What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-03-28 compared with 2023-03-30 · 272 added, 211 removed, 106 unchanged (82% of the section changed)

(the “Company,” “Expion360”, “we,” “us” or “our”) focuses on the design,

assembly, manufacturing, and sales of lithium iron phosphate (LiFePO4) batteries and supporting accessories for recreational vehicles

(“RVs”) and marine applications with plans to expand into home energy storage products and industrial applications.

assemble, and distribute high-powered, lithium battery solutions using ground-breaking concepts with a creative sales and marketing approach.

We believe that our product offerings include some of the most dense and minimal-footprint batteries in the RV & Marine industry.

We are developing the e360 Home Energy Storage:

a system that we expect to significantly change the industry in barrier price, flexibility,

and integration.

We are deploying multiple IP strategies with cutting-edge research and unique products to sustain and scale the business.

We currently have customers consisting of dealers, wholesalers, private label customers and original equipment manufacturers who are

driving revenue and brand awareness nationally.

corporate headquarters are based in Redmond, Oregon, with assembly in the United States and suppliers based in Asia.

focuses on the design, assembly, manufacturing, and sales of lithium iron phosphate (“LiFePO4”) batteries and supporting

accessories for recreational vehicles (“RVs”), marine applications and home energy storage products, with plans to expand

into industrial applications.

We design, assemble, and distribute high-powered, lithium battery solutions using ground-breaking concepts

and rugged, high-quality designs with a creative sales and marketing approach.

We believe that our product offerings include some of

the most dense and minimal-footprint batteries in the RV and marine industries.

We are developing the e360 Home Energy Storage System,

a system that we expect to significantly change the industry in barrier price, flexibility, and integration.

We are deploying multiple

intellectual property strategies with cutting-edge research and unique products to sustain and scale the business.

We currently have

customers consisting of dealers, wholesalers, private label customers and original equipment manufacturers who are driving revenue and

brand awareness nationally.

corporate headquarters are based in Redmond, Oregon, and our suppliers are based in the United States, Asia, and Europe.

We are currently

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of most of our components and assemblies, including cell manufacturing, to the United States.

main target markets are currently the RV & Marine industry.

We believe that we are well positioned to capitalize on the rapid market

conversion from lead-acid to lithium batteries as the primary method of power sourcing in these industries.

Additional focus markets

include home energy storage, where we aim to provide a cost-effective, low barrier of entry, and a do-it-yourself (“DIY”)

flexible system for those looking to power their homes via solar energy, wind, or grid back-up.

Along with RV/Marine and home energy

storage markets, we aim to provide additional capacities to the ever-expanding electric forklift and industrial material handling markets.

e360 product line, which is manufactured for the RV/Marine industry, was launched in December 2020.

The e360 product line, through its

rapid sales growth, has shown to be a preferred conversion solution for lead-acid batteries.

We believe that our e360 Home Energy Storage

system has strong revenue potential with recurring income opportunities for us and our associated sales partners.

primary target markets are currently the RV and marine industries.

We believe that we are well-positioned to capitalize on the rapid

market conversion from lead-acid to lithium batteries as the primary method of power sourcing in these industries.

We are also focused

on expanding into the home energy storage market with the introduction of our two LiFePO4 battery storage systems, where we aim to provide

a cost-effective, low barrier of entry, flexible system for those looking to power their homes via solar energy, wind, or grid back-up.

Along with RV, marine and home energy storage markets, we aim to provide additional capacities to the ever-expanding electric forklift

and industrial material handling markets.

e360 product line, which is manufactured for the RV and marine industries, was launched in December 2020.

The e360 product line, through

its sales growth, has shown to be a preferred conversion solution for lead-acid batteries.

In December 2023, we announced our entrance

into the home energy storge market with our introduction of two LiFePO4 battery storage solutions that enable residential and small business

customers to create their own stable micro-energy grid and lessen the impact of increasing power fluctuations and outages.

that our e360 Home Energy Storage System has strong revenue potential with recurring income opportunities for us and our associated sales

products provide numerous advantages for various industries that are looking to migrate to lithium-based energy storage.

