Company: NEOV
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001683168-25-007304
Chunk: 73

Company: NeoVolta Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 73
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Presently, our two main raw
material components, batteries and inverters, are imported from different suppliers in China and, until recently, were subject to fairly
low tariff rates that had been in effect for several years. Beginning in April 2025, the Trump Administration implemented a significant
increase in tariff rates on all goods imported from China, although it was temporarily suspended for 90 days in April 2025 and the suspension
has recently been extended to early November 2025. Prior to the tariff escalation in April 2025, we had anticipated the likelihood of
facing such a tariff increase and began stockpiling our inventory of these two components. As a result, we do not anticipate having to
purchase a significant level of such components at post-tariff prices for the next several months.

In the event, however, that
such a mutual trade 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