NeoVolta Inc. Debt Disclosure

 

(2)

Debt

 

On September 3, 2024, we entered into an agreement with a newly formed financing entity whereby we obtained a line of credit for borrowings of up to $5,000,000. Under this agreement, we are obligated to make periodic payments to the lender of accrued interest, at the rate of 16% per annum, on any outstanding borrowings that we make, with the principal and any unpaid accrued interest being due at maturity, which was subsequently extended to September 3, 2028 (see Note 6). In order to secure such borrowings, we have granted a security interest in all of our assets to the lender. As a condition of receiving this line of credit from the lender, we have agreed not to issue any securities pursuant to the Company’s Form S-3 (file number 333-280400), without the lender’s consent, so long as any borrowings remain outstanding. As of June 30, 2025, we had made net borrowings under this credit agreement in the amount of $383,538, leaving an available balance of $4,616,462. Accrued interest as of June 30, 2025 was $30,767.

 

On October 4, 2024, we made an initial borrowing of $250,000 under this line of credit largely in order to fund a short-term loan in the same amount to a new customer which has a government-backed contract to install a large number of our units in Puerto Rico over a two year period. The purpose of the loan was to provide working capital to the customer in conjunction with the startup of the contract in Puerto Rico. The loan was structured to be non-interest bearing, if repaid prior to December 31, 2024. The loan was fully repaid in December 2024.

 

In the month of November 2024, we initiated short-term borrowings from a commercial accounts receivable lender under a loan agreement allowing for borrowings, secured by certain property interests, of up to $4,000,000. As of June 30, 2025, we had made borrowings from this lender to finance customer shipments and related costs in the total amount of $5,106,343. The lender charges a placement fee of 1% on each borrowing and assesses interest at the rate of 2.5% per month on the outstanding borrowings. Borrowings are to be repaid upon the earlier of: (i) 120 days from the borrowing date; or (ii) receipt of payment from the customer. In the event of default, interest is assessed at the default rate of 1% per 7 days. Through June 30, 2025, we had repaid $2,503,120 of such borrowings, including accrued interest and fees, leaving an outstanding balance as of that date, including accrued interest and fees, of $2,603,223.