Good day, and welcome to the NeoVolta First Quarter 2027 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you must press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Ardes Johnson, Chief Executive Officer. Please go ahead.
Thank you, operator, and good afternoon, everyone. Welcome to NeoVolta's first quarter fiscal 2027 earnings conference call. I am Ardes Johnson, Chief Executive Officer of NeoVolta, and I am 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 risk and uncertainties that could cause actual results to differ materially from what we discussed today. Please refer to the safe harbor statements in today's earnings release, as well as the risk factors included in our most recent annual report on our Form 10-K and other filings with the SEC. We undertake no obligation to update forward-looking statements except as required by law. The central message today is straightforward. NeoVolta has moved from construction to production.
Now it is about execution of our manufacturing platforms against customer commitments. Demand continues to be strong across all verticals, residential, C&I, and utility scale. This past quarter, we had a grand opening of our Georgia facility, and it is now online and producing, and we are lining up several commercial opportunities supporting the ramp-up schedule. We formally launched our third-party ownership, TPO, finance platform for residential and C&I, along with our NV Wave residential product, and are ramping up projects under that platform. We announced our domestic battery supply agreement and strategy and began taking orders for C&I and utility-scale products.
Last quarter, we talked about the building blocks we put in place, the factory, the team, the product capabilities, and the strategic relationships. That is exactly what we have done. We will continue to build out the infrastructure to support our growth in line with ramping of our factory. Let me turn to the first quarter. Revenue was approximately $2.8 million. The residential rebound we expected after a difficult fourth quarter due to the slip in timing of our TPO launch. Jing will cover the financials in more detail momentarily. Residential remains an important part of our business. With NV Wave available and our third-party ownership financing platform now live, we have both the product and the financing our installer partners need to reach more customers.
We continue to build on that momentum created last quarter and are looking to grow this quarter and into the future. Our TPO platform is designed to lower the upfront cost of ownership and support growth across residential and commercial applications. This combination, product availability plus financing access, uniquely positions us to drive continued residential growth through fiscal 2027 and beyond. We announced our strategic supply of manufacturing collaboration with SK On, up to 18 GWh of domestic-made cells to support pack and BESS manufacturing. We also formalized a $53 million commercial commitment under our utility-scale framework with Infinite Grid Capital, and we officially opened Pendergrass following a well-attended grand opening event.
While it was an active quarter, we know we are just getting started. Let's spend a few minutes on the factory. Pendergrass is officially online and producing. The immediate focus now is building a consistent production rhythm, holding the line on quality, and getting products ready for customers as we ramp. Opening the facility was the accomplishment. Operating it well is the job now. That means having the materials, people, processes, and working capital in place to meet customer requirements. It means staying disciplined as volume increases, and it means turning the commitments we've already secured into shipments and revenue.
The ramp remains on track, and the recent agreements give us a stronger foundation for planning production and allocating capital. We are not building capacity on hope. We're building it around specific customer commitments. As we look ahead, our priorities are clear. First, execute the Pendergrass ramp without sacrificing quality or delivery discipline. Second, convert our committed business into shipments and revenue. Third, keep building the pipeline across commercial and utility-scale markets while supporting the residential recovery. And fourth, align capital spending and working capital with the production schedule and customer commitments.
The commercial progress is real, but orders aren't the finish line. We still have to manufacture the product, deliver it, and get paid. That's where our attention is now. We enter calendar year 2027 with an operating factory, a recovering residential business, an initial commercial customer base, and meaningful contracted manufacturing activity behind our growth plans. We're proud of what the team has built. Now it's time to deliver on it. With that, I'll turn it over to Jing to walk through our financial results, balance sheet, and capital priorities.
Thank you, Ardes. For the quarter ended September 30th, 2026, our revenue was $2.8 million, compared with $13,000 in the previous quarter ended June 30th, 2026. This sequential increase is the first financial result of the residential reset we described on our last call. Last quarter, our revenue was held back by the sharp slowdown in the traditional installer channel demand after changes in the federal incentive environment. We responded to the changing residential market by advancing the NV Wave modular residential product design and setting up the TPO structure. This quarter, the revenue rebound came from our TPO platform. We recognized revenue on our first batch of residential energy storage projects that reached substantial completion and sold to the third-party-owned platform supported by tax equity partners.
