Q4 2026 NeoVolta Inc Earnings Call

September 23, 2026

Speaker #1: Greetings, and welcome to the NeoVolta fourth quarter 2026 financial results. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation.

Operator: Greetings, and welcome to the NeoVolta Q4 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.

Speaker #1: If anyone requires operator assistance, please press star zero (*) on your telephone keypad. It is now my pleasure to introduce your host, Artis Johnson, Chief Executive Officer and Director.

Speaker #1: Thank you. You may begin.

Speaker #2: Thank you, Operator, and good afternoon, everyone. Welcome to NeoVolta's fourth quarter and fiscal year 2026 earnings conference call. I'm Artis Johnson, Chief Executive Officer of NeoVolta, and I'm joined today by our Chief Financial Officer, Gene Nelis.

Ardes Johnson: Thank you operator, and good afternoon, everyone. Welcome to NeoVolta's Q4 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 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 discuss today. Please refer to the safe harbor statement on slide 2 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.

Speaker #2: 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 discuss today.

Speaker #2: Please refer to the Safe Harbor statement on slide 2 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.

Speaker #2: We undertake no obligation to update forward-looking statements, except as required by law. Before turning to the year, I want to welcome Gene to her first earnings call as NeoVolta's Chief Financial Officer.

Ardes Johnson: 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 NeoVolta at 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 building a state-of-the-art battery energy storage factory. We are now transitioning from commissioning, completing final certifications, and will be moving to the execution of production and ramp-up over the coming months. Fiscal year 2026 was a defining year for NeoVolta.

Speaker #2: Gene 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.

Speaker #2: She joined NeoVolta at an important point in our evolution, and I'm pleased to have her with us today. Gene will review our financial results, balance sheet position, and capital allocation priorities shortly.

Speaker #2: Last week, we marked an important milestone with the official opening of our Pentagras Georgia manufacturing facility. That event reflected the culmination of progress we have made in building a state-of-the-art battery energy storage factory.

Speaker #2: We are now transitioning from commissioning—completing final certifications—and will be moving to the execution of production and ramp-up over the coming months. Fiscal year 2026 was a defining year for NeoVolta.

Speaker #2: We completed the strategic transformation of the company from a residential battery storage business into a multi-market energy storage platform, serving residential, commercial, industrial, and utility-scale markets.

Ardes Johnson: 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 BESS manufacturing platform in Pendergrass, Georgia. We expanded our commercial and industrial route to market, and we continue developing the NV Wave modular residential product. We established a multi-gigawatt power long-term US manufactured lithium iron 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, Q4 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.

Speaker #2: That transformation was built through deliberate execution. We launched NeoVolta Power, our domestic best manufacturing platform, in Pentagras, Georgia. We expanded our commercial and industrial route to market, and we continue developing the NVWave modular residential product.

Speaker #2: We established a multi-gigawatt, long-term U.S.-manufactured lithium iron phosphate cell supply relationship with SKON, and we added key leadership and financing capabilities to support the company's next phase of growth.

Speaker #2: 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 2026.

Speaker #2: 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 about the long-term growth potential for the residential market.

Ardes Johnson: 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 NV Wave's FEOC compliance and domestic content certification and have also received our first PO and expect delivery in the coming days. The central message is that NeoVolta is now much more than a residential energy storage company.

Speaker #2: We have now launched the NVWave, featuring 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 costs, and support a sequential recovery in residential volumes as fiscal year 2027 progresses.

Speaker #2: In fact, we have just received both the confirmation on the NVWave's FIOC compliance and domestic content certification, and have also received our first PO. We expect delivery in the coming days.

Speaker #2: 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, C&I, and utility-scale markets.

Ardes Johnson: We've built a broader platform positioned to participate in the growing market for domestic energy storage across residential, C&I, 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 NV 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 FEOC compliance position, and subsequent to fiscal year-end, we announced the strategic supply and manufacturing collaboration with SK On. That is meaningful progress in a relatively short period of time. The question now is not whether the strategic building blocks are in place. They are.

Speaker #2: Over the past 12 months, we've built the necessary pieces of the platform. We strengthened the leadership team. We developed and launched the NVWave product.

Speaker #2: 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.

Speaker #2: We received an independent opinion supporting the Pentagras facility FIOC compliance position, and subsequent to fiscal year-end, we announced the strategic supply and manufacturing collaboration with SKON.

Speaker #2: That is meaningful progress in a relatively short period of time. The question now is not whether the strategic building blocks are in place.

Speaker #2: They are. The focus now is on execution—moving Pentagras through the operational ramp, converting qualified demand into binding customer orders, and scaling the platform in a disciplined manner.

Ardes Johnson: 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 Power 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 BESS products. The facility is now moving from physical build-out to operational execution. The initial production line is advancing through commissioning and site acceptance test, 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.

Speaker #2: 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 Power facility in Pentagras is officially open.

Speaker #2: 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 BESS products. The facility is now moving from physical build-out to operational execution.

Speaker #2: The initial production line is advancing through commissioning and site acceptance tests. Initial production remains on track. Our immediate focus is on completing the remaining validation and quality processes.

Speaker #2: 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.

Ardes Johnson: First, it gives NeoVolta a controlled US-based manufacturing platform in Georgia's battery manufacturing ecosystem, with access to the I-85 logistics corridor, the Port of Savannah, and skilled regional workforce. Second, it is designed to support customers that increasingly prioritize domestic supply chains and BESS solutions positioned to meet applicable domestic content and FEOC-sensitive procurement requirements. Third, the facility provides a scalable base from which we can serve opportunities across C&I 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 SK On is an important part of our strategy. The collaboration includes a signed five-year agreement for SK On to supply 9 gigawatt-hours of US-manufactured LFP battery cells to NeoVolta Power from 2027 to 2031.

Speaker #2: With access to the I-85 logistics corridor, the Port of Savannah, and a skilled regional workforce. Second, it is designed to support customers that increasingly prioritize domestic supply chains and seek the best solutions positioned to meet applicable domestic content and FIOC-sensitive procurement requirements.

Speaker #2: 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.

Speaker #2: Our collaboration with SKON is an important part of our strategy. The collaboration includes a signed five-year agreement for SKON to supply 9 gigawatt-hours of U.S.

Speaker #2: 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.

Ardes Johnson: It is also tied to a framework for broader collaboration under which SK On 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 SK On as both a key supply chain partner and future customer for packs manufactured at the facility. Third, the scale of the relationship supports our decision to accelerate our investment to build the second production line designed around pouch LFP cells.

Speaker #2: 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.

Speaker #2: This relationship is strategically important for three reasons. First, it provides a multi-year, manufactured LFP cell supply as we advance the factory in Pentagras. Secondly, it establishes SKON as both a key supply chain partner and a future customer for packs manufactured at the facility.

Speaker #2: 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.

Speaker #2: That second line could expand our Pentagras 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 of potential deployments.

Ardes Johnson: That second line could expand our Pendergrass manufacturing facility towards its target of 8 gigawatt-hours of annual BESS 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. LONGi, PotisEdge, Infinite Grid Capital, and SK On 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 Jing. Fiscal year 2026 was a year of meaningful transformation and progress.

Speaker #2: Approximately $53 million has now been secured in a binding capacity reservation agreement. More broadly, the strategic relationships around our platform matter. Longy, PotasEdge, Infinite Grid Capital, and SKON provide manufacturing expertise, supply chain depth, channel access, and early demand visibility.

Speaker #2: Together, this ecosystem provides important support as NeoVolta moves from commissioning into production. Let me close before I turn the call over to Jean. Fiscal year 2026 was a year of meaningful transformation and progress.

Speaker #2: We built a broader platform—an 80% owned, domestic, best-in-class manufacturing business—and expanded our product portfolio, growing commercial and utility-scale channels, strategic supply and manufacturing relationships, and a leadership team built for the next phase.

Ardes Johnson: We built a broader platform, an 80% owner-owned domestic BESS 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 disciplined execution. With that, I'll turn it over to Jing.

Speaker #2: Fiscal year 2027 is about operational execution. The factory in Pentagras is officially open. The production ramp remains on track. Our priorities are clear: execute the ramp, convert commercial opportunities into binding orders, advance the SKON collaboration, and manage capital prudently as we grow.

