NeoVolta (NEOV) boosts revenue but posts larger loss amid JV build-out
Rhea-AI Filing Summary
NeoVolta, Inc. reported strong top-line growth but wider losses for the quarter and nine months ended March 31, 2026. Quarterly revenue was $2.0 million, roughly flat year over year, while quarterly net loss widened to $3.0 million from $1.4 million as spending on growth accelerated.
For the nine months, revenue rose to $13.3 million from $3.7 million, driven by expansion into new sales channels, but net loss increased to $9.8 million from $3.4 million as general and administrative and R&D expenses grew sharply. Cash and cash equivalents climbed to $11.5 million from $0.8 million, supported by $22 million of equity financing and short-term borrowings, leaving working capital of about $19.5 million.
The company formed an 80%-owned joint venture to build a utility-scale battery manufacturing facility in Georgia, contributing $7 million so far and expecting to add $8 million in June 2026 plus up to $25 million more through June 2027. Management believes current resources and recent financings will fund operations for at least 12 months, but future capital will be needed to meet joint-venture commitments.
Positive
- Revenue growth: Nine-month revenue rose to $13.3 million from $3.7 million, reflecting rapid expansion into new sales channels while maintaining gross margins of roughly 25%.
Negative
- Rising losses and capital intensity: Nine-month net loss nearly tripled to $9.8 million and the Georgia joint venture requires an additional $8 million in June 2026 plus up to $25 million through June 2027, increasing funding and dilution risk.
Insights
Rapid revenue growth is offset by heavier losses and large future funding needs.
NeoVolta is scaling quickly, with nine-month revenue of $13.3 million versus $3.7 million a year earlier, helped by new sales channels. Gross margin held around 25%, indicating the core product economics are intact even as volumes rise.
The cost of this expansion is visible in operating expenses: general and administrative reached $10.5 million and R&D $0.5 million, pushing the nine-month net loss to $9.8 million. Financing inflows of $21.6 million and quarter-end cash of $11.5 million provide a buffer, but cash from operations was negative $8.2 million, so the business still relies on external capital.
The 80%-owned Georgia joint venture introduces substantial capital commitments: an initial $7 million already funded, an expected $8 million in June 2026, and up to $25 million through June 2027. Execution of this plan, and the company’s ability to raise financing without excessive dilution, will be central themes in subsequent filings.
Key Figures
Key Terms
Energy Storage Systems financial
Revenue from Contracts with Customers (Topic 606) financial
noncontrolling interest financial
right-of-use asset financial
International Emergency Economic Powers Act regulatory
material weakness financial
Earnings Snapshot
Table of Contents
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NEOVOLTA, INC.
FORM 10-Q
MARCH 31, 2026
INDEX
| Page | |
| CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | 3 |
| PART I. FINANCIAL INFORMATION | 4 |
|
Item 1. Financial Statements |
4 |
| Consolidated Balance Sheets as of March 31, 2026 and June 30, 2025 (Unaudited) | 4 |
| Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025 (Unaudited) | 5 |
| Consolidated Statements of Operations for the nine months ended March 31, 2026 and 2025 (Unaudited) | 6 |
| Consolidated Statements of Stockholders’ Equity for the three and nine months ended March 31, 2026 and 2025 (Unaudited) | 7 |
| Consolidated Statements of Cash Flows for the nine months ended March 31, 2026 and 2025 (Unaudited) | 8 |
| Notes to Consolidated Financial Statements (Unaudited) | 9 |
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 19 |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 23 |
| Item 4. Controls and Procedures | 23 |
|
PART II. OTHER INFORMATION |
24 |
| Item 1. Legal Proceedings | 24 |
| Item 1A. Risk Factors | 24 |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 24 |
| Item 3. Defaults Upon Senior Securities | 24 |
| Item 4. Mine Safety Disclosures | 24 |
| Item 5. Other Information | 25 |
| Item 6. Exhibits | 26 |
| Signatures | 27 |
| 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.
Consolidated Balance Sheets
(Unaudited)
| March 31, | June 30, | |||||||
| 2026 | 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 $ | ||||||||
| Note receivable, net (including accrued interest of $ | ||||||||
| Total current assets | ||||||||
| Construction in progress | ||||||||
| Property and equipment, net | ||||||||
| Net property and equipment | ||||||||
| Intellectual property (net of accumulated amortization of $ | ||||||||
| Other assets: | ||||||||
| Lease right-of-use asset, net | ||||||||
| Miscellaneous assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Lease liability | ||||||||
| Short-term notes payable | ||||||||
| Total current liabilities | ||||||||
| Payable to line of credit lender | ||||||||
| Lease liability | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 5) | ||||||||
| Stockholders' equity: | ||||||||
| Common stock, $ par value, shares authorized, shares and shares issued and out- standing, 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.
Consolidated Statements of Operations
(Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues from contracts with customers | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| General and administrative | ||||||||
| Research and development | ||||||||
| Depreciation and amortization | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Loss on debt exchanges | ( | ) | ||||||
| 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.
Consolidated Statements of Operations
(Unaudited)
| Nine Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues from contracts with customers | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| General and administrative | ||||||||
| Research and development | ||||||||
| Depreciation and amortization | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Loss on debt exchanges | ( | ) | ||||||
| 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.
| 6 |
NEOVOLTA, INC.
