UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the Quarterly Period Ended
or
For the transition period from ________________ to ______________
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (zip code) |
Registrant’s telephone number, including
area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol (s) | Name of each exchange on which registered |
| The Stock Market LLC | ||
| The Stock Market LLC |
Indicate by check mark whether the Registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company | ||
|
Emerging growth company
|
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No
The number of shares outstanding of Common Stock, par value $0.001 per share, as of November 10, 2025, was shares.
NEOVOLTA, INC.
FORM 10-Q
SEPTEMBER 30, 2025
INDEX
| 2 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We make forward-looking statements under the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other sections of this Report. In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Report.
You should read the matters described in, and incorporated by reference in, “Risk Factors” and the other cautionary statements made in this Report, as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements.
All forward-looking statements speak only at the date of the filing of this Quarterly Report. You should not rely upon forward-looking statements as predictions of future events. The reader should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this Quarterly Report are reasonable, we provide no assurance that these plans, intentions or expectations will be achieved. We disclose important factors that could cause our actual results to differ materially from our expectations under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended June 30, 2025, as filed with the SEC on September 29, 2025. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf. We do not undertake any obligation to update or revise publicly any forward-looking statements except as required by law, including the securities laws of the United States and the rules and regulations of the SEC.
| 3 |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NEOVOLTA, INC.
Balance Sheets
(Unaudited)
| September 30, | June 30, | |||||||
| 2025 | 2025 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory, net | ||||||||
| Prepaid expenses and other current assets (including prepaid inventory in amounts of $ | ||||||||
| Total current assets | ||||||||
| Other asset: | ||||||||
| Lease right-of-use asset, net | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Lease liability | ||||||||
| Short-term notes payable | ||||||||
| Advance received for Stock Subscription | ||||||||
| Total current liabilities | ||||||||
| Payable to line of credit lender | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 4) | ||||||||
| Stockholders' equity: | ||||||||
| Common stock, $ par value, shares authorized, shares and shares issued and outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders' equity | ||||||||
| Total liabilities and stockholders' equity | $ | $ | ||||||
See accompanying notes to unaudited financial statements.
| 4 |
NEOVOLTA, INC.
Statements of Operations
(Unaudited)
| Three Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Revenues from contracts with customers | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| General and administrative | ||||||||
| Research and development | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest expense | ( | ) | ||||||
| Interest income | ||||||||
| Total other income (expense) | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares outstanding - basic and diluted | ||||||||
| Net loss per share - basic and diluted | $ | ) | $ | ) | ||||
See accompanying notes to unaudited financial statements.
| 5 |
NEOVOLTA, INC.
Statements of Stockholders' Equity
Three Months Ended September 30, 2025 and 2024
(Unaudited)
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-in | Accumulated | Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock compensation expense | ||||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-in | Accumulated | Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock compensation expense | ||||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
See accompanying notes to unaudited financial statements.
| 6 |
NEOVOLTA, INC.
Statements of Cash Flows
(Unaudited)
| Three Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operations: | ||||||||
| Stock compensation expense | ||||||||
| Amortization of ROU asset | ||||||||
| Provision for expected credit losses/bad debt expense | ||||||||
| Changes in current assets and liabilities | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventory | ||||||||
| Prepaid insurance and other current assets | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses | ( | ) | ||||||
| Operating lease obligation | ( | ) | ||||||
| Net cash flows used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Borrowings under line of credit | ||||||||
| Borrowings under short-term notes payable | ||||||||
| Repayments of short-term notes payable | ( | ) | ||||||
| Advance received for Stock Subscription | ||||||||
| Net cash flows provided by financing activities | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | ||||||||
See accompanying notes to unaudited financial statements.
| 7 |
NEOVOLTA, INC.
