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Q1 ’17 Q&A with CEO Ron Dutt

1. What is the status of Flux’s lithium pack built for airline ground support equipment?

A: During our fiscal fourth quarter of 2016, we successfully completed a pilot of our custom-developed, 72-volt battery pack to power electric aviation ground support equipment with a leading regional airline at Los Angeles International Airport.  Feedback on our packs from both the airline and our distribution partner is very positive and Flux expects to break through with first sales to this customer in the quarter to come.  The successful development and 3-month pilot highlights the scalability of our design and engineering capabilities, as well as, our proprietary battery management technology for a broad array of motive power applications. Importantly it also moves us into a customer price point of roughly $20,000 to $25,000 per pack for several power rating alternatives, creating an excellent new leg of growth potential.

LAX is also the site of a second trial with another major airline that is progressing well.  The industry has taken note of the performance features of our lithium power solution and are eager to upgrade past legacy sources of power for ground support equipment.  Performance of our lithium packs is apparent, they only remaining hurdle to firm orders is to demonstrate cost value proposition of lithium power to the accountants who keep a firm eye on initial spending decisions.

Charlatte, the leading manufacturer of battery powered electric airport vehicles throughout Europe and the USA, is now conducting a review and trial of our GSE pack.  We believe the support of Charlatte will be a major influence in our exposure and sales growth.  

2. Can you talk about some of the large accounts that have just started the piloting process for their walkie pallet jack forklift fleets?

A: Flux has on-boarded more than a dozen large accounts over the last two years all of whom have transacted modest sales to date as a precursor to full deployment at some point in the future.  More recently, Flux has commenced the piloting process with another dozen or more large accounts that have caught wind through the industry grapevine of the performance and long term cost benefits of our lithium power solution.  I define ‘large accounts’ as an organization that maintains anywhere from 100 – 500 walkie pallet jacks in their fleet of equipment and in most cases owns or rents larger forklifts such as End Riders (a Class III cousin of walkie pallet jacks) in addition to Class I vehicles.  

The most active interest in our LiFT Packs continues to come from companies involved with food and beverage distribution, grocery stores and specialty retail operations. 

3. What is the feedback from the OEM’s on the current lineup of UL Listed LiFT Packs

A: I met with Toyota and Crown at their headquarters over the summer to give them a Flux Power business update as well as to collectively strategize on our sales pipeline.  OEM’s are obviously very much aware of the entire forklift power ecosystem and see strong demand for lithium-based alternative power solutions. These OEMs, by the way, have approved our packs for use on their lift equipment.  It just so happens that Flux believes that we have the premier lithium-based solution due in part to our advanced technology and first-mover advantage including the only UL Listed product in this industry.  Equally important is the goodwill and trusted relationships Flux has built with a variety of dealers, distributors and clients; those parties are the beneficiaries of our commitment to client service.

4. Why are Flux LiFT Packs such a good fit for the food service industry?

We’ve been very impressed with the vision and openness of the food industry to trying a new power solution for their forklifts. The importance of reliability and performance, combined with a lower total cost of ownership was quick to resonate with this audience, generating some of our earliest customers and pilots. We are grateful for this support.  Now that we have built in customer requested features and secured UL and OEM approvals, we’re ramping our shipments and our production capacity to serve the demand we have created.

Flux batteries provide an enormous opportunity to optimize food industry supply chains by enhancing productivity, providing faster charging, longer operating times and eliminating battery maintenance while also reducing fixed costs. Our “LiFT Packs” are also an environmentally friendly battery solution that frees the food industry from the maintenance, venting, safety, performance, useful life and other drawbacks of lead acid batteries. 

5.  Can you give a high level overview of your battery management system?

Our systems use lithium-ion cells that are denser in energy than traditional lead-acid batteries, which allow our batteries to hold more charge over the same weight. In addition, our BMS protects the lithium-ion batteries enabling the lithium-ion batteries to reach their full life and cycle potential and generating longer run times than lead-acid based batteries.  Longer run times equates to fewer battery changes and therefore fewer costs over the same time period. Our systems manage individual cells and their charge cycles, which generally allows for more consistent discharge capability and ease of maintenance over an unmanaged battery. Through our BMS, we have enhanced battery systems overall to provide safer, more reliable and extended life rechargeable energy storage systems for applications including motive, marine, industrial, military, stationary, and grid management markets.  The lithium chemistry in our cells, Lithium iron phosphate, is one of the safest, most cost effective, and widely accepted Lithium alternatives available.

 

 

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