NeoVolta(NEOV) - 2025 Q2 - Quarterly Report

Financial Performance - Revenues from contracts with customers for Q2 2024 reached $1,071,581, a 5.3% increase from $1,017,828 in Q2 2023[17] - Gross profit for Q2 2024 was $323,911, compared to $205,873 in Q2 2023, reflecting a significant increase of 57.1%[17] - Total operating expenses for Q2 2024 were $1,270,841, up 64.1% from $774,698 in Q2 2023[17] - Net loss for Q2 2024 was $971,137, compared to a net loss of $556,044 in Q2 2023, representing a 74.6% increase in losses[17] - Revenues for the three months ended December 31, 2024, were $1,071,581, a modest increase from $1,017,828 in the same period of 2023, attributed to new sales channels opened since the new CEO's engagement[76] - Revenues for the six months ended December 31, 2024, were $1,661,817, down from $1,781,958 in 2023, influenced by macroeconomic and regulatory factors[83] - Net loss for the three months ended December 31, 2024, was $971,137, compared to $556,044 for the same period in 2023, reflecting the overall financial performance[82] - Net loss for the six months ended December 31, 2024, was $1,935,631, up from $984,759 for the same period in 2023[88] Cash and Liquidity - Cash and cash equivalents decreased to $328,746 as of December 31, 2024, down from $986,427 at the end of June 2024, a decline of 66.7%[25] - As of December 31, 2024, the company had a cash balance of approximately $0.3 million and net working capital of approximately $3.7 million[93] - The company anticipates sufficient cash to operate for at least the next 12 months due to increased product demand and recent financing arrangements[93] - Net cash used in operating activities for the six months ended December 31, 2024, was $1,451,330, compared to $503,497 in the same period in 2023, due to increased cash operating expenses[90] - Net cash provided by financing activities for the six months ended December 31, 2024, was $793,649, compared to zero in the same period in 2023, following the establishment of a line of credit[91] Assets and Liabilities - Total current assets as of December 31, 2024 were $4,018,118, a decrease of 13.7% from $4,656,530 as of June 30, 2024[15] - Total liabilities increased to $717,830 as of December 31, 2024, compared to $61,100 as of June 30, 2024, indicating a significant rise in liabilities[15] - The company reported a stockholders' equity of $3,300,288 as of December 31, 2024, down from $4,595,430 as of June 30, 2024, a decrease of 28.2%[15] Research and Development - Research and development expenses for Q2 2024 were $42,324, compared to no expenses in Q2 2023, indicating a new focus on product development[17] - Research and development expenses for the three months ended December 31, 2024, were $42,324, compared to zero in the same period of 2023, indicating increased focus on product development[79] - Research and development expenses for the six months ended December 31, 2024, were $50,941, compared to zero for the same period in 2023, reflecting increased product development efforts[86] Stock and Compensation - The company recognized stock compensation expense of $392,339 for the six months ended December 31, 2024, compared to $81,683 for the same period in 2023[53] - For the six months ended December 31, 2024, total non-cash stock compensation expense recognized was $480,089, compared to $181,858 for the same period in 2023, reflecting a significant increase[54][56] - The new CEO received an initial equity grant of 1,280,000 restricted stock units valued at $2,854,000, vesting over four years[50] - As of December 31, 2024, the outstanding warrants totaled 1,081,150 shares with a weighted average exercise price of $4.00 and an intrinsic value of $1,308,192[48] Market and Sales - The company has expanded its sales of proprietary Energy Storage Systems (ESS) through wholesale customers, primarily in California, with plans for further market expansion[27] - The company has expanded its market presence, successfully installing products in multiple states beyond California, including Arizona, Texas, and Florida[71] - For the three months ended December 31, 2024, two dealers represented approximately 37% and 34% of the Company's revenues, while for the six months ended December 31, 2024, they represented approximately 35% and 33%[31] Financing and Borrowings - The Company obtained a line of credit for borrowings of up to $5,000,000 in September 2024, with net borrowings of $383,538 as of December 31, 2024, leaving an available balance of $4,616,462[40] - In November 2024, the Company initiated short-term borrowings of $371,997 from a commercial lender to finance shipments to a new customer in Puerto Rico[42] - The gross proceeds from the August 2022 public offering were $4,485,000, with net proceeds of approximately $3,780,000 after deductions[45] - The company issued 500,000 shares of common stock at $2.00 per share on February 4, 2025, raising gross proceeds of $1,000,000 for working capital needs[63] - On February 4, 2025, the company issued 500,000 shares of common stock at $2.00 per share, resulting in gross proceeds of $1,000,000[92] Corporate Governance and Compliance - NeoVolta, Inc. has filed various amended and restated documents, including Articles of Incorporation and Bylaws, indicating ongoing corporate governance updates[121] - The company is preparing for a private offering in February 2025, as indicated by the Form of Subscription Agreement[121] - Steve Bond has an amended employment agreement effective February 4, 2025, which may reflect changes in compensation or responsibilities[121] - The consulting agreement with Brent Willson, effective March 1, 2025, suggests strategic advisory support for the company[121] - Certifications by the Principal Executive Officer and Principal Financial Officer were filed, ensuring compliance with the Sarbanes-Oxley Act[121] - Inline XBRL documents have been prepared, indicating a commitment to transparency and modern reporting standards[121] - The company has signed the report on February 7, 2025, indicating timely compliance with regulatory requirements[126] - H. Ardes Johnson serves as the Chief Executive Officer, while Steve Bond is the Chief Financial Officer, highlighting key leadership roles[126] Risk Factors - The company is monitoring potential tariff increases on imported components, which could significantly impact costs if enacted[95]