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trend of vehicle electrification is expected to be a significant growth catalyst for lithium compounds over the next decade and beyond.

According to industry sources and management estimates, the global electric vehicle market was valued at $163.01 billion in 2020, and

is projected to reach $823.75 billion by 2030, a CAGR of 18.2%.

In addition, the North American electric vehicle market is projected

to reach $147.6 billion by 2028, a CAGR of 37.2%.

the North American RV market was estimated at roughly $33.95 billion in 2021, and is expected to grow at a 9.7% CAGR, approaching $59.16

billion by 2027.

There are almost 230 national chain RV dealers in the United States, further exemplifying the robust market for these

In addition, the global recreational boating market was valued at $27.32 billion in 2021, and is projected to reach $36.78

billion by 2027, growing at a CAGR of 5.1% from 2021 to 2027.

According to ResearchAndMarkets.com, the global EV market demand is expected to reach $1.66 trillion by 2030, expanding at a compound

annual growth rate (“CAGR”) of 14.5% over the forecast period.

On a global level, the market is driven by initiatives taken

by governments of various countries to promote manufacturing of EVs.

For example, the Electric Vehicles Initiative (“EVI”),

a multi-government forum with 13 participating countries, works to increase the adoption of EVs globally.

Several campaigns and programs

have been launched through the EVI forum, including the EV30@30 in 2017 initiative, which aims to have at least 11 countries with EVs

reflecting 30% of new vehicle sales by 2030.

Further, according to ResearchAndMarkets.com, the United States EV market size was valued

at $49.1 billion in 2022 and is anticipated to expand at a CAGR of over 15.5% between 2023 and 2032 due to the growing demand for efficient

and eco-friendly vehicles.

the North American RV market was estimated at roughly $33.95 billion in 2021, and is projected to grow at a 5.0% CAGR from 2024 to 2032

according to Expert Market Research.

There are over 200 national chain RV dealers in the United States, further underscoring the robust

market for these vehicles.

the intersection of both these trends lies the rapidly expanding lithium battery market.

The market for lithium-ion batteries is expected

to grow at 13.1% CAGR between 2022 and 2031, from roughly $44.5 billion to $135.1

The vast expansion of the lithium battery market can be attributed to global trends promoting clean energy, as well as the compact

and flexible nature of lithium battery packs which make them easy to install in RV’s and boats.

Our technology, which we believe

offers industry leading battery pack flexibility for the most efficient energy storage, is poised to be able to offer power to these

large vehicles such as RV’s and recreational boats.

According to IMARC, the market for lithium-ion

batteries is projected to grow at 13.2% CAGR to reach $93.3 billion by 2028.

vast expansion of the lithium battery market can be attributed to global trends promoting clean energy, as well as the compact and flexible

nature of lithium battery packs which make them easy to install in RVs and boats.

Our technology, which we believe offers industry leading

battery pack flexibility for the most efficient energy storage, is poised to be able to offer power to these large vehicles such as RVs

and recreational boats.

is focused on expanding its position in the deep cycle, off-grid and stationary energy storage markets.

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believe the following strengths differentiate Expion360 and create long-term, sustainable competitive advantages:

Capacity to Lead Acid Competitors

Superior Capacity

to Lead Acid Competitors

batteries have always been the standard in RV and marine transportation vehicles.

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12 years - three to four times that of certain lead-acid batteries and with ten times the number of charging cycles.

we believe that our typical battery provides three times the power of the typical, lead-acid battery despite being half the weight (comparing,

Furthermore, we

believe that our typical battery provides three times the power of the typical, lead-acid battery despite being half the weight (comparing,

for example, a typical lead-acid battery like Renogy Deep Cycle AGM, which is rated at 100Ah, to our own LFP 100Ah battery and assuming

slow discharge at a .1C rate).

Pack Flexibility

addition, in September 2023, Expion360 introduced a new 4.5 Ah 26650 lithium-ion phosphate battery cell.

This will allow us to increase

energy density by over 32% compared to traditional 3.4 Ah 26650 cells.

