Company: NEOV
Filing Date: 2025-02-07
Form Type: 10-Q
Source: 0001683168-25-000834
Chunk: 8

Company: NeoVolta Inc.
Filing Date: 2025-02-07
Form: 10-Q
Item: Part I, Item 1
Chunk 8
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Costs – Research and development costs are expensed as incurred.

Use of Estimates –
Management has made a number of estimates and assumptions in preparing these financial statements in conformity with accounting principles
generally accepted in the United States of America. Actual results could differ from those estimates.

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Recent Accounting Pronouncements
– From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, (“FASB”),
or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently
issued and prospective standards that are not yet effective will not have a material impact on the Company’s financial position
or results of operations upon adoption. The Company has considered all other recently issued accounting pronouncements and does not believe
the adoption of such pronouncements will have a material impact on its financial statements.

Liquidity – These
financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge
its liabilities in the normal course of business. The continuation of the Company as a going concern has been dependent upon the ability
of the Company to obtain necessary debt and equity financing to continue operations and the attainment of profitable operations.

As disclosed in Note 2, we
entered into an agreement with a financing entity in September 2024 whereby we have obtained a line of credit for borrowings of up to
$5,000,000, in order to meet any near-term borrowing needs. As a result, we believe that we will have sufficient financial resources available
to us in order to operate our business for at least the next 12 months from the date these financial statements are issued.

(2) Debt
Financing Transactions

On September 3, 2024, we entered
into an agreement with a newly formed financing entity whereby we obtained a line of credit for borrowings of up to $5,000,000. Under
this agreement, we are obligated 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