#3038 von ulgo aus dem Hauptsräd
- damit hier nichts verloren geht
01.10.04 22:50:54
here we go
---------------------------------------
THE FOLLOWING REPORT IS EXCERPTED FROM THE WALL STREET TRANSCRIPT COMPANY INTERVIEW
PETER BRAUN
iQ Power Technology Inc
----------------------------------------
Please begin with a brief historical sketch of the company and a picture of the things you are doing at the present time.
Mr. Braun: iQ Power was founded back in the mid-1990s as a pure research company built on a background from the German aerospace and defense industry. Since then our research teams have been focusing on developing the state-ofthe-art technology needed to solve a major weakness we identified in modern motor vehicles: their electrical power supply. What we created was the first intelligent battery, which we put on the market in 2001. nfortunately, its debut at the Frankfurt Auto Show coincided with and was overshadowed by the 9/11 terrorist attacks against the United States. One of the primary tasks as a pure research organization, of course, was to get the company funded. We took the company public on the NASDAQ-OTC in 1999 through our parent company iQ Power Technology Inc. that we founded a year earlier. After the IPO, we concentrated on collaborating with major organizations, such as the Massachusetts Institute of Technology, in the area of 42-volt electrical systems, which at that time was a hot topic of discussion among automotive industry circles. We earned some notable honors, including Aviation Week’s 2001 Technology Innovation Award. But since then, we have been focusing our activities more on the European market, where we have been involved in a number of major automotive projects, some of them funded by the European Union. In the first project called PEIT (Powertrain Equipped with Intelligent Technology) under the lead of Daimler-Chrysler, which concludes this month, we were charged with developing the x-by-wire technology for automotive power supplies — one of our specialties. Meanwhile we are involved in an even larger follow-on project entitled SPARC (Secure Propulsion with Advanced Redundant Control). Today we are already supplying the automotive industry with initial products. We have forged many important strategic alliances with major players over here in Europe and anticipate securing the financing needed for our own
production site this year.
Can you explain in layman’s terms what intelligent battery means?
Mr. Braun: The problem with today’s batteries is that they are not part of the overall diag-nostic system. Electronically monitored microprocessors are now capable of diagnosing every little detail in your car — except the battery. Despite modern power nets and electrical components, the battery remains a rather primitive commodity product, whose importance as a safety-critical component is too often overlooked. The automotive industry, at least here in Europe, wants to create x-by-wire vehicles that use electrical signals, instead of mechanical or hydraulic connections, to control the vehicle’s functions such as steering and braking. Just like in aerospace vehicles, the industry wants to increase active and passive safety features. The kind of onventional
battery you have in your car today is totally inadequate for use with x-by-wire vehicles, because if it fails, you lose all control over the vehicle. An intelligent battery, on the other hand, identifies and makes sure that critical functions get the energy they need for safe operation. Our intelligent-battery system not only increases the performance of standard batteries, it is also a built-in,
stand-alone, microprocessor-controlled system that “talks” to the components of your car, improving their performance as well.
You mentioned the first product or initial product.
Mr. Braun: That’s right. The first product we delivered was the intelligent battery itself called MAGiQ. Even so, the intelligent battery alone is still not enough. The complete system must be reengineered for a new functionality we call “safe energy,” which includes diagnostics and safety redundancies. Our success doesn’t depend on waiting for the future — our first products can
already be used in today’s vehicles. Based on this, we have begun developing complete architectures for power nets, including electronic control units, instrumentation devices, as well as diagnostic and software tools such as the PowerLyzer. We started shipping these products to the automotive industry on a small scale last year and expect to beef up those operations rather shortly.
How different will the initial product be from the succeeding products?
Mr. Braun: Not very. It’s all based on the same core technology, which has been developed by our team and is protected by numerous patents, as you can imagine. The heart of this model is a software tool used to simulate the battery’s behavior under various conditions. It takes years to develop a tool like this, not to mention the fact that the battery measurements themselves take a long
time and include a wide range of temperature and other tests.
How much will the intelligent battery cost in the first
year or so? How much will it cost down the road?
Mr. Braun: As always, that’s quite naturally a function of the number of units produced. Conventional batteries cost next to nothing, so you can’t really compare the two. Costs must always be viewed in relation to the benefits. So even though the units we sell to industry now are more expensive than standard batteries, they save users much more in warranty and systems costs and will certainly become much more economical in the
near future.
