Q1 2024 Ideal Power Inc Earnings Call

Participants

Jeff Christensen; IR; Darrow Associates Inc

R. Daniel Brdar; President, Chief Executive Officer, Director; Ideal Power Inc

Timothy Burns; Chief Financial Officer, Treasurer, Secretary; Ideal Power Inc

Brian Dobson; Analyst; Chardan Capital Markets LLC

Presentation

Operator

Good morning, ladies and gentlemen, and welcome to the Ideal Power first quarter 2024 results call. (Operator Instructions) As a reminder, this event is being recorded.
I would now like to turn the conference over to Jeff Christensen. Please go ahead.

Jeff Christensen

Thank you, operator, and good morning, everyone. Thank you for joining Ideal Power's first quarter 2024 a conference call. With me on the call are Dan Brdar, President and Chief Executive Officer; and Tim Burns, Chief Financial Officer. Ideal Power's first quarter 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 on the call and webcast, including those regarding future 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 the associated risks, and we would also refer you to the company's website for supporting company information.
Now I'd like to turn the call over to Ideal Power's President and CEO, Dan Brdar. Dan?

R. Daniel Brdar

Thank you, Jeff, and everyone for joining us on the first quarter 2024 conference call. This morning. I'm eager to share some recent updates on the business since the start of the first year and review our priorities for 2024. Then I'll turn things over to Tim Burns, to review our financials. We'll be pleased to answer your questions after our remarks.
This was an exciting quarter for us as we made significant progress in our customer engagements and commercialization efforts as evidenced by the conversion of customers in our test and evaluation program moving to commercial orders, shipping our first commercial products, the addition of our first distributor and their subsequent customer orders successfully completing the current program phase with Stellantis and the addition of new large companies to our test and evaluation program.
We'll take a look at each of these activities and some additional progress against our objectives for the year. But for those new to Ideal Power, I want to briefly address the markets we serve and the opportunity for our technology. Our technology, Vitran is a low loss bidirectional power semiconductor device that has wide applicability in high-power applications such as solid-state circuit breakers and circuit protection, renewable energy, energy storage, electric vehicles and EV charging, Industrial motor drives UPS systems for datacenters and power converters for a variety of industrial utility and military applications.
Based on a recent study by more door intelligence in their global power electronics market report and company estimates that Vitran's serviceable addressable market or SAM is predicted to more than double over the next five years with a projected 16% compound annual growth rate. The total SAM for Vitran is forecasted to grow from $3.6 billion in 2023 to $7.6 billion in 2028.
Today, this market is currently served largely by conventional power semiconductor devices called IGBTs, which were invented decades ago and are largely believed to have reached the limit of their performance. Primary drivers for all of these applications I just mentioned are the need to reduce costs and improve their efficiency or the useful energy available for the end user customers.
It in essence, is what Vitran was specifically designed to do for electric vehicles. It means lower vehicle first cost and longer range for EV charging. It means lower cost chargers and faster charging for data centers. It means lower operating costs for renewable energy and energy storage. It means more useful kilowatt hours for the end customer.
Last year, we completed the highest technical risks of our technology development, which was making high-performance high quality devices in a commercial wafer fab with good yields our focus for this year and going forward is commercialization of our technology and our products. We're thrilled about our continued momentum and advancement of customer engagements and meaningful steps on our Vitran commercialization roadmap as evidenced by these recent announcements.
First, the fulfillment of initial customer orders for our SimCorp power module, simple power module delivers very low conduction losses for circuit breaker and circuit protection applications in industrial utility, electric vehicle and military markets, and is expected to be the earliest source of our sales ramp.
Second, we added our first distributor, Richardson Electronics for discrete Vitorin devices and simple products. Richardson Electronics has already placed multiple orders with Ideal Power from large global customers interested in our technology for solid-state circuit breaker products for industrial markets.
Third, we successfully completed Phase 2 of our development program with Stellantis, a top 10 global automaker well ahead of schedule. Fourth, we added a global leader in circuit protection, industrial fuses and power conversion technology with over $1 billion in annual sales to the roster of the Vitran test and evaluation program.
Fifth, we're nearing completion of what we expect to be a successful qualification run with our second high-volume wafer fabrication partner. And sixth, we released Vitran and simple videos and application nodes for prospective customers technical audience resulting in the addition of new opportunities to our sales funnel because they help engineering teams at our target customers. Better understand our new technology videos demonstrate the testing of Vitran devices and simple power modules and the compelling advantage Vitran offers.
Before I discuss some of these activities, I want to take a step back and highlight what customers are looking for and the advantages of our approach due to the increasing electrification of our society. There is a growing need for better circuit protection for industrial facilities and the electric utility transmission and distribution system as more renewable energy energy storage and vehicle charging installations are added to our grid.
The current electric utility grid was never designed to safely accommodate the widespread adoption of intermittent generation such as solar or wind energy electric vehicles also need enhanced circuit protection to safely control the use of lithium based batteries and extend their range in addition to huge investment in vehicle charging stations needed to support the adoption of electric vehicles will require significant investment in the utility and industrial infrastructure safely allow these systems to be grid connected and government policy is expected to help accelerate this much-needed infrastructure update and improve the overall reliability of the grid.
On Monday, the US Federal Energy Regulatory Commission approved its first major electric transmission policy update in over a decade to address this growing need to update our grid infrastructure. The new rule aims to speed up new interregional transmission lines to move clean energy to meet the growing demand created by the adoption of EVs and EV chargers, data centers and artificial intelligence.
