Expion360 Inc.

1. Organization and Nature of Operations

Expion360 Inc. (formerly Yozamp Products Company, LLC) (the “Company”) was incorporated in the State of Nevada in November 2021. Effective November 1, 2021, the Company converted to a C corporation. Upon conversion, all of the members were issued shares of the Company’s common stock, par value $0.001 per share, and became stockholders of the Company.

The Company designs, assembles, and distributes premium lithium batteries for recreational vehicles (“RVs”), marine, golf, industrial, residential, and off-the-grid needs. The Company uses lithium iron phosphate (“LiFePO4”) batteries. LiFePO4 batteries are considered a top choice for high energy density, dependability, longevity, and safety, providing the ability to power anything, anywhere. The Company is located in Redmond, Oregon.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statement presentation. However, the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation have been included.

Results of operations for the three- and six-month periods ended June 30, 2025 and 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or for any other reporting period. The unaudited interim financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025, and amended April 30, 2025 (the “Annual Report”).

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified for consistency with current year presentation. These reclassifications had no effect on the reported results of operations.

Going Concern

The Company’s activities are subject to significant risks and uncertainties, including the potential that the Company may continue to incur significant losses and fail to secure additional funding before achieving or sustaining profitability or positive cash flow from operations. Historically, the Company’s growth has been funded through a combination of equity financing, third-party debt, and working capital loans. The Company may need to raise additional debt or equity financing to expand its presence in the marketplace, acquire inventory, develop and commercialize new products, achieve operating efficiencies, and accomplish its long-term business plan. There can be no assurance as to the availability of financing or the terms upon which it might be available.

As presented in the financial statements, the Company has sustained recurring losses and negative cash flows from operations. The Company incurred a net loss of $1.4 million and $2.5 million for the three and six months ended June 30, 2025, respectively, and has incurred an accumulated deficit of $37.1 million through June 30, 2025. The Company expects to continue to incur additional losses for the foreseeable future. In addition, the Company had a cash and cash equivalents balance of approximately $685,000 as of June 30, 2025. These factors raise substantial doubt about the Company’s ability to continue as a going concern within 12 months from the date the financial statements in this Quarterly Report were issued. However, management is working to address these challenges, including increasing revenue from the sale of products, managing inventory levels, identifying alternative supply chain resources, managing operational expenses, and raising additional capital.

Historically, the Company’s growth has been funded through a combination of sales of equity interests, third party debt, and working capital loans. The Company’s net sales for the three months ended June 30, 2025 increased 134% compared to the same period in 2024, and the net sales for the six months ended June 30, 2025 increased 124% compared to the same period in 2024. The Company believes these increases were driven not only by the RV market recovering from its previous slowdown but also by enhanced sales efforts, including expanded outreach to OEM partners, strategic marketing initiatives, and the successful onboarding of new customers during this period. Selling, general, and administrative expenses decreased by 2% for the three months ended June 30, 2025, primarily due to savings in rent and related expenses, offset by an increase in travel expenses and research and development. Selling, general, and administrative expenses decreased by 14% for the six months ended June 30, 2025, primarily due to savings in salaries and benefits, rents, and legal and professional fees, offset by an increase in research and development. Other expenses decreased by 97% for both the three and six months ended June 30, 2025, primarily due to decreased interest expense and settlement expense. These changes resulted in a 38% improvement in net loss for the three months ended June 30, 2025 and a 43% improvement in net loss for the six months ended June 30, 2025, compared to the same periods in 2024.

Historically, the Company’s growth has been funded through a combination of equity financing, third-party debt, and working capital loans. However, there can be no assurance that the Company’s financial performance will continue to improve or that it will be able to raise additional equity or debt financing to finance its operations. If the Company is unable to increase sales of its products to levels sufficient to achieve profitability and positive cash flows from operations, it may be required to pursue alternative business strategies, sell assets, seek additional equity or debt financing, or cease operations.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business; however, the above conditions raise substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

For additional information regarding the significant risks and uncertainties that may impact our business and financial results, see Part II, Item 1A, “Risk Factors” in this Quarterly Report.

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company’s significant accounting estimates include the depreciable lives of fixed assets, right-of-use asset and liability for operating leases, revenue recognition, valuation of warrants, stock-based compensation, and deferred assets and liability for income tax purposes. Management makes its estimates and assumptions on an ongoing basis using historical experience, existing and known circumstances, authoritative accounting pronouncements, and other factors management believes to be reasonable. In addition, the Company has considered the potential impact of macroeconomic factors, including tariffs, inflation, interest rates, commodity pricing, and recessionary concerns on its business and operations. Although the full impact of these factors is unknown and cannot be reasonably estimated, the Company believes it has made appropriate accounting estimates and assumptions based on the facts and circumstances available as of the reporting date. However, actual results could vary materially from the estimates and assumptions that were used, which may result in material effects on the Company’s financial condition, results of operations, and liquidity.

