Expion360 (US:XPON)2025-11-13 20:49Home Energy Storage Solutions - Expion360 began shipping its e360 Home Energy Storage Solutions in January 2025, which include two LiFePO4 battery storage solutions designed for cost-effective home energy management [161]. - The home energy storage market is projected to grow at a 26.4% CAGR, reaching $17.5 billion by 2028, with only 6.0% of residential solar systems currently utilizing battery storage [170]. - The company launched its e360 product line in December 2020, which has become a preferred solution for converting from lead-acid batteries [163]. - Expion360's lithium-ion batteries offer an expected lifespan of approximately 12 years, which is three to four times longer than certain lead-acid batteries, and provide three times the power at half the weight [167]. - The company is focused on increasing OEM market penetration and advancing product development for home energy storage solutions [164]. - Expion360's proprietary e360 SmartTalk mobile app allows users to monitor and manage e360 Bluetooth-enabled LiFePO4 batteries, enhancing user experience and product integration [169]. - The company is exploring opportunities to extend its technology into adjacent applications, including electric forklifts and industrial material handling markets [162]. Financial Performance - Net sales for the three months ended September 30, 2025, increased by $1.0 million, or 72.2%, to $2.4 million compared to $1.4 million for the same period in 2024 [197]. - Net sales for the nine months ended September 30, 2025, increased by $3.8 million, or 104.2%, to $7.4 million compared to $3.6 million for the same period in 2024 [198]. - Cost of sales for the three months ended September 30, 2025, increased by $600,000, or 51.6%, to $1.8 million compared to $1.2 million for the same period in 2024, with cost of sales as a percentage of net sales decreasing by 10.5% [200]. - Gross profit for the three months ended September 30, 2025, increased by $373,000, or 221.6%, to $542,000 compared to $169,000 for the same period in 2024, with gross profit as a percentage of net sales increasing to 22.7% [203]. - Selling, general and administrative expenses for the three months ended September 30, 2025, increased by $1.4 million, or 69.1%, to $3.5 million compared to $2.1 million for the same period in 2024, with expenses as a percentage of net sales at 148.1% [206]. - Other income for the three months ended September 30, 2025, was $3.7 million, a decrease of $10.6 million, or 154.1%, compared to an expense of $6.9 million for the same period in 2024 [209]. - The increase in net sales was primarily due to the recovery of the RV market and enhanced sales efforts, including outreach to OEM partners and strategic marketing initiatives [199]. - Selling, general and administrative expenses for the nine months ended September 30, 2025, increased by $877,000, or 13.9%, to $7.2 million compared to $6.3 million for the same period in 2024, with expenses as a percentage of net sales decreasing significantly [207]. - Gross profit for the nine months ended September 30, 2025, increased by $950,000, or 132.6%, to $1,667,000 compared to $717,000 for the same period in 2024 [204]. - Total cost of sales for the nine months ended September 30, 2025, increased by $2.9 million, or 97.3%, to $5.8 million compared to $2.9 million for the same period in 2024 [201]. - Net income for the three months ended September 30, 2025, was $723,000, compared to a net loss of $8.8 million for the same period in 2024, indicating significant improvement [212]. - For the nine months ended September 30, 2025, the net loss was reduced to $1.8 million from $13.2 million in the prior year, driven by increased sales and decreased cost of sales [212]. Cash Flow and Capital Structure - Cash used in operating activities decreased to $3.7 million for the nine months ended September 30, 2025, from $6.6 million in the prior year, primarily due to reduced inventory levels [216]. - Cash provided by financing activities increased to $7.5 million for the nine months ended September 30, 2025, compared to $5.9 million in 2024, with net proceeds from warrant exercises and common stock issuance contributing significantly [217]. - As of September 30, 2025, working capital improved to $8.5 million from $2.0 million as of December 31, 2024, with cash and cash equivalents rising to $4.3 million from $548,000 [219]. - The company recognized $3.6 million in non-cash operating income for the nine months ended September 30, 2025, compared to $7.5 million in non-cash operating costs in the prior year [213]. - Long-term debt as of September 30, 2025, was approximately $206,000, with $31,000 due within the next 12 months [223]. - The company expects to continue incurring losses and may need to raise additional capital to support operations and growth initiatives [222]. - As of September 30, 2025, the company had $788,000 in long-term operating lease liabilities [227]. - The company sold 4,336 shares of common stock under the Equity Line of Credit for an aggregate amount of $828,491 prior to the termination of the agreement [226]. - The company is classified as a smaller reporting company and is not required to provide the information called for by Item 305 of Regulation S-K [241]. Market and Distribution - The company has added several new distributors and OEM customers in the RV and marine markets, contributing to sales growth during the first nine months of 2025 [176]. - Management anticipates that products sourced from third-party manufacturers in Asia may face additional tariff exposure in 2025, but plans to mitigate potential impacts on gross margins through various strategies [180]. - As of September 30, 2025, Expion360 sells 15 models of LiFePO4 batteries, with varying average selling prices and costs of goods sold depending on the sales channel mix [182].