These trends drive the need for solid-state circuit breakers and circuit protection, which connect orders of magnitude faster than conventional mechanical breakers to safely eliminate parking and the potential for fires and reduce the maintenance parking imposes on traditional burgers. It makes solid-state circuit protection viable requires a very low loss high power semiconductor, which is what the trend provides.
The desire of large companies to bring these solutions to market is what is driving our initial customer engagements and orders and is expected to be the first source of commercial revenue for us. And as it's reflected in our initial super simple orders and the growing list of large companies evaluating our products, key advantage of our simple product is that it not only provides ultra-low conduction losses. It also provides inherent directionality and its design.
So the customer can parallel as many units as they need to get to any rating they desire for their circuit protection products. Scalability gives them significant flexibility in how they size products like circuit breakers, which can range in size from hundreds of volts to tens of thousands of volts while simultaneously lowering component count, energy losses and OEM system costs.
Our progress in this market is evidenced by the growing number of large companies in our sales funnel focused on solid-state circuit breaker and circuit protection and by the advancement of companies in our test and evaluation program, now placing commercial orders for our products. We recently received an order for simple power modules and drivers from one of the Forbes Global 500 leaders in diverse power management markets and our Vitran test and evaluation program.
This global power management market leader is evaluating simple against IGBT modules for use in solid-state circuit breaker applications. The order for simple power modules follows the customers' testing of discrete trend devices as part of our test and evaluation program. In response to this customer's request, Ideal Power provided high volume, multiyear quotes for simple power modules as part of their product planning activities with customers also evaluating our technology for its other power conversion applications.
We expect to convert additional program participants into initial and follow-on orders over the course of this year. As customers complete their technology evaluations and begin working on product designs incorporating simple. Also during the first quarter, we received an order for Vitran devices and a circuit breaker evaluation board from a global leader in power semiconductor and power electronics solutions in connection with its launch of a multiyear DC power distribution system program. This global leader presents multiple opportunities for us as it addresses several of our target industrial markets, including solid-state circuit breakers, industrial grid infrastructure and renewable energy.
We also added a global leader in circuit protection, industrial fuses and power conversion technology with over $1 billion in annual sales to the roster or the Vitran test and evaluation program. This program participant is expected to test and evaluate Vitran power semiconductors for circuit protection and industrial markets, including industrial fuses, renewable energy and energy storage, power conversion for rail transportation and ET power management.
As we said previously, given the evaluation and OEM product design cycles of most industrial companies, volume and revenue will be modest in 2024 as our customers go through their their product planning and product design cycles. Because these customers work towards releasing their products that incorporate our Vitran technology as part of our effort to reach additional customers and leverage the semiconductor infrastructure.
We added our first distributor Richardson Electronics for discrete metering devices and simple power modules have strong technical sales capability, expertise in creating demand and securing sales for new technologies, robust customer support and global reach. Our relationship with them allows us to leverage their extensive customer base and brings Richardson Electronics compelling products to add to their portfolio for their customers needing high and medium voltage power semiconductors.
Which is electronics has already placed multiple orders with Ideal Power from large global customers interested in our technology for solid-state circuit breaker products for industrial markets, including an order from a large global company not previously in Ideal Power sales funnel. We already see customers, particularly in the circuit breaker and circuit protection markets starting to be served by Richardson Electronics.
We expect this trend to continue as we convert program participants initially into distribution customers and ultimately to direct customers for large out of larger OEMs. We're also finalizing an agreement with a second distributor with particular strength in Asia. Our focus is engaging distributors like Richardson Electronics with a strong technical sales team with expertise in securing sales for new technologies and global reach will add more reps and distributors over time to have comprehensive channel coverage.
Turning to the automotive market, automakers are looking for solutions to help them both lower cost and extend the range of electric vehicles to drive mass adoption, which is what Vitran provides for hybrid and electric vehicles with current solutions such as IGBTs and silicon carbide mass specs, there's a trade-off between cost and range. Our technology allows automakers to improve range at the cost of silicon rather than incurring the high cost of silicon carbide devices.
Building upon work done by Toyota on the impact of improving semiconductor performance feature and has the potential to improve the range of electric vehicles of 7% to 10% compared to conventional IGBTs, while offering significant cost savings compared to silicon carbide devices. These are the advantages that continue to be the focus for Stellantis and our funded program for their next-generation EV platform.
Our focus is to use a custom Vitro and power module for use in EV drivetrain inverters and also for battery circuit protection. Our stated goal for the program is to have a custom module production ready by 2025 we expect modest revenue from Stellantis this year as we continued to execute against program milestones and deliverables.
During the quarter, we successfully completed all the Phase two deliverables of the program several months ahead of schedule. Phase two deliverables completed this year included multi wafer run delivery of tested and packaged devices and drivers to both the programs, packaging company and the organization building the initial drug and traction inverter.
We collaborated closely with Lantis and the program partners to supply B trend devices for integration into the custom power module and inverter designs. The device testing results by the Stellantis program validated the expected efficiency improvements anticipated from the use of the trend in the drivetrain. Successful completion of Phase two is customer Valley validation of Vitran and its potential impact on improving EV range in costs.
