What changed in this filing

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Item 1. Financial Statements

2026-05-15 compared with 2026-02-13 · 366 added, 300 removed, 378 unchanged (64% of the section changed)

Financial Statements

NEOVOLTA, INC.

Balance Sheets

Consolidated Balance Sheets

Current assets:

3 unchanged sentences

Prepaid expenses and other current assets (including prepaid inventory in amounts of $ 455,454 and $ 535,938 , respectively)

Note receivable, net (including accrued interest of $ 14,712 )

Total current assets

Property and equipment

Accumulated depreciation

Construction in progress

Property and equipment, net

Net property and equipment

15 unchanged sentences

Stockholders' equity:

Common stock, $ 0.001 par value, 100,000,000 shares authorized, 36,195,684 shares and 34,124,873 shares issued and outstanding, respectively

Common stock, $ 0.001 par value, 100,000,000 shares authorized, 42,711,301 shares and 34,124,873 shares issued and out- standing, respectively

Additional paid-in capital

6 unchanged sentences

NEOVOLTA, INC.

Statements of Operations

Consolidated Statements of Operations

Three Months Ended

8 unchanged sentences

( 2,625,649 )

( 1,370,970 )

Other income (expense):

5 unchanged sentences

$ ( 1,449,331 )

$ ( 971,137 )

Weighted average shares outstanding - basic and diluted

2 unchanged sentences

NEOVOLTA, INC.

Statements of Operations

Six Months Ended

Consolidated Statements of Operations

Nine Months Ended

Revenues from contracts with customers

10 unchanged sentences

Loss on debt exchanges

( 1,266,030 )

Interest expense

6 unchanged sentences

Net loss per share - basic and diluted

See accompanying notes to unaudited financial

See accompanying notes to unaudited financial statements.

NEOVOLTA, INC.

Statements of Stockholders' Equity

Six Months Ended December 31, 2025 and 2024

Consolidated Statement of Stockholders' Equity

Nine Months Ended March 31, 2026 and 2025

Stockholders'

14 unchanged sentences

( 32,559,255 )

Stock compensation expense

Issuance of common stock in public offering

Issuance of common stock in private offering

Issuance of common stock for debt exchange

( 3,028,402 )

Balance at March 31, 2026

$ ( 35,587,657 )

Stockholders'

8 unchanged sentences

( 22,678,169 )

See accompanying notes to unaudited financial statements.

Stock compensation expense

Issuance of common stock in private offering

( 1,449,331 )

Balance at March 31, 2025

$ ( 24,127,500 )

See accompanying notes to unaudited financial

NEOVOLTA, INC.

Statements of Cash Flows

Six Months Ended

Cash flows from operating activities:

Consolidated Statements of Cash Flows

Nine Months Ended

Cash flows used in operating activities:

$ ( 9,810,523 )

6 unchanged sentences

Provision for expected credit losses/bad debt expense

Changes in current assets and liabilities

Changes in assets and liabilities

Accounts receivable

( 3,636,878 )

Prepaid expenses and other current assets

Other long term assets

Prepaid insurance and other current assets

Operating lease obligation

5 unchanged sentences

Cash flows used in investing activities:

Addition of assets for cash

Additions to Construction in Progress

Additions to Other Property & Equipment

Additions to Note Receivable

( 1,500,000 )

Net cash flows used in investing activities

( 2,785,375 )

Cash flows from financing activities:

Issuance of common stock in private offering

Issuance of common stock in public offering

Borrowings under line of credit

16 unchanged sentences

Right-of-use assets obtained for operating lease liabilities

Purchases of construction in progress recorded in accounts payable

See accompanying notes to unaudited financial statements.

NEOVOLTA, INC.

Notes to Financial Statements

Notes to Consolidated Financial Statements

( 1) Business

10 unchanged sentences

Interim Financial Information

– The Company has prepared the accompanying financial statements, without audit, in accordance with accounting principles generally

accepted in the Unites States of America for interim financial information and pursuant to the rules and regulations of the Securities

and Exchange Commission (“SEC”).

In the opinion of management, these financial statements contain all adjustments, consisting

only of normal recurring adjustments, necessary to fairly state the Company’s financial position as of December 31, 2025, the results

of its operations for the three and six month periods ended December 31, 2025 and 2024, the changes in its stockholders’ equity

for the three and six month periods ended December 31, 2025 and 2024, and cash flows for the six month periods ended December 31, 2025

The balance sheet as of June 30, 2025 has been derived from the Company’s June 30, 2025 financial statements that were

audited by an independent registered public accounting firm but does not include all of the information and footnotes required for complete

annual financial statements.

The results of operations for the interim periods are not necessarily indicative of the results to be expected

for the full year.

These financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended June

30, 2025, as filed with the SEC on September 29, 2025.

– The Company has prepared the accompanying consolidated financial statements, without audit, in accordance with accounting

principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations

of the Securities and Exchange Commission (“SEC”).

In the opinion of management, these consolidated financial statements contain

all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the Company’s consolidated financial

position as of March 31, 2026, the results of its operations for the three and nine month periods ended March 31, 2026 and 2025, the changes

in its stockholders’ equity for the three and nine month periods ended March 31, 2026 and 2025, and cash flows for the nine month

periods ended March 31, 2026 and 2025.

The balance sheet as of June 30, 2025 has been derived from the Company’s June 30, 2025 financial

statements that were audited by an independent registered public accounting firm but does not include all of the information and footnotes

required for complete annual consolidated financial statements.

The results of operations for the interim periods are not necessarily

indicative of the results to be expected for the full year.

These consolidated financial statements should be read in conjunction with

our Annual Report on Form 10-K for the year ended June 30, 2025, as filed with the SEC on September 29, 2025.

Principles of Consolidation

- The consolidated financial statements include the accounts of the Company and its subsidiary, NeoVolta Power, LLC, which was formed

in January 2026 (see Note 2).

