Ideal Power Inc (IPWR) 2024 Q4 法說會逐字稿

Good morning ladies and gentlemen, and welcome to the Ideal Power 4th quarter and full year 2024 results call.(Operator Instructions).

I would now like to turn the conference over to Jeff Christensen, please go ahead.

Thank you, operator, and good morning everyone.

Thank you for joining Ideal Power's 4th quarter in full year 2024 results conference call. With me on the call are Dan Brdar, President and Chief Executive Officer, and Tim Burns, Chief Financial Officer. Ideal Powell's 4th quarter and full year 2024 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 in 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. Now I'll turn the call over to Ideal Power's President and CEO Dan Brdar.

Thank you, Jeff. I appreciate everyone joining us today. I'm looking forward to updating you on the progress since the start of the 4th quarter as we accomplished several key 2024 milestones, made significant progress with a number of key customers including Stellantis.

Based on our recent successes, positive customer feedback, and the heightened level of customer engagement, we're excited about how 2025 is shaping up for the company.

Since the announcement of our first design win in September, our pipeline has expanded, and the pace of evaluation of our technology and meetings is accelerated.

It's just one of the reasons why we're so excited about 2025. We have a roster of large global companies we've been working with for several months and several more in the queue in early stage discussions.

Given the size of these companies, any one of them could represent annual revenue to us of millions of dollars or more over time. A few key design wins would be enough to get us to profitability.

I'll briefly cover the key highlights since the start of the 4th quarter, and discuss them in a little bit more depth to provide context for their importance. Then I'll turn things over to Tim to discuss our financial results. We'll be pleased to answer your questions after our prepared remarks.

First, we secured our first design win for solid state circuit breakers with one of Asia's largest circuit protection equipment manufacturers serving industrial and utility markets. Our B-TRAN based solution easily fits in the customer's existing design for a circuit breaker product. This will reduce the time to market for their initial B-TRAN enabled breaker product.

The Joint Development Program in connection with this design win targeted B-TRAN-based circuit breaker prototypes late in the 2nd quarter of 2025 to be followed by commercial sales to their to their customers later in the year.

We're pleased to announce that this program is well ahead of schedule, with circuit breaker prototypes now expected to be completed, tested, and shipped to the customer in late March or early April. This will allow the OEM to test and begin marketing the new low loss breaker to their customers sooner than planned.

Second, we secured an order for SIMcool IQ intelligent power modules from a customer that specializes in the development and manufacture of circuit protection and power conversion solutions. This customer is interested in the SIMcool IQ modules for several markets, including renewable energy storage, electric vehicle charging, and data centers.

This product opens an estimated 1.4 billion serviceable addressable market for energy and power applications. This will be the 2nd market to contribute to our sales ramp behind the solid state switch gear market served by our SIMcool power module.

Third, we secured orders from a 3rd global tier one automotive supplier for numerous discrete B-TRAN devices, simple power module, solid-state circuit breaker evaluation board, and driver.

This customer is interested in using B-TRAN for solid state electric vehicle contact their applications, a new application where B-TRAN is an enabling technology.

The B-TRAN value proposition for EV contractors is similar to that of solid state circuit breakers, very fast acting, safer and more reliable with programmability and diagnostic capability.

Turning to Stellantis, as many of they had a challenging year in 2024 with high vehicle pricing, high inventory levels, and production outpacing demand. During this period, next generation vehicle programs like ours slowed down as their senior management and production teams focused on resetting their traditional combustion engine vehicle business to align with the changes in the marketplace.

Fortunately, they have largely addressed those challenges and are now refocusing on their next generation platforms.

Earlier this month, we completed a comprehensive program review in Detroit with Stellantis US, French and Italian production and engineering teams, along with the other major suppliers contributing to Stellantis new EV platform.

At the program review, we reviewed the design, device operation, and test data completed in the first two phases of the program. We also reviewed the work done with their engineering team that provided a direct comparison of IGBT.

These silicon carbide by MOSFETs and B-TRAN based switching options, which clearly showed B TRAN provided the lowest loss solution.