Notes to Financial Statements
(Unaudited)
| (1) | Business and Summary of Significant Accounting Policies |
Description of Business – NeoVolta Inc. (“we”, “our” or the "Company") is a Nevada corporation, which was formed on March 5, 2018. The Company is a designer, seller and manufacturer of Energy Storage Systems (ESS) which can store and use energy via batteries and an inverter at residential and commercial sites. The Company sells its proprietary ESS units through wholesale customers, initially in California, and in an expanding number of other states. In August 2022, the Company completed an underwritten public offering of its equity securities resulting in its common stock and warrants becoming listed on a national exchange (see Note 3).
Interim Financial Information – The Company has prepared the accompanying financial statements, without audit, in accordance with accounting principles generally accepted in the Unites States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the Company’s financial position as of September 30, 2025, the results of its operations for the three month periods ended September 30, 2025 and 2024, the changes in its stockholders’ equity for the three month periods ended September 30, 2025 and 2024, and cash flows for the three month periods ended September 30, 2025 and 2024. The balance sheet as of June 30, 2025 has been derived from the Company’s June 30, 2025 financial statements that were audited by an independent registered public accounting firm but does not include all of the information and footnotes required for complete annual financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended June 30, 2025, as filed with the SEC on September 29, 2025.
Cash and Cash Equivalents
– The Company considers all highly liquid accounts with original maturities of three months or less at the date of acquisition to
be cash equivalents. Periodically, the Company may carry cash balances at financial institutions in excess of the federally insured
limit of $250,000, per bank. At September 30, 2025, the Company maintained all of its accounts at one bank and the combined balances of
all accounts at this bank was in excess of the FDIC insurance limit by $
Inventory – Inventory consists of batteries and inverters purchased from Asian suppliers and delivered to a location near the Company’s offices, for assembly into ESS units. Inventory is stated at the lower of cost or net realizable value, cost being determined using the first-in, first out (FIFO) method. The Company periodically reviews the value of items in inventory and records an allowance to reduce the carrying value of inventory to the lower of cost or net realizable value based on its assessment of market conditions, inventory turnover and current stock levels. Inventory write-downs are charged to cost of goods sold. The following table presents the components of inventory as of September 30, 2025 and June 30, 2025:
| September 30, | June 30, | |||||||
| 2025 | 2025 | |||||||
| Raw materials, consisting of assembly parts, batteries and inverters | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| Total | $ | $ | ||||||
| 8 |
Revenue Recognition – The Company recognizes revenue in accordance with Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606). Revenues are recognized when control of the promised goods is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or services. Revenue is recognized based on the following five step model:
| · | Identification of the contract with a customer | |
| · | Identification of the performance obligations in the contract | |
| · | Determination of the transaction price | |
| · | Allocation of the transaction price to the performance obligations in the contract | |
| · | Recognition of revenue when, or as, the Company satisfies a performance obligation |
The Company generates revenues
from contracts with customers, consisting of a relatively small number of wholesale dealers and installers, in California and several
other states. Four such dealers represented approximately
Allowance for Expected
Credit Losses – The Company recognizes an allowance for expected credit losses based on the assessed risk of loss for a
customer's account, reflecting the net amount expected to be collected. As of September 30, 2025 and June 30, 2025, our allowance for
expected credit losses was $
Stock Compensation Expense – Employee and non-employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period.
Research and Development Costs – Research and development costs are expensed as incurred.
Use of Estimates – Management has made a number of estimates and assumptions in preparing these financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.
Recent Accounting Pronouncements – From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, (“FASB”), or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards, including ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, and prospective standards that are not yet effective, including ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense disaggregation disclosures (Topic 220-40): Disaggregation of Income Statement Expenses, are not expected to have a significant impact on the Company’s financial statement disclosures upon adoption. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.
| 9 |
Liquidity – These financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern has been dependent upon the ability of the Company to obtain necessary debt and equity financing to continue operations and the attainment of profitable operations.