Consolidated Statement of Stockholders' Equity
Nine Months Ended March 31, 2026 and 2025
(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 | ( | ) | ||||||||||||||||||
| Stock compensation expense | ||||||||||||||||||||
| Issuance of common stock for asset acquisition | ||||||||||||||||||||
| Issuance of common stock for debt exchanges | ||||||||||||||||||||
| Issuance of common stock in private offering | ||||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||
| Balance at December 31, 2025 | ( | ) | ||||||||||||||||||
| Stock compensation expense | ( | ) | ( | ) | ||||||||||||||||
| Issuance of common stock in public offering | ||||||||||||||||||||
| Issuance of common stock in private offering | ||||||||||||||||||||
| Issuance of common stock for debt exchange | ||||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| 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 | ( | ) | ||||||||||||||||||
| Stock compensation expense | ||||||||||||||||||||
| Exercise of common stock warrants | ||||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||
| Balance at December 31, 2024 | ( | ) | ||||||||||||||||||
| Stock compensation expense | ||||||||||||||||||||
| Issuance of common stock in private offering | ||||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
See accompanying notes to unaudited financial statements.
| 7 |
NEOVOLTA, INC.
Consolidated Statements of Cash Flows
(Unaudited)
| Nine Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows used in operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operations: | ||||||||
| Stock compensation expense | ||||||||
| Loss on debt exchanges | ||||||||
| Depreciation and other amortization expense | ||||||||
| Amortization of right-of-use asset | ||||||||
| Provision for expected credit losses/bad debt expense | ||||||||
| Changes in assets and liabilities | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ( | ) | ||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Other long term assets | ( | ) | ( | ) | ||||
| Operating lease obligation | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses | ||||||||
| Net cash flows used in operating activities | ( | ) | ( | ) | ||||
| Cash flows used in investing activities: | ||||||||
| Additions to Construction in Progress | ( | ) | ||||||
| Additions to Other Property & Equipment | ( | ) | ||||||
| Additions to Note Receivable | ( | ) | ||||||
| Net cash flows used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Issuance of common stock in private offering | ||||||||
| Issuance of common stock in public offering | ||||||||
| Borrowings under line of credit | ||||||||
| Repayments of line of credit | ( | ) | ( | ) | ||||
| Borrowings under short-term notes payable | ||||||||
| Repayments of short-term notes payable | ( | ) | ( | ) | ||||
| Proceeds from exercise of common stock warrants | ||||||||
| 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 | ||||||||
| Cash paid for amounts included in operating lease liabilities | ||||||||
| Supplemental disclosures of financing and investing activities | ||||||||
| Issuance of common stock for debt exchanges | ||||||||
| Addition of assets for common stock | ||||||||
| Right-of-use assets obtained for operating lease liabilities | ||||||||
| Purchases of construction in progress recorded in accounts payable | ||||||||
See accompanying notes to unaudited financial statements.
| 8 |
NEOVOLTA, INC.
Notes to Consolidated 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 4).
Interim Financial Information – The Company has prepared the accompanying consolidated financial statements, without audit, in accordance with accounting principles generally accepted in the United 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 consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the Company’s consolidated financial position as of March 31, 2026, the results of its operations for the three and nine month periods ended March 31, 2026 and 2025, the changes in its stockholders’ equity for the three and nine month periods ended March 31, 2026 and 2025, and cash flows for the nine month periods ended March 31, 2026 and 2025. 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 consolidated 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 consolidated 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.
Principles of Consolidation - The consolidated financial statements include the accounts of the Company and its subsidiary, NeoVolta Power, LLC, which was formed in January 2026 (see Note 2). The noncontrolling interests in this subsidiary, which are nonredeemable, will be accounted for as a separate line within stockholders’ equity when recognized. All intercompany accounts and transactions have been eliminated in consolidation.
Acquisitions – The Company evaluates acquisitions to first determine whether a set of assets acquired constitutes a business and should be accounted for as a business combination. If the assets acquired are not a business, the transaction is accounted as an asset acquisition in accordance with Accounting Standards Codification (“ASC”) 805-50, Asset Acquisitions (“ASC 805-50”), which requires the acquiring entity to recognize assets acquired and liabilities assumed based on the cost to the acquiring entity on a relative fair value basis, except for non-qualifying assets such as inventory.
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 March 31, 2026, the Company maintained all of its parent and subsidiary company accounts at one bank and
the combined balances of all accounts exceeded the combined FDIC insurance limit by $
Inventory – Inventory consists of batteries and inverters purchased from Asian suppliers and delivered to a location near the Company’s main 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 March 31, 2026 and June 30, 2025:
| March 31, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Raw materials, consisting of assembly parts, batteries and inverters | $ | $ | ||||||
| Finished goods | ||||||||
| Total | $ | $ | ||||||
| 9 |
Property and Equipment
– The Company capitalizes the cost of property and equipment and depreciates it over their estimated useful lives ranging from
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 distributors, in California, Texas and
several other states. Two such customers 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 March 31, 2026 and June 30, 2025, our allowance for expected
credit losses for accounts receivable was $
Amortization Expense
– Amortization expense applicable to intellectual property acquired in an acquisition of assets in October 2025 is recognized on
a straight-line basis over their estimated useful lives consisting of
Depreciation Expense
– Depreciation expense applicable to property and equipment which is placed in service is recognized on a straight-line basis over
their estimated useful lives ranging from
Impairment Expense – The Company accounts for impairment expense in accordance with the provisions of ASC 350-30, General Intangibles Other Than Goodwill, for intellectual property and ASC 360-10-35, Property, Plant and Equipment – Subsequent Measurement, for other property and equipment.
