NASDAQ: NEOVW

In 2023, we transitioned from
contract manufacturing to in-house production by hiring key personnel and assuming direct responsibility for manufacturing operations
in Poway, California. This change enhanced quality control and supply chain resilience.

Since 2024, we have broadened
our product portfolio with the launch of the NVPlus energy storage system and the NV7600 stand-alone inverter, extending our reach into
higher-capacity residential and light commercial applications. In February 2025, we expanded into a larger facility in Poway to support
increased production. Subsequent to fiscal year end, we announced two additional products: a 250 kW / 430 kWh Commercial & Industrial
(C&I) Battery Energy Storage System, and the NV16 kW AC hybrid inverter with 24 kW PV input, expected to be available beginning in
November 2025.

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Our Products

We design and manufacture
energy storage systems (“ESS”) that combine lithium iron phosphate (LiFePO₄) battery technology with integrated or stand-alone
inverters to provide safe, reliable backup power for residential and light commercial applications. All systems are NEMA 3R rated for
indoor or outdoor installation, UL 9540/9540A certified, and compatible with both AC- and DC-coupled solar configurations.

·NV14 — Our flagship ESS, the NV14
integrates a 14.4 kWh battery with a 7.6 kW hybrid inverter capable of 120V/240V residential and 208V three-phase commercial operation.
The system is designed for energy efficiency, time-of-use optimization, and backup power.

·NV24 — The NV24 expansion battery
increases NV14 capacity from 14.4 kWh to 24.0 kWh without requiring an additional inverter, allowing customers to scale storage at lower
cost.

·NVPlus — Introduced in 2024, NVPlus
is a higher-capacity ESS developed for larger residential and small commercial applications. It provides extended runtime, supports greater
solar inputs, and is designed for customers requiring whole-home backup or higher daily cycling.

·NV7600 — A stand-alone 7.6 kW inverter
launched in 2024, designed for use with NeoVolta storage products or as a retrofit solution for existing solar systems.

In addition to these core
products, we have also developed the NV14-K, a custom variant of the NV14 engineered to EOS Linx specifications. This product is manufactured
on a limited basis for a single customer application and is not marketed generally.

Subsequent to fiscal year
end, we announced two additional products: (i) a Commercial & Industrial Battery Energy Storage System (BESS) with a 250 kW power
rating and 430 kWh usable capacity, designed for larger-scale applications; and (ii) the NV16 kW AC hybrid inverter with 24 kW PV input,
developed to support higher-capacity residential installations and whole-home backup. The NV16 kW inverter is expected to become generally
available in November 2025.

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Market Overview

Our addressable market is
expanding across multiple customer segments, supported by favorable policy, resiliency needs, and evolving financing and distribution
models.

Residential Retrofit.
There are an estimated 4.2 million U.S. homes equipped with solar panels, and more than 3 million of these do not currently have battery
storage. (SolarInsure) This represents a significant retrofit opportunity, particularly as installed inverters approach end of life after
10–15 years of operation. Grid reliability concerns, increasingly common utility outages, and changing rate structures are expected
to accelerate adoption of storage among this installed base.

New Residential and Small
Commercial Installations. The U.S. installer market is highly fragmented, with more than 11,000 companies nationwide, most of them
small independent operators not typically serviced by larger ESS providers. These smaller installers represent NeoVolta’s core customers.
Once certified, they generally become recurring purchasers, relying on just-in-time availability to serve homeowners who prefer not to
stock or pre-finance equipment.

Battery adoption in new solar
projects is rising rapidly. Nationally, only about 6% of residential solar systems included storage in 2020, compared to an estimated
15–20% by 2024. (Clean Energy Group) In California, adoption has been even stronger: under the new net-billing tariff, roughly 60%
of new residential systems are now being paired with storage, compared to 10–14% under prior net-metering rules. (Utility Dive)
Nationally, the residential storage market is scaling quickly—Wood Mackenzie reports ~458 MW added in Q1 2025 alone, the strongest
first quarter on record. (Wood Mackenzie)

Commercial and Industrial
Expansion. Beyond residential applications, the market for C&I storage is emerging as a new growth segment. Businesses are increasingly
seeking solutions for demand-charge management, backup power, and grid services. To address this demand, we recently announced a 250 kW
/ 430 kWh C&I battery energy storage system, positioning NeoVolta to participate directly in this next stage of adoption.