In addition, we reviewed the automotive qualification testing results to date and provided a live device switching demonstration for their drivetrain inverter in the lab.

We also introduced them to the concept of a B-TRAN-based EV contractor, leveraging work we're doing with other automakers and tier one suppliers. The feedback from the Stellantis teams was overwhelmingly positive.

As a result of the successful program review, we met with Stellantis earlier this week to discuss their priorities and next steps. At that meeting, Stellantis informed us that they intend to award us an additional program for B-TRAN-enabled EV contractors. Prior to the program review, Stellantis identified an immediate need for a low loss solid state EV contractor but had not identified a solution.

The semiconductor-based solutions they evaluated for the contractor did not meet their conduction loss and cost requirements. At the program review, when we shared the work we're doing on contractors with other OEMs and tier one suppliers, they realized that our technology is likely the solution they need for an ultra low loss EV contractor.

We're extremely excited about this potential new program as the implementation of EV compactors in an EV is not nearly as complex as undertaking and implementing a new EV drivetrain platform. This program would meaningfully accelerate our timeline to substantive revenue from our relationship with Stellantis. We expect to finalize the scope and cost of this incremental opportunity with Stellantis in March, followed by their formal internal program review and approval and purchase order.

While this program is exciting, it's equally important to note that Stellantis is still fully engaged with us on the existing inverter program. The program review highlighted to Stellantis that B-TRAN is a lower loss solution for a drivetrain inverter module.

Their plan is to continue to advance the current program with us while also proceeding with a new high priority program for B-TRAN enabled EV contractors. And in a parallel initiative to the inverter program, Solentes continues working with us and a large semiconductor company with expertise in driver control circuitry for the B-TRAN inverter drivers.

Fifth, we commenced third party automotive qualification and reliability testing of B TRAN devices. With several 100 devices being tested, the results are positive, with zero die failures to date. While automotive qualification testing is a long process involving many thermal and power cycles and well over 1,000 devices, we remain highly confident that we'll successfully complete auto qualification later this year.

Let's move on to the 2025 milestones we recently published.

Those milestones are the highest priorities in our commercial roadmap to ramp sales and our path toward positive cash flow and profitability.

Our first milestone is to secure the next stage of our development program with Stellantis. As I mentioned, we not only expect to continue advancing the current program with Stellantis, but we're expecting to secure an additional program with Stellantis for BV enabled EV contractors.

Our second milestone is to complete the deliverables related to our first design win that we announced in December.

As I mentioned, we're well ahead of schedule to complete those deliverables, enabling the customer to roll out their first B-TRAN enabled product sooner than planned.

Our third milestone is to capture additional design wins and custom development agreements.

These design wins and agreements are the precursor to our revenue ramp, and we're engaged with several large companies that could turn into design wins for us, particularly for solid state circuit breaker applications.

Our 4th milestone is to start our initial sales ramp in the 2nd half of the year. We expect our first design win to contribute to the start of the sales ramp later this year, along with additional design wins in the coming months.

Our first design win represents a significant validation of B-TRN as an enabling technology for solid state circuit breakers, and we expect it to act as a catalyst for our anticipated revenue ramp.

Based on the customer's projections, the opportunity for this customer's first V tram based product alone can translate into revenue of several $100,000 in its 1st year of sales, with the opportunity to exceed a million dollars in revenue in the 2nd year of sales.

Upon the successful rollout of this first product, we expect this OEM to expand its offerings to include a suite of Bran enabled solidate circuit breakers with a wide range of ratings.

Each product would incorporate one or more of our devices or modules to achieve the desired current rating, presenting a substantial opportunity for revenue growth beyond what's expected from their initial product.

Our 5th milestone is to increase the current rating of our products.

For the customer's perspective, this is relatively invisible as there will be no change in the manufacturing cost or form factor of our products. We expect the increased current ratings to positively impact customer adoption of our technology as it further improves its value proposition.

A higher current rating allows our products to handle more power for a customer to use fewer devices to achieve a specified current rating for its OEM products.