Long Term Leases – The Company accounts for long term operating leases in excess of 12 months in accordance with the provisions of ASU 2016-02, Leases (Topic 842). Accordingly, the Company capitalizes the present value of the future lease obligations while recognizing an offsetting lease liability and amortizes the related right-of-use asset each month over the term of the lease.
| 10 |
Note Receivable –
Note receivable consists of a loan in the original principal amount of $
Research and Development Costs – Research and development costs are expensed as incurred.
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.
Fair Value Measurement - Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
Assets and liabilities that are carried at fair value are classified and disclosed in one of the following three categories:
Level 1 - Inputs represent unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets that are either directly or indirectly observable; and
Level 3 - Inputs are unobservable and considered significant to fair value measurement.
As more fully described in Note 5, we have accounted for our acquisition of tangible and intangible assets from another company in October 2025 by allocating the total purchase price paid at closing to the fair value of the assets acquired.
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.
Segment Information – Management has determined that the Company operates in reportable segment, which is the development and commercialization of energy storage products. The Company's chief operating decision maker (CODM) is its Chief Executive Officer, who reviews financial information presented on a company-wide basis. The CODM primarily uses net loss, which is reported in the Statements of Operations, to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions, such as the assessment of performance and allocation of resources. The significant categories within net loss that the CODM regularly reviews are revenues, cost of goods sold, and general and administrative expenses.
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 consolidated 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 consolidated financial statements.
| 11 |
Liquidity – These consolidated 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. With the proceeds of our three equity financings in the nine months ended March 31, 2026 (see Note 4) and our existing financial resources, we believe we will have sufficient cash to operate for at least the next 12 months.
(2) Consolidated Subsidiary
In January 2026, we executed a series of joint venture agreements with the U.S. affiliate of a foreign entity for the formation of a new domestic limited liability company known as NeoVolta Power, LLC (“NVP”), a Delaware entity, to jointly own and operate a utility-scale battery manufacturing facility in the State of Georgia. Pursuant to these agreements, as amended in April 2026, the Company has an 80% ownership interest in the joint venture company, and the U.S. affiliate of the foreign entity has a 20% ownership interest (subject to service-based vesting and forfeiture provisions), which will be accounted for as a noncontrolling interest based on the estimated fair value of its services as contributed to the joint venture (none as of March 31, 2026).
Under the terms of the joint
venture agreements, we made our initial capital contribution of $
In
accordance with the joint venture agreements, we expect to make an additional cash capital contribution of $
(3) Debt
In September 2024, we entered
into an agreement with a newly formed financing entity whereby we obtained a line of credit for borrowings of up to $5,000,000. Under
this agreement, we agreed to make periodic payments to the lender of accrued interest, at the rate of 16% per annum, on any outstanding
borrowings that we make, with the principal and any unpaid accrued interest being due at maturity in September 2028. In February 2026,
we made full payment to the lender of our outstanding borrowings of $
In 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 $4,000,000. In the nine months ended March 31, 2026, we made borrowings from this lender
to finance customer shipments and related costs in the total amount of $
| 12 |
(4) Equity
Common Stock –
In November 2025, the Company entered into subscription agreements for a private equity offering with an accredited investor group under
which the Company issued a total of shares of its common stock to the investor group in December 2025 at an offering price of
$2.50 per share, resulting in gross proceeds to the Company in the amount of $
In January 2026, we closed
a securities purchase agreement with a group of institutional investors, pursuant to which the Company sold to the purchasers, in a registered
direct offering, a total of shares of our common stock at an offering price of $4.76 per share. The gross proceeds to the Company
from the registered direct offering were $
In February 2026, we closed
another private equity offering in conjunction with our formation of a new joint venture company. In that offering we sold a total of
shares of our common stock at an offering price of $2.50 per share to the U.S. investment arm of our joint venture partner,
resulting in gross proceeds to the Company in the amount of $
In the nine months ended March
31, 2026, the Company entered into three voluntary exchange agreements with the commercial lender providing short-term financing for customer
shipments and related costs whereby we issued a total of shares of our common stock having a fair value of $ to the lender
in exchange for total reductions in our outstanding principal loan balance amounting to $
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 March 31, 2026, there were outstanding Warrants for a total of
| 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 March 31, 2026 | $ | $ | ||||||||||||||
| Exercisable at March 31, 2026 | $ | $ | ||||||||||||||
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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 – As of March 31, 2026, we have issued Non-Qualified Stock Options to a group of our non-executive employees to purchase a total of shares of common stock, net of forfeitures, at the then-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 calculated that the total fair value of these options at issuance was approximately $ and are amortizing this total amount to stock compensation expense on a straight-line basis over the -year vesting period of the options.
On February 23, 2026, we issued Non-Qualified Stock Options to two executive employees to purchase a total of shares of common stock at the current stock price of $3.54 per share, in exchange for surrender of their right to receive a total of 1,520,000 shares of restricted common stock. Using the Black-Scholes valuation model, and assuming expected volatility of % and current interest rate of %, we calculated that the total fair value of these options at issuance was approximately $, (see further disclosure below).
