XPON

Greetings, and welcome to the Expion360 Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded and will be available on the company's Investor Relations website at investors.expion360.com. Before we begin the formal presentation, I would like to remind everyone that certain statements made on this call and through the webcast are forward-looking statements within the meaning of federal securities laws and are subject to considerable risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements made on this call today, other than statements of historical facts are forward-looking statements and include statements regarding the company's beliefs, plans and expectations about its operations, growth prospects product development and pipeline ability to execute its long-term growth strategy, anticipated timing of commercial availability of its products, market size and opportunity, the anticipated incremental revenue to be generated from new OEM partnership and distributors; potential partnerships or collaborations with third parties and the anticipated use of proceeds from the company's public offerings. While these forward-looking statements represent management's current beliefs and expectations, they are subject to risks and uncertainties that could cause actual results to differ materially. The company has explained some of these risks and uncertainties in its SEC filings, including the Risk Factors section of its annual report on Form 10-K. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our expectations as of the date of this presentation. Except as required by law or the NASDAQ listing standards, the company expressly disclaims any intent or obligation to publicly update or revise any forward-looking statements. Your host today, Brian Schaffner, Chief Executive Officer and Interim Chief Financial Officer, will present the company's results of operations as of and for the second quarter ended June 30, 2025. A press release detailing these results crossed the wire this afternoon at 4:05 p.m. Eastern Time and is available at investor.expion360.com. At this time, I will turn the call over to Brian.