Speaker #2: We are proud of the progress the team has made, and we remain focused on disciplined execution. With that, I'll turn it over to Jean.

Speaker #1: Thank you, Artis, and good afternoon, everyone. I am pleased to be joining you for my first earnings call as NeoVolta's Chief Financial Officer. I'll begin with a brief review of our fiscal year 2026 financial results.

Jing Nealis: Thank you, Artis, and good afternoon, everyone. I am pleased to be joining you for my first earnings call as NeoVolta's Chief Financial Officer. I will 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 ramp. 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 NeoVolta beyond its historical residential base. Q4 revenue was approximately $13,000, compared with $4.8 million in the prior year Q4. 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.

Jing Nealis: Thank you, Ardes, and good afternoon, everyone. I am pleased to be joining you for my first earnings call as NeoVolta's Chief Financial Officer. I will 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 ramp. 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 NeoVolta beyond its historical residential base. Q4 revenue was approximately $13,000, compared with $4.8 million in the prior year Q4. 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.

Speaker #1: Then, discuss our balance sheet, capital allocation priorities, and financing strategy as we advance the Pentagras production ramp. For fiscal year 2026, revenue increased 58% to $13.3 million, compared with $8.4 million in fiscal year 2025.

Speaker #1: The performance reflects continued expansion of NeoVolta beyond its historical residential base. Fourth quarter revenue was approximately $13,000, compared with $4.8 million in the prior year fourth quarter.

Speaker #1: 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.

Speaker #1: 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.

Jing Nealis: While the Q4 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 NV Wave modular residential product design and our third-party ownership financing offering while also accelerating our expansion into C&I 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 or $0.15 loss per share in fiscal year 2025. Q4 GAAP net loss was $11.7 million, compared with $1.6 million in the same period prior year. Q4 GAAP net loss increase was primarily driven by $3.9 million provision for credit losses and bad debt expenses and $1.1 million of residential inventory reserves.

Speaker #1: We responded to the changing residential market by advancing the NVWave modular residential product design and our third-party ownership financing offering, while also accelerating our expansion into CNI and utility-scale energy storage markets.

Speaker #1: For fiscal year 2026, our GAAP net loss was $21.5 million, or a loss of $0.55 per share. This compares with a net loss of $5 million, or a loss of $0.15 per share in fiscal year 2025.

Speaker #1: Fourth quarter GAAP net loss was $11.7 million, compared with $1.6 million in the same period prior year. Fourth quarter GAAP net loss increase was primarily driven by a $3.9 million provision for credit losses and debt expenses, and $1.1 million of residential inventory reserves.

Speaker #1: The increased loss also reflects the investment phase of the company: the build-out and ramp preparation for the Pentagras manufacturing facility, as well as growth in personnel and operating capabilities associated with building a broader, multi-market energy storage business.

Jing Nealis: The increased loss also reflects 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-GAAP measure to provide investors with additional visibility into our underlying operating performance as our business grows. For fiscal year 2026, adjusted EBITDA was -$12.8 million, compared with -$2.6 million in fiscal year 2025. Q4 adjusted EBITDA was -$8 million, compared with -$0.7 million in the prior year Q4. We believe adjusted EBITDA is useful because it helps investors evaluate operating performance across periods by excluding items such as interest, taxes, depreciation and amortization, stock-based compensation, and certain non-recurring or non-operating items. A full reconciliation to the most directly comparable GAAP measure is included in today's earnings release.

Speaker #1: Beginning this quarter, we are introducing adjusted EBITDA as a supplemental non-GAAP measure to provide investors with additional visibility into our underlying operating performance as our business grows.

Speaker #1: For 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 $0.7 million in the prior year fourth quarter.

Speaker #1: We believe adjusted EBITDA is useful because it helps investors evaluate operating performance across periods by excluding items such as interest, taxes, depreciation and amortization, stock-based compensation, and uncertain, non-recurring or non-operating items.

Speaker #1: A full reconciliation to the most directly comparable GAAP measure is included in today's earnings release. We ended fiscal year 2026 with cash and cash equivalents of $22.2 million.

Jing Nealis: 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 BESS manufacturing facility and supporting the operating investments required to transition NeoVolta into a multi-market energy storage company serving residential, C&I, and utility scale customers. Subsequent to year-end, we further expanded our financing capabilities by entering into a $20 million senior secured term loan facility, which was funded net of our internal issue discount at closing. The facility also includes the potential for up to an additional $10 million, subject to mutual agreement and specified conditions.

Speaker #1: 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.

Speaker #1: Those financings were central to funding the initial construction phase of the Pentagras' 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.

Speaker #1: Subsequent to year-end, we further expanded our financing capabilities by entering into a $20 million senior-secured term loan facility, which was funded net of our original issue discount at closing.

Speaker #1: 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 also because it reflects an evolution in our capital formation strategy.

Jing Nealis: This financing is important, not only because it provides additional funding for working capital and general corporate purposes, but because it reflects an 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 emphasis on cost of capital, shareholder dilution, financing flexibility, and execution certainty.

Speaker #1: Fiscal year 2026 was primarily about financing the transformation, funding the manufacturing facility, building the organization, and establishing the commercial and supply chain relationships required to support our growth.

Speaker #1: 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.

Speaker #1: 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 emphasis on cost of capital, shareholder dilution, financing flexibility, and execution certainty.

Speaker #1: Looking ahead, our capital allocation priorities are clear. We will support the disciplined ramp of the Pentagras facility, including the working capital needs associated with production and customer deliveries.

Jing Nealis: 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 C&I and utility scale opportunities into binding customer orders and revenue. We will accelerate our investment in line 2, which is designed to use pouch LFP cells from SK On. We believe NeoVolta enters fiscal year 2027 with a stronger than ever balance sheet and a capital formation strategy designed to support our revenue growth. With that, I will turn the call to the operator to open up for questions.

Speaker #1: 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 2, which is designed to use pouch LFP cells from SKON.

Speaker #1: We believe NeoVolta enters fiscal year 2027 with a stronger-than-ever balance sheet and a capital formation strategy designed to support our revenue growth. With that, I'll turn the call over to the operator to open it up for questions.

Speaker #2: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad.

Operator: Thank you. We will now be conducting a question and answer session. If you would 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 yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing these star keys. 1 moment please, while we poll for questions. Our first question comes from the line of Sean Milligan with Needham. Please proceed with your question.

Speaker #2: A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up their handset before pressing the star keys.

Speaker #2: One moment, please, while we pull for questions. Our first question comes from the line of Sean Milligan with a question.

Speaker #3: Hey, Artis and Jane. Thanks for taking the questions. I guess, kind of off the bat, you filed a $200 million shelf after the close, and it looks like the stock's down on that.

Sean Milligan: Hey, Artis and Jing. Thanks for taking the questions. I guess off the bat, you filed a $200 million shelf after the close also, and it looks like the stock is down on that. I guess, could you talk through liquidity at year-end, plus the debt raise and just how much you think you need through the initial startup of the factory and just the rationale behind the shelf? You know, and willingness to maybe use equity at current prices or not, or seek alternatives to equity down here.

Sean Milligan: Hey, Ardes and Jing. Thanks for taking the questions. I guess off the bat, you filed a $200 million shelf after the close also, and it looks like the stock is down on that. I guess, could you talk through liquidity at year-end, plus the debt raise and just how much you think you need through the initial startup of the factory and just the rationale behind the shelf? You know, and willingness to maybe use equity at current prices or not, or seek alternatives to equity down here.

Speaker #3: I guess, could you talk through liquidity at year-end, plus the debt raise, and just how much you think you'll need through the initial kind of startup of the factory, and just the rationale behind the shelf?

Speaker #3: And willingness to maybe use equity at current prices—or not—and seek alternatives to equity down here?

Speaker #1: Hi, Sean. Thank you for the question. I'll answer that. We filed S-3 as an administrative filing—it is not intended to be used right away, because our current S-3 is running out of balance.

Jing Nealis: Hi, Sean. Thank you for the question. I will answer that. We filed S-3 as administrative filing. It is not intended to be used right away because our current S-3 is running out of balance. It is getting pretty low. So the new filing is for a few years to really provide that flexibility for us to use equity. But with the recent financing through Rojo, we are good for working capital for a period of time, and then we are getting customer POs in that process. I would take that as administrative filing.