The purpose of the TPO platform is to enable us to establish a business model and customer base to leverage our OBBB-compliant residential energy storage product, state and federal tax incentives while capturing higher revenue and margin at the project level. Gross margin was 36.5%, which reflects the higher value of fully installed project sales compared with a product sale-only business model. We expect residential volumes to continue building as we scale the TPO platform and deploy our next-generation residential energy storage product, NV Wave. Net loss was $7.7 million, or $0.13 loss per share, compared with $11.7 million, or $0.24 loss per share in the previous quarter. Adjusted EBITDA was - $5.5 million, compared with - $8 million in the previous quarter.
As a reminder, we use adjusted EBITDA as a supplemental non-GAAP measure, as we believe it is useful to help investors evaluate our operating performance across periods by excluding items such as interest, taxes, depreciation, and amortization, stock-based compensation, and certain non-operating items. A full reconciliation to the most directly comparable GAAP measure is included in today's earnings release. Cash used in operating activities was $6.6 million in the quarter, which is in line with our expectation as we start production ramp at the Pendergrass, Georgia facility. Capital expenditures were $7.3 million, mainly for the production equipment and leasehold improvements at Pendergrass. Net property and equipment on our balance sheet nearly doubled during the quarter from $9.9 million at June 30th to $18 million at September 30th.
We ended the quarter with cash and cash equivalents of $26 million and restricted cash of $2.8 million, for total cash, restricted cash, and cash equivalents of $28.8 million. That compares with $25.4 million at June 30th. As we previewed on our last call in September, we closed a $20 million senior secured term loan with the potential for up to additional $10 million, subject to lender agreement. This facility is part of our capital formation strategy. Fiscal 2026 was funded primarily with equity. As our Pendergrass facility moves from commissioning into production, and as we convert pipeline to orders, we expect to have more financing tools available, including customer prepayments, working capital, and asset-backed line of credit facilities, alongside cash on hand and equity markets. Before I turn to our priorities, I want to highlight an administrative change.
We are changing NeoVolta's fiscal year end from June 30th to December 31st, effective December 31st, 2026. Going forward, our fiscal year will match the calendar year. This aligns our reporting with most of our industry peers, with budgeting and procurement cycles of our C&I and utility-scale customers. It also aligns our tax year with the calendar year, which positions us to be able to more efficiently monetize the 45X tax credits we expect to generate from our U.S. manufacturing facility, since most tax credit buyers operate on a calendar tax year. It also simplifies comparison for our investors and shareholders as we hope to begin our high-growth journey. As a result, the six months from July 1st through December 31st, 2026, will be a transition period. We will report that period in the transition report on Form 10-K, which will include audited financial statements for the six months.
Our next fiscal year will then run from January 1st to December 31st, 2027. We will provide recast historical quarterly information to help investors compare periods on a calendar year basis. As we look ahead, our strategy and focus remain unchanged. We are committed to delivering energy storage products to residential, C&I, and utility-scale markets. We are continuing to execute against our production ramp roadmap. We are well-positioned to fulfill customer demand that we expect to generate as we move into 2027. We continue to see strong momentum in customer engagements. Our priority remains moving these engagements from pipeline to committed backlog to shipments. To sum up, the first quarter showed a clear sequential improvement. Revenue recovered with the launch of the TPO platform. Our net loss and adjusted EBITDA both improved from the previous quarter, and we increased our liquidity.
Our spending is focused on bringing Pendergrass into production to support the revenue growth in the coming year. We will continue to weigh the cost of capital, shareholder dilution, financing flexibility, and execution certainty when we choose how to fund our rapid growth. With that, I will turn the call back to the operator to open up for questions.
Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Your first question comes from Sean Milligan from Needham & Company. Please go ahead.
