaker prototypes to our first DesignWin customer. These updated prototypes incorporate additional capabilities into the device driver that were requested by the customer to further differentiate their product offering. The customer is completing their prototype testing and will soon begin gathering feedback on this new product from their targeted end customers ahead of the product launch of their first VTRAN-enabled solid-state circuit breaker product planned for later this year. Second, we entered into a collaboration with a fourth global Tier 1 automotive supplier. We ship them packaged devices, a reference design, and driver to enable them to evaluate B-TRAN, and our understanding is that they plan to launch a formal solid-state EV contactor program within the next few months. Third, one of our distributors introduced our products to a fourth global automaker and the automaker's preferred Tier 1 supplier. They ordered numerous packaged B-TRAN devices, Simcoe power modules, solid-state circuit breaker reference design boards, and drivers. customer will evaluate BTRAN as part of their innovative solid-state EV contactor design implementation. The same distributor also introduced our products to a fifth automotive OEM for a potential EV contactor program. We're now collaborating with a total of five automakers including four of the top ten global automakers. Fourth, Stellantis formally informed us that they are issuing a purchase order to us for custom development and package devices targeting multiple EV applications and broadening our collaboration with one of the world's largest automakers prior to the launch of the EV contactor program. Fifth, we added a partnership with Kaimei Electronic Corp. to distribute Ideal Powers products to their existing and prospective customers throughout Asia, alongside their own product portfolio. Asia is the world's largest market for power electronics, and Asian companies typically adopt new technologies faster than their European and U.S. counterparts. They started introducing B-Trend to their customer base. Sixth, we shipped solid-state circuit breaker reference designs to several large companies currently evaluating our technology for solid-state circuit breakers or EV contactor applications. This includes two previously announced Forbes Global 500 power management market leaders, as well as our fourth and fifth global Tier 1 automotive suppliers that we added in late June. And seventh, we successfully completed the third-party automotive pre-qualification and reliability testing of V-TRAN devices with zero failures. We expect to complete full third-party automotive qualification and reliability testing later this year. Let's briefly turn to what we've repeatedly been hearing and seeing from current and prospective customers. There's a growing interest in our V-TRAN technology, both for industrial and automotive applications, particularly for circuit protection applications such as solid-state circuit breakers, transfer switches, and EV contactors, where ultra-low conduction losses are enabling for the applications. For these applications, we're typically competing against silicon carbide devices, and the consistent message we are hearing from prospective customers is that the cost and conduction losses of solid state solutions using silicon carbide are too high. A recent example of this is our first design wind customer. This customer is one of the largest circuit protection equipment manufacturers in Asia, targeting data centers, industrial and utility markets, and renewable energy applications. sent us their 20-amp unit directional silicon carbide breaker prototypes that did not meet their cost and performance requirements. We reworked them and sent them back a 63-amp bidirectional B-Tran breaker with a 60% reduction in losses compared to the silicon carbide prototypes. Obviously, this is a significant performance improvement with much higher power density while achieving lower total losses using silicon devices that are at a lower price point than silicon carbide devices. Since then, we provided the customer with updated prototype breakers incorporating additional capability they requested be put into the device drivers to accommodate some innovative ideas on the capabilities they want to add to their breaker product. The customer is testing the updated prototypes now, and they'll be soliciting feedback from their customers on these prototypes in the near term with a particular focus on data center customers. Following this feedback cycle, they plan to move forward with a product launch of their first BTRAN-enabled solid-state circuit breaker this year, and we're excited to collaborate with this customer in launching additional BTRAN-enabled breakers across various power ratings in the future. As we've previously mentioned, and based on the first design wind customer's projections, the initial product from this customer could translate to several hundred thousand dollars of revenue for ideal power in its first year of sales, with the opportunity to exceed millions of dollars in revenue for us in the second year of sales. Importantly, this is just the beginning. This initial product is anticipated to be the first of several products from this customer that will incorporate V-TRAN into solid-state circuit breakers. This customer provides a variety of circuit breaker products across various power ratings, and it's expected that they could add a full family of solid-state circuit breakers at ratings similar to their current family of electromechanical breakers. Importantly, our development agreement with this customer does not constrain us in any way from working with other companies interested in