Company: NEOV
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0001683168-25-003355
Chunk: 4

Company: NeoVolta Inc.
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 8
Chunk 4
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 to make periodic payments to the lender of accrued interest, at the rate of 16%
per annum, on any outstanding borrowings that we make, with the principal and any unpaid accrued interest being due at maturity on September
3, 2026. In order to secure 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 March 31, 2025, 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 March 31, 2025 was $15,468,
after considering a payment of accrued interest of $18,292.

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 accounts receivable lender under a loan agreement allowing for borrowings, secured
by certain property interests, of up to $2,000,000. As of March 31, 2025, we had made borrowings from this lender to finance customer
shipments and related costs in the total amount of $2,081,845. 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 the event of default, interest is assessed at the default rate of
1% per 7 days. Through