Hey, Ardes and Jing. Thank you for taking the questions. I guess the press release mentions a $116 million master purchase agreement for products with deliveries this year. Is that incremental to the IGC, the $53 million IGC award you had too? Just trying to understand where the current backlog is for this year now for the plant.
Yeah. Thanks, Sean, for that question. That is backlog that would be in calendar year, beginning calendar year 2027. We just received that. We just closed that essentially today, and it is a big opportunity for us, and we are going to start delivering on that in the beginning, in Q1 of calendar year 2027. Just so we are all aligned, that is our goal. You know, it is through 2027, but it is actually, we are going to try to get as much of that in the first half as we can, the opportunity to pull that through to the first half of calendar year 2027.
I t is a big step for us, a big growth, and it is brand new, and we were not really able to talk about it in the pre-record, but here we are to discuss today, lock that. We just got that locked in. Just so you know, it is not part of anything that we have had before. It is brand new.
Okay. So, now you have that plus the IGC award. I guess the IGC award still needs to convert to orders, but—
Yeah. That is one we have already got, right? And it is a commitment from them. It is going to be over a series of projects in 2027 as it gets deployed. But yeah, that commitment was for one larger project with several POs within that project will come over a period of time in next year.
Okay. You mentioned prepayments as potential financing vehicle for some of the cell—
Sure.
—purchases as you build inventory. Can you talk about the structure of the new award? If it didn't, like—
Yeah.
—conversations you're having with additional customers around prepayments?
Yeah. While we can't go into too much detail about the commercial side of it, you could imagine that for each project we're working on, particularly on the amount with the demand and the ability for us to service it here in the U.S., there are series of prepayments or commitments for the overall project that get done. Yeah, we're not only negotiating those with customers, but also utilizing these commitments to go for certain financing to support the raw materials and the growth of these projects, as well as working with our vendors for favorable terms on supply as well. We're doing those combinations, but yeah, our expectation is that we will get prepayments for products that we are delivering out of the Georgia facility. Yeah.
Great. Then I know, I think you originally were talking about maybe 10 systems or something like that between the end of September and the end of December. I guess, like, can you talk us through what kind of the activities that are going on at the plant this quarter?
Yeah.
You know, do you have cell inventory today? Are you starting to run cells? Kind of how many initial early systems do you expect to deliver?
Yeah. We are. The demand. We procured enough material for the first 10 units. Some of that material is still in transit or hasn't arrived, but it'd be expected to be arriving. Our deliveries for that is not just depending on our ability to produce, but also tied to when the customers need it. The timing doesn't always align. Our goal is to try to get some units built. If you went there today, you'd see some units that are built now, still doing certain tests on them. It doesn't stop our production or ability to produce. We've got to get through those final tests, and they're kind of checking the box tests, so to speak. We get those final tests done, which are imminent, and that'll give us the ability to then be able to ship.
We plan on having the ability to even ship the units that we're going through on the tests is our expectation. But we are pushing to have as many of those, a few of those at least, shipped this calendar year, the remaining of this calendar year to get that done. But we've got it lined out with who we'd be working with on those. It's going to come down to timing of when the customers actually want them and our ability to ship them as soon as we possibly can, but also based on their schedule as well.
Great. Then one last one, if I can. On the SK On agreement, I think final. You've been pretty optimistic on having final docs before year-end.
Yeah.
Is that still sort of the cadence that we're on for the SK, for seeing final documents on SK On?
Yeah, I would tell you that we're down to the very, very end of that, what I'd call negotiation, if you want to call it that. It's really more technical than anything else, and a lot of that's tied to the design of what the pack line will be that we've talked about that'll come online in the second half of next year. Both parties are very actively wanting to get the deal done, but we're also being very conscientious of making sure that we get everything done now versus having to go back into the contract and make changes on the technical side. The teams are working really hard on that to get it done, and the expectation is imminent that we get that contract done. So, like I said, both parties, both sides are very active and have a desire to get it done.
