NeoVolta(NEOV) - 2026 Q1 - Quarterly Report

Financial Performance - Revenues from contracts with customers for the three months ended September 30, 2025, were $6,650,258, a significant increase from $590,236 in the same period of 2024, representing a growth of approximately 1,025%[17] - Gross profit for the same period was $1,577,252, compared to $92,847 in 2024, indicating a substantial increase in profitability[17] - The net loss for the three months ended September 30, 2025, was $1,243,322, compared to a net loss of $964,494 in the same period of 2024, representing an increase in losses of approximately 29%[17] - Cost of goods sold for the three months ended September 30, 2025, was $5,073,006, compared to $497,389 in 2024, resulting in gross profits of approximately 24% in 2025 versus 16% in 2024[70] - General and administrative expenses increased to $2,374,668 for the three months ended September 30, 2025, from $1,050,119 in 2024, largely due to the hiring of a new CEO and additional personnel[71] - Net cash used in operating activities for the three months ended September 30, 2025, was $2,494,069, up from $593,031 in 2024, reflecting increased operating expenses[75] - Net cash provided by financing activities in the three months ended September 30, 2025, was $2,589,052, compared to zero in 2024, due to short-term borrowings for inventory purchases[76] Assets and Liabilities - Total current assets increased to $8,357,393 as of September 30, 2025, up from $6,664,633 as of June 30, 2025, reflecting a growth of approximately 25.4%[15] - Total liabilities rose to $6,313,803 as of September 30, 2025, compared to $3,895,451 as of June 30, 2025, marking an increase of approximately 62.2%[15] - Total stockholders' equity decreased to $2,133,165 as of September 30, 2025, down from $2,909,722 as of June 30, 2025, indicating a decline of approximately 26.6%[15] - Cash and cash equivalents at the end of the period were $889,819, up from $794,836 at the beginning of the period, indicating a net increase of approximately 12%[22] Stock and Compensation - The company reported stock compensation expense of $466,765 for the three months ended September 30, 2025, compared to $265,399 in the same period of 2024, representing an increase of approximately 76%[23] - The company recognized stock compensation expense of $293,025 for RSUs in the three months ended September 30, 2025, compared to $221,524 in the same period of 2024[51][52] - The company has made total awards of 2,669,219 shares under its 2019 Stock Plan, which was amended to increase the number of shares authorized for issuance by 5,000,000[53] - The company issued Non-Qualified Stock Options for 147,000 shares at an exercise price of $3.60 per share, with a total fair value of approximately $349,500[45] Borrowings and Credit - The company obtained a line of credit for borrowings of up to $5,000,000 with a 16% annual interest rate, maturing on September 3, 2028, and had net borrowings of $633,538 as of September 30, 2025[38] - The company initiated short-term borrowings of $4,199,549 from a commercial accounts receivable lender, with an outstanding balance of $4,142,275 as of September 30, 2025[39] - The company had accrued interest of $48,646 on its line of credit as of September 30, 2025[38] Acquisitions and Agreements - The company closed an Asset Purchase Agreement on October 15, 2025, acquiring assets from Neubau Energy Inc. for approximately $1.5 million, including cash and stock[58] - The company plans to account for the acquisition of Neubau as an acquisition of assets and will assign the total purchase price to the fair value of the assets acquired[58] - The company entered into an Asset Purchase Agreement dated October 1, 2025, with Neubau Energy Inc. and its shareholders[95] - The company commenced plans for a private equity offering, receiving a cash deposit of $800,000 from a potential investor as of September 30, 2025[40] Internal Controls and Legal Proceedings - As of September 30, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were not effective due to a material weakness related to the lack of segregation of duties[85] - Management acknowledged that any controls and procedures can only provide reasonable assurance of achieving desired control objectives, considering resource constraints[86] - There were no changes in internal controls over financial reporting during the quarter ended September 30, 2025, that materially affected internal controls[87] - The company is not currently a party to any material legal proceedings and is not aware of any material legal or governmental proceedings against it[89] - There have been no material changes from the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended June 30, 2025[90] Share Issuance and Trading - During the three months ended September 30, 2025, the company issued 78,565 shares of common stock to a distributor under a distribution agreement[91] - The company has not experienced any defaults upon senior securities[92] - No directors or executive officers adopted or terminated any trading arrangements during the period covered by the Quarterly Report[94] Shares Outstanding - The weighted average shares outstanding for the period were 34,193,531, compared to 33,244,061 in the same period of 2024, reflecting an increase of approximately 2.9%[17] - As of September 30, 2025, the company had outstanding warrants for a total of 1,081,150 shares of common stock, exercisable at $4.00 per share until August 1, 2027[43]