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Item 1. Business

2025-09-29 compared with 2024-09-27 · 287 added, 483 removed, 19 unchanged (98% of the section changed)

We are a designer, manufacturer,

and seller of high-end Energy Storage Systems (or ESS), primarily our NeoVolta NV14, NV 24 and, to a lesser extent, our NV14-K, 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.

In the future, we intend to expand multiple opportunities

with residential developers, commercial developers, and other commercial opportunities.

Because we are purely dedicated to energy solar

systems, virtually all of 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 ourselves as a major player in the energy storage market.

Our NV14 ESS contains a 7,680

W hybrid 120V / 240V and 208V 3-phase inverter and a 14.4 kWh battery system power.

The NV14 is energy efficient, has a variety of operating

options, and uses Lithium Iron Phosphate (LiFe (PO4)) batteries.

The batteries we utilize are capable of 6,000 cycles at a Depth of Discharge

(DoD) of 90% and have a high thermal range (heat and cold tolerances).

Our NV14 ESS integrates all components and is NEMA Type 3R rated

(indoor/outdoor).

Our NV14-K variant is specifically designed for inclusion into EOS Linx Electric Vehicle charging and advertising products

named “Aurora Charge Station.” Our NV24 provides additional energy storage capacity raising the NV14 from 14.4 KW to 24.0

Our newest update of the NV14 ESS allows for commercial 208V 3-phase installations adding significantly to our potential customer

We completed the initial design

work and completed testing and certification of our first offering, the NeoVolta NV14, in August 2018.

In September 2018, we completed

our first production prototype.

By March 2019, we completed all certifications and were granted approval by the California Energy Commission

(CEC) for off-grid and on-grid installation.

Since our headquarters are located in San Diego County, a county with more than 160,000 solar

customers, we chose San Diego for our initial rollout.

In May 2019, the NV14 was approved throughout San Diego County and City areas by

San Diego Gas & Electric (SDG&E) for connection to its grid system and customer installations began.

In June 2019, we moved our

contracted manufacturing to a facility in Poway, California.

In June 2019, we began marketing to San Diego based solar installers.

early 2020, we expanded our certified installer network to the greater Los Angeles, San Francisco, and Sacramento areas.

At present, we

have installs in the following 14 States and Territories:

California, Nevada, Arizona, Utah, Colorado, Wyoming, Texas, Oklahoma, Missouri,

Tennessee, Alabama, Georgia, Florida, and Puerto Rico.

In January 2021, we moved to a larger production facility in Poway, California

to facilitate growth.

Our Products - NeoVolta NV14, NV14-K, and NV24

The NV14 is a complete ESS

with 7,680-Watt 120V / 240V hybrid inverter (one of the largest in the industry) which is also capable of 208V 3-phase commercial power

with a 14.4 kWh lithium iron phosphate (LiFe (PO4)) battery system.

The NV14-K is a variant of the NV14 built to EOS Linx specifications.

This is all incorporated in one National Electrical Manufacturer Association (NEMA) Type 3R rated indoor/outdoor cabinet system with all

United Laboratories (UL) compliant electrical certifications, and fire code requirements.

The NV14 is capable of storing and using inverted

(AC) photovoltaic, non-inverted (DC) photovoltaic, or both AC and DC photovoltaic solar sources.

It can also accept utility grid AC power

as a charging source for the integrated 14.4 kWh battery system.

The NV14 system will charge the batteries with excess solar photovoltaic

(AC, DC or both AC and DC) power during daylight conditions - a unique functionality in the ESS industry.

The inverter will invert DC

battery power into AC power during periods of darkness or higher use periods.

Once discharged, the batteries will be idle until excess

solar photovoltaic is available and will subsequently begin to recharge.

The NV14 is designed to primarily charge from solar but can be

programmed to charge from other sources of power (solar, wind turbine, generator, and grid).

It can be easily programmed by our certified

installers to customer-specific use profiles, including for “rate arbitrage,” (graph below) which allows charging from the

grid during the lowest rate periods if the utility company allows this activity.

Once recharged, the batteries will discharge once solar

photovoltaic begins to wane or when the customer needs more power than available from solar photovoltaic.

By doing this, customers will

be consuming their own solar photovoltaic production instead of sending excess photovoltaic power to the grid and then buying this power

back later in the evening from the utility at an often significantly higher retail rate, thereby potentially lowering their monthly electric

bill depending on their local utility’s rate plan.

Our NV14 is also capable of multi-tasking by recharging via solar photovoltaic

power while also supplying power.

We believe our NV14 is unique

among its competitors in that the cabinet is rated for indoor/outdoor installation (NEMA Type 3R) allowing for more installation configurations

and the ability to fit more residential customer use cases.

With measurements of 50.5” H x 38” W x 10” D it can be installed

either inside the garage or outside (preferable near existing utility connections) of the residence or facility.

No solar system can provide

power to a home without a system capable of “Islanding,” due to safety regulations put in place for utility workers during

“Islanding” is when a PV generator or other electrical source continues to power a location or residence even though

electrical grid power is no longer present.

According to Bloomenergy.com, power outages are on the rise in California.

There were 25,281

blackout events in 2019, a 23% increase from 20,598 in 2018.

The number of utility customers affected jumped to 28.4 million in 2019,

up 50% from 19 million in 2018.

