UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
| Filed by the Registrant ☒ |
| Filed by a Party other than the Registrant ☐ |
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| Check the appropriate box: |
| ☐ |
Preliminary Proxy Statement |
| ☐ |
Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2) |
| ☒ |
Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
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NeoVolta,
Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if
other than the Registrant)
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| Payment of Filing Fee (Check the appropriate box): |
| ☒ |
No fee required. |
| ☐ |
Fee paid previously with preliminary materials. |
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11 |
13651 Danielson Street, Suite A
Poway, California 92064
October 31, 2024
Dear Fellow Stockholder:
On behalf of the Board of
Directors (the “Board”) and management of NeoVolta, Inc. (the “Company”), you are cordially invited to attend
the 2024 Annual Meeting of Stockholders of the Company (the “Annual Meeting”). The Annual Meeting will be held at the Company’s
offices located at 13651 Danielson Street, Suite A, Poway, CA, on Tuesday, December 10, 2024, at 2:00 P.M., Pacific Standard Time.
The attached Notice of the
Annual Meeting (the “Notice”) and Proxy Statement describe in greater detail all of the formal business that will be transacted
at the Annual Meeting.
The Company’s Board
has determined that each of the proposals that will be presented to the stockholders for their consideration at the Annual Meeting are
in the best interests of the Company and its stockholders, and unanimously recommends and urges you to vote “FOR” each director
nominee, “FOR” ratification of MaloneBailey, LLP as the Company’s independent registered public accounting firm for
the fiscal year ending June 30, 2025, and “FOR” approval of the amendment to the NeoVolta, Inc. 2019 Stock Plan. If any
other business is properly presented at the Annual Meeting, the proxies will be voted in accordance with the recommendations of the Company’s
Board.
We are distributing our proxy
materials to stockholders via the Internet under the “Notice and Access” rules of the U.S. Securities and Exchange Commission.
We believe this expedites stockholders’ receipt of proxy materials, lowers the Annual Meeting costs and conserves natural resources.
As a result, we are mailing to many stockholders a Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”),
rather than a paper copy of the Notice and Proxy Statement and 2024 Annual Report to Stockholders, which consists of the Company’s
Annual Report on Form 10-K for the fiscal year ended June 30, 2024. The Notice of Internet Availability contains instructions on how to
access the proxy materials online, vote online and obtain, if desired, a paper copy of our proxy materials. The Notice of Internet Availability
is not a proxy card and cannot be used to vote your shares. You will not receive paper copies of the proxy materials unless you request
the materials by following the instructions on the Notice of Internet Availability or on the website referred to in the Notice.
We encourage you to attend
the Annual Meeting, but if you are unable to attend, it is important that you vote in advance via the Internet, by telephone, or sign,
date and return the enclosed proxy card in the enclosed postage-paid envelope. Your cooperation is appreciated since a majority of the
common stock must be represented, either in person or by proxy, to constitute a quorum for the transaction of business at the Annual Meeting.
On behalf of the Board and
all of the employees of the Company, we thank you for your continued support.
Sincerely,
/s/ Brent Willson
Brent Willson
Chairman of the Board
13651 Danielson Street, Suite A
Poway, California 92064
NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN
that the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of NeoVolta, Inc. (the “Company”) will
be held at the Company’s offices located at 13651 Danielson Street, Suite A, Poway, CA, on Tuesday, December 10, 2024, at 2:00 P.M.,
Pacific Standard Time, for the following purposes:
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Election of Directors: To elect the following five (5) director nominees to the Board of Directors to serve for a one-year term ending at the 2025 Annual Meeting of Stockholders or until their successor is duly elected and qualified: |
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Brent Willson |
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Susan Snow |
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Steve Bond |
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John Hass |
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James Amos |
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Ratification of the Appointment of Independent Auditors: To ratify the appointment of MaloneBailey, LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2025. |
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Approval of the amendment to the NeoVolta, Inc. 2019 Stock Plan: To approve the adoption of the amendment to the NeoVolta, Inc. 2019 Stock Plan to increase the number of shares of common stock authorized for issuance by 5,000,000 shares. |
The Board of Directors (the
“Board”) is not aware of any other business that will be presented for consideration at the Annual Meeting. If any other matters
should be properly presented at the Annual Meeting or any adjournments or postponements of the Annual Meeting for action by stockholders,
the persons named in the form of proxy will vote the proxy in accordance with their best judgment on that matter.