As disclosed in Note 2, we
entered into an agreement with a financing entity in September 2024 whereby we have obtained a line of credit for borrowings of up to
$
| (2) | Debt |
On September 3, 2024, we entered
into an agreement with a newly formed financing entity whereby we obtained a line of credit for borrowings of up to $
In the month of November 2024,
we initiated short-term borrowings from a commercial accounts receivable lender under a loan agreement allowing for borrowings, secured
by certain property interests, of up to a principal amount of $
| (3) | Equity |
Common Stock –
In September 2025, the Company commenced plans for a private equity offering of shares of its common stock to accredited investors. As
of September 30, 2025, the Company had received a cash deposit from a potential investor in the amount of $
In August 2022, the Company
completed an underwritten public offering of its equity securities in the form of Units with
In the underwritten public
offering, a total of Units, including exercise of the underwriter’s overallotment option, were sold at an offering price
to the public of $4.00 per Unit. The gross proceeds of the offering were $
Warrants – As
of September 30, 2025, there were outstanding Warrants for a total of
| 10 |
The following table presents activity with respect to the Company’s warrants for the three months ended September 30, 2025:
| Number | Wtd. Avg. | Wtd. Avg. | Aggregate | |||||||||||||
| of | Exercise | Remaining | Intrinsic | |||||||||||||
| Shares | Price | Term (Yrs.) | Value | |||||||||||||
| Outstanding at June 30, 2025 | $ | |||||||||||||||
| Warrants issued | ||||||||||||||||
| Warrants exercised/forfeited | ||||||||||||||||
| Outstanding at September 30, 2025 | $ | $ | ||||||||||||||
| Exercisable at September 30, 2025 | $ | $ | ||||||||||||||
These warrants were issued in conjunction with an underwritten public equity offering, therefore, there was no employee or non-employee compensation expense recognized.
Stock Compensation Expense – On August 22, 2025, we issued Non-Qualified Stock Options to a group of our non-executive employees to purchase a total of shares of our common stock at the current stock price of $ per share, pursuant to the provisions of our 2019 Stock Option Plan. These options are exercisable for a period of years from the date of issuance and will become vested on a ratable basis over a period of years from the date of issuance. Using the Black-Scholes valuation model, and assuming expected volatility of % and current interest rate of %, we have calculated that the total fair value of these options as of the date of issuance was approximately $, and we are amortizing this total amount to stock compensation expense on a straight-line basis over the -year vesting period of the options.
The following table presents activity with respect to our Non-Qualified Stock Options for the three months ended September 30, 2025:
| Number | Wtd. Avg. | Wtd. Avg. | Aggregate | |||||||||||||
| of | Exercise | Remaining | Intrinsic | |||||||||||||
| Shares | Price | Term (Yrs.) | Value | |||||||||||||
| Outstanding at June 30, 2025 | ||||||||||||||||
| Options issued | $ | |||||||||||||||
| Options exercised/forfeited | ||||||||||||||||
| Outstanding at September 30, 2025 | $ | $ | ||||||||||||||
| Exercisable at September 30, 2025 | $ | $ | ||||||||||||||
In April 2024, we entered into an employment agreement with a new Chief Executive Officer (“CEO”), providing for an initial term extending through June 30, 2027, which will be automatically renewed for additional one-year terms unless either party chooses not to renew it. Pursuant to the agreement, our new CEO received an initial equity grant equal to restricted stock units (“RSU’s”), with a grant date value of $, which will vest over a four-year period, subject to his continued employment with the Company, and will be entitled to earn additional RSU’s on each anniversary in the form of three annual performance-based equity grants, beginning in the year ending June 30, 2025, with a target value of up to $660,000 each. However, our Compensation Committee has not set any definitive targets, therefore, no additional grants have been made as of September 30, 2025.
