Buried in a footnote in its latest quarterly filing NeoVolta (NEOV), a maker of energy storage systems, revealed a revenue round-tripping arrangement in which it will provide funds to a customer so it can purchase products from NeoVolta.

NeoVolta loaned $250,000 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.”

If NeoVolta recognizes the revenue ratably over the two year contract with the customer beginning with the latest quarter, the roundtrip is the equivalent of:

—5.29% of sales in the latest quarter
—4.71% of FY24 sales
—2.6% of consensus FY25 revenue estimates

NeoVolta says the purpose of the loan is to provide short term working capital to the customer in conjunction with the startup of the contract in Puerto Rico.

NeoVolta did not immediately respond when DuDil asked if it had ever provided financing to a company not using NeoVolta products.

Notably, CEO Ardes Johnson will receive a cash and equity bonus of $1.18 million in FY25 if NeoVolta sells 1,200 units.