our technology for solid-state circuit breaker solutions. In fact, the work that we've done with this customer can be leveraged to benefit current and future customers aiming to bring solid-state circuit breaker products to market. Due to the increased customer engagement from Asia and the magnitude of the opportunity for the region for industrial applications beyond our first design with customer, we're in the process of adding a sales director and field applications engineer for the region. We're seeing increased interest in VTRAN for circuit breakers and static transfer switches for data centers. In both circuit breakers and transfer switches, a smaller solid state solution would replace bulky, slower acting electromechanical solutions. Solid-state circuit breakers and data centers protect against faults and offer the same advantages as solid-state circuit breakers in utility and other industrial applications. Transfer switches for data centers are used to minimize or eliminate server downtime by quickly switching the power source to backup power when needed. Transfer switches are critical as data centers strive for better than five nines or better than 99.999% uptime. It's also important to note that waste heat is a critical issue for data centers, and that BTRAN-enabled switchgear, like circuit breakers and transfer switches, have ultra-low conduction losses and generate significantly less waste heat relative to competing solid-state solutions. We're excited that our BTRAN is an enabler for customers seeking solutions for solid-state switchgear in data centers. Moving on to another exciting market for BTRAN, electric and hybrid electric vehicles, including EV contactors. For those of you unfamiliar with EV contactors, a contactor can be thought of similarly to a solid-state circuit breaker for an electric vehicle. It isolates the battery from electrical subsystems during both fault conditions and planned maintenance for improved safety. Traditional electromechanical contactors aren't fast enough and do not offer programmability or diagnostic capabilities. Auto OEMs need a solution that is very fast-acting to protect the batteries and the systems connected to the battery to prevent a runaway event, injury, or other damage. Stellantis and multiple other global automakers, as well as numerous Tier 1 automotive suppliers, are already looking at B-TRAN for solid-state EV contactor applications. They, along with others in the industry, appear to have uniformly decided that an electromechanical contactor is not the right solution for electric vehicles due to the slow speed of electromechanical devices and the need for enhanced safety, programmability, and diagnostic capabilities. The application of BDRAN and EVs is exemplified by our expected purchase order from Stellantis, encompassing custom development and package devices aimed at multiple EV applications. The order has been approved by Stellantis internally, and we expect to receive their purchase order in the near term. The primary deliverables under this order are a non-traditional double-sided custom semiconductor package design, numerous B-Tran dies in this custom package, and related drive circuitry. The custom package is required by the unique thermal management design Stellantis intends to adopt for its next-generation electric vehicle platforms. The combination of V-TRAN and Stellantis' thermal management design allows for commonality of parts in multiple locations within its EV, including the drivetrain, contactors, and other high-power EV applications, and across its EV platforms. This new order is intended to form the basis for a common power semiconductor and packaging design for both the drivetrain and contactor programs. The order will represent significant and continued progress Stellantis, as they implement their EV strategy. As this order will enable multiple uses of V-TRAN in Stellantis' EV platforms, we're excited about our broadening collaboration and the customer validation of the benefits V-TRAN can provide to high-power EV applications. We remain actively engaged with Stellantis, meeting regularly with them and their program partners on both the planned EV contactor and current drivetrain inverter programs, and collaborating with them on automotive qualification and related requirements. Turning to other automotive customers, we added our fourth and fifth global Tier 1 automotive suppliers to our roster of engagements. For the fourth global Tier 1 automotive supplier, we're engaged with their engineering teams from both the U.S. and Asia. They have B-TRAN devices in their lab and will be evaluating B-TRAN in the near term. Our understanding is that they expect to launch a formal solid-state EV contactor program within the next few months. For the fifth global Tier 1 supplier, we've begun shipping the numerous package B-Trans devices, Simcoe power modules, solid-state circuit breaker reference design boards, and drivers that they'll evaluate for an innovative solid-state EV contactor design. Both these Tier 1 suppliers serve several top 10 global automotive OEMs. Moving on to the macroeconomic level, investors have asked about tariffs and evolving trade policies. While the tariff situation is very fluid, we continue to expect minimal impact on our operations from tariffs in place today. Importantly, power semiconductors are exempt from many tariff locations currently in effect, or in some cases are capped at a low tariff rate. This limits the potential impact on us. Although the situation remains dynamic, as evidenced by recent tariff adjustments with China, we're well positioned to mitigate the impact of future changes in tariffs and trade policies and other