In February 2025, we entered into an amended and restated employment agreement with our Chief Financial Officer (“CFO”). The initial term of the employment agreement ends on December 31, 2027 and will be automatically renewable for additional one-year terms unless either party chooses not to renew the agreement. Pursuant to the agreement, we issued our CFO an award of RSUs vesting in four annual installments. In February 2022, we entered into an earlier amended and restated employment agreement with our CFO, pursuant to which we issued him an RSU award for up to shares of our common stock upon achieving two defined milestones. The first milestone was achieved as of January 1, 2023, and the underlying shares of common stock were issued to our CFO as of that date. The second milestone was achieved as of January 1, 2024, and the underlying shares of common stock are expected to be issued to our CFO at a later date.
| 11 |
In January 2025, we entered into an employment agreement with our former Chief Operating Officer and current Chief Business Officer (“CBO”). The initial term of the employment agreement ends on December 31, 2027 and will be automatically renewable for additional one-year terms unless either party chooses not to renew the agreement. Pursuant to the agreement, we issued our CBO an award of RSUs vesting in three annual installments. As a result, we presently have a total of RSUs that have been issued to our three officers. For all of these awards, we have calculated the grant date value of such awards and are amortizing it as stock compensation expense over the underlying vesting periods. We have recognized stock compensation expense applicable to such RSU awards in the three months ended September 30, 2025 and 2024 in the amounts of $ and $, respectively (see Note 5).
In February 2025, we entered into a referral agreement with a marketing company to market our products to qualified solar and energy storage system installers. The term of the referral agreement ends on December 31, 2026. Pursuant to the agreement, the only compensation that the marketing company will be entitled to receive will be through the issuance of shares of our common stock in exchange for reaching specified target levels of product sales, up to a maximum total of 2,000,000 shares for reaching a total of 2,500 units sold and paid for. In accordance with ASC 718, we are accounting for this agreement based on our periodic assessments of the probability of reaching such target levels.
In conjunction with our public
offering in August 2022, we appointed two new independent directors and adopted a new compensation plan for all independent directors
based on an annual compensation amount of $65,000 with not less than 70% of such amount paid in shares of our common stock, calculated
based on the share price at the end of such prior fiscal quarter, and up to 30% paid in cash, with such final amounts to be determined
by each director. As of September 30, 2025 and 2024, we booked an accrual of $
In the three months ended September 30, 2025, we recognized total non-cash stock compensation expense of $ as follows: (i) $ for the amortized value of the RSUs granted to our three executive officers; (ii) $ for the amortized value of the portion of the new compensation plan for our independent directors that is attributable to stock; (iii) $ for the value of the shares issuable to a distribution company pursuant to a April 2025 distribution agreement; and (iv) $ for the amortized value of the Non-Qualified Stock Options issued to non-executive employees in August 2025. There was a total of shares of our common stock that were issued to various grantees for services in the three months ended September 30, 2025, all of which were previously expensed in the year ended June 30, 2025.
In the three months ended September 30, 2024, we recognized total non-cash stock compensation expense of $ as follows: (i) $ for the amortized value of the RSUs granted to our chief executive officer, as previously described, plus a non-executive recipient of another RSU award granted in June 2024; and (ii) $ for the amortized value of the portion of the new compensation plan for our independent directors that is attributable to stock. There were a total of shares of our common stock that were issued to two grantees in the three months ended September 30, 2024, which were previously expensed in the year ended June 30, 2024.
Other Matters – In February 2019, the Company’s Board of Directors approved the establishment of a new 2019 Stock Plan (“Plan”) with an authorization for the issuance of up to shares of common stock. In December 2024, the Plan was amended to increase the number of shares of common stock authorized for issuance by shares. The Plan is designed to provide for future discretionary grants of stock options, stock awards and stock unit awards to key employees, consultants, advisors, and non-employee directors. As of September 30, 2025, we have made total awards of shares under the Plan as follows: (i) RSUs for shares granted to our executive officers, as noted above; (ii) shares for the initial services of our three independent directors in the years ended June 30, 2025, 2024 and 2023, pursuant to the compensation plan adopted in August 2022 for independent directors; (iii) shares granted to various consultants for their services and to wholesale dealers under an incentive sales program; and (iv) Non-Qualified Stock Options to purchase shares granted to employees in August 2025.