Cash and Cash Equivalents

The Company considers all cash amounts which are not subject to withdrawal restrictions or penalties, and all highly liquid investments purchased with an original maturity of three months or less from the date of purchase, to be cash equivalents. The Company maintains its cash balances with high-quality financial institutions located in the United States. Cash accounts are secured by the Federal Deposit Insurance Corporation up to $250,000 per institution. At times, balances may exceed federally insured limits. Investment accounts are placed in funds consisting of U.S. Treasury securities. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to any significant credit risk with respect to its cash and cash equivalents. As of June 30, 2025, investment accounts totaling $714 were invested in U.S. Treasury securities.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount, are due within a year or less, and generally do not bear any interest. The Company performs ongoing credit evaluations of its customers and generally requires no collateral. An allowance for uncollectible accounts may be recorded to reduce accounts receivable to the estimated amount that management expects will be collected. The allowance is based upon management’s review of the accounts receivable aging, specific identification of potentially uncollectible balances and other factors deemed relevant. Recoveries of accounts previously written off and adjustments to the allowance for uncollectible accounts are recorded as adjustments to bad debt expense. For the three and six months ended Jue 30, 2025 and 2024, the Company wrote off $0 to bad debt expense. The Company has not accrued an allowance for doubtful accounts as of June 30, 2025 or December 31, 2024, as management believed all outstanding amounts to be fully collectible.

Customer Deposits

As of June 30, 2025 and December 31, 2024, the Company had customer deposits totaling $48,693 and $48,474, respectively.

Inventory

Inventory generally consists of batteries and accessories, resale items, components, and related landing costs. Inventory is stated at the lower of cost (first in, first out) or net realizable value.

As of June 30, 2025 and December 31, 2024, the Company had inventory that consisted of finished assemblies totaling $4,396,037 and $4,077,013, respectively, and raw materials (inventory components, parts, and packaging) totaling $742,226 and $754,448, respectively. The stated inventory value is inclusive of fixed production overhead costs based on normal capacity of the assembly warehouse.

The Company periodically reviews its inventory for evidence of slow-moving or obsolete inventory and provides for an allowance when considered necessary. The Company determined that no such reserve was necessary as of June 30, 2025 or December 31, 2024.

The Company prepays for inventory purchases from foreign suppliers. Prepaid inventory totaled $485,507 and $1,612,686 as of June 30, 2025 and December 31, 2024, respectively, and included inventory in transit where title had passed to the Company but had not yet been physically received.

Vendor and Foreign Concentrations of Inventory Suppliers

During the three months ended June 30, 2025 and 2024, approximately 22% and 83%, respectively, of inventory purchases were made from foreign suppliers located in Asia. During the six months ended June 30, 2025 and 2024, approximately 38% and 79%, respectively, of inventory purchases were made from foreign suppliers located in Asia. Management expects products shipped from the Company’s third-party manufacturers in Asia will be subject to tariffs. The Company intends to maintain its gross margins through a combination of supplier concessions and customer price increases. The Company has also engaged a lobbyist firm to assist with tariff relief.

Property and Equipment

Property and equipment are stated at cost less depreciation calculated on the straight-line basis over the estimated useful lives of the related assets as follows:

Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives.

Betterments, renewals, and extraordinary repairs that extend the lives of the assets are capitalized; other repairs and maintenance charges are expensed as incurred. The cost and related accumulated depreciation and amortization applicable to assets retired are removed from the accounts, and the gain or loss on disposition is recognized on the statements of operations.

Leases

The Company determines if an arrangement is a lease at inception. Leases may be categorized as operating leases or finance leases. The Company does not have any finance leases.

Operating lease right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset during the lease term, and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating leases are included in ROU assets, current operating lease liabilities, and long-term operating lease liabilities on the balance sheets.

Lease ROU assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term at commencement date calculated using the Company’s incremental borrowing rate (“IBR”) applicable to the lease asset, unless the implicit rate is readily determinable. The Company’s IBR represents the interest rate that the Company would expect to incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis with similar terms and payments, in an economic environment where the leased asset is located. ROU assets include any lease payments made at or before lease commencement and exclude any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of 12 months or less are not recognized on the balance sheets. The Company’s leases do not contain any residual value guarantees. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

The Company accounts for lease and non-lease components as a single lease component for all its leases.

Impairment of Long-Lived Assets

Long-lived assets consist primarily of property and equipment. When events or circumstances indicate the carrying value of a long-lived asset may be impaired, the Company estimates the future undiscounted cash flows to be derived from the use and eventual disposition of the asset to assess whether or not a potential impairment exists. If the carrying value exceeds the estimate of future undiscounted cash flows, the impairment is calculated as the excess of the carrying value of the asset over the estimate of its fair value. Fair value is determined primarily using the estimated cash flows discounted at a rate commensurate with the risk involved. No long-lived asset impairment was recognized during the three or six months ended June 30, 2025 or 2024.

Product Warranties

The Company sells the majority of its products to customers along with conditional repair or replacement warranties. The Company’s branded DC mobile chargers are warrantied for two years from the date of sale and its branded VPR 4EVER Classic and Platinum batteries are warrantied at gradually lesser levels over a 12-year period from date of sale. The Company determines its estimated liability for warranty claims based on the Company’s historical experience with the amount of claims actually made. The Company has not accrued any liability for product warranties as of June 30, 2025 and December 31, 2024 because, historically, there have been very few warranty claims, and any costs for repairs or replacement parts have been nominal.

Liability for Refunds

The Company does not have a formal product return policy but does accept returns under its warranty policies. Returns have historically been minimal. The Company has not accrued a refund liability as of June 30, 2025 or December 31, 2024. If a refund liability was recognized, revenue would be recorded net of this amount. Any returns of discontinued product are not added back to inventory and therefore related costs are nominal and not recorded as an asset.

