Legend Power Systems Inc.

Good morning, everybody. We're waiting for the few final people to pop into the conference, and we'll get started in just a few seconds. Everybody has joined the conference, so Randy, good to go.

Thank you, Mike. Welcome to Legend Power Systems' physical 2025 year-end investor call. I'm Randy Buckemer, Legend's Chief Executive Officer. We're pleased to have you join us today to discuss our corporate progress and financial results for fiscal year 2025, which were the 12 months ending September 30th, 2025. Please note that certain statements in this column may be forward-looking in nature. They include statements involving known and unknown risks, uncertainties, and other factors that could cause actual results to differ maturely from those expressed or implied in our forward-looking statements. For more information about Legends forward-looking statements and risk factors, please see our management discussion analysis which was filed on CDAR yesterday under our company profile at cdarplus.ca. I'm joined today by Paul Moffitt, our Chief Operating Officer and Acting CFO, and Mike Ciocci, our VP Sales and Marketing. Paul will provide an update on the various operational units under his leadership. And Mike will discuss the extraordinary challenges affecting sales over the last year and his appropriate plans and tools that have been developed to minimize the challenges impact on sales going forward. We've operated obviously on a tight cash environment for the last couple of years and 2025 was also a tight cash year. We continue to make the necessary expense and operational cost reduction changes to keep our momentum going. including several leadership team members deferring salaries from September to January. In addition, the team members were paid back only 75% of the salaries owed to conserve cash. The dedication and resilience shown by the Legend team during challenging times, in my opinion, has been commendable and heroic at times, and we thank our Legend team members for their ongoing support. In previous years, in system generations, purchasing decisions were made on industry standard energy saving methodologies. Previous system versions cost varying from $60,000 to $100,000, and installations were $30,000 to $100,000. Today, systems are $125,000 to $250,000 and up, and installations $100,000 to $300,000. So decisions can't be just justified simply on energy savings, but combined with non-energy savings. Without industry standard methodology to measure the non-energy savings, prospects question the validity or how impartial non-energy calculations are. The skepticism has led to deal closing delays, and Mike will discuss how we're managing the challenge and how the combination of energy and non-energy saving provides very attractive payback ROI. We've also been frustrated during the year with the US government flip-flops on programs and policy changes that have deferred significant orders. Expected commitments have been seriously delayed due to government intervention, including complete departmental shutdowns or eliminations. To be clear, we have not lost or we don't expect to lose in a U.S. government business. We've experienced delays, but expect good future order flow. And again, Mike will give more color on that. We continue to lower component costs and increase our system margins. Substantial reviews have been conducted to source new vendors or better pricing reduce our COGS. And we expect to achieve 50% margins during the next year. We managed our backlog by leveraging existing inventory to continue fulfilling commitments. We currently have a seven system backlog and expect all systems to be shipped by year end. We see more opportunity than ever before. Smart gate interest is strong. We're close on numerous large multiple year deals and infield system performance has been outstanding on the new product. Importantly, while the green investing sector has faced political challenges, Legend Power's value proposition transcends political narratives. Over the last year or so, power quality and the cost of that power are being highlighted. By delivering lower costs, increased profitability, and reduced risk, we can provide enduring value rooted in traditional business fundamentals. We see a bright Legend future, and the Legend team is absolutely committed to make Legend Power a success story. On that note, we'll share some more insight. Paul, to you, please.

Hi, and thanks, Randy. Revenue for our fourth quarter 2025 was $690,000. That was compared to $705,000 in the same quarter of fiscal 24. Revenue for the year ended September 30th, 2025 was 1.7 million. That was down from 1.9 million fiscal 24. And that was basically unit volume, a couple of units more in 24 and also deal value. With ongoing shipment of our backlog, our cash receipts are steady and our inventories levels have continued to reduce. We saw a 25% reduction year over year in inventories from 24 to 25. Gross margin for the year ended September 30th, 25 was 23% compared to 38% in fiscal 24. And there's some good assignable reasons for that. The decrease in gross margin in 25 was primarily due to an additional inventory provision. which we've completed. We do not see any more of those provisions in the near future, as well as an increase in our costs due to inflation and a decrease in average price due to product mix and what has been sold. But as Randy mentioned, we do expect to see 50% gross margins, and we have active supplier and material cost reductions in play that will help us to achieve our 50% target. Our operating expenses for the fourth quarter of 25 are at an all-time low of $650,000. That's $217,000 per month. We have ideas to lower that even further, and that's down from almost a million dollars per quarter in the same quarter of fiscal 24. In some years in the past, two or three years ago, we had costs of as much as $550,000 per month, so we've done a dramatic change a massive improvement in our monthly costs and we continue to focus on that, conserve cash and we plan to do more in that area. Overall operating costs for the year ended September 30th, 25 were 3.7 million versus four in fiscal 24. And the primary cause for the decrease was really optimization of processes and resources. We had lower headcount, salaries, consulting and system costs all decreased as a result of internal cost cutting and continuous improvement measures. In operations, we ended FY25 with 12 systems in backlog or $1.3 million. Since then, five systems have shipped and seven are remaining. that will ship over the fiscal driving further cash receipts to support operations. We continue to manage cash very tightly and we will do so throughout the year. Our monthly operating costs, as I mentioned, have reduced to 217K and we target 200 per month. And again, this was achieved through continuous improvement in all areas of the business, streamlining of processes, and elimination of any costs, obviously, that we don't need, but ones that are not specifically driving revenues within the business. We continue our focus on COGS reduction. We've recently received a prototype component that will reduce our COGS by close to 10%, potentially 12% to 15% with other actions underway. We expect to implement mid-summer of this year in support of our objectives for fiscal 26. In general, material costs have increased somewhat. However, with growing sales and ongoing supplier relationships, we have leveraged to negotiate improved pricing and terms as we grow order size and we procure more materials from our strong partners that we've made over the many years. With the stable Gen3 SmartGate platform, Engineering has focused on mainly system refinements, centered around quality and COGS improvement, as I mentioned, as well as communications and security enhancements within the product. Our factory redesign is complete, and by adding a second shift, we have burst capacity designed in and available with no additional capital requirements. Thanks, everybody, and I'll pass it over to Mike.