| (4) | Commitments and Contingencies |
Effective February 1, 2025,
the Company relocated its corporate and manufacturing office space to a nearby facility in Poway, California, under a 13 month sublease
agreement with the sublandlord, at a base rental of $
| 12 |
We are dependent on our two main component vendors for our suppliers of batteries, inverters and other raw materials and the inability of these single-source suppliers to deliver necessary components of our products according to our schedule and at prices, quality levels and volumes acceptable to us, or our inability to efficiently manage these components, could have a material adverse effect on our financial condition and operating results. Beginning in April 2025, the Trump Administration implemented a significant increase in tariff rates on all goods imported from China, although it was temporarily suspended for 90 days in April 2025 and the suspension has been extended to November 2025, subject to judicial review. Prior to the tariff escalation in April 2025, we had anticipated the likelihood of facing such a tariff increase and began stockpiling our inventory of these two components.
From time to time in the ordinary course of our business, the Company may be involved in legal proceedings, the outcomes of which may not be determinable. The Company is not involved in any legal proceedings at this time. The results of litigation are inherently unpredictable. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and result in diversion of significant resources. We are not able to estimate an aggregate amount or range of reasonably possible losses for those legal matters for which losses are not probable and estimable.
| (5) | Subsequent Events |
Asset Purchase Agreement -
On October 15, 2025, we closed an Asset Purchase Agreement (the “Agreement”) with Neubau Energy Inc. (“Neubau”), a privately-owned company based in California, and its shareholders, whereby the Company acquired substantially all of Neubau’s assets consisting mostly of intellectual property and other intangible assets along with a relatively small amount of tangible inventory and fixed assets. Neubau has developed a proprietary battery storage module but has not had any commercial sales of the product. With this acquisition, the Company is able to produce and sell Neubau’s proprietary module, which is a complement to the Company’s products.
The total consideration paid at closing was approximately $1.5 million consisting of cash in the amount of $500,000 and 200,000 shares of the Company’s common stock. The Company will also pay Neubau a royalty of $10.00 per unit of Neubau’s proprietary module sold by the Company for a period of three years following the closing. Additionally, Neubau has the right to receive up to 4,000,000 additional shares of the Company’s common stock if certain sales milestones related to Neubau’s proprietary product are met within specified time periods through December 31, 2028. The Company is planning to account for this transaction as an acquisition of assets and plans to assign the total purchase price paid at closing to the fair value of the assets acquired.
In conjunction with closing the asset purchase, we entered into employment agreements with the two principals of Neubau covering a three year period ending September 30, 2028. One of the principals was appointed as the Company’s Chief Operating Officer replacing our former Chief Operating Officer engaged in January 2025 in that capacity (see Note 3), and our former Chief Operating Officer has now been re-designated as our Chief Product Officer. The other principal was appointed as our Chief Technology Officer. Pursuant to their employment agreements, we granted each of the two new officers an award of 450,000 RSUs (900,000 RSUs in total), vesting in three annual installments.
Other Reportable Events
Effective October 1, 2025, we entered into an extension of our sublease agreement with the sublandlord on our corporate and manufacturing office space from an expiration date of February 28, 2026 to March 31, 2031. Future undiscounted lease payments under the extended lease agreement are approximately $1.2 million, exclusive of operating expenses and obligations under the existing lease agreement. We will capitalize the present value of the future lease obligations under the extended sublease agreement and amortize the related right-of-use asset on a straight-line basis over the term of the extended lease (see Note 4).
On October 15, 2025, we entered into an Exchange Agreement with our commercial lender who has provided short-term financing to us for customer shipments and related costs under a loan agreement beginning in November 2024. Pursuant to a negotiated exchange ratio in the Exchange Agreement, we issued 200,000 shares of our common stock to the lender in exchange for reducing the outstanding principal loan balance that we owed to the lender in the amount of $500,000 (see Note 2).