The 12 volt 450 Ah battery was introduced in September 2023 as

our first e360 battery incorporating our 4.5 Ah cell technology.

battery packs are also highly flexible, designed to be moved and used in various applications seamlessly.

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By onshoring, we expect to be able to react to market demands at a much quicker pace and increase profit levels over our competition.

RV and Marine Industry Experience and Relationships and Strong Insider Ownership

Expion360 is managed by a team with a strong track record in the RV and clean energy spaces.

John Yozamp, Founder of Expion360, pioneered

multiple new recreational concepts in the RV industry.

As the founder and previous owner of Zamp Solar, he has extensive relationships

in the RV OEM industry.

In addition, our co-founders own significant equity in the company, signaling a strong commitment and personal

into New Markets

RV and marine applications currently drive revenue, Expion360 has plans to expand into the home energy market in the coming years.

e360 Home Energy Storage system is planned to target entry level customers with its modular design that will allow for DIY expansion.

We see the vision of stored energy as a portable, moving concept, where stored energy can be transported from the home to other devices

outside of it.

Furthermore, Expion360 plans to file for IP protection for Expion360’s “Smart Talk” upon completion

of development.

“Smart Talk” is designed to allow multiple batteries in a bank to communicate as one and be linked to a network.

furtherance of our vision of stored energy, in January 2023, Expion360 introduced two portable power generator products:

the AURA POWERCAP™

600 and AURA POWERCAP™ 800 (together, the “Aura”).

The AURA POWERCAP™ 600 is designed to fit and convert any

one of Expion360’s group 24 lithium batteries into a 600W mobile power station while the AURA POWERCAP™ 800 is designed to

fit and convert any one of Expion360’s group 27 lithium batteries into an 800W mobile power station.

The Aura’s proprietary

patent pending design allows the AURA POWERCAP™ 600 to join seamlessly to 60Ah, 80Ah, and 95Ah Expion360 batteries and the AURA

POWERCAP™ 800 to join to 100Ah and 120Ah Expion360 batteries.

The AURA POWERCAP™ 600 and AURA POWERCAP™ 800 are an

exclusive fit to Expion360 batteries and will not fit other brands.

The AURA POWERCAP™ 600 and AURA POWERCAP™ 800 contain

beneficial features and functions for a compact portable power unit, including the ability to recharge the battery from the input charge

port using the included 7 Amp household charger and the ability to recharge remotely with Expion360’s lightweight portable solar

panel options, which are sold separately.

Expansion into New Markets

furtherance of our vision of stored energy, in the second quarter of 2023, we commenced deliveries of a portable power generator product,

the AURA POWERCAP™ 600 (the “Aura 600”).

The Aura 600 is designed to fit and convert any one of Expion360’s Group

24 lithium batteries into a 600W mobile power station.

The Aura 600’s proprietary patent pending design allows it to join seamlessly

to 60Ah, 80Ah, and 95Ah Expion360 batteries.

The Aura 600 is an exclusive fit to Expion360 batteries and is not compatible with other

The Aura 600 contains beneficial features and functions for a compact portable power unit, including the ability to recharge

the battery from the input charge port using the included 7 Amp household charger and the ability to recharge remotely with Expion360’s

lightweight portable solar panel options, which are sold separately.

In January 2023, we also announced our plans to introduce the AURA

POWERCAP™ 800 (the “Aura 800”), which is designed to fit and convert any one of our Group 27 lithium batteries into

an 800W mobile power station.

The Aura 800’s design allows it to join to 100Ah and 120Ah Expion360 batteries.

While we have completed

development of the Aura 800 and accepted pre-orders of the product, demand for the Aura 800 has been softer than anticipated and we have

no current plans to commence commercial sales of the product.

We remain focused on growing our commercial sales of the Aura 600.

Additionally,

in June 2023, we unveiled e360 SmartTalk, an innovative mobile app that allows the seamless integration and management of e360 Bluetooth-enabled

LiFePO4 batteries.