Speaker #1: It's getting pretty low. So, the new filing is for a few years to really provide that flexibility for us to use equity. But with the recent financing through ROHO, we are good for working capital for a period of time, and then we're getting customer POs in that process.

Speaker #1: So, I would take that as an administrative filing.

Speaker #3: Okay, great. Thank you. And then the SKON agreements seem particularly interesting. I guess, Artis, from your perspective, what do you think the SKON agreements say about your ability to manufacture the PAX, and then also maybe more specifically, the controls layer you have?

Sean Milligan: Okay, great. Thank you. The SK On agreements seem particularly interesting. I guess, Artis, from your perspective, what do you think the SK On agreements say about your ability to manufacture the packs and then also maybe more specifically, the controls layer you have? Because for SK On to sign a partnership with someone of your size seems to speak volumes to, I think, your process. Is that attracting attention or like a halo effect from other potential customers?

Sean Milligan: Okay, great. Thank you. The SK On agreements seem particularly interesting. I guess, Ardes, from your perspective, what do you think the SK On agreements say about your ability to manufacture the packs and then also maybe more specifically, the controls layer you have? Because for SK On to sign a partnership with someone of your size seems to speak volumes to, I think, your process. Is that attracting attention or like a halo effect from other potential customers?

Speaker #3: Because for SKON to sign a partnership with someone of your size, it seems to speak volumes to, I think, your process. And then, is that attracting attention, or like a halo effect, from other potential customers?

Speaker #4: Yeah, thanks, Sean, for that question. I would say that the experience that we have on our team, in terms of taking a battery cell and turning it into a pack, is something that we can say is, in our opinion, one of the best in the world, right?

Ardes Johnson: Yeah. Thanks, Sean, for that question. I would say that the experience that we have in our team in terms of taking a battery cell and turning it into a pack is something that we can say is, in our opinion, one of the best in the world, right? It is kind of a testament to a company like SK and their size. It is not merely acquiring tools and moving from a battery cell manufacturer into a pack manufacturer and ultimately the BESS manufacturing business. They recognize that this is something that we have that capability to, and we are one of the few companies in the world that have that capability to the extent that we do have.

Speaker #4: And it's kind of a testament to a company like SK and their size. It's not merely acquiring tools and moving from a battery cell manufacturer into a pack manufacturer, and ultimately the best manufacturing business.

Speaker #4: They recognize that this is something that we have the capability to do, and we're one of the few companies in the world that have that capability to the extent that we do have.

Speaker #4: And I would say that the SK movement started over a year ago, prior to the joint venture with us and Longi, ultimately. And recognizing that this isn't just something that was spur of the moment.

Ardes Johnson: I would say that the SK movement started over a year ago, prior to the joint venture with us and LONGi ultimately, and recognizing that this is not just something that was spur of the moment. This is something we have been working on since day one of the JV, and ultimately we knew that this was going to be where it went. The fact that they are looking to us for packs is reflective of our capability and some of the IP and the trade secrets, so to speak, with the capability of the people that we have on the NeoVolta Power team. Right now we are going through a design phase with them, but ultimately we will be doing that manufacturing right here in the US in the Pendergrass facility. In terms of what it has done in the marketplace, it has definitely created a large interest in what we can do.

Speaker #4: This is something we've been working on since day one of the JV. Ultimately, we knew that this was going to be where it went.

Speaker #4: The fact that they are looking to us for PAX is reflective of our capability, and some of the IP and the trade secrets—so to speak—with the capability of the people that we have on the NeoVolta Power team.

Speaker #4: Right now, we're going through a design phase with them. But ultimately, we'll be doing that manufacturing right here in the US, at the Pentagras facility.

Speaker #4: In terms of what it's done in the marketplace, it has definitely created significant interest in what we can do. There are a lot of customers now who are reaching out to us, particularly interested once we start manufacturing those.

Ardes Johnson: There is a lot of customers now that are reaching out to us, are particularly interested in once we start manufacturing those. We are working with many people now in terms of qualifying the facility. As we had our grand opening last week, we received a lot of interest from that. The combination of the two have created a lot of opportunity now that we are working through and we are thinking strategically how not only do we launch into that, but also how we carry forward until that line is up and running in H2 of next year. But it most definitely has created a lot of buzz, so to speak. But beyond that, there is a lot of opportunity for us because, yes, we are new to the game, relatively speaking. We are a smaller company at this point in our trajectory, so to speak.

Speaker #4: We're working with many people now in terms of qualifying the facility. As we had our grand opening last week, we received a lot of interest from that.

Speaker #4: The combination of the two has created a lot of opportunity that we're working through. And we're thinking strategically about not only how we launch into that, but also how we carry forward until that line is up and running in the second half of next year.

Speaker #4: But it most definitely has created a lot of buzz, so to speak. Beyond that, there's a lot of opportunity for us because, yes, we are new to the game.

Speaker #4: Relatively speaking, we are a smaller company at this point in our trajectory, so to speak. But ultimately, we have that capability and that wherewithal, particularly not only with our PAC manufacturing, but our battery management capability that we have, that we think is very attractive to customers.

Ardes Johnson: But ultimately we have that capability and that wherewithal with our particularly not only the pack manufacturing, but our battery management capability that we have that we think is very attractive to customers. So we are leaning into that as we start to develop a lot of these opportunities, both short and long term.

Speaker #4: And so we're leaning into that as we start to develop a lot of these opportunities, both short- and long-term.

Speaker #3: Great. And then, just to kind of build on the SK announcement, I guess, what are the gating items to getting the formal purchase agreement signed for the nine gigawatt on the PAC side?

Sean Milligan: Great. Just to kind of build on the SK announcement, I guess, what are the gating items to getting the formal purchase agreement, I guess, signed for the 9 gigawatts on the pack side?

Speaker #4: Yeah.

Speaker #3: I'm assuming you'll try to have that in hand before you accelerate Line 2.

Ardes Johnson: Yeah.

Sean Milligan: I am assuming you will try to have that in hand before you accelerate line 2.

Speaker #4: Yeah, for sure. In fact, it's designed to be done here in the coming weeks. To be honest with you, from a commercial perspective, we've already kind of come to those high-level agreements now.

Ardes Johnson: Yeah, for sure. In fact, it is designed to be done here in the coming weeks to be honest with you. From a commercial perspective, we have already kind of come to those high-level agreements. Now we are really working through more of the technical portion of it and getting through all the process it is to kind of come to that final agreement. From commercial perspective in terms of timing and pricing and things of that nature, we have already come to those arrangements from that perspective. It is just a process piece of it that we need to get done from a technical side and we want to ensure that we do that in a proper form and not rush to getting it done.

Speaker #4: We're really working through more of the technical portion of it, and getting through all the processes that are needed to come to that final agreement.

Speaker #4: But from a commercial perspective, in terms of timing, pricing, and things of that nature, we've already come to those arrangements. From that perspective, it's just a process piece that we need to get done from a technical side.

Speaker #4: And we want to ensure that we do that in a proper form and not rush to getting it done. But in times of the essence, so to speak, as they say in legal terms, but relatively speaking to where we look at it, we think that we'll have this done in the next coming weeks in six to eight weeks.

Ardes Johnson: Time is of the essence, so to speak, as they say in legal terms, but relatively speaking to where we look at it, we think that we will have this done in the next coming weeks, in 6 to 8 weeks.

Speaker #3: Great, thank you. I'll turn it over and then get back in the queue. Thanks.

Sean Milligan: Great. Thank you. I will turn it over and then get back in the queue. Thanks.

Speaker #5: Thank you. Our next question comes from the line of Rob Brown with Lake Street Capital Markets. Please proceed with your question.

Operator: Thank you. Our next question comes from the line of Rob Brown with Lake Street Capital Markets. Please proceed with your question.

Speaker #6: Hi, this is Jing. First question is on the sales pipeline. I think you talked a little bit about it. Could you kind of characterize the sales pipeline at this point and the next steps in getting that converted to POs, and what the dependencies are?