The noncontrolling interests in this subsidiary, which are nonredeemable, will be accounted for as a separate

line within stockholders’ equity when recognized.

All intercompany accounts and transactions have been eliminated in consolidation.

Acquisitions –

4 unchanged sentences

the acquiring entity to recognize assets acquired and liabilities assumed based on the cost to the acquiring entity on a relative fair

value basis, except for non-qualifying assets including financial assets such as inventory.

value basis, except for non-qualifying assets such as inventory.

Cash and Cash Equivalents

3 unchanged sentences

limit of $250,000, per bank.

At December 31, 2025, the Company maintained all of its accounts at one bank and the combined balances of

all accounts was less than the FDIC insurance limit.

At March 31, 2026, the Company maintained all of its parent and subsidiary company accounts at one bank and

the combined balances of all accounts exceeded the combined FDIC insurance limit by $ 11,230,829 .

– Inventory consists of batteries and inverters purchased from Asian suppliers and delivered to a location near the Company’s

offices, for assembly into ESS units.

Inventory is stated at the lower of cost or net realizable value, cost being determined using the

first-in, first out (FIFO) method.

main offices, for assembly into ESS units.

Inventory is stated at the lower of cost or net realizable value, cost being determined using

the first-in, first out (FIFO) method.

The Company periodically reviews the value of items in inventory and records an allowance to reduce

3 unchanged sentences

The following table presents the components

of inventory as of December 31, 2025 and June 30, 2025:

of inventory as of March 31, 2026 and June 30, 2025:

Schedule of inventory

Raw materials, consisting of assembly parts, batteries and inverters

Work in process

Finished goods

Property and Equipment

– The Company capitalizes the cost of property and equipment and depreciates it over their estimated useful lives ranging from

1 to 7 years.

No depreciation is recognized on construction in progress until the project is completed and placed in service.

Revenue Recognition

14 unchanged sentences

Two such customers represented approximately 71 % and 29 % of the Company’s revenues in the three months ended

December 31, 2025, however, no other dealers accounted for more than 10% of the revenues in such period.

Those same two customers represented

approximately 46 % and 12 % of the Company’s revenues in the six months ended December 31, 2025.

Those same two customers also represented

approximately 54 % and 20 % of the Company’s accounts receivable as of December 31, 2025.

Two customers represented approximately

37 % and 34 % of the Company’s revenues in the three months ended December 31, 2024.

Two customers represented approximately 35 % and

33 % of the Company’s revenues in the six months ended December 31, 2024.

Since all of the Company’s revenue is currently generated

from the sales of similar products, no further disaggregation of revenue information for the three and six months ended December 31, 2025

and 2024 is provided.

March 31, 2026, however, no other dealers accounted for more than 10% of the revenues in such period.

Those same two customers plus another

one represented approximately 39 %, 15 % and 11 % of the Company’s revenues in the nine months ended March 31, 2026.

Those same three

customers also represented approximately 46 %, 25 % and 19 % of the Company’s accounts receivable as of March 31, 2026.

Two such dealers

represented approximately 48 % and 15 % of the Company’s revenues in the three months ended March 31, 2025.

Three such dealers represented

approximately 26 %, 24 % and 15 % of the Company’s revenues in the nine months ended March 31, 2025.

Since all of the Company’s

revenue is currently generated from the sales of similar products, no further disaggregation of revenue information for the three and

nine months ended March 31, 2026 and 2025 is provided .

Allowance for Expected

1 unchanged sentence

customer's account, reflecting the net amount expected to be collected.

As of December 31, 2025 and June 30, 2025, our allowance for expected

credit losses was $ 186,000 and $ 314,200 , respectively.

Depreciation Expense

– Depreciation expense applicable to property and equipment acquired in an acquisition of assets in October 2025 is recognized on

a straight-line basis over their estimated useful lives ranging from 1 to 7 years (see Note 4).

As of March 31, 2026 and June 30, 2025, our allowance for expected

credit losses for accounts receivable was $ 540,000 and $ 314,200 , respectively.

Amortization Expense

– Amortization expense applicable to intellectual property acquired in an acquisition of assets in October 2025 is recognized on

a straight-line basis over their estimated useful lives ranging from an average of 5 years for licensed technology to 10 years for owned

technology (see Note 4).

a straight-line basis over their estimated useful lives consisting of 2 years for software and information technology, 5 years for licensed

technology, and 10 years for owned technology.

Depreciation Expense

– Depreciation expense applicable to property and equipment which is placed in service is recognized on a straight-line basis over

their estimated useful lives ranging from 1 to 7 years.

Impairment Expense

2 unchanged sentences

property and equipment.

Stock Compensation Expense

– Employee and non-employee share-based payment compensation is measured at the grant date, based on the fair value of the award,

and is recognized as an expense over the requisite service period.

Long Term Leases –

4 unchanged sentences

Loss Per Common Share

– Basic loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of

common shares outstanding during the period.

Diluted loss per common share is determined using the weighted-average number of common shares

outstanding during the period, adjusted for the dilutive effect of common stock equivalents.

In periods when losses are reported, the

weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

As of December 31, 2025, the Company had total outstanding common stock equivalents of 4,297,803 shares as follows:

(i) 3,019,653 shares

related to restricted stock units granted to five officers since April 2024;

(ii) 1,081,150 shares related to warrants issued to investors

in the public offering completed in August 2022;

(iii) 147,000 shares for Non-Qualified Stock Options granted to employees in August 2025;

and (iv) 50,000 shares related to restricted stock units granted to an officer in March 2022 (see Note 3).

– Basic loss per common share is computed by dividing consolidated net loss available to common shareholders by the weighted-average

number of common shares outstanding during the period.

Diluted loss per common share is determined using the weighted-average number of

common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents.

In periods when losses are

reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be

anti-dilutive.