The technology enables users to wirelessly monitor and manage e360 batteries, providing a view of individual battery

conditions and performance as well as a comprehensive view of an entire power bank consisting of multiple e360 batteries.

GC2 LiFePO4 battery was also introduced in June 2023 as our first e360 SmartTalk Battery for powering electric golf carts and other light

electric vehicles (LEVs).

December 2023, we entered the home energy storage market with our introduction of two LiFePO4 battery storage solutions:

a wall mounted

all-in-one inverter and 10kW battery and an expandable server rack style battery cabinet system.

We believe our new home energy storage

product line will benefit from a fast-growing battery energy storage market, which is forecasted by Markets and Markets to grow at a

26.4% CAGR to reach $17.5 billion by 2028.

Further, according to Clean Energy Group, approximately 3.2 million homes in the United States

have solar panels installed, but only about 6% of residential solar systems have battery storage.

National Retail Customers and Distribution Channels

has sales relationships with many major RV retailers and with marine retailers and plans to use what we believe is a strong reputation

in the lithium battery space to create an even stronger distribution channel.

John Yozamp has used his decades of experience in the energy

and RV industries to cultivate relationships with numerous retailers in the space.

Expion360 has already established a sales relationship

with several large retail customers, including Camping World, a leading national RV retailer, as well as NTP-STAG, a leading distributor

of aftermarket RV parts.

focus on the design, assembly, and sales of lithium iron phosphate (LiFePO4) batteries and supporting accessories for RV and marine applications.

Our batteries are designed and engineered in house using premium lithium iron phosphate cells with quality controls at every step We

use high-grade LiFePO4 encased in steel and meeting the UL 1642 standard (UL file no.

We believe that our materials and engineering

enhance the reliability, stability, and safety of our products.

We reimagined the standard battery case and included built-in rubber

feet, radiused corners, 96.7% larger terminal connection pads, interior molded ribs for structural security, and the highest-grade ABS

plastics with additives for fire retardancy.

To maximize the power and efficiency of our batteries, we welded our cells via thick copper/tin

machined collector plates, welded all interior pack points, added a press broke flange at each end to create a mechanical backbone for

the battery monitoring system (the “BMS”), used high-grade wiring and ring terminals throughout, and treated connections

with industrial epoxy for long-lasting protection.

Our internal “smart” BMS design includes multiple safety and performance

features, such as:

low temperature discharge, auto shutoff, short circuit protection, low- and high-voltage shutoffs, and overcurrent

Our structurally sound BMS board features a bolted design, eliminating all unnecessary solder, resulting in one cohesive

pack with a long lifespan.

We hold our lithium batteries to high safety standards, which has enabled us to achieve a UL 1973 compliance.

has sales relationships with many major RV and marine retailers, and plans to use what we believe is a strong reputation in the lithium

battery space to create an even stronger distribution channel.

Current and former members of management have used their decades of experience

in the energy and RV industries to cultivate relationships with numerous retailers in the space, including Camping World, a leading national

and Meyer Distributing, Inc., a leading national marketer and distributor of automotive and RV specialty products.

Expion360 Products

focus on the design, assembly, and sales of LiFePO4 batteries and supporting accessories for RV and marine applications, as well as our

recent expansion into home energy storage solutions.

Our batteries are designed and engineered in-house using premium lithium iron phosphate

cells with quality controls at every step.

We use high-grade LiFePO4 encased in steel and meeting the UL 1642 standard (UL File No.

We believe that our materials and engineering enhance the reliability, stability, and safety of our products.

We reimagined the standard

battery case and included built-in rubber feet, radiused corners, 96.7% larger terminal connection pads, interior molded ribs for structural

security, and the highest-grade ABS plastics with additives for fire retardancy.

To maximize the power and efficiency of our batteries,

we welded our cells via thick copper/tin-machined collector plates, welded all interior pack points, added a press break flange at each

end to create a mechanical backbone for the battery monitoring system (the “BMS”), used high-grade wiring and ring terminals

throughout, and treated connections with industrial epoxy for long-lasting protection.