Revenue Recognition

The Company’s revenue is generated from the sale of products consisting primarily of batteries and accessories. The Company recognizes revenue when control of goods or services is transferred to its customers in an amount that reflects the consideration it is expected to be entitled to in exchange for those goods or services. The Company recognizes revenue based on the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the performance obligation(s) is satisfied. Revenue is recognized upon shipment or delivery to the customer, as that is when the customer obtains control of the promised goods and the Company’s performance obligation is considered satisfied. As such, accounts receivable is recorded at the time of shipment or will call, when the Company’s right to the consideration becomes unconditional and the Company determines there are no uncertainties regarding payment terms or transfer of control.

Concentration of Major Customers

A customer is considered a major customer when net revenue attributable to the customer exceeds 10% of total revenue for the period, or the accounts receivable balance attributable to the customer exceeds 10% of total accounts receivables.

During the three months ended June 30, 2025, sales to two customers totaled $1,581,339, comprising approximately 53% of total sales. These two customers represented 27% of total accounts receivable as of June 30, 2025. Accounts receivable from two additional customers totaled $223,228, representing approximately 31% of total accounts receivable as of June 30, 2025. During the six months ended June 30, 2025, sales to three customers totaled $2,816,096, comprising approximately 56% of total sales. These customers represented 36% of total accounts receivable as of June 30, 2025. Accounts receivable from two additional customers totaled $223,228, representing approximately 31% of total accounts receivable as of June 30, 2025.

During the three months ended June 30, 2024, sales to one customer totaled $232,513, comprising approximately 19% of total sales. This customer represented 12% of total accounts receivable as of June 30, 2024. During the six months ended June 30, 2024, sales to one customer totaled $284,571, comprising approximately 12% of total sales and total accounts receivable as of June 30, 2024. Accounts receivable from two additional customers totaled $134,362, representing approximately 38% of total accounts receivable as of June 30, 2024.

Shipping and Handling Costs

Shipping and handling fees billed to customers totaled $12,766 and $29,199 during the three months ended June 30, 2025 and 2024, respectively, and $27,684 and $51,889 during the six months ended June 30, 2025 and 2024, respectively, and are classified as net sales on the statements of operations. Shipping and handling costs for shipping product to customers totaled $59,423 and $59,651 during the three months ended June 30, 2025 and 2024, respectively, and $142,600 and $102,694 during the six months ended June 30, 2025 and 2024, respectively, and are classified as selling, general, and administrative expense on the statements of operations.

Advertising and Marketing Costs

The Company expenses advertising and marketing costs as incurred. Advertising and marketing expenses totaled $242,557 and $228,308 for the three months ended June 30, 2025 and 2024, respectively, and $489,199 and $468,384 for the six months ended June 30, 2025 and 2024, respectively, and are included in selling, general and administrative expense on the statements of operations.

Research and Development

Research and development costs are expensed as incurred. Research and development costs charged to expense amounted to $78,816 and $82,790 for the three months ended June 30, 2025 and 2024, respectively, and $165,978 and $156,465 for the six months ended June 30, 2025 and 2024, respectively, and are included in selling, general and administrative expenses on the statements of operations.

Income Taxes

The Company’s deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of exiting assets and liabilities and their respective tax basis. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Fair Value of Financial Instruments

The Company accounts for its financial assets and liabilities in accordance with ASC Topic 820,Fair Value Measurement. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value, as follows:

*Level 1:*Quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. The fair value hierarchy gives the highest priority to Level 1 inputs.

*Level 2:*Observable prices that are based on inputs not quoted on active markets but corroborated by market data. These inputs include quoted prices for similar assets or liabilities; quoted market prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

*Level 3:*Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as consider counterparty credit risk in the assessment of fair value.

The Company’s financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable, short-term revolving loans, stockholder promissory notes, and long-term debt. The fair value of cash and cash equivalents, accounts receivable, accounts payable, and short-term revolving loans approximates their respective carrying values because of the short-term nature of those instruments. The fair value of the stockholder promissory notes, and long-term debt approximates their respective carrying values because the interest rates applicable to these instruments approximate market rates available to the Company for similar obligations with the same maturities.

Basic and Diluted Net Loss Per Share

The basic net earnings or loss per share is calculated by dividing the net earnings or loss by the weighted average number of shares outstanding during the period. Diluted earnings or loss per share adjusts the basic earnings or loss per share for the potentially dilutive impact of securities (e.g., options and warrants).

We calculate basic and diluted net earnings or loss per share using the weighted average number of common shares outstanding during the periods presented. For the diluted earnings per share calculation, we adjust the weighted average number of common shares outstanding to include stock options, warrants, unvested restricted stock units (“RSUs”), and shares associated with the conversion of any convertible notes or convertible preferred stock, in each case as applicable. We use the if-converted method for calculating any potential dilutive effect of convertible notes and convertible preferred stock on diluted net earnings or loss per share. For periods in which we have a net loss position, we exclude these potentially dilutive securities from the weighted average number shares because their inclusion would be anti-dilutive. Accordingly, for periods in which we have a net loss position, basic and diluted net loss per share are the same.

The following shows the amounts used in computing net loss per share:

As of June 30, 2025 and December 31, 2024, the Company had outstanding warrants, options, and RSUs convertible into or exercisable for an aggregate of 6,440,677 and 5,392,395 shares of common stock, respectively.