As of March 31, 2026, the Company had total outstanding common stock equivalents of 4,484,209 shares as follows:

shares related to restricted stock units granted to officers and others since April 2024;

(ii) 1,081,150 shares related to warrants issued

to investors in the public offering completed in August 2022;

(iii) 2,391,697 shares for Non-Qualified Stock Options granted to employees

in August and December 2025 and to two executives in February 2026 in exchange for their surrendered RSUs;

and (iv) 50,000 shares related

to restricted stock units granted to an officer in March 2022 (see Note 4).

Note Receivable –

Note receivable consists of a loan in the original principal amount of $ 1,500,000 to a private solar project development company.

loan is in the form of a promissory note bearing interest at the rate of 6 % per annum with the principal and accrued interest being due

on demand on or after December 5, 2026.

Research and Development

Costs – Research and development costs are expensed as incurred.

Value Measurement - Fair value is defined as the price that would be received for an asset or paid

to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly

transaction between market participants on the measurement date .

Stock Compensation Expense

– Employee and non-employee share-based payment compensation is measured at the grant date, based on the fair value of the award,

and is recognized as an expense over the requisite service period.

Value Measurement - Fair value is defined as the price that would be received for an asset or paid to

transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction

between market participants on the measurement date .

Assets and liabilities that are carried at fair

13 unchanged sentences

Actual results could differ from those estimates.

Segment Information

– Management has determined that the Company operates in one reportable segment, which is the development and commercialization

of energy storage products.

The Company's chief operating decision maker (CODM) is its Chief Executive Officer, who reviews financial

information presented on a company-wide basis.

The CODM primarily uses net loss, which is reported in the Statements of Operations, to

assess financial performance and allocate resources.

These financial metrics are used by the CODM to make key operating decisions, such

as the assessment of segment performance and allocation of resources.

The significant categories within net loss that the CODM regularly

reviews are revenues from customers, cost of goods sold, and general and administrative expenses.

Other expenses reported in the Company’s

net loss include interest expense and research and development expenses.

Information – Management has determined that the Company operates in one

reportable segment, which is the development and commercialization of energy storage products.

The Company's chief operating

decision maker (CODM) is its Chief Executive Officer, who reviews financial information presented on a company-wide basis.

primarily uses net loss, which is reported in the Statements of Operations, to assess financial performance and allocate resources.

These financial metrics are used by the CODM to make key operating decisions, such as the assessment of performance and allocation

of resources.

The significant categories within net loss that the CODM regularly reviews are revenues, cost of goods sold, and

general and administrative expenses.

Recent Accounting Pronouncements

7 unchanged sentences

Disaggregation of Income Statement Expenses, are not expected to have a significant impact

on the Company’s financial statement disclosures upon adoption.

The Company has considered all other recently issued accounting

pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.

Liquidity – These

financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge

its liabilities in the normal course of business.

The continuation of the Company as a going concern has been dependent upon the ability

of the Company to obtain necessary debt and equity financing to continue operations and the attainment of profitable operations.

As disclosed in Note 2, we

entered into an agreement with a financing entity in September 2024 whereby we have obtained a line of credit for borrowings of up to

$ 5,000,000 , in order to meet any near-term borrowing needs.

As a result, we believe that we will have sufficient financial availability

between our current credit sources and our recent private equity offering in December 2025 (see Note 3), in order to operate our business

for at least the next 12 months from the date these financial statements are issued.

On September 3, 2024, we entered

on the Company’s consolidated financial statement disclosures upon adoption.

The Company has considered all other recently issued

accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its consolidated financial

Liquidity – These consolidated financial statements have been prepared on a going

concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business.

The continuation of the Company as a going concern has been dependent upon the ability of the Company to obtain necessary debt and equity

financing to continue operations and the attainment of profitable operations.

With the proceeds of our three equity financings in the

nine months ended March 31, 2026 (see Note 4) and our existing financial resources, we believe we will have sufficient cash to operate

for at least the next 12 months.

Consolidated Subsidiary

In January 2026, we executed

a series of joint venture agreements with the U.S.

affiliate of a foreign entity for the formation of a new domestic limited liability

company known as NeoVolta Power, LLC (“NVP”), a Delaware entity, to jointly own and operate a utility-scale battery manufacturing

facility in the State of Georgia.

Pursuant to these agreements, as amended in April 2026, the Company has an 80% ownership interest in

the joint venture company, and the U.S.

affiliate of the foreign entity has a 20% ownership interest (subject to service-based vesting

and forfeiture provisions), which will be accounted for as a noncontrolling interest based on the estimated fair value of its services

as contributed to the joint venture (none as of March 31, 2026).

Under the terms of the joint

venture agreements, we made our initial capital contribution of $ 7,000,000 of cash to NVP in January 2026, in order to fund the startup

of construction on the battery manufacturing facility.

The minority partner is not required to make cash contributions and will instead

contribute ongoing operational and technical services to the joint venture based on its project development and supply chain expertise.

As of March 31, 2026, approximately $ 1,208,000 of the initial cash capital contribution had been spent as capital expenditure on the manufacturing

facility and is reflected on our consolidated balance sheet, mostly as Construction in progress.

As of March 31, 2026, approximately $ 284,000

had been spent on operating expenses for the joint venture and is included in our consolidated statement of operations in General and

administrative expenses.

accordance with the joint venture agreements, we expect to make an additional cash capital contribution of $ 8,000,000 to NVP in June 2026

primarily to fund the purchase of equipment for the battery manufacturing facility.

The plant will be constructed in phases with the initial

phase expected to be completed in the summer of 2026 leading to the commencement of limited production of batteries for sale to customers.

Further, we are expected to make additional capital contributions to NVP through June 30, 2027 in total amounts of up to $ 25,000,000 ,

pursuant to the joint venture agreements, to fund equipment purchases, working capital requirements and other items as may be needed by

We presently anticipate funding our additional capital contributions from the proceeds of one or more one equity and/or debt financings,

subject to market conditions.

However, there can be no assurance that we will be successful in raising sufficient proceeds from any public

or private offerings in order to fully satisfy our obligations for the additional capital contributions to NVP.

