Company: NEOV
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001683168-25-007304
Chunk: 405

Company: NeoVolta Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 7
Chunk 405
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 our increasing level of short-term borrowings from this lender have been made at a relatively high
borrowing cost in terms of interest rate and fees, we have been able to meet our rising funding needs in this period in large part due
to the timely responsiveness of this lender. In December 2024, we also received proceeds from the exercise of warrants issued in our August
2022 public offering in the amount of $160,400.

As of June 30, 2025, we had
a cash balance of approximately $0.8 million and net working capital of approximately $3.2 million. Currently, we are not generating a
break-even level of net operating cash flow from our net sales. However, we anticipate that demand for our products will ultimately increase
over time and that, with our current credit sources, we will have sufficient cash to operate for at least the next 12 months.

 24 

Other Developments

We continue to monitor current
international developments occurring in Ukraine and Israel. However, we do not believe that they will have a significant impact on either
the domestic markets for our products or the international supply chains for our product components, which are largely sourced from Asia.

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 new 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. Either circumstance would likely materially adversely affect our