Eco Wave Power Global 2026 Q3 Earnings Call

Good morning, everyone, and thank you for joining Eco Wave Power's third quarter 2026 investors conference call. I'm Aharon Yehuda, Chief Financial Officer of Eco Wave Power, and I'm joined today by our founder and Chief Executive Officer, Inna Braverman. I will begin with an overview of our financial results, and then Inna will discuss our commercial developments, technological milestones, and strategic priorities. Before we begin, I would like to remind everyone that today's discussion may include forward-looking statements. These statements are subject to risk and uncertainties, and actual results may differ materially. Please refer to our earnings release and SEC filings for additional information. Turning to our third quarter financial results. We are pleased to report a significant improvement in our financial performance compared with the corresponding period last year.

For the third quarter of 2026, our net loss decreased by approximately 47% to $529,000, compared with $996,000 in the third quarter of 2025. Our operating loss decreased by approximately 25% from $888,000 to $666,000. These improvements reflect our continued focus on managing operating costs and allocating financial resources efficiently. We also recorded a significant improvement in our financial results. During the third quarter of 2026, we had net financial income of $137,000, compared with net financial expenses of $108,000 during the corresponding quarter of 2025. This represents a positive year-over-year change of $245,000. Moving to our results for the first nine months of 2026. For the nine months ended September 30, 2026, our operating loss decreased by approximately 14% from approximately $2.5 million in 2025 to $2.1 million in 2026.

Research and development expenses decreased by approximately 48% from $591,000 to $310,000. Sales and marketing expenses decreased by 21% from $293,000 to $230,000. General and administrative expenses decreased by approximately 3% from $1.611 million to $1.569 million. Net financial expenses declined significantly by approximately 80% from $412,000 to $84,000. As a result, our net loss for the first nine months of 2026 decreased by approximately 24% from approximately $2.9 million to $2.2 million. We believe these improvements demonstrate our ability to maintain financial discipline while continuing to advance our project and technology development initiatives. Turning to our liquidity position. As of September 30, 2026, Eco Wave Power held approximately $7.68 million in total cash and short-term bank deposits, including restricted deposits.

This consisted of $4.42 million in cash and cash equivalents, $3.01 million in short-term bank deposits, and approximately $250,000 in restricted short-term bank deposits. Excluding restricted deposits, our cash and short-term bank deposits totaled approximately $7.43 million. We believe this liquidity position provides an important financial foundation for our ongoing activities while we continue to manage expenditure carefully and evaluate financing agreements appropriate for future commercial projects. I would also like to briefly address our capital market activities. in June 2026, Eco Wave Power successfully completed a $4 million registered direct offering with a single institutional investor. The offering was priced at $10 per American depositary share, representing a 10.7% premium to the previous Nasdaq closing price.

In October, Schedule 13G filed with the SEC identified Citadel Advisors, Citadel Securities, and other affiliated reporting persons in connection with beneficial ownership of Eco Wave Power's securities. We remain committed to financial discipline and responsible capital allocation as we continue advancing our global project portfolio. In summary, our third quarter results demonstrate a significant improvement in our financial performance. We reduced our quarterly net loss by 47%, improved our operating results by 25%, and achieved a positive net financial result. For the first nine months, we reduced our net loss by 24%, operating loss by 14%, and net financial expenses by 80%. Looking ahead, our financial priorities remain focused on maintaining an efficient operating structure, supporting our most important commercial and technology development opportunities, and managing our financial resources responsibly. Thank you for your attention.

I will now hand the call over to our founder and CEO, Inna Braverman, who will discuss our commercial progress, AI developments, and strategic outlook.

Inna, over to you. Thank you, Aharon, and good morning to everyone joining us today.

