Company: NEOV
Filing Date: 2025-02-07
Form Type: 10-Q
Source: 0001683168-25-000834
Chunk: 60

Company: NeoVolta Inc.
Filing Date: 2025-02-07
Form: 10-Q
Item: Part I, Item 2
Chunk 60
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, which are largely sourced from Asia.

Presently, our two main raw
material components, batteries and inverters, are imported from different Asian suppliers and are subject to fairly low tariff rates that
have been in effect for several years. The newly inaugurated Trump Administration has indicated that it may propose a significant increase
in such tariff rates on various types of goods imported from Asia that could apply to our two main components. In the event that any such
possible tariff increases recently proposed by President Trump on China and two North American countries become enacted, which are applicable
to our two main components, they would significantly increase the cost of our two main imported components whenever the increased rates
become effective. In that case, 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.

Off-Balance Sheet Arrangements

We have no obligations, assets
or liabilities which would be considered off-balance sheet arrangements as defined in Item 303 of Regulation S-K.

 19 

Critical Accounting Policies and Estimates

Our discussion and analysis
of our financial condition and results of operations are based on financial statements which have been prepared in accordance with generally
accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments
that affect the reported amounts of assets, liabilities, revenues and expenses. We believe that certain accounting policies affect our
more significant judgments and estimates used in the preparation of our financial statements. See “Note 1. Business and Summary
of Significant Accounting Policies” of the Notes to Financial Statements set forth above and under “Item 8. Financial Statements
and Supplementary Data” of our Annual Report on Form 10-K for the year ended June 30, 2024, as filed with the SEC on September 27,
2024, for a further description of our critical accounting policies and estimates.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information for this Item
is not required as the Registrant is a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We have established and maintain
a system of disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed
in our reports filed with the Securities and