Since then, the number of major power outages in California reached a peak in 2020 before declining slightly

Our NV14 is capable of “Islanding” when used with AC or DC photovoltaic (PV) systems.

As islanding can be dangerous

to utility workers, who may not realize that a circuit is still powered, an ESS capable of “islanding” must be capable of

physically disconnecting from the grid power when it senses that grid supply is not present, has an over current, or an undercurrent condition.

The NV14 includes “islanding” relays that are approved to perform this function.

Islanding also allows solar production to

function and power the residence or facility thereby decreasing the impact of a grid outage.

Our NV14 currently includes

a commercially available encrypted WiFi logger and associated smart phone application that allows customers to visualize the state of

the system in 8-minute intervals (battery, home, grid, photovoltaic, and/or generator).

Settings adjustments for how the system works

can be made remotely by the installer if/when utilities make changes to Time-of-Use billing rates/times.

Our remote management system

is included with the product and allows NeoVolta 24/7 system health monitoring, malfunction diagnosis, and the ability to push firmware

and software updates.

This allows NeoVolta, installers, and their customers, insight into system health 24/7.

Remote monitoring and programming

is accomplished using AWS Key Management encryption and cloud storage ensuring customer privacy and security.

Our NV24 has additional battery

capability that raises NV14 energy storage from 14.4 KW to 24.0 KW.

As the NV24 has add-on battery capacity, additional inverters are

not required.

This enables customers to achieve a 67% increase in storage for a fraction of the typical cost of adding more storage.

competitive systems require an additional inverter for any additional storage.

New ESS fire code regulations

have been significant and are ongoing, especially in California.

ESSs can no longer be installed inside the living areas of a home.

can be installed inside the garage but require smoke and heat detectors and may also require bollards or caging to protect the ESS from

being accidentally struck by a vehicle.

This is a particularly detrimental code to ESS that cannot be installed outside.

Both requirements

are directly related to fire risk from certain battery chemistries.

Lithium Ion, a very popular chemistry in the ESS industry, has demonstrated

fire and thermal runaway characteristics in certain circumstances.

Our batteries were UL 9540 certified at the cell and modular level

in July 2021 certifying that they will not catch on fire and exhibit no thermal runaway characteristics.

We expect such changes in

regulatory code to be a routine requirement as ESS is a new field that warrants scrutiny and is a major focus of our management team.

We also see the complex regulatory environment as a significant barrier to new market entry.

Market Characteristics

Our market can be looked at

the solar installer market and the ESS market.

Solar Installer Market .

The bulk of NeoVolta’s present revenue and recurring customer base is residential and commercial solar system installers.

January 2024, IBIS World estimates that there are approximately 11,100 solar panel installation companies operating in the US.

secure supply chain backed by tax incentives, this number is expected to rise as both the commercial and residential markets continue

The impact of the Inflation Reduction Act (see, “ Market Drivers – Regulation ”) on just residential solar

panel installation is expected to grow at a compound annual growth rate of 14.4% from 2024 to 2030.

Most solar installers in the US are

very small, independently owned operators and are generally not serviced by the larger companies.

These underserved installers have been

NeoVolta’s target market.

Our average recurring installer customer purchases 1-2 systems a month.

They generally sell their systems

and install and pay for them within the same month, and typically do not stock inventory, so we believe NeoVolta’s “just in

time” product availability makes us an ideal fit.

Once these customers become certified NeoVolta installers, they become recurring

We built our company based on servicing small installers and will continue to do so by focusing on product availability, installer

service, and, most importantly, the characteristics of our product while we capture market share.

As we gain market acceptance, we expect

larger installers to take notice.

This is especially true when considering repeated product availability challenges within the industry.

Installer storage installation

activity has grown over time, with approximately one-half of all active residential installers in recent years having completed at least

one solar + storage system, according to Berkeley Labs.

The rate of attachment, or number of PV systems installed with storage, is growing

considerably.

According to Wood Mackenzie, by 2025, nearly 29% of all behind-the-meter solar systems will be paired with storage, compared

to under 11% in 2021.

Most of the growth will be powered by the smaller installers, as larger installers have already incorporated storage

into their standard new solar offerings.

Although Tesla and LG Chem have dominated the market in the past few years, new market entries

continue to gain ground and new opportunities in the space continue to present themselves to those who can adapt to fill the need.

Additionally,

our larger ESS competitors focus on energy storage as a component of their new solar installation, whereas NeoVolta focuses entirely on

ESSs, revealing what we believe to be a compelling market in existing solar system retrofits.

According to a December 2023 report from

Berkeley Lab, there are over 3.4 million solar systems installed in the US with only a relatively small percentage of those having energy

storage installed.

This marketplace scenario presents small installer customers almost 3 million households to revisit for a storage retrofit

especially when their 10-15 year old inverter experiences end of life.

We believe that our 100% commitment

to ESS and our relatively small size allow us to navigate this nascent industry more nimbly, and we have been able to develop distinct

competitive advantages despite our relative resources.

a relatively new market as solar attached storage systems have only become viable in the last decade.

It is a subset of what the Solar

Energy Industries Association (SEIA) refers to as the $17 billion U.S.

residential solar PV market.

According to Mordor Intelligence,

the global residential energy storage systems market is expected to register a compound annual growth rate (CAGR) of more than 19% during

the forecast period of 2021 - 2026, reaching a market value of more than $8.5 billion by 2026 from $2.2 billion in 2019.