On October 16, 2025, we issued a total of 47,757 shares of our common stock to the three independent members of our Board of Directors as consideration for their services rendered in the year ended June 30, 2025. We recognized the underlying expense for such services in the year ended June 30, 2025.
| 13 |
| ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Introduction
This information should be read in conjunction with the interim unaudited financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto and “Part II. Other Information - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, contained in our Annual Report on Form 10-K for the year ended June 30, 2025, filed with the Securities and Exchange Commission on September 29, 2025 (the “Annual Report”).
Certain capitalized terms used below and otherwise defined below, have the meanings given to such terms in the footnotes to our unaudited financial statements included above under “Part I - Financial Information” - “Item 1. Financial Statements”.
Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,” “NEOV”, refer specifically to NeoVolta, Inc.
In addition, unless the context otherwise requires and for the purposes of this Report only:
| · | “Exchange Act” refers to the Securities Exchange Act of 1934, as amended; |
| · | “SEC” or the “Commission” refers to the United States Securities and Exchange Commission; and |
| · | “Securities Act” refers to the Securities Act of 1933, as amended. |
Overview
We are a designer, manufacturer, and seller of high-end Energy Storage Systems (or ESS), primarily our NeoVolta NV14, NV14-K, and NV-24, which can store and use energy via batteries and an inverter at residential or commercial sites. We were founded to identify new ways to leverage emerging technologies with the dynamic changes that are taking place in the energy delivery space. We primarily market and sell our products directly to our certified solar installers and solar equipment distributors. We are also pursuing agreements with residential developers, commercial developers, and other commercial opportunities. Because we are purely dedicated to energy solar systems, virtually all our current resources and efforts go into further developing our flagship NV14, NV14-K, and NV-24 products, while focusing on specific industry needs for our next generation of products. We believe we are unique in the marketplace due to our low cost, our innovative battery chemistry, our product versatility and our commitment to installer service. Because of these factors, we believe NeoVolta is uniquely equipped to establish itself as a major player in the energy storage market.
As further discussed below under “Liquidity and Capital Resources,” we completed an underwritten public offering of our equity securities in the form of Units in August 2022. We sold a total of 1,121,250 Units in the offering at an offering price to the public of $4.00 per Unit. The gross proceeds of the offering were $4,485,000 and the net proceeds, after deduction of underwriting discounts and other offering costs, were approximately $3,780,000. We have used the proceeds of this public offering to increase our current production capacity, expand our product portfolio, enlarge our product marketing and sales efforts, and for other general corporate purposes.
Results of Operations
The following discussion reflects the Company’s revenues and expenses for the three-month periods ended September 30, 2025 and 2024, as reported in our financial statements included in Item 1.
Comparison of three months ended September 30, 2025 versus three months ended September 30, 2024
Revenues - Revenues from contracts with customers for the three months ended September 30, 2025 were $6,650,258 compared to $590,236 for the three months ended September 30, 2024. Such increase in our revenues was primarily due to the rapid expansion of various new sales channels outside of our traditional focus on the local installer market in the Southern California area while maintaining essentially the same price points since the engagement of our new chief executive officer in April 2024.
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Cost of Goods Sold - Cost of goods sold for the three months ended September 30, 2025 were $5,073,006 compared to $497,389 for the three months ended September 30, 2024. The cost of goods sold in both periods reflected the cost of procuring and assembling the component parts of the energy storage systems that were sold in each fiscal year and resulted in gross profits on such sales of approximately 24% and 16%, respectively, with the increase due to manufacturing efficiencies and the correction of a prior period entry.
General and Administrative Expense - General and administrative expenses for the three months ended September 30, 2025 were $2,374,668 compared to $1,050,119 for the three months ended September 30, 2024. Such increase was mainly due to our engagement of a new chief executive officer, who was engaged at an annual salary of $350,000 and also received a 4 year amortizing equity award of $2,854,000, as well as the hiring of several other employees since April 2024. The addition of these personnel has resulted in a higher level of both cash compensation expense and other associated expenses, such as marketing and travel, as well as non-cash stock compensation expenses related to the Company’s equity incentive programs.