To the extent that we

may be unable to raise sufficient proceeds in order to fully satisfy our obligations for the additional capital contributions to NVP,

the parent company of the same foreign entity will be permitted to bring in one or more new members to fund such additional capital contributions

which would dilute our 80% majority ownership of NVP.

In September 2024, we entered

into an agreement with a newly formed financing entity whereby we obtained a line of credit for borrowings of up to $5,000,000.

this agreement, we are obligated to make periodic payments to the lender of accrued interest, at the rate of 16 % per annum, on any outstanding

borrowings that we make, with the principal and any unpaid accrued interest being due at maturity on September 3, 2028 .

In order to secure

such borrowings, we have granted a security interest in all of our assets to the lender.

As of December 31, 2025, we had made net borrowings

under this credit agreement in the amount of $ 633,538 , leaving an available balance of $ 4,366,462 .

Accrued interest as of December 31,

2025 was $ 74,195 .

In the month of November 2024,

we initiated short-term borrowings from a commercial accounts receivable lender under a loan agreement allowing for borrowings, secured

by certain property interests, of up to a principal amount of $ 4,000,000 .

In the six months ended December 31, 2025, we made borrowings

from this lender to finance customer shipments and related costs in the total amount of $ 6,448,725 .

The lender charges a placement fee

of 1% on each borrowing and assesses interest at the rate of 2.5% per month on the outstanding borrowings.

Borrowings are to be repaid

upon the earlier of:

(i) 120 days from the borrowing date;

this agreement, we agreed to make periodic payments to the lender of accrued interest, at the rate of 16% per annum, on any outstanding

borrowings that we make, with the principal and any unpaid accrued interest being due at maturity in September 2028.

In February 2026,

we made full payment to the lender of our outstanding borrowings of $ 633,538 , plus accrued interest of $ 100,779 , and the line of credit

borrowing arrangement was terminated.

In November 2024, we initiated

short-term borrowings from a commercial accounts receivable lender, under a loan agreement allowing for borrowings secured by certain

property interests of up to a principal amount of $4,000,000.

In the nine months ended March 31, 2026, we made borrowings from this lender

to finance customer shipments and related costs in the total amount of $ 6,686,891 .

The lender charges a placement fee of 1% on each borrowing

and assesses interest at the rate of 2.5% per month on the outstanding borrowings.

Borrowings are to be repaid upon the earlier of:

120 days from the borrowing date;

or (ii) receipt of payment from the customer.

In the event of default, interest

is assessed at the default rate of 1% per 7 days.

In the six months ended December 31, 2025, we repaid $ 5,173,058 of such borrowings,

including accrued interest and fees, and converted a total of $ 1,000,000 of loan principal into equity (see Note 3), leaving an outstanding

balance as of that date, including accrued interest and fees, of $ 2,878,890 .

Based on the fair value of our common stock at the time of

the two conversions, we recognized non-operating losses on the debt exchanges during the six months ended December 31, 2025 in the total

amount of $ 858,002 .

In the event of default, interest is assessed at the default

rate of 1% per 7 days.

In the nine months ended March 31, 2026, we repaid $ 6,976,976 of such borrowings, including accrued interest and

fees, and made three conversions of loan principal and accrued interest totaling $ 1,703,494 into equity (see Note 4), leaving an outstanding

balance as of that date, including accrued interest and fees, of $ 609,644 (see Note 7) .

on the fair value of our common stock at the time of the three conversions, we recognized non-operating losses on the debt exchanges during

the nine months ended March 31, 2026 in the total amount of $ 1,266,030 .

Common Stock –

In November 2025, the Company entered into subscription agreements for a private equity offering with an accredited investor group under

which the Company issued in December 2025 a total of 1,200,000 shares of its common stock to the investor group at an offering price of

which the Company issued a total of 1,200,000 shares of its common stock to the investor group in December 2025 at an offering price of

$2.50 per share, resulting in gross proceeds to the Company in the amount of $ 3,000,000 .

1 unchanged sentence

offering to meet working capital needs and for other general corporate purposes.

In the six months ended December

31, 2025, the Company entered into two voluntary exchange agreements with the commercial lender providing short-term financing for customer

shipments and related costs whereby we issued a total of 366,667 shares of its common stock having a fair value of $ 1,858,002 to the lender

in exchange for total reductions in its outstanding principal loan balance amounting to $ 1,000,000 .

In January 2026, we closed

a securities purchase agreement with a group of institutional investors, pursuant to which the Company sold to the purchasers, in a registered

direct offering, a total of 2,100,841 shares of our common stock at an offering price of $4.76 per share.

The gross proceeds to the Company

from the registered direct offering were $ 10,000,000 and the net proceeds were $ 9,301,844 , after deducting offering expenses payable by

We are using the net proceeds from this offering for working capital and general corporate purposes.

In February 2026, we closed

another private equity offering in conjunction with our formation of a new joint venture company.

In that offering we sold a total of

4,000,000 shares of our common stock at an offering price of $2.50 per share to the U.S.

investment arm of our joint venture partner,

resulting in gross proceeds to the Company in the amount of $ 10,000,000 .

We have invested $ 7,000,000 of those proceeds in the joint venture

company in order to satisfy our initial capital contribution, as required under the joint venture agreements, and are using the remaining

proceeds from this offering for working capital and general corporate purposes (see Note 2).

In the nine months ended March

31, 2026, the Company entered into three voluntary exchange agreements with the commercial lender providing short-term financing for customer

shipments and related costs whereby we issued a total of 648,065 shares of our common stock having a fair value of $ 2,969,524 to the lender

in exchange for total reductions in our outstanding principal loan balance amounting to $ 1,703,494 .

The Company recognized non-operating

losses on these two exchanges in the total amount of $ 858,002 (see Note 2).

losses on these three exchanges in the total amount of $ 1,266,030 (see Note 3).

