Financial Data and Key Metrics Changes - In Q2 2025, the company recorded revenue of $1.5 million from research and development services, compared to no revenue in Q2 2024 [19] - Gross profit for Q2 2025 was $131,000, with a net loss of $13.4 million, up from a net loss of $10.9 million in Q2 2024 [19][22] - Year-to-date revenue reached $2 million, all from R&D services, with a total net loss of $30.7 million compared to $26.4 million in the same period last year [22] Business Line Data and Key Metrics Changes - Operating expenses for Q2 2025 were $15.8 million, an increase from $14 million in Q2 2024, primarily due to higher R&D costs [20] - R&D expenses rose to $10.1 million in Q2 2025 from $8.3 million in Q2 2024, reflecting increased production of additive components [20] Market Data and Key Metrics Changes - The introduction of a 30% investment tax credit for customers deploying linear generators or fuel cells is expected to drive customer adoption and interest in the company's Carnot power module [5][18] - The company signed a strategic MOU with Al Qaraif Industries for a potential $1 billion opportunity to deploy Carnot power modules in Saudi Arabia [16] Company Strategy and Development Direction - The company aims to execute the early adopter program and prepare for a commercial launch in 2026, focusing on scaling manufacturing and improving product performance [27] - The transition to in-house production of linear electric motors (LEMs) is expected to enhance quality and execution, minimizing risks of delays [9][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about overcoming key engineering and manufacturing challenges, which will facilitate continued production and customer deployments [4][18] - The company anticipates delivering all 10 early adopter units in 2025, with commercialization efforts extending into 2026 to incorporate customer feedback [12][24] Other Important Information - The company achieved a significant technical milestone by confirming the effectiveness of a new powder removal method for the REGEN component, which is critical for the Carnot system's performance [10] - The company has received a Phase II small business innovation research contract from the U.S. Navy for further R&D work, focusing on software development for multi-megawatt Carnot systems [14] Q&A Session Summary Question: Can you share more on the 30% tax credit? - Management emphasized the importance of the tax credit for both the company and its customers, highlighting its simplicity and long-term applicability without fuel stipulations [30][32] Question: Are there other large issues that need to be resolved prior to shipping? - Management confirmed that the main issues regarding LEMS and REGEN have been addressed, allowing for resumed production and improved performance [33][35] Question: How is the Navy planning to use the Carnot, and are there other military contracts being pursued? - The Carnot is intended for use in autonomous unmanned vessels and stationary applications at military bases, with ongoing efforts to expand military applications [37][39]

Financial Data and Key Metrics Changes - The company recorded revenue of $500,000 for Q1 2025, compared to no revenue in Q1 2024, indicating a significant year-over-year improvement [20] - Operating expenses increased to $19,700,000 in Q1 2025 from $19,000,000 in Q1 2024, with R&D costs rising to $12,200,000 from $8,000,000, reflecting increased R&D activities [21] - The net loss for Q1 2025 was $17,300,000, up from $15,600,000 in Q1 2024, indicating ongoing financial challenges [22] Business Line Data and Key Metrics Changes - The company has over 100 units under non-binding Letters of Intent (LOIs) across various markets, including data centers and EV charging, indicating strong interest in the Carnot power module [10] - Initial definitive agreements are in place with early adopter customers, including the U.S. Navy and several Fortune 500 companies, which is a positive sign for future revenue [10] Market Data and Key Metrics Changes - The ACT Expo showcased the Carnot power module, highlighting the underdeveloped state of the power segment and the growing demand for alternative power generation technologies [7][8] - A recent competitor raised over $250 million, signaling investor confidence in the distributed power market, which may benefit the company [8] Company Strategy and Development Direction - The company is focused on delivering reliable, fuel-flexible, and scalable power solutions, with plans to commercialize the Carnot power module by the end of 2025 [19][30] - The company is addressing production challenges by bringing some manufacturing in-house and improving component sourcing, which is expected to enhance production capabilities [13][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the reliability of the Carnot system tested with the U.S. Navy, noting no unplanned downtime since operations began [12][33] - The company remains on track for commercialization and expects to generate revenue between $10 million and $15 million for the full year 2025, driven by early adopter unit deployments [19][27] Other Important Information - The company is facing potential tariff impacts on capital spending, particularly related to additive printers sourced from the EU, which could increase costs by $2 million to $3 million [24] - Capital expenditures for 2025 are now expected to be closer to $30 million, up from the previous estimate of $25 million, due to increased spending on additive printing machines [26] Q&A Session Summary Question: Can you tell us more about the Navy's unit performance? - Management reported strong reliability from the Navy's unit, with no need for repairs or rebuilds since operations began, indicating a stable system [32][33] Question: Given the challenges discussed, how will this impact growth plans for next year? - Management indicated that while production challenges exist, they do not foresee a negative impact on the ability to scale manufacturing next year, with plans to continue commercialization as scheduled [35][37]