Thank you, Ariel, and good afternoon, everyone. I am pleased to welcome you to today's second quarter 2025 Financial Results Conference Call. I'd like to start by giving a brief overview of who we are and what we do. Expion360 is focused on creating energy storage solutions for our customers, utilizing our core values of safety through third-party testing and UL certification, quality offering an industry-leading 12-year warranty and service providing customer support for the entire energy storage system purchased from us, not just the Expion360-built components. Expion360 designs, assembles and sells lithium iron phosphate or LiFePO4 batteries and supporting accessories for RV, marine, light electric vehicle and home energy storage applications. We believe that our product offerings include some of the most energy dense and minimal footprint batteries available, and we are deploying multiple intellectual property strategies advanced research and development capabilities and innovative products to sustain and scale our business. Our customers include dealers, wholesalers, private label customers and original equipment manufacturers or OEMs who are driving revenue and brand awareness nationally, and we complement our wholesale channel with direct to consumer sales. Our management team and Board members are experienced across engineering, technology and finance. We believe the combination of these factors positions us to execute our long-term growth strategies. The second quarter included 2 of our most successful months of sales in company history, marking our sixth consecutive quarter of sequential revenue growth and sustained momentum. Revenue grew 134% year-over-year to $3 million and 46% sequentially from the first quarter of 2025. And if you can't tell, I am proud of the progress we have made and remain excited about our future. Our e360 product line continues to be a preferred conversion solution for lead acid batteries as demonstrated by its strong sales growth. We now have more than 300 customers nation nationwide and maintained sales relationships with major RV retailers and distributors, including Camping World, K-Z Recreational Vehicles, a subsidiary of THOR Industries and Meyer Distributing Inc. We continue to work towards additional OEM market penetration with new major partners, including Scout Campers and Alaskan campers. We believe we have a strong reputation in the lithium battery space, and we plan to continue leveraging that to broaden our distribution channels. To highlight some of our operational accomplishments and milestones in the second quarter. We have advanced our Home Energy Storage Solutions, or HESS vertical, with shipments beginning in January 2025. We believe the HESS product line will benefit from a fast-growing battery energy storage market and consumer update can rapidly scale with the introduction of products like HESS to improve price flexibility and integration. We are exploring opportunities to expand HESS into the AI data center storage and backup market. We are actively pursuing a tariff exclusion request in working with our resources in Washington, D.C. to minimize potential impacts on our business and growth. We implemented both short- and long-term mitigation strategies, including building 6 to 12 months of inventory ahead of the tariff changes, reducing our costs in the current battery line and diversifying our supply sources. Longer term, our goal is to onshore manufacturing of key components such as BMS sales, communications and cases, which would reduce tariff exposure and allow us to pursue opportunities in the government and defense space. Our reputation for quality in the recreational and LEV markets is the driving force behind our development of home energy solutions, which we expect will be the foundation for our future growth. As mentioned, we pride ourselves on servicing the entire system sold to a customer, not just the battery, and we are also a master Victron distributor. We believe we have strategically positioned our battery portfolio across the 5 markets we serve, each of which I will touch on. The RV market is recovering with healthy momentum driven by interest in outdoor activities and demand for vehicles that depend on batteries to power their systems. Our lithium batteries support RV systems and appliances while replacing noisy generators for off- grid power and can be charged by the engine or by solar. Our Edge battery, which is now commercially available, features a custom form factor incorporating our patent-pending innovations and recently developed IP, including VHC heating technology, SmartTalk Bluetooth and CAN Bus communications. We began shipping the Edge to customers in the third quarter of 2024. Our solutions are also employed in the marine market to support trolling motors and operating cabin electronics. The third established market we serve is the light electric vehicle market or such as golf carts, which are undergoing the transition from lead acid to lithium and require the power generation and reliability that our batteries can provide. The fourth and newest market we serve is the home energy storage market, including both home and commercial solar power storage solutions. I'll expand on our opportunity in home energy shortly. Finally, we see the industrial applications market as a future growth vertical for us driven by demand for additional capabilities for electric forklift and industrial material handling. We are building a robust IP portfolio across all 5 of these markets, and we currently have 11 patents pending. Now I'll focus on our market expansion within the e360 Home Energy Storage Solutions, or HESS. With the introduction of our 2 LiFePO4 battery solutions to support home energy storage, we are targeting home and small commercial solar and users and installers who are interested in a high-performance modular system with straightforward installation. The company accelerated its home energy development time line in response to the downturn in RV sales in 