The following table presents activity with respect to our Non-Qualified Stock Options for the nine months ended March 31, 2026:
| 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 March 31, 2026 | $ | $ | ||||||||||||||
| Exercisable at March 31, 2026 | $ | $ | ||||||||||||||
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 1,280,000 restricted stock units (“RSUs”). As approved by the Compensation Committee of the Company’s Board of Directors, our CEO surrendered all of these RSUs and earned performance grants of approximately $ on February 23, 2026, in exchange for newly-issued options to purchase a total of shares of common stock, at the current stock price of $3.54 per share, which will vest at the rate of 25% per year for 4 years, subject to his continued service to the Company on each vesting date. Such number of options was calculated using a methodology intended to replicate the equivalent value of the cancelled RSUs and the remaining unrecognized compensation cost of RSUs of approximately $1.5 million is to be expensed on a straight-line basis over the 4-year vesting period of the options.
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 240,000 RSUs. As approved by the Compensation Committee of the Company’s Board of Directors, our CFO surrendered all of these RSUs on February 23, 2026, in exchange for newly-issued options to purchase a total of shares of common stock, at the current stock price of $3.54 per share, which will vest at the rate of 25% per year for 4 years, subject to his continued service to the Company on each vesting date. Such number of options was calculated using a methodology intended to replicate the equivalent value of the cancelled RSUs and the remaining unrecognized compensation cost of RSUs of approximately $0.6 million are expensed on a straight-line basis over the 4-year vesting period of the options.
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In January 2025, we entered
into an employment agreement with our former Chief Operating Officer (“COO”) and former Chief Business Officer (“CBO”),
which individual resigned from the Company on January 31, 2026 and received a lump-sum severance payment of $
In February 2025, we entered into a referral agreement with a marketing company to sell our products to qualified solar and energy storage system installers through December 31, 2026. Pursuant to the agreement, the only compensation that the marketing company will be entitled to receive is 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 three 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 March 31, 2026 and 2025, we recorded an accrual of $
In the nine months ended March 31, 2026, we recognized total non-cash stock compensation expense of $ as follows: (i) $ for the amortized value of the RSUs granted to our executive officers and key employees; (ii) $ for the amortized value of the portion of the 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 an April 2025 distribution agreement; (iv) $ for the value of the shares issuable to various consultants; and (v) $ for the amortized value of the Non-Qualified Stock Options issued to non-executive employees in August 2025 and to two executives in February 2026 in exchange for their surrendered RSUs. There was a total of shares of our common stock that were issued to various grantees for services in the nine months ended March 31, 2026, of which shares were previously expensed in the year ended June 30, 2025.
In the nine months ended March 31, 2025, we recognized total non-cash stock compensation expense of $ as follows: (i) $ for the amortized value of the RSUs granted to our three officers and two other individuals; (ii) $ for the amortized value of the portion of the compensation plan for our independent directors that is attributable to stock; (iii) $ for the March 2025 issuance of shares of our common stock to a consultant for his advisory services in the area of energy regulatory matters; (iv) $ for the amortized value of the shares potentially issuable to a marketing company pursuant to a February 2025 referral agreement; and (v) $ for the March 2025 issuance of shares of our common stock to a consultant for marketing services. There was a total of shares of our common stock that were issued to various grantees for services in the nine months ended March 31, 2025, of which shares 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 March 31, 2026, we have made total awards of shares under the Plan as follows: (i) RSUs for shares granted to our executive officers and key employees, as noted above; (ii) shares for the 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 contracted services; and (iv) shares for Non-Qualified Stock Options to purchase common stock granted to employees beginning in August 2025 and to two executives in February 2026 in exchange for surrendered RSUs. As of March 31, 2026, there were a total of shares available for future issuance under the Plan.
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Preferred Stock – The Company is authorized to issue up to shares of preferred stock. Our articles of incorporation authorize the board to issue these shares in one or more series, to determine the designations and the powers, preferences and relative, participating, optional or other special rights and the qualifications, limitations and restrictions thereof. No such preferred stock has been issued to date.
(5) Asset Purchase Agreement
In October 2025, we closed an Asset Purchase 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 smaller amount of tangible 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 complementary to the Company’s products. Sales of the proprietary battery storage module by the Company are expected to begin in calendar year 2026.
The total consideration paid
at closing was approximately $
The Company is accounting
for this transaction as an acquisition of assets and has assigned the total purchase price paid at closing, taking into account the probability
assessment of the contingent consideration noted above, to the fair value of the assets acquired, as summarized in the table below. For
the tangible property and equipment acquired, we began recognizing depreciation expense from the acquisition date and have recorded depreciation
expense in the amount of $
| Property and equipment | ||||
| Tooling and manufacturing equipment | $ | |||
| Intellectual property | ||||
| Owned technology | ||||
| Licensed technology | ||||
| Software and information technology | ||||
| $ | ||||
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, who has since resigned, in that capacity. Pursuant to their employment agreements, we granted each of the two new officers an award of RSUs ( RSUs in total), vesting in three annual installments (see Note 4).
