NeoVolta Inc.

Greetings and welcome to the Neo Volta fourth quarter 2026 financial results. 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. It is now my pleasure to introduce your host, Ardes Johnson, Chief Executive Officer and Director. Thank you. You may begin.

Thank you, Operator, and good afternoon, everyone. Welcome to Neo Volta's fourth quarter and fiscal year 2026 earnings conference call. I'm Ardes Johnson, Chief Executive Officer of Neovolta, and I'm joined today by our Chief Financial Officer, Jing Liu Nealis. Before we begin, I would 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 risks and uncertainties that could cause actual results to differ materially from what we discussed today. Please refer to the safe harbor statement on slide two of our investor presentation as well as the risk factors included in our most recent annual report on Form 10-K and other filings with the SEC. We undertake no obligation to update forward-looking statements except as required by law. Before turning to the year, I want to welcome Jing to her first earnings call as Neovolta's Chief Financial Officer. Jing joined the company in May and brings more than 20 years of experience across the energy transition, manufacturing, technology, Capital Formation, and Operational Scale-Up. She joined Nia Volta, an important point in our evolution, and I'm pleased to have her with us today. Jing will review our financial results, balance sheet position, and capital allocation priorities shortly. Last week, we marked an important milestone with the official opening of our Pendergrass Georgia manufacturing facility. That event reflected the culmination of progress we have made in the building a state-of-the-art battery energy storage factory. We are now transitioning from commissioning, completing final certifications, and we'll be moving to the execution of production and ramp up over the coming months. Fiscal year 2026 was a defining year for Neovolta. We completed the strategic transformation of the company from a residential battery storage business into a multi-market energy storage platform serving residential, commercial and industrial, and utility scale markets. That transformation was built through deliberate execution. We launched Neovolta Power, our domestic best manufacturing platform in Pendergrass, Georgia. We expanded our commercial and industrial route to market, and we continued developing the NV Wave modular residential product. We established a multi-gigawatt our long-term U.S.-manufactured lithium-ion phosphate cell supply relationship with SK On. And we added key leadership and financing capabilities to support the company's next phase of growth. At the same time, the fourth quarter was difficult for the residential storage market. Revenue reflected a sharp decline in traditional installer channel demand following changes in the federal incentive environment beginning in January of 2026. This was a market-wide headwind, and it reinforced why it was strategically important for Neovolta to diversify beyond a solely residential model. We remain optimistic on the long-term growth potential for the residential market. We now launch the NV Wave with its modular architecture and sub-30-minute installation design, as well as our third-party ownership financing offering. We firmly believe this positions us to improve installer economics reduce upfront customer cost, and support a sequential recovery in residential volumes as fiscal year 2027 progresses. In fact, we have just received both the confirmation on the NVWave's FEOC compliance and domestic content certification, and have also received our first PO and expect delivery in the coming days. But the central message is that Neovolta is now much more than a residential energy storage company. We've built a broader platform positioned to participate in the growing market for domestic energy storage across residential, CNI, and utility-scale markets. Over the past 12 months, we've built the necessary pieces of the platform. We strengthened the leadership team. We developed and launched the Envy Wave product. We established a commercial and industrial route to market. We launched Neovolta Power. We announced early utility-scale demand through the non-binding letter of intent with Infinite Grid Capital. We received an independent opinion supporting the Pendergrass facility Fiat compliance position. And subsequent to fiscal year end, we announced the strategic supply and manufacturing collaboration with SKR. That is meaningful progress in a relatively short period of time. The question is now is not whether the strategic building blocks are in place, they are. The focus now is on execution. moving Pendergrass through the operational ramp, converting qualified demand into binding customer orders, and scaling the platform in a disciplined manner. Let me spend a few minutes on the factory, because it's rightly the area investors are focused on most closely. Following last week's grand opening event, the Neovolta Powers facility in Pendergrass is officially open. The 210,600 square foot facility is a purpose-built domestic battery energy storage systems manufacturing platform designed to manufacture commercial, industrial, and utility-scale best products. The facility is now moving from physical build-out to operational execution. The initial production line is advancing through commissioning and site acceptance tests, and initial production remains on track. Our immediate focus is on completing the remaining validation and quality processes. Establishing repeatable production workflows and preparing the line for customer deliveries. The facility is central to our strategy for several reasons. First, it gives Neovolta a controlled U.S.-based manufacturing platform in Georgia's battery manufacturing ecosystem with access to the I-85 logistics corridor, the Port of Savannah, and skilled regional workflows. Second, it is designed to support customers that increasingly prioritize domestic supply chains and best solutions positioned to meet applicable domestic content and FEOC-sensitive procurement requirements. And third, the facility provides a scalable base from which we can serve opportunities across CNI and utility scale markets. As we execute the production ramp, our priorities are straightforward. Qualify the production processes, meet customers' quality standards, convert the opportunities we have developed into binding orders, deliver products to customers, and ultimately revenue to Neovolta. Our collaboration with SKON is an important part of our strategy. The collaboration includes a signed five-year agreement for SKON to supply nine gigawatt hours of U.S. manufactured LFP battery cells to Neovolta Power from 2027 to 2031. It is also tied to a framework for broader collaboration under which SKON would supply an additional 9 gigawatt hours of cells and purchase energy storage packs manufactured by Neovolta Power, subject to finalization of commercial terms and order documents. Together, the signed agreement and broader framework are expected to support up to 18 gigawatt hours of combined activity between the companies. This relationship is strategically important for three reasons. First, it provides a multi-year manufactured LFP cell supply as we advance the factory in Pendergrass. Secondly, it establishes SKON as both a key supply chain partner and future customer for PACS manufactured at the facility. And third, the scale of the relationship supports our decision to accelerate our investment to build the second production line designed around pouch LFP cells. That second line could expand our Pendergrass manufacturing facility towards its target of 8 gigawatt hours of annual best production capacity in 2028. On the demand side, we have approximately 1.1 gigawatt hours of early demand visibility through a non-binding letter of intent with Infinite Grid Capital, representing approximately $200 million in potential deployments. Approximately $53 million has now been secured in a binding capacity reservation agreement. More broadly, the strategic relationships around our platform matter. Long-G, POTUS Edge, Infinite Good Capital, and SKON provide manufacturing expertise, supply chain depth, channel access, and early demand visibility. Together, this ecosystem provides important support as Neovolta moves from commissioning into production. Let me close before I turn the call over to Gene. Fiscal year 2026 was a year of meaningful transformation and progress. We built a broader platform, an 80% owned domestic best manufacturing business, an expanded product portfolio, growing commercial and utility scale channels, strategic supply and manufacturing relationships, and a leadership team built for the next phase. Fiscal year 2027 is about operational execution. The factory in Pendergrass is officially open. The production ramp remains on track. Our priorities are clear. Execute the ramp, convert commercial opportunities into binding orders, advance the SK on collaboration, and manage capital prudently as we grow. We are proud of the progress the team has made, and we remain focused on discipline execution. With that, I'll turn it over to Jean.