2023. Despite increasing our market share during that period, we recognize that home energy represented a critical growth opportunity for our future. Of our 2 existing home energy product options, one has received UL 9540 certification, and the other is in final stages of UL approval, a requirement in states such as requires California that require UL 9540 certification of the battery and inverter to qualify for tax credits. Battery Storage systems offer a way to capture ROI for a consumer outside of a traditional solar system, utilizing the draw of power into the system during off-peak hours and a discharge during peak hours. Our solutions provide scalability and versatility across market channels, including solar installers, electrical contractors, residential and commercial builders and energy service providers. The view of our home energy solutions can be found on our website. We think the home energy market provides complementary economics to our business model with an opportunity to generate recurring revenue streams while enabling margin expansion in a market that is expected to surpass $123 billion globally by 2029 according to market data forecast, supported by incentives such as California's Self-Generation Incentive Program and federal tax credits available through the Inflation Reduction Act. We are using proceeds from our public offerings to provide necessary funding necessary funding to further develop our new e360 home energy storage solutions, including finishing our UL testing and certification process in addition to other requirements required for various authorities having jurisdiction. I will now discuss our second quarter 2025 financial results. Revenue in the second quarter totaled $3 million, an increase of 134% from $1.3 million in the prior year period. The increase in net sales was primarily attributable to sales growth in the RV market along with accessory sales growth through integrator partners. Gross profit totaled $0.6 million or 21% of revenue as compared to $0.3 million or 25% of revenue in the prior year period. The decrease in gross margin percentage was primarily attributable to the product mix sold in the different periods. Gross margin was affected by ongoing tariff uncertainty and a higher mix of lower margin pass-through product sales. We mitigated some of this impact through early inventory builds, cost reduction in our battery line and supply chain diversification to free trade countries, such as South Korea. Long term, our strategy includes onshoring manufacturing of key components. Our selling and administrative expenses were $2 million, which was flat compared to the prior year period and a decrease as a percentage of sales of 91 percentage points, from 157% of sales in the second quarter of 2024 to just 66% of sales in the second quarter of 2025. The decrease was primarily due to the reduced cost of rent related expenses and offset by smaller increases in travel expense, research and development and other expenses. Net loss in the second quarter totaled $1.4 million, a 38% improvement over a net loss of $2.2 million in the prior year period. The decrease in net loss was primarily a result of a higher net sales for the period ending June 30, 2025, combined with our decreases in selling, administrative and general expenses. Turning to the first half 2025 results. For 6 months ended June 30, 2025, net sales totaled $5 million, a 124% increase from $2.2 million in the prior year period. The increase in net sales was primarily attributable to sales growth in the RV market along with accessory sales growth through our integrator partners. Gross profit for the 6 months ended June 30, 2025, totaled $1.1 million or 22% as a percentage of sales compared to $0.5 million or 24% and as a percentage of sales in the prior year period. Again, the decrease in gross margin percentage was primarily attributable to the product mix sold in the different periods. Selling, general and administrative expenses for 6 months ending June 30, 2025, decreased by 14% to $3.6 million compared to $4.2 million in the prior year period and decreased as a percentage of sales by 114 percentage points, from 186% of sales in the first half of 2024 to just 72% of sales in the first half of 2025. The decrease was primarily due to decreases in salaries, benefit, rent and related expenses and legal and professional fees were slightly offset by an increase in research and development expenses. Net loss for 6 months ending June 30, 2025, totaled $2.5 million, a 43% improvement from a net loss of $4.4 million in the prior year period. The decrease in net loss was primarily a result of higher net sales for the period ended June 30, 2025, combined with decreases in selling, administrative and general expenses. Cash and cash equivalents totaled $0.7 million as of June 30, 2025, compared to $0.5 million as of December 31, 2024. Net cash used in operating activities totaled $1.6 million for the 6 months ending June 30, 2025, compared to $3.4 million in the prior year period. Receiving inventory that was prepaid during the prior period accounted for the majority of the change for the 6 months ended June 30, 2025. In closing, we remain confident and enthusiastic about 2025 and beyond with substantial purchase orders already in hand, and interest from new customers across our product line, including our next-generation GC2, Group 27 and Edge batteries, we look forward to additional milestones in the months ahead. Our focus on safety, quality and service continues to resonate with our more than 300 customers nationwide. Operationally, we have undertaken several initiatives to increase margins and reduce costs within the current line of batteries. We continue to work towards additional OEM market penetration by continuing to add features, including enhanced energy density and developing OEM-centric form factors to further our market reach. I thank you all for attending. And now I would like to hand the call over to the operator to open the line for questions.