Would you say that the intelligent battery will make its mark with the driver?
Mr. Braun: We get requests from private customers all the time. People have heard about us and say, “I’ve got to have this product.” They’ve become so frustrated by their cars breaking down or having problems, electronic problems. Automobile club studies show that the biggest
problem in today’s cars is the battery. And the reason for this is quite simply because the basic design of the battery has not changed in the past 100 years.
It’s an amazing situation where cars today are so advanced and the battery hasn’t kept up with the rest of the car.
Mr. Braun: Exactly. There is a big gap, and we are eliminating this gap with iQ technology.
What are competitors doing and in what way are you different?
Mr. Braun: At first glance there are the big battery manufacturers that dominate the market. However, it seems like they have not given much attention to changing the batteries they sell today. In light of the extremely competitive nature of the business over the past years, their efforts have been more on streamlining and improving how batteries are produced. Despite their enormous research labs and countless electrochemical engineers, the feedback we’re getting from car makers
and major suppliers is that they believe our solutions are miles ahead. Our edge lies in the ability to look at the
electrical system as a whole and not simply at one small part of it. I think that is the major difference. Our people, working closely with the engineers from the OEMs and major suppliers, have been able to develop something that really works and is truly reliable.
What are the key elements in your strategy for the next three years?
Mr. Braun: The first step is to make sure we can deliver our products to the users. To do this we must enhance our supplier base. We’re in the middle of negotiations with important players starting in Europe, who can support us in the quantities and quality needed to satisfy those customers of ours that normally buy in large volume. Then, in order to keep proprietary control over the technology and processes both now and in the future, we intend to build a pilot manufacturing plant here in Germany. Grants from government have already been assured. The site we’ve chosen in Bavaria is located in a newly established automotive industrial park that even has a state-funded technology research center designed to attract
many more suppliers. Thirdly, we want to penetrate the market as quickly as possible. We will use licensing agreements to gain entry into those markets where we
don’t already have a footprint. As we move forward we will improve and expand our role as an innovator through research partnerships with OEMs and major suppliers. We
are convinced that this is the only sure way of maintaining continued success as a major supplier of innovative products in the future.
What would the company look like if things go well three years from now? What would be the milestones along the way for investors to look for?
Mr. Braun: The most important milestone is the pending move of our headquarters from Canada to Switzerland. Since we don’t have operating activities in North America, this move will effectively place the head atop the company’s shoulders, resulting in a leaner structure and less overhead costs. The savings generated from operating the company in Switzerland will be a big
benefit to the shareholders. The next milestone will be reached together with strategic investors. Major funding will allow us to build our production facility, which will be followed by licensing operations. Actually, licensing will be done concurrently with the establishment of joint ventures beyond the European continent. I see this as laying the foundation to make our company more attractive to strategic investors from within the automotive and related industries. Equity interests of this scale would
certainly facilitate rapid growth.
When might the company be profitable?
Mr. Braun: We won’t become really profitable until we have reached a certain level of market penetration. Getting there will require additional capital and achieving the milestones I just mentioned. I can’t tell you the exact date, but what I can tell you is that we can present a very attractive business case to our potential investors.
What problems might arise for you in the next few years?
Mr. Braun: Over the years we have mastered any number of problems and setbacks. I am convinced that the management and staff are fully prepared to successfully handle any challenge that undoubtedly will come. One of the problems we might encounter is too rapid a pace of growth and the impact it would have on change management.
How fast are you burning cash?
Mr. Braun: Historically the rate has been around $2 million per year. This is really not a big figure when you look at all the accomplishments we’ve made. Planned investments will allow us to launch a kind of new organization. Once the financing is taken care of, we can grow our team and our revenues and the figure will change.
You used the term “new organization.” Would expand on that?
Mr. Braun: As I mentioned earlier, we are planning to move the corporation’s headquarters to Switzerland. We also intend to set up a subsidiary in Switzerland that will hold all the patents and be responsible for licensing activities. An operating company in Germany would also incorporate manufacturing operations, research and development, marketing and sales. The holding company in Switzerland will also maintain equity investments in foreign companies, such as joint ventures or similar arrangements. This kind of structure brings with it
considerable tax advantages.
How many employees do you have at the present time?
