Review from Tim Hysell


Financial Performance

The company continues to perform to our aggressive growth plan.  Our intelligent transportation segment is contributing strongly to our growth with the anticipation of near term revenue contributions from the mission critical IT and motive market segments.

Below is our Q1 year over year results.  Revenue is ramping well and, notably, our backlog is showing a tremendous increase, providing a positive primary indicator of our future revenue growth potential.

Q1 Year on Year


Series B Fundraise

The Company has raised over $6 million through the sale of Series B Preferred stock at $1.50 per share.  We have closed on $4 million of the $6 million as we are trying to minimize dilution for all shareholders.  The remaining will be closed on if we determine the liquidity is needed.

Institutional Round

We are engaged with a number of institutional funding sources discussing both equity or non-dilutive debt terms.  We expect to close a financing in the $10 million to $15 million range before Labor Day.


Our US Operations team focuses on continuous improvement and there are significant results from their efforts in Q1:

  • The team completed a Lean manufacturing implementation resulting in a 10% throughput increase during Q1.
  • A cost reduction effort on our UPStealth controller work-in-process (WIP) will result in a 20% reduction exiting Q1 and the team is on track for an additional 10% reduction by the end of Q4
  • Our product reliability measures have shown an increase during the quarter and our customer service and support response time has decreased.
  • Inventory turns in Q1 reduced to <30 days.

With our unit sales ramping, we have a need to increase our total space at our Tualatin, OR facilities.  To that end, we have signed a new 3-year lease on our facilities and added an additional 6,000 sq. ft. suite, giving us a total of 17,718 sq. ft.  We will move into the new suite in late July.

China Operations

Our team in China has made significant increases in manufacturing output and developing partnerships to expand capacity.

  • The China team has increased SubC cell manufacturing output to 45,000 cells/month enabling achievement of the Q1 revenue plan and building some inventory for Q2 revenue ramps
  • They completed the first run of semi-automated, high-volume LN3 monobloc battery production process.  The batteries are being tested and qualified at our China lab
  • With this capacity in place, the team is on schedule to deliver 1,000 LN3 monoblocs per month beginning in June
  • We’ve received agreement from our manufacturing partner in China (WKF) that they will support our ramp to 1 million SubC cells/month in Q4 of 2018, and will further partner with us to deliver up to 5 million cells/month

New Product

ZincFive UPS

Our team executed an exciting launch of our ZincFive UPS targeted at mission critical IT applications.  The launch centered on the Data Center World Global 2018 conference, March 19-22nd in San Antonio, TX, and our pre-show preparation paid off with a successful first public showing.  In addition to attracting solid leads at the show, we got the attention of potential UPS OEM partners as well.  Our solution messaging of an agile UPS with performance, safety and simplicity in operation rang true with customers and was reinforced by media coverage.  We’re now engaged in follow-up activities to maintain the momentum of our launch and quote activity is ramping.


Customers and Markets

Intelligent Transportation

Our revenue growth is fueled by penetration of existing as well acquiring new customers.  We acquired 51 new customers between the end of Q1 2017 and Q1 2018 and unit shipments in Q1 2018 increased by 79% over Q1 2017.

Mission Critical IT

We’re working with customers for UPS products across multiple mission critical IT market segments including co-location and edge data center facilities providers as well as medical, academic, legal and social media IT users. An important focus of our business development work this past quarter included making positive strides toward a contractual relationship for batteries with a large, strategic and global IT company.  This contract has the potential for a significantly positive material impact on the company.


In this market, we’re working with a variety of customers and segments interested in our nickel-zinc battery solutions.  These include specialty vehicle applications such as fork and aerial scissor lifts, truck refrigeration systems and electric shuttle vehicles.  Additionally, we have significant interest from a large healthcare electric wheelchair provider who values the properties of our nickel-zinc batteries.   

Market Recognition

The company received multiple awards as well as industry analyst recognition last year from the Technology Association of Oregon, Oregon Entrepreneur’s Network, Portland Business Journal, Gartner, 451 Research, Lux Research and Frost & Sullivan.  We continued our efforts in these areas in Q1 and applied for industry awards as well as cultivated analyst relationships.  Frost & Sullivan, impressed with our technology and go-to-market strategy, has just requested that we provide an interview for their Movers & Shakers program, a venue for further promotion of the company.

In Closing

Our team executed well in Q1.  Revenue and backlog are growing and we are favorably positioned with disruptive, customer-focused products in high growth markets.  We look forward to successfully executing our growth plan for the rest of the year and I want to convey our team’s appreciation for the support provided by our board, shareholders, employees and business partners as we continue this exciting journey.