NeoVolta Inc.
For the period ended Dec 31, 2024. Filed Feb 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 7, 2025
NEOV$2.61+23.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001683168-24-007816
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-07.
0001683168-25-000834
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 30 previous paragraphs and 38 current paragraphs.
15 unchanged; 12 reworded; 7 added; 3 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 4 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Three months ended December 31, 2024 versus three months ended December 31, 2023
Current report
Revenues - Revenues from contracts with customers for the three months ended December 31, 2024 were $1,071,581 compared to $1,017,828 for the three months ended December 31, 2023. Such relatively modest increase in revenues was primarily due tothe impact of opening various new sales channels since the engagement of our new chief executive officer in April 2024.
Current report
Six months ended December 31, 2024 versus six months ended December 31, 2023
Current report
Other Income and Expense - Interest expense for the six months ended December 31, 2024 was $24,546 compared to zero for the six months ended December 31, 2023, reflecting interest attributable to borrowings made under our line of credit and borrowing arrangements obtained since June 30, 2024. Interest income for the six months ended December 31, 2024 was $1,734 compared to $18,054 for the six months ended December 31, 2023. This decrease was due to our lower level of investable cash in the six months ended December 31, 2024.
Current report
Financing activities. Net cash provided by financing activities in the six months ended December 31, 2024 was $793,649, compared to zero in the six months ended December 31, 2023. 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. As of December 31, 2024, we had made net borrowings under this credit agreement in the total amount of $383,538 initially to fund a short-term loan that we made to a customer in October 2024, in the amount of $250,000, which was fully repaid in December 2024. In November and December 2024, we made short-term borrowings from an accounts receivable lender in the total amount of $371,997, of which a portion had been repaid, leaving an outstanding balance as of December 31, 2024 of $249,711. 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.
Current report
On February 4, 2025, the Company entered into an agreement with an accredited investor group under which the Company issued a total of 500,000 shares of its common stock to the investor group at an offering price of $2.00 per share resulting in gross proceeds to the Company in the amount of $1,000,000.
Current report
Presently, our two main raw material components, batteries and inverters, are imported from different Asian suppliers and are subject to fairly low tariff rates that have been in effect for several years. The newly inaugurated Trump Administration has indicated that it may propose a significant increase in such tariff rates on various types of goods imported from Asia that could apply to our two main components. In the event that any such possible tariff increases recently proposed by President Trump on China and two North American countries become enacted, which are applicable to our two main components, they would significantly increase the cost of our two main imported components whenever the increased rates become effective. In that case, 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.
Removed paragraphs (3)
Previous report
Financing activities. As indicated in Note 2, we entered into an agreement with a newly formed financing entity in September 2024 whereby we obtained a line of credit for borrowings of up to $5,000,000. Under this agreement, we will be required to make monthly 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 2026. In order to secure such borrowings, we have granted a security interest in all of our assets to the lender. As of September 30, 2024, we had made no borrowings under this credit agreement.
Previous report
Assembly Inventory Purchase
Previous report
In April 2023, we made a bulk purchase of raw materials inventory from our contract manufacturer by making a cash payment to that company in the net amount of approximately $1.3 million. This transaction was completed pursuant to an amendment of our Master Supply Agreement with our contract manufacturer. In addition to the purchase of the raw materials inventory from our contract manufacturer, this amendment provided for the eventual assumption by us of full responsibility from our contract manufacturer for the manufacturing of our proprietary Energy Storage Systems (“ESS”) units. Pursuant to the amendment, we assumed such responsibility for the manufacturing process surrounding our ESS units from our contract manufacturer on June 1, 2023. In conjunction with assuming this responsibility, we hired the employees of our contract manufacturer who previously performed contract manufacturing services for us.
Reworded paragraphs (12)
Previous wording
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 are using 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.
Current wording
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.
Previous wording
On April 14, 2023, California implemented Net Energy Metering 3 (NEM3) for subsequent new solar installations. NEM3 reduces the amount of NEM credit for each kilowatt (KW) of solar power sent to the utility from a rate of approximately $0.20 per KW to $0.09 per KW (each Utility varies). NEM3 effectively increases the average solar Return of Investment (ROI) from 5-6 years to 10-12 years (each Utility varies). Effectively, the Company believes that solar installation in California currently makes little financial sense without also including a battery system. Installing NeoVolta nets a ROI of 4-6 years. NEM3 reduced our sales from December 2022 until very recently as solar installers worked off their permitted NEM2 installs. We expect our sales to ultimately increase going forward.
Current wording
On April 14, 2023, California implemented Net Energy Metering 3 (NEM3) for subsequent new solar installations. NEM3 reduces the amount of NEM credit for each kilowatt (KW) of solar power sent to the utility from a rate of approximately $0.20 per KW to $0.09 per KW (each Utility varies). NEM3 effectively increases the average solar Return of Investment (ROI) from 5-6 years to 10-12 years (each Utility varies). Effectively, the Company believes that solar installation in California currently makes little financial sense without also including a complimentary battery system such as ours. We believe that the anticipation of the passage of NEM3 in California, as well as the timing of its post-effective implementation, has had an erratic and temporary impact on the sales of our products in that state, beginning in December 2022.
Previous wording
The following discussion reflects the Company’s revenues and expenses for the three month periods ended September 30, 2024 and 2023, as reported in our financial statements included in Item 1.
Current wording
The following discussion reflects the Company’s revenues and expenses for the three-month and six-month periods ended December 31, 2024 and 2023, as reported in our financial statements included in Item 1.