The growth of

the ESS market comes from a combination of retrofits to existing solar installations and more widespread adoption of storage as part of

new solar installations.

According to Wood Mackenzie’s

Energy Storage Monitor, released in December 2020, the residential storage segment posted its best quarter ever in the third quarter

of 2020, during the height of the coronavirus pandemic with 52 megawatts and 119 megawatt-hours of new storage installed.

is expected to reach 7.5 gigawatts in 2025, which amounts to sixfold growth from 2020.

Market Drivers

At the federal level, the most

significant recent regulatory development regarding ESS has been, by far, the passage of the Inflation Reduction Act (“IRA”)

in August 2022.

Due to its extensive investment-related incentives, the IRA is expected to have a wide-ranging impact

on both public and private investment in the clean energy space in the US, on a long-term basis.

Additionally, there have been

a rapidly expanding number of mandates at the state and local level that have also been directed toward the solar industry in recent years.

On the incentive side, the IRA has increased the

federal Investment Tax Credit, or ITC, from 26% to 30% for qualifying investments, including energy storage.

For a typical ESS, the ITC

can reduce the cost of the system by $4,500 to $6,000.

In certain instances, the incentives of the ITC can be potentially increased up

to as much as 60% of the qualifying project cost.

Finally, the IRA also expands the federal Production Tax Credit, which was first enacted

in 2007, primarily for the benefit of the wind industry, to the solar power industry.

On the mandate side, California became the first

state in the country to require builders to install solar and battery storage on new commercial buildings and high-rise multifamily buildings

in August of 2021.

This state approved Energy Code also includes requirements for builders to design single-family homes so battery storage

can be easily added to the already existing solar system in the future as well as related incentives to eliminate natural gas from new

Many other states are also implementing various measures in order to encourage greater adoption of energy storage technologies.

For example, some utilities are now also offering incentives to home and business owners who install storage.

To date, most of these

utility-specific storage incentives are in the Northeast.

We anticipate more of these programs being put in place in the future.

Of further note on the state regulatory level,

California implemented Net Energy Metering 3 (NEM3) for subsequent new solar installations on April 14, 2023.

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.

We estimate that NEM3 reduced our sales from the enactment date in December

2022 continuing through our last fiscal quarter, as solar installers worked off their permitted NEM2 installs.

We expect our sales to

gradually increase going forward.

Utilities can also impact

battery storage adoption on the cost side of the equation.

In certain circumstances, when state utilities change their billing profiles,

the market for ESS becomes more (or less) attractive.

For example, Hawaii’s attachment rate rose to 80% after the state began transitioning

away from net energy metering (NEM) and reduced compensation for grid exports.

dependence has been a growing concern in the last few years as weather patterns have become more erratic.

New findings from the U.S.

of Energy’s National Renewable Energy Laboratory (NREL) and Clean Energy Group (CEG) found that when the value of resilience is

considered - preventing power outages - several more integrated solar-plus-storage projects are economically viable.

Utilities are addressing this

matter in some cases through Public Safety Power Shut Off (PSPS) events (when power is purposefully turned off in the case of high winds

with very dry vegetation conditions that increase wildfire risks).

The direct result of this was seen in California after the PSPS events

of late 2019.

Consumer Perception .

Although both economics and resiliency have been impactful on ESS demand, researchers at Berkeley Labs concluded that a third category

of consumer perception may be adding to the trend.

The feedback they received included the concept that consumers saw ESS as a “green”

investment and felt like it was a way to “stick it to the utilities”.

These factors are obviously less measurable than the

more objective drivers above but are an additive factor in the market.

We are a designer and manufacturer

of high-performance energy storage systems (“ESS”) for residential and commercial applications.

Our product portfolio includes

the NV14, NV24, NVPlus, NV7600 stand-alone inverter, and most recently, the NV16 kW AC hybrid inverter with 24 kW PV input and a 250 kW

/ 430 kWh commercial and industrial (“C&I”) system.

Our systems combine lithium iron phosphate (LiFePO₄) battery

technology with hybrid inverter capability, providing safe, flexible, and adaptable solutions for backup power, self-consumption, and

energy resilience.

We market and sell our products

primarily through certified solar installers and regional and national distributors.

Initially focused on Southern California, we have

since expanded into other markets throughout the United States and Puerto Rico.

Looking forward, we intend to grow across residential,

commercial, and industrial segments while building financing solutions and pursuing domestic and FEOC-compliant sourcing to support long-term

competitiveness.

We were founded in 2018 to

develop safe, reliable, and versatile residential energy storage systems.

Later that year, we produced our first prototype of the NV14,

which received certification and approval from the California Energy Commission in early 2019.

Customer installations began shortly thereafter

in San Diego County following approval from San Diego Gas & Electric.

Between 2020 and 2022, we

expanded beyond Southern California into other major metropolitan regions and ultimately into more than 15 additional states and territories.

During this period, we introduced the NV24 expansion battery and continued to secure certifications under evolving California and national

regulatory standards.

In 2023, we transitioned from

contract manufacturing to in-house production by hiring key personnel and assuming direct responsibility for manufacturing operations

in Poway, California.

This change enhanced quality control and supply chain resilience.

Since 2024, we have broadened

our product portfolio with the launch of the NVPlus energy storage system and the NV7600 stand-alone inverter, extending our reach into

higher-capacity residential and light commercial applications.

