Expion360 Inc. Q2 FY2024 earnings call

• Expion360 focuses on designing, assembling, and selling LiFePO4 batteries for RV and marine applications, and is expanding into light electric vehicles and home energy storage markets.
• Key milestones in Q2 2024 include: announcement of substantial pre-orders for next-gen Group 27 and GC2 series batteries with VHC technology (shipments began in May), release of home energy storage specs, launch of Edge Battery with modular design and VHC tech, partnership with Tractor Supply for e-commerce retail, collaboration with K-Z Recreational Vehicles to integrate batteries into their premium offerings, and closing of a $10 million public offering to advance home energy storage commercialization and other growth initiatives.

In the second quarter of 2024, revenue totaled $1.3 million, a 26% decrease from $1.7 million in the prior year period. Gross profit for the second quarter was $300,000, which is 25.5% of revenue, compared to $500,000 or 26.3% of revenue in the prior year period. Net loss for the second quarter of 2024 was $2.2 million or negative $0.30 per share, whereas the prior year period had a net loss of $1.5 million or negative $0.21 per share. The decrease in gross profit percentage was due to lower sales leading to higher fixed overhead costs per unit.

• Remains confident in growth trajectory for remainder of 2024 and beyond.
• RV market momentum with June 2024 RV shipments up 8.4% year-over-year.
• Working towards additional OEM market penetration by adding features, improving energy density, and developing unique OEM-centric form factors.
• All pre-orders for Group 27 and GC2 batteries have been shipped.
• Intends to use proceeds from public offering to advance home energy storage solutions and other growth initiatives.

• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, as detailed in SEC filings including risk factors in 10-K and 10-Q reports. The company disclaims intent to update forward-looking statements unless required by law.

Q: Could you talk about filling the majority of substantial pre-orders for Group 27 and GC2 batteries cited in the April press release?

A: Yes, we have shipped everything that had been pre-ordered at this point.

Q: Talk about the thought process behind new equity financing versus previous financing with 3i and Tumim Stone?

A: Previous financing relied on convertible note and ELOC, which didn't provide effective traction; pivoted to new public offering as it's a better model for bringing cash into the company for operations.

Q: What effect will an anticipated drop in interest rates have on current market segments?

A: Lower interest rates would help increase demand for RVs, make financing easier, and be favorable for home energy market return on investment calculations.

Q: How does the cash raise set the company up for future success?

A: Capital raised will be used to advance commercialization of home energy solutions and pursue other key growth initiatives.

Q: Talk about dilution effect related to August 8 public offering?

A: Portions of the structure from the public offering are subject to shareholder approval at the October 3/4 shareholder meeting; dilution factor reliant on shareholder approval and confidence in the company