It should also positively impact margins with that benefit being shared with the customer as higher current rated devices are typically priced higher and in this case there's no incremental cost from increasing the rating. It's a win-win for both us and our customers.

6th and last milestone is to complete the 3rd party automotive qualification testing. This testing requires well over 1,000 packages of BTR devices for multiple wafer runs. As I mentioned, test results to date are positive with no dye failures, and we expect to complete automotive qualification testing later this year.

Automotive qualification will get us well positioned for the automotive segment as due to their longer design cycles, initial automotive OEMs and tier one automotive suppliers won't need automotive certified products from us until next year. It will, however, provide them comfort knowing that we've already taken the devices through the testing, including things like shock and vibration, which are unique to the automotive standards.

It will also generate lots of great third party reliability data to share with prospective industrial customers. Industrial qualification includes a subset of the testing required to meet automotive codes and standards with less stringent requirements for certain tasks. Industrial orders are not dependent on successful completion of automotive qualifications.

However, third party automotive qualification will further assure industrial customers of the long-term reliability of B-TRAN under conditions beyond what is required for their industrial applications. It's also expected to potentially accelerate sales to industrial customers who are often conservative and adopting new technologies.

Looking at our target industrial markets, these markets are expected to be the early source of our product sales and revenue ramp, initially for solid state circuit breakers and other circuit protection applications.

Our first product, the Simcool Power module, was explicitly designed for a solid state switch gear market with an estimated serviceable addressable market for us of $1 billion.

The growth in electrification in DC power systems in renewable energy storage, EV charging, and data centers requires solid state or semiconductor-based circuit breakers to handle DC fault currents that can rise much more quickly than AC fault currents.

Solid state circuit breakers also provide several other benefits compared to electromechanical breakers widely used today. These benefits include more than 100 times faster operation, enhanced safety and reliability, and programmability and diagnostic capabilities. We're well positioned with our simple power module to take advantage of the pending upgrades that need to be made in the grid infrastructure and industrial facilities globally.

The market has had a desire to move to solid state circuit protection due to its benefits relative to slower acting electromechanical devices. While solid state circuit breakers have been around for a while, the problem has been that IGBT-based breakers suffer from conduction losses that are too high to make them broadly adopted practical solutions.

This is not true of B-TRAN enabled breakers, as B-TRAN has clear advantages in this application, including dramatically lower conduction losses compared to IGBT silicon carbide MOSFET based breakers.

Conduction losses are critical in continually conducting applications like solid state circuit breakers.

They're also inherently bidirectional, reducing the number of devices for any breaker rating. This results in lower system costs compared to IGBT and silicon carbide MOSFET-based breakers. And last, they reduced thermal management requirements for B-TRAN breaker is there's less heat generated from our technology because of its ultra low conduction losses.

A smaller surface area and less complex thermal management systems are needed to dissipate the heat resulting from smaller, lighter, and lower cost solidate circuit breaker solutions.

As we stated previously, we're unaware of any competing and inherently bidirectional high powered technologies similar to Bran or any potentially enabling technologies for solidate circuit breakers other than our B-TRAN technology.

Turning to the automotive market, we're now engaged with 3 tier 1 auto suppliers, in addition to 3 global automakers. While we were previously focused on the drivetrain inverter and onboard charging applications for electric vehicles, the EV contactor application is now generating a lot of interest from global automakers, including Stellantis and their Tier 1 suppliers. In fact, the last two additions to our automotive engagements are both focused on EV contact their applications.

For those unfamiliar with contractors, a conventional electric vehicle contractor is an electromechanical device that disconnects the electric vehicle subsystems from the vehicle's battery in the event of a crash or fault or when the vehicle or subsystem is not operational.

Contractors are a vital safety feature to control high current and high voltage loads to and from the battery.

Several contractors, typically 5 to 8, are used in an electric vehicle to disconnect the battery from loads such as the motor drive, heating and cooling systems, and charging systems. The benefits of solid state electric vehicle contractors are similar to the benefits of solid state circuit breakers fast acting, safer and more reliability with program programmability and diagnostic capability.