The Board recommends that
you vote “FOR” each of the director nominees, and “FOR” ratification of the appointment of MaloneBailey,
LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2025, and “FOR”
approval of the amendment to the NeoVolta, Inc. 2019 Stock Plan.
Only stockholders of record
as of the close of business on October 18, 2024 are entitled to receive notice of, to attend and to vote at the Annual Meeting. If you
are a beneficial owner as of that date, you will receive communications from your broker, bank or other nominee about the Annual Meeting
and how to direct the vote of your shares, and you are welcome to attend the Annual Meeting in person, all as described in more detail
in the attached Proxy Statement.
Important Notice Regarding
the Availability of Proxy Materials for the Annual Meeting to Be Held on Tuesday, December 10, 2024. The Proxy Statement, form of
Proxy, and our 2024 Annual Report on Form 10-K for the year ended June 30, 2024, are available on the Internet at https://www.cstproxy.com/neovolta/2024
and on our corporate website at www.neovolta.com under “Investors—SEC Filings.”
By Order of the Board of Directors,
/s/ Brent Willson
Brent Willson
Chairman of the Board
October 31, 2024
TABLE OF CONTENTS
NEOVOLTA,
Inc.
13651 Danielson Street, Suite A
Poway, California 92064
PROXY STATEMENT
GENERAL INFORMATION
For the 2024 Annual Meeting of Stockholders
To Be Held on Tuesday, December 10, 2024
Our Board of Directors
is soliciting proxies to be voted at our 2024 Annual Meeting of Stockholders (the “Annual Meeting”) to be held at the Company’s
offices located at 13651 Danielson Street, Suite A, Poway, CA, on Tuesday, December 10, 2024, at 2:00 P.M., Pacific Standard Time, for
the purposes set forth in the attached Notice of Annual Meeting of Stockholders (the “Notice”) and in this Proxy Statement.
This Proxy Statement and the proxies solicited hereby are being first sent or delivered to stockholders of the Company on or about October
31, 2024.
As used in this Proxy Statement,
the terms “Company,” “we,” “us,” “our” and “NeoVolta” refer to NeoVolta, Inc.,
and the terms “Board of Directors” and “Board” refers to the Board of Directors of the Company.
Questions and Answers about these Proxy Materials
and the Annual Meeting
What is the Notice of Internet Availability
of Proxy Materials that I received in the mail and why am I receiving it?
In accordance with rules adopted
by the U.S. Securities and Exchange Commission (the “SEC”), except for stockholders who have requested otherwise, we have
generally mailed to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”).
The Notice of Internet Availability provides instructions either for accessing our proxy materials, including this Proxy Statement, the
form of Proxy, and the 2024 Annual Report to Stockholders, which consist of the Company’s Annual Report on Form 10-K for the fiscal
year ended June 30, 2024 (the “2024 Annual Report”), at the website address referred to in the Notice of Internet Availability,
or for requesting printed copies of the proxy materials by mail or electronically by e-mail. If you would like to receive a paper or e-mail
copy of our proxy materials either for this Annual Meeting or for all future meetings, you should follow the instructions for requesting
such materials included in the Notice of Internet Availability we mailed to you.
Our Board provided the Notice
of Internet Availability and is making the proxy materials available to you in connection with the Annual Meeting, to be held on Tuesday,
December 10, 2024. As a stockholder of record as of October 18, 2024 (the “Record Date”), you are invited to attend the Annual
Meeting, and are entitled to and requested to vote on the items of business described in this Proxy Statement.
What information is contained in this Proxy
Statement?
This information relates to
the proposals to be voted on at the Annual Meeting, the voting process, and certain other required information.
Can I access the Company’s proxy materials
and 2024 Annual Report electronically?
Yes. The Proxy Statement,
form of Proxy and our 2024 Annual Report are available at https://www.cstproxy.com/neovolta/2024. To view this material, you must have
available the control number located on the proxy card or, if shares are held in the name of a broker, bank or other nominee, the voting
instruction form.
