PowerBank Corporation

Hello, everyone. Thank you for standing by. Good afternoon and welcome to the Power Bank Fiscal Third Quarter 2026 Financial Results and Corporate Update Conference Call. My name is Megan Haley. At this time, all participants are in a listen-only mode. After today's presentation, there will be a question and answer session, which will feature previously received questions. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call and accessible on the investor relations portion of our website for access for 30 days. On Friday, the company issued a press release for its financial results for the fiscal third quarter ended March 31st, 2026. A copy of that press release can be found on the company's website at powerbankcorp.com under the investors tab. Joining me on today's earnings call from PowerBank's management team are Dr. Richard Liu, Chief Executive Officer, and Sam Sun, Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address PowerBank's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in PowerBank's annual information form, most recently filed annual report on Form 40-F, and subsequent periodic reports filed with the SEC, CDAR+, and PowerBank's press release that accompanies this call, particularly the cautionary statements in it. The content of this call contains time-sensitive information that is accurate only as of today, except as required by law Power Bank disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to CEO, Dr. Richard Liu.

Thank you, Megan. Good afternoon to everyone on the call. It's very happy to be here. Really appreciate everyone's attention to the company. Power Bank continues to execute on a clear strategy, scaling up development and EPC platform while steadily expanding our portfolio of long lived cash generating IPP assets. We are also actively adopting to a fast evolving regulatory and market environment in North America, particularly in the US, where policy and the tariff dynamics are influencing project economics and the timing. Operationally, during the quarter and subsequent to quarter end, we made progress across several key areas. First is the construction momentum. In March, we announced the spring mobilization of nine projects in New York State, including Jordan 1, Jordan 2, Elmira, Newmark, and Camp Smith, among others. These projects represent a combined generation capacity of 42 megawatts of solar and 21 megawatt-hour of battery energy storage. Spring mobilization marks the initial stage of construction, including site preparation, and we are pleased to have this activity underway. Second, safe harboring of ITC eligibility. Our procurement team have secured 15 late-stage distributed solar and energy storage projects in New York State, executed in December 2025, has positioned those projects to remain eligible for U.S. federal investment tax credit under the One Big Beautiful Bill Act. Nine of those projects broken ground this spring, having met the IRS physical work test ahead of the July 4, 2026 deadline. The estimated ITC value associated with the Safe Harbor project is approximately US $65 million, with an estimated portfolio construction value of approximately US $168 million. Third, new partnerships and growth initiatives. In April, we announced a letter of intent with Nodiak Corporation to leverage PowerBank's portfolio of solar and BES sites across North America for the deployment of distributed AI computer infrastructure, i.e. edge data centers. We also executed a lease agreement on the New York Cochrane Hill Road project. That's a five megawatts hybrid solar plus battery energy storage project in upper state New York, eligible for incentives under the NYSERDA New York Sun program and the Retail Storage Incentive Program. Fourth, the Ontario BESS milestone. Our SFO6 battery energy storage project in Ontario achieved a commercial operation on April 20th, 2026. This is a very significant milestone and adds a new recurring IPP revenue stream to our portfolio and a long-term contract with the Ontario IESO. For the additional two projects, NIO3 and OZ1, the Ontario ELT1 BESS contracts, the timeline remain dependent on permitting process, and we are actively managing those proceedings. Fifth, strategic partnerships and incentives. On March the 3rd, we announced an agreement with Grand Bridge Corporation, a local distribution company in Ontario to jointly develop and invest in solar energy and battery storage projects within the LDC's territory in Ontario, creating a collaborative framework for projects with nameplate capacity of two megawatts or greater. In addition, NASERDA approved incentives totaling approximately US $3.4 million across Elmira, Jordan 1, and Jordan 2 projects further strengthen the economics of our New York pipeline. So stepping back, we continue to see a large addressable opportunity set. As disclosed, our total development pipeline is approximately one gigawatt hours of solar and one gigawatt hours of battery at this moment, including 58 megawatts under construction and 164 megawatts in advanced development across solar PV and battery storage with the balance in early stage development. So with those significant areas that I will turn it over to Sam, our CFO, to review our financial results in more detail, and we'll come back with some commentaries at the end. Thank you. And Sam, if you could take it further.