supply chain risks. Our asset-light outsourced business model, leveraging the large investment already made in silicon wafer processing and packaging, enables flexibility. Additionally, our dual-sourcing approach in different geographic regions strengthens our supply chain resilience and optionality with wafer fabrication and packaging in different parts of the world. Importantly, our supply chain strategy is entirely independent of China, further insulating us from regional geopolitical and trade uncertainties and any potential trade conflicts between the U.S. and China. Looking briefly at innovation, we intend to increase the power rating of our product later this year, and updated data sheets will be issued accordingly. We've been conservative in how we've rated our technology, which customers have told us they appreciate as we're introducing a new technology to their markets and applications. As we get more and more testing hours and go through reliability testing, including third-party automotive pre-qualification testing, we're finding that we have more than ample margin in our design to increase the power rating of our products. Higher product ratings will allow customers to design their products to perform at higher ratings with the same number of devices, or to hold their product ratings constant but potentially utilize fewer B-train devices in their application, either of which make their product even more competitive in the marketplace. The work to complete the testing and release new data sheets for the uprated products is in progress and on track. As I mentioned earlier, we successfully completed the third-party automotive prequalification and reliability testing of BTRAN discrete dye last month, achieving zero dye failures. Test results indicate that double-sided, cooled packaging utilized for BTRAN devices is much more robust than semiconductor packages utilizing wire bonding because wire bonding is a common point of failure in semiconductor packaging. For example, to meet automotive qualification standards, package devices must withstand 15,000 power cycles without failure. Our devices recently passed 50,000 power cycles without any failures. In addition, the pre-qualification allowed us to identify and implement packaging improvements to optimize the design for easier assembly for high volume manufacturing and to reduce cost. The production of multiple wafer runs required for high-volume automotive qualification testing is nearing completion. The gating item for completing the device packaging is the tooling for the encapsulation of the package devices, which has been ordered, and our packaging supplier is expecting its delivery in the next few weeks. We previously mentioned orders this year are not dependent on the successful completion of automotive qualifications. However, achieving third-party automotive qualification would provide additional confidence to industrial customers regarding V-TRAN's long-term reliability. It also provides evidence of reliability under conditions, including extremes of humidity and temperature, that surpass those needed for industrial applications. And since engineers tend to be conservative when adopting new technologies, automotive qualification would potentially speed up the rollout of V-TRAN-based products by early adopters in our initial target industrial markets. Our BTRAN patent estate continues to grow. Currently, we have 96 issued BTRAN patents, with 47 of those issued outside of the United States. Our patent coverage spans North America, China, Taiwan, Japan, South Korea, India, and Europe, all representing our high-priority patent coverage geographies. As a result of our continued innovation, our list of pending BTRAN patents is now at 74. To safeguard our intellectual property further, we treat the proven double-sided wafer process flow we developed to make our devices as a trade secret and do not disclose the identity of and work under strict confidentiality with our wafer fabrication partners. So even if a competitor studied our patents, they wouldn't have the know-how to fabricate the device. In summary, we're excited about the expected purchase order from Stellantis, which targets multiple EV applications and will precede the new EV contactor program with Stellantis. Our first design wind customer is completing their solid-state circuit breaker prototype testing in advance of their planned BTRAN-enabled product launch later this year. We anticipate that following their initial product rollout, this OEM will broaden its product lineup to include a variety of BTRAN-enabled solid-state circuit breakers across multiple power ratings, which could lead to significant revenue growth for us. We view solid-state switchgear for data centers and other industrial facilities and grid infrastructure, including solid-state circuit breakers from this first design wind customer as our path to significant revenue growth and profitability. Additionally, we're now collaborating with our fourth and fifth global Tier 1 automotive suppliers and additional top 10 global automakers as the automotive industry is seeking low-loss solid-state solutions for EV contactors. Looking forward, we're confident we'll deliver against all our milestones for 2025. This year, in addition to the current program with Stellantis, we're expecting a second development program with them, additional design wins and our custom development agreements for circuit protection applications with global companies, the start of our revenue ramp, an increase in the power rating of our products, and the completion of third-party automotive qualification. Now, I'd like to hand the call over to Tim Burns to review our financials.