NeoVolta Inc.

Greetings and welcome to the Neo Volta Second Quarter 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Artis Johnson, Chief Executive Officer. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to Neovolta's second quarter fiscal 2026 earnings call. This is Neovolta's inaugural earnings conference call, and we appreciate you joining us as we review our results and discuss the strategic transformation underway at the company. I'm Artis Johnson, the chief executive officer of Neovolta, and I'm joined today by our chief financial officer and co-founder, Steve Bond. Before we begin, I'd like to remind everyone that our remarks today will include forward-looking statements within the meaning of federal securities laws. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from what we discussed today. For more information, please refer to the full Safe Harbor Statement on slide two of our presentation, as well as the risk factors described in our Form 10-K for the year ended June 30, 2025, and our Form 10-Q for the quarter ended December 31, 2025, filed with the SEC. We do not undertake any obligation to update these forward-looking statements except as required by law. For those of you following along on the webcast, our slide deck is available in the investor relations section of our website at neovolta.com. With that, please turn to slide three for a summary of our second quarter highlights. This was truly a transformational quarter for Neovolta. In Q2 fiscal 2026, we generated revenue of $4.6 million, an increase of 334% versus the same quarter last year. For the first half of fiscal 2026, revenue was $11.3 million, up 580% from $1.7 million in the first half of the prior year. Those are strong numbers, but more important than the growth itself is what's behind it. Over the past 24 months, the US energy storage market has entered a structural inflection point. Grid operators are dealing with record peak demand, accelerated electrification, and rising volatility in wholesale power markets. At the same time, utilities are retiring dispatchable generation faster than firm capacity is being replaced. As a result, battery energy storage has shifted from being a supplemental technology to a core infrastructure solution. In 2023 and 2024, Utility-scale storage installations reach record levels in the United States, and forward interconnection queues remain heavily weighted towards storage-paired projects. Commercial and industrial customers are facing demand charge volatility, resiliency requirements, and decarbonization mandates. Residential customers continue to prioritize backup power and energy independence, particularly in outage-prone regions. Against that backdrop, the addressable market for storage is not just growing, it is maturing. Customers are no longer experimenting with batteries. They're deploying them as critical infrastructure. Neovolta's transformation is directly aligned with that structural shift. With that in mind, over the past two quarters, we executed on three major milestones. We closed the acquisition of the assets of Norval Energy, which brings us the NV Wave modular battery platform, We advanced our strategic collaboration with Luminia, a key partner for our commercial industrial efforts, and we launched our U.S. battery energy storage manufacturing joint venture with POTUS Edge and Long-E to build a factory that we expect to provide two gigawatt hours of initial annual capacity and position us to serve utility scale and larger CNI customers with domestically manufactured tax-incentive qualified systems. In parallel, we completed approximately $23 million of equity financing to fund our joint venture obligations and to support working capital. Taken together, these actions are moving Neovolta from being primarily a residential storage provider to becoming an integrated energy solutions platform that serves residential, commercial and industrial, and utility scale markets. Residential remains our foundation. It provides brand strength and revenue stability. DNI represents what we often call the missing middle, a segment that is underserved and where we see attractive opportunities over the next two to three years. Utility scale, driven by our joint venture partners, is where we can deliver meaningful scale and margin over time. These are not isolated projects. They are deliberately connected steps in a broader plan to expand our total addressable market and to de-risk our business by diversifying products, customers, and revenue streams. Now, please turn to slide four. NeoVolta delivers integrated energy storage solutions that help homeowners, businesses, and utilities optimize energy use, reduce grid dependence, and build resilience against outages, peak demand, and rising costs. With our new U.S. manufacturing joint venture, we are working towards scaling from residential systems to commercial and industrial and utility-scale battery energy storage systems. This evolution is central to our strategy. Now turn to slide nine, which lays out our multi-pillar business model. Our first pillar is scalable US-based energy storage manufacturing through the new Volta Power LLC. With our 60% controlling interest in the Georgia facility, we are building an initial two gigawatt hour of capacity with the ability to expand to eight gigawatt hours in the same building over time as market demand and other key indicators support it. The expected mix is roughly 75% utility scale and 25% CNI. Beyond capacity, the platform strengthens supply chain control, supports eligibility for current tax incentives, and positions us to compete in higher margin segments. Our second pillar is strengthening and scaling our residential foundation. We are expanding our national footprint