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(6) 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 $
Future undiscounted lease
payments under the extended lease agreement are approximately $
| Year ending June 30, 2026 | $ | |||
| Year ending June 30, 2027 | ||||
| Year ending June 30, 2028 | ||||
| Year ending June 30, 2029 | ||||
| Year ending June 30, 2030 | ||||
| Thereafter | ||||
| Total future minimum lease payments | ||||
| Less amounts representing interest | ( | ) | ||
| Present value of lease liability | ||||
| Current portion of operating lease liability | ( | ) | ||
| Long-term portion of operating lease liability | $ |
We are dependent on our two main component vendors for our supplies 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 consolidated financial condition and operating results. Beginning in April 2025, the Trump Administration implemented a significant increase in tariff rates based on the authority of the International Emergency Economic Powers Act (“IEEPA”) on all goods imported from China, although it was temporarily suspended for 90 days in April 2025 and the tariff rate was lowered in November 2025, subject to judicial review. In February 2026, the Supreme Court declared the tariffs to be unconstitutional based on the authority of IEEPA, therefore, the Administration is considering alternative approaches to implementing tariffs that it believes would be sustained in a 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 in order to reduce the impact of the tariffs.
In conjunction with the closing of our Asset Purchase Agreement with Neubau Energy Inc. in October 2025, we granted the sellers the right to receive contingent consideration of up to additional shares of our common stock if certain sales milestones related to Neubau’s proprietary battery storage product are met within specified time periods through December 31, 2028 (see Note 5).
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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.
(7) Subsequent Events
On April 8, 2026, we entered into a one-year revolving credit agreement with our depository bank providing for borrowings of up to $3,000,000 at an annual interest rate of 2% above the applicable secured overnight financing rate (“SOFR”), plus an adjustment of up to 0.1% per annum. The proceeds of any borrowings made under this credit agreement are to be used for working capital purposes. In conjunction with the credit agreement, we were required to transfer $3,150,000 of cash into a restricted account at our depository bank as collateral. We made an initial draw under the credit agreement to fully repay our outstanding borrowings from a commercial accounts receivable lender in late April 2026 in the amount of approximately $620,000 (see Note 3). As of the date of this report, our outstanding borrowings under this credit agreement remain at $620,000.
On April 20, 2026, we entered into a Management Services Agreement with an affiliate of the foreign entity referenced in our formation of a joint venture in Note 2, pursuant to which that affiliate agreed to provide sales and marketing coordination services to us in connection with our commercial and industrial battery energy storage business. As consideration for the services, we agreed to issue the affiliate 1,200,000 shares of our common stock which vests in four equal semi-annual installments of 300,000 shares each on the 6-month, 12-month, 18-month, and 24-month anniversaries of the effective date.
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| 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 consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto and "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 consolidated 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 storage 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.
In January 2026, we formed a joint venture with the U.S. affiliate of a foreign entity to jointly own and operate a new utility-scale battery manufacturing facility in the State of Georgia. We have an 80% ownership interest in the joint venture company, with the U.S. affiliate of the foreign entity having a 20% ownership interest (subject to service-based vesting and forfeiture provisions). In accordance with the joint venture agreements, as amended in April 2026, we made our initial capital contribution to the joint venture of $7,000,000 in January 2026 and expect to make an additional capital contribution of $8,000,000 in June 2026 as well as additional capital contributions of up to $25,000,000 through June 30, 2027, which will require us to secure significant future infusions of equity and/or debt financing. The plant will be constructed in phases with the initial phase expected to be completed in the summer of 2026 leading to the commencement of limited production of batteries for sale to customers.
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Upon completion, this new facility is anticipated to provide the capacity for us to greatly expand our line of new energy storage products as an integrated energy solutions leader and generate substantial amounts of both customer revenues and net operating cash flows over an extended period of time.
Results of Operations
The following discussion reflects the Company’s revenues and expenses for the three and nine month periods ended March 31, 2026 and 2025, as reported in our consolidated financial statements included in Item 1.
Comparison of three months ended March 31, 2026 versus three months ended March 31, 2025
Revenues - Revenues from contracts with customers for the three months ended March 31, 2026 were $2,023,718 compared to $2,014,105 for the three months ended March 31, 2025. Such static level of revenues was primarily due to expiration of the federal solar tax credit for individuals and various other macroeconomic factors arising in the current quarter impacting not only the domestic solar industry but the overall economy in general.
Cost of Goods Sold - Cost of goods sold for the three months ended March 31, 2026 were $1,095,895 compared to $1,499,597 for the three months ended March 31, 2025. 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 period and resulted in gross profits on such sales of approximately 46% and 26%, respectively, with the increase being largely due to an upward out of period adjustment reflected in the current quarter related to higher inventory cost recognition in the immediately preceding quarter.
General and Administrative Expense - General and administrative expenses for the three months ended March 31, 2026 were $3,021,127 compared to $1,857,531 for the three months ended March 31, 2025. Such increase was mainly due to our continuing rapid expansion of both our marketing and other product development expenses since the engagement of a new chief executive officer in April 2024, including the hiring of a significant number of new employees. The addition of these personnel has resulted in a higher level of both cash compensation expense and other associated expenses, such as promotion 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 March 31, 2026 were $403,887 compared to $27,947 for the three months ended March 31, 2025. Such fluctuation was largely due to the recent acceleration of our product development efforts.
Depreciation and Amortization Expense - Depreciation and amortization expenses for the three months ended March 31, 2026 were $128,458 compared to zero for the three months ended March 31, 2025. Such fluctuation was primarily attributable to our closing of an acquisition of intangible and tangible assets from Neubau Energy Inc., which closed in October 2025.
