Company: NEOV
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001683168-25-007304
Chunk: 68

Company: NeoVolta Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 68
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 standards that materially impact product design and installation requirements.

California and Hawaii have
been at the forefront of these regulatory changes. In California, the California Public Utilities Commission (“CPUC”) has
implemented standards such as the Common Smart Inverter Profile (CSIP) and “Rule 21” interconnection requirements. On August
5, 2020, the California Energy Commission (“CEC”) approved NeoVolta’s CSIP compliance application, enabling our products
to meet CPUC interconnection rules. In addition, “rapid shutdown” requirements—mandating that emergency responders be
able to quickly disable PV systems at the service panel—were adopted in 2021 and are now reflected in the National Electrical Code.

Fire code and safety standards
have also advanced significantly. Beginning in 2022, California prohibited installation of energy storage systems in residential living
spaces, limited installation in garages to units with fire protection measures, and required additional safeguards such as heat and smoke
detectors or bollards. These changes reflect increasing scrutiny of certain lithium-ion chemistries that have demonstrated thermal runaway
risks. NeoVolta’s lithium iron phosphate (LiFePO₄) batteries, by contrast, have been certified under UL 9540A testing, which
evaluates thermal runaway and fire propagation, and meet current safety requirements.

NeoVolta’s products
are certified under multiple safety and performance standards, including:

·UL 9540 and UL 9540A (energy storage system safety
and thermal runaway testing)

·UL 1741SA / SB and IEEE 1547 (inverter and grid
interconnection)

·UL 1973 (battery modules)

·FCC Class B (communications compliance)

·NFPA 70 National Electrical Code (2023 edition)

·California Rule 21 and Hawaii Electric SRD-UL-1741-SA-V1.1
(interconnection requirements)

·NEMA 3R (outdoor enclosure rating)

We expect the regulatory
environment for ESS to remain highly dynamic. Although compliance requires continued investment in engineering and certification, we believe
these requirements create higher barriers to entry for new competitors and reinforce NeoVolta’s positioning as a compliant and safety-focused
manufacturer.

Manufacturing

We manufacture our NV14 and
NV24 energy storage systems at our facility in Poway, California. These products are built under a made-to-order model, with minimal finished-goods
inventory and higher raw-materials inventory relative to projected sales to support delivery timelines. In April