Rob Brown: Hi, Artis and Jing. First question is on the sales pipeline. You talked a little bit about it, but you characterize the sales pipeline at this point and the next steps in getting that converted to POs and what the dependencies are there. Thank you.

Rob Brown: Hi, Ardes and Jing. First question is on the sales pipeline. You talked a little bit about it, but you characterize the sales pipeline at this point and the next steps in getting that converted to POs and what the dependencies are there. Thank you.

Speaker #6: Thank you.

Speaker #4: Yeah, Rob, thank you for the question. We have a very robust pipeline, and we are starting to move those things into conversion now. As we stated—it might not have been very clear—but as we stated with the Infinite Grid Capital LOI that we had, we're already beginning to execute on that.

Ardes Johnson: Yeah. Rob, thank you for the question. We have a very robust pipeline, and we are starting to move those things into conversion now. It might not have been very clear, but as we stated with the Infinite Grid Capital LOI that we had, we are already beginning to execute on that. We have come to a high-level commitment agreement, a reservation, so to speak, on the first 300 megawatt hours on a project that we are working with them, to deliver for edge data center applications. That will be up in Canada area, but that will be coming out of the US factory as needed. As we start to produce, that will be in 2027. So that is the high level starting to convert that. It would become purchase orders over time as we start to do that, but it is a reservation agreement that they placed with us, with financial commitment tied to that.

Speaker #4: We've come to a high-level commitment agreement—a reservation, so to speak—on the first 300 megawatt-hours on a project that we're working with them to deliver for edge data center applications.

Speaker #4: That will be up in the Canada area. But that'll be coming out of the US factory as needed. And as we start to produce, that'll be in 2027.

Speaker #4: So that's the high-level, starting to convert that. It would become purchase orders over time as we start to do that, but it's a reservation agreement that they've placed with us, with financial commitment tied to that.

Ardes Johnson: It would become purchase orders over time as we start to do that, but it is a reservation agreement that they placed with us, with financial commitment tied to that.

Speaker #4: So we're starting to see that execution now. For us, it's really coming down to the fact that we've got all the compliance required in order to move forward, and now we're starting to go through what I'd call the qualification QA/QC process, which could take a few weeks, maybe a month or two.

Ardes Johnson: We are starting to see that execution now. For us, it is really coming down to, we have got all the compliance required in order to move forward, and now we are starting to go through what I would call the qualification QA QC process, which could take a few weeks, maybe a month or two. We had a lot of potential customers that were at the factory last week. They were able to put their hands, so to speak, on the tools and see them and see that the factory is real. Now we are starting to move through that process, and things are starting to accelerate. So we feel very comfortable in terms of our projections coming into this year and really being able to fill the factory as we start that ramp-up process over the coming months into the middle of next calendar year.

Speaker #4: We had a lot of potential customers that were at the factory last week. They were able to put their hands, so to speak, on the tools and see them.

Speaker #4: And see that the factory is real. Now we're starting to move to that process, and things are starting to accelerate. So we feel very comfortable in terms of our projections coming into this year.

Speaker #4: And really being able to feel the factory as we start that ramp-up process over the coming months, and into the middle of next calendar year.

Speaker #4: But definitely, we knew that we had a pipeline. We knew we had a lot of interest, but now it's starting to become real. And we expect to start receiving orders between now and the end of this calendar year, so to speak.

Ardes Johnson: But definitely, we knew that we had a pipeline. We knew we had a lot of interest, but now it is starting to become real. We expect to start receiving orders between now and the end of this year, calendar year, so to speak, as we start to continue to move forward in ramping up. We are even starting to have long-term conversations with those in terms of capacity going into 2027, 2028, and beyond, recognizing particularly when we start to launch the pouch cells being the domestic content capability they provide, how they can get in line to take longer, larger opportunities with us on more of a master supply agreement perspective. So we are starting to get orders now. We have set up. We are going to build our first 10 units.

Speaker #4: As we start to continue to move forward and ramp up, we're even starting to initiate long-term conversations with those in terms of capacity going into 2027, 2028, and beyond. This is particularly important when we start to launch the pouch cells, given the domestic content capability they provide. It allows them to get in line to take on longer, larger opportunities with us from more of a master supply agreement perspective.

Speaker #4: So, we are starting to get orders now. We've set up—we're going to build our first 10 units. We've already procured all the materials to do that.

Ardes Johnson: We've already procured all the materials to do that, and we feel like we've already got a home for those. We'll be turning those into purchase orders and start delivering that product this year and then moving into next year on the ramp-up phase. We really think that we're going to be stepping into some pretty large opportunities and more to come on that. But we feel very confident about where we're at. In fact, I feel better every week as the factory becomes real, as customers start to come to the factory, as we start to move down this pathway of becoming a producer of the large-scale BESS. The C&I side as well has got a lot of pickup, a lot of opportunity there as we start to deliver that product in Q1 of next year. We think that there's a real robust pipeline on that side as well.

Speaker #4: And we feel like we've already got a home for those. We'll be turning those into purchase orders and start delivering that product this year.

Speaker #4: And then, moving into next year on the ramp-up phase, we really think that we're going to be stepping into some pretty large opportunities—and more to come on that.

Speaker #4: But we feel very confident about where we're at. In fact, I feel better every week as the factory becomes real, as customers start to come to the factory, as we start to move down this pathway of becoming a producer of the large-scale best. The CNI side as well, it's got a lot of pickup, a lot of opportunity there.

Speaker #4: As we start to deliver that product in Q1 of next year, we think that there's a real, robust pipeline on that side as well.

Speaker #4: So, definitely going to be looking for us to start converting things into POs and making those announcements, and start delivering product very soon.

Ardes Johnson: Definitely going to be looking for us to start converting things into POs and making those announcements and start delivering product very soon.

Speaker #6: Okay, great. Thank you. And then, on the decision to accelerate the second line, can you give us a sense of when you would start ordering equipment there and installing a line?

Rob Brown: Okay. Thank you. And then on the decision to accelerate the second line, could you give a sense of when you would start ordering equipment there and installing the line and I guess how that line would ramp to meet, I think you said the 2028 deliveries?

Speaker #6: And I guess how that line would ramp to be—I think you said the 2028 kind of deliveries.

Speaker #4: Yeah, so we look at it like this. We're still working through some final designs and that portion of the process, but that will start moving very rapidly.

Ardes Johnson: Yeah. We look at it like this. We're still working through some final designs and the design portion of the process, but that will start moving very rapidly. It's not something that takes a few weeks. It takes months to get everything done, get it over here and get it delivered, get it installed, get it started up. But, for us, we look to be moving into that at the beginning of next fiscal year for us. But then to the middle of next year, of calendar year, is when we feel like we'll start producing off of that line. And we'll have both lines producing at the pack level, supporting that on the back end with the final BESS piece that we already have, and then ultimately building both of those full lines out.

Speaker #4: It is not a it's not something that takes a few weeks. It's definitely a few it takes months to get everything done, get it over here and get it delivered, get it installed, get it started up.

Speaker #4: But for us, we look to be moving into that at the beginning of next fiscal year for us. But then to the middle of next year, is when of calendar year is when we feel like we'll start producing off of that line.

Speaker #4: And we'll have both lines producing at the pack level, supporting that on the back end with the final best piece that we already have.

Speaker #4: Then, ultimately, building out both of those full lines. But for those who were in our factory last week, at the very beginning of the process, that's the pack design and the pack line.

Ardes Johnson: For those that were in our factory last week at the very beginning of the process, that is the pack design and the pack line. We will ultimately put that second pack line in that will support the pouch cells, so we will be able to deliver both pouch and prismatic BESS and delivering that into the phase of the BESS line itself. Then we will ultimately build that out as needed as we continue to ramp up. Expect to really have that in the H2 of next calendar year.

Speaker #4: We'll ultimately put that second pack line in that will support the pouch cells, so we'll be able to deliver both pouch and prismatic. Best in delivering that into the phase of the best line itself.

Speaker #4: And then we will ultimately build that out as needed as we continue to ramp up. But expect to really have that in the second half of next calendar year.

Speaker #6: Okay, thank you. I'll turn it over. Congratulations on all the progress.

Rob Brown: Okay. Thank you. I will turn it over. Congratulations on all the progress.

Speaker #5: Thank you. Our next question comes from the line of Ted Jackson with Northland Securities. Please proceed with your question.

