Company: NEOV
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001683168-25-007304
Chunk: 448

Company: NeoVolta Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 7
Chunk 448
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-09, Revenue from Contracts
with Customers (Topic 606). Revenues are recognized when control of the promised goods is transferred to the customer in an amount that
reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or services. Revenue is recognized
based on the following five step model:

·Identification of the contract with a customer

·Identification of the performance obligations
in the contract

·Determination of the transaction price

·Allocation of the transaction price to the performance
obligations in the contract

·Recognition of revenue when, or as, the Company
satisfies a performance obligation

     33 

The Company generates revenues
from contracts with customers, consisting of a relatively small number of wholesale dealers and installers, in California and several
other states. In the year ended June 30, 2025, two such dealers represented approximately 41% and 23% of the Company’s revenues,
however, no other dealers accounted for more than 10% of the revenues in such period. Those same two dealers plus one other one represented
approximately 39%, 12% and 12% of the Company’s net accounts receivable as of June 30, 2025, however, no other dealers accounted
for more than 10% of the accounts receivable as of June 30, 2025. In the year ended June 30, 2024, two such dealers represented approximately
20% and 14% of the Company’s revenues. Under its present contracts with customers, the Company’s sole performance obligation
is the delivery of products to the customer. Since all of the Company’s revenue is currently generated from the sales of similar
products delivered to customers in domestic locations, no further disaggregation of revenue information for the years ended June 30, 2025
and 2024 is provided.

Allowance for Expected
Credit Losses – The Company recognizes an allowance for expected credit losses whenever a loss is expected to be incurred
in the realization of a customer’s account. As of June 30, 2025 and 2024, our allowance for expected credit losses was $314,200
and $1,030,000, respectively.

Income Taxes –
The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities
are determined based on the differences between the financial reporting and the tax bases of reported assets and liabilities and are measured
using the enacted