Next phase of the program now incorporates the production side of their organization and internally is still Lantis is already underway. Recently, the latest issued a solicitation through a large number of Tier 1 suppliers to submit their proposals for a preproduction EV inverter. That includes Vitran since we're already working with some of the Tier 1 suppliers.
They're well-positioned to provide a competitive proposal, but it also introduces Ideal Power to several additional Tier 1 suppliers that are not in our current list of engagements. These companies are the dominant suppliers to many of the global automotive OEMs.
So it provides a great opportunity for us to engage other automakers as we're not constrained in any way under the terms of our agreement with Stellantis, the proposals from Tier 1 suppliers are doing a few weeks at which point the Lantis will down-select to a shortlist of Tier 1 suppliers that will be part of the engagement and scope of our Phase three activity.
As a parallel activity, we're preparing to begin our automotive qualification testing based on the test plan approved by Stellantis as part of Phase two. The supplier has been selected and the runs we intend to use for the initial testing are already in progress while the automotive qualification process is rather lengthy. Taking many months to complete.
We've been working closely with a third party firm selected for the testing to gather information on the most common failure mechanisms from previous automotive qualified products to ensure the packaging design and wafer fabrication activities leverage the lessons learned from other semiconductor qualifications. Successful completion of the automotive qualification process will enable Vitran to be the core of the powertrain inverter for the automaker's next-generation EV platform.
It also strengthens the commercial readiness of our products and technology for industrial customers as the standards for automotive, the automotive industry are the most demanding of any power semiconductor application. An advantage to our approach for the foreseeable future is that the wafers and resulting dyes are all exactly the same for any application, whether it's going into a circuit breaker, electric vehicle energy storage system or solar installations, we can ramp up production cost effectively because we don't have to forecast wafer demand and die design mix based on that on the application, they're all the same for us.
Another advantage to our approach is our ability to leverage the huge investment already made in silicon wafer fabrication and packaging for power semiconductor devices. Our asset-light business model gives us the ability to continue focusing on technology improvement while quickly incorporating customer feedback into our product roadmap so quickly and what we were doing to ensure the supply chain is able to support our longer-term sales and production ramp and manage costs.
Our second high-volume wafer fabrication partner is nearing completion of the qualification runs. This wafer fab in Europe will support future revenue growth and add dual sourcing for wafer fabrication. We're very pleased with the capability of the team and their expertise as a wafer fab that already makes high-power semiconductors.
They bring a high level of fabrication expertise and are eager to play a role in bringing a novel high-performance product to market that's focused on the market segments driving long-term growth in the power semiconductor industry. We're leveraging the proven process flow being used at our existing wafer fab in Asia and their progress has been excellent. The run at this European fab is nearing completion, and we're confident it'll result in working devices. On the first run, we expect to complete the qualification of this gap in the coming weeks.
At our existing fab, we've been pleasantly surprised by their rapid progress. Our initial qualification run produced excellent devices with a yield much higher than expected on initial qualification rates. Our expectation was that through most of next year, we'd be working closely with them to drive wafer yield up to the commercial levels needed for a mature technology. Our most recent few runs are already achieving the yields that we were targeting for next year. So we're excited to see this level of performance because it enhances our capacity and lowers our device costs.
Looking briefly at our intellectual property, we're not aware of any competing inherently bidirectional technologies that are using anything similar to our technology. In addition, we treat the proven process flow. We used to make our devices as a trade secret and work under strict confidentiality with our wafer fabrication partners.
Looking at our expanding Vitran patent estate. We currently have 86 issued Vitran's patents with 39 of those issued outside of the United States. Our current geographic coverage for our patents includes North America, China, Japan, South Korea, India, India and Europe with pending coverage in Taiwan, all representing our high priority hadn't covered geographies.
As part of our product development and introductions, we've expanded our patent efforts to include what we believe to be high-value patents for our driver design controls and packaging designs as both are unique to the bidirectional nature of our technology as a result of our continued innovation. Our list of pending the Vitran patents is now at 41.
We've seen significant commercial progress this quarter and remain very much on track to complete our stated 2024 milestones for our commercialization roadmap. We started fulfilling customer orders for simple. We completed phase two of our program with Stellantis ahead of schedule. We added a global distributor that's already securing orders for us.
We advanced companies from our test and evaluation program to placing commercial orders, and we expanded the roster of test and evaluation program participants are growing our sales funnel. Strong momentum continues, and we remain on track to achieve our 2024 milestones, which include converting large OEMs in our test and evaluation program.
To design wins and our custom development agreements, selling simple power modules to existing and additional target industrial customers, adding one or more additional distributors for our simple products, securing Phase three of and continuing the strong execution on our development program with Stellantis completing the qualification of a second high-volume production fab, beginning a third party automotive qualification testing and capturing initial orders for our simple IQ intelligent power module.
We look forward to several announcements in the coming months as we complete the key objectives we've outlined for the year. We'll maintain our relentless focus on executing our Vitran commercialization roadmap and growing customer engagements.
I'd like to hand the call over to our Chief Financial Officer, Tim Burns, to review our financials. Tim?