Our internal “smart” BMS design includes

multiple safety and performance features, such as:

low temperature discharge, auto shutoff, short circuit protection, low- and high-voltage

shutoffs, and overcurrent disconnect.

Our structurally sound BMS board features a bolted design, eliminating all unnecessary solder,

resulting in one cohesive pack with a long lifespan.

We hold our lithium batteries to high safety standards, which has enabled us to

achieve a UL 1973 compliance.

We stand by our batteries with an industry leading 12-year warranty.

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such as Victron Energy and RedArc.

Company has the following products:

24 batteries:

e360 60Ah lithium battery

e360 80Ah lithium battery

e360 Extreme Density 95Ah lithium battery

27 batteries:

e360 100Ah lithium battery

e360 Extreme Density 120Ah lithium battery

E360 Extreme Density 360Ah battery

As of December 31,

2023, we offer the following products for sale:

Group 24 batteries:

60Ah lithium battery

80Ah lithium battery

Extreme Density 95Ah lithium battery

Group 27 batteries:

100Ah lithium battery

Extreme Density 120Ah lithium battery

Custom form factor battery:

Extreme Density 360Ah battery

Extreme Density 450 Ah lithium battery

Group GC2 batteries:

36Ah lithium battery

e360 Lithium Power Bundle™

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tie-downs – 7 models

Company has the following products in its pipeline:

January 2023, Expion360 introduced AURA POWERCAP™ 600 and AURA POWERCAP™ 800.

Expion360 began taking pre-orders of the new AURA POWERCAP™ 600 and 800 in Q1 2023

with anticipated deliveries Q2 2023.

See “— Competitive Strengths—Expansion

into New Markets ” for additional information about the AURA POWERCAP™ 600

and AURA POWERCAP™ 800.

is also currently developing the e360 off-grid home energy system with release expected in

POWERCAP TM 600

SmartTalk TM mobile app

of December 31, 2023, we have the following products in our pipeline:

In September 2023, we introduced

a new 4.5 Ah 26650 lithium-ion phosphate battery cell and 12 Volt 450 Ah e360 SmartTalk™ lithium-ion battery.

Expion360 began

taking pre-orders for the new 450 Ah e360 SmartTalk™ battery starting in the fourth quarter of 2023, with initial shipments

expected to begin in the first quarter of 2024.

In December 2023, we introduced

our two LiFePO4 battery storage solutions, a wall mounted all-in-one inverter and 10kW battery and an expandable server rack style

battery cabinet system.

Expion360 expects to begin taking orders for the new home energy storage solutions in second quarter of 2024

with anticipated deliveries beginning in second half of 2024.

See the section above titled “— Expansion into New Markets ”

for additional information about the new home energy storage solutions.

competitors include lithium-ion battery manufacturers, such as Relion (which was acquired by Brunswick Corporation in September 2021);

Battle Born Batteries, Renogy, and Dakota Lithium.

Lead-acid battery manufactures also continue to have a presence in the marketplace.

We have designed custom form factors in both the industry standard Group 24 and Group 27 battery sizes allowing us to visually and structurally

differentiate Expion360 within the market space.

We believe that our custom 360Ah battery also provides a unique capacity to footprint

ratio compared to lead-acid and lithium battery competitors.

Our batteries utilize lithium iron phosphate, and therefore, are expected

to have a lifespan of approximately 12 years — three to four times that of certain lead-acid batteries and with ten times the number

of charging cycles.

Furthermore, we believe that our typical battery provides three times the power of the typical, lead-acid battery

despite being half the weight (comparing, for example, a typical lead-acid battery like Renogy Deep Cycle AGM, which is rated at 100Ah,

to our own LFP 100Ah battery and assuming slow discharge at a .1C rate).

Dragonfly Energy Holdings Corp (Nasdaq:

DFLI), the manufacturer of Battle Born Batteries;

and Dakota Lithium.

Lead-acid battery

manufactures also continue to have a presence in the marketplace.

We have designed custom form factors in both the industry standard

Group 24 and Group 27 battery sizes allowing us to visually and structurally differentiate Expion360 within the market space.

that our custom 360Ah battery also provides a unique capacity to footprint ratio compared to lead-acid and lithium battery competitors.