Financing and Distribution.
The importance of financing structures has grown significantly across all customer segments. As system costs increase and federal incentives
such as the Investment Tax Credit (“ITC”) phase down under the One Big Beautiful Bill Act (scheduled to sunset by December
31, 2025), adoption is expected to depend increasingly on third-party ownership, leasing, and loan-based models. These financing options
reduce upfront costs and align payments with monthly utility savings, broadening access to storage. At the same time, NeoVolta is evolving
its channel strategy: while we initially sold primarily to independent installers, we are now leveraging regional and national distributors
to expand reach, improve logistics, and scale efficiently across multiple geographies.

Policy and Resiliency Drivers.
Federal and state policy incentives continue to support adoption, including the ITC, though subject to phase-outs after 2025. Several
states, led by California and Hawaii, have adopted building codes and interconnection requirements that mandate or encourage storage.
Utilities are increasingly turning to rate reform, such as California’s net-billing tariff, which improves the economics of pairing
solar with batteries. Meanwhile, grid reliability concerns—including widespread Public Safety Power Shutoff events in California—continue
to highlight the resiliency benefits of energy storage for both homeowners and businesses.

We believe that these combined
factors—retrofit opportunity, rising attachment in new installations, growth into C&I, expanding financing and distribution
channels, and favorable regulatory and resiliency drivers—create a substantial and growing market opportunity for NeoVolta.

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Growth Strategy

With the addition of Ardes
Johnson to NeoVolta’s management team as our CEO in April 2024, we adopted a refreshed growth strategy designed to expand our market
penetration, diversify revenue channels, and accelerate product development. This strategy rests on three primary objectives: (i) expanding
revenue through strategic sales channel development, (ii) broadening financing options through partnerships, and (iii) initiating development
of next-generation storage solutions.

Sales Channel Expansion.
We have built a national sales team targeting key renewable energy distribution centers and regional installers. While NeoVolta initially
focused on direct sales to small, independent installers, we are now leveraging regional and national distributors to extend reach and
support scalability. Distributors improve logistics, expand product availability, and position us to penetrate high-growth markets such
as Texas, Florida, Hawaii, and Puerto Rico.

Financing Partnerships.
We are developing financing solutions that align with the evolving market. As federal incentives phase down under the One Big Beautiful
Bill Act (scheduled to sunset by December 31, 2025), adoption is expected to rely increasingly on third-party ownership, leasing, and
loan-based models. By working with financing partners, we intend to make our products more accessible and affordable to homeowners and
small businesses, supporting continued adoption despite changing incentive structures.

Product Innovation.
We are investing in research and development to expand our product portfolio and maintain a competitive edge. In addition to our core
NV14, NV24, NVPlus, and NV7600 inverter, we recently announced two major product launches: (i) a 250 kW / 430 kWh commercial and industrial
battery energy storage system, and (ii) the NV16 kW AC hybrid inverter with 24 kW PV input. These launches expand our reach into larger
residential and commercial markets. We have also begun advanced discussions with technology partners to develop future generations of
NeoVolta storage systems.

Commercial Market Entry.
We are positioning NeoVolta to compete in the emerging commercial and industrial (“C&I”) segment, where businesses are
seeking solutions for resiliency, demand-charge management, and grid services. Our newly introduced 250 kW / 430 kWh C&I product is
the first step in this expansion.

Strategic Combinations.
In addition to organic growth, we may evaluate acquisitions, joint ventures, or other strategic transactions to expand our technology
base, accelerate market entry, and enhance financing capabilities.

