Equity

6 Months Ended

Dec. 31, 2025

(3) Equity

Common Stock – In November 2025, the Company entered into subscription agreements for a private equity offering with an accredited investor group under which the Company issued in December 2025 a total of 1,200,000 shares of its common stock to the investor group at an offering price of $2.50 per share resulting in gross proceeds to the Company in the amount of $3,000,000. The Company is using the proceeds of this private offering to meet working capital needs and for other general corporate purposes.

In the six months ended December 31, 2025, the Company entered into two voluntary exchange agreements with the commercial lender providing short-term financing for customer shipments and related costs whereby we issued a total of 366,667 shares of its common stock having a fair value of $1,858,002 to the lender in exchange for total reductions in its outstanding principal loan balance amounting to $1,000,000. The Company recognized non-operating losses on these two exchanges in the total amount of $858,002 (see Note 2).

In August 2022, the Company completed an underwritten public offering of its equity securities in the form of Units with each Unit consisting of one share of common stock and one warrant (each, a “Warrant” and collectively, the “Warrants”) to purchase one share of common stock at an exercise price of $4.00 per share. The shares of common stock and the Warrants comprising the Units were immediately separated at closing of the offering and each is now independently listed on the NASDAQ Capital Market. Each Warrant became exercisable on the date of issuance and will expire five years from the date of issuance.

In the underwritten public offering, a total of 1,121,250 Units, including exercise of the underwriter’s overallotment option, were sold at an offering price to the public of $4.00 per Unit. The gross proceeds of the offering were $4,485,000 and the net proceeds, after deduction of underwriting discounts and other offering costs were approximately $3,780,000. The Company also granted the underwriter non-tradeable warrants to purchase a total of 58,500 shares of common stock at an exercise price of $4.40 per share for a period of five years.

Warrants – As of December 31, 2025, there were outstanding Warrants for a total of 1,081,150 shares of common stock issued to investors which are exercisable at any time up to August 1, 2027. The Warrants may be exercised upon payment of the exercise price in cash on or prior to the expiration date. Under the terms of the Warrant Agreement, we must use our best efforts to maintain the effectiveness of the registration statement and current prospectus relating to common stock issuable upon exercise of the Warrants until the expiration of the Warrants. If we fail to maintain the effectiveness of the registration statement and current prospectus relating to the common stock issuable upon exercise of the Warrants, the holders of the Warrants shall have the right to exercise the Warrants solely via a cashless exercise feature provided for in the Warrants, until such time as there is an effective registration statement and current prospectus.

The following table presents activity with respect to the Company’s warrants for the six months ended December 31, 2025:

Number

Wtd. Avg.

Aggregate

Exercise

Remaining

Intrinsic

Price

Term (Yrs.)

Value

Outstanding at June 30, 2025

1,081,150

4.00

2.1

Warrants issued

–

Warrants exercised/forfeited

–

Outstanding at December 31, 2025

1,081,150

4.00

1.6

–

Exercisable at December 31, 2025

1,081,150

4.00

1.6

–

These warrants were issued in conjunction with an underwritten public equity offering, therefore, there was no employee or non-employee compensation expense recognized.

Stock Compensation Expense – On August 22, 2025, we issued Non-Qualified Stock Options to a group of our non-executive employees to purchase a total of 147,000 shares of our common stock at the current stock price of $3.60 per share, pursuant to the provisions of our 2019 Stock Option Plan. These options are exercisable for a period of 5 years from the date of issuance and will become vested on a ratable basis over a period of 3 years from the date of issuance. Using the Black-Scholes valuation model, and assuming expected volatility of 78.6% and current interest rate of 4.3%, we have calculated that the total fair value of these options as of the date of issuance was approximately $349,500, and we are amortizing this total amount to stock compensation expense on a straight-line basis over the 3-year vesting period of the options.

The following table presents activity with respect to our Non-Qualified Stock Options for the six months ended December 31, 2025:

Number

Wtd. Avg.

Aggregate

Exercise

Remaining

Intrinsic

Price

Term (Yrs.)

Value

Outstanding at June 30, 2025

–

Options issued

147,000

3.60

Options exercised/forfeited

–

Outstanding at December 31, 2025

147,000

3.60

4.6

–

Exercisable at December 31, 2025

–

3.60

4.6

–

In April 2024, we entered into an employment agreement with a new Chief Executive Officer (“CEO”), providing for an initial term extending through June 30, 2027, which will be automatically renewed for additional one-year terms unless either party chooses not to renew it. Pursuant to the agreement, our new CEO received an initial equity grant equal to 1,280,000 restricted stock units (“RSUs”), with a grant date value of $2,854,000, which will vest over a four-year period, subject to his continued employment with the Company, and will be entitled to earn additional RSUs on each anniversary in the form of three annual performance-based equity grants, beginning in the year ending June 30, 2025, with a target value of up to $660,000 each. Effective December 31, 2025, our Compensation Committee approved the issuance of the first such annual performance grant of RSUs and one-half of the second annual performance grant with a total value of $990,000, however, issuance of the RSUs is currently pending.