The following table sets forth the number of shares excluded from the computation of diluted loss per share since their inclusion would have been anti-dilutive.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718 “Compensation—Stock Compensation,” which requires compensation costs to be recognized at grant date fair value over the requisite service period of each of the awards. The Company recognizes forfeitures of awards as they occur.

The fair value of stock options is determined using the Black-Scholes-Merton (“Black-Scholes”) option-pricing model. Certain assumptions are made regarding the components of the model, including risk-free interest rate, volatility, expected dividend yield, and expected life of the stock option. Changes to these assumptions could cause significant adjustments to the valuations.

Accounting Guidance Issued but Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40).” This ASU was issued to improve the disclosures about an entity’s expenses and require certain types of expenses to be disclosed individually. The Company is currently evaluating the impact of this standard on its financial statements.

In March 2024, the FASB issued ASU 2024-01, “Compensation—Stock Compensation,” which adds an illustrative example to demonstrate how to apply the guidance in paragraph 718-10-15-3. The Company is currently evaluating the impact of this standard on its financial statements.

3. Property and Equipment, Net

Property and equipment consist of the following:

Depreciation expense was $31,215 and $45,422 for the three months ended June 30, 2025 and 2024, respectively. Depreciation expense was $65,242 and $94,866 for the six months ended June 30, 2025 and 2024, respectively. There were disposals and sales of fixed assets during the six months ended June 30, 2025 and 2024 resulting in the net cash received of $4,250 and $87,684, respectively, and a fixed assed was transferred in exchange for services rendered valued at $21,420 during the six months ended June 30, 2025. As a result of disposals and sales of fixed assets, the Company recognized a loss of $14,978 and $13,353 during the three months and six months ended June 30, 2025, respectively, and $0 and $306 during the three and six months ended June 30, 2024, respectively.

4. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

5. Long-Term Debt

Long-term debt consisted of the following as of June 30, 2025 and December 31, 2024:

Future maturities of long-term debt are as follows:

6. Stockholder Promissory Notes

The Company previously issued unsecured promissory notes to certain stockholders (the “Notes”). As of June 30, 2025 and December 31, 2024, the Company hadno outstanding principal balance due to pursuant to the Notes. The Notes were fully repaid in August 2024.

Interest paid to stockholders under the Notes totaled $0 during the three and six months ended June 30, 2025, and $17,501 and $35,499 during the three and six months ended June 30, 2024, respectively. There wasno accrued interest as of June 30, 2025 and December 31, 2024 related to the Notes.

**7.Equity and Debt Financings

January 2025 Public Offering

In January 2025, the Company sold in a public offering (i)474,193 shares of common stock, (ii) pre-funded warrants to purchase 574,193 shares of common stock, which were exercised immediately upon closing, and (iii) warrants to purchase 1,048,386 shares of common stock (the “January 2025 Public Offering”) for aggregate gross proceeds of $2,599,997. Net proceeds from this offering, after related costs, totaled $1,779,557.

The fair value of the warrants issued in the offering was determined at the date of issuance using the Black-Scholes option-pricing model and following assumptions: per share price of common stock on date of grant $2.22, expected dividend yield of 0%, expected volatility of 158.64%, risk-free interest rate of 4.41% and expected life offive years. The warrants were valued at $2.064 per share, with a total value of $2,163,869. All of the warrants remain outstanding.

The offering of the shares of common stock and pre-funded warrants in the January 2025 Public Offering was made pursuant to an effective shelf registration statement on Form S-3 (File No. 333-272956), which the Company filed with the SEC on June 27, 2023 and was declared effective on July 10, 2023 (the “Shelf Registration Statement”). The offering of the warrants in the January 2025 Public Offering was made pursuant to a registration statement on Form S-1 (File No. 333-284354), which the Company filed with the SEC on January 17, 2025 and was declared effective on February 11, 2025.

Reverse Stock Split True-Up Payment

On October 8, 2024, the Company effected a 1-for-100 reverse stock split (the “Reverse Stock Split”) of its issued and outstanding common stock, which was approved by the Company’s board of directors on September 27, 2024, following stockholder approval at the Company’s annual meeting of stockholders held on September 27, 2024 (the “2024 Annual Meeting”).

As a result of thelowest daily volume weighted average price (“VWAP”)of the common stock during the five trading days before and after the Reverse Stock Split, a Reverse Stock Split cash true-up payment provision in the Series A Warrants, which is capped at $5.0 million in the aggregate under all Series A Warrants (as described under the section entitled “—August 2024 Public Offering” below), was triggered, but the payment of the Reverse Stock Split cash true-up payment was suspended in accordance with the terms of the Series A Warrants (the “Cash True-up Payment”).

During the year ended December 31, 2024, $14,052 of the Cash True-up Payment was relieved in connection with the exercise of Series A Warrants, leaving a remaining liability of $4,985,948 as of December 31, 2024. The Company used $500,000 of the net proceeds from the January 2025 Public Offering to satisfy a portion of the Cash True-up Payment leaving a remaining liability of $4,485,948 as of June 30, 2025.

August 2024 Public Offering

On August 8, 2024, the Company sold in a public offering, (i)33,402,000 Common Units (pre-Reverse Stock Split), each consisting of one share of common stock, two Series A Warrants and one Series B Warrant, and (ii)16,598,000 Pre-Funded Units (pre-Reverse Stock Split), each consisting of one Pre-Funded Warrant, two Series A Warrants, and one Series B Warrant (the “August 2024 Public Offering”).