What does it mean if I receive more than
one Notice of Internet Availability or set of proxy materials?
It means your shares are registered
differently or are in more than one account. Please provide voting instructions for each account for which you have received a Notice
of Internet Availability or set of proxy materials.
Who is soliciting my vote pursuant to this
Proxy Statement?
Our Board is soliciting your
vote at the Annual Meeting.
Who is entitled to vote?
Only stockholders of record
at the close of business on the Record Date will be entitled to vote at the Annual Meeting.
How many shares are eligible to be voted?
As of the Record Date, we
had 33,361,711 shares of common stock outstanding. Each outstanding share of our common stock will entitle its holder to one vote on each
of the five director nominees to be elected and one vote on each other matter to be voted on at the Annual Meeting.
What am I voting on?
You are voting on the following matters:
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1. |
Election of Directors: The election of five director nominees to the Board to serve for a one-year term ending at the 2025 Annual Meeting of Stockholders or until their successor is duly elected and qualified. Our director nominees are: |
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Brent Willson |
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Susan Snow |
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Steve Bond |
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John Hass |
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James Amos |
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Ratification of the Appointment of Independent Auditors: To ratify the appointment of MaloneBailey, LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2025. |
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Approval of the Amendment to the NeoVolta, Inc. 2019 Stock Plan: To approve the amendment to the NeoVolta, Inc. 2019 Stock Plan to increase the number of shares of common stock authorized for issuance by 5,000,000 shares. |
How does the Board recommend that I vote?
The Board unanimously recommends
that you vote your shares as follows:
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“FOR” each director nominee; |
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“FOR” the ratification of the appointment of MaloneBailey, LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2025; and |
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“FOR” the approval of the amendment to the NeoVolta, Inc. 2019 Stock Plan. |
None of our directors have
informed us in writing that he or she intends to oppose any action intended to be taken by us at the Annual Meeting.
How many votes are required to hold the
Annual Meeting and what are the voting procedures?
Quorum Requirement:
As of the Record Date, 33,361,711 shares of the Company’s common stock were issued and outstanding. The holders of a majority in
voting power of the issued and outstanding shares entitled to vote at the Annual Meeting, present or represented by proxy, constitutes
a quorum for the purpose of adopting proposals at the Annual Meeting. If you submit a properly executed proxy, then you will be considered
part of the quorum.
Required Votes:
Each outstanding share of our common stock is entitled to one vote on each proposal at the Annual Meeting. If there is a quorum at the
Annual Meeting, the matters to be voted upon by the stockholders require the following votes for such matter to be approved:
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Election of Directors: Directors are elected by a plurality of the votes cast at the Annual Meeting. “Plurality” means that the nominees who receive the largest number of votes cast “FOR” are elected as directors. As a result, any shares not voted “FOR” a particular nominee (whether as a result of stockholder abstention or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election. Votes of “WITHHOLD” and broker non-votes have no legal effect on the election of directors due to the fact that such elections are by a plurality. Abstentions will have no effect on the outcome of this proposal. Broker non-votes will have no effect on the outcome of this proposal. |
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Ratification of the Appointment of Independent Auditors: The affirmative vote of the holders of at least the majority of the voting power present in person or represented by proxy at the Annual Meeting is necessary to ratify the appointment of MaloneBailey, LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2025. Abstentions and broker non-votes will have no effect on the outcome of this proposal. |
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Approval of the Amendment to the NeoVolta, Inc. Stock Plan: The affirmative vote of the holders of at least the majority of the voting power present in person or represented by proxy at the Annual Meeting is necessary to approve the amendment to the NeoVolta, Inc. 2019 Stock Plan. Abstentions will have no effect on the outcome of this proposal. Broker non-votes will have no effect on the outcome of this proposal. |
If a broker indicates on its
proxy that it submits to the Company that it does not have authority to vote certain shares held in “street name,” the shares
not voted are referred to as “broker non-votes.” Broker non-votes occur when brokers do not have discretionary voting authority
to vote certain shares held in “street name” on particular proposals under the rules of the New York Stock Exchange, and the
“beneficial owner” of those shares has not instructed the broker how