Sure. Thank you, Richard, and good afternoon, everyone. Unless otherwise stated, all figures are in Canadian dollars and are presented in thousands in our filings. So I will refer to them in millions. Third quarter fiscal 2026 revenue was negative $34,000 compared to $4.7 million in the prior year quarter. The result reflects a revenue adjustment of approximately $2.5 million in connection with the contractual repurchase of certain project entities, the Grantsville and Highway 28 projects following the exercise by QCELS of the conditional sale back right subsequent to the quarter end. Management determined this represent an adjusting subsequent event as of March 31st, 2026, Excluding this adjustment, EPC services revenue was $949,000 and IPP production revenue was $938,000 in this quarter. For the nine months ended March 31st, 2026, total revenue was $22 million compared to $23.9 million in the prior year period. EPC services revenue was $14.7 million, development fee revenue was $882,000 and IPP production revenue was $6 million up from $5.8 million in the prior year, reflecting improved production levels across our operating solar facilities. The other services contributed $570,000 up from $38,000 in the prior year period. Turning to profitability, The nine-month gross profit was $7.8 million, or 35% of revenue, compared to the $6.2 million, or 26% of revenue in the prior year period. This meaningful margin expansion reflects a more favorable revenue mix and improved operating discipline. Operating expenses for the nine-month and March 31, 2026 were $28.1 million compared to $30.7 million in the prior year period. The prior year period included $7.8 million in impairment charge and did not recur this year. The current year period included $2.1 million of inventory write-offs related to the project cancellations, $933,000 accounts receivable write-offs, and $578,000 $80,000 in the contract cancellation fees. Net loss for the nine months ended March 31st, 2026 was $12.2 million or $0.31 per basic year compared to a net loss of $34.7 million or $1.1 per basic year. In the prior year period, the third quarter alone net loss was 5.5 million dollars or 12 cents per share compared to a net loss of 6.5 million dollars or 21 cents per share in the prior year quarter adjusted EBITDA a non-IFRS measure was a loss of approximately 3.8 million dollars in this quarter compared to a loss of approximately 3.6 million dollars in the prior year quarter for nine months year to date, adjusted EBITDA was a loss of approximately $1.3 million compared to a loss of $1.3 million in the prior year period too. Please refer to our MD&A for the reconciliation and additional detail. Turning to liquidity and the balance sheet, as of March 31st, 2026, we have cash of $11.3 million compared to $7.6 billion at June 30, 2025. Total current assets were $36.7 million and current liabilities were $26 million, resulting in positive working capital of $10.7 million, improved from a working capital deficit of $2 million at fiscal year end June 30, 2025. Total assets were $135 million at quarter end total liability were $106 million and total equity was $29 million. Long-term debt, including current portion remains primarily project level, non-recourse financing associated with our operating asset and the projects under construction. For cash flow perspective, for nine months and in March 31st, 2026, cash used in operating activities were $11.4 million, cash used in investing activities were $5.8 million, and cash provided by financing activities was $21.1 million, resulting in a net increase in cash of approximately $3.9 million during the period. We remain focused on disciplined capital allocation as we execute our near-term construction milestones. advanced late stage development and selectively monetize asset while pursuing growth in our IPP base. That concludes my remarks. I will turn the call back to Richard. Thank you.

Thank you, Sam. So before we opening up the call to question and answers, I'd like to make some remarks on the power banks current condition and the market. I want to illustrate three takeaways in relation to power bank. The first one is that power bank demonstrated a very strong resilience in such a volatile working environment against strong headwinds. And we continue to operate. And while many companies are in financial difficulties, are in the state of liquidating their assets. And we remained relatively flat and did not deteriorate, even marginally improved compared to the same time 12 months ago, same period. The second takeaway when you're looking at a power bank I would say that we first demonstrated that Power Bank has a very solid bench strength. It is the team that in the last 14 years have consistently delivered and continue to execute with our experienced professionals in both Canada and the US. So if you look at the numbers, Revenue same period of time was $22 million compared to $24 million marginally flat. But the gross profit was $7.8 million compared to $6.2 million. So we were able to improve our profitability. In the meantime, if you look at the operating expense, the same period of time was $20 million versus the same time last year was $30 million. So we'll also be able to, at difficult times, significantly reduce our operating expense. The net loss was $12 million compared to a net loss of $34 million last the same year time. And due to a series of management initiatives and also our adjusted EBITDA, the loss is 3.8 compared to the same year of 3.6. marginally remain the same right our liquidity certainly improved you know we have cash of 11.3 million dollars and the same time last year was 7.6 million right and from a cash flow perspective that we were able to have a net increase of cash about four million dollars right so let's demonstrate the company's very strong bench strengths to prepare this company continue to operate in a difficult headwind environment ready for the next opportunities that coming in the coming years. So the third takeaway is the great potentials that the company is building. That our traditional business in building solar farms and the battery storage projects in both Canada and the USA and remain strong. The new demand of electricity is from the data center market, specifically for us giving our network of assets, giving our experience with property owners, with local permitting authorities, with the utility interconnection distribution systems that we are well positioned to do well in the edge data center area where speed to power is the name of the game today. So as you know, we have about 100 operating sites that we have dealt with more than 50 municipalities permitting authorities, and we are in material discussions that how do we leverage our experience, our network, and our assets to further advance the business in the power supply to the data centers in the coming years. So those are the three takeaways I would like to share with everyone. So now I'd like to turn the call over to the operator so that we can begin the questions and answer session.

Thank you, Richard. So we'll just take a moment to pause and see if there are any questions from the audience. OK, so it seems there are no questions for management at this time. We are always available for any questions over email or phone. So please do feel free to reach out to us at any time. And I'll pass it back over to Dr. Liu.

Thank you so much for everyone participating. And one thing that from management, the board, that can assure our shareholders and our investors that we are very resilient and we have a very strong bench strength and we continue to execute our existing pipelines, meanwhile developing potential opportunities. So we look forward to seeing you next time at our year-end earning call. Thank you.