In February 2025, we expanded into a larger facility in Poway to support

increased production.

Subsequent to fiscal year end, we announced two additional products:

a 250 kW / 430 kWh Commercial & Industrial

(C&I) Battery Energy Storage System, and the NV16 kW AC hybrid inverter with 24 kW PV input, expected to be available beginning in

November 2025.

We design and manufacture

energy storage systems (“ESS”) that combine lithium iron phosphate (LiFePO₄) battery technology with integrated or stand-alone

inverters to provide safe, reliable backup power for residential and light commercial applications.

All systems are NEMA 3R rated for

indoor or outdoor installation, UL 9540/9540A certified, and compatible with both AC- and DC-coupled solar configurations.

· NV14 — Our flagship ESS, the NV14

integrates a 14.4 kWh battery with a 7.6 kW hybrid inverter capable of 120V/240V residential and 208V three-phase commercial operation.

The system is designed for energy efficiency, time-of-use optimization, and backup power.

· NV24 — The NV24 expansion battery

increases NV14 capacity from 14.4 kWh to 24.0 kWh without requiring an additional inverter, allowing customers to scale storage at lower

· NVPlus — Introduced in 2024, NVPlus

is a higher-capacity ESS developed for larger residential and small commercial applications.

It provides extended runtime, supports greater

solar inputs, and is designed for customers requiring whole-home backup or higher daily cycling.

· NV7600 — A stand-alone 7.6 kW inverter

launched in 2024, designed for use with NeoVolta storage products or as a retrofit solution for existing solar systems.

In addition to these core

products, we have also developed the NV14-K, a custom variant of the NV14 engineered to EOS Linx specifications.

This product is manufactured

on a limited basis for a single customer application and is not marketed generally.

Subsequent to fiscal year

end, we announced two additional products:

(i) a Commercial & Industrial Battery Energy Storage System (BESS) with a 250 kW power

rating and 430 kWh usable capacity, designed for larger-scale applications;

and (ii) the NV16 kW AC hybrid inverter with 24 kW PV input,

developed to support higher-capacity residential installations and whole-home backup.

The NV16 kW inverter is expected to become generally

available in November 2025.

Market Overview

Our addressable market is

expanding across multiple customer segments, supported by favorable policy, resiliency needs, and evolving financing and distribution

Residential Retrofit .

There are an estimated 4.2 million U.S.

homes equipped with solar panels, and more than 3 million of these do not currently have battery

(SolarInsure) This represents a significant retrofit opportunity, particularly as installed inverters approach end of life after

10–15 years of operation.

Grid reliability concerns, increasingly common utility outages, and changing rate structures are expected

to accelerate adoption of storage among this installed base.

New Residential and Small

Commercial Installations .

installer market is highly fragmented, with more than 11,000 companies nationwide, most of them

small independent operators not typically serviced by larger ESS providers.

These smaller installers represent NeoVolta’s core customers.

Once certified, they generally become recurring purchasers, relying on just-in-time availability to serve homeowners who prefer not to

stock or pre-finance equipment.

Battery adoption in new solar

projects is rising rapidly.

Nationally, only about 6% of residential solar systems included storage in 2020, compared to an estimated

15–20% by 2024.

(Clean Energy Group) In California, adoption has been even stronger:

under the new net-billing tariff, roughly 60%

of new residential systems are now being paired with storage, compared to 10–14% under prior net-metering rules.

(Utility Dive)

Nationally, the residential storage market is scaling quickly—Wood Mackenzie reports ~458 MW added in Q1 2025 alone, the strongest

first quarter on record.

(Wood Mackenzie)

Commercial and Industrial

Beyond residential applications, the market for C&I storage is emerging as a new growth segment.

Businesses are increasingly

seeking solutions for demand-charge management, backup power, and grid services.

To address this demand, we recently announced a 250 kW

/ 430 kWh C&I battery energy storage system, positioning NeoVolta to participate directly in this next stage of adoption.

Financing and Distribution.

The importance of financing structures has grown significantly across all customer segments.

As system costs increase and federal incentives

such as the Investment Tax Credit (“ITC”) phase down under the One Big Beautiful Bill Act (scheduled to sunset by December

31, 2025), adoption is expected to depend increasingly on third-party ownership, leasing, and loan-based models.

These financing options

reduce upfront costs and align payments with monthly utility savings, broadening access to storage.

At the same time, NeoVolta is evolving

its channel strategy:

while we initially sold primarily to independent installers, we are now leveraging regional and national distributors

to expand reach, improve logistics, and scale efficiently across multiple geographies.

Policy and Resiliency Drivers.

Federal and state policy incentives continue to support adoption, including the ITC, though subject to phase-outs after 2025.

states, led by California and Hawaii, have adopted building codes and interconnection requirements that mandate or encourage storage.

Utilities are increasingly turning to rate reform, such as California’s net-billing tariff, which improves the economics of pairing

solar with batteries.

Meanwhile, grid reliability concerns—including widespread Public Safety Power Shutoff events in California—continue

to highlight the resiliency benefits of energy storage for both homeowners and businesses.

We believe that these combined

factors—retrofit opportunity, rising attachment in new installations, growth into C&I, expanding financing and distribution

channels, and favorable regulatory and resiliency drivers—create a substantial and growing market opportunity for NeoVolta.

