Company: NEOV
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001683168-25-007304
Chunk: 219

Company: NeoVolta Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1A
Chunk 219
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 system installers. The
term of the referral agreement ends on December 31, 2026. Pursuant to the agreement, the only compensation that the marketing company
will be entitled to receive will be through the issuance of shares of our common stock in exchange for reaching specified target levels
of product sales, up to a maximum total of 2,000,000 shares for reaching a total of 2,500 units sold and paid for. In accordance with
ASC 718, we are accounting for this agreement based on our periodic assessments of the probability of reaching such target levels. Based
on that approach, we have recognized stock compensation expense as of June 30, 2025, in the amount of $165,000.

In conjunction with our public
offering in August 2022, we appointed two new independent directors and adopted a new compensation plan for all independent directors
based on an annual compensation amount of $65,000 to be paid quarterly with not less than 70% of such amount paid in shares of our common
stock, calculated based on the share price at the end of such prior fiscal quarter, and up to 30% paid in cash, with such final amounts
to be determined by each director. As of June 30, 2025 and 2024, we booked an annual accrual of $195,000 of compensation expense (of which
$175,500 will be settled through the issuance of shares) for our three independent directors under this plan.

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In the year ended June
30, 2025, we recognized total non-cash stock compensation expense of $2,101,488
as follows: (i) $1,011,405
for the amortized value of the RSUs granted to our three officers and two other individuals; (ii) $175,500
for the amortized value of the portion of the new compensation plan for our independent directors that is attributable to stock;
(iii) $515,498
for the fair value of the issuance of 174,650 shares of our common stock  to two consultants for their advisory services in
the area of energy regulatory and marketing matters; (iv) $234,085
for the grant date value of 78,565
shares of common stock to be issued to a distributor as a sales incentive pursuant to a February 2025 distribution agreement; and
(v) $165,000
for the amortized value of the shares potentially issuable to a