[Operator Instructions] As there are currently no questions from the phone, I would like to turn the question-and-answer session over to Larry to take questions from the webcast.

Our first webcast question asks, current tariff environment and lobbying efforts in Washington, D.C. Has anything developed?

Yes, that's a good question. Obviously, the tariff finish line for a lack of a better term continues to be moved on a monthly basis. We do feel confident with our lobbying efforts in D.C. and we believe that we have our case for an exclusion or an exception in front of the right people. But right now, we are continuing to benefit from the decisions that we made in September and October and November when we preloaded our inventory for the next year.

Our next webcast question asks, how much prebuilt inventory is left for subsequent quarters?

It's a considerable amount. I mean, the inventory that you see on our books, which is over $5 million that is available for sale, that represents a majority of the what is left on the inventory that we purchased in September and October and November. And so we are looking to actively replace that so that we can head into 2026.

And our last webcast question asks, does the China tariff pause help? Or will you pass price increases to customers or sell at lower margins?

I think that for us, for the next quarter, what matters is our sales mix. As I alluded to before, we have some accessory sales that went out at a little lower margin than we normally have on our batteries. And I would tend to think that our battery sales, which is driving our top line, our battery sales is going to help us with a strong margin in the third quarter.

This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Schaffner for any closing remarks.

Thank you to everyone for attending today's call, and we are excited about where we're headed and looking forward to continuing to engage with our investors throughout the remainder of 2025. Just a note, if you are unable to answer or if we were unable to answer any of your questions, please reach out to our IR firm, MZ Group. They would be more than happy to assist you, and this concludes our call.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Greetings, and welcome to the Expion360 First Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded and will be available in the Investor Relations section of the company's website at investors.expion360.com. Before we begin the formal presentation, I would like to remind everyone that certain statements made on this call and throughout the webcast are forward-looking statements within the meaning of the federal security laws and are subject to considerable risks and uncertainties. These forward-looking statements are intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements made on this call today, other than statements of historical facts are forward-looking statements and include statements regarding the company's beliefs, plans and expectations about its operations, growth prospects, product development and pipeline, anticipated timing of commercial availability of its products, market size and opportunity and the anticipated incremental revenue to be generated from new OEM partnerships and distributors, potential partnerships with NeoVolta and the anticipated use of proceeds from the company's recently completed public offering. While these forward-looking statements represent management's current beliefs and expectations, they are subject to risks and uncertainties that could cause actual results to differ materially. The company has explained some of these risks and uncertainties in its SEC filings, including in the risk factor section of its annual reports on Form 10-K. You are cautioned not to place any undue reliance on these forward-looking statements, which reflect our expectations as of the date of this presentation. Except as required by law or the NASDAQ listing standards, the company expressly disclaims any intent or obligation to publicly update or revise any forward-looking statements. Your host today, Brian Schaffner, Chief Executive Officer and Interim Chief Financial Officer, will present results of operations for the first quarter ended March 31, 2025. A press release detailing these results crossed the wire this afternoon at 4.05 PM Eastern Time and is available in the Investor Relations section of the company's website at investors.expion360.com. At this time, I will turn the call over to Expion360's CEO and Interim CFO, Brian Schaffner.

