What changed in this filing

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Item 1A. Risk Factors

2025-09-29 compared with 2024-09-27 · 67 added, 105 removed, 544 unchanged (24% of the section changed)

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and adverse effect on our business, prospects, financial condition and operating results.

We may become subject to further tariff

increases that would apply to the two main raw material components of our products which are sourced from Asian suppliers.

Presently, our two main raw

material components, batteries and inverters, are imported from different suppliers in China and, until recently, were subject to fairly

low tariff rates that had been in effect for several years.

Beginning in April 2025, the Trump Administration implemented a significant

increase in tariff rates on all goods imported from China, although it was temporarily suspended for 90 days in April 2025 and the suspension

has recently been extended to early November 2025.

Prior to the tariff escalation in April 2025, we had anticipated the likelihood of

facing such a tariff increase and began stockpiling our inventory of these two components.

As a result, we do not anticipate having to

purchase a significant level of such components at post-tariff prices for the next several months.

In the event, however, that

such a mutual trade agreement is not reached between the parties within the next several months and we find it necessary to begin purchasing

a significant level of our inventory components from China at post-tariff prices, we would be faced with a decision as to whether we should

attempt to pass along such tariff increases to our customers through higher prices for our products or absorbing them internally, or some

combination of those two alternatives.

Changes in our supply chain may result in

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Due to our limited operating

history, we depend on a relatively small number of wholesale dealers and installers, primarily in California, for our revenue.

year ended June 30, 2024, two such dealers represented approximately 20% and 14% of the Company’s revenues whereas in the year ended

June 30, 2023, three such dealers represented approximately 25%, 15% and 13% of the Company’s revenues.

As of June 30, 2024, three

such dealers represented approximately 22%, 18% and 14% of the Company’s accounts receivable.

Our limited customer base and concentration

could expose us to the risk of substantial losses if a single dominant customer stops purchasing, or significantly reduces orders for,

our products.

Our ability to maintain close relationships with these top customers is essential to the growth and profitability of our

If we fail to sell our products to one or more of these top customers in any particular period, or if a large customer purchases

fewer of our products, defers orders or fails to place additional orders with us, or if we fail to develop additional major customers,

our revenue could decline, and our results of operations could be adversely affected.

history, we depend on a relatively small number of wholesale dealers and installers in California and other states for our revenue.

the fiscal year ended June 30, 2025, our two largest dealers accounted for approximately 41% and 23% of our total revenues, respectively.

For the fiscal year ended June 30, 2024, our two largest dealers accounted for approximately 20% and 14% of our total revenues, respectively.

As of June 30, 2025, our three largest dealers represented approximately 39%, 12% and 12% of our accounts receivable balance.

customer base and concentration could expose us to the risk of substantial losses if a single dominant customer stops purchasing, or significantly

reduces orders for, our products.

Our ability to maintain close relationships with these top customers is essential to the growth and

profitability of our business.

If we fail to sell our products to one or more of these top customers in any particular period, or if a

large customer purchases fewer of our products, defers orders or fails to place additional orders with us, or if we fail to develop additional

major customers, our revenue could decline, and our results of operations could be adversely affected.

If we fail to scale our business operations

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production cost targets on our products pursuant to our plans, we may not be able to meet our gross margin and other financial targets.

Many of the factors that impact our manufacturing costs are beyond our control, such as potential increases in the costs of our materials

Many of the factors that impact on our manufacturing costs are beyond our control, such as potential increases in the costs of our materials

and components, such as lithium iron phosphate, nickel and other components of our battery cells.

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Any such increase, supply interruption or shortage could

materially and negatively impact our business, prospects, financial condition and operating results.

We use various materials in our business,

including inverters and lithium iron phosphate cells, from suppliers.

materially and negatively impact on our business, prospects, financial condition and operating results.

We use various materials in our

business, including inverters and lithium iron phosphate cells, from suppliers.

The prices for these materials

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and operating results.

Recent increases in mortgage interest rates

may result in a decrease in demand by homeowners for our residential energy storage systems.

Continued high mortgage interest rates may

result in a decrease in demand by homeowners for our residential energy storage systems.

Sales volume in our homeowner

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and global markets are

experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflicts between

Russia and Ukraine, beginning in in February 2022, and between Gaza and Israel, beginning in in October 2023.

Although the length and

impact of these ongoing military conflicts are highly unpredictable, they could lead to further market disruptions, including significant

volatility in commodity prices, credit and capital markets, as well as supply chain interruptions.

We are continuing to monitor the situations

in both of these areas and globally and assessing any potential impacts on our business.

experiencing volatility and disruption following the escalation of geopolitical tensions and the military conflicts between Russia and

Ukraine, which began in February 2022, and between Gaza and Israel, which began in October 2023.

Although the length and impact of these

ongoing military conflicts are highly unpredictable, they could lead to further market disruptions, including significant volatility in

commodity prices, credit and capital markets, as well as supply chain interruptions.

We are continuing to monitor the situations in both

of these areas and globally and assessing any potential impacts on our business.

Any of the above mentioned

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Our products and services are subject to

substantial regulations, which are evolving, and unfavorable changes or failure by us to comply with these regulations could substantially

substantial regulations, which are evolving, and unfavorable changes or failures by us to comply with these regulations could substantially

harm our business and operating results.

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financial condition and results of operations.

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.

Typically, 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

Our business and operations would suffer

in the event of third-party computer system failures, cyber-attacks on third-party systems or deficiency in our cyber security.

We rely on information technology

(“IT”) systems, including third-party “cloud based” service providers, to keep financial records, maintain product

support data, and corporate records, to communicate with staff and external parties and to operate other critical functions.

