Mr. Jonathan Lansky reports

LEGEND POWER SYSTEMS REPORTS Q4 F2023 FINANCIAL RESULTS

Legend Power Systems Inc. has released its financial results for the three months ended Sept. 30, 2023. The company has also scheduled a conference call to provide a business update to discuss its fiscal Q4 2023 financial results today at 11 a.m. ET (8 a.m. PT) (details herein). The call will be hosted by Randy Buchamer, president and chief executive officer. A complete set of financial statements and management discussion and analysis has been filed on SEDAR+.

Fiscal Q4 2023 highlights:

• Revenue of $159,000 versus $579,000 in fiscal Q4 2022;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $926,000 versus a $893,000 loss in fiscal Q4 2022;
• Net loss of $970,000 versus a $1.09-million loss in fiscal Q4 2022;
• Cash of $2.5-million, no debt and $3.79-million in working capital at Sept. 30, 2023.

"Our focus this quarter remained around advancing sales opportunities and we currently have new late-stage large deals with very strong financial viability," said Randy Buchamer, chief executive officer of Legend Power Systems. "We have passed the critical stage of having to prove our solutions work. We have successfully completed technology evaluations in numerous markets, and we are focusing on helping partners and prospects develop deployment plans. We have many prospects deciding on where and how to deploy SmartGates and our order visibility is clearer and stronger than ever."

Fiscal Q4 2023 operational highlights:

• Green Proving Ground program for the U.S. General Services Administration, which operates approximately 1,800 federally owned buildings is proceeding well; the deployment and evaluation schedule is well under way; two initial sites have been selected and installations are expected in 2024;
• The company's SmartGate is deployed in several key commercial real estate verticals such as multifamily residential, hospitality, big-box retail and commercial office, accounting for roughly 50 per cent of installed SmartGates; additionally, Legend Power Systems is engaged in active sales processes with several of the top firms in the commercial real estate space, with over 196 buildings in active sales cycles for over 400 plus potential SmartGates;
• Preparation efforts continue for scaling production to handle increasing demand; both local and international contractors have provided subassembly outsourcing proposals, and, internally, plans have been established for increased product assembly and test capacity; manufacturing engineering and production staff are undergoing reviews of existing procedures, documentation and data collection requirements to further streamline production and error-proof the process; significant improvements have been realized in material requirements planning, inventory management and production planning tools and processes.

Fiscal Q4 2023 financial highlights

Revenue for the fourth quarter of 2023 was $159,114, compared with $578,828 in the same quarter of fiscal 2022. The lower revenue during Q4 of fiscal 2023 was primarily due to a decrease in the number of completed installation of SmartGate units. Revenue for the year ended Sept. 30, 2023, was $1,106,093, down from $2,118,033 in fiscal 2022. The lower revenue in fiscal 2023 is due to a lower number of units sold; however, both deal size and average revenue per unit are increasing.

Gross margin in the fourth quarter of fiscal 2023 was negative 4 per cent, compared with 11 per cent in the same quarter of fiscal 2022. Negative margins in Q4 of fiscal 2023 were the result of allocated fixed costs incurred. Gross margins normalized for these allocated fixed costs would have been 33 per cent. Gross margin for the year ended Sept. 30, 2023, was 18 per cent compared with 10 per cent in fiscal 2022. The increase in gross margin experienced in fiscal 2023 was due to an increase in average selling price of the SmartGate units.

The company's operating expenses for the fourth quarter of fiscal 2023 were $1,001,073, down from $1,172,330 in the same quarter of fiscal 2022. Operating expenses for the year ended Sept. 30, 2023, was $4,430,493 versus $5,570,858 in fiscal 2022. The primary cause for the decrease was lower salaries and consulting costs as a result of internal cost-cutting measures.

Adjusted EBITDA for the fourth quarter of fiscal 2023 was negative $885,809, compared with negative $893,159 in the same quarter of fiscal 2022. For the year ended Sept. 30, 2023, adjusted EBITDA was negative $3,655,150, compared with negative $4,561,706 in fiscal 2022.

Net loss for the fourth quarter of fiscal 2023 was $969,729, compared with a net loss of $1,091,099 in the same quarter of fiscal 2022. Higher gross margin and cost-cutting measures taken resulted in a lower net loss year over year.

Conference call details

Date:  Friday, Dec. 22, 2023

Time:  11 a.m. ET (8 a.m. PT)

Webinar:   Legend Power fiscal 2023 financial results investor webinar

Replay:  available on Legend Power's website

About Legend Power Systems Inc.

Legend Power Systems provides an intelligent energy management platform that analyzes and improves building energy challenges, significantly impacting asset management and corporate performance. Legend Power's proven solutions support pro-active executive decision making in a complex and volatile business and energy environment. The proprietary and patented system reduces total energy consumption and power costs while also maximizing the life of electrical equipment. Legend Power's unique solution is also a key contributor to both corporate sustainability efforts and the meeting of utility energy efficiency targets.

We seek Safe Harbor.