Timothy Burns

Thank you, Dan. I will review the first quarter 2024 financial results. We recorded $79,000 in commercial revenue for the first quarter. Looking at the balance of 2024, we expect modest commercial revenue from both product sales and development agreements.
Operating expenses were $2.5 million in the first quarter of 2024, down from $2.6 million in the first quarter of 2023. We 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 in hiring the timing of equity grants and related stock-based compensation expense may also cause variability in our quarterly operating expenses.
We expect general and administrative expenses to be up modestly in the second quarter of 2024, due partly to the timing of our annual shareholder meeting and associated costs, sales and marketing spending is expected to continue to increase modestly in coming quarters due to hiring and costs associated with our commercialization efforts.
Net loss in the first quarter of 2024 was $2.5 million, flat compared to the first quarter of 2023. First Quarter 2024 cash burn, which excludes the net proceeds from our public offering, was $1.9 million below our guidance of $2.3 million to $2.4 million due to the timing of spending and related payments. We continue to manage expenses prudently and aggressively.
We expect second quarter 2024 cash burn of approximately $2.2 million to $2.4 million, partly due to timing reversals from the first quarter and the full year 2020 for cash burn of $8 million to $8.5 million, net of an expected $1 million benefit from proceeds from expiring heavily in the money warrants. Cash and cash equivalents totaled $20.2 million at March 31, 2024.
We have no debt in a clean capital structure despite a difficult capital market for small and micro-cap companies. We completed a public offering, which added multiple years of cash to our balance sheet. A strong balance sheet is critical to our commercialization efforts as the large companies we are engaged with need to know we have the capital support ramping our business.
The public offering closed in late March with net proceeds of $13.7 million. Subsequently, the overallotment was exercised by the underwriters in April, bringing the total net proceeds to $15.7 million through a clean transaction common stock only our largest existing institutional holders with the deal. We added exclusively high-quality, long only new investors. The book was more than two times oversubscribed. It's a public offering completed.
Our sole focus is on commercialization at the end of March, we had 7,381,378 shares outstanding, 887,160 prefunded warrants outstanding, 844,175 options and stock units outstanding and 786,420 warrants outstanding, 400, 44,180 of these warrants outstanding are set to expire in November of this year, if not exercised before. At March 31, 2024 our fully diluted share count was 9,899,133 shares in April, 300,000 shares outstanding were added to this total due to the closing of the overallotment option from our public offering.
At this time, I'd like to open up the call for questions. Operator?