While some have expressed concern related to certain of our target markets due to the change in administration here in the US, the adoption of electric vehicles and renewable energy is a global market and it will continue despite any near term changes in government policy in the United States.

We do not see a slowdown in engagement from automakers, tier one auto suppliers, or industrial customers. These companies are uniformly focused on improving the performance, whether it be driving range for EVs or efficiency for solar installations.

And the cost of their next generation products. B-TRAN not only improves the performance and economics of electric vehicles and renewable energy solutions, but also other applications like solid state circuit production, UPS systems for data centers, and industrial motor drives.

With subsidies and tax credits for EVs being eliminated in some places, adopting new technologies to reduce cost and improve performance is even more important to electric vehicle automakers.

Technological advancements in the adoption of new technologies are critical to the mass adoption of EVs. B-TRAN improves the range of EVs at the cost of silicon and enables solid state EV contractors, hence the strong and growing interest in B-TRAN from global automakers and 21 auto suppliers.

Turning to our distributors, we have agreements with 3 distributors with demand generation expertise and comprehensive customer networks that expand our global reach.

Purchasing electronics for the global distribution of hydropower products.

RYOSHO for global product distribution with particular strength in Japan.

And Seacorm for product distribution throughout China.

Our distributors' introductions to large global companies are expanding our sales pipeline with customers we would not normally be able to reach. RYOSHO is now engaged in discussions with the Forbes Global 500 power market leader regarding Bran for solid-state circuit breaker applications. This could turn into our third engagement with a Forbes Global 500 power management leader.

Corm recently secured an order for discrete B-TRAN devices, simple power modules, and evaluation boards from a new customer interested in B-TRAN for solid-state circuit breaker applications.

We're also excited to be in discussions with a short list of additional distributors focused on the European market.

Moving on to innovation with our smaller dye later this year, we'll be getting twice as many dye out of the same wafer. Our plan is not to change the size of the packaging dimensions due to the reduction in the size of the dye, to avoid any disruption to customer adoption and to conform to industry standard packaging dimensions.

This is one of several cost reduction activities we've planned over the coming quarters as we lay the groundwork for our targeted product gross margins at 50% at scale.

Looking at our expanding B-TRAN patent estate, we currently have 94 issued patents with 45 of those issued outside the United States.

Our current geographic coverage for our patents includes North America, China, Taiwan, Japan, South Korea, India, and Europe.

And all representing our high priority patent coverage geographies.

In the 4th quarter, we had our first B-TRAN patent issue in Taiwan, providing coverage in a country known for its power semiconductor manufacturing.

As a result of our continued innovation, our list of B-TRAN patents that is pending is now at 53.

To further protect our intellectual property, we treat the proven double-sided wafer process flow we developed to make our devices as a trade secret and work under strict confidentiality with our li for 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 very excited about the recent progress and positive program review with Stellantis, the opportunity to add a second program with Stellantis for EV contractors, and our first design win. Our first design win represents both significant validation of B-TRN as an enabling technology for solid state circuit breakers and a catalyst for our anticipated revenue ramp in the second half of 2025.

It's exciting to witness the heightened level of customer engagement for solid state circuit breakers and EV contractors. An overall expansion of our pipeline and in cases like our first design win an accelerated timeline for the rollout of B-TRAN-based products.

We have a roster of large global companies evaluating our technology for potential inclusion in their OEM products and several more in the queue in early stage discussions. Given the size of these companies, any one of them could represent annual revenue to us of millions of dollars or more over time. And a few key design wins can get us to profitability.

2025 is shaping up to be an exciting year for Ideal Power. Now I'd like to hand the call over to Tim Burns to review our financials. Tim.

Thank you, Dan, and good morning everyone.

Our fourth quarter, 2024 cash burn was $2.6 million up from $2.1 million in the fourth quarter of 2023, and up from $2.4 million in the third quarter of 2024.