We knew that the earnings announcement was coming today, and we're pushing very hard for that. Ultimately, we have a couple big trade shows coming up, and we all want to be there as partners and have those conversations and be able to talk to customers as partners. But at the same time, we both recognize that we want to do it the right way. But in terms of commercial and everything else, we're really aligned with them right now. It's more on the technical side, but expectation is we get it done in very short order. Yeah.
Great. Thank you for all the color Ardes . It's exciting to continue to watch this thing ramp up. Seems like the next quarter or two is going to bring a lot of news and results that we'll be able to see in the financials, so.
Yeah. Right on. Thank you, Sean. Appreciate that.
Thank you. Your next question comes from Rob Brown from Lake Street Capital Markets. Please go ahead.
Good afternoon. I just want to follow up a little more on the kind of expected order cadence as you get into next year. As you look at your pipeline, how do you sort of think the order cadence plays out? Do you need to sort of get these tests and certifications done before you get orders, or is it a matter of just kind of customer need and timing?
Yeah. I wouldn't say that it's more aligned with the testing. What we're doing is nothing that our customers are unexpected. They realize what we're doing, and they understand it. It's really going to come down to aligning with projects that are being done and how we can secure that with where their needs are. Some customers, again, when we talk about testing and other things, they will want to come in with some third-party folks to look at it. I wouldn't say that it's stopping any of our activities or opportunities. We're, quite frankly, looking at with some of the stuff that we're getting lined up now to understanding what our ability to serve above and beyond our ramp schedule, which hasn't changed, and that expectation.
Right now, it's more aligned with some of our customers and the timing of when they need product and when we're going to be able to deliver that product. Some of that is also aligned to coming into the second half with some of the U.S. supply with the SK On agreement that we have, and the combination of those two. But we expect to start getting that backlog as soon as possible, even going into the second half of next calendar year. We really feel that it's going to be more aligned with customers' needs and the timing for what they need the product and when they need the product.
We are working really diligently with those partners to try to make that align with our needs from a quarterly basis and our growth plans as well, so that we build smartly and are stewards of cash flow in a way that makes sure that we are doing what we need to do from a financial perspective to keep the company moving in the right direction. It is around customers' timing of demand and how we are working with them with some of their projects. As you guys are probably well aware, our industry is one tied to projects that get caught up along the way very often in certain phases of the delivery status. We are working with really tied-in deals that are being done now and looking to get that executed in a timely manner.
We feel very good about the pipeline in and of itself, along with that pipeline on the utility scale, which is our large DC blocks. We are also feeling very highly bullish on the C&I side, and we will be able to start delivering that product in the second quarter of next year out of the Georgia facility. We are lining up a lot of opportunities there for multiple units across different, not only opportunities, but more of even platforms, some larger installers who are looking at larger MSA-type agreements for multiple units. Both of those are kind of tying in, and we are aligning those with our production as well as our certifications. Long story short, Rob , it is around customers' demand.
Okay, great. Thank you. Very helpful for all the color there. Just sort of following up on SK On, is that the agreement you are discussing, is it on both sides of that agreement, both the supply and the production sales side of it as well?
Right now, from a sales side, from our capacity and what we are going to be taking from them, we have pretty much locked that down. It is tied into the design of the pack, the pack design tools that we will be procuring and installing in the first half of next year for delivery in the second half of next year of product. Most of it is right now the technical aspects of not only the cell design, which is a little bit, it is different than their existing cell right now, it is a little bit newer cell design, and our pack design. We are working really closely together on what that is going to look like and from the form, function, and features of those packs.
That is what we are securing that second half, which includes the pack portion that we have been talking about earlier on for SK. As we've said, that product in and of itself back to SK is likely going to be a 2028 calendar year delivery, is kind of what we've had planned all along. The rush of what we're trying to do to get the signatures done don't really impact any of that. Nothing is being impacted by any delay in signing of documents. We're all working really well together. We're just making sure that we have everything aligned as we secure the agreement on both sides. But the cell agreement is done, and we are now moving on to the pack side. Yep.
Okay, great. Thank you. I'll turn it over.