Other Income and Expense – Loss on debt exchanges for the three months ended March 31, 2026 was $408,028 compared to zero for the three months ended March 31, 2025, and resulted from an exchange agreement entered into with one of our lenders in January 2026. Interest expense for the three months ended March 31, 2026 was $51,810 compared to $78,499 for the three months ended March 31, 2025, reflecting interest attributable to a lower level of borrowings made under our lender credit arrangements obtained since September 30, 2024. Interest income for the three months ended March 31, 2026 was $57,085 compared to $138 for the three months ended March 31, 2025, due to a higher average level of investable cash in the three months ended March 31, 2026.
Net Loss - Net loss for the three months ended March 31, 2026 was $3,028,402 compared to $1,449,331 for the three months ended March 31, 2025, 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.
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Comparison of nine months ended March 31, 2026 versus nine months ended March 31, 2025
Revenues - Revenues from contracts with customers for the nine months ended March 31, 2026 were $13,319,493 compared to $3,675,922 for the nine months ended March 31, 2025. 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.
Cost of Goods Sold - Cost of goods sold for the nine months ended March 31, 2026 were $10,041,896 compared to $2,744,656 for the nine months ended March 31, 2025. 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 25% in each period, in accordance with our customary expectations.
General and Administrative Expense - General and administrative expenses for the nine months ended March 31, 2026 were $10,474,212 compared to $4,136,167 for the nine months ended March 31, 2025. Such increase was mainly due to our continuing rapid expansion of both our marketing and other product development expenses since the engagement of a new chief executive officer in April 2024, including the hiring of a significant number of new employees. The addition of these personnel has resulted in a higher level of both cash compensation expense and other associated expenses, such as promotion 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 nine months ended March 31, 2026 were $519,594 compared to $78,888 for the nine months ended March 31, 2025. Such fluctuation was largely due to the recent acceleration of our product development efforts.
Depreciation and Amortization Expense - Depreciation and amortization expenses for the nine months ended March 31, 2026 were $240,290 compared to zero for the nine months ended March 31, 2025. Such fluctuation was primarily attributable to our closing of an acquisition of intangible and tangible assets from Neubau Energy Inc., which closed in October 2025.
Other Income and Expense – Loss on debt exchanges for the nine months ended March 31, 2026 was $1,266,030 compared to zero for the nine months ended March 31, 2025, and resulted from three exchange agreements entered into with one of our lenders since October 2025. Interest expense for the nine months ended March 31, 2026 was $645,644 compared to $103,045 for the nine months ended March 31, 2025, reflecting interest attributable to a higher level of borrowings made under our lender credit arrangements obtained since September 30, 2024. Interest income for the nine months ended March 31, 2026 was $57,650 compared to $1,872 for the nine months ended March 31, 2025, due to a higher average level of investable cash in the nine months ended March 31, 2026.
Net Loss - Net loss for the nine months ended March 31, 2026 was $9,810,523 compared to $3,384,962 for the nine months ended March 31, 2025, 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 nine months ended March 31, 2026 was $8,156,853 compared to $3,501,515 in the nine months ended March 31, 2025. 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 a recent increase in our outstanding accounts receivable.
Investing activities. Net cash used in investing activities in the nine months ended March 31, 2026 was $2,785,375, compared to zero in the nine months ended March 31, 2025. Such fluctuation was due to our initial capital expenditures on a jointly owned utility-scale battery manufacturing facility currently under construction in the State of Georgia (see “Other Developments” below) as well as the cash portion of our purchase price of an acquisition of intangible and tangible assets from Neubau Energy Inc., which closed in October 2025.
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Financing activities. Net cash provided by financing activities in the nine months ended March 31, 2026 was $21,628,221 compared to $3,051,054 in the nine months ended March 31, 2025. In the nine months ended March 31, 2026, we completed the following equity financings: (i) in November 2025, we entered into a private equity offering with accredited investors group under which we issued a total of 5,200,000 shares of our common stock at an offering price of $2.50 per share for gross proceeds of $13,000,000, which closed in two tranches in December 2025 and February 2026; and (ii) in January 2026, we closed a registered direct offering of a total of 2,100,841 shares of our common stock at an offering price of $4.76 per share resulting in net proceeds of $9,301,844. Beginning in November 2024, we also made short-term borrowings from two private lenders, primarily to finance inventory purchases. In the nine months ended March 31, 2026, we made borrowings from these lenders in the total amount of $6,936,891 and repayments in the amount of $ 7,610,514.
In the nine months ended March 31, 2025, we made borrowings from our two private lenders in the total amount of $2,581,845 and repayments in the amount of $778,191. In February 2025, we closed a private equity offering with accredited investors under which we issued a total of 543,500 shares of our common stock to the investors at an offering price of $2.00 per share resulting in gross proceeds of $1,087,000. In December 2024, we also received proceeds from the exercise of warrants issued in our August 2022 public offering in the amount of $160,400.
As of March 31, 2026, we had a consolidated cash balance of approximately $11.5 million and consolidated net working capital of approximately $19.5 million, an increase of approximately $15.4 million in the recent quarter. 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 and the proceeds of our three equity financings in the nine months ended March 31, 2026, we will have sufficient cash to operate for at least the next 12 months (see “Other Developments” below).