Growth Strategy

With the addition of Ardes

Johnson to NeoVolta’s management team as our CEO in April 2024, we have implemented an entirely new growth strategy that is designed

to greatly expand our market penetration and product sales.

Johnson is a seasoned industry executive who most recently, served as

the President of the U.S.

subsidiary of Meyer Burger, a major manufacturer of

solar cells and solar modules based in Switzerland, for three years.

His previous experience includes high level sales positions with

both Tesla and General Electric.

Johnson’s direction and leadership, we intend to vigorously pursue three major growth objectives as follows (i) Expanding revenue

through strategic sales channel development, (ii) Broadening financing options through partnerships with major industry players, and (iii)

Initiating development of the next generation of batteries.

In furtherance of these key growth

objectives , Mr.

Johnson has recently undertaken the following significant tactical initiatives:

Sales Team Formation :

NeoVolta has successfully assembled a national sales team targeting key renewable energy

distribution centers, ensuring a robust presence across the U.S.

Collaborations Initiated :

We have begun collaborations with leading solar installers in California, Nevada, and

Florida, positioning ourselves to attempt to capture a larger market share.

Conversations for Next-Gen Systems :

We have initiated discussions with entities to develop the next generation

of NeoVolta’s energy storage systems, setting the stage for future innovation.

Additionally, we are planning

to adopt a number of other near-term strategic moves that are designed to rapidly increase the growth of our product sales.

NeoVolta is actively expanding into high-potential regions such as Hawaii, Texas, Florida, and Puerto Rico, with regionally based sales

teams to maximize reach and service.

Also, another of our key initiatives is to make NeoVolta’s products more accessible and affordable,

driving increased adoption and sales in the residential energy storage market.

With regard to the

expanding commercial market for our products, we are planning to enhance our existing R&D technology to create

complementary solutions tailored for the commercial sector, expanding NeoVolta’s market footprint, beginning in 2025.

we will be launching our Virtual Peaker Solution in order to a ddress the growing demand for

storage-only solutions from utilities and aggregators, seeking to position NeoVolta at the forefront of energy storage

We compete with several large

competitors already successfully selling in the ESS space.

Notable competitors include Tesla, LG Chem, Sonnen, Enphase, SunPower, and

SMA America, among others.

Some of our competitors have significantly greater financial, product development, manufacturing, marketing

resources, and name recognition.

In addition to competitors in the ESS space, we compete with companies in power generation equipment

and other engine powered products industries.

We face competition from a variety of large diversified industrial companies as well as

smaller generator manufacturers, along with mobile equipment, engine powered tools, solar inverter, battery storage and grid services

providers, both domestic and internationally.

In addition, as energy storage becomes a necessary component for residential customers to

realize better value/savings from their solar PV installation, we believe new competitors will emerge in this field.

There is no assurance

that we will be able to successfully compete in this market.

NeoVolta Competitive Advantages:

Availability .

recent back-order times for competitive products have been as long as 9-months in recent years.

Smaller installers rely on quick sales

to install to payment to keep their business going, and the lack of availability of competitive products is often the reason they are

introduced to NeoVolta.

Since December 2021, NeoVolta has been delivering on orders in usually less than two weeks, very often the same

We achieve this by maintaining a high level of parts inventory relative to projected sales, component consolidation prior to shipment,

and a small lot, recurring freight strategy, which we believe allows for more flexibility in getting through the supply chain.

of maintaining higher levels of inventory based on projected sales means that to the extent our sales expectations in any periods are

incorrect we may suffer cash flow constraints for such periods.

Inability to secure reliable product delivery, fire risk, and recalls

have harmed reputations of our competitors.

Johnson to NeoVolta’s management team as our CEO in April 2024, we adopted a refreshed growth strategy designed to expand our market

penetration, diversify revenue channels, and accelerate product development.

This strategy rests on three primary objectives:

(i) expanding

revenue through strategic sales channel development, (ii) broadening financing options through partnerships, and (iii) initiating development

of next-generation storage solutions.

Sales Channel Expansion.

We have built a national sales team targeting key renewable energy distribution centers and regional installers.

While NeoVolta initially

focused on direct sales to small, independent installers, we are now leveraging regional and national distributors to extend reach and

support scalability.

Distributors improve logistics, expand product availability, and position us to penetrate high-growth markets such

as Texas, Florida, Hawaii, and Puerto Rico.

Financing Partnerships .

We are developing financing solutions that align with the evolving market.

As federal incentives phase down under the One Big Beautiful

Bill Act (scheduled to sunset by December 31, 2025), adoption is expected to rely increasingly on third-party ownership, leasing, and

loan-based models.

By working with financing partners, we intend to make our products more accessible and affordable to homeowners and

small businesses, supporting continued adoption despite changing incentive structures.

Product Innovation.

We are investing in research and development to expand our product portfolio and maintain a competitive edge.

In addition to our core

NV14, NV24, NVPlus, and NV7600 inverter, we recently announced two major product launches:

(i) a 250 kW / 430 kWh commercial and industrial

battery energy storage system, and (ii) the NV16 kW AC hybrid inverter with 24 kW PV input.

These launches expand our reach into larger

residential and commercial markets.

We have also begun advanced discussions with technology partners to develop future generations of

NeoVolta storage systems.

Commercial Market Entry.