Operator: Thank you. Our next question comes from the line of Ted O'Neill with Northland Securities. Please proceed with your question.

Operator: Thank you. Our next question comes from the line of Ted Jackson with Northland Securities. Please proceed with your question.

Speaker #7: Thanks very much. Just a little clarification, just to make sure I understood it. So, you expect to actually have the second line kind of up and running in the second half of calendar '27?

Ted O'Neill: Thanks very much. Art, just a little clarification just to make sure I understood it. So you expect to actually have the second line up and running in the H2 of calendar 2027? Would it be fair for us then to be adjusting our models towards that end, that you would have the first line up and then the second line, and then will you be at that point running two shifts on the first line and then starting up the second line? Or is there some kind of, like you were just saying, is there some kind of shift where it might be one production line, instead of saying running a shift, then another running a shift? Just maybe a little more clarity around that. That would be my first question.

Ted Jackson: Thanks very much. Art, just a little clarification just to make sure I understood it. So you expect to actually have the second line up and running in the H2 of calendar 2027? Would it be fair for us then to be adjusting our models towards that end, that you would have the first line up and then the second line, and then will you be at that point running two shifts on the first line and then starting up the second line? Or is there some kind of, like you were just saying, is there some kind of shift where it might be one production line, instead of saying running a shift, then another running a shift? Just maybe a little more clarity around that. That would be my first question.

Speaker #7: And would it be fair for us then to be adjusting our models towards that end; that you would have the first line up, and then the second line? And then, will you be at that point running two shifts on the first line and then starting up the second line?

Speaker #7: Or is there some kind of—you're just saying, or will there be—is there some kind of shift where it might be one production line? You see what I'm saying?

Speaker #7: Running a shift, and another running a shift -- just maybe a little more clarity around that. That'd be my first question.

Speaker #4: Yeah. In the beginning, I wouldn't necessarily characterize it as a second line, and changing the final best numbers in particular. We are working through an agreement arrangement on the pack manufacturing, which would bring revenue with SK toward the second half of next year.

Ardes Johnson: Yeah. In the beginning, I wouldn't necessarily characterize it as a second line and changing the final BESS numbers in particular. We do and are working through an agreement arrangement on the pack manufacturing, which would bring revenue with SK On towards the second half of next year. That's still in discussion, depending on the demand that's coming to us on the final BESS. But think of it more as just the front end where we could produce, whether it's a pack that's made with Prismatic or a pack that's made with the pouch cells. Going into the final BESS solution, we expected to maintain the pace of the final BESS that's coming out. I wouldn't necessarily say that we are necessarily ramping that up. We can, as needed.

Speaker #4: That's still in discussion, depending on the demand that's coming to us on the final BES. But think of it more as just the front end, where we can produce whether it's a pack that's made with prismatic, or a pack that's made with the pouch cells.

Speaker #4: Going into the final best solution, we expect to maintain the pace of the final best that's coming out. So, I wouldn't necessarily say that we are ramping that up.

Speaker #4: We can, as needed and somewhat, when we talk about the ramp-up of our plant going from two to four to six to eight, typically we've been articulating it such that we would be two shifts getting to four, second line getting to six, and then two shifts there getting to eight.

Ardes Johnson: And somewhat, when we talk about the ramp-up of our plant going from 2 to 4 to 6 to 8, typically, we've been articulating it such that we would be 2, then two shifts getting to 4, second line getting to 6, and then two shifts there getting to 8. But really think of it more of we're going to have flexibility on the front end, but not necessarily needing to produce final BESS product, doubling that up. I don't think that from the perspective of how you've looked at it, Ted, and how you've articulated it, would necessarily change. There could be an adjustment as we move forward on the pack delivery to SK. But in terms of the BESS products that we'll be delivering, the containerized 5 megawatt hour DC blocks that we'll be delivering off the line.

Speaker #4: But really, think of it more as we're going to have flexibility on the front end, but not necessarily need to produce a final, best product, doubling that up.

Speaker #4: So, I don't think that, from the perspective of how you've looked at it, Ted, and how you've articulated it, that would necessarily change. There could be an adjustment as we move forward on the pack delivery to SK.

Speaker #4: But in terms of the best products that will be delivering the containerized 5 megawatt-hour DC blocks that will be delivering off the line, right now we're kind of looking at it as going to be the same as needed.

Ardes Johnson: Right now, we're kind of looking at it as going to be the same as needed. And like I said, if demand increases, we'll be able to move up rapidly. So we may be doing one to two shifts at the BESS on the back end to start and then two pack lines coming in. So that's how I would look at it. It's more flexibility in the beginning with a quicker ramp as needed if we need to reach more demand in the future. But not at this time. This is more of giving us flexibility on the front end with the SK solution and/or the Prismatic solution. And there will be an additional additive potential portion coming into the end of calendar year 2027, but moving into 2028 on the pack delivery to SK.

Speaker #4: And like I said, if demand increases, we'll be able to move up rapidly. So we may be doing one to two shifts, at best, on the backend to start, and then two pack lines coming in.

Speaker #4: So that's how I would look at it: more flexibility in the beginning, with a quicker ramp as needed if we need to reach more demand in the future.

Speaker #4: But not at this time. This is more about giving us flexibility on the front end with the SK solution and/or the prismatic solution, and there will be an additional additive potential portion coming into the end of calendar year 2027, but moving into 2028 on the pack delivery to SK.

Speaker #7: Okay, that makes sense. Thank you. My next question is just asking for an update with regards to the commercial product line coming out of Pentagraph.

Ted O'Neill: Okay. That makes sense. Thank you. My next question is just asking for an update with regards to the commercial product line coming out of Pendergrass. I know the expectation is initially that the utility products is kind of tried and true and tested and in the market already.

Ted Jackson: Okay. That makes sense. Thank you. My next question is just asking for an update with regards to the commercial product line coming out of Pendergrass. I know the expectation is initially that the utility products is kind of tried and true and tested and in the market already.

Speaker #7: I know the expectation is initially that the utility products are kind of tried and true, tested, and already in the market. But the commercial product will come in behind it.

Ardes Johnson: Yeah.

Ted O'Neill: But the commercial product will come in behind it. What is the timeline for that? Because you said you are looking at it.

Ted Jackson: But the commercial product will come in behind it. What is the timeline for that? Because you said you are looking at it.

Speaker #7: What's the timeline for that?

Speaker #4: Yeah, yeah. We're looking towards the second quarter of next calendar year, so kind of getting into our final quarter of next calendar year, we had a product and design.

Ardes Johnson: Yeah, we are looking towards Q2 of next calendar year, so kind of getting into our final quarter of next calendar year. We had a product and a design. We have updated that design slightly. We have a current solution that we can sell that is based on a 233 kilowatt hour solution. We are moving up to a 313 kilowatt hour solution, a little bit bigger from a 125 to a 150 kilowatt PCS. What is taking a little bit of time there, obviously, is transitioning that product here to the US with more domestic content capability in it, from the PCS design and everything from that capability, moving it here, qualifying vendors, finalizing that design. We are going through first beta production of that right now, and then it will be more about certification starting in, say, November.

Speaker #4: We've updated that design slightly. We have a current solution that we can sell, which is based on a 233-kilowatt-hour solution. We're moving up to a 313-kilowatt-hour solution.

Speaker #4: A little bit bigger, from a 125 to a 150-kilowatt PCS. And what's taking a little bit of time there, obviously, is transitioning that product here to the US with more domestic content capability in it.

Speaker #4: From the PCS design and everything from that capability, moving it here, qualifying vendors, finalizing that design—we're going through the first beta production of that right now. Then it'll be more about certification, starting in, say, November.

Ardes Johnson: November, and we know that that could take us two to three months of getting it done. So that is why we are kind of looking at Q2. Obviously, we have internal expectations where we try to pull things up as soon as possible, but right now we are looking at it more towards Q2 of next calendar year that we will be delivering that product. But that is not stopping us now to start to sell that and prepare people, educate them on the solution. We know that the C&I market, those products and those solutions sometimes can take six months or so or plus. So we are already starting to market that. You will see it at the trade shows in November that we attend. Customers are already aware of it. Our sales teams are already out trying to sell it.

