It uses a ignition driver(magneto). It has 2 coils (high/low) speed in the distributor/driver. The coils feed the switchbox which has a rectifier inside. The switchbox internal capacitor charges 4 time per revolution from the magnetic rotor (positive cycles only). The switchbox SCR is triggered by the negative cycles(blue wire) thus allowing capacitor to discharge into coil. This switchbox does not use any voltage from battery or keyswitch as it grounds to kill. Applying any voltage to the red terminal will kill the switchbox.
To Test:
If you have no spark remove the salmon and brown wire from blue terminal of switchbox. Make sure plug wires are removed from sparkplugs and attached to a sparktester as engine may start. If you now have spark check the wiring harness,mercury switch or tach if installed.
If still no spark remove all wire from switchbox. With meter omh between the red and white wires and you should have 410-430 ohms(4.1-4.3 on Rx100 scale).
Next test between blue and white and you should read 10.0-11.0 ohms on Rx100 scale.
Lastly take a reading between all wires and driver housing and reisistance should read infinite.
If any readings do not match there is trouble inside housing,if all is ok the switchbox has failed...