We are positioning NeoVolta to compete in the emerging commercial and industrial (“C&I”) segment, where businesses are

seeking solutions for resiliency, demand-charge management, and grid services.

Our newly introduced 250 kW / 430 kWh C&I product is

the first step in this expansion.

Strategic Combinations.

In addition to organic growth, we may evaluate acquisitions, joint ventures, or other strategic transactions to expand our technology

base, accelerate market entry, and enhance financing capabilities.

We believe this growth strategy—driven

by expanded distribution, financing innovation, product development, and C&I expansion—will allow NeoVolta to scale efficiently

and strengthen our competitive position in the growing energy storage market.

We compete with several established

companies in the energy storage systems (“ESS”) market, including Tesla, LG Chem, Sonnen, Enphase, SunPower, and SMA America.

Many of these competitors have significantly greater financial resources, manufacturing capacity, brand recognition, and established distribution

Their scale allows them to pursue aggressive pricing, broader marketing, and faster product refresh cycles.

In addition to dedicated ESS

providers, we also face competition from diversified industrial companies, generator manufacturers, inverter suppliers, and other firms

that offer alternative backup power or distributed energy solutions.

We expect new entrants to continue to emerge as energy storage adoption

expands and regulatory requirements evolve.

Despite the presence of larger

and more established competitors, we believe NeoVolta maintains distinct competitive advantages:

Product Availability.

We generally fulfill orders in less than two weeks, often within days, compared to extended backlogs reported by some competitors.

supports the cash-flow needs of small and mid-sized installers.

Installer Service.

NeoVolta considers its installer relationships to be the key to our growth.

The relative newness of the industry requires a great deal

of education and support to ensure quality and efficient installations.

With all energy storage, there is significant necessary electrical

work, which may be new to smaller solar installers.

NeoVolta requires that every installer go through our Certified Installer Program

and we often walk them through early installations one-on-one to get them comfortable with the product either in-person or via smart phone

NeoVolta’s San Diego-based direct customer support is available throughout the install and for any ongoing service, as well

as through our remote system monitoring.

This one-on-one philosophy has generated great customer loyalty and install success and we intend

to invest the resources necessary to keep this partnership culture a priority.

Superior Product .

of our competitors have significantly greater financial, product development, manufacturing, marketing resources, and name recognition

than we have.

However, with the industry’s growth will come frequent and dramatic change.

We believe that our 100% commitment to

ESS and our size allow us to navigate this nascent industry more nimbly, and we have been able to develop distinct competitive advantages

to appeal to smaller and regional independent installers.

We designed the NeoVolta NV14 to be cost effective, easy to install and service,

and adaptable to customer needs.

We are one of very few in the ESS industry to focus virtually all our resources on energy storage systems.

Key Product Advantages :

· Residential / Commercial:

System adapts to either

application without the need for any additional equipment (transformers)

· Outdoor or Indoor installations:

NEMA 3R rated

· Higher power than most competitive options (7,680

· Compatible with AC, DC or both AC and DC power

· UL certified to have no thermal runaway and no

thermal risk (UL 9540A)

· Higher 6,000 cycle batteries

· Compatible with generators

· Can support off grid

· Capable of adding additional battery storage

capacity without need for additional inverter

Our NV14 inverter can also

accept 208 Volt 3-phase commercial power by simply making a settings change.

This feature allows small businesses to back up vital systems

such as refrigeration, servers, alarm systems, entry and exit security features, vaults, emergency lighting, etc.

Some States are beginning

to require these capabilities as an emergency capability due to frequent grid outages.

IP & Product Development

We currently have three issued

US utility patents.

US Patent No.

10,998,730 B1 is directed to NeoVolta’s solar power inverter system.

US Patent No.

B2 relates to NeoVolta’s generators.

US Patent No.

11,605,952 B1.

which is an expansion of our first Patent, relates to NeoVolta’s

solar power inverter system.

We will continue to expand our Patent portfolio when appropriate.

Our Certified Installer Program, direct technical support, and remote monitoring capabilities provide education and assistance to installers,

fostering loyalty and reducing installation risk.

Product Safety and Flexibility.

Our systems use lithium iron phosphate (LiFePO₄) chemistry and are UL 9540/9540A certified with no thermal runaway risk.

are NEMA 3R rated for indoor/outdoor use, support both AC- and DC-coupled solar, and allow capacity expansion without requiring an additional

Market Focus.

some competitors that sell storage primarily as an add-on to solar, NeoVolta is focused entirely on energy storage.

We target independent

installers and distributors that are underserved by larger providers, particularly in retrofit markets and emerging commercial segments.

We believe these differentiators

allow us to compete effectively in a rapidly growing market, even against larger, more established participants.

Intellectual Property & Product Development

We rely on a combination of

patent, trademark, copyright, trade secret, including federal, state and common law rights in the United States and other countries, nondisclosure

agreements, and other measures to protect our intellectual property.

We require our employees, consultants, and advisors to execute confidentiality

agreements and to agree to disclose and assign to us all inventions conceived under their respective employment, consultant, or advisor

agreement, using our property, or which relate to our business.

Despite any measures taken to protect our intellectual property, unauthorized

parties may attempt to copy aspects of our products or to obtain and use information that we regard as proprietary.

Our business is affected

by our ability to protect against misappropriation and infringement of our intellectual property, including our trademarks, service marks,

patents, domain names, copyrights and other proprietary rights.

patents, trademarks, copyrights, trade secrets, and contractual protections to safeguard our technology and brand.