Speaker #4: And we know that that could take us two to three months to get it done. So that's why we're kind of looking at the second quarter.

Speaker #4: Obviously, we have internal expectations where we try to pull things up as soon as possible. But right now, we're looking at it more towards the second quarter of next calendar year.

Speaker #4: That we'll be delivering that product. But that's not stopping us now from starting to sell it and prepare people, educate them on the solution. We know that in the CNI market, those products and those solutions sometimes can take six months or so, or more.

Speaker #4: So we're already starting to market that. You'll see it at the trade shows in November that we attend, and customers are already aware of it.

Speaker #4: Our sales teams are already out trying to sell it. But we expect first deliveries February, March, April time next year.

Ardes Johnson: We expect first deliveries February, March, April time next year.

Speaker #7: And then, how important of a channel is Lumina for that product? I mean, is that what's really going to allow you to leverage that relationship?

Ted O'Neill: And then how important of a channel is Luminia for that product? I mean, is that what is really going to allow you to leverage that relationship? Or is there-

Ted Jackson: And then how important of a channel is Luminia for that product? I mean, is that what is really going to allow you to leverage that relationship? Or is there-

Speaker #7: Or are there areas in your quiver?

Ardes Johnson: Yeah

Ted O'Neill: arrows in your quiver? Okay.

Ted Jackson: arrows in your quiver? Okay.

Speaker #4: Yeah, yeah, yeah. No, it's a good question. So Luminia is definitely a very strategic partner of ours. I know we've talked about the fact that we currently have a non-binding LOI to look at some M&A activity with them.

Ardes Johnson: Yeah. No, it is a good question. Luminia is definitely a very strategic partner of ours. I know we have talked, that we put out there that we currently have a non-binding LOI to look at some M&A activity with them. But they bring a portfolio and a pipeline of opportunities with them already that they are continually developing. They are already starting to develop them based on our product portfolio. So they are going to be a very strong partner for us. They have also supported us on the TPO, the third party ownership platform that we have developed, not only for the C&I that we will be using for our product, but also on the residential side. And we kind of mentioned that early in the call about that we have launched that TPO platform, and so that allows us to push product through.

Speaker #4: But they bring a portfolio and a pipeline of opportunities with them already, that they're continually developing. They're already starting to develop them based on our product portfolio.

Speaker #4: So they're going to be a very strong partner for us. They've also supported us on the TPO—the third-party ownership platform that we've developed.

Speaker #4: Not only for the CNI that we will be using for our product, but also on the residential side. And we kind of mentioned that early in the call, about the fact that we've launched that TPO platform.

Speaker #4: And so, that allows us to push product through. But we are getting a huge amount of demand outside of them. Think about them as a development arm of NeoVolta, right?

Ardes Johnson: But we are getting a huge amount of demand outside of them. Think about them as a development arm of NeoVolta, right? So they are out there developing a portion of that opportunity and that business, and they will be bringing a lot of pull through in that C&I, and we are already building out that pipeline. There are several dozens and dozens of megawatts of both solar plus storage and storage-only opportunities that they are focused on and working on, all behind-the-meter opportunities they are working on programmatically, mostly in the state of California, but other places. But our sales team, just naturally out there in that channel portion of the business, sees a lot of opportunity and demand. Many of these channel installers and developers both do residential and C&I.

Speaker #4: So they're out there developing a portion of that opportunity in that business, and they will be bringing a lot of pull-through in that CNI.

Speaker #4: And we're already building out that pipeline. There are several dozens and dozens of megawatts of both solar-plus-storage and storage-only opportunities that they're focused on and working on, all behind-the-meter opportunities they're working on programmatically, mostly in the state of California, but also in other places.

Speaker #4: But our sales team, just naturally out there in that channel portion of the business, sees a lot of opportunity and demand. Many of these channel installers and developers both do residential and C&I.

Speaker #4: When I think of Luminia, I think of it more programmatically: several units, several opportunities going over time, working at the utility level, developing programs with them to help them deploy storage under the grid to support the utilities.

Ardes Johnson: When I think of Luminia, I think it more programmatically, several units, several opportunities going over time, working at the utility level, developing programs with them to help them to deploy storage onto the grid to support the utilities. But also we are seeing a lot of that in solar plus, as well as storage-only opportunities all across the US right now. We feel that there is a demand and a huge demand for a FEOC-compliant domestic content created product, and we feel that we will be one of the few that actually have that product available for customers going into next year.

Speaker #4: But also, we're seeing a lot of that in solar-plus as well as storage-only opportunities all across the US right now. We feel that there's a demand and a huge demand for a FET-compliant, domestic content-created product.

Speaker #4: And we feel that we'll be one of the few that actually have that product available for customers going into next year.

Speaker #7: Great, thanks for all the color. To battle on.

Ted O'Neill: Great. Thanks for all the color, Tip Adelaine.

Ted Jackson: Great. Thanks for all the color, it's about a lot.

Speaker #6: Thank you. And as a reminder, if anyone has any questions, you may press star one on your telephone keypad to join the question-and-answer queue.

Operator: Thank you. As a reminder, if anyone has any questions, you may press star one on your telephone keypad to join the question and answer queue. Our next question comes from the line of Steve Ferazani with Sidoti & Company. Please proceed with your question.

Speaker #6: Our next question comes from the line of Steve Ferrazzani with Sudodi and Company. Please proceed with your question.

Speaker #4: Good evening, Artist Jing. I appreciate all the color on the call. I know you had an awful lot to cover. Congratulations on securing the term loan.

Steve Ferazani: Evening, Ardes, Jing. Appreciate all the color on the call. I know you had an awful lot to cover. Congratulations on securing the term loan. I am trying to figure out, in terms of how you are thinking about cash burn rate ahead of purchase orders, how you are thinking about being able to secure prepayments, just what the path is from A to B in managing costs ahead of revenue and how you get there.

Speaker #4: I'm trying to figure out, in terms of how you're thinking about cash burn rate ahead of purchase orders, how you're thinking about being able to secure prepayments.

Speaker #4: Just what the path is from A to B in managing costs ahead of revenue, and how you get there.

Speaker #2: I see. Yeah, thank you for the question. I'll cover this. So, the way we think about our capital formation strategy and how to fund the significant growth that we're looking to deliver in the coming quarters and years, the way we're kind of thinking about it is a term loan would give us the time to hit a few major milestones that Artis addressed during the call, including signing the SK On PAC deal and turning pipeline to initial POs, and so on and so forth.

Jing Nealis: Hi, Steve. Yeah, thank you for the question. I will cover this. The way we think about our capital formation strategy and how to fund the significant growth that we are looking to deliver in the coming quarters and years, the way we are thinking about it is the term loan would give us the time to hit a few major milestones that Ardes addressed during the call, including signing the SK On pack deal and turning pipeline to initial POs and so on and so forth. We are working on potential ABL type of facility to fund working capital as we get

Speaker #2: We are working on a potential ABL-type facility to fund working capital, as we get customer POs and prepayments, and turn them into AR and inventory. That would allow us to have some sort of asset-based working capital revolver.

Ardes Johnson: Yeah

Jing Nealis: customer POs and prepayment and turning to AR and inventory, that would allow us to have some sort of asset-based working capital revolver. That is another channel that we are actively working on. There is always the customer prepayment for sure. The IGC reservation agreement that we signed is a good example that we are seeing customers want to lock in our capacity, especially with the SK On deal domestic content product going into 2028 and forward. We are looking to get capacity reservation fees also. So there are different channels to get paid in front from the customer. However, we still need to fund working capital to procure our materials, and then, of course, equity is a way to fund it, and we will evaluate based on cost of capital and certainty and the demand to make sure we do it in a very thoughtful way.

Speaker #2: So that's another channel that we are actively working on. And there is always the customer prepayment for sure. And then we are the IGC reservation agreement that we sign is a good example that we're seeing customers want to lock in our capacity, especially with the SK on deal domestic content product going into 2028 and forward.

Speaker #2: We are looking to get reservation and capacity reservation fees as well, so there are different channels to get paid up front from the customer. However, we still need to fund working capital to procure materials, and then, of course, equity is a way to fund it. We'll evaluate based on cost of capital and certainty and the demand, to make sure we do it in a very thoughtful way.

