Company: NEOV
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001683168-25-007304
Chunk: 127

Company: NeoVolta Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1A
Chunk 127
---
 agreement is not reached between the parties within the next several months and we find it necessary to begin purchasing
a significant level of our inventory components from China at post-tariff prices, we would be faced with a decision as to whether we should
attempt to pass along such tariff increases to our customers through higher prices for our products or absorbing them internally, or some
combination of those two alternatives.

 10 

Changes in our supply chain may result in
increased cost. If we are unsuccessful in our efforts to control and reduce supplier costs, our operating results will suffer.

There is no assurance that
our suppliers will ultimately be able to meet our cost, quality and volume needs, or do so at the times needed. Furthermore, as the scale
of our energy storage systems increase, we will need to accurately forecast, purchase, warehouse and transport to our manufacturing facilities
components at much higher volumes than we have experience with. If we are unable to accurately match the timing and quantities of component
purchases to our actual needs, or successfully implement automation, inventory management and other systems to accommodate the increased
complexity in our supply chain, we may incur unexpected production disruption, storage, transportation and write-off costs, which could
have a material adverse effect on our financial condition and operating results.

We are currently selling two primary products
and if these products that we sell or install fail to perform as expected, our reputation could be harmed and our ability to develop,
market and sell our products and services could be harmed.

If our energy products were
to contain defects in design and manufacture that cause them not to perform as expected or that require repair or take longer than expected
to become enabled or are legally restricted, our ability to develop, market and sell our products and services could be harmed. While
we intend to perform internal testing on the products we manufacture, as a start-up company we currently have no frame of reference by
which to evaluate detailed long-term quality, reliability, durability and performance characteristics of our battery packs, inverters,
and energy storage products. There can be no assurance that we will be able to detect and fix any defects in our products prior to their
sale to or installation for consumers. Any product defects, delays or legal restrictions on product features, or other failure of our
products to perform as expected could harm our reputation and result in delivery delays, product recalls, product liability claims, significant
warranty and other expenses, and could have a material adverse impact on our business, financial condition, operating results and