NeoVolta (NEOV) risk factors, FY2025 10-K

Risks Related to our Business and Industry

1. 01We are a relatively new company, with our sales having only commenced in July 2019, and we continue to have some of the risks associated with start-up ventures
2. 02We have a history of net losses and we are uncertain about our future profitability24% rewritten
3. 03We may experience in the future, delays or other complications in the design, manufacture, launch and production ramp of our energy storage products which could harm our brand, business, prospects, financial condition and operating results
4. 04We may be unable to meet our growing energy storage production plans and delivery plans, any of which could harm our business and prospects
5. 05We 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 suppliersNew
6. 06Changes in our supply chain may result in increased cost. If we are unsuccessful in our efforts to control and reduce supplier costs, our operating results will suffer
7. 07We are currently selling two primary products and if these products that we sell or install fail to perform as expected, our reputation could be harmed and our ability to develop, market and sell our products and services could be harmed
8. 08We depend on a small number of wholesale dealers for a significant portion of our revenues to date52% rewritten
9. 09If we fail to scale our business operations and otherwise manage future growth and adapt to new conditions effectively as we grow our company, we may not be able to produce, market, sell and service our products successfully
10. 10If we are unable to achieve our targeted manufacturing costs for our energy storage products our financial condition and operating results will suffer
11. 11Increases in costs, disruption of supply or shortage of materials, in particular for inverters and lithium iron phosphate cells, could harm our business
12. 12Continued high mortgage interest rates may result in a decrease in demand by homeowners for our residential energy storage systems
13. 13We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims
14. 14Our products and services are subject to substantial regulations, which are evolving, and unfavorable changes or failures by us to comply with these regulations could substantially harm our business and operating results45% rewritten
15. 15Our business and operations would suffer in the event of third-party computer system failures, cyber-attacks on third-party systems or deficiency in our cyber security24% rewritten
16. 16We may need to assert intellectual property-related claims or defend ourselves against intellectual property infringement claims, which may be time-consuming and could cause us to incur substantial costs
17. 17Our business could be negatively impacted if we fail to adequately protect our intellectual property rights
18. 18Our industry is subject to technological change, and our failure to continue developing new and improved products and to bring these products rapidly to market could have an adverse impact on our business
19. 19Public company compliance may make it more difficult to attract and retain officers and directors
20. 20We are heavily reliant on the services of both Ardes Johnson, our Chief Executive Officer, and Steve Bond, our Chief Financial Officer, and the departure or loss of either officer could disrupt our business45% rewritten
21. 21If we are unable to recruit and retain key management, technical and sales personnel, our business would be negatively affected
22. 22Artificial intelligence presents risks and challenges that can impact our business, including by posing security risks to our confidential information, proprietary information and personal data

Risks Related to Our Securities

1. 23Nevada law and provisions in our articles of incorporation and bylaws could make a takeover proposal more difficult
2. 24As an “emerging growth company” under the Jumpstart Our Business Startups Act, or JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements
3. 25We intend to take advantage of all of these reduced reporting requirements and exemptions
4. 26We are authorized to issue an aggregate of 100,000,000 shares of common stock and 5,000,000 shares of “blank check” preferred stock. In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders
5. 27We do not anticipate paying dividends on our common stock, and investors may lose the entire amount of their investment
6. 28The Warrants we issued in our July 2022 offering are speculative in nature, and the trading market for our Warrants are volatile, sporadic and limited
7. 29Holders of the Warrants we issued in our July 2022 offering will have no rights as a common stockholder until they acquire our common stock
8. 30Although our securities became listed on Nasdaq in August 2022, there can be no assurance that we will be able to comply with the continued listing standards of Nasdaq, a failure of which could result in a de-listing of our common stock
9. 31The price of our common stock and Warrants may be volatile
10. 32Negative research about our business published by analysts or journalists could cause our stock price to decline. A lack of regularly published research about our business could cause trading volume or our stock price to decline
11. 33Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us
12. 34Shareholder activism could cause material disruption to our business