Company: NEOV
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001683168-25-007304
Chunk: 126

Company: NeoVolta Inc.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1A
Chunk 126
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 additional components in a short amount of time. While we believe that we will be able
to secure additional or alternate sources of supply for most of our components in a relatively short time frame, there is no assurance
that we will be able to do so or develop our own replacements for certain highly customized components of our products. In addition, if
we are required to use alternative suppliers for certain critical components, we may need to have our products go through a re-certification
process with various regulatory bodies, which process may be lengthy. In such event, we would not be able to sell our products using these
new components until we received all required certifications.

If we encounter unexpected
difficulties with key suppliers such as our inverter or lithium-iron phosphate cell supplier, and if we are unable to fill these needs
from other suppliers, we could experience production delays and potential loss of access to important technology and parts for producing,
servicing and supporting our products. This limited, and in many cases single source, supply chain exposes us to multiple potential sources
of delivery failure or component shortages for the production of our products. The loss of any single or limited source supplier or the
disruption in the supply of components from these suppliers could lead to significant product design changes and delays in product deliveries
to our customers, which could hurt our relationships with our customers and result in negative publicity, damage to our brand and a material
and adverse effect on our business, prospects, financial condition and operating results.

We may become subject to further tariff
increases that would apply to the two main raw material components of our products which are sourced from Asian suppliers. 

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