The research and development wing of the U.S. Department of Defense, DARPA, concentrates on maintaining technological superiority of the U.S. military by sponsoring revolutionary, high-payoff research that bridges the gap between fundamental discoveries and their military use. 

Maxwell Technologies develops, manufactures and markets energy storage and power delivery products for transportation, industrial telecommunications and other applications and microelectronic products for space and satellite applications. However, its future performance will improve mainly through strong ultracapacitor sales growth.

As a technology-driven company, Maxwell has to spend a substantial sum to maintain its technological edge over its competitors. Research and Development (R&D) spending is related primarily to product development of ultracapacitor cells, multi-cell modules and Microelectronics single board computers.

Research & Development expenses accounted for 16% of fiscal 2009 revenues. The company has regularly accessed funds through earnings dilutive share issuances. The number of outstanding shares has risen from 15.7 million at fiscal-end 2004 to 26.2 million at the end of the third quarter of 2010.

We are bullish on Maxwell's ultracapacitor driven growth story as demand is expected to rise since key end-markets appear likely to benefit from government stimulus programs as well as more stringent automotive emissions legislation.

Maxwell's geographically diversified ultracapacitor sales will benefit immensely from steady demand emanating from heavy transportation, wind, braking recuperation and automotive programs.