In February 2025, we entered into an amended and restated employment agreement with our Chief Financial Officer (“CFO”). The initial term of the employment agreement ends on December 31, 2027 and will be automatically renewable for additional one-year terms unless either party chooses not to renew the agreement. Pursuant to the agreement, we issued our CFO an award of 240,000 RSUs vesting in four annual installments. In February 2022, we entered into an earlier amended and restated employment agreement with our CFO, pursuant to which we issued him an RSU award for up to 300,000 shares of our common stock upon achieving two defined milestones. The first milestone was achieved as of January 1, 2023, and the underlying 250,000 shares of common stock were issued to our CFO as of that date. The second milestone was achieved as of January 1, 2024, and the underlying 50,000 shares of common stock are expected to be issued to our CFO at a later date (see Note 6).

In January 2025, we entered into an employment agreement with our former Chief Operating Officer (“COO”) and former Chief Business Officer (“CBO”), which individual resigned from the Company on January 31, 2026. Pursuant to the agreement, we issued an award of 150,000 RSUs vesting in three annual installments. In October 2025, we entered into employment agreements with our new COO and our new Chief Technology Officer. Pursuant to their employment agreements, we granted each of the two new officers an award of 450,000 RSUs (900,000 RSUs in total), vesting in three annual installments (see Note 4). For all of these awards, we have calculated the grant date value of such awards and are amortizing it as stock compensation expense over the underlying vesting periods. We have recognized stock compensation expense applicable to all RSU awards in the six months ended December 31, 2025 and 2024 in the amounts of $1,987,813 and $392,339, respectively (see Note 6).

In February 2025, we entered into a referral agreement with a marketing company to market our products to qualified solar and energy storage system installers. The term of the referral agreement ends on December 31, 2026. Pursuant to the agreement, the only compensation that the marketing company will be entitled to receive will be through the issuance of shares of our common stock in exchange for reaching specified target levels of product sales, up to a maximum total of 2,000,000 shares for reaching a total of 2,500 units sold and paid for. In accordance with ASC 718, we are accounting for this agreement based on our periodic assessments of the probability of reaching such target levels.

In conjunction with our public offering in August 2022, we appointed two new independent directors and adopted a new compensation plan for all independent directors based on an annual compensation amount of $65,000 with not less than 70% of such amount paid in shares of our common stock, calculated based on the share price at the end of such prior fiscal quarter, and up to 30% paid in cash, with such final amounts to be determined by each director. As of December 31, 2025 and 2024, we booked an accrual of $97,500 of compensation expense (of which $87,750 will be settled through the issuance of shares) for our three independent directors under this plan.

In the six months ended December 31, 2025, we recognized total non-cash stock compensation expense of $3,019,034 as follows: (i) $1,987,813 for the amortized value of the RSUs granted to our executive officers and key employees ; (ii) $87,750 for the amortized value of the portion of the new compensation plan for our independent directors that is attributable to stock; (iii) $227,993 for the value of the shares issuable to a distribution company pursuant to a April 2025 distribution agreement; (iv) $673,668 for the value of the shares issuable to various consultants; and (v) $41,810 for the amortized value of the Non-Qualified Stock Options issued to non-executive employees in August 2025. There was a total of 304,144 shares of our common stock that were issued to various grantees for services in the six months ended December 31, 2025, of which 176,322 shares were previously expensed in the year ended June 30, 2025.

In the six months ended December 31, 2024, we recognized total non-cash stock compensation expense of $480,089 as follows: (i) $392,339 for the amortized value of the RSUs granted to our chief executive officer, as previously described, and two other non-executive recipients of RSU awards granted since June 2024; and (ii) $87,750 for the amortized value of the portion of the new compensation plan for our independent directors that is attributable to stock. There were a total of 125,620 shares of our common stock that were issued to various grantees in the six months ended December 31, 2024, which were previously expensed in the year ended June 30, 2024.

Other Matters – In February 2019, the Company’s Board of Directors approved the establishment of a new 2019 Stock Plan (“Plan”) with an authorization for the issuance of up to 2,500,000 shares of common stock. In December 2024, the Plan was amended to increase the number of shares of common stock authorized for issuance by 5,000,000 shares. The Plan is designed to provide for future discretionary grants of stock options, stock awards and stock unit awards to key employees, consultants, advisors, and non-employee directors. As of December 31, 2025, we have made total awards of 3,770,671 shares under the Plan as follows: (i) RSUs for 3,156,362 shares granted to our executive officers and key employees, as noted above; (ii) 201,565 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) 265,744 shares granted to various consultants for their contracted services; and (iv) 147,000 shares for Non-Qualified Stock Options to purchase common stock granted to employees in August 2025.

Preferred Stock – The Company is authorized to issue up to 5,000,000 shares of preferred stock. Our articles of incorporation authorize the board to issue these shares in one or more series, to determine the designations and the powers, preferences and relative, participating, optional or other special rights and the qualifications, limitations and restrictions thereof. No such preferred stock has been issued to date.

- Definition

The entire disclosure for equity.

+ References

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+ Details

NeoVolta Inc. 10-Q