Thank you, operator, and good afternoon, everyone. I am pleased to welcome you to today's first quarter 2025 financial results conference call. But before I begin, I apologize for any difficulties with the audio. I am calling in from our nation's capital, Washington, DC, where have been speaking with the elected officials and US representatives about our onshoring efforts and tariff concerns, which I will address in more detail shortly. For those of you who might be new to our story, I'd like to start by giving a brief overview of who we are and what we do. Expion360 is focused on creating energy storage solutions for our customers, utilizing our core values of safety through third-party testing and UL certification, quality, offering an industry-leading 12-year warranty and service, we provide customer support for the entire system purchased from us, not just the Expion360 built components. Expion360 designs, assembles and sells lithium iron phosphate or LifePO4 batteries and supporting accessories for RVs, marine, light EV and home energy storage applications. We believe our product offerings include some of the most energy dense and minimal footprint batteries available. We are also deploying multiple intellectual property strategies, advanced research and development capabilities and innovative products to sustain and scale our business. Our customers consist of dealers, wholesalers, private label customers and original equipment manufacturers or OEMs. Who are driving revenue and brand awareness nationally and we complement our wholesale channel with direct-to-consumer sales. Our management team and Board of Directors are experienced across engineering, technology and finance. We believe the combination of these factors positions us to execute our long-term growth strategies. I'm extremely proud of the progress we made in the first quarter and remain excited about our future. Our E360 product line is a preferred conversion solution for lead acid batteries as demonstrated by its sales growth. We currently have more than 300 customers across the United States, consisting of dealers, wholesalers, private label customers and OEMs who then sell our products to end consumers. In addition, we sell products directly to consumers through our e-commerce platform. We have sales relationships with major RV retailers including Camping World, a leading RV retailer, K-Z Recreational Vehicles, a subsidiary of Thor Industries and Meyer Distributing Inc. a leading national marketer and distributor of automotive and RV specialty products. We believe we have a strong reputation in the lithium battery space, which we plan to continue leveraging to broaden our distribution channels. Let me take a moment to highlight some of our accomplishments and milestones in the first quarter. We have continued our progress in our Home Energy Storage Solutions, or HESS vertical with shipments beginning in January 2025. We believe the HESS product line will benefit from a fast-growing battery energy storage market and consumer uptake can rapidly scale with the introduction of products that improve price, flexibility and integration. We also anticipate that HESS will benefit from incentives available through California's Self-Generation Incentive Program and federal tax credits available through the Inflation Reduction Act for home battery systems. Additionally, we are exploring a partnership with NeoVolta to combine our strengths towards a potential collaboration that aims to engineer a US-based state-of-the-art battery manufacturing facility and develop innovative lithium ion battery cell and module product designs. A formal engagement would enable us to contribute our expertise in design and engineering, while NeoVolta plans to provide the necessary capital and manpower. Together, we expect to bring high-performance, sustainable energy storage solutions to the market to address the growing demand for efficient energy management in both residential and commercial applications. Our anticipated partnership with NeoVolta and our goal to onshore American-made batteries has become increasingly timely with the recent implementation of tariffs. In addition to pursuing this partnership to mitigate risks associated with international manufacturing, we are actively working to complete a tariff exclusion request working with our resources in Washington to ensure that tariffs have little, if any, impact on our business and our growth. In addition to strengthening our relationships with existing OEM partners, we continue to work towards additional OEM market penetration with new major partners. Newer relationships have included three announced new OEM customers, Scout Campers, Alaskan Campers and K-Z Recreational Vehicles, welcome, and we have secured several new OEM customers. Recently, we welcomed Carson Heagen as Chief Operating Officer. Carson brings over 10 years of leadership experience in operations, finance, global supply chain management and ERP systems. Carson joined Expion360 in 2021 and has rapidly and deservedly risen from the Director of Finance to VP of Operations and now our COO. We closed a registered direct offering and concurrent private placement with institutional investors in January of 2025. Aggregate gross proceeds from both transactions were approximately $2.6 million. We are using the net proceeds from the offering as working capital and for general corporate purposes to advance the commercialization of our home energy storage system and pursue other key growth initiatives like our onshoring. As I just mentioned, I am in Washington, D.C., where I have been speaking with elected officials and U.S. representatives about our onshoring efforts and tariff relief. While Monday's news about a reduction in tariffs on imports from China is step in the right direction, we have nonetheless undertaken both short- and long-term strategies to address current and future uncertainties. Our tariff mitigation efforts include several initiatives to increase margins and reduce costs within the current line of batteries. We have also prepared for continued growth and tariff mitigation by building 12 to -- 6 to 12 months inventory early in the quarter before the new tariffs were introduced. One of our stated long-term goals has been onshoring the manufacturing and production of our BMS, sales, communications and cases. This would not only tariff proof our products, but allow us to pursue opportunities in the government and defense space, and I hope to be able to report some positive developments in the very near future. Our reputation for quality in the recreational and LED markets is the driving force behind our development of home energy solutions that will be a foundation for our future growth. As mentioned before, we pride ourselves on servicing the entire system sold to a customer not just a battery, and we are also a master Victron distributor. We believe we have strategically positioned our battery portfolio, across multiple markets, each of which I will now touch on. The RV market is recovering with healthy momentum driven by interest in outdoor activities and demand for vehicles that depend on batteries to power systems. Our lithium battery support RV systems and appliances, while replacing noisy generators for off-grid power and can be charged by engine or solar. The Edge battery, which is now commercially available, features a custom form factor that includes our patent-pending innovations and other recently developed IP. The Edge incorporates BHC heating technology SmartTalk Bluetooth and canvas communication. We began shipping the edge to customers in the third quarter of 2024. Our solutions are also employed in the marine market to support trolling motors and operating cabin electronics. The third established market we serve is the LEV market such as golf carts, which are undergoing to transition from lithium to lead acid. These