We believe this growth strategy—driven
by expanded distribution, financing innovation, product development, and C&I expansion—will allow NeoVolta to scale efficiently
and strengthen our competitive position in the growing energy storage market.

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Competition

We compete with several established
companies in the energy storage systems (“ESS”) market, including Tesla, LG Chem, Sonnen, Enphase, SunPower, and SMA America.
Many of these competitors have significantly greater financial resources, manufacturing capacity, brand recognition, and established distribution
channels. Their scale allows them to pursue aggressive pricing, broader marketing, and faster product refresh cycles.

In addition to dedicated ESS
providers, we also face competition from diversified industrial companies, generator manufacturers, inverter suppliers, and other firms
that offer alternative backup power or distributed energy solutions. We expect new entrants to continue to emerge as energy storage adoption
expands and regulatory requirements evolve.

Despite the presence of larger
and more established competitors, we believe NeoVolta maintains distinct competitive advantages:

Product Availability.
We generally fulfill orders in less than two weeks, often within days, compared to extended backlogs reported by some competitors. This
supports the cash-flow needs of small and mid-sized installers.

Installer Service.
Our Certified Installer Program, direct technical support, and remote monitoring capabilities provide education and assistance to installers,
fostering loyalty and reducing installation risk.

Product Safety and Flexibility.
Our systems use lithium iron phosphate (LiFePO₄) chemistry and are UL 9540/9540A certified with no thermal runaway risk. Products
are NEMA 3R rated for indoor/outdoor use, support both AC- and DC-coupled solar, and allow capacity expansion without requiring an additional
inverter.

Market Focus. Unlike
some competitors that sell storage primarily as an add-on to solar, NeoVolta is focused entirely on energy storage. We target independent
installers and distributors that are underserved by larger providers, particularly in retrofit markets and emerging commercial segments.

We believe these differentiators
allow us to compete effectively in a rapidly growing market, even against larger, more established participants.

Intellectual Property & Product Development

We rely on a combination of
patents, trademarks, copyrights, trade secrets, and contractual protections to safeguard our technology and brand. As of September 2025,
we hold three issued U.S. utility patents:

·U.S. Patent No. 10,998,730 B1 – directed
to NeoVolta’s solar power inverter system.

·U.S. Patent No. 11,502,618 B2 – directed
to NeoVolta’s generators.

·U.S. Patent No. 11,605,952 B1 – an expansion
of our inverter system patent.

We expect to continue filing
for patent protection when appropriate as we expand our technology portfolio.

In addition to patents, we protect our intellectual
property through nondisclosure agreements, confidentiality provisions, and invention assignment agreements with employees, consultants,
and advisors. Despite these protections, unauthorized parties may attempt to copy aspects of our products or use information we consider
proprietary. The success of our business depends in part on our ability to defend against misappropriation and infringement.

Product Development.
We continue to invest in research and development to expand our product offerings. In addition to our core NV14 and NV24 ESS products,
we have launched NVPlus, a higher-capacity residential and small commercial system; the NV7600 stand-alone inverter; and two new products
in 2025: (i) a 250 kW / 430 kWh commercial and industrial BESS, and (ii) the NV16 kW AC hybrid inverter with 24 kW PV input. We are also
exploring partnerships to accelerate development of next-generation systems.

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Regulatory Environment

The energy storage industry
is subject to a complex and evolving regulatory framework at the federal, state, and local levels. In recent years, regulators have adopted
new safety, interconnection, and performance standards that materially impact product design and installation requirements.

California and Hawaii have
been at the forefront of these regulatory changes. In California, the California Public Utilities Commission (“CPUC”) has
implemented standards such as the Common Smart Inverter Profile (CSIP) and “Rule 21” interconnection requirements. On August
5, 2020, the California Energy Commission (“CEC”) approved NeoVolta’s CSIP compliance application, enabling our products
to meet CPUC interconnection rules. In addition, “rapid shutdown” requirements—mandating that emergency responders be
able to quickly disable PV systems at the service panel—were adopted in 2021 and are now reflected in the National Electrical Code.

