Greetings, and welcome to the Expion360 Second Quarter 2024 Financial Results Conference Call. At this time, all participants are in 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 websites 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 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 fact, are forward-looking statements and include statements regarding the company's beliefs, plans, and expectations about it’s operations, growth prospects, product development and pipeline, anticipated timing of commercial availability of its products, market size and opportunity, 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 and quarterly reports on Form 10-Q. 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 hosts today, Brian Schaffner, Chief Executive Officer; and Greg Aydelott, Chief Financial Officer, will present results of operations for the second quarter ended June 30, 2024. A press release detailing these results crossed the wire this afternoon at 4.05 p.m. 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 Chief Executive Officer, Brian Schaffner.

Thank you operator and good afternoon everyone. I am pleased to welcome you to today's second quarter 2024 Financial Results Conference Call. 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 focuses on the design, assembly and sales of lithium-ion phosphate or LiFePO4 batteries and supporting accessories for RVs and marine applications. As recently announced, we are also expanding into the light electric vehicle or LED market and the Home Energy Storage markets and we have plans to expand into industrial applications in the future. We design, assemble, and distribute high-powered lithium battery solutions using ground-breaking concepts while employing a creative sales and marketing approach. We believe our product offerings include some of the most dense and minimal footprint batteries available. We are developing e360 Home Energy Storage solutions, which we expect to bring positive change to the industry with regards to key areas of differentiation including price, flexibility, and integration. We are also deploying multiple intellectual property strategies, advanced research and development capabilities, and innovative products to sustain and scale the business. We currently have customers consisting of dealers, wholesalers, private label customers, and original equipment manufacturers, or OEMs, who are driving revenue and brand awareness nationally, and 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. I am proud of the progress we made in the second quarter and remain excited about our future prospects. Our e360 product line, which is manufactured for RV and marine industries, is a preferred conversion solution for lead acid batteries. We currently have more than 300…

Thank you, Brian. For the second quarter of 2024 revenue totaled $1.3 million, a 26% decrease from $1.7 million in the prior year period. This was primarily attributable to the lingering effects of the downturn in the RV market, combined with customers limiting orders in anticipation of the availability of our new products with enhanced features. However, we are pleased to highlight that revenue in the second quarter reflects a 32% sequential growth compared to the first quarter of 2024. Gross profit for the second quarter of 2024 totaled $300,000 or 25.5% of revenue as compared to $500,000 or 26.3% of revenue in the prior year period. The decrease in gross profit as a percentage of revenue was primarily attributable to decreases in sales, which drove higher fixed overhead costs per unit. Selling, general and administrative expenses were $2 million in both the second quarter of 2024 and the second quarter of 2023. Net loss for the second quarter of 2024 totaled $2.2 million or negative $0.30 per share and net loss of $1.5 million or negative $0.21 per share in the prior year period. The increase in net loss was primarily the result of lower net sales for the second quarter and non-stock-based compensation expense, non-cash stock-based compensation expense. I will now turn the call back to Brian for his closing summary.

Thank you, Greg. In closing, we remain confident and enthusiastic about our growth trajectory for the remainder of 2024 and beyond. Momentum in the RV market continues with June 2024 RV shipments of 8.4% year-over-year compared to June 2023, according to the RV Industry Association's June 2024 market report. We continue to work towards additional OEM market penetration by continuing to add features, improve energy density, and develop unique OEM-centric form factors. Notably, we announced substantial preorders for our next generation Group 27 and GC2 series batteries with proprietary vertical heat conduction technology, which began shipping in May. The launch of the Edge Battery featuring a slim profile that maximizes available space and incorporates vertical heat conduction, SmartTalk Bluetooth, and CAN Bus communication, and release specifications for our home energy storage solutions. Before we get to the Q&A portion of the call, we are again excited to have recently announced our partnership with K-Z Recreational Vehicles, a subsidiary of four industries for integration of Expion 360's 51.2V 60A Edge, VHC heated batteries, and new Group 27 12.8V 100A VHC heated batteries into K-Z RV's premium offering. Thank you all for attending, and now I would like to hand the call back over to our operator to open up the line for questions.

Thank you. [Operator Instructions] And the first question will be from Brian Lantier from Zach's Small-Cap Research. Please go ahead.

Good afternoon, gentlemen. I was wondering if you could talk a little bit about the previous press release from April. At this point, do you feel like you filled the majority of the substantial pre-orders for the Group 27 and GC2 batteries that you cited in that press release?

Sure. Thanks for the question, Brian. Yes, I did check with the shipping before this call, and we have placed all of the, shipped everything that had been pre-ordered at this point.

Can you talk a little bit about the thought process behind the new equity financing versus the previous financing that was in place with 3i and Tumim Stone?

Sure. The previous financing relied on a convertible note and an ELOC. And we just didn't get a lot of traction related to either volume on the shares or with the price of the shares to be able to use that effectively. We tried to do that so that it represented a less dilutive model as far as bringing cash into the company for operations. And that's why we had to pivot away from that to the new capital raise, the public offering that was done earlier this month.

Great. And I guess the last one would be, do you have a timeline or an estimate of when we would know what the exercise price will be for all of the warrants and the total number of warrants issued?

Sure. That's a great question. Portions of the structure of that August 8 public offering are still subject to shareholder approval. Our shareholders meeting, it's like Friday, October 4, October 3, whichever the Friday is. And we have faith in our shareholders that they will go ahead and approve some of the portions of the structure. And we also have faith in the value that they see in our company. But ultimately that dilution factor is going to be reliant on their approval and shareholder confidence.

All right. Thank you.

[Operator Instructions] And at this time I would like to pass the baton to any webcast questions that may have been submitted.

Our first question asks, what effect will an anticipated drop in interest rates have on your current market segments?

That's a great question. It's my opinion that lower interest rates would help increase the demand for RVs, makes it easier to finance them. Also, lower rates historically have helped with the return on investment calculations, which are very vital to selling into the home energy market as well. So I think that it would be very favorable for us to see a drop in interest rates.

Our second webcast question asks, this was a highly dilutive event. Tell us how the cash raise sets the company up for future success.

Sure. Our company believes that the home energy market with its size and its growth is a key component for our future growth. And this raise brought in the capital that will be used to advance the commercialization of our home energy solutions and to pursue other key growth initiatives. So that is why we raise the funds.

And our last webcast question asks, talk to us about the dilution effect related to your August 8 public offering.

Sure, sure. As discussed before with the call-in question, really portions of the structure from August 8 have to be approved by our shareholders as part of that public offering. And we do have faith in our shareholders and the value they see in our company. We think, though, that the dilution factor will be completely reliant on their approval and on their confidence in our company going forward.

And that concludes our webcast, UNI.

Thank you. And, ladies and gentlemen, this concludes our question-and-answer session. So I would like to turn the conference back over to Mr. Schaffner for any concluding remarks.

Thank you so much for attending today's call. We're excited about where we are headed. And we look forward to continue to engage with our investors throughout the second half of 2024. Just a note, if you're unable, if we were unable to answer any of your questions, please do reach out to our IR firm, MZ Group, who would be happy to assist you. And this concludes our call.

And thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.