As of September 2025,

we hold three issued U.S.

utility patents:

10,998,730 B1 – directed

to NeoVolta’s solar power inverter system.

11,502,618 B2 – directed

to NeoVolta’s generators.

11,605,952 B1 – an expansion

of our inverter system patent.

We expect to continue filing

for patent protection when appropriate as we expand our technology portfolio.

In addition to patents, we protect our intellectual

property through nondisclosure agreements, confidentiality provisions, and invention assignment agreements with employees, consultants,

and advisors.

Despite these protections, unauthorized parties may attempt to copy aspects of our products or use information we consider

The success of our business depends in part on our ability to defend against misappropriation and infringement.

Product Development .

We continue to invest in research and development to expand our product offerings.

In addition to our core NV14 and NV24 ESS products,

we have launched NVPlus, a higher-capacity residential and small commercial system;

the NV7600 stand-alone inverter;

and two new products

(i) a 250 kW / 430 kWh commercial and industrial BESS, and (ii) the NV16 kW AC hybrid inverter with 24 kW PV input.

exploring partnerships to accelerate development of next-generation systems.

Regulatory Environment

Regulators are quickly getting

involved in the ESS space.

In the past three years, California regulators have implemented major requirements, including CSIP and CPUC

“rapid shutdown,” garage safety, non-ferrous cabinet, and more are being planned.

We have a track record of understanding,

adapting, and deploying our products in this ever-changing world.

California, via the California

Public Utilities Commission (CPUC), and Hawaii appear to be leading the United States when it comes to new ESS regulations.

36-months, CPUC adopted Common Smart Inverter Profile (CSIP), solar rapid shutdown, and several fire standards both inside garages and

outside on residential dwellings.

On June 22, 2020, with significant technical development and relationship building, NeoVolta received

all certifications necessary for California CSIP compliance.

On August 5, 2020, the California Energy Commission (CEC) approved NeoVolta’s

CSIP application.

CEC facilitates regulatory approvals for the CPUC.

In January 2021, CPUC adopted

solar “rapid shutdown” requirements, which means emergency responders needed to be able to quickly terminate all with a switch

or lever within a few feet of the Main Service Panel (MSP).

NeoVolta already met this challenge with outside AC solar installations, and

quickly met the requirements for indoor installations and DC solar.

In June 2022, California adopted

several requirements for inside garage installations and disallowed any installs inside residential living spaces to include most basements.

These changes affect where a system can be installed and may prevent installation in colder climates.

NeoVolta’s other certifications

· Underwriters Laboratories (UL) 9540, 9540A, 1973, 1741SA, 1642, and 1699B Arc Fault Circuit Protection

· UL 1741 third edition

(including UL 1741 Supplemental SB)

· UL 9540A Battery Energy Storage System (ANSI/CAN/UL

· Institute of Electrical and Electronics Engineers

(IEEE) 1547 (2018 standard)

· International Electrotechnical Commission (IEC)

· Electrical Codes:

National Fire Protection Association’s NFPA 70 National Fire Codes (NEC) 2023

· California Public Utilities Commission (CPUC) Rule 21 Interconnection

· Hawaii Electric Companies Source Requirement Document Version 1.1 (SRD-UL-1741-SA-V1.1)

· CSA Group C22.2 No.

107.1:2001 Ed.

· Federal Communications Commission (FCC) 15 Class B

· National Electrical Manufacturers Association

(NEMA) Type 3R

· California Energy Commission (CEC):

Grid Support Utility, Utility Interactive, Energy Storage System NV14

NeoVolta has established a

track record for quickly understanding and meeting regulatory hurdles.

Although regulatory changes will cause an enduring need for increases

in Research and Development (R&D) and product constraints, we believe this will also raise the barrier of entry to new market entrants.

We believe NeoVolta is well positioned to face new regulatory requirements due to our battery chemistry and our product being developed

in California - where regulatory standards in energy are generally set.

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.

We estimate that NEM3 reduced our sales from the enactment date in December 2022 continuing through our last

fiscal quarter, as solar installers worked off their permitted NEM2 installs.

We expect our sales to gradually increase going forward.

The energy storage industry

is subject to a complex and evolving regulatory framework at the federal, state, and local levels.

In recent years, regulators have adopted

new safety, interconnection, and performance standards that materially impact product design and installation requirements.

California and Hawaii have

been at the forefront of these regulatory changes.

In California, the California Public Utilities Commission (“CPUC”) has

implemented standards such as the Common Smart Inverter Profile (CSIP) and “Rule 21” interconnection requirements.

5, 2020, the California Energy Commission (“CEC”) approved NeoVolta’s CSIP compliance application, enabling our products

to meet CPUC interconnection rules.

In addition, “rapid shutdown” requirements—mandating that emergency responders be

able to quickly disable PV systems at the service panel—were adopted in 2021 and are now reflected in the National Electrical Code.

Fire code and safety standards

have also advanced significantly.

Beginning in 2022, California prohibited installation of energy storage systems in residential living

spaces, limited installation in garages to units with fire protection measures, and required additional safeguards such as heat and smoke

detectors or bollards.