Research and Development Expense - Research and development expenses for the three months ended September 30, 2025 were $56,912 compared to $8,617 for the three months ended September 30, 2024. Such fluctuation was largely due to timing differences in the level of the Company’s recent product development efforts.
Other Income and Expense - Interest expense for the three months ended September 30, 2025 was $389,134 compared to zero for the three months ended September 30, 2024, reflecting interest attributable to borrowings made under our lender credit arrangements obtained since September 30, 2024. Interest income for the three months ended September 30, 2025 was $140 compared to $1,395 for the three months ended September 30, 2024. This decrease was due to our lower level of investable cash in the three months ended September 30, 2025.
Net Loss - Net loss for the three months ended September 30, 2025 was $1,243,322 compared to $964,494 for the three months ended September 30, 2024, representing the aggregate of the various revenue and expense categories indicated above. The Company has not recognized any income tax benefit for these net losses due to the uncertainty of its ultimate realization.
Liquidity and Capital Resources
Operating activities. Net cash used in operating activities in the three months ended September 30, 2025 was $2,494,069 compared to $593,031 in the three months ended September 30, 2024. This increase was largely due to the current period increase in our comparative net loss, primarily resulting from an increase in our previously noted cash operating expenses for personnel and related costs, as well as the relatively higher changes in our net working capital needs, including recent stockpiling and prepayment of inventory, on a comparative basis.
Financing activities. Net cash provided by financing activities in the three months ended September 30, 2025 was $2,589,052, compared to zero in the three months ended September 30, 2024. Beginning in November 2024, we have made short-term borrowings from two private lenders, primarily to finance inventory purchases. In the three months ended September 30, 2025 we made borrowings from these lenders in the amount of $4,199,549 and repayments in the amount of $2,660,497. Additionally, we received a cash deposit from an investor for an advance subscription under our planned new private equity offering.
As of September 30, 2025, we had a cash balance of approximately $0.9 million and net working capital of approximately $2.7 million. Currently, we are not generating a break-even level of net operating cash flow from our net sales. However, we anticipate that demand for our products will ultimately increase over time and that, with our current credit sources, we will have sufficient cash to operate for at least the next 12 months.
Other Developments
We continue to monitor current international developments occurring in Ukraine and Israel. However, we do not believe that they will have a significant impact on either the domestic markets for our products or the international supply chains for our product components, which are largely sourced from Asia.
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Presently, our two main raw material components, batteries and inverters, are imported from different suppliers in China and, until recently, were subject to fairly low tariff rates that had been in effect for several years. Beginning in April 2025, the Trump Administration implemented a significant increase in tariff rates on all goods imported from China, although it was temporarily suspended for 90 days in April 2025 and the suspension has been extended to November 2025, subject to judicial review. Prior to the tariff escalation in April 2025, we had anticipated the likelihood of facing such a tariff increase and began stockpiling our inventory of these two components. As a result, we do not anticipate having to purchase a significant level of such components at post-tariff prices for the next several months.
In the event, however, that such a mutual trade agreement is not reached between the parties within the next several months and we find it necessary to begin purchasing a significant level of our inventory components from China at post-tariff prices, we would be faced with a decision as to whether we should attempt to pass along such tariff increases to our customers through higher prices for our products or absorbing them internally, or some combination of those two alternatives. Either circumstance would likely materially adversely affect our sales and/or our profitability.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements as defined in Item 303 of Regulation S-K.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based on financial statements which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We believe that certain accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements. See “Note 1. Business and Summary of Significant Accounting Policies” of the Notes to Financial Statements set forth above and under “Item 8. Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended June 30, 2025, as filed with the SEC on September 29, 2025, for a further description of our critical accounting policies and estimates.