Mr. Braun: We have a staff of about 30 people. Some of them are on our permanent payroll and others are hired on an interim basis.
Would you tell us about the background, the expertise and the responsibilities of several of the key people in the company, you included?
Mr. Braun: Let me start with Dr. Guenther Bauer. He is our Chief Technical Officer and has been responsible for technology from the very start. As you might guess, his responsibility is product development. Besides being a highly sought-after personality for international conferences and scientific events, he has been a lecturer
at the German Armed Forces University for 20 years. He enjoys a superb reputation and is a highly respected scientist and engineer in the German and, I would say, the worldwide automotive industry. The second person I want to mention is Dr. Herbert Weininger. He has been our Chief
Financial Officer for only a couple of months now, but is right on top of things, thanks to his years of top-management experience as a banker. His responsibilities
include the future financing of the corporation, negotiations with potential financiers and banks, finance structuring and, of course, overall cash management.
That leaves me responsible for everything that these two gentlemen don’t do. My duties are business development, key account management and strategic corporate planning, including its many organizational issues. At the moment we are looking for or have identified people for the production side of the house. We have a chief of production
who is currently not on our payroll. We want to get him on board as quickly as possiblealong with someone for the sales and marketing position. For the latter, we want to find a person who has a lot of marketing savvy and appropriate contacts in the business.
How long have you been with iQ Power?
Mr. Braun: I am one of the founders, so I have been with iQ Power from the beginning, which is now about 10 years.
What were the elements in your own background that led you to become a founder of this company?
Mr. Braun: Believe it or not, I’m a rocket
scientist. Innovation and high technology have fascinated
me from a very early age. I worked for Deutsche Aerospace, which is now EADS. When I was there it was a subsidiary of Daimler-Benz, now DaimlerChrysler, and I was exposed to any number of different technology fields. Back then I was responsible for what we called conversion technology.
The fall of the Iron Curtain resulted in drastic cuts in defense budgets. Attempts to convert many of the high-tech military programs into civilian applications failed. That was about the time I met Dr. Bauer and told myself, “Okay, this is such a fascinating field that I want to play an active part in it.” Dr. Bauer and I decided to leave Deutsche Aerospace and set up our own company to create
needed high-technology solutions for the civilian
and mass markets. Basically, I saw this as a tremendous opportunity to exchange a secure management position to
pursue the entrepreneurial spirit, which is really the
foundation of innovation. I wasn’t the kind of person
who came along and said, this is how we’ll do it. Instead, iQ Power has allowed me to grow into the position through perseverance, constant learning and personal and professional development. “Major funding will allow us to build our production facility, which will be followed by
licensing operations. Actually, licensing will be done concurrently with the establishment of joint ventures beyond the European continent. I see this as laying the foundation to make our company more attractive to
strategic investors from within the automotive and related industries.”
What about the company’s capital structure? Do you see any need at this time to try and improve it?
Mr. Braun: Until we begin operating profitably,
we intend to strengthen the shareholders’ equity part of our structure so as not to be dependent on bank loans or financing. Other than that, I see no need to make any fundamental changes in the capital structure.
Has the company been working very hard at investor relations?
Mr. Braun: Actually, there has been no IR activity in North America, which explains why most of our current shareholders are from Europe. But, we are looking into this situation. That is why I was glad to have the opportunity of talking with you today and giving our company some exposure.
What would be the three or four best reasons for the long-term investor in particular to take a very good look at iQ Power?
Mr. Braun: If you’re asking what the perfect recipe for success is, then I would say: take a unique technology, protect it with patents, add a critical market need, blend in additional products and innovations and add just the right amount of professional management. Top it all off with a low stock price and you’ve got it.
What are the chief characteristics of a successful management team in your industry?
Mr. Braun: Some would say it’s only important to be skilled, clever, work hard and even be ruthless at times. But when I look at myself and what I needed to grow and develop, the single most important trait is the ability to work with all sorts of different people and cultures. Integrity, perseverance, credibility and accountability are key factors of any successful leadership team regardless of the branch of business. The automotive industry, on the other hand, is a rather closed-shop kind of business, despite producing some 60 million cars a year. So of course it is critical to have the right connections. In the end, though, it’s the human being within the team that counts ahead of those management skills that you can learn and acquire.
Herzlichen Dank Ulgo