These changes reflect increasing scrutiny of certain lithium-ion chemistries that have demonstrated thermal runaway

NeoVolta’s lithium iron phosphate (LiFePO₄) batteries, by contrast, have been certified under UL 9540A testing, which

evaluates thermal runaway and fire propagation, and meet current safety requirements.

NeoVolta’s products

are certified under multiple safety and performance standards, including:

· UL 9540 and UL 9540A (energy storage system safety

and thermal runaway testing)

· UL 1741SA / SB and IEEE 1547 (inverter and grid

interconnection)

· UL 1973 (battery modules)

· FCC Class B (communications compliance)

· NFPA 70 National Electrical Code (2023 edition)

· California Rule 21 and Hawaii Electric SRD-UL-1741-SA-V1.1

(interconnection requirements)

· NEMA 3R (outdoor enclosure rating)

We expect the regulatory

environment for ESS to remain highly dynamic.

Although compliance requires continued investment in engineering and certification, we believe

these requirements create higher barriers to entry for new competitors and reinforce NeoVolta’s positioning as a compliant and safety-focused

manufacturer.

Manufacturing

All of NeoVolta’s products

are manufactured in-house at our Poway, CA facility.

We manufacture our products in an efficient build-to-order model, keeping very little

finished-goods inventory.

We sublease and share our facility with our former contract manufacturer under a physical arrangement.

Pursuant to an amendment to

our supply agreement with our former contract manufacturer in April 2023, we took over direct responsibility for the manufacturing process

surrounding our ESS units from our contract manufacturer on June 1, 2023.

Accordingly, we now issue customer build orders to our two new

employees that we hired from our former contract manufacturer, they pull the raw materials from the warehouse, assemble the final units

and prepare them for shipment or pick-up.

Our timeline from order to delivery is usually less than two weeks.

The end-product is then picked

up or shipped from our docks, signed off by our installer and logged into our system when installed for system monitoring.

We run multiple quality checks

throughout the process and have systems to track components and end-units from Asia to San Diego to the end-user’s location.

record all component serial numbers, all torque settings, and annotate all required item numbers and functionality prior to packaging.

Assembly Inventory Purchase

In April 2023, we closed the

bulk purchase of raw materials inventory from our contract manufacturer by making a cash payment to that company in the net amount of

$1.3 million, after considering credits for prepayments and other items of approximately $0.1 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.

conjunction with assuming this responsibility, we hired the employees of our contract manufacturer who previously performed contract manufacturing

services for us.

We plan to hire up to three additional “assemblers” in the future.

All of our manufacturing certifications

are listed under NeoVolta.

This amended agreement had no effect on our present Sublease Agreement with our contract manufacturer, pertaining

to our existing manufacturing location in Poway, CA (see “Item 2 – Properties”).

As of June 30, 2024, we have

We manufacture our NV14 and

NV24 energy storage systems at our facility in Poway, California.

These products are built under a made-to-order model, with minimal finished-goods

inventory and higher raw-materials inventory relative to projected sales to support delivery timelines.

In April 2023, we amended our

master supply agreement and purchased bulk raw-materials inventory from our former contract manufacturer;

on June 1, 2023, we assumed

direct responsibility for manufacturing NV14/NV24 systems and hired key personnel who previously supported those activities.

2025, we secured a larger Poway facility to accommodate growth in these product lines.

Other NeoVolta products —including

NVPlus, the NV7600 stand-alone inverter, and newly announced offerings—are manufactured through qualified contract partners under

NeoVolta specifications.

We manage supplier selection, production planning, and quality control, and we perform firmware configuration

and final acceptance testing as appropriate before shipment.

Our manufacturing processes

emphasize traceability and compliance.

For NV14/NV24, we track components from receipt through final build, recording serial numbers,

torque settings, and required test results prior to packaging.

All units are released only after passing defined quality checkpoints.

For partner-manufactured products, we apply incoming inspection protocols aligned to our specifications and certifications.

We source critical components

from suppliers in the United States and Asia.

To mitigate risks from supply chain disruptions, tariffs, or component shortages, we maintain

buffer stocks of key NV14/NV24 components, pursue multi-sourcing arrangements, and coordinate production schedules with our partners.

In addition, we are actively working to increase domestic content across our products and to ensure that our supply chain is compliant

with Foreign Entity of Concern (FEOC) requirements, which will become increasingly important for eligibility under federal incentive programs.

As of June 30, 2025, we had

17 full-time employees.

Our CEO, who joined the Company in April 2024, manages all Company strategy, sales and R&D, our CFO manages

all finance and administration.

Our manufacturing operations are performed by the new employees that we have hired from our former contract

operator, as noted above.

The balance of the staff manages supply chain, technical support and marketing/sales support.

We also contract

for hire with four outside consultants and contractors on an ongoing basis.

Also, we enter into specific contracts for non-recurring R&D

projects, as needed.

Our Chief Executive Officer oversees overall company strategy, sales, and product development, while our Chief

Financial Officer manages finance and administration.

Our Poway facility staff is primarily focused on manufacturing and quality control

for our NV14 and NV24 systems, supported by supply chain, technical support, and sales and marketing personnel.

We also engage outside consultants

and contractors for specialized functions, including research and development, regulatory compliance, and market development.

to time, we may enter into specific contracts for non-recurring projects to supplement our workforce.

We consider our relationship

with employees to be good.

None of our employees are represented by a labor union, and we have not experienced any work stoppages.

Access to Information

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What changed 10-K

Item 1. Business