through distributors and installers, broadening channel penetration, and driving greater system sales. By expanding partnerships, increasing installer penetration, and introducing the MV Wave modular platform with significant installation savings, we are improving both top-line growth and per-system economics. Residential remains a durable and resilient market. It generates brand recognition, channel relationships, and recurring revenue. Our third pillar is growing commercial and industrial. We are entering this market by partnering with, acquiring, or building bundled engineering procurement and construction capabilities, as well as financing platforms. The CNI segment is under-penetrated. These projects are larger than residential, yet often too small or fragmented for major utility-scale EPC players. Customers in this segment face increasing demand charge volatility, resiliency requirements, electrification mandates, and ever-rising costs of electricity. Through partnerships like Luminia, we are positioning Neovolta to offer turnkey bankable solutions with further revenue streams from development, EPC, and O&M revenue. Our fourth pillar is expanding services and financing. By introducing models such as battery as a service and third-party ownership, we can lower upfront costs for customers, accelerate adoption, and build recurring revenue streams from Neovolta. These pillars support each other. Our residential presence builds our brand, which we believe will help us win CNI and utility projects. We believe those projects will create demand for our Georgia factory when completed. The domestic tax-compliant production from that factory, in turn, should make our products more competitive and support our customers' project economics. If you'll now turn to slide 10, you can see the scale of the opportunity we're addressing. We estimate that our U.S. total addressable market expands to approximately $45 billion by 2030. That's about $20 billion in utility-scale storage, $15 billion in residential storage, and $10 billion in CNI storage, plus an estimated $20 billion additional in financing and services. Our strategy is to participate across this entire value chain as an integrated energy solutions provider. With that context, let's go deeper on key strategic milestones from the quarter. Please turn to slide 11. In October, we closed the acquisition of substantially all the assets of Neubau Energy. Neubau has developed a proprietary modular battery storage platform that we are branding as NV Wave and NuClick. NuClick platform is designed around plug-and-play modules that can be stacked up to 60 kilowatt hours for residential applications. The system can be installed in under 30 minutes, which is roughly 75% faster than typical systems in the market today. That installation speed matters. It reduces labor costs for installers, increases the number of systems they can deploy in any given timeframe, and supports improved margins for Neovolta on a per-system basis. The acquisition also added important leadership talent. We appointed Amani Ibrahim as Chief Operating Officer and Thomas Inzendorfer as Chief Technology Officer, bringing additional depth in operations, product, and commercialization. Strategically, NVWave extends our product portfolio, enhances our economics, and positions us to scale more efficiently as demand grows. Now please turn to slide 12, which covers our collaboration with Luminia. Luminia is a California-based energy storage project developer and financing platform with deep expertise in structuring and executing commercial and industrial storage projects. Importantly, Luminia is not a typical participant in the distributed storage market. It operates as a platform-scale developer with procurement volumes that rival and in certain cases exceed the annual deployment levels of the broader U.S. CNI segment. To put it in perspective, Luminia has already executed contracted demand for approximately 160 megawatt hours of distributed BESS equipment with an additional 640 megawatt hours of active pipeline, representing roughly 800 megawatts of total potential demand. For context, total U.S. CNI battery storage deployments in 2025 are estimated to be in the range of 300 to 600 megawatt hours for the full year. That means Luminia's Neovolta-Alan pipeline alone represents capacity equivalent to or potentially more than double the entire annual U.S. CNI market. In December, we advanced the framework for supply collaboration for the contracted 160 megawatt hours. Based on current market pricing, that represents approximately $39 million of potential equipment revenue. More importantly, it positions Neovolta alongside a scale development platform capable of driving sustained multi-year demand rather than isolated project wins. The Luminea relationship is about far more than units and near-term revenue. It underscores the strategic importance of our supply alignment with a platform-scale developer that has the potential to become a leading participant in the distributed CNI storage market. Luminia provides Neovolta with turnkey EPC capability and an established project financing partner, enabling us to deliver fully structured bankable energy solutions rather than simply selling hardware. That meaningfully lowers our barrier to entry into the missing middle CNI segment, projects that are often too large for residential installers yet too small to attract the focus of the larger utility-scale EPC firms. Importantly, the relationship also creates forward demand visibility that can support production planning and utilization of our Georgia manufacturing facility. In combination, this positions Neovolta not just as a component supplier, but as an integrated solutions provider capable of