Our batteries utilize lithium iron phosphate, and therefore, are expected to have a lifespan of approximately 12 years - three to four

times that of certain lead-acid batteries and with ten times the number of charging cycles.

Furthermore, we believe that our typical

battery provides three times the power of the typical, lead-acid battery despite being half the weight (comparing, for example, a typical

lead-acid battery like Renogy Deep Cycle AGM, which is rated at 100Ah, to our own LFP 100Ah battery and assuming slow discharge at a

Manufacturing

and Supply Chain

batteries are manufactured by multiple third-party manufacturers located in China who also produce our battery cells.

assemble and package the batteries in the United States for sale to our customers.

While we do not have long-term purchase

agreements with our third-party manufacturers and our purchases are completed on a purchase order basis, we have had strong

relationships with our third-party manufacturers spanning many years.

During the years ended December 31, 2022 and 2021,

approximately 85% and 90%, respectively, of inventory purchases were made from foreign suppliers in China and Hong Kong.

batteries are manufactured by multiple third-party manufacturers located in Asia, which also produce our battery cells.

While we do not

have long-term purchase agreements with our third-party manufacturers and our purchases are completed on a purchase order basis, we maintain

strong relationships with our manufacturers and cell suppliers, reflected in our ability to increase our purchase order volumes (qualifying

us for related volume-based discounts).

The strength of these relationships has helped us moderate increased supply-related costs associated

with inflation, currency fluctuations, and U.S.

government tariffs imposed on our imports and to avoid potential shipment delays.

aim to maintain an appropriate level of inventory to satisfy our expected supply requirements.

We believe that we could locate suitable

alternative third-party manufacturers to fulfill our needs if needed.

third-party manufacturers source the raw materials and battery components required for the production of our batteries directly from

third-party suppliers that meet our approval and quality standards and as a result, we may have limited control over the agreed

pricing for these raw materials and battery components.

Our battery cell manufacturers also have joint venture factories outside of

China and have secured sourcing contracts from lithium suppliers in South America and Australia.

In addition, the Company has

secured a secondary source for lithium iron phosphate cells used in its batteries from a supplier in Denmark, enabling the Company

to source materials outside of China in the event it becomes necessary to do so.

to maintain an appropriate level of inventory to satisfy our expected supply requirements.

We believe that we could locate alternative

third-party manufacturers to fulfill our needs.

third-party suppliers that meet our approval and quality standards and, as a result, we may have limited control over the agreed pricing

for these raw materials and battery components.

We estimate that raw material costs account for over half of our cost of goods sold.

The costs of these raw materials, particularly lithium-ion batteries, are volatile and beyond our control.

Additionally, availability

of the raw materials used to manufacture our products may be limited at times, resulting in higher prices and/or the need to find alternative

For example, a global shortage and component supply disruptions of electronic battery components were reported during 2021

and 2022, but it is not currently affecting our supply chain.

Our battery cell manufacturers also have joint venture factories outside

of Asia and have secured sourcing contracts from lithium suppliers in South America and Australia.

In addition, we secured a secondary

source for lithium iron phosphate cells used in our batteries from a supplier in Europe, enabling us to source materials outside of Asia

in the event it becomes necessary to do so.

is a key raw material used to produce our battery cells and as a result, the cost of our battery cells is dependent on the price and

availability of lithium.

From 2010 until 2015, the price of lithium stayed fairly flat.

In 2016 the price started to rise, fueled by

the fear of material shortages.

As a result of the higher prices, new mining operations that had been in development came online and

companies invested in more efficient extraction processes.

The increases in production led to an oversupply of lithium in 2019 and a

sharp drop in prices.

The lithium prices in 2020 ended below the 2016 prices.

availability of lithium, which may be volatile and unpredictable

addition to increased mining and newly located reserves, there is also an industry push to provide more efficient ways to extract lithium

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that might adversely affect our supply chain.

currently have over 213 customers across the United States consisting of dealers, wholesalers, private-label customers and original equipment

manufacturers who then sell our products to end consumers.