Speaker #4: Could financing have any impact on trying to establish the second line? I know you've already proven you can do this at very low cost, and you showed it on the first line.

Steve Ferazani: Could that have any impact, financing have any impact on trying to establish the second line? I know you have already proven you can do this at very low cost, and you have shown it on the first line, but how does the financing side affect second line?

Speaker #4: But how does the financing side affect second line?

Jing Nealis: The first line, the CapEx cost for the line itself is around $15 million. The total CapEx

Speaker #2: The second line was off the first line. The CapEx cost for the line itself is around $15 million, right? The total CapEx for building the facility is $20 million.

Steve Ferazani: Yeah

Jing Nealis: for building the facility.

Steve Ferazani: Amazing

Jing Nealis: is $20 million.

Speaker #2: The line itself is $15 for the equipment. So, the second line we're expecting somewhere below that number. And then, as Artist mentioned a little bit, we are taking a phased approach that we really just need to have the pipeline.

Steve Ferazani: Yeah.

Jing Nealis: The line itself is 15 for the equipment. The second line, we are expecting somewhere below that number.

Steve Ferazani: Okay.

Jing Nealis: Then as Ardes mentioned a little bit, we are taking a phased approach that we really just need to have the pack line installed. So there will be some CapEx to really accelerate. But to make it clear, the CapEx investment for line 2 has always been in our plan.

Speaker #2: And so, there will be some CapEx to really accelerate, but to make it clear, the CapEx investment for line two has always been in our plan.

Steve Ferazani: Yep.

Speaker #2: We need to find a way to fund it. With the SK-on deal, it is really an acceleration, right? Instead of making that decision later next year, we are making that decision later this year.

Jing Nealis: We need to find a way to fund it. With the SK On deal, it is really an acceleration.

Steve Ferazani: Yep

Jing Nealis: Instead of making that decision later next year, we are making that decision later this year to accelerate line 2, which will bring our capacity to hit the total 8 gigawatt hour a lot earlier than the original plan.

Speaker #2: To accelerate line two, which will bring our capacity to hit the total 8 gigawatt-hours a lot earlier than the original plan.

Speaker #4: Got it. That's really helpful. If I could pull back for a second—in terms of, we know hopefully the recent market downturn is temporary.

Steve Ferazani: Got it. That is really helpful. If I could pull back for a second in terms of, we know hopefully the resi market downturn is temporary, but given all you have going on in Pendergrass and all the efforts you are making there, is that a bit of a distraction for you right now? Do you really still believe in resi as being that third piece? You have gone through with the FEOC compliance with NV Wave. But really going forward, how important is that market for you? It seems like you remain very committed to it.

Speaker #4: But given all you have going on in Pendergas, and all the efforts you're making there, is that a bit of a distraction for you right now?

Speaker #4: Do you really still believe in Resy as being that third piece? You've gone through with the fiat compliance with NV Wave, but really, going forward, how important is that market for you?

Speaker #4: It seems like you remain very committed to it.

Speaker #5: Yeah, I can jump in on this one. The truth of the matter is the market has definitely suffered. And we see fallout now with many manufacturers and their inability to get to the compliance solution that needs to work in order to make the residential market flow, which is the TPO market, right?

Ardes Johnson: Yeah. I can jump in on this one. The truth of the matter is the market has definitely suffered, and we see fallout now with many manufacturers and their inability to get to the compliance solution that needs to work in order to make the residential market flow, which is the TPO market, right, the third-party ownership.

Speaker #5: The third-party ownership platform—we invested in that. And a lot of our cash burn is tied to that residential business. We are always evaluating what makes the most sense strategically.

Steve Ferazani: Yeah

Ardes Johnson: platform. We invested into that and a lot of our cash burn is tied to that residential business. We are always evaluating what makes the most sense strategically. We still believe in that market. We think that we are on the back end of that investment now. We had, and it was reflected, we did have some delays on completing of the NV Wave, but that is done and we are starting to ship product now. We feel very bullish about how it is going to position itself in the marketplace based on its capabilities. We have also launched the TPO model, the platform. That has also been launched, and we are executing on that as we speak today. We think that we have not only the product, but the financing solution that we can also share with our customers, not exclusively.

Speaker #5: We still believe in that market. We think that we're on the back end of that investment now. We have some delays on completing the NV Wave.

Speaker #5: But that's done, and we're starting to ship product now. We feel very bullish about how it's going to position itself in the marketplace based on its capabilities.

Speaker #5: And we've also launched the TPO model on the platform. That has also been launched, and we're executing on that as we speak today. So we think that we have not only the product, but the financing solution that we can also share with our customers.

Speaker #5: Not exclusively. We can work our product into other third-party ownership platforms as well. And we think there's going to continue to be fallout of product in those platforms in terms of their compliance, or the inability to be compliant.

Ardes Johnson: We can work our product into other third-party ownership platforms as well, and we think there is going to continue to be fallout of product in those platforms in terms of their compliance or the inability to be compliant. We definitely feel that marketplace is going to, A, continue to grow and B, going to become more limited in who the suppliers are going to be into that marketplace. We definitely are continuing to move forward with that. We feel that it supports us in terms of our brand and our capability. We feel now that we are going to turn that corner in terms of operating expense versus revenue and profitability over the coming months. Definitely going to see how that continues to play out. But having a FEOC-compliant, domestic content compliant platform product that has its own TPO we think is also very valuable.

Speaker #5: So, we definitely feel that the marketplace is going to, A, continue to grow, and B, become more limited in who the suppliers are going to be in that marketplace.

Speaker #5: So, we definitely are continuing to move forward with that. We feel that it supports us in terms of our brand and our capability. We feel now that we're going to turn that corner in terms of operating expense versus revenue and profitability.

Speaker #5: Over the coming months, we're definitely going to see how that continues to play out. But having a fiat client, domestic content compliant platform product that has its own TPO, we think, is also very valuable.

Speaker #5: So it's something that we are always looking at—how we position it going forward. We definitely are aware, we have the self-awareness to say, "Hey, look, we've got a big thing going on in Georgia with this factory."

Ardes Johnson: It is something that we are always looking at as how we position it going forward. We definitely are aware. We have the self-awareness to say, "Hey, look, we have got a big thing going on in Georgia with this factory." It is definitely a vertical that is separate. You do not see this very often. In fact, in terms of actually delivering product I do not know of anybody that really does all three anymore. Most people are, even the big guys of the world are focusing maybe on residential and utility scale. We are going to be in all three verticals, and we think that they are all very critical. But we are always evaluating where we are going to be positioned, right? It is how we need to be as we continue to grow. The expectation is it continues to be a meaningful share, ultimately, of our revenue.

Speaker #5: It is definitely a vertical that is separate. You don't see this very often. In fact, in terms of actually delivering product, I don't know anybody that really does all three anymore.

Speaker #5: Most people, even the big guys in the world, are focusing maybe on residential and utility scale. We're going to be in all three verticals.

Speaker #5: And we think that they're all very critical, but we're always evaluating where we're going to be positioned, right? It's how we need to be as we continue to grow, and the expectation is it continues to be a meaningful share, ultimately, of our revenue.

Ardes Johnson: The expectation is it continues to be a meaningful share, ultimately, of our revenue. We will see where that takes us. But we have made that investment. We are on the back end of that investment now, and we are trying to get some gains from that investment, and we feel like we are going to really be in a good position over the coming months to show that the Wave and the TPO platform that we created are valuable.

Speaker #5: And then we'll see where that takes us. But we've made the investment. We're on the back end of that investment now, and we're trying to get some gains from that investment.

Ardes Johnson: We will see where that takes us. But we have made that investment. We are on the back end of that investment now, and we are trying to get some gains from that investment, and we feel like we are going to really be in a good position over the coming months to show that the Wave and the TPO platform that we created are valuable.

Speaker #5: And we feel like we're going to be in a really good position over the coming months to show that the Wave and the TPO platform that we created are valuable.

Speaker #4: Got it. Appreciate the thoughtful answer. Thanks, Artist. Thanks, Jane.

Steve Ferazani: Got it. Appreciate the thoughtful answer. Thanks, Artis. Thanks, Shane.