Previous wording
Cost of Goods Sold - Cost of goods sold for the three months ended September 30, 2024 were $497,389 compared to $642,958 for the three months ended September 30, 2023. 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 16% in both periods.
Current wording
Cost of Goods Sold - Cost of goods sold for the three months ended December 31, 2024 were $747,670 compared to $811,955 for the three months ended December 31, 2023. 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 30% and 20%, respectively, with the increase largely being due to the reversal in December 2024 of a prior year reserve for obsolescence on component parts of our NV-14Ks of $90,000.
Previous wording
General and Administrative Expense - General and administrative expenses for the three months ended September 30, 2024 were $1,050,119 compared to $555,160 for the three months ended September 30, 2023. 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 several other employees since April 2024. The addition of these personnel 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.
Current wording
General and Administrative Expense - General and administrative expenses for the three months ended December 31, 2024 were $1,228,517 compared to $774,698 for the three months ended December 31, 2023. 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 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.
Previous wording
Research and Development Expense - Research and development expenses for the three months ended September 30, 2024 were $8,617 compared to zero for the three months ended September 30, 2023. Such fluctuation was largely due to timing differences in the level of the Company’s recent product development efforts.
Current wording
Research and Development Expense - Research and development expenses for the three months ended December 31, 2024 were $42,324 compared to zero for the three months ended December 31, 2023. Such fluctuation was largely due to timing differences in the level of the Company’s recent product development efforts.
Previous wording
Other Income and Expense - Interest income for the three months ended September 30, 2024 was $1,395 compared to $5,273 for the three months ended September 30, 2023. This decrease was due to the Company’s lower level of investable cash in the three months ended September 30, 2024.
Current wording
Other Income and Expense - Interest expense for the three months ended December 31, 2024 was $24,546 compared to zero for the three months ended December 31, 2023, reflecting interest attributable to borrowings made under our line of credit and borrowing arrangements obtained since June 30, 2024. Interest income for the three months ended December 31, 2024 was $339 compared to $12,781 for the three months ended December 31, 2023. This decrease was due to our lower level of investable cash in the three months ended December 31, 2024.
Previous wording
Net Loss - Net loss for the three months ended September 30, 2024 was $964,494 compared to $428,715 for the three months ended September 30, 2023, 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.
Current wording
Net Loss - Net loss for the three months ended December 31, 2024 was $971,137 compared to $556,044 for the three months ended December 31, 2023, 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.
Previous wording
Revenues - Revenues from contracts with customers for the three months ended September 30, 2024 were $590,236 compared to $764,130 for the three months ended September 30, 2023. Such decrease was primarily due tothe impact of various macroeconomic factors, such as relatively high interest rates, and regulatory factors, such as utility regulations in the State of California that we believe may have temporarily caused an economic disadvantage for residential utility customers to acquire ourenergy storage systems not only prior to the April 2023 effective date of those regulations, but also subsequently, as certain implications of them because better known in the marketplace.
Current wording
Revenues - Revenues from contracts with customers for the six months ended December 31, 2024 were $1,661,817 compared to $1,781,958 for the six months ended December 31, 2023. Such decrease was primarily due tothe impact of various macroeconomic factors, such as relatively high interest rates, and regulatory factors, such as utility regulations in the State of California, partially offset by the impact of opening various new sales channels since the engagement of our new chief executive officer in April 2024.
Previous wording
Operating activities. Net cash used in operating activities in the three months ended September 30, 2024 was $593,031 compared to $179,089 in the three months ended September 30, 2023. This increase was largely due to the current period increase in our comparative net loss, largely due to the decline in our gross profit and the increase in our other cash operating expenses. The fluctuations in our working capital components had only a de minimis impact on net operating cash flow on a comparative basis.
Current wording
Operating activities. Net cash used in operating activities in the six months ended December 31, 2024 was $1,451,330 compared to $503,497 in the six months ended December 31, 2023. 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, as well as relatively higher changes in our net working capital needs on a comparative basis.
Previous wording
As of September 30, 2024, we had a cash balance of approximately $0.4 million and net working capital of approximately $3.9 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, in conjunction with our recently obtained line of credit noted above, we will have sufficient cash to operate for at least the next 12 months.
Current wording
As of December 31, 2024, we had a cash balance of approximately $0.3 million and net working capital of approximately $3.7 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, in conjunction with our recently obtained line of credit noted above and the completion of the February 2025 private offering, we will have sufficient cash to operate for at least the next 12 months.
Previous wording
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 Asis.
Current wording
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.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Cost of Goods Sold - Cost of goods sold for the six months ended December 31, 2024 were $1,245,059 compared to $1,454,913 for the six months ended December 31, 2023. 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% and 18%, respectively, with the increase largely being due to the reversal in December 2024 of a prior year reserve for obsolescence on component parts of our NV-14Ks of $90,000.
Current report — wording carried from elsewhere
General and Administrative Expense - General and administrative expenses for the six months ended December 31, 2024 were $2,278,636 compared to $1,329,858 for the six months ended December 31, 2023. 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 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.
Current report — wording carried from elsewhere
Research and Development Expense - Research and development expenses for the six months ended December 31, 2024 were $50,941 compared to zero for the six months ended December 31, 2023. Such fluctuation was largely due to timing differences in the level of the Company’s recent product development efforts.
Current report — wording carried from elsewhere
Net Loss - Net loss for the six months ended December 31, 2024 was $1,935,631 compared to $984,759 for the six months ended December 31, 2023, 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.