Our sales are completed on a purchase order basis and most are without firm,

long-term revenue commitments or sales arrangements.

currently have more than 300 customers across the United States consisting of dealers, wholesalers, private-label customers and original

equipment manufacturers who then sell our products to end consumers.

Our sales are completed on a purchase order basis and most are without

firm, long-term revenue commitments or sales arrangements.

In addition, we also sell products directly to consumers.

Expion360 has sales relationships

with many major RV retailers, including Camping World, a leading national RV retailer, as well as NTP-STAG, a leading distributor of

aftermarket RV parts as well as with marine retailers.

In December 2022, we were selected as the exclusive supplier of lithium-ion batteries

for an overland trailer to be branded and sold by a top U.S.

Expion360 has sales

relationships with many major RV retailers, including Camping World, a leading national RV retailer and Meyer Distributing, Inc., a leading

national marketer and distributor of automotive and RV specialty products.

In December 2022, we were selected as the exclusive supplier

of lithium-ion batteries for an overland trailer to be branded and sold by a top U.S.

sports utility vehicle manufacturer.

Due to the progress and success with

our existing sales and distribution activities and to avoid any channel conflicts, our previously announced value-added reseller program

has been deferred, pending additional review.

We will continue to focus on our sales and distribution channels in order to develop existing

customer relationships and grow our customer base.We also offer a high level of technical support to our customers before and after product sales.

progress and success with our existing sales and distribution activities and to avoid any channel conflicts, our previously announced

value-added reseller program has been deferred, pending additional review.

We will continue to focus on our sales and distribution channels

in order to develop existing customer relationships and grow our customer base.

We also offer a high level of technical support to our

customers before and after product sales.

currently derive a significant portion of our revenues from a limited number of customers.

During the year ended December 31, 2023, sales

to our top three customers totaled $2,905,326, comprising approximately 41% of our total sales, including sales to one customer, which

totaled $1,346,344 or approximately 19% of our total sales.

to two customers totaled approximately 21% of our total sales.

While these customers did not have accounts receivable balances as of

December 31, 2023, four other customers had accounts receivable balances totaling $140 thousand, representing 90% of total accounts receivable

as of December 31, 2023.

Sales to each of our other customers did not exceed 10% during this period.

success of our business and our technology leadership is supported by our proprietary battery technology.

We have filed 11 patent applications

in the United States to provide protection for our technology.

Two design patents in the United States related to the new AURA POWERCAP™

are pending as of December 2022.

In addition, we rely upon a combination of trademark and trade secret laws in the United States, as

well as license agreements and other contractual protections, to establish, maintain and enforce rights in our proprietary technologies.

We also seek to protect our intellectual property rights through non-disclosure and invention assignment agreements with our employees

and consultants and through non-disclosure agreements with business partners and other third parties.

in the United States to provide protection for our technology, including seven design patent applications and four utility patent applications.

In addition, we rely upon a combination of trademark and trade secret laws in the United States, as well as license agreements and other

contractual protections, to establish, maintain and enforce rights in our proprietary technologies.

We also seek to protect our intellectual

property rights through non-disclosure and invention assignment agreements with our employees and consultants and through non-disclosure

agreements with business partners and other third parties.

periodically review our development efforts to assess the existence and patentability of new intellectual property.

We pursue the registration

of our domain names and trademarks and service marks in the United States and in an effort to protect our brand, as of December 31, 2022,

we own 5 trademark registrations to cover our house marks in the United States and we have 3 pending trademark applications relating

to our design logos and slogans in the United States.

of our domain names, trademarks, and service marks in the United States.

In an effort to protect our brand, as of December 31, 2023,

we own 15 trademark registrations to cover our house marks in the United States.

We also own nine trademark registrations relating to

our house marks in Canada.

Government Regulation

are subject to inspections by federal, state, and local regulators overseeing environmental health and safety, which could result in

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governing their transportation.

We have implemented policies and procedures,

trained our employees, and conducted internal audits to verify compliance with environmental health and safety regulations.