Other Developments
In January 2026, we executed a series of joint venture agreements with the U.S. affiliate of a foreign entity for the formation of a new domestic limited liability company to jointly own and operate a planned utility-scale battery manufacturing facility in the State of Georgia. Pursuant to these agreements, the Company has an 80% ownership interest in the joint venture company, and the U.S. affiliate of the foreign entity has a 20% ownership interest.
In accordance with the joint venture agreements, we made our initial capital contribution of $7,000,000 in January 2026 and expect to make an additional capital contribution of $8,000,000 in June 2026, which is primarily to fund the purchase of equipment. Further, we are expected to make additional capital contributions to the joint venture company through June 30, 2027 in total amounts of up to $25,000,000, pursuant to the joint venture agreements. We presently anticipate funding those additional capital contributions from the proceeds of one or more equity and/or debt financings, subject to market conditions. However, there can be no assurance that we will be successful in raising sufficient proceeds from such private offerings in order to fully satisfy our obligations for the additional capital contributions to the joint venture company. To the extent that we may be unable to raise sufficient proceeds in order to fully satisfy our obligations for the additional capital contributions to the joint venture company, the parent company of the same foreign entity will be permitted to bring in one or more new members of the joint venture company to fund such additional capital contributions which would dilute our present 80% majority ownership of the joint venture company.
We continue to monitor current international developments occurring in Iran and Ukraine. 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.
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 based on the authority of the International Emergency Economic Powers Act (“IEEPA”) on all goods imported from China, although it was temporarily suspended for 90 days in April 2025 and the tariff rate was lowered in November 2025, subject to judicial review. In February 2026, the Supreme Court declared the tariffs to be unconstitutional based on the authority of IEEPA, therefore, the Administration is considering alternative approaches to implementing tariffs that it believes would be sustained in a 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 in order to reduce the impact of the tariffs.
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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 consolidated financial statements which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these consolidated 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 consolidated financial statements. See “Note 1. Business and Summary of Significant Accounting Policies” of the Notes to Consolidated 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. None of those policies are deemed to be critical accounting policies nor critical accounting 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 March 31, 2026, 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.
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 March 31, 2026, 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 |
Except as set forth in a previously filed Form 8-K, in the three months ended March 31, 2026, and in the subsequent period through the date hereof, we had the following unregistered issuance of our common stock, which was made pursuant to exemptions from registration as set forth in Section 4(a)(2) and/or Section 3(a)(9) of the Securities Act, as applicable to each issuance: On February 9, 2026, we closed the second tranche of a private equity offering entered into in November 2025 with an institutional investor under which we issued a total of 4,000,000 shares of our common stock to the investor at an offering price of $2.50 per share resulting in gross proceeds to the Company in the amount of $10,000,000. We expect to use the proceeds of this private offering to meet working capital needs and for other general corporate purposes.
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
None.
| ITEM 4. | MINE SAFETY DISCLOSURES |
Not applicable.
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| ITEM 5. | OTHER INFORMATION |
During the period covered by
this Quarterly Report, none of the Company’s directors or executive officers has
On May 12, 2026, the Company entered into a Consulting Services Agreement (the “Consulting Agreement”) with Infinite Grid Capital, LP, a Delaware limited partnership (“IGC”), pursuant to which the Company engaged IGC to provide offtake origination and related advisory services in connection with the Company’s battery energy storage manufacturing operations being undertaken through NeoVolta Power, LLC, a Delaware limited liability company (the “Joint Venture”).
Under the Consulting Agreement, IGC has provided, and will continue to provide, strategic advisory services to the Company, including services previously rendered in connection with the formation and development of the Joint Venture (the “Pre-Signing Services”) and ongoing offtake origination services (the “Offtake Services”). The Offtake Services include identifying and evaluating potential offtake counterparties, advising on the structuring of offtake arrangements and assisting in the negotiation of term sheets, letters of intent and definitive offtake agreements.
As consideration for the Pre-Signing Services, the Offtake Services and the entry into the Consulting Agreement, the Company will issue IGC 500,000 shares of the Company’s common stock (the “Signing Fee”). In addition, IGC is entitled to receive a success fee (the “Offtake Fee”) for each qualifying offtake agreement attributable to IGC’s direct and material causal contribution, calculated as a percentage of gross revenue received by the Company for energy storage equipment and associated hardware under the applicable offtake agreement (“Project Equipment Revenue”), as follows: (i) 5.0% for projects with contracted capacity of less than 100 MWh; (ii) 4.0% for projects with contracted capacity of 100 MWh or greater but less than 250 MWh; and (iii) 3.0% for projects with contracted capacity of 250 MWh or greater. The maximum Offtake Fee payable with respect to any single offtake agreement is $3,000,000, and multiple offtake agreements with the same counterparty or as part of a single project are aggregated for purposes of determining applicable capacity thresholds and fee percentages. Each Offtake Fee is payable, at the mutual election of the Company and IGC, in cash, shares of Company common stock (or prefunded warrants), or a combination thereof. If payable in shares, the number of shares is determined by dividing the applicable Offtake Fee by the “Minimum Price” calculated in accordance with Nasdaq Listing Rule 5635(d) as of the applicable determination date. To the extent that any issuance of common stock would cause IGC to beneficially own in excess of 4.9% of the outstanding shares of common stock, such excess shares will instead be issued in the form of prefunded warrants, each with an exercise price of $0.001 per share, exercisable immediately upon issuance and containing a 9.9% beneficial ownership limitation. The shares of common stock are being and will be issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.