In addition, the Company granted the underwriter a 45-day option to purchase additional shares of common stock and/or Pre-Funded Warrants and/or Series A Warrants and/or Series B Warrants, representing up to 15% of the number of the respective securities sold in the August 2024 Public Offering, solely to cover over-allotments, if any. The underwriter partially exercised its over-allotment option with respect to 15,000,000 Series A Warrants (pre-Reverse Stock Split) and 7,500,000 Series B Warrants (pre-Reverse Stock Split).

The Common Units were sold at a price of $0.20 per unit and the Pre-Funded Warrants were sold at a price of $0.199 per unit (pre-Reverse Stock Split).

The Pre-Funded Warrants were immediately exercisable at an exercise price of $0.001 per share (pre-Reverse Stock Split) and could be exercised at any time until all Pre-Funded Warrants are exercised in full. As of June 30, 2025 and December 31, 2024, all Pre-Funded Warrants had been exercised.

Each Series A Warrant is exercisable at any time or times beginning on September 30, 2024, which was the first trading day following the Company’s notice to the Series A Warrant holders of stockholder approval received at the 2024 Annual Meeting, and will expire five years from such date. Each Series A Warrant was initially exercisable at an exercise price of $24.00 per share of common stock (post-Reverse Stock Split). The exercise price of the Series A Warrants was subject to reduction on the 11 th trading day after stockholder approval to the greater of the lowest VWAP during the ten trading day period following stockholder approval and the floor price of $5.206 (representing 20% of the lower of the closing price of the common stock on The Nasdaq Capital Market on the date the Company priced the August 2024 Public Offering and the average closing price of the common stock on The Nasdaq Capital Market for the five trading days ending on such date (such lower price, without giving effect to such 20% reduction, the “Nasdaq Minimum Price”), and the number of shares issuable upon exercise was proportionately adjusted such that the aggregate exercise price remained unchanged. As of September 30, 2024, there were 5,301,592 shares of common stock (post-Reverse Stock Split and assuming the adjustment had occurred on September 30, 2024) issuable upon exercise of the Series A Warrants. Subsequent to September 30, 2024, the exercise price under the Series A Warrants was reduced to the floor price of $5.206 (representing 20% of the Nasdaq Minimum Price, post-Reverse Stock Split), beginning on October 14, 2024, the 11 th trading day following stockholder approval. As of June 30, 2025 and December 31, 2024,14,900 shares of common stock had been issued upon exercise of Series A Warrants and 5,286,692 shares of common stock remained issuable upon exercise of Series A Warrants.

Each Series B Warrant was exercisable immediately upon issuance at an exercise price of $0.10 per share (post-Reverse Stock Split). The number of shares of common stock issuable under the Series B Warrants were subject to adjustment using a reset price based on the weighted average price of common stock over a rolling five-trading-day period between the issuance date of the Class B Warrants and the close of trading on the tenth trading day following stockholder approval, subject to certain floor prices. Effective October 8, 2024, the Reverse Stock Split occurred. As of November 12, 2024,87,384 shares of common stock remained issuable upon exercise of Series B Warrants using the reset price, which was reduced to the floor price of $5.206 (representing 20% of the Nasdaq Minimum Price (post-Reverse Stock Split).

Pursuant to an underwriting agreement, the Company paid the underwriter a cash underwriting discount of 7% of gross proceeds received in the August 2024 Public Offering, reimbursement for underwriter expenses of $100,000, and reimbursement for legal fees and disbursements of $100,000.

The offering of securities in the August 2024 Public Offering was made pursuant to the Shelf Registration Statement.

Convertible Note Financing

On December 27, 2023, the Company entered into a securities purchase agreement with 3i, LP (“3i”), pursuant to which the Company sold and 3i purchased: (i) a senior unsecured convertible note issued in the aggregate principal amount of $2,750,000, with a 10.0% original issue discount and an interest rate of 9.0% per annum (the “3i Note”), (ii) up to $247,500 in newly issued shares of common stock (the “Interest Shares”), which were payable, subject to the fulfillment of certain conditions set forth in the 3i Note, to satisfy interest payments under the 3i Note, and (iii) 635 shares of common stock issued to 3i as consideration for its commitment to purchase the 3i Note (collectively, the “Convertible Note Financing”). The gross proceeds to the Company from the Convertible Note Financing were $2,500,000.

The offering of securities in the Convertible Note Financing was made pursuant to the Shelf Registration Statement.

On August 8, 2024, in connection with the closing of the August 2024 Public Offering, the Company repaid the 3i Note, and the Company’s obligations under the 3i Note were fully satisfied and discharged.

Equity Line of Credit

On December 27, 2023, the Company entered into a common stock purchase agreement (the “Purchase Agreement”) with Tumim Stone Capital, LLC (“Tumim”), pursuant to which the Company had the right, but not the obligation, to sell to Tumim, and Tumim was obligated to purchase, up to the lesser of (a) $20,000,000 in aggregate gross purchase price of newly issued common stock, and (b) the Exchange Cap (as defined in the Purchase Agreement) (the “Equity Line of Credit”).

In connection with the Equity Line of Credit, the Company filed a Registration Statement on Form S-1 (File No. 333-276663) with the SEC on January 23, 2024, which was declared effective on February 9, 2024, registering the securities to be sold thereunder, if any.

