Very Important To Understand These For (new investors) We supply our BiDirex PCS functionality under three product models described below.
OEM Sales:
Our OEM business encompasses sales of the core power electronics subassemblies needed to
provide the power conversion and control functionality of our BiDirex technology to a
manufacturer of integrated energy storage systems. The principal components of the sub
assemblies are the power electronics circuits and embedded firmware, which are delivered as a
subassembly, and the magnetic components. Each is typically manufactured in different
locations by us or by our contract manufacturers or suppliers and delivered separately to our
customer for integration by the customer at its site.
In these applications, we take no responsibility for integration of the BiDirex PCS into the
energy storage system, although we will typically provide engineering support services for a
fee. This model also requires a higher level of engineering capacity on the part of the customer
and continuous support from our engineering group especially for new product development.
During the 2013 and 2014 fiscal years more than 90% of total revenues were derived from OEM
sales to customers outside the consolidated entity.
BiDirex PCS Sales:
Our BiDirex PCS business encompasses sales of integrated power control and conversion
functionality in a certified enclosure which can be deployed by our customer as a discrete
component in the customer designed energy storage system. Customers for this product are more likely to be independent integrators of custom designed energy storage systems. because
of the high level of engineering required for integration of an energy storage system we do not
currently anticipate high levels of demand for this product During FY 2014 most BiDirex PCS
sales were to developers of advanced battery technologies to support development and
demonstration of their products.
AC Battery Sales:
We define an AC Battery as an integrated and certified combination of our BiDirex PCS and a
specific battery that requires only a grid connection and a dispatch signal to provide a fully
functional and durable energy storage system. Our model is to assemble, test, and deliver the
AC Battery to our customers incorporating the BiDirex PCS and the specific battery selected
and sourced by the customer. To execute on this model we develop software controls for each
AC Battery design that integrate the BiDirex PCS control software with the battery
management software controls for each battery type.
We collaborate with the battery manufacturer to fully integrate and certify the combination to
meet regulatory standards so that no further inspection is required on installation of the AC
Battery. Our model allows customers to select the best battery for their application and to
negotiate pricing for the batteries.
Our Growth Strategy
Our goal is to become the #1 provider of power control and power conversion functionality for
smart grid energy storage in power ratings from 2kW to 60kW. We measure success as a 30%
market share in each of the target markets. Our strategy to achieve this goal is to work through
nonexclusive strategic relationships with companies which have the capability in terms of
technology, market presence, and channels to move our BiDirex products in high volume.
Our goal is to position our BiDirex platform as a “universal” power control and conversion
system that will allow our customers to move easily between the different battery technologies
selecting the best combination of cost and performance for the application without changing
their basic power control strategies. We believe that our customers will be companies that
have developed or sourced their own proprietary energy management and supervisory control
software which will brand and define their position with their end customers. We believe that
these customers will also source batteries based on their individual choice of performance
criteria for the various applications which they serve.
In Germany, we deliver the BiDirex functionality under an OEM model with Sonnenbatterie
GmbH, Under this model we deliver only the BiDirex power electronics subassembly to the
customer which is responsible for final assembly and testing of the integrated product solution
sold directly to end consumers. We expect to follow this model with Sonnenbatterie GmbH in
the U.S. In the US our preferred model is to collaborate closely with the leading suppliers of
batteries to tightly integrate the power controls with the battery management controls and
enable an AC Battery which will easily interface with customer proprietary energy management