Our Q4 cash burden was at the low end of our guidance of $2.6 Million to $2.8 million through the timeline of spending and related payments.

Our full year 2024 cash burn was $8.2 million net of $1 million in proceeds to the company from warrants exercised in the third quarter.

Our full year 2024 cash burn was at the low end of our guidance of $8.2 million to $8.4 million that the $1 million dollar in proceeds from warrant exercises.

We continue to manage expenses prudently and aggressively.

We expect first quarter 2025 cash burn to decrease to approximately $2.2 Million to $2.4 million with a full year 2025 cash burn over $10 million with the increase primarily due to 2024 and planned 2025 hiring.

This compares to a 2024 cash burn of $9.2 million excluding the benefit of warrant proceeds.

Cash in cash equivalents totaled $15.8 million in December 31, 2024. We have no debt in a clean capital structure.

We recorded modest revenue for the 4th quarter of 2024, driven by our prioritization of devices for automotive qualification testing.

While initial orders from large companies evaluating our technology for potential inclusion in their OEM products will be small, we expect order sizes to increase as customers start to prototype their OEM products and progress through their design cycles and roll out B- based products.

Looking at the first quarter of 2025, we expect to see modest volume and commercial revenue from product sales with our revenue ramps starting in the second half of 2025.

Operating expenses were $2.8 million in the fourth quarter of 2024 compared to $2.5 million in the fourth quarter of 2023.

We expect both research and development and sales and marketing spending 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 during the timing of semiconductor fabrication runs, and packaging activities, product development, and 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 fourth quarter of 2024 was $2.6 million compared to $2.4 million in the fourth quarter of 2023.

Now lost in the full year 2024 was $10.4 million compared to $10 million in the full year 2023.

At the end of December 2024, we had 8,335,491 shares outstanding.

955, 129 stock options and stock units outstanding.

763,827 pre-funded warrants outstanding.

And 342,240 warrants outstanding.

The remaining warrants have an exercise price of $8.90 and are set to expire in August of this year.

If exercised in full, the exercise of these warrants would result in $3 million in proceeds to the company.

In December 30, 2024, our fully diluted share account was 10,396,687 shares.

At this time, I'd like to open up the call for questions, operator.

(operator Instructions).

Jesse Sobelson, D. Boral Capital.

Hi everyone.

Thanks for taking that question here.

It's an exciting time, so good to hear everything's developing well. I'm curious, and you mentioned several 100,000 in revenue in the 1st year of sales with this one SFCB customer. Is that implying that the second half should see that number in revenue or is it a 12 month from sales beginning in late 2Q 25?

It's the second, so it is from when they start their initial sales for the 1st 12 months of the product launch. That's their expectation.

Okay, great, cool, understood, yes, so beyond this initial design when, can you disclose or give an idea of just how many additional SFCB customers are in active evaluation phases and maybe additionally, could you clarify what the typical sales cycle length is for this market segment?

Yes, so there's over 6 dozen very large companies that are evaluating our technology right now for solid state circuit breaker applications.

The design cycles, I mean, each customer is a little bit different. We saw with that the first design when we announced it was just a few months to get from, initial discussions, and actually it'll be just, maybe half a year to get from initial discussions to actual prototype product in their hands. So it can be pretty quick. The industrial design cycles are typically closer to 1 year. Which obviously is much faster than like the automotive design cycle.

Is it possible that we might be able to to hear about some more design wins in this space, and some more potential revenue generation opportunities in fiscal 25, or is that more of a fiscal '26 event?

Now we're targeting getting more into the queue here for 2025.

Awesome. It's good to hear. Okay, did they, yeah, I'll take one more just on the EV side, and I'll then let the others run in, but I'm just, there's some really exciting news here when it comes to the expansion of the partnership with Stellantis, and I'm just kind of curious with regards to the EV contractors you mentioned the scope and cost will be discussed in March. Could design wins for this opportunity be in 2025 as well?

Well, the automotive programs take longer. It would be a funded program, but we would expect to see funding from the program in 2025 for sure.