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Information for this Item is not required as the Registrant is a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.
| ITEM 4. | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
We have established and maintain a system of disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports filed with the Securities and Exchange Commission pursuant to the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Commission and that such information is accumulated and communicated to our management, including our Chief Executive Officer, who is our principal executive officer, and Chief Financial Officer, who is our principal financial and accounting officer, to allow timely decisions regarding required disclosures.
As of September 30, 2025, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as a result of the material weakness relating to the lack of segregation of duties, our disclosure controls and procedures as of the end of the period covered by this Quarterly Report were not effective. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. We will be required to hire additional personnel in order to remediate our material weakness.
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Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Changes in Internal Controls over Financial Reporting
There was no change in our internal controls over financial reporting that occurred during the quarter ended September 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
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PART II. OTHER INFORMATION
| ITEM 1. | LEGAL PROCEEDINGS |
Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are not currently a party to any material legal proceeding. In addition, we are not aware of any material legal or governmental proceedings against us, or contemplated to be brought against us.
| ITEM 1A. | RISK FACTORS |
There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended June 30, 2025, as filed with the SEC on September 29, 2025 (the “Form 10-K”), under the heading “Risk Factors”, and investors should review the risks provided in the Form 10-K prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Form 10-K for the year ended June 30, 2025, under “Risk Factors”, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
During the three months ended September 30, 2025, we issued 78,565 shares of common stock to a distributor pursuant to a distribution agreement. The issuance was made pursuant to an exemption from registration as set forth in Section 4(a)(2) of the Securities Act.
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
None.
| ITEM 4. | MINE SAFETY DISCLOSURES |
Not applicable.
| ITEM 5. | OTHER INFORMATION |
During the period covered by
this Quarterly Report, none of the Company’s directors or executive officers has
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| ITEM 6. | EXHIBITS |
| Exhibit No. | Exhibit Description | |
| 2.1+ | Asset Purchase Agreement dated October 1, 2025 by and among NeoVolta, Inc., Neubau Energy Inc. and the shareholders of Neubau Energy Inc. (incorporated by reference to exhibit 2.1 of the Company’s Form 8-K filed October 7, 2025) | |
| 3.1 | Amended and Restated Articles of Incorporation of NeoVolta, Inc. (incorporated by reference to exhibit 2.1 of the Company’s Form 1-A (file no. 024-10942)). | |
| 3.2 | Second Amended and Restated Bylaws of NeoVolta, Inc. (incorporated by reference to exhibit 3.3 of the Company’s Form S-1 (file no. 333-264275)). | |
| 10.1 | Employment Agreement dated October 1, 2025 between NeoVolta, Inc. and Amany Ibrahim (incorporated by reference to exhibit 10.1 of the Company’s Form 8-K filed October 7, 2025) | |
| 10.2 | Employment Agreement dated October 1, 2025 between NeoVolta, Inc. and Thomas Enzendorfer (incorporated by reference to exhibit 10.2 of the Company’s Form 8-K filed October 7, 2025) | |
| 31.1* | Certification of Principal Executive Officer Pursuant to Section 302 of Sarbanes- Oxley Act of 2002 | |
| 31.2* | Certification of Principal Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002 | |
| 32.1* | Certification of Principal Executive Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32.2* | Certification of Principal Financial Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS * | Inline XBRL Instance Document | |
| 101.SCH * | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL * | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF * | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB * | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE * | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
______________________
* Filed herewith.
+ Pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the SEC, certain portions of this exhibit have been redacted. The Company hereby agrees to furnish supplementally to the SEC, upon its request, an unredacted copy of this exhibit.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NEOVOLTA, INC.
| November 10, 2025 | /s/ H. Ardes Johnson |
H. Ardes Johnson
Chief Executive Officer
(Principal Executive Officer)
| November 10, 2025 | /s/ Steve Bond |
Steve Bond
Chief Financial Officer
(Principal Financial/Accounting Officer)
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