I am pleased to share the progress Eco Wave Power has made during the third quarter of 2026 and the important developments that followed. As Aharon just explained, we delivered a significant improvement in our financial performance. But what makes this period particularly exciting is that we are improving our financial efficiency while continuing to achieve tangible commercial and technological milestones. During the quarter and the subsequent period, we advanced our international projects, strengthened relationships with major industry players, and made important progress in our artificial intelligence initiatives. I believe these developments are bringing us closer to our long-term objective of making wave energy commercially scalable and increasingly intelligent renewable energy technology. Let me start with India.

On October 29, we announced a major milestone in our collaboration with Bharat Petroleum Corporation, one of India's largest energy companies and a Fortune 500 corporation. Following the memorandum of understanding we signed in February 2025, BPCL has now issued its first purchase order for comprehensive site assessment for planned wave energy projects at its marine oil terminals in Mumbai. This is important because we are moving from an initial strategic agreement into a defined project development phase. The assessment will evaluate local marine conditions, technical feasibility, and opportunities to integrate our wave energy technology into BPCL's existing coastal infrastructure. We believe India represents a significant longer-term potential for wave energy, given its extensive coastline, growing electricity demand, and continued investment in renewable energy. Our goal is to successfully complete this initial phase and establish the technical foundation for potential pilot installation and future expansion. Moving to the U.S. Earlier this year, we successfully completed our first U.S. pilot at the Port of Los Angeles, developed in collaboration with AltaSea and Shell Marine Renewable Energy.

The project provided important practical experience in engineering, permitting, installation, and working within an operating U.S. port. We are now beginning to build on that experience. We recently held our first licensing-related kickoff discussion with AltaSea regarding a potential commercial-scale wave energy installation of up to 60 MW at the Port of Los Angeles. We are preparing an initial presentation for submission to the port as part of the preliminary licensing process. Of course, this potential expansion is still at an early stage and remains subject to further feasibility work, licensing, permitting, and financing. Nevertheless, we believe that moving from a successful pilot toward discussions regarding a significantly larger project is an encouraging development.

We were also pleased that California's final Senate Bill 605 report specifically referenced Eco Wave Power and Port of Los Angeles pilot as part of the state's assessment of future marine renewable energy commercialization opportunities. In September, I also participated as an invited luminary speaker at the inaugural Futures: Ocean Forum in Newport, Rhode Island. This engagement builds on earlier U.S. coastline feasibility work conducted by Shell Marine Renewable Energy with Eco Wave Power, which identified potential additional coastal locations for wave energy development. One of them is in Rhode Island. We believe that the U.S. represents an important longer-term potential growth market for Eco Wave Power. Turning to Portugal. Portugal remains one of our priorities because our planned 1 MW installation in Porto represents our first megawatt-scale project under concession agreement that provides for up to 20 MW.

During the third quarter, I visited Portugal and met with key local subcontractors as we continued preparing for project execution. We are pleased that APDL, the Portuguese Port Authority, has commenced the necessary rehabilitation works at the Barra do Douro breakwater. We also received a formal support letter from APDL for our request to extend the project grid connection deadline. Importantly, APDL informed us that the rehabilitation works are progressing better than expected. Our ambition remains to begin construction during 2027, subject to completion of the necessary work, safe site access, and required approvals. We believe successful implementation in Portugal could provide valuable engineering and execution experience that would support future larger-scale commercial deployments. In Taiwan, we continue coordinating with our local partner regarding the planned wave energy installation at Suao Port.

The project site has been secured, we are now awaiting the remaining approvals necessary to commence installation works. In Israel, our grid-connected station at Jaffa Port continues demonstrating the operational reliability of our technology. In August, we published updated production results showing increased electricity generation during stronger wave conditions. The station has also maintained zero downtime attributable to our system since the beginning of 2025. Beyond producing renewable electricity, Jaffa is providing us with real-world operating data that we can use to improve our system and support the development of future commercial installations. This brings me to one of the most exciting developments of this quarter, artificial intelligence and Digital Twin technology. In September 2026, we announced a collaboration with Germany-based AI engineering to develop an AI-powered Digital Twin of our proprietary wave energy technology.