Question and Answer Session

Operator

(Operator Instructions)
Brian Dobson, Chardan.

Brian Dobson

Good morning. Thanks very much for taking my questions.

R. Daniel Brdar

Sure.

Brian Dobson

So I guess first, first on Stellantis on that some exciting news about a Phase two being completed. I guess as you've as you giving us some really good color on that already. How do you think progressing through this process with the core Tier 1 OEM. like Stellantis has has helped you in your approach to perhaps other OEMs? Do you find that there is a lot of synergy there in terms of improving your products?

R. Daniel Brdar

I take great question. One of the things that we are happy about is that we're not really constrained in what we're doing under the slant this program. So we are literally taking test results that we've generated for Stellantis and going to other Tier 1 and other automotive OEMs. So those are the things that they're focused on the kind of data they want, how they want testing done.
We basically get a lot of repeatability out of it in the fact that when we go to these other OEMs and other Tier ones, when it's clear that we understand how the testing needs to be done for the automobile sector, it gives them confidence that we actually really got our arms around what their requirements are. So it's been really beneficial that we don't have limitations as a result of what we've done go ahead.

Brian Dobson

Yeah, very good. And so the order activity, rents and schools interesting, when do you think you might have more color in terms of feedback from those modules. Have you received any early feedback from those two for the S&P 500 companies?

Timothy Burns

So we're actively engaged with both and that obviously one has already ordered some cool product from us. I would say it's a little bit early to get detailed feedback. I mean, we're in discussions with one of them in particular for potentially a development program for a product line that they're working to potentially roll out for solid-state circuit breakers.
So I think it's something where we're just seeing actively engage with these companies and once they kind of graduate, so to speak, from the test and evaluation program, there's still going to be initially low volume orders that no follow-on orders will increase in size over time, but it's not a it's not a process where you clinical graduate from the test and evaluation program in the next days of design win, right. It's an ongoing process and we think the process really it's about a 12 month month process. So we would expect to convert some of these companies here potentially later this year. And in design wins for products that would be ready to roll out either very late this year or into early next year.

Brian Dobson

Yes, very good. You mentioned a lot of areas for growth on the call but if you had to narrow down to, say, one or two that you're most excited about for 2025, 2026, and what would those be where where you're looking to devote the lion's share of, call it managements management's time and efforts.

R. Daniel Brdar

Yes, I think it's really things that are around circuit protection for one because that is a shorter cycle but in the timeframe you're talking about, we're also going to be pretty well into the programs with certainly Stellantis and hopefully others. So we've got sort of a short term opportunity a longer term opportunity that's even bigger. So we're kind of trying to leverage what we're doing for both of those and be responsive to both because they both are just driven by two, really fundamental changes going on in the automobile industry and the need to upgrade our electric infrastructure.

Brian Dobson

Excellent. Thanks very much.

R. Daniel Brdar

Thank you.

Operator

(Operator Instructions)
Okay. I will now turn this call back to Jeff Christensen to read any questions that have been submitted through the web. Thank you.

Jeff Christensen

Thanks, operator. And our first question is Have all the companies involved in our test and evaluation program been announced? Or are there some that you just have not announced?

Timothy Burns

So yes, there are some that we haven't announced. I mean, we focus our announcements really on what we think are the largest opportunities. So there's companies that are not not that announced that are in that program. I would say also there's companies that may be very large companies that just won't participate in the test and evaluation program that goes straight to buying our Simcor product because they really want to get a head start in evaluating that product for their solid-state circuit breaker and circuit protection products. So it will be a mix. But yes, I will we continue to announce the very large companies that have joined the program. But in general, no, we will not announce every entered into that test and evaluation program.

