Company: NEOV
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001683168-25-008147
Chunk: 36

Company: NeoVolta Inc.
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 8
Chunk 36
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 for future discretionary grants
of stock options, stock awards and stock unit awards to key employees, consultants, advisors, and non-employee directors. As of September
30, 2025, we have made total awards of 2,669,219 shares under the Plan as follows: (i) RSUs for 2,120,000 shares granted to our executive
officers, as noted above; (ii) 197,335 shares for the initial services of our three independent directors in the years ended June 30,
2025, 2024 and 2023, pursuant to the compensation plan adopted in August 2022 for independent directors; (iii) 204,884 shares granted
to various consultants for their services and to wholesale dealers under an incentive sales program; and (iv) Non-Qualified Stock Options
to purchase 147,000 shares granted to employees in August 2025.

(4)Commitments and Contingencies

Effective February 1, 2025,
the Company relocated its corporate and manufacturing office space to a nearby facility in Poway, California, under a 13 month sublease
agreement with the sublandlord, at a base rental of $18,638 per month. We are accounting for the lease agreement as an operating lease
under ASU 2016-02, Leases (Topic 842). Accordingly, the Company has capitalized the present value of the future lease obligations
and is amortizing the related right-of-use asset on a straight-line basis each month over the term of the lease.

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We are dependent on our two
main component vendors for our suppliers of batteries, inverters and other raw materials and the inability of these single-source suppliers
to deliver necessary components of our products according to our schedule and at prices, quality levels and volumes acceptable to us,
or our inability to efficiently manage these components, could have a material adverse effect on our financial condition and operating
results. 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 been extended to November 2025, subject
to judicial review. 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.

From time to time in the ordinary
course of our business, the Company may