In August 2022, the Company

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Warrants – As

of December 31, 2025, there were outstanding Warrants for a total of 1,081,150 shares of common stock issued to investors which are exercisable

at any time up to August 1, 2027 .

The Warrants may be exercised upon payment of the exercise price in cash on or prior to the expiration

Under the terms of the Warrant Agreement, we must use our best efforts to maintain the effectiveness of the registration statement

and current prospectus relating to common stock issuable upon exercise of the Warrants until the expiration of the Warrants.

to maintain the effectiveness of the registration statement and current prospectus relating to the common stock issuable upon exercise

of the Warrants, the holders of the Warrants shall have the right to exercise the Warrants solely via a cashless exercise feature provided

for in the Warrants, until such time as there is an effective registration statement and current prospectus.

The following table presents

activity with respect to the Company’s warrants for the six months ended December 31, 2025:

of March 31, 2026, there were outstanding Warrants for a total of 1,081,150

shares of common stock issued to investors which are exercisable at any time up to August

The Warrants may be exercised upon payment of the exercise price in cash on or prior to the expiration date.

terms of the Warrant Agreement, we must use our best efforts to maintain the effectiveness of the registration statement and current

prospectus relating to common stock issuable upon exercise of the Warrants until the expiration of the Warrants.

If we fail to maintain

the effectiveness of the registration statement and current prospectus relating to the common stock issuable upon exercise of the Warrants,

the holders of the Warrants shall have the right to exercise the Warrants solely via a cashless exercise feature provided for in the

Warrants, until such time as there is an effective registration statement and current prospectus.

The following table presents activity

with respect to the Company’s warrants for the nine months ended March 31, 2026:

Schedule of warrant activity

2 unchanged sentences

Warrants exercised/forfeited

Outstanding at December 31, 2025

Exercisable at December 31, 2025

Outstanding at March 31, 2026

Exercisable at March 31, 2026

These warrants were issued

1 unchanged sentence

Stock Compensation Expense

– On August 22, 2025, we issued Non-Qualified Stock Options to a group of our non-executive employees to purchase a total of

147,000 shares of our common stock at the current stock price of $ 3.60 per share, pursuant to the provisions of our 2019 Stock Option

These options are exercisable for a period of 5 years from the date of issuance and will become vested on a ratable basis over a

period of 3 years from the date of issuance.

Using the Black-Scholes valuation model, and assuming expected volatility of 78.6 % and current

interest rate of 4.3 %, we have calculated that the total fair value of these options as of the date of issuance was approximately $ 349,500 ,

and we are amortizing this total amount to stock compensation expense on a straight-line basis over the 3 -year vesting period of the options.

– As of March 31, 2026, we have issued Non-Qualified Stock Options to a group of our non-executive employees to purchase a total

of 159,000 shares of common stock, net of forfeitures, at the then-current stock price of $ 3.04 - 3.60 per share, pursuant to the provisions

of our 2019 Stock Option Plan.

These options are exercisable for a period of 5 years from the date of issuance and will become vested

on a ratable basis over a period of 3 years from the date of issuance.

Using the Black-Scholes valuation model, and assuming expected

volatility of 78.6 - 81.5 % and current interest rate of 4.1 - 4.3 %, we calculated that the total fair value of these options at issuance was

approximately $ 366,000 and are amortizing this total amount to stock compensation expense on a straight-line basis over the 3 -year vesting

period of the options.

On February 23, 2026, we issued

Non-Qualified Stock Options to two executive employees to purchase a total of 2,232,697 shares of common stock at the current stock price

of $3.54 per share, in exchange for surrender of their right to receive a total of 1,520,000 shares of restricted common stock.

the Black-Scholes valuation model, and assuming expected volatility of 81.5 % and current interest rate of 4.1 %, we calculated that the

total fair value of these options at issuance was approximately $ 5,380,800 , (see further disclosure below).

The following table presents

activity with respect to our Non-Qualified Stock Options for the six months ended December 31, 2025:

activity with respect to our Non-Qualified Stock Options for the nine months ended March 31, 2026:

Schedule of non qualified stock options

2 unchanged sentences

Options exercised/forfeited

Outstanding at December 31, 2025

Exercisable at December 31, 2025

In April 2024, we entered

into an employment agreement with a new Chief Executive Officer (“CEO”), providing for an initial term extending through June

30, 2027, which will be automatically renewed for additional one-year terms unless either party chooses not to renew it.

Pursuant to the

agreement, our new CEO received an initial equity grant equal to 1,280,000 restricted stock units (“RSUs”), with a grant date

value of $ 2,854,000 , which will vest over a four-year period, subject to his continued employment with the Company, and will be entitled

to earn additional RSUs on each anniversary in the form of three annual performance-based equity grants, beginning in the year ending

June 30, 2025, with a target value of up to $660,000 each.

Effective December 31, 2025, our Compensation Committee approved the issuance

of the first such annual performance grant of RSUs and one-half of the second annual performance grant with a total value of $ 990,000 ,

however, issuance of the RSUs is currently pending.

In February 2025, we

entered into an amended and restated employment agreement with our Chief Financial Officer (“CFO”).

The initial term of the

employment agreement ends on December 31, 2027 and will be automatically renewable for additional one-year terms unless either party chooses

not to renew the agreement.

Pursuant to the agreement, we issued our CFO an award of 240,000 RSUs vesting in four annual installments.

In February 2022, we entered into an earlier amended and restated employment agreement with our CFO, pursuant to which we issued him an

RSU award for up to 300,000 shares of our common stock upon achieving two defined milestones.

The first milestone was achieved as of January

1, 2023, and the underlying 250,000 shares of common stock were issued to our CFO as of that date.

The second milestone was achieved as

of January 1, 2024, and the underlying 50,000 shares of common stock are expected to be issued to our CFO at a later date (see Note 6).