Fire code and safety standards
have also advanced significantly. Beginning in 2022, California prohibited installation of energy storage systems in residential living
spaces, limited installation in garages to units with fire protection measures, and required additional safeguards such as heat and smoke
detectors or bollards. These changes reflect increasing scrutiny of certain lithium-ion chemistries that have demonstrated thermal runaway
risks. NeoVolta’s lithium iron phosphate (LiFePO₄) batteries, by contrast, have been certified under UL 9540A testing, which
evaluates thermal runaway and fire propagation, and meet current safety requirements.

NeoVolta’s products
are certified under multiple safety and performance standards, including:

·UL 9540 and UL 9540A (energy storage system safety
and thermal runaway testing)

·UL 1741SA / SB and IEEE 1547 (inverter and grid
interconnection)

·UL 1973 (battery modules)

·FCC Class B (communications compliance)

·NFPA 70 National Electrical Code (2023 edition)

·California Rule 21 and Hawaii Electric SRD-UL-1741-SA-V1.1
(interconnection requirements)

·NEMA 3R (outdoor enclosure rating)

We expect the regulatory
environment for ESS to remain highly dynamic. Although compliance requires continued investment in engineering and certification, we believe
these requirements create higher barriers to entry for new competitors and reinforce NeoVolta’s positioning as a compliant and safety-focused
manufacturer.

Manufacturing

We manufacture our NV14 and
NV24 energy storage systems at our facility in Poway, California. These products are built under a made-to-order model, with minimal finished-goods
inventory and higher raw-materials inventory relative to projected sales to support delivery timelines. In April 2023, we amended our
master supply agreement and purchased bulk raw-materials inventory from our former contract manufacturer; on June 1, 2023, we assumed
direct responsibility for manufacturing NV14/NV24 systems and hired key personnel who previously supported those activities. In February
2025, we secured a larger Poway facility to accommodate growth in these product lines.

Other NeoVolta products—including
NVPlus, the NV7600 stand-alone inverter, and newly announced offerings—are manufactured through qualified contract partners under
NeoVolta specifications. We manage supplier selection, production planning, and quality control, and we perform firmware configuration
and final acceptance testing as appropriate before shipment.

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Our manufacturing processes
emphasize traceability and compliance. For NV14/NV24, we track components from receipt through final build, recording serial numbers,
torque settings, and required test results prior to packaging. All units are released only after passing defined quality checkpoints.
For partner-manufactured products, we apply incoming inspection protocols aligned to our specifications and certifications.

We source critical components
from suppliers in the United States and Asia. To mitigate risks from supply chain disruptions, tariffs, or component shortages, we maintain
buffer stocks of key NV14/NV24 components, pursue multi-sourcing arrangements, and coordinate production schedules with our partners.
In addition, we are actively working to increase domestic content across our products and to ensure that our supply chain is compliant
with Foreign Entity of Concern (FEOC) requirements, which will become increasingly important for eligibility under federal incentive programs.

Employees

As of June 30, 2025, we had
17 full-time employees. Our Chief Executive Officer oversees overall company strategy, sales, and product development, while our Chief
Financial Officer manages finance and administration. Our Poway facility staff is primarily focused on manufacturing and quality control
for our NV14 and NV24 systems, supported by supply chain, technical support, and sales and marketing personnel.

We also engage outside consultants
and contractors for specialized functions, including research and development, regulatory compliance, and market development. From time
to time, we may enter into specific contracts for non-recurring projects to supplement our workforce.

We consider our relationship
with employees to be good. None of our employees are represented by a labor union, and we have not experienced any work stoppages.

Access to Information

Our website is at www.neovolta.com.
We make available, free of charge, on our corporate website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), as soon as reasonably practicable after they are electronically filed with the Securities
and Exchange Commission (SEC). The SEC maintains an internet site that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC at www.sec.gov. Information contained on our website does not, and shall not be
deemed to, constitute part of this Annual Report on Form 10-K. Our reference to the URL for our website is intended to be an inactive
textual reference only.

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