Okay, great, yes, I understand that it can be a little bit more lengthy in their evaluation phase, but it's good news that you guys are expanding the partnership there and have so much interest in the product. They are

Happy with the progress we made today and it turns out we're in a good position to solve some other problems that they've got.

Great, well thanks for taking the questions guys.

Thanks Jesse.

Thank you very much. I will now turn the call back to Jeff Christensen to read through questions submitted the webcast. Thank you.

Thank you, Jenny. Our first question is, any additional color on the program review in Detroit with Stellantis and the new EV contactors program with Stellantis?

Yes, working with Stellantis has been interesting. They're such a big company and we're finding is that the decision-making process there, part of what drives it to be so long is the fact that you've got A groups in the US that have to weigh in on things, groups in France that have to weigh in on things, and groups in Italy that have to weigh in on things on both engineering and production side.

So we were pretty excited to actually have the opportunity to have them all together in a room to get them, kind of all on the same page, but also to have the key people there because we came in prepared to pitch them on the EV contactor work and when we did.

The response we got was pretty impressive because clearly they had been exploring another silicon carbide-based solution that wasn't getting them there and that work apparently been underway for quite a while. So while they're happy with the work we've been doing on the original program, they pretty quickly jumped to, having everybody in the room saying, hey, this is what we need for our contractor issue here. So it was it was a really interesting and dynamic meeting, lots of good questions.

We got a lot of insight into some other things they were doing where we can play a role, so it was a very good meeting for us.

Thank you. The next question is, can you talk about how complimentary your technology is with the design when customers products and what other technology did the customer consider?

The customer actually had a silicon carbide solution that wasn't hitting the performance metrics that they needed, so, it was a case to really bring them an alternative when they understood a little bit about what Bran is capable of. So it's we're finding that's happening in a couple of places, both on circuit breakers and compactors, where the current path that many of them were on is really creating an opportunity for us to bring a better solution.

Thank you. What size circuit breaker is the first design win for and what market is it targeting?

It's an industrial sized circuit breaker that can handle several dozen amps, so it's pretty good size in terms of its power rating. But what's interesting is because of the fact that we have such low losses, there's very little thermal management needs to be done. So this breaker that can handle, dozens and dozens of amps can literally fit in your hand.

Which is part of what has them excited that you've got something that is high performance and small and small low thermal management means to them means a lower cost product.

And they have several other products in the industrial size and the utility scale, so we we're really focusing on making sure the first one goes well so that they can start to bring out other products that would utilize our technology.

Thank you. Our next submitted question is, will the solid state circuit breaker design win, will that be sold to other companies, or is this a specific design win for current design when that that customer only, will it fit into existing breaker panels as well as new ones?

Yes, I mean this is, it's an industrial breaker, so there's, we're not constrained in any way. We can take the work that we're doing here and go elsewhere. What's interesting is because of the capability of our guy, you could actually have breakers at different ratings using the exact same design that we've got now. It's going to be a function of conduction losses versus how high a current rating you want.

So we're actually going to leverage this work with, other companies that we're already engaged with. And because we're already through that design cycle, it really helps us with the solutions that we can bring to other companies that we're working with on circuit breakers.

Thank you. Are the additional design wins expected in the short term by large OEMs in your T&E roster or coming from your three distributors?

Yes. So it'll be a mix for the distributors. They do introduce us, to large companies that then our business development team engages with directly. So they're really contributing to the funnel of those large customers that we're working with for potentially design wins.

So it will be, it's a multi multi-pronged. Approach where really we have our team going out there for their networks, the networks that leveraging our board members to get to certain customers and then for customers that we don't have contacts with or just are geographically in areas where our team isn't, doesn't have the same level of connections, we have those distributors to really assist with that effort.

Thank you. Our next question, submitted is, will STELANTA, is they, are they close to deciding on the tier one supplier, or any thoughts on that?