The Consulting Agreement provides IGC with piggyback registration rights with respect to all shares of common stock and other equity securities held by IGC or its affiliates that are not then registered for resale. In addition, the Company is required to file a registration statement covering the resale of the Signing Fee shares and cause such registration statement to be declared effective by no later than June 30, 2026.
The Consulting Agreement continues until completion of the services, unless earlier terminated by either party upon 45 days’ prior written notice or for material breach (subject to a 30-day cure period). Following termination or expiration, IGC is entitled to an Offtake Fee with respect to offtake agreements executed within 90 days with counterparties first introduced by IGC during the term and identified on a written list delivered by IGC prior to the effective date of termination.
On May 12, 2026, the Company also entered into a Letter Agreement (the “Letter Agreement”) with IGC, pursuant to which the Company granted IGC certain preemptive rights, registration rights, and board observation rights. During the period ending December 31, 2027, IGC has a preemptive right to participate in any financing by the Company, the proceeds of which are intended to fund any capital contribution to the Joint Venture, on the same terms and conditions as such financing is offered to other investors. The preemptive rights do not apply to the Company’s use of its at-the-market facility to raise capital for ongoing corporate obligations (excluding Joint Venture-related obligations) in an amount not to exceed $1,000,000 per quarter, or to financings for acquisitions or strategic transactions unrelated to the Joint Venture. The Company is required to file a registration statement covering the resale of the common stock acquired by IGC in the Company’s private placement that was completed in February 2026, and to cause such registration statement to be declared effective by no later than June 30, 2026. IGC has the right, upon written notice to the Company, to designate a representative to attend all board and committee meetings as a non-voting observer, with the same notice of meetings and access to materials provided to directors. The Letter Agreement terminates at such time as IGC holds fewer than 250,000 shares purchased pursuant to the private placement that was completed in February 2026.
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| ITEM 6. | EXHIBITS |
| Exhibit No. | Exhibit Description | |
| 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 | Operating Agreement among NeoVolta Power, LLC and the Members dated January 13, 2026 (incorporated by reference to exhibit 10.1 of the Company’s Form 8-K filed January 20, 2026) | |
| 10.2 | Contribution Agreement among NeoVolta Power, LLC and the Members dated January 13, 2026(incorporated by reference to exhibit 10.2 of the Company’s Form 8-K filed January 20, 2026) | |
| 10.3 | Form of Securities Purchase Agreement, by and among NeoVolta Inc. and the Purchasers, dated January 22, 2026 (incorporated by reference to exhibit 10.1 of the Company’s Form 8-K filed January 23, 2026) | |
| 10.4* | Technical Services Agreement between NeoVolta Power, LLC and Can Current Corporation, dated March 20, 2026 | |
| 10.5 | Form of Subscription Agreement in $2.50 private offering (incorporated by reference to exhibit 10.3 of the Company’s Form 10-Q filed February 13, 2026) | |
| 10.6 | Form of RSU Cancellation Agreement, by and among NeoVolta, Inc. and each of Ardes Johnson and Steve Bond, dated February 23, 2026 (incorporated by reference to exhibit 10.1 of the Company’s Form 8-K filed February 25, 2026) | |
| 10.7 | Sales Agreement, dated March 27, 2026, by and between NeoVolta, Inc. and Needham & Company, LLC (incorporated by reference to exhibit 1.1 of the Company’s Form 8-K filed March 27, 2026) | |
| 10.8 | First Amendment to Employment Agreement dated March 26, 2026 between NeoVolta, Inc. and Steve Bond (incorporated by reference to exhibit 10.1 of the Company’s Form 8-K filed March 27, 2026) | |
| 10.9 | Amended and Restated Operating Agreement of NeoVolta Power, LLC, dated April 15, 2026 (incorporated by reference to exhibit 10.1 of the Company’s Form 8-K filed April 21, 2026) | |
| 10.10 | First Amendment to Contribution Agreement, dated April 15, 2026 (incorporated by reference to exhibit 10.2 of the Company’s Form 8-K filed April 21, 2026) | |
| 10.11 | Asset Purchase Agreement between Can Current Corporation and NeoVolta Power, LLC, dated April 15, 2026 (incorporated by reference to exhibit 10.3 of the Company’s Form 8-K filed April 21, 2026) | |
| 10.12 | Management Services Agreement between NeoVolta Inc. and Potisedge Technology Pte Ltd., dated April 20, 2026 (incorporated by reference to exhibit 10.4 of the Company’s Form 8-K filed April 21, 2026) | |
| 10.13* | Severance Agreement and General Release by and between NeoVolta, Inc. and Michael Mendik | |
| 10.14* | Consulting Services Agreement dated May 12, 2026 by and between NeoVolta, Inc. and Infinite Grid Capital, LP. | |
| 10.15* | Side Letter Agreement dated May 12, 2026 by and between NeoVolta, Inc. and Infinite Grid Capital, LP. | |
| 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. | ||
| May 14, 2026 | /s/ H. Ardes Johnson | |
| H. Ardes Johnson | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| May 14, 2026 | /s/ Steve Bond | |
| Steve Bond | ||
| Chief Financial Officer | ||
| (Principal Financial/Accounting Officer) |
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