Ideal Power Inc.

automotive I plan on leveraging my extensive commercial experience and relationships to drive revenue growth in our target markets revenue is a priority I'm sure you are wondering what I plan on doing or what you should expect from me having joined ideal power just last week I'm spending time getting my hands on the details of the business during the next several weeks I will be listening closely to feedback from our customers distributors and suppliers, and the outstanding team here at Ideal Power. Because I'd like to be highly visible with customers, both existing and prospective, I'll be meeting with them to understand their priorities, opportunities, and requirements, and listen to their feedback about our technology and their applications. I'll review our opportunities, progress, roadmap, and strategic initiatives. Those discussions will deepen my understanding of our business and enable me to fine tune our vision and strategy going forward, building on the strong foundation that is in place today. Upon completion of that process, I anticipate scheduling a call and webcast to share more detailed information and discuss certain topics in greater depth, including my perspective for product commercialization. Before setting expectations, I want to take the necessary time to thoroughly understand the current state of our business. As an organization, we will strive to execute in all aspects of the business with rigor, discipline, and a strong sense of urgency. We will endeavor to execute on what we communicate and not put ourselves in a position to have to reset expectations. It goes without saying that this is important to establishing and maintaining credibility. One thing is abundantly clear. With a strong foundation in place from which to drive our future growth, I'm not going back to the drawing board. We're well-positioned to drive long-term value creation for our customers, suppliers, employees, and stockholders. In closing, I look forward to partnering with Tim Burns, our CFO. I'd like to recognize the entire team for the third quarter progress and results. I'd also like to thank my predecessor, Dan Bergar, for assisting with the transition and providing a strong foundation for our growth. I'm thrilled to be joining Ideal Power at a time when the company has such exciting opportunities ahead. Now, I'd like to turn the call over to Tim Burns to discuss our recent progress.