Thank you. Once again, if you have a question, please press star then one. Your next question comes from Ted Jackson from Northland Securities. Please go ahead.
Thanks, Jing, Ardes, just congrats on a great quarter, and the outlook looks fabulous, as it always has.
Thank you.
I wanted to start on the master purchase agreement. Is there full orders behind that? I mean, is that actually, for all intents and purposes, backlog, that $116 million?
Yeah, the way that I would articulate it is, we signed a master service agreement. There's tied-in commitments and payments that need to be made so that it's secured in that sense, right? So we've secured that with reservation, and now we would really come down to getting POs, which are based on timing and when they need it. They'll be giving us POs, and they have a little bit of time to come up with those decisions here in the next month or so. Then we will start getting POs, which will be timed to the actual deliveries of when they want to get that, which is going into the tail end of Q1 of next year, calendar year. That's really what we do. But we consider that to be a committed master service agreement.
What I say in that is they've committed to that, they've committed to this, and they have time to put in POs, but they are committing to down payments to reserve that capacity.
How much of that is tied to tangible products? Products, I mean products, projects. Projects that, you know what I am saying? Like you can look through and say, this is circled to go here. I mean, is it—
Yeah.
—that firm that there are actual projects that you can know about?
Well, I cannot go into too many details about what the use of those are going to be for them, but we do know that they are working with their customers, and we have seen the throughput of that conversation and those. So we understand what it looks like in terms of each amount and where it is going to be going. We have a line of sight to that. But for us, it is more about delivering them the product, and then they have an end-use customer that they are working with for the final delivery. Yeah.
Do you have any color, or could you provide any commentary on the application? Is it kind of backing up solar? Is it data center? Kind of anything along that kind of—
From what I am seeing and what I can tell, it is kind of a combination, is what I would say at this point. There is some utility-scale connections there, mostly is what I would say to that. That is probably about as much detail as I can give.
Can you comment with regards to channel? I mean, your main channel for this kind of stuff really would be kind of LONGi and PotisEdge. Is it fair to assume that this is coming through them, or is it outside of that?
No, no. We are just totally separate. I think we would be a little bit more forthcoming, obviously, if we are working with those guys. But yeah, this is a different channel than from them. [crosstalk] I'm sorry, say that again, Ted?
I said that makes it even more exciting that you actually, I mean, it's actually a little bit of an expansion, so I think that's kind of neat.
Yeah. Yep. Thank you.
My final topic that I know I'll get out of line, I wanted to talk about the TPO, because you clearly are showing some enthusiasm, more enthusiasm, with regards to residential products and the growth prospects for it. I mean, if you were able to generate this kind of revenue when you've just kind of put that structure in place, how do we think about that business out rolls out for the remainder of this year and rolls into next?
Yeah. On our side, we've always been very bullish on all three of the verticals. The residential market took a real hit last year, the beginning of this calendar year, in terms of the rules and the changing of the guard. We had a redesign of our product and the launching of the NV Wave, which gave us all the compliance that we needed from FEOC and gave us domestic content, those things that are needed in that third-party ownership model when everything transitioned. It took us a while to get there. We're very confident. It's a very strong market in terms of the desire for tax equity. It's a multi-billion dollar market out there. We are capturing some of that with our TPO. We're working with partners who obviously have the tax equity and who are bringing the money to the table.
But we see a demand there, and we see a dropping off of many of the competitors as the FEOC compliance has worked itself through the system. So we think with the combination of our compliant product and the application of our own TPO, we can control our own destiny. We look at it like it's almost a spigot that we can open up or close as much as needed, and we want to use that to support our overarching business. Our primary focus, of course, is going to be the factory and what we're doing there, but this is also a very important play in what we're doing. It ties, the TPO is not going to just tie into residential, right?
It's going to roll into the C&I market, so we feel very strongly that it's going to support us as we start to establish our product as a beachhead for FEOC-compliant, American-made, made here in America product, that we're going to be able to utilize that TPO and work for some of those behind-the-meter projects that we are looking at. Some of our work and our partnership historically with many of the, as the developer, that they bring that to the table and they're bringing in projects. Those are things we're going to start working across the board with others as well, and being able to deliver that product. But the residential piece, we think, can be a real growth engine for us.