August of 2022, our Group 24 and Group 27 batteries passed UL 1973 certification.

We have implemented policies and procedures, trained our employees, and conducted internal audits to

verify compliance with environmental health and safety regulations.

August 2022, our Group 24 and Group 27 batteries passed UL 1973 certification.

In February 2023, our custom 360Ah battery also passed

UL 1973 certification.

of December 31, 2022, we had 25 employees, all full time.

None of our employees are covered by collective bargaining agreements and we

have never experienced an organized work stoppage, strike, or labor dispute.

We believe working conditions and compensation packages

are competitive with those offered by competitors and consider our relations with our employees to be good.

of Being an Emerging Growth Company and a Smaller Reporting Company

qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.

an emerging growth company, we have elected to take advantage of specified reduced disclosure and other requirements that are otherwise

of December 31, 2023, we had 23 full-time employees.

None of our employees are covered by collective bargaining agreements, and we have

never experienced an organized work stoppage, strike, or labor dispute.

We believe our working conditions and compensation packages are

competitive with those offered by competitors and consider our relations with our employees to be good.

Environmental, Health, and Safety

and our third-party manufacturers and suppliers are, and could become, subject to a wide range of international, federal, state, provincial,

and local governmental regulations directed at preventing or mitigating environmental harm, as well as to the storage, discharge, handling,

generation, disposal and labeling of toxic or other hazardous substances.

Although we outsource our manufacturing, the manufacturing

of our products by our third-party manufacturers and suppliers require the use of hazardous materials that similarly subject these third

parties, and therefore our business, to such environmental laws and regulations.

Our failure or the failure of these third parties to

comply with these laws or regulations can result in regulatory, civil, or criminal penalties, fines, and legal liabilities, suspension

of production, alteration of manufacturing processes, including for our products, reputational damage, and negative impact on our operations

or sales of our products and services.

Increased compliance costs by our third-party manufacturing partners may also result in increased

costs to our business.

Our business and operations are also subject to health and safety laws and regulations adopted by government agencies

such as the Occupational Safety and Health Administration.

Although we believe we are in material compliance with applicable law concerning

matters relating to health, safety, and the environment, the risk of liability relating to these matters cannot be eliminated completely.

To date, we have not incurred significant expenditures relating to environmental compliance nor have we experienced any material issues

relating to employee health and safety.

See the section titled “ Risk Factors ” for additional information.

Implications of

Being an Emerging Growth Company and a Smaller Reporting Company

qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

As an emerging growth company, we have elected to take advantage of specified reduced disclosure and other requirements that are otherwise

applicable generally to public companies.

These provisions include:

requirement that we provide only two years of audited financial statements in addition to

any required unaudited interim financial statements with correspondingly reduced “Management’s

Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

requirement that we provide only two years of audited financial statements in addition to any required unaudited interim financial

statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

disclosure about our executive compensation arrangements;

exemption from the requirement that we hold a non-binding advisory vote on executive compensation

or golden parachute arrangements;

exemption from the auditor attestation requirement in the assessment of our internal control

over financial reporting.

from the requirement that we hold a non-binding advisory vote on executive compensation or golden parachute arrangements;

exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.

may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company.

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of the completion of our initial public offering;

(iii) the date on which we have issued more than $1 billion in nonconvertible debt

(iii) the date on which we have issued more than $1.0 billion in non-convertible debt

during the previous three years;

or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

or (iv) the date on which we are deemed to be a large accelerated filer as defined in the Exchange Act.

are also a smaller reporting company as defined in the Exchange Act.

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We may take advantage of certain of the scaled disclosures available to smaller reporting companies

and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates

is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0

million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than

$700.0 million measured on the last business day of our second fiscal quarter.

and will be able to take advantage of these scaled disclosures for so long as (i) our common stock, par value $0.001 per share (“Common

Stock”) held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or (ii)

our annual revenue is less than $100.0 million during the most recently completed fiscal year, and our Common Stock held by non-affiliates

is less than $700.0 million measured on the last business day of our second fiscal quarter.

What changed 10-K

Item 1. Business