Company: NEOV
Filing Date: 2025-02-07
Form Type: 10-Q
Source: 0001683168-25-000834
Chunk: 30

Company: NeoVolta Inc.
Filing Date: 2025-02-07
Form: 10-Q
Item: Part I, Item 8
Chunk 30
---
, per bank. At December 31, 2024, the Company maintained all of its accounts at one bank and the combined balances of
all accounts at this bank was in excess of the FDIC insurance limit by $78,746.

Inventory – Inventory
consists of batteries and inverters purchased from Asian suppliers and delivered to a location near the Company’s offices, for assembly
into ESS units. Inventory is stated at the lower of cost or net realizable value, cost being determined using the first-in, first out
(FIFO) method. The Company periodically reviews the value of items in inventory and records an allowance to reduce the carrying value
of inventory to the lower of cost or net realizable value based on its assessment of market conditions, inventory turnover and current
stock levels. Inventory write-downs are charged to cost of goods sold. The following table presents the components of inventory (net of
prior year reserve for obsolescence on assembly parts of $90,000) as of December 31, 2024 and June 30, 2024:

    Schedule of inventory 
    December 31, 
2024  
    June 30, 
2024 

    Raw materials, consisting of assembly parts, batteries and inverters 
    $1,615,565  
    $1,076,479 
  
    Work in progress 
     –  
     89,386 
  
    Finished goods 
     417,693  
     621,443 

    Total 
    $2,033,258  
    $1,787,308 

     9 

Revenue Recognition
– The Company recognizes revenue in accordance with Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts
with Customers (Topic 606). Revenues are recognized when control of the promised goods is transferred to the customer in an amount that
reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or services. Revenue is recognized
based on the following five step model:

·Identification of the contract with a customer

·Identification of the performance obligations in the contract

·Determination of the transaction price

·Allocation of the transaction price to the performance obligations in the contract

·Recognition of revenue when, or as, the Company satisfies a performance obligation

The Company generates revenues
from contracts with customers, consisting of a relatively small number of wholesale dealers and installers, primarily in California. Two
such