LEDs require sufficient power generation and reliability, which our batteries deliver. The fourth and newest market we serve is the home energy storage market, including both home and commercial, solar-powered, storage solutions. I'll expand on our opportunity in home energy shortly. Finally, we see the industrial applications market as a future growth vertical for us, driven by demand for additional capacities related to electric forklift and industrial material handling. We continue to build a robust IP portfolio across all five of these markets, and we currently have 11 patent spending. Now, I will focus on our market expansion with the e360 Home Energy Storage Solutions, or HESS. With the introduction of our two LiFePO4 battery solutions to support home energy storage, we are targeting home and small commercial solar users and installers who are interested in a high-performance modular system with straightforward installation. The company moved up its home energy development time line due to the downturn in RV sales in 2023, and we've seen the benefit of that. Even though we actually gained the market share during the downturn, our team knew that home energy was future. Development was accelerated, and we now have two systems that are in final stages of UL certification and testing, proper UL certification is vital as states such as California require UL 9540 certification of the battery and its inverter system to qualify for tax credits. Battery storage systems offer a way to capture ROI for a consumer outside of a traditional solar system, utilizing a draw of power into the system during off-peak hours and a discharge during peak hours. Our solutions provide scalability and versatility across market channels, including solar installers, electrical contractors, residential and commercial builders and energy service providers. Please visit a view of our home energy solutions at our website, expion360.com/pages/residential.com. In January, we began distribution and fulfilling purchase orders of HESS. These order deliveries reflect a significant milestone in bringing e360 HESS to the market. We believe the HESS product line will benefit from a fast-growing market, battery market and energy storage market and consumer uptake can rapidly scale with the introduction of products. HESS improves price flexibility and integration. We anticipate HESS will benefit from incentives available through California self-generation incentive program and federal tax credits available through the Inflation Reduction Act for home battery systems. We think the home energy market provides complementary economics for our business model with an opportunity to generate recurring revenue streams, while enabling margin expansion in a market that is expected to surpass $123 billion globally by 2029 according to market forecast. We are using proceeds from our public offering to provide necessary funding to further develop our new e360 home energy storage solutions, including completion of UL testing and certification processes in addition to other requirements for various authorities having jurisdiction. I will now discuss our first quarter 2025 financial results. Revenue in the first quarter of 2025 totaled $2.0 million, an increase of 111% from $1 million in the prior year period. The increase in net sales was due in part to a rebound in the RV market overall, as well as completing our first sales in the home energy market. Gross profit in the first quarter of 2025 totaled $0.5 million or 24.5% of revenue compared to $0.2 million or 22.9% revenue in the prior year period and 20.5% of revenue for the full fiscal year ended December 31, 2024. The increase was primarily attributable to the increase in sales and lower cost of goods sold as a percentage of our sales. Selling, general and administrative expenses in the first quarter of 2025 decreased 24.7% to $1.6 million compared to $2.2 million in the prior year period. The decrease was primarily due to decreases in salaries and benefits, including lower non-cash stock-based compensation as well as a reduction in headcount. Legal and professional fees have also seen a significant decrease as did rent expense due to terminating the lease on our second warehouse. Net loss in the first quarter of 2025 totaled $1.2 million, a 47.5% improvement from a net loss of $2.2 million in the prior year period. The decrease in net loss was primarily the result of higher net sales for the period ending March 31, 2025, combined with the decrease in selling, general and administrative expenses. Cash and cash equivalents totaled $1.1 million as of March 31, 2025, compared to $0.5 million as of December 31, 2024. On January 3, 2025, our company closed a $2.6 million registered direct offering and private placement priced at the market under NASDAQ rules. Net cash used in operating activities totaled $1.2 million for the three months ending March 31, 2025, compared to $1.7 million in the prior year period. Receiving inventory that was prepaid during the prior period accounted for a large portion of the change for three months ending March 31, 2025, as well as making payments to decrease our suspended liability. In closing, we remain confident and enthusiastic about our growth trajectory for 2025 and beyond. With substantial purchase orders already in hand and additional new customers expressing interest across our product lines. We look forward to announcements of additional milestones in the months ahead. New customers are expressing interest across product lines, including our next-generation GC2, Group 27 and Edge batteries. Most importantly, market tailwinds are further strengthening our expectations for continued sequential growth moving forward. Our focus on safety, quality and service is paying off with our customers, and this has been translated to the top and bottom lines, underscored by the confidence from over 300 resellers in our network nationwide. Our customers know that we truly believe in our product quality and manufacturing capabilities. Results for the RV Industry Association's March 2025 survey of manufacturers found that total RV shipments increased 14% in the first quarter of 2025, and we believe the RV market will continue to gain ground through 2025 with shipments increasing traction throughout the year. We are focused on expanding our addressable market, most recently with our E360 home energy storage solutions, which began production and shipments in January of 2025. Operationally, we have undertaken several initiatives to increase margins and reduce costs within the current line of our batteries. We are also actively engaged with resources in Washington to ensure that tariffs have little of any impact on our business and growth, and we are working to diversify our supply chain with potential sourcing from additional free trade countries, such as South Korea to further avoid tariffs and increase volume and margin. We have also prepared for continued growth in tariff mitigation by adding to 6 to 12 months of inventory early in the quarter before new tariffs were introduced. In fact, we believe there is a significant market disconnect in our current valuation, as we now have more in inventory than our market cap. Our long-term goal is to onshore the US manufacturing of most of our components and assemblies, including cell manufacturing. To that end, we continue to work with NeoVolta to combine our strengths towards a potential collaboration that aims to engineer a US-based state-of-the-art battery manufacturing facility and develop innovative lithium iron battery cell and module product designs. We continue to work towards additional OEM market penetration by adding features, improving energy density and developing unique OEM-centric form factors. Thank you all for attending. And now, I would like to hand the call back over to the operator for additional questions. Operator?