Thank you, Ardes, and good afternoon, everyone. I am pleased to be joining you for my first earnings call as Neil Volta's Chief Financial Officer. I'll begin with a brief review of our fiscal year 2026 financial results, then discuss our balance sheet, capital allocation priorities, and financing strategy as we advance the Pendergrass production rent. For fiscal year 2026, revenue increased 58% to $13.3 million. compared with 8.4 million in fiscal year 2025. The performance reflects continued expansion of Neo Volta beyond its historical residential base. Fourth quarter revenue was approximately 13,000 compared with 4.8 million in the prior year fourth quarter. The decline primarily reflected the sharp slowdown in residential and traditional installer channel demand following changes in the federal incentive environment earlier in calendar year 2026. While the fourth quarter result is clearly not representative of the scale of business we intend to build, it provides important context for the investments and the strategic decisions we made during fiscal year 2026. We responded to the changing residential market by advancing the NVVAVE modular residential product design and our third-party ownership financing offering while also accelerating our expansion into CNI and utility-scale energy storage markets. For fiscal year 2026, our GAAP net loss was $21.5 million, or $0.55 loss per share, compared with a net loss of $5 million were $0.15 loss per share in fiscal year 2025. Fourth quarter gap net loss was $11.7 million compared with $1.6 million in the same period prior year. Fourth quarter gap net loss increase was primarily driven by $3.9 million provision for credit losses and debt expenses and $1.1 million of residential inventory reserves. The increased loss also reflect the investment phase of the company, the build-out and the ramp preparation for the Pendergrass manufacturing facility, growth in personnel and operating capabilities associated with building a broader multi-market energy storage business. Beginning this quarter, we are introducing adjusted EBITDA as a supplemental non-gap measure to provide investors with additional visibility and many more. The fiscal year 2026 adjusted EBITDA was negative 12.8 million compared with negative 2.6 million in fiscal year 2025. Fourth quarter adjusted EBITDA was negative 8 million compared with negative .7 million in the prior year fourth quarter. We believe adjusted EBITDA is useful because It helps investors evaluate operating performance across periods by excluding items such as interest, excess, depreciation, and amortization, stock-based compensation, and certain non-recurring or non-operating items. A full reconciliation to the most directly comparable gap measure is included in today's earnings release. We ended fiscal year 2026 with cash and cash equivalents of 22.2 million and restricted cash of 3.2 million. For total cash, restricted cash and cash equivalents of 25.4 million. During fiscal year 2026, NeoVolta successfully raised nearly 50 million through equity financing. Those financing were central to funding the initial construction phase of the Pendergrass Best Manufacturing Facility and supporting the operating investments required to transition Neovolta into a multi-market energy storage company, serving residential, CNI and utility scale customers. Subsequent to year end, we further expanded our financing capabilities by entering into a 20 million senior secure term loan facility, which was funded net of original issue discount at closing. The facility also includes the potential for up to an additional 10 million subject to mutual agreement and specified conditions. This financing is important not only because it provides additional funding for working capital and general corporate purposes, but because it reflects a evolution in our capital formation strategy. Fiscal year 2026 was primarily about financing the transformation, funding the manufacturing facility, building the organization and establish the commercial and supply chain relationships required to support our growth. As we move from construction and commissioning into production execution, we expect a broader range of growth financing alternatives to become available to us. The recent senior secured term loan facility is an important example of that progression. Our current funding toolkit includes cash on hand, the senior secured term loan facility, customer prepayments, and equity financing. We intend to use these tools thoughtfully as we grow, balancing the needs of the business with an emphasize on cost of capital, shareholder dilution, financing flexibility, and execution certainty. Looking ahead, our capital allocation priorities are clear. We will support the disciplined ramp of the Pendergrass facility, including the working capital needs associated with production and customer deliveries. We will prioritize investments that help convert our CNI and utility scale opportunities into binding customer orders and revenue. We will accelerate our investment in line two, which is designed to use pouch LFP cells from SK On. We believe Neol Volta enters fiscal year 2027 with a stronger than ever balance sheet and the capital formation strategy designed to support our revenue growth. With that, I'll turn the call to the operator to open up for questions.