We are always very conscientious of our need to be focused, and we feel right now we can stay focused in all three of those verticals as we continue to grow out. It could bring us near-term needs and success, but it could also, we can continue to ramp that up. Like I said, we just kicked it off last quarter, and right now, what we're mastering or working through is the inner workings of a TPO on the financial project management side of the business. So, we're working through that. We could go a lot faster, I believe, but we feel like we want to do it in the most risk-averse way as possible by bringing value to the company and value to our shareholders.
We want to make sure that when we open it up, that it is opened up and we don't get, as they say, too far ahead of our skis. Right now, we are controlling that somewhat on our side, but at the same time, we're always looking at how we grow that and how we pivot that as we move into next year when we have the product that we can use the TPO for on the C&I side coming out. I would say more things to come there. We could probably, in the next few months, really have some detailed indication of where the residential business is going to go. But I definitely feel that it's going to be growing over what you've seen so far coming out in this past quarter.
All right. I'll leave it at that. It's exciting. I look forward to next year.
Sounds good.
Thank you. Your next question comes from Steve Ferazani from Sidoti. Please go ahead.
Good evening, Ardes, Jing . Thanks so much for all the commentary on what was obviously a nice bounce-back quarter on the resi side. Ardes, I do want to talk about the numbers you reported in the quarter, because certainly I think it was stronger than most of us were expecting, and congratulations for that. Was there any pent-up demand as you got the TPO started that maybe boosted this number, is the first part. The second part would be related to market education around the benefits of NV Wave and how much progress you have made there. Throw in one other piece, sorry, the margins. Is this really the starting point of what you think are reasonable margins with this project-based approach, and as you ramp up volume, that can improve from here? Is that a reasonable way of thinking of it?
Yeah. Thanks for the questions. The way that I would look at it is, was there pent-up demand? Well, I can tell you this. We definitely felt internally that we had gotten to a place last quarter to have some form of revenue, that there was a slight delay in the TPO in terms of making sure we're aligned from an auditing perspective, and it did cause a delay. Unfortunately, it showed up pretty sharply in the results. However, that being said, I wouldn't say that we took two quarters of demand and put it into one quarter this quarter, per se. I think for us, it's really more of how we throttle the growth of that right now. The good news for us is, we're doing this a little bit differently. We're a manufacturer, and we also have the TPO.
It's fairly rare in our industry. You're either one or the other. The fact that we are a manufacturer and we are going to start deploying our new product into that, I think that it really is up to us and to control that space. But we get the project level margins that you've seen there. There's also some product margin inside of that that's not necessarily reflective in some of that, but can help us grab portions of that as well. But at the same time, in terms of the growth of it, I think for us, that was just the beginning. If you really go back and look at that quarter, it was really back-end loaded into the last six weeks of that quarter with the projects.
I think for us, now that we've got some rhythm and moving forward, we expect to have a decent clip of growth. But we're controlling that growth in the sense that we're going to limit ourselves to certain known, what I'd call friendly installers and partners that we're working with that ensure us to do the right quality way that we can do it to control that a little bit. We're not just opening it up to the broad industry at this time. It's really supporting us in developing and launching and delivering on the NV Wave as we go forward. That's something that we're beginning to do now, and we'll continue to do that, and hopefully it'll support that. In terms of getting that out into the marketplace.
The good news about this is in the residential industry, most of the time, people go invest and develop a product, they spend tens of millions of dollars in marketing that product, and then they try to get that product, get some engagement in there. With the TPO, we have set engagement that we can control, right? So we've controlled and created that engagement because our installer partners, they need the finance platform. And inside that finance platform, when we have the NV Wave ready to go and start delivering it as we are right now, that we will control what they can use to install. It'll be our product, right? It'll be our product as we grow that. And so those things will be very aligned in that sense.
