NeoVolta Inc. Enters $20M Secured Loan Facility; Issues Warrants

What Happened

• On September 4, 2026 NeoVolta, Inc. (NEOV) entered a Loan, Security and Guaranty Agreement with Horizon Technology Finance, ROHO Capital Opportunity Fund and Monroe Capital as agent, providing $20,000,000 in term loans with an option to increase commitments up to an additional $10,000,000 by mutual agreement. The loans mature March 3, 2028 and carry a 10.00% annual interest rate. The loans are secured by a first‑priority lien on substantially all of NeoVolta’s assets and are guaranteed by its subsidiaries.
• As part of the deal NeoVolta issued five‑year warrants to purchase 1,454,545 shares of common stock at a $3.30 exercise price, with additional pro rata warrants of up to 727,273 shares tied to any loan increase. The company also agreed to file a Form S-3 registration statement for the resale of the warrant shares.

Key Details

• Loan amount: $20,000,000 initially; up to $30,000,000 total with lender consent. Maturity: March 3, 2028. Interest: 10.00% per year.
• Amortization: scheduled monthly payments starting December 4, 2026; each payment equals the greater of $1,250,000 or 7.5% of prior month “value traded,” capped at $2,000,000 per month.
• Warrants: 1,454,545 shares issuable, $3.30 exercise price, five‑year term; additional up to 727,273 shares if loan increases. Exercise limits: cashless only if resale registration unavailable; holder cannot exceed 4.99% beneficial ownership and each holder is allocation‑capped pro rata at 19.99% of outstanding shares absent stockholder approval.
• Covenants and liquidity tests: secured loan; a “Minimum Cushion Requirement” and a requirement to maintain at least $5,000,000 consolidated cash on hand. Company must seek stockholder approval to allow warrant exercises above cap allocation.

Why It Matters

• This transaction gives NeoVolta immediate secured funding for working capital and general corporate purposes, improving near‑term liquidity. However, the loan carries a relatively high 10% interest rate and monthly amortization that will require cash outflows beginning December 2026.
• The security interest on substantially all assets and the liquidity/cushion covenants may limit flexibility for future financings or asset sales. The issued warrants create potential future dilution if exercised; the company must also obtain and maintain a registration statement to enable resale of those shares. Investors should weigh the added liquidity against interest cost, repayment schedule, asset lien and possible dilution from the warrants.