Steve Ferazani: Got it. Appreciate the thoughtful answer. Thanks, Ardes. Thanks, Jing.

Speaker #1: Thank you. Our next question comes from the line of Sean Milligan with Needham & Company. Please proceed with your question.

Operator: Thank you. Our next question comes from the line of Shawn Milligan with Needham & Company. Please proceed with your question.

Speaker #6: Hey, Artist. One question about, as you brought up line one and you've installed that: anything you found in that line that's better than expected or different than expectations?

Sean Milligan: Hey, Artis. One question about as you brought up line 1 and you've installed that, anything you found in that line that's better than expected or different than expectations? The second piece of the question is around the container supply. I guess that's the one piece that you're going to be requiring a third party on. Just curious about your visibility into container supply and that supplier's ability to ramp up with you.

Sean Milligan: Hey, Ardes. One question about as you brought up line 1 and you've installed that, anything you found in that line that's better than expected or different than expectations? The second piece of the question is around the container supply. I guess that's the one piece that you're going to be requiring a third party on. Just curious about your visibility into container supply and that supplier's ability to ramp up with you.

Speaker #6: And then the second part of the question is about the container supply. I guess that's the one area where you're going to need to rely on a third party.

Speaker #6: Just curious about your visibility into container supply and that supplier's ability to ramp up with you.

Speaker #5: Yeah, to answer the first question, I would say that I've got to find a piece of wood to knock on. But I think the reality is, everything came together a lot smoother than we expected it to, to be honest with you.

Ardes Johnson: Yeah. To answer the first question, I would say that, I've got to find a piece of wood to knock on. But I think the reality is, everything came together a lot smoother than we expected it to be honest with you. As you start to put a factory together you know things are going to happen, but everything's been moving very well for us. Like I said, the team that we have is a very experienced team. It's not their first rodeo, so to speak, even though it is for us as NeoVolta. We have teams in NeoVolta Power and people there that are very experienced and very knowledgeable.

Speaker #5: As you start to put a factory together, you know things are going to happen. But everything's been moving very well for us. Like I said, the team that we have is a very experienced team.

Speaker #5: It's not their first rodeo, so to speak—even though it is for us with NeoVolta. We have teams in NeoVolta Power and people there who are very experienced and very knowledgeable.

Speaker #5: And so, things have been moving very, very well for us. Quite frankly, we feel that we're going to be able to bring customers in and pinpoint them to areas in our line and facility that show a differentiation.

Ardes Johnson: Things have been moving very well for us and quite frankly, we feel that we are going to be able to bring customers in, pinpoint them to areas in our line and facility that shows the differentiation and what they can even go look at if they were in another factory to some differentiations that we have and our capabilities that we can reflect to show our experience in that. That being said, yes, we are always looking out there for the raw materials and how do we make sure that we have got good quality suppliers and partners in there. The container happens to be one of those.

Speaker #5: And what they can even go look at, if they're in another factory, are some differentiations that we have and our capabilities that we can reflect to show our experience in that.

Speaker #5: But that being said, yes, we're always looking out there for the raw materials and how do we make sure that we've got good-quality suppliers and partners in there. That container happens to be one of those.

Speaker #5: And we have several people that we're talking to and working with to support us, whether it's just purely the container or even the options to go from a full skid build-out with the container, with the HVAC and the fire suppression.

Ardes Johnson: We have several people that we are talking to and working with to support us, whether it is just purely the container or even the options to go from a full skid build-out with the container, with the HVAC and the fire suppression. We will be doing that in our own factory at some point here in the very near future. We have that capability and flexibility depending on how we ramp or size up that we can work with partners who have a bigger capability. What I will tell you is relatively speaking, people who are in that kind of container business have been looking across the platform and portfolio of opportunities that they can supply, and they have really been almost project-based, right? They build out a project, but now everything is becoming more productized. We think that we are going to have more focus.

Speaker #5: We'll be doing that in our own factory at some point here in the very near future. But we have that capability and flexibility, depending on how we ramp or size up, that we can work with partners who have a bigger capability.

Speaker #5: What I will tell you is, relatively speaking, people who are in that kind of container business have been looking across the platform and portfolio of opportunities that they can supply.

Speaker #5: And they have really been almost project-based, right? They build out a project. But now, everything's becoming more productized. So we think that we're going to have more focus.

Speaker #5: Our vendors are telling us that they're going to get out of that kind of project-based business and really get into the product side of the business, which is rinse and repeat—deliver over and over and over the same thing. This is going to get their costs down, their quality is going to continue to rise, but also, we look at it as something that we can consider to be flexible for us, particularly when we get the sales from SK.

Ardes Johnson: Our vendors are telling us that they are going to get out of that kind of project-based business and really get into the product side of the business, which is rinse and repeat, deliver over and over and over the same thing, which is going to get their cost down, their quality is going to continue to rise. Also we look at it from something that we can consider to be something of flexibility for us, particularly when we get the cells from SK On. In our world, what we care about is a percentage of domestic content, right? There needs to be a certain percentage of that, and the reflectivity of a US cell really skews our percentage towards domestic content very, very high at that percentage evaluation.

Speaker #5: In our world, what we care about is the percentage of domestic content, right? There needs to be a certain percentage of that. And the reflectivity of a U.S. cell really skews our percentage towards domestic content very, very high at that percentage evaluation.

Speaker #5: So what that allows us to do is open up the aperture, so to speak, on who we, and where we can get certain other raw materials, including the container.

Ardes Johnson: What that allows us to do is open up the aperture, so to speak, on who we and where we can get certain other raw materials, including the container. At that same viewpoint, we feel that once we have the SK On portion of the line in, it will allow us to grant ourselves more flexibility to look at other suppliers, not necessarily cost out, but definitely looking at cost as a piece of it, but ensure that we have got the highest quality that not only we have for ourselves, but we can then pass on to our customers and partners. We feel very good about where that is. We always have hard conversations and high expectations of our partners and our vendors.

Speaker #5: So, at that same viewpoint, we feel that once we have the SK portion of the line in, it'll allow us to grant ourselves more flexibility to look at other suppliers—not necessarily cost out, but definitely looking at costs as a piece of it—and ensure that we've got the highest quality, not only for ourselves but so we can then pass on to our customers and partners. So we feel very good about where that is.

Speaker #5: We always have hard conversations and high expectations of our partners and our vendors. But at the same time, we feel that those who are in this business recognize the future in terms of energy storage and these DC block batteries that are being built, and see that this is something they want to latch themselves onto.

Ardes Johnson: But at the same time, we feel that those who are in this business recognize the future in terms of energy storage and these DC block batteries that are being built and see that this is something they want to latch themselves onto. So there are several facilities in the US that we have opportunities with. There are facilities outside of the US that we have opportunities to work with. And we have actually had vendors come to us and other people who are in that industry, particularly on the container side of the business, saying, "Hey, would it make sense to put our container manufacturing nearer to your factory up?" Which I think is great news.

Speaker #5: There are several facilities in the U.S. that we have opportunities with. There are also facilities outside of the U.S. that we have opportunities to work with.

Speaker #5: And we've actually had vendors come to us, and other people who are in that industry—particularly on the container side of the business—saying, "Hey, would it make sense to put our container manufacturing nearer to your factory?" Which I think is great news, but just to let you know, there's tons of opportunity there.

Ardes Johnson: Just to let you know, there is tons of opportunity there, and we are going to have a pretty hardened QA QC process moving forward to ensure that we hold the standards that we need in order for these things to be put into an application that has 5, 10, 15 years of longevity.

Speaker #5: And we're going to have a pretty hardened QA/QC process moving forward to ensure that we hold the standards that we need in order for these things to be put into an application that has five, ten, fifteen years of longevity.

Speaker #6: Great. Thank you, and congrats on all the progress.

Sean Milligan: Great. Thank you, and congrats on all the progress.

Speaker #5: Thanks, Sean.

Ardes Johnson: Thanks, Sean.

Speaker #1: Thank you. And we have reached the end of the question and answer session. And we also have reached the end of today's conference. And we'd like to thank you for your participation.

Operator: Thank you. We have reached the end of the question and answer session. We also have reached the end of today's conference. We would like to thank you for your participation. You may now disconnect your lines at this time. Thank you, and have a great day.