Thank you. We will begin the question-and-answer session. [Operator Instructions] We have no audio questions at this moment, ladies and gentlemen, and we'll now proceed to any questions from the webcast.

Our first webcast question asks, how will the onshoring of a cell plant help Expion financially?

Well, there are a couple of ways that will help us financially. One of them is, is that we will have access to calls for our batteries at a cost-plus basis, which should help us increase our margins, with no threat of tariffs for those high-density cells that are currently made in Asia. We also benefit from economies of scale through shared administrative tasks. Finally, we would be receiving royalties from the sale of the battery cells and that would directly affect our cash and our bottom line.

Our next question asked, what would your financial burden be should a domestic sell plant be constructed?

Well, we provide the technology and the business partner in Asia. And our job is to bring our trusted manufacturing partners and their IP to the table, to onshore production in the US and managed site construction, equipment installation, production ramp up and then the management of production going forward. That is our job. Our partner bears the financial burden and responsibility of providing the necessary capital to get that done.

And our last webcast question asked, how did your meetings go in Washington? And can you provide any additional details?

Well, I can say that they were really incredible. They went very, very well. I'm greatly encouraged by the support we're receiving to make our onshoring efforts a reality. There is a great desire to increase US manufacturing investment in jobs. And that's what we plan on being part of and I come away from my meetings in Washington more encouraged than ever that this can become a possibility for us. And we do look forward to sharing more with our valued investors and friends in the future.

That concludes the webcast question-and-answer portion of the session.

This concludes our question-and-answer session. I would now like to turn the call back over to Mr. Schaffner for his closing remarks.

Thank you, and thank you for attending today's call. We are excited about where we are headed and look forward to continuing to engage with our investors throughout the remainder of 2025. If for some reason, we're unable to answer any of your questions, please do reach out our IR firm, MZ Group, who would be more than happy to assist. This concludes our call.

Thank you for attending today's presentation. You may now disconnect.