Yes, what we discovered in the meeting is, Europe has a different view of this than the US team, so it looks like they're actually going to use a couple of tier ones. They want them kind of competing against each other. So we're going to be fortunately the ones that they are interested in, we're already working with for other things. So it's going to be a couple of tier ones that will be in the inverter program that we'll be supporting as they do their inverter design.

Thank you. What are the next question is, what are you doing to expand the industrial and automotive pipeline?

Yes, for that, I think it's kind of been answered a little bit with a really multi-pronged approach to it. So again, we have, for instance, Drew Freeman on our board ran automotive sales on the NXP for semiconductors, so he has connections. We have our existing team with connections. Actually our Stellantis relationship resulted from a connection that our VP of business development had based on prior roles that he's been in.

And then we're specifically targeting distributors that have really creation capabilities in terms of demand. So these are companies that have relationships with very large companies that can make those introductions and open those doors for us. We've obviously mentioned we have Richardson electronics here in the US. We have two different distributors now in the Asian markets, and we're working to add a European distributor here in the near term.

Thank you. Regarding the contractors in automotive in automotive, how many would that translate, how many devices would that translate in revenue per vehicle?

Yes, so in terms of number of contractors we've mentioned, it's typically about 5 to 8 per electric vehicle. In terms of content, it's probably $2000 to $300 of content. Our opportunities specifically for that. So if you look at the opportunity with any specific automaker, it really just depends on how many models they put in. I mean.

Anybody can model out for a specific automaker what their, vehicle com is that's generally public information on vehicle sales and to really see what the potential opportunity is with any of these large automakers and I mean you can do the same thing for Stellantis obviously as well.

Thank you. What is your headcount now and how and how many are in sales and what is the expected headcount growth in 2025?

Yes, we have a very light asset light business model, so we're highly outsourced obviously for things like wafer fabrication for packaging. Right now our headcount is at 16. It'll probably be closer to 20 by the end of the year. We have 4 people currently in on the sales side. We'll probably going from 16 to 20 and 1 or 2 more on the sales side specifically.

Just the number of engagements is increasing and we really need additional support for the sales side and there's still opportunities that places that our companies that we haven't got hardware in their hands yet, and we want to get the doors open and get that hardware in their hands because there's such a broad market for this technology. We'll have to beef it up a little bit.

On the third party automotive qualification or reliability testing of B-TRAN, is it common or rare to have no failures going through testing? Is there a certain number of failures allowed to still pass?

And or does the all automotive certification require no failures during testing?

No, that's a good question. The automotive standards actually allow a certain number of failures. They also specify the amount of change in performance of the device can have.

So, we still have a lot of testing to go yet, so we may see some failures as we go along, but that won't, prevent us from being auto qualified. The failures, if they, when they do happen, you want them to be in the packaging side, not the die side, because packaging related. A failures usually have to do with things like solder voids or like an IGBT.

The most common failure mechanism was the wire bond that bonds the dye to the package. We don't use wire bonding, but it's more package related things, particularly for all the thermal cycles where connections fatigue.

So there is room to actually have some failures and to make sure that we're within the parameters of how much performance can be lost at the end of the of all that testing.

Thank you. What are your thoughts on potential design wins for hybrid autos?

Yes, hybrids have the same issues. I mean, they need, better EV contractors. They need better inverters, for their performance.

The OEMs we're working with right now they seem more focused on the full electric vehicles, so I think it'll be a function of as we continue to work with these folks, we'll get pulled into the other opportunities. The approach that we're seeing kind of uniformly here is there seems to be a desire to get a common platform across multiple models and brands for these big automakers, and that seems to be their highest priority.

I think as we get a little further along, just like we did with the contractor, there'll be an open to open the door on what's happening on the hybrid side as well, because we should be able to leverage everything we've been doing here so far.

Thank you. That concludes our question and answer session. I would like to now turn the call back over to Dan Brdar for closing remarks.

I just want to thank everybody who joined the call today and for all the good questions. We look forward to updating you with Ituran commercial announcements before our next update call and operator, you can end the call.

Thank you very much. This does conclude today's conference. All parties may disconnect and have a great day.