executing its scale in the CNI market. Now turn to slide 13, where we outline the U.S. Battery Manufacturing Joint Venture. One of the most significant shifts in the U.S. storage market is the growing emphasis on domestic manufacturing, supply chain resilience, and incentive alignment with the current tax bill. Customers, developers, and financiers are increasingly prioritizing systems that qualify for advanced manufacturing production credits under the Section 45X and meet domestic content requirements tied to investment tax credits. At the same time, foreign entity of concern regulations and evolving trade policies are reshaping procurement decisions. In short, manufacturing location now directly impacts project economics. In January, we announced the formation of Nia Volta Power LLC, a joint venture with U.S. affiliates of POTUSEDGE and Longy Green Energy. The facility, a 210,600 square foot building in Pendergrass, Georgia, offers Neovolta a strategically advantaged location along the I-85 logistics corridor with access to the Port of Savannah, a skilled advanced manufacturing workforce supported by Georgia's training infrastructure, a structurally competitive cost environment, and a strong alignment with state and federal domestic manufacturing incentives, all of which enhance execution speed, margin profile, and long-term scalability for our energy storage platforms. Initial production capacity is expected to be approximately 2 gigawatt hours per year, with ability to scale to 8 gigawatt hours over time. The targeted product mix, as said, is approximately 75% utility scale systems and 25% commercial and industrial applications. The facility is being structured to align with the foreign entity of concern, also known as FEOC, compliance standards, and to qualify for the IRS Section 45X Advanced Manufacturing Production Tax Credits. In addition, our domestic assembly model is designed to support customers seeking eligibility under the IRS Section 40 investment tax credits, including potential domestic content bonus treatment where applicable. Neovolta holds a 60% ownership interest in the joint venture, consolidates its financial results, and controls three of the five board seats, providing both operational control and strategic alignment as we scale. This venture is supported by a $13 million pipe financing anchored by Infinite Grid Capital, which has deep experience in energy infrastructure. With initial output of two gigawatt hours per year and using illustrative average pricing of $200 per kilowatt hour, the facility could support approximately $400 million of annual revenue. That is not a forecast or guidance, but it does give you a sense of the scale we are building towards. If you turn to slide 14, you'll see more detail around the production timeline and product set. We are targeting equipment acquisition and installation of the first and second quarters of calendar 2026 and mass production ramping up in mid-2026. Initially, the facility will focus on prismatic cell pack assembly and DC container integration. At initial capacity, we expect to employ roughly 89 production personnel on a single shift. Our initial product lineup will include utility-scale systems up to 5-megawatt-hour units and CNI systems that are stackable 125-kilowatt, 233-kilowatt-hour, all-in-one systems. This joint venture, coupled with NV Wave platform and our Luminia partnership, is central to our transformation. We are building a vertically integrated, multi-segment business with domestic manufacturing, differentiated products, and strong partners across the value chain. If you now turn to slide 15, you'll see these pieces fit together across our strategic roadmap. Over the past 18 months, we have executed against a clearly defined strategic roadmap to evolve Neovolta from a product-focused storage manufacturer into a vertically integrated energy solutions platform. That transformation has included strengthening our leadership team, expanding national distribution relationships, introducing new modular product platforms, completing strategic acquisitions, forming scale development partnerships, and launching our Georgia Manufacturing Joint Venture. Importantly, we have delivered the majority of these milestones on or ahead of the timelines we communicated. As a result, Neovolta today is fundamentally different from where we stood a year ago. We have broadened our product portfolio. We've diversified our revenue streams across residential, CNI, and utility-scale markets. established a pathway to domestic manufacturing aligned with federal incentive frameworks, and partnered with the experienced operators who help mitigate execution risk as we scale. Before I turn it over to Steve, I want to briefly address a recent leadership transition. As disclosed in our filings, we implemented a planned change in the chief product officer role. This reflects the next phase of our operational execution rather than any shift in strategy or disruption to our roadmap. Our product architecture, development timelines, and commercialization plans remain unchanged and are progressing as expected. We have intentionally built depth across our engineering, operations, and manufacturing leadership to ensure execution continuity and to avoid dependency on any single individual. In the interim, senior leadership is directly overseeing product responsibilities while we evaluate the optimal long-term structure to support our continued expansion across residential, C&I, and utility-scale platforms. This transition does not impact customer deliveries, regulatory approvals, or the timeline of the Georgia manufacturing ramp. With that, I'll turn the call over to Steve to walk through the financial details of our capital structure. Steve?