Outstanding at March 31, 2026

Exercisable at March 31, 2026

In April 2024, we

entered into an employment agreement with a new Chief Executive Officer (“CEO”), providing for an initial term extending

through June 30, 2027, which will be automatically renewed for additional one-year terms unless either party chooses not to renew

Pursuant to the agreement, our new CEO received an initial equity grant equal to 1,280,000 restricted stock units

As approved by the Compensation Committee of the Company’s Board of Directors, our CEO surrendered all

of these RSUs and earned performance grants of approximately $ 1.0 million on February 23, 2026, in exchange for newly-issued options

to purchase a total of 1,880,166

shares of common stock, at the current stock price of $3.54 per share, which will vest at the rate of 25% per year for 4 years,

subject to his continued service to the Company on each vesting date.

Such number of options was calculated using a methodology

intended to replicate the equivalent value of the cancelled RSUs and the remaining unrecognized compensation cost of RSUs of

approximately $1.5 million is to be expensed on a straight-line basis over the 4-year vesting period of the options.

In February 2025, we entered

into an amended and restated employment agreement with our Chief Financial Officer (“CFO”).

The initial term of the employment

agreement ends on December 31, 2027 and will be automatically renewable for additional one-year terms unless either party chooses not

to renew the agreement.

Pursuant to the agreement, we issued our CFO an award of 240,000 RSUs.

As approved by the Compensation Committee

of the Company’s Board of Directors, our CFO surrendered all of these RSUs on February 23, 2026, in exchange for newly-issued options

to purchase a total of 352,531 shares of common stock, at the current stock price of $3.54 per share, which will vest at the rate of 25%

per year for 4 years, subject to his continued service to the Company on each vesting date.

Such number of options was calculated using

a methodology intended to replicate the equivalent value of the cancelled RSUs and the remaining unrecognized compensation cost of RSUs

of approximately $0.6 million are expensed on a straight-line basis over the 4-year vesting period of the options.

In January 2025, we entered

into an employment agreement with our former Chief Operating Officer (“COO”) and former Chief Business Officer (“CBO”),

which individual resigned from the Company on January 31, 2026.

Pursuant to the agreement, we issued an award of 150,000 RSUs vesting

in three annual installments.

In October 2025, we entered into employment agreements with our new COO and our new Chief Technology Officer.

Pursuant to their employment agreements, we granted each of the two new officers an award of 450,000 RSUs ( 900,000 RSUs in total), vesting

in three annual installments (see Note 4).

For all of these awards, we have calculated the grant date value of such awards and are amortizing

it as stock compensation expense over the underlying vesting periods.

We have recognized stock compensation expense applicable to all

RSU awards in the six months ended December 31, 2025 and 2024 in the amounts of $ 1,987,813 and $ 392,339 , respectively (see Note 6).

which individual resigned from the Company on January 31, 2026 and received a lump-sum severance payment of $ 50,000 .

Pursuant to the agreement,

we issued an award of 150,000 RSUs vesting in three annual installments, of which 50,000 RSUs had been vested at the time of his resignation

and the remaining 100,000 RSUs were surrendered.

In October 2025, we entered into employment agreements with our new COO and our new Chief

Technology Officer.

Pursuant to their employment agreements, we granted each of the two new officers an award of 450,000 RSUs ( 900,000

RSUs in total), vesting in three annual installments (see Note 4).

For all of these awards, we have calculated the grant date value of

such awards and are amortizing it as stock compensation expense over the underlying vesting periods.

We have recognized stock compensation

expense applicable to all RSU awards in the nine months ended March 31, 2026 and 2025 in the amounts of $ 1,543,272 and $ 693,622 , respectively.

In February 2025, we entered

into a referral agreement with a marketing company to market our products to qualified solar and energy storage system installers.

term of the referral agreement ends on December 31, 2026.

Pursuant to the agreement, the only compensation that the marketing company

will be entitled to receive will be through the issuance of shares of our common stock in exchange for reaching specified target levels

of product sales, up to a maximum total of 2,000,000 shares for reaching a total of 2,500 units sold and paid for.

In accordance with

ASC 718, we are accounting for this agreement based on our periodic assessments of the probability of reaching such target levels.

into a referral agreement with a marketing company to sell our products to qualified solar and energy storage system installers through

December 31, 2026.

Pursuant to the agreement, the only compensation that the marketing company will be entitled to receive is the issuance

of shares of our common stock in exchange for reaching specified target levels of product sales, up to a maximum total of 2,000,000 shares

for reaching a total of 2,500 units sold and paid for.

In accordance with ASC 718, we are accounting for this agreement based on our periodic

assessments of the probability of reaching such target levels.

In conjunction with our public

offering in August 2022, we appointed two new independent directors and adopted a new compensation plan for all independent directors

offering in August 2022, we appointed three new independent directors and adopted a new compensation plan for all independent directors

based on an annual compensation amount of $65,000 with not less than 70% of such amount paid in shares of our common stock, calculated

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by each director.

As of December 31, 2025 and 2024, we booked an accrual of $ 97,500 of compensation expense (of which $87,750 will be

As of March 31, 2026 and 2025, we recorded an accrual of $ 146,250 of compensation expense (of which $131,625 will be

settled through the issuance of shares) for our three independent directors under this plan.

In the six months ended December

In the nine months ended March

31, 2026, we recognized total non-cash stock compensation expense of $ 2,812,763 as follows:

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the RSUs granted to our executive officers and key employees;

(ii) $ 87,750 for the amortized value of the portion of the new compensation

(ii) $ 131,625 for the amortized value of the portion of the compensation

plan for our independent directors that is attributable to stock;

(iii) $ 259,724 for the value of the shares issuable to a distribution

company pursuant to a April 2025 distribution agreement;

company pursuant to an April 2025 distribution agreement;

(iv) $ 673,668 for the value of the shares issuable to various consultants;

(v) $ 41,810 for the amortized value of the Non-Qualified Stock Options issued to non-executive employees in August 2025.

There was a total

of 304,144 shares of our common stock that were issued to various grantees for services in the six months ended December 31, 2025, of

which 176,322 shares were previously expensed in the year ended June 30, 2025.