In connection with the August 2024 Public Offering, the Company and Tumim mutually agreed to terminate the Equity Line of Credit, effective immediately upon the closing of the August 2024 Public Offering. Prior to the closing of the August 2024 Public Offering, the Company had sold 4,336 shares of common stock (post-Reverse Stock Split) under the Equity Line of Credit for an aggregate amount of $828,491, of which $434,958 was used to repay a portion of the balance under the 3i Note.

8. Commitments and Contingencies

Operating Leases

The Company leases its warehouses and office space under long-term lease arrangements. None of its leases include characteristics specified in ASC 842,Leases, that require classification as financing leases, and accordingly, these leases are accounted for as operating leases. The Company does not recognize an ROU asset and lease liability for short-term leases, which have terms of 12 months or less. For longer-term lease arrangements that are recognized on the Company’s balance sheets, the ROU asset and lease liability are initially measured at the commencement date based upon the present values of the lease payments due under the leases.

The implicit interest rates of the Company’s lease arrangements are generally not readily determinable and as such, the Company applies an IBR, which is established based upon the information available at the lease commencement date, to determine the present value of lease payments due under the arrangement. Under ASC 842, the IBR for leases must be (1) a rate of interest over a similar term, and (2) for an amount that is equal to the lease payments. The Company uses both the Federal Reserve Economic Data U.S. corporate debt effective yield and the U.S. Treasury rates adjusted for credit spread as the primary data points for purposes of determining the IBR.

In the first quarter of 2022, the Company entered into two new long-term, non-cancelable operating lease agreements for office and warehouse space resulting in the Company recognizing an additional lease liability totaling $2,348,509, representing the present value of the lease payments discounted using an effective interest rate of 8.07% and 8.86%, and corresponding ROU assets of $2,348,509. The leases initially expired in December 2026 and December 2028. One of the leases terminated early in September of 2024, to consolidate our warehouses and save on monthly expenses.

In the first quarter of 2021, the Company entered into a long-term, non-cancelable operating lease agreement for office and warehouse space resulting in the Company recognizing an additional lease liability totaling $1,268,089, representing the present value of the lease payments discounted using an effective interest rate of 7.47% and a corresponding ROU asset of $1,268,089. The lease expires in January 2028 and contains one three-year option to renew.

The Company signed a lease for warehouse space in close proximity to its existing headquarters and main warehouse with a term commencing May 1, 2025.

The following is a summary of total lease costs during the three and six months ended June 30, 2025 and 2024:

The weighted-average remaining lease term was 2.54 years and 2.91 years as of June 30, 2025 and December 31, 2024, respectively. The weighted average IBR was 8.96% and 7.60%, as of June 30, 2025 and December 31, 2024, respectively.

The total lease liability as of June 30, 2025 and December 31, 2024 was $863,870 and $798,917, respectively.

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of June 30, 2025, for years ending June 30:

Subleases

The Company has subleased office and warehouse space under one of its existing operating leases on similar terms as the Company’s lease agreements. The sublease terminated in February 2025 and there were no remaining income or liabilities associated with subleases as of June 30, 2025. The sublease terminated in February 2025 and there was no remaining income due or liabilities remaining in relation to the sublease as of June 30, 2025.

Legal Proceedings

From time to time, the Company is subject to legal claims, regulatory matters and contingencies in the ordinary course of business. Accruals for these matters are reflected in the financial statements based on management’s assessment of the expected outcome of these matters. Liabilities for estimated losses are accrued if the potential losses from any legal proceedings, regulatory matters or contingencies are considered probable and the amounts can be reasonably estimated. Significant judgment is required in both the determination of probability of loss and the determination as to whether the amount can be reasonably estimated. Accruals are based only on information available at the time of the assessment due to the uncertain nature of such matters. As additional information becomes available, management reassesses potential liabilities related to legal claims, regulatory matters and contingencies, and may revise its previous estimates, which could materially affect the Company’s results of operations.

Except as set forth below, as of June 30, 2025 and December 31, 2024, the Company was not a party to any legal proceedings, regulatory matters, or other disputes or claims which, if determined adversely, would, individually or taken together, have a material adverse effect on the Company’s business, financial condition, operating results, liquidity, or future prospects.

On July 1, 2025, the Company received a staff determination (the “Staff Determination”) from the Nasdaq Listing Qualifications department (the “Staff”) of The Nasdaq Stock Market (“Nasdaq”) stating that the bid price of its common stock had closed below the $1.00 minimum required by Nasdaq Listing Rule 5550(a)(2) for the prior 30 consecutive business days (the “Minimum Bid Price Requirement”) and the Staff had determined to delist its securities from The Nasdaq Capital Market (the “Staff Determination”).

The Company requested a hearing before a Nasdaq Hearings Panel (the “Panel”) to appeal the Staff Determination, staying the delisting of its common stock pending the Panel’s decision. At the hearing, which is scheduled for August 19, 2025, the Company will present a comprehensive plan to regain compliance with the Minimum Bid Price Requirement. The Company is committed to maintaining its Nasdaq listing and executing such plan to ensure full compliance with Nasdaq’s continued listing standards.

9. Stockholders’ Equity

The Company is authorized to issue an aggregate of 220,000,000 shares of capital stock, par value $0.001 per share, consisting of 200,000,000 shares of common stock and 20,000,000 shares of preferred stock.

A holder of common stock is entitled to one vote for each share of common stock. The holders of common stock have no conversion, redemption or preemptive rights and shall be entitled to receive dividends when, as, and if declared by the board of directors. Upon dissolution, liquidation, or winding up of the Company, after payment or provision for payment of debts and other liabilities of the Company, subject to the rights, if any, of the holders of any class or series stock having a preference over the right to participate with common stock with respect to the distribution of assets of the Company upon such dissolution, liquidation, or winding up of the Company, the holders of common stock shall be entitled to receive the remaining assets of the Company available for distribution to its stockholders ratably in proportion to the number of shares of common stock held.

Since no shares of preferred stock have been issued, no rights and privileges of preferred stockholders have been defined.

The Company sold in the January 2025 Public Offering (i)474,193 shares of common stock, (ii) pre-funded warrants to purchase 574,193 shares of common stock, which were exercised immediately upon closing, and (iii) warrants to purchase 1,048,386 shares of common stock. See Note 7, “Equity and Debt Offerings—January 2025 Public Offering.”

In April 2025, the Company issued 105,000 RSUs that were immediately vested and settled into 105,000 shares of common stock as part of the 2021 Incentive Award Plan, and 125,000 shares were granted to a vendor as payment for services rendered. Expenses of $80,850 in stock-based compensation and $106,250 in Legal and Professional fees were recorded for these two transactions, respectively.

As of June 30, 2025 and December 31, 2024,3,374,468 and 2,096,082 shares, respectively, of common stock were issued and outstanding. No shares of preferred stock have been issued.

Warrants / Options

During the six months ended June 30, 2025, a total of 574,193 pre-funded warrants were issued and immediately exercised for $2.48 per share, and 1,048,386 warrants were issued, which have an exercise price of $2.36 per share. These warrants have not been exercised and remain outstanding as of June 30, 2025.

During the year ended December 31, 2023,73,000 warrants exercisable for 730 shares at $290.00 per share were exercised using the cashless conversion option which resulted in the issuance of 311 shares of common stock (post-Reverse Stock Split). This left 78,000 warrants remaining, which expired on November 9, 2024, without being exercised, and there areno warrants remaining at $290.00 per share as of June 30, 2025.

During the year ended December 31, 2023,22,606 warrants exercisable for 226 shares of common stock at $332.00 per share were exercised using the cashless conversion option, which resulted in the issuance of 102 shares of common stock, and 15,000 warrants exercisable for 150 shares of common stock at $332.00 per share were exercised on a cash basis, which resulted in the issuance of 150 shares of common stock. During the year ended December 31, 2024,7,535 warrants exercisable for 75 shares of common stock at $332.00 per share were exercised using the cashless conversion option which resulted in the issuance of 16 shares of common stock. This leaves 514,290 warrants remaining convertible into 5,149 shares of common stock with an exercise price of $332.00 per share as of June 30, 2025.

On August 10, 2023, the Company issued 25,000 warrants to its investor relations firm in accordance with a letter of engagement signed July 22, 2022, to purchase 250 shares of common stock at an exercise price of $500.00 per share. The warrants expire two years from the date of grant on August 9, 2025. The fair value of the warrants was determined at date of issuance using the Black-Scholes option-pricing model and following assumptions: per share price of common stock on date of grant $5.20, expected dividend yield of 0%, expected volatility of 88%, risk-free interest rate of 4.82% and expected life of two years. The fair value of $65,045 was recorded as an increase in additional paid-in capital and expensed to legal and professional services.

As part of a settlement agreement on May 2, 2024, the Company agreed to modify the exercise price of 88,803 warrants convertible into 891 shares from $910.00 to $450.00.

8,125,000 Series B Warrants exercisable for 496,232 shares at $0.10 per share were exercised using the cashless conversion option which resulted in the issuance of 215,678 shares of common stock (based on a $5.206 reset price). Another 46,300,000 Series B Warrants were exercised on a cash basis which resulted in the issuance of 1,078,689 shares of common stock (based on a $5.206 reset price). This leaves 3,075,000 Series B warrants remaining, which are exercisable for 87,384 shares (post-Adjustment), as of June 30, 2025. In addition,323,203 Series A Warrants were exercised on a cash basis which resulted in the issuance of 14,900 of common stock. This leaves 114,676,797 Series A Warrants remaining, which are exercisable for 5,286,692 shares of common stock, as of June 30, 2025.

As of both June 30, 2025 and December 31, 2024, a total of 687,295 regular warrants to purchase 6,889 shares of common stock were issued and outstanding.

Below is a summary of warrants issued and outstanding as of June 30, 2025:

Equity Plans

As of June 30, 2025, the Company had adopted two stock-based compensation plans, the 2021 Incentive Award Plan (the “2021 Plan”) and the 2021 Employee Stock Purchase Plan (the “2021 ESPP”).

2021 Incentive Award Plan

The purpose of the 2021 Plan is to enhance the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership opportunities. Various stock-based awards may be granted under the 2021 Plan to eligible employees, consultants, and non-employee directors.

During the three months ended June 30, 2025, 105,000 shares were issued pursuant to the 2021 Plan. During the three months ended June 30, 2024, no shares were issued pursuant to the 2021 Plan.

As of June 30, 2025, the aggregate number of shares that can be issued under the 2021 Plan is 122,762, of which 11,372 options and 105,649 RSUs have been granted.

The stock-based compensation expense that has been charged against operations for awards issued under the 2021 Plan was $133,229 and $123,069 for the three months ended June 30, 2025 and 2024, respectively, and $183,951 and $438,923 for the six months ended June 30, 2025 and 2024, respectively.