Tim? Thank you, David, and good morning, everyone. Since David just started last week, I'll share an update on our progress since the start of the third quarter. First, we secured a purchase order from Stellantis in late August for custom development in packaged B-Tran devices targeting multiple electric vehicle applications. We successfully completed our first of five deliverables under the purchase order in late September. The remaining deliverables are expected to be completed next year. Second, we expect Stellantis to award us with a multi-year EV contactor program. As part of the program scope, Stellantis has told us they want to install BTRAN-based contactors in Stellantis test vehicles potentially as early as late 2026. We'll know more about the scope and timing specifics as we work through the program details with Stellantis in the coming months. This program has broad and substantial potential as Stellantis recently shared with us that they are evaluating the deployment of V-TRAN based contactors across all of their EV models and platforms. Third, we are engaged in early discussions with the sixth global automaker. This automaker is evaluating V-TRAN for next generation high voltage EV power switching and protection applications where bidirectionality and low conduction losses enable more compact, reliable, and efficient vehicle and charging architectures. We will share further updates on this opportunity as the engagement progresses. Fourth, our first DesignWin customer has successfully completed testing of the updated solid-state circuit breakers that we provided them during the third quarter. We're currently working with them on the finalization of their product design as they prepare for and the customer sampling and production. Fifth, we shipped additional solid state circuit breaker reference designs to large potential customers, including a global power management market leader in Asia. Reference designs are an important part of our commercialization strategy, as vTRAN is a new technology, and customers are eager to get hardware in their hands that demonstrates the advantages of vTRAN in their target applications. Sixth, we increased the power rating of our discrete V-TRAN product by 50% and commenced shipment of these devices with a higher power rating and power density. This development has sparked greater interest from both existing customers and new prospects in our sales pipeline as it aligns well with the market moving to higher power architectures for many applications. Seventh, we continue to expand our global reach, adding our first direct salesperson in Asia. He's already conducting face-to-face meetings with current and prospective customers. Interest in B-Tran is growing across Asia, which is the world's largest market for power electronics. We're excited about the opportunity for B-Tran in this region as Asian companies typically adopt new technologies faster than their European and American counterparts. Eighth, third-party automotive qualification and reliability testing of B-TRAN devices is well underway with more than 1,000 packaged B-TRAN devices from multiple wafer runs. Early test results are positive with zero failures to date. As a new semiconductor device without a long operating history, third-party reliability testing and the data it generates is key for both industrial and automotive customers as they evaluate and adopt B-TRAN for their applications. Moving on to the initial market for B-TRAIN, the industrial markets, and in particular, solid-state circuit protection for data centers, microgrids, industrial facilities, and grid infrastructure. Our first design wind customer is one of the largest circuit protection equipment manufacturers in Asia, serving data centers, industrial and utility markets, and renewable energy applications. As we have previously mentioned, and based on the first DesignWin customer's projections, the initial product from this customer could translate to several hundred thousands of dollars of revenue for ideal power in its first year of sales, with the opportunity to exceed a million dollars in revenue for us in the second year of sales. Importantly, this marks only the beginning. The initial product is anticipated to be the first of multiple products from this customer that will incorporate B-TRAN into solid-state circuit breakers. This customer provides a variety of circuit breaker products across various power ratings and is expected that they could expand their portfolio to add a full family of solid-state circuit breakers at ratings similar to their current family of electromechanical breakers. Discussions of other BTRAN-enabled solid-state circuit breaker products has already started, and our team recently built the solid-state circuit breaker prototype with a higher rating to share with this customer. Looking briefly at innovation, we increased the power rating of our discrete B-TRAN product by 50% in commencement shipment of these devices with a higher power rating and power density. This development has sparked greater interest from both existing customers and new prospects in our sales pipeline. Our approach to power ratings of our products is deliberately cautious, an approach that has been well received by our customers as we bring new solutions to their markets and applications. As we accumulate more testing hours and go through additional reliability testing, including the ongoing third-party automotive qualification testing, we're finding that we have more than ample margin in our design to increase the power rating of our products. Elevated product ratings will expand our SAM to include additional applications. It will also strengthen our product's competitiveness in the marketplace as it translates to smaller, lower-cost OEM products for customers to choose B-TRAN as their power semiconductor solution. We previously mentioned that orders near-term are not dependent upon the successful completion of automotive qualification. However, achieving third-party automotive qualification would provide additional confidence among industrial customers regarding V-TRAN's long-term reliability. It would also provide evidence of the device's reliability under extreme conditions, such as high humidity and temperature, which exceeds typical industrial application requirements. Additionally, given that engineers tend to be cautious when adopting new technologies, Achieving automotive qualification could help accelerate the adoption of BTRAN-based products by early adopters in our initial target industrial markets. Our BTRAN patent estate continues to grow. Currently, we have 97 issued BTRAN patents with 47 of those issued outside 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 B-Tran patents is now at 73. 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. Next, I'll discuss our financial results. Our third quarter 2025 cash burn from operating and investing activities was $2.7 million, up from $2.4 million in the third quarter of 2024, and up from $2.5 million in the second quarter of this year. Our Q3 cash burn was at the lower end of our guidance of $2.7 to $2.9 million. Our cash burn from operating and investing activities for the first nine months of 2025 with $7.4 million, up from $6.6 million in the first nine months of 2024. We continue to manage expenses prudently and aggressively. We expect fourth quarter 2025 cash burn to be approximately $2.5 to $2.7 million, with a full year 2025 cash burn of approximately $10 million. This compares to a 2024 cash burn of $9.2 million, excluding the benefit of warrant proceeds. The higher forecasted cash burn in 2025 compared to 2024 is due to increased semiconductor fabrication spending and hiring. Cash and cash equivalents totaled $8.4 million on September 30, 2025. We have no debt and a clean capital structure. We recorded modest revenue for the third quarter of 2025 as customers continue to evaluate our technology. Initial orders from the large companies evaluating our products for potential inclusion in their OEM products will be small with order sizes increasing as customers start to prototype their OEM products, progress through their design cycles, and build inventory for the rollout of their B-Tran-based products. Operating expenses were $3 million in the third quarter of 2025 compared to $2.9 million in the third quarter of 2024 with the increase due to higher wafer fabrication costs at our second foundry. We expect operating expenses to increase modestly in the coming quarters due to recent and future hiring and costs associated with our development and commercialization efforts. We also continue to expect some quarter-to-quarter variability in operating expenses, particularly our research and development spending, due to the timing of semiconductor fabrication runs, product development, other research and development activities, and hiring. The timing of equity grants and related stock-based compensation expense recognition will also cause variability in our quarterly operating results. Net loss in the third quarter of 2025 was $2.9 million compared to $2.7 million in the third quarter of 2024. Considering our asset-wide business model, no debt, and modest planned cash burn, we have sufficient liquidity on our balance sheet to fund operations through at least mid-2026. We'll potentially see several sources of funds over the next year, such as product sales, development agreements, and other commercial agreements with upfront payments. Additionally, we are exploring strategic relationships with our well-capitalized and large global partners with these opportunities strengthening as we further advance these customer relationships. As a publicly traded company, we also have access to the capital markets as necessary, providing us with additional financial flexibility. At the end of September, we had 8,511,403 shares outstanding, 824,760 options and stock units outstanding, and 653,827 pre-funded warrants outstanding. At September 30th, 2025, our fully diluted share count was 9,989,990 shares. In summary, we are thrilled to share that our first DesignWin customer has successfully completed testing of the updated solid-state circuit breakers and are now finalizing their product design as they prepare for end customer sampling and production. We're also delighted to announce that not only securing the purchase order from Stellantis for custom development and packaged B-Tran devices targeting multiple EV applications, but also completing our first of five deliverables under this purchase order. Overall, it is an exciting time at Ideal Power, and I look forward to working with David to capture the significant market potential for B-Tran as an ultra-well loss and bidirectional power semiconductor. At this time, I'd like to open up the call for questions. Operator?

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