But at the same time, we will continue to market our product out there into the channel, to the distribution networks out there, and to other installers, and ultimately other third-party ownership platforms that are out there. There are others out there that have TPO platforms, and we would like our product on those platforms, and we think that we can get those. Those generally take a long time to get on, and it takes a lot of work to get on.
S o that's why we made the investment in our own TPO, and so that we can do that in a way that allows us to launch our product, not have to spend that tens of millions of dollars of marketing, right, to get our product out there and engaged, and then also bring the demand and desire for other TPOs, because once they see it working on our own, they're definitely going to pick up the phone and have a conversation.
[crosstalk].
That's at least been my experience to date. That's really the driver.
Well, great start with it. If I could switch over to Pendergrass. Sounds like you're de-risking some of the issues that you could run into as you get into this production ramp, which sounds like you're ready to go here. But I'm thinking about de-risking, one, the financial side, and then two, the supply chain side, if you could address that. Sounds like you're managing prepayments. Seems like as you build up working capital, it opens up other financing avenues. Sounds like you're on top of that.
You can just address your comfort level, both on the supply chain and the financing side. Nothing that's going to hold you back from getting the ramp that you may have in place as these POs start coming through.
I can probably I'll address the financing side first.
Yeah, please.
Yeah. So on the financing side, as you can see from the last few quarters, I joined six months ago. I think we're building up a stronger liquidity for sure, and the JV funding is no longer an issue. At this point, I think the funding requirement is really to fund the growth, right? And then we are in active conversations on the supply chain side from a payment term perspective. And then when we take orders from our customers, like the one we just signed, they're usually a capacity reservation fee and then a down payment and payment milestones. What we're trying to do is to try to tie that as much as possible to our payables to our suppliers, and any gap will be working capital requirements.
We're working actively on line of credits, and I have a few term sheets we're evaluating. And then with cash in hand, prepayment, line of credits, and of course, there's a capital market as well, I think we're very well positioned to fund our growth in the coming year.
Excellent. Excellent. That's very helpful. And then just in terms of the supply chain, in terms of meeting your needs with cells and equipment, given the ramp and knowing the demand for some of these pieces, where you are in terms of getting everything you need timed towards the POs and making sure you can be timely in completing any of these projects.
Yeah, I think we're well-positioned for any factory, right? Managing the supply chain lead time with different suppliers and what we make, the parts. There are many, many parts, so we know exactly where we're going to ordering from and who has the longest lead time. That's why we've spent some working capital in the current and last quarter to procure certain longer lead time items to make sure that we have enough to procure, to make the initial units. With the 2027 orders, we'll of course, as part of the process, look into longer lead time versus shorter lead time, and that's all part of the factory planning process that we're building up the capability of.
Great. Thanks, Ardes. Thanks, Jing.
Thank you.
This does conclude our question and answer session. I'd now like to turn the conference back over to Ardes for any closing remarks.
Oh, okay. Yeah, thank you very much, and I really appreciate the questions and everyone being on the call today. I will say we have spent the past year building this platform, right? We talked about this before, the facility, the team, the products, and strategic relationships that we are starting to build out, and we talked about this. Our focus is now on executing against that and all the investment that has been made in us and these customer commitments that we are securing. It is about execution, right? The recent agreements that we have, a more defined base of business heading into calendar year 2027. We talked about the residential side recovering and establishing those initial commercial industrial base of customers on the C&I side. These are real steps forward. Commercial commitments, as we all know, are only part of the work.
We still have to manufacture the product, meet our customers' requirements, deliver on schedule, and convert all of that to revenue and ultimately cash flow. That is how we intend to measure our progress as we move forward. As we grow, we will stay disciplined about production. We know we are going to stay disciplined about working capital and the investments that we make to support our customers' demand. We see substantial opportunity here in the U.S. for U.S.-made energy storage, and our priority is to execute well on that and on what is in front of us. I want to thank our employees again and our customers and our partners for all their support, and our shareholders, of course, for their continued confidence in NeoVolta. With that, operator, I will turn it back over to you. Thank you very much.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.