2021 Employee Stock Purchase Plan

The purpose of the 2021 ESPP is to assist eligible employees of the Company in acquiring a stock ownership in the Company and to help such employees provide for their future security and to encourage them to remain in the employment of the Company. The 2021 ESPP consists of a Section 423 component and non-Section 423 component. The Section 423 component is intended to qualify as an employee stock purchase plan and authorizes the grant of options. Options granted under the non-Section 423 Component are granted pursuant to separate offerings containing sub-plans. Option awards are generally granted with an exercise price equal to 85% of the lesser of the fair market value of a share on (a) the applicable grant date and (b) the applicable exercise date, or such other price as designated by the administrator, provided that in no event shall the option price be less that the per share par value price.

No shares have been issued to date under the 2021 ESPP.

See Note 9 – “Stockholders’ Equity” in the Company’s financial statements in Part IV of the Annual Report for further information regarding the 2021 Plan and 2021 ESPP.

Stock Options

The fair value of each option granted pursuant to the 2021 Plan is estimated on the date of grant using the Black-Scholes option pricing model. The option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term. Expected volatility was calculated based upon similar traded companies’ historical share price movements as adequate historical Company trading experience is not available to provide a reasonable estimate. Expected term is calculated based on the simplified method as adequate historical experience is not available to provide a reasonable estimate. The simplified method will continue to apply until enough historical experience is available to provide a reasonable estimate of the expected term.

The risk-free interest rate is calculated based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term. The Company has historically not paid dividends and has no foreseeable plans to pay dividends.

The Company has computed the fair value of the options granted during the year ended December 31, 2024 using the following assumptions:

There were no options granted during the six months ended June 30, 2025.

The following table summarizes the Company’s stock option activity during the three months ended June 30, 2025 under the 2021 Plan:

During the three and six months ended June 30, 2025, the weighted-average grant-date fair value of the options granted to employees and non-employees was $0 and $0, respectively, and was $0 and $312,873 for the three and six months ended June 30, 2024. The options granted in March 2024 vested 50% at time of grant with the remaining shares vesting in 12 equal consecutive quarterly installments commencing June 30, 2024 and becoming fully vested on March 31, 2027.

The Company granted 649 RSUs in 2024 and granted 105,000 RSUs in April 2025, all of which were vested and settled as of December 31, 2024 and June 30, 2025.

Common Stock Reserved for Future Issuance

The following is a summary of shares of common stock reserved for future issuance as of June 30, 2025:

10. Segment Reporting

The Company focuses on the design, assembly, manufacturing, and sale of LiFePO4 batteries and supporting accessories for RVs, marine applications and home energy storage products with plans to expand into industrial applications. The Company sells to wholesalers, distributors, and OEMs, as well as directly to consumers.

The Company has identified one reportable segment: Energy Storage. This segment generates revenue in North America, and the Company manages its product sales and associated expenses on a total basis. The accounting policies for this segment align with those outlined in the summary of significant accounting policies. The Chief Executive Officer is the Chief Operating Decision Maker (CODM) and assesses the performance of this segment and allocates resources based on net income or loss, which is reflected on the statements of operations, and the measure of segment assets is represented as total assets on the balance sheets.

The CODM evaluates the net income or loss from our reportable segment. Net income or loss is also utilized to monitor the difference between budgeted and actual results, offering insights into financial performance and guiding any necessary corrective actions. Additionally, the CODM employs net income or loss for competitive analysis by comparing the Company’s financial performance with competitors in the Energy Storage space.

The Company does not engage in any intra-entity sales or transfers.

11. Income Taxes

The Company has incurred losses and consequently recorded no provision beyond the minimum or base tax rate for state or federal income taxes for the three and six months ended June 30, 2025. The Company maintains a full valuation allowance on all deferred tax assets, as it has concluded that it is more likely than not that these assets will not be realized. As of June 30, 2025 and December 31, 2024, there wereno material unrecognized tax benefits included in the balance sheets that would, if recognized, affect the effective tax rate. For the three and six months ended June 30, 2025, the Company accrued $38 and $75, for income taxes, respectively, and for the three and six months ended June 30, 2024, the Company accrued income taxes of $460 and $920, respectively.

12. Related-Party Transactions

As of June 30, 2025 and December 31, 2024, related-party transactions consisted of the repayment of the Notes (see Note 6 – “Stockholder Promissory Notes”).

13. Subsequent Events

Exercise of Series B Warrants

On July 18, 2025, a warrantholder elected to exercise 3,000,000 Series B warrants and was issued 85,252 shares on July 21, 2025, for which the company received proceeds of $8,525.

Annual Meeting and Award Issuance

The Company held its annual meeting of stockholders on July 31, 2025 (the “Annual Meeting”). The required quorum of votes was reached, and all proposals were approved. All directors were re-elected for a one-year term of office expiring at the annual meeting of stockholders to be held in 2026, M&K CPAs, PLLC were ratified as the Company’s independent public accounting firm for the year ending December 31, 2025, and amendments to the Company’s 2021 Incentive Award Plan and 2021 Employee Stock Purchase Plan were approved, which increased the number of shares of common stock available for issuance under both plans. An award of stock options and RSUs that had been approved by the board contingent on approval of the stockholders at the Annual Meeting of the share increase under the 2021 Incentive Award Plan will be effective July 31, 2025, and includes 15,000 RSUs that vest and settle immediately.