In the six months ended December

(v) $ 204,475 for the amortized value of the Non-Qualified Stock Options issued to non-executive employees in August 2025 and to two executives

in February 2026 in exchange for their surrendered RSUs.

There was a total of 437,522 shares of our common stock that were issued to various

grantees for services in the nine months ended March 31, 2026, of which 184,700 shares were previously expensed in the year ended June

In the nine months ended March

31, 2025, we recognized total non-cash stock compensation expense of $ 1,368,583 as follows:

(i) $ 693,622 for the amortized value of the

RSUs granted to our chief executive officer, as previously described, and two other non-executive recipients of RSU awards granted since

and (ii) $ 87,750 for the amortized value of the portion of the new compensation plan for our independent directors that is

attributable to stock.

There were a total of 125,620 shares of our common stock that were issued to various grantees in the six months

ended December 31, 2024, which were previously expensed in the year ended June 30, 2024.

RSUs granted to our three officers and two other individuals;

(ii) $ 131,625 for the amortized value of the portion of the compensation

plan for our independent directors that is attributable to stock;

(iii) $ 438,000 for the March 2025 issuance of 150,000 shares of our

common stock to a consultant for his advisory services in the area of energy regulatory matters;

(iv) $ 62,158 for the amortized value

of the shares potentially issuable to a marketing company pursuant to a February 2025 referral agreement;

and (v) $ 43,178 for the March

2025 issuance of 14,250 shares of our common stock to a consultant for marketing services.

There was a total of 289,870 shares of our

common stock that were issued to various grantees for services in the nine months ended March 31, 2025, of which 125,620 shares were previously

expensed in the year ended June 30, 2024.

Other Matters –

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of stock options, stock awards and stock unit awards to key employees, consultants, advisors, and non-employee directors.

As of December

31, 2026, we have made total awards of 4,403,746 shares under the Plan as follows:

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officers and key employees, as noted above;

(ii) 201,565 shares for the initial services of our three independent directors in the years

ended June 30, 2025, 2024 and 2023, pursuant to the compensation plan adopted in August 2022 for independent directors;

(iii) 265,744

shares granted to various consultants for their contracted services;

and (iv) 147,000 shares for Non-Qualified Stock Options to purchase

common stock granted to employees in August 2025.

(ii) 209,943 shares for the services of our three independent directors in the years ended

June 30, 2025, 2024 and 2023, pursuant to the compensation plan adopted in August 2022 for independent directors;

(iii) 265,744 shares

granted to various consultants for their contracted services;

and (iv) 2,391,697 shares for Non-Qualified Stock Options to purchase common

stock granted to employees beginning in August 2025 and to two executives in February 2026 in exchange for surrendered RSUs.

31, 2026, there were a total of 3,096,254 shares available for future issuance under the Plan.

Preferred Stock –

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the tangible property and equipment acquired, we began recognizing depreciation expense from the acquisition date and have recorded depreciation

expense in the amount of $ 7,123 as of December 31,

expense in the amount of $ 16,746 as of March 31, 2026.

For the intellectual property acquired, we began recognizing amortization expense from the acquisition date and have recorded amortization

expense in the amount of $ 216,102

as of December 31, 2025.

Shown below is a summary by Balance Sheet classification of the allocated fair values that we assigned to the

acquired assets as of the acquisition date based upon an independent valuation performed by a professional valuation consulting firm:

as of March 31, 2026.

Shown below is a summary by Balance Sheet classification of the allocated fair values that we assigned to the acquired

assets as of the acquisition date based upon an independent valuation performed by a professional valuation consulting firm:

Schedule of acquired assets

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Software and information technology

In conjunction with

closing the asset purchase, we entered into employment agreements with the two principals of Neubau covering a three year period ending

September 30, 2028.

One of the principals was appointed as the Company’s Chief Operating Officer replacing our former Chief Operating

Officer engaged in January 2025 in that capacity, and our former Chief Operating Officer has now been re-designated as our Chief Product

The other principal was appointed as our Chief Technology Officer.

Pursuant to their employment agreements, we granted each

of the two new officers an award of 450,000 RSUs ( 900,000 RSUs in total), vesting in three annual installments (see Note 4).

In conjunction with closing

the asset purchase, we entered into employment agreements with the two principals of Neubau covering a three-year period ending September

One of the principals was appointed as the Company’s Chief Operating Officer replacing our former Chief Operating Officer

engaged in January 2025, who has since resigned, in that capacity.

Pursuant to their employment agreements, we granted each of the two

new officers an award of 450,000 RSUs ( 900,000 RSUs in total), vesting in three annual installments (see Note 4).

(6) Commitments

8 unchanged sentences

Effective October 1, 2025, we entered into an

extension of our sublease agreement with the sublandlord whereby we extended the terms of the sublease agreement for an additional five

extension of our sublease agreement with the sublandlord whereby we extended the term of the sublease agreement for an additional five

years and one month from the original expiration date of February 28, 2026 to the extended expiration date of March 31, 2031.

of the extension, which was accounted for as a modification, we remeasured the lease liability using a discount rate as of October 1,

2025, and recorded increases to the Company’s operating lease liability and right-of-use asset of $ 787,862 during the three months

ended December 31, 2025.

The rate implicit in the extended sublease agreement was not readily determinable and, as such, we used the Company’s

incremental borrowing rate as the discount rate to remeasure the lease liability.

The incremental borrowing rate was determined to be

13.75 % based on the Company’s borrowing capability over a similar term of the extended sublease agreement utilizing the effects

of full collateralization.

of the extension, which was accounted for as a modification, we remeasured the lease liability using the discount rate as of October 1,

2025, and recorded increases to the Company’s operating lease liability and right-of-use asset of $ 787,862 during the nine months

ended March 31, 2026.

The rate implicit in the extended sublease agreement was not readily determinable and, therefore, we used the Company’s

incremental borrowing rate of 13.75 % based on the Company’s borrowing capability over a similar term of the extended sublease agreement

utilizing the effects of full collateralization.

