Powur

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

The Platform Focused on Revolutionizing Residential Solar & Storage in America

Milestones

Powur, PBC was organized in the State of Delaware in January 2014.

Since then, we have:

• 100% virtual, residential solar & storage company in the cloud.
• Achieved over $1.1 billion in total revenue, demonstrating a scaled platform.
• $359M in revenue for 2023.
• Strong Balance Sheet: $17M Cash & Cash Equivalents.
• Over 4,500 active platform users.
• 120 active solar contractors on platform servicing 22 states.
• Grew revenue per project 15% YoY to $41,500

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2023, the Company had revenues of $360,844,239 compared to the year ended December 31, 2022, when the Company had revenues of $328,406,102. Our gross margin was 30.98% in fiscal year 2023, and 33.5% in 2022.
• Assets. As of December 31, 2023, the Company had total assets of $71,819,324, including $21,767,984 in cash. As of December 31, 2022, the Company had $105,313,794 in total assets, including $49,411,071 in cash.
• Net Loss. The Company has had net losses of $4,027,893 and net income of $4,765,281 for the fiscal years ended December 31, 2023 and December 31, 2022, respectively.
• Liabilities. The Company's liabilities totaled $48,913,389 for the fiscal year ended December 31, 2023 and $80,170,468 for the fiscal year ended December 31, 2022.

Related Party Transaction

Refer to Question 26 of this Form C for disclosure of all related party transactions.

Liquidity & Capital Resources

To-date, the company has been financed with $8,633,564 in equity.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 24 months before we need to raise further capital.

We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.

We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.

Runway & Short/Mid Term Expenses

Powur, PBC cash in hand is $12,200,000, as of October 2024. Over the last three months, revenues have averaged $10,859,586/month, cost of goods sold has averaged $7,321,001/month, and operational expenses have averaged $4,273,702/month, for an average burn rate of $735,117 per month. Our intent is to be profitable in 6 months.

Since the date of our last financials, there's been a significant shift in in the solar industry, with a sharp decline in sales due in part to high interest rates and net metering policy eroding economic value of solar. The result was a 29% decline from the 1H to the 2H 2023. Expecting a 54% decline in YoY revenue in 2024. 

For Q4 2024 we're expecting revenue of $39M, with a historically low Q1 dropping into the $35-36M range. We expect to burn $3.2M in cash in before becoming profitable again in Q3-25. With a expected minimum raise of $3M between the Reg CF and Reg D rounds, our cash position will remain above $10M.  

Powur expects to return to profitability in Q3-25. Working capital adjustments are expected to offset negative operating cash flow to maintain a safe cash position.  Capital raise funds are expected to support current technology and headcount investment necessary to push key growth and fulfillment initiatives forward. 

There is a preferred Reg D capital raise concurrently with the Wefunder raise. We have the cash balance necessary to cover short-term burn. The main purpose behind the raise was to support continued cash burn through Q2-25 in order to support the  technology investments identified for Powur's future growth. 

All projections in the above narrative are forward-looking and not guaranteed.