Company: NEOV
Filing Date: 2025-02-07
Form Type: 10-Q
Source: 0001683168-25-000834
Chunk: 33

Company: NeoVolta Inc.
Filing Date: 2025-02-07
Form: 10-Q
Item: Part I, Item 8
Chunk 33
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such borrowings, we have granted a security interest in all of our assets to the lender. As a condition of receiving this line of credit
from the lender, we have agreed not to issue any securities pursuant to the Company’s Form S-3 (file number 333-280400), without
the lender’s consent, so long as any borrowings remain outstanding. As of December 31, 2024, we had made net borrowings under this
credit agreement in the amount of $383,538, leaving an available balance of $4,616,462. Accrued interest as of December 31, 2024 was $13,595,
of which none had been paid.

On October 4, 2024, we made
an initial borrowing of $250,000 under this line of credit largely in order to fund a short-term loan in the same amount to a new customer
which has a government-backed contract to install a large number of our units in Puerto Rico over a two year period. The purpose of the
loan was to provide working capital to the customer in conjunction with the startup of the contract in Puerto Rico. The loan was structured
to be non-interest bearing, if repaid prior to December 31, 2024. The loan was fully repaid in December 2024.

In the month of November 2024,
we initiated short-term borrowings from a commercial lender under a loan agreement allowing for borrowings, secured by certain property
interests, of up to $2,000,000. As of December 31, 2024, we had made borrowings from this lender to finance four shipments to the new
customer in Puerto Rico in the total amount of $371,997. 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; or (ii) receipt of payment from the customer in Puerto Rico. In the event of default, interest is assessed at the default rate of
1% per 7 days. Through December 31, 2024, we had repaid one such borrowing, including accrued interest and fees, in the total amount of
$140,021, leaving an outstanding balance as of that date, including accrued interest and fees of $17,735, in the total amount of