This includes

critical systems such as email, other communication tools, electronic document repositories and archives.

If any of these third-party

information technology providers are compromised due to computer viruses, unauthorized access, malware, natural disasters, fire, terrorism,

war and telecommunication failures, electrical failures, cyber-attacks or cyber-intrusions over the internet, then sensitive emails or

documents could be exposed or deleted.

Similarly, we could incur business disruption if our access to the internet is compromised, and

we are unable to connect with third-party IT providers.

Our business and

operations would suffer in the event of third-party computer system failures, cyber-attacks on third-party systems or deficiency in our

cyber security.

rely on information technology (“IT”) systems, including third-party “cloud based” service providers, to keep

financial records, maintain product support data, and corporate records, to communicate with staff and external parties and to operate

other critical functions.

This includes critical systems such as email, other communication tools, electronic document repositories and

If any of these third-party information technology providers experience security breaches or incidents due to computer viruses,

unauthorized access, malware, ransomware, natural disasters, fire, terrorism, war, telecommunication failures, electrical failures, cyber-attacks

or cyber-intrusions over the internet, then sensitive data, including personal information, trade secrets, and confidential business information

could be compromised, exposed, or deleted.

Similarly, we could incur business disruption if our access to the internet is compromised,

and we are unable to connect with third-party IT providers.

The risk of a security breach or disruption, particularly through cyber-attacks

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expiration of our patents may lead to increased competition with respect to certain products.

Potential tariffs or a global trade war

have increased our costs and could further increase the cost of our products, which could adversely impact the competitiveness of our

products and our financial results.

In 2019, the Trump Administration

announced tariffs on goods imported from China in connection with China’s intellectual property practices.

Our products depend on

materials from China, namely inverters and batteries, which are the main components of our products.

Traditionally, the tariff rate for

our imports has been 3.4%.

Presently, our tariff rate is 10.9% on these imports.

To date, the Biden Administration has made no significant

changes to these Chinese tariffs.

We cannot predict what actions

may ultimately be taken with respect to tariffs or trade relations between the United States and China, what products may be subject to

such actions, or what actions may be taken by the China in retaliation.

The tariffs described above, the adoption and expansion of trade

restrictions, the occurrence of a trade war, or other governmental action related to tariffs, trade agreements or related policies have

the potential to adversely impact our supply chain and access to equipment, our costs and our product margins.

Any such cost increases

or decreases in availability could slow our growth and cause our financial results and operational metrics to suffer.

Our industry is subject to technological

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rules subsequently implemented by the SEC have required changes in corporate governance practices of public companies.

As a recent Nasdaq

listed public company, we expect these rules and regulations to increase our compliance costs and to make certain activities more time

consuming and costly.

As a public company, we also expect that these rules and regulations may make it more difficult and expensive for

us to obtain director and officer liability insurance in the future and we may be required to accept reduced policy limits and coverage

or incur substantially higher costs to obtain the same or similar coverage.

As a result, it may be more difficult for us to attract and

retain qualified persons to serve on our Board of Directors or as executive officers.

As a public company,

we expect that these rules and regulations may make it more difficult and expensive for us to obtain director and officer liability insurance

in the future and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same

or similar coverage.

As a result, it may be more difficult for us to attract and retain qualified persons to serve on our Board of Directors

or as executive officers.

Confidentiality agreements with employees

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We are heavily reliant on the services of

both Ardes Johnson, our Chief Executive Officer, and Brent Willson, our former CEO and current chief technology officer, and the departure

or loss of either officer could disrupt our business.

both Ardes Johnson, our Chief Executive Officer, and Steve Bond, our Chief Financial Officer, and the departure or loss of either officer

could disrupt our business.

We depend heavily on the continued

efforts of Ardes Johnson, our Chief Executive Officer, who joined the Company in April 2024, and Brent Willson, our former CEO and current

chief technology officer , who are essential to our strategic vision and day-to-day operations and would be difficult to

efforts of Ardes Johnson, our Chief Executive Officer, and Steve Bond, our Chief Financial Officer , who are essential to

our strategic vision and day-to-day operations and would be difficult to replace.

The departure or loss of either Mr.

Johnson or Mr.

Willson, or the inability to timely hire and retain qualified replacements,

could negatively impact our ability to manage our business.

or the inability to timely hire and retain qualified replacements, could negatively impact our ability to manage our business.

If we are unable to recruit and retain key

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Risks Related to Our Securities

Our executive officers and directors will

exercise significant control over us for the foreseeable future, which will limit our shareholders ability to influence corporate matters

and could delay or prevent a change in corporate control.

Our executive officers and

directors currently hold or have the right to acquire, in the aggregate, up to approximately 18.1 % of our outstanding common stock.

a result, these stockholders will be able to influence our management and affairs and heavily influence the outcome of matters submitted

to our stockholders for approval, including the election of directors and any sale, merger, consolidation, or sale of all or substantially

all of our assets.

These stockholders may have

interests, with respect to their common stock, that are different from our other stockholders and the concentration of voting power among

one or more of these stockholders may have an adverse effect on the price of our common stock.

In addition, this concentration

of ownership might adversely affect the market price of our common stock by:

(1) delaying, deferring or preventing a change of control

of our company;

(2) impeding a merger, consolidation, takeover or other business combination involving our company;

or (3) discouraging

a potential acquirer from making a tender offer or otherwise attempting to obtain control of our company.

Nevada law and provisions in our articles

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an emerging growth company until the earliest of:

· the last day of the fiscal year during which we have total annual gross revenues of $1 billion or more;

· the last day of the fiscal year during which we have total annual gross revenues of $1.235 billion or

· the last day of the fiscal year following the fifth anniversary of our initial public offering;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors