NeoVolta Inc. (NEOV), a maker of energy storage systems, routinely issues stock and awards at significant discounts to pay for operating expenses and reward certain shareholders, service providers, and insiders, significantly diluting shareholders.

In the year ended June 30, 2025, NeoVolta set aside 7.5 million shares in anticipation of the exercise of outstanding stock options, warrants, and rights.

It’s the equivalent of 21.9% of shares outstanding.

Many of NeoVolta’s stock awards— as well as shares issued directly in private offerings— are awarded at steep discounts, netting recipients significant and instant paper profits:

—In February 2025, NeoVolta privately issued 543,500 shares at $2.00 per share, a 38.4% discount to the average closing price that month, resulting in an instant $678,750 unrealized gain
—NeoVolta issued two consultants shares at an estimated $2.95 per share, a 10.6% discount to the weighted average price of outstanding options, warrants and rights issued in FY25
—NeoVolta issues a distributor shares at an estimated $2.97 per share, a 10% discount to the weighted average price of outstanding options, warrants and rights issued in FY25

Separately, additional scrutiny of NeoVolta’s latest annual report reveals an apparent discrepancy regarding shares issued to employees.

On August 22, 2025, NeoVolta issued employees options to purchase 144,000 shares over the next five years at “the current stock price of $3.60.”

However, NeoVolta shares did not open or close at that price on that day, instead closing at $3.84, a 6.25% discount to issuance.

Last year, DuDil warned investors of a revenue round-tripping arrangement buried in a footnote in which NeoVolta loaned money to a customer which was to be used to purchase products from NeoVolta.

With an Enterprise Value (EV) of approximately $204 million, NeoVolta is priced as if it will grow annual sales to more than $2.8 billion, up from an estimated $15.8 million in FY26. To justify its current share price of $5.89 our Reverse DCF— which quantifies investor expectations embedded in the current share price— indicates NeoVolta must:

—Grow sales 85% annually between 2028-2035, versus the company’s estimated FY26 and FY27 sales growth of 87.5% and 30.4%, respectively
—Increase NOPAT margin to 6.5%, versus our FY25 estimate of (56.4%) and three-year average estimate of (73.2%)
—Increase Invested Capital (IC) Turns to 1.5, up from our FY25 estimate of 0.81 and three-year average estimate of 0.56

Notably, the current share price also implies NeoVolta increases Return on Invested Capital (ROIC) to 9.75% from our FY25 estimate of (67.45%) and three-year average estimate of (46.67%):