Jeff Christensen

Okay, thank you. Is the arrangement with Richardson exclusive in any way and why was Richardson selected?

R. Daniel Brdar

Yes, it is not exclusive on. There was a little bit of confusion when Richardson had their other earnings calls that there are so excited about what we're doing together. I think the speaker kind of got a little carried away, but are and we had to go back to them and let them know that the individual, unfortunately misspoke.
Our relationship with them is not exclusive, and we really selected them because while they're not the biggest distributor out there and they really have unique expertise in technical sales as it relates to new technology and new products there, they don't really focus on the commodity parts that you find with some of the other really, really large distributors where it's just turning parts out at the lowest cost. They really have the technical expertise.
They actually support their customers as new technology comes to market. And I think they're just kind of a great fit for what we need. But as I mentioned in my prepared comments, we're going to be adding some others because we do realize that while they've got a great customer base. There are customers they don't reach. So we want to make sure that we've got really good channel coverage globally in terms of the opportunities that the Vitran presents for us.

Jeff Christensen

Thank you. And I just wanted to do it. We got several questions in the queue here on the webcast from the ask-a-question button. So look forward to your questions is there you can submit it into that to ask a question button.
Our next question is what is what is the product that Ideal Power's circuit breaker, what circuit breaker product that we replace with our product.

R. Daniel Brdar

Yeah, I mean, we well it's a circuit breaker that will be designed by others, companies that make industrial equipment and utility equipment companies like Siemens, Eaton ABB, what it's replacing is the traditional electromechanical breaker on. If you look at any utility infrastructure, you go to a substation there, they all use these electromechanical breakers on that while they have low conduction losses, they act very slowly on a semiconductor-based device can literally add more than 100 times faster, which means you don't have parking working process.
Fires are asking where's the contacts in the breaker. So the need to actually have faster-acting breakers as we have more and more distributed energy input into the system. And as we have more distributed loads like EV charging requires better faster-acting breakers on. And that's really the the opportunity that's presenting for us.
Solid-state circuit breakers have actually been around for a while, but the problem has been those that are IGBT based have just had to high production loss to make them a practical solution. So we'd actually function as an enabling technology for the circuit breaker replacement.

Jeff Christensen

Thank you. Can you provide any updates on any of the other companies in the test and evaluation program beyond what you mentioned.

Timothy Burns

So we're actively engaged with all, the one that's probably most notable is the other top 10 automakers in that program. And they became, I would say, particularly actively engaged after we were able to name Stellantis back in December. We continued discussions with them on a regular basis. We're talking about actually multiple different ideas right now for potential custom development program with them.
So I would say that's probably the biggest update. I mean, Dan, in his prepared remarks, went through us converting some of the companies, including a quote Forbes Global 500 power management market leader and into actually starting to see my product in place orders with us. So I think that's kind of the expectation is that as companies get through their initial valuation, they'll start to actually placed orders for relatively small quantities so that they can continue their evaluation, particularly if they're looking at the same cool for the solid-state circuit breaker application.
The actual test and evaluation program is designed around the discrete Vitran device or a single buying out this multi-dose and core module. And we released our first commercial product. So we think that's going to kind of be the evolution really test and evaluation programs will transition to ordering and obviously follow on orders and ultimately design wins are custom development agreements.

Jeff Christensen

(Event Instructions)
Our next question is, can you provide us with any other information on Tier 1 and OEMs besides Stellantis in automotive.

R. Daniel Brdar

We can't name any of them. There's there are a couple that we actually meet with on a regular basis. And now I guess it's actually starting today, are those that were in the solicitation from Stellantis. We're now engaging with a broader group of them. So the Tier 1 ultimately know that they're going to be ones providing the system. So those that are big players that you would expect to be providing.
This space are already being engaged with us to understand the technology, understand the benefits that it can bring in to understand how the automakers that we're working with are thinking about using the technology on. My hope is that, particularly as we get through this next phase with Stellantis will be able to start naming some of these these Tier 1 because if you know the automobile industry, you'll recognize their names.

Jeff Christensen

Great. Thank you. And that's all the time we have questions for and and Dan, do you have any closing remarks?

R. Daniel Brdar

I just want to thank everybody for joining our call. We made great progress on our path to commercialize our technology and our talented team is on track for a very successful 2024. We look forward to continuing commercial announcements before our next update call. So operator, you may end the call.

Operator

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