Future undiscounted lease

2 unchanged sentences

Future operating lease minimum payments,

together with their present value as of December 31, 2025, are summarized as follows:

together with their present value as of March 31, 2026, are summarized as follows:

Schedule of future operating lease minimum payments

10 unchanged sentences

We are dependent on our two

main component vendors for our suppliers of batteries, inverters and other raw materials and the inability of these single-source suppliers

main component vendors for our supplies of batteries, inverters and other raw materials and the inability of these single-source suppliers

to deliver necessary components of our products according to our schedule and at prices, quality levels and volumes acceptable to us,

or our inability to efficiently manage these components, could have a material adverse effect on our financial condition and operating

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 tariff rate was lowered in November 2025, subject to judicial

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.

or our inability to efficiently manage these components, could have a material adverse effect on our consolidated financial condition

and operating results.

Beginning in April 2025, the Trump Administration implemented a significant increase in tariff rates based on the

authority of the International Emergency Economic Powers Act (“IEEPA”) on all goods imported from China, although it was temporarily

suspended for 90 days in April 2025 and the tariff rate was lowered in November 2025, subject to judicial review.

In February 2026, the

Supreme Court declared the tariffs to be unconstitutional based on the authority of IEEPA, therefore, the Administration is considering

alternative approaches to implementing tariffs that it believes would be sustained in a judicial review.

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

in order to reduce the impact of the tariffs.

In conjunction with the closing

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(7) Subsequent

Joint Venture Agreement

On January 13, 2026, we executed

a series of joint venture agreements with the U.S.

affiliates of a foreign entity for the formation of a new domestic limited liability

company to jointly own and operate a planned battery manufacturing facility in the southeastern United States.

Pursuant to these agreements,

the Company has a 60% ownership interest in the joint venture company, and the two U.S.

affiliates of the foreign entity each have a 20%

ownership interest.

conjunction with the formation of this new company, we completed a private offering in early February 2026 of

a total of 4,000,000 shares of our common stock at an offering price of $2.50 per share with the U.S.

investment arm of the same foreign

entity resulting in gross proceeds to the Company in the amount of $10,000,000.

We have invested $7,000,000 of those proceeds in the joint

venture company in order to satisfy our initial capital contribution, as required under the joint venture agreements.

the terms of the agreement, the Company agreed to contribute capital contributions up to $40,000,000, in exchange for 60 Class A Membership

Interests in the Company, of which $7,000,000 was provided in January 2026.

We presently anticipate funding our additional capital contributions

from the proceeds of one or more public or private offerings of our common stock, subject to market conditions.

However, there can be

no assurance that we will be successful in raising sufficient proceeds from such public or private offerings in order to fully satisfy

our obligations for the additional capital contributions to the joint venture company.

To the extent that we may be unable to raise sufficient

proceeds in order to fully satisfy our obligations for the additional capital contributions to the joint venture company, the parent company

of the same foreign entity will be permitted to bring in one of more new members of the joint venture company to fund such additional

capital contributions which would dilute our present 60% majority ownership of the joint venture company.

Other Reportable Events

On January 26, 2026, we closed

a securities purchase agreement with a group of purchasers, pursuant to which the Company sold to the purchasers, in a registered direct

offering, a total of 2,100,841 shares of our common stock at an offering price of $4.76 per share.

The gross proceeds to the Company from

the registered direct offering were $10,000,000 and the net proceeds were $9,350,000, after deducting offering expenses payable by the

We intend to use the net proceeds from this offering for working capital and general corporate purposes.

In January 2026, we entered

into another Exchange Agreement with our commercial lender providing short-term financing for customer shipments and related costs whereby

we issued a total of 281,398 shares of our common stock having a fair value of $1,111,522 to the lender in exchange for total reductions

in our outstanding principal loan balance amounting to $703,494.

Based on the fair value of our common stock at the time of the exchange,

we will recognize a non-operating loss on this exchange in the three months ending March 31, 2026 in the total amount of $408,028 (see

In January 2026, we made a

loan in the amount of $1,500,000 to a private solar project development company.

The loan is in the form of a convertible promissory note

bearing interest at the rate of 6% per annum with the principal and accrued interest being due on demand on or after December 5, 2026.

On February 6, 2026, the Company

entered into a Severance Agreement and General Release (the “Severance Agreement”) with Michael Mendik, its Chief Product

Under the Severance Agreement, in exchange for the covenants and releases in the agreement, the Company agreed to pay Mr.

Mendik a lump-sum severance payment of $50,000, less applicable withholdings and deductions.

In addition, the Company will reimburse

an amount equal to four full months of COBRA premiums to continue health coverage.

April 8, 2026, we entered into a one-year revolving credit agreement with our depository bank providing for borrowings of up to $3,000,000

at an annual interest rate of 2% above the applicable secured overnight financing rate (“SOFR”), plus an adjustment

of up to 0.1 % per annum.

The proceeds of any borrowings made under this credit

agreement are to be used for working capital purposes.

In conjunction with the credit agreement,

we were required to transfer $3,150,000 of cash into a restricted account at our depository bank as collateral.

We made an initial draw

under the credit agreement to fully repay our outstanding borrowings from a commercial accounts receivable lender in

late April 2026 in the amount of approximately $620,000 (see Note 3).

As of the date of this report, our outstanding borrowings under

this credit agreement remain at $620,000.

April 20, 2026, we entered into a Management Services Agreement with an affiliate of the foreign entity referenced in our formation

of a joint venture in Note 2, pursuant to which that affiliate agreed to provide sales and marketing

coordination services to us in connection with our commercial and industrial battery energy storage business.

As consideration for the

services, we agreed to issue the affiliate 1,200,000 shares of our common stock which vests in four equal semi-annual installments of

300,000 shares each on the 6-month, 12-month, 18-month, and 24-month anniversaries of the effective date.

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-Q

Item 1. Financial Statements