Thanks, Artis, and good morning, everyone. I'll start with a review of our second quarter and first half financial results, then I'll discuss our capital structure. and joint venture funding position. We'll start on slide 16. For the three months ended December 31 25 revenue was 4.6 million dollars compared to 1.1 million dollars in the same period last year. That represents year-over-year growth of 334 percent and for the first six months of fiscal 2026 revenue was $11.3 million versus $1.7 million in the first half of the prior year, an increase of 580%. This growth reflects continued expansion beyond our original Southern California base into new regions and channels, including strong progress in Texas and Puerto Rico, as well as additional demands through national distributors. During the profitability, gross profit for the second quarter was approximately $800,000 or gross margin of about 17%. That compares to gross profit of roughly $0.3 million and gross margin of 30% in the second quarter of last year. For the first half of fiscal 2026, gross profit was about $2.3 million and gross margin was roughly 21% versus 25% in the prior year period. The margin compression compared to last year is driven by several factors. We chose to make strategic inventory investments to support anticipated demand and ensure product availability. We also experienced some supply chain and cost dynamics during the quarter that put temporary pressure on input costs. Those headwinds were partially offset by the reversal of a prior year inventory obsolescence reserve. in the comparable period, which makes the year-over-year comparison more challenging. Looking ahead, we expect margins to improve over time as we scale volumes, as the NVWave modular platform ramps up, and as we benefit from continued supply chain optimization and, longer term, from domestic production of the higher margin utility and CNI products at the Georgia facility. Operating expenses for the quarter were $5.2 million compared to $1.3 million in the same quarter last year. The increase is driven primarily by non-cash share-based compensation of approximately $2.1 million and by strategically focused investments in leadership, sales and marketing, and corporate infrastructure to support our growth and upcoming manufacturing ramp. It's important to emphasize that a meaningful portion of these expenses were a deliberate investment in our capacity to scale. We brought on experienced executives, expanded our commercial and operational teams. We've also invested in the systems and processes necessary to manage a more complex, multivertical platform. We believe these investments position us for long-term growth and leverage. Net loss for the quarter was $5.5 million, or $0.16 per share, compared to a net loss of $1 million, or $0.03 per share, in a year-ago quarter. For the first half of fiscal 2026, net loss was $6.8 million, or $0.20 per share. The higher loss reflects, among other items, the $2.3 million in non-cash stock comp, as well as approximately $1.1 million related to debt exchanges. with our commercial accounts receivable lender. Excluding these items, our underlying operating performance aligns with the investment phase Ardis described. From a balance sheet perspective, as of December 31, 2025, we had cash of approximately $212,000 and working capital of about $3.4 million. Today, our working capital is approximately $16 million. If you turn to slide 17, I'll now review our capital structure and joint venture funding. Since announcing the Georgia joint venture, we've completed two strategic equity financing transactions totaling roughly $23 million in gross proceeds. First, we completed a $13 million private placement anchored by Infinite Grid Capital. Second, in January, we closed a $10 million registered direct offering with Needham & Company as exclusive placement agent. which generated net proceeds of approximately $9.4 million. Our capital commitment to the joint venture is structured in three phases. Phase one was a $7 million initial contribution, which we funded in January, 2026. Phase two is an $8 million milestone payment due on April 30th, 2026. Phase three is a $10 million commitment at commissioning, structured as an asset purchase from our JV partner. The operating agreement also allows for up to $15 million of contributions through June 30th, 2027, if needed to support expanded capacity or accelerated growth. Following these financings and our phase one contribution, our capital position of approximately $16 million gives us confidence in our ability to meet the $8 million phase two obligation due at the end of April while maintaining adequate liquidity for our core operations. For phase three and any potential additional capital, we're actively evaluating project financing, equipment financing, and other strategic funding options to optimize our cost of capital and maintain flexibility. The key point is that we've made meaningful progress de-risking the funding associated with our joint venture while also supporting the working capital needs of our growing residential and CNI business. With that, I'll turn the call back over to Artis for some closing remarks before we open the line for questions.

Before we move to Q&A, I want to briefly summarize where Neovolta stands today and why we're excited about the road ahead. Please turn to slide 19. We have established a strong growth trajectory with fiscal 2025 revenue of $8.4 million, followed by the first half fiscal 2026 revenue of $11.3 million. We have a transformational manufacturing joint venture that is on track for National LAMP in mid-2026, with the potential to scale from two to eight gigawatt hours over time. We have executed accretive acquisitions and collaborations, including Neubau, our collaboration with Luminea, and our JV with POTUS Edge and Longy. Our addressable market is expanding from a residential foundation to a multivertical platform that spans residential, P&I, and utility-scale storage. as well as financing and services. Our product portfolio is expanding, too, with our flagship MV14 and 24 systems, the MV Wave modular platform, and upcoming utility and C&I offerings from the Georgia facility. The market is ready. We've built the foundation, and we believe we are positioned for scale. On behalf of our entire team, I want to thank our employees, partners, and shareholders for the continued support We're still early in this next phase of Neovolta's journey, but we believe the pieces are now in place to drive long-term value. With that, Steve and I are happy to take your questions. Operator, please open the line for Q&A.

Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment please while we poll for questions.

Thank you.

Our first question is from Sean Milligan with Needham and Company.

Hey, guys. Good morning. Thanks for taking the questions. I was just curious, with your JV partner, you know, as you move into C&I products and utility-scale products, like, the kind of bankability of those products, where you are in that process, and kind of how you see the grant playing out in 2026.

Yeah, Sean, thanks for that question. Several bankability standards are required, and we're working through that process right now, including pre-production and inspection Q&A with some companies that we're talking to. We feel very confident with that, especially with our partnerships with POTUS Edge and Longy to assist us in that bankability. We're leveraging some of their experience, some of the installations they've done, as well as their future pipeline to enable us to get to the bankability based on their timing. of their need of product. Like I said, we're expected to start production second half of this year, and that could be several hundred megawatts, both utility scale and CNI. We've got a pretty robust pipeline right now, and we expect to be entering into some definitive purchase orders in the coming weeks to align with both those product sets. whether it be CNI and working with Luminia and some of the off-takes they have and some of the off-takes that we have already generated ourselves with Neovolta Inc., as well as some of the pipeline that both POTUS Edge, Long-G already has, as well as some of the other projects we're working with, including one of our investment partners, Investment Grid Capital, excuse me, Infinite Grid Capital.

Okay, that's great. My second question was going to be about the pipeline and what you're seeing there, but If we can move on, the two gigawatt hours that you're talking about initially with the equipment you have ordered and are installing, can you go over, like, you mentioned the ability to expand to eight gigawatt hours, but is that additional shifts or, you know, more equipment? Kind of how should we think about the step changes there as you start to expand this over time?

Yeah, great question. In terms of stepwise expansion to the over eight gigawatts, The current line that we have in the facility, the facility is now being designed such that we can put two lines in. However, the one line that we're putting in, we could expand that to over four gigawatt hours just by adding more shift work, more capacity in terms of employment, and are able to be able to ramp very quickly to meet growing demand. And as we start to see that market progress and to see what our demand is going to look like over the coming months, we fully expect to be making some strategic decisions about ordering the second line to be put in. So if you think about our facility, the 210,000 square foot facility, it's designed to have two lines placed, and we're pre-placing the first line in to accommodate for the second line to be the most utilized capacity that we can to get to that over eight gigawatts. So starting off two gigawatt hours, adding more people gets us to about, you know, gets us over four gigawatt hours. And then adding the next line, which, you know, could be as soon as six to eight months from now if we needed, could be the next step from six to eight gigawatt hours there.

Great.

And then on cell supplies, you know, I saw where you're using European source cells for this, but is there any thought to using domestic cells at all in the production or in the assembly?

Well, actually, the way that we're working to be under the guidance of the current tax code, we can procure cells from China for the remaining of this calendar year. We're looking outside of that right now with non-Chinese partners, whether it's in Southeast Asia, Europe, or the U.S. for the next round starting in 2027 calendar year. For us, we're starting to have conversations with many of the actual producers in the U.S., particularly on EV applications. As you've seen in the news as of late and some of the discussions that we've been having, there's a lot of capacity for EV battery cells here, and a lot of that capacity is starting to be shipped to stationary applications. So we're having conversations across the board. We considered US cell manufacturing to be something that we were targeting for calendar year 2028, but that could actually get accelerated into next year. based on the transition for some of these plants that we're looking at. So we're talking across the board. Of course, we have Chinese partners, and then we have non-Chinese partners in Southeast Asia. Many of those have applications and battery cell manufacturing here in the U.S. So we're talking about that with them on a transition basis, but we're also starting to talk to other companies as well to take immediate sales from the U.S., immediate being in the next 12 months.

Okay, great. Thank you so much for taking the questions.

You bet, Sean. Thank you.

Our next question is from Steve Verrazani with Sidoti & Company.

Morning, Artis. Morning, Steve. We appreciate you covering so much ground, a lot accomplished in the last quarter. I just want to pin down, if I can, timing of production under the joint venture, when we could start seeing revenue, and just to clarify that that will all be consolidated on your income statement.

Yeah, our expectation is internally that we're pushing as early in the second half of this year as possible. We have an internal goal to be installed, commissioned, installed, started up, commissioned by the end of this half, this fiscal year for us, which is in June. So we expect production to be starting to go in the July-August timeframe, and on a full capacity basis, that would accomplish just under a gigawatt hour for this year. Our expectation is to hit as high of that mark as we can. So we're really shooting for as soon as the second half as we can. So we're already going to be responding to some of the pipeline that we've got now to meet those requirements and expectations to get that going and to confirm based on our ownership in the joint venture, we will be able to consolidate the full financials.

Excellent. That's helpful. And Artis, you referenced a couple of times the higher margin from utility and CNI. I know you don't want to quantify it this early, but you can talk about just how margins could look from the Georgia plant versus what you've been generating so far.

Yeah. For us, when we talk margin, we don't only talk percentage, but we do talk margin dollars too, right? So there's going to be a lot more capacity, a lot more revenue, generating a lot more margin. But, you know, our expected revenues are in the mid-20s percent at this point that we're seeing for U.S. production is our expectation. We're shooting for as high as 30, but we know that the market is going to be something that's going to dictate that in the beginning. And we also measure dynamics and costs, but that's our expectations in the mid-20s.

Okay. And then comfort level in terms of the financing, you still have the two more milestones to hit. You have raised some cash. I know you're going to have increasing working capital demands in terms of the timing and your ability to hit those two thresholds.

Yeah, we feel very confident in our ability to meet that. In fact, we're being very selective in how we try to achieve those next two milestones, whether looking at different combinations of you know, more equity debt, some other selective ways to do it is the most, you know, utilize the money in the most way that supports our shareholders. But, yeah, we feel very confident that we're going to be able to raise that capital.

Great. Thanks, Artis. Thanks, Steve. You bet, Steve. Thanks, Steve.

Thank you. There are no further questions at this time. I'd like to hand the floor back over to Artis Johnson for any closing comments.

Yeah, thanks, Operator. And I just want to say thanks again to everyone for joining us today and for your continued interest in NeoVolta. We're excited about the progress that we've made and the opportunities ahead as we execute on our strategy to become fully an integrated energy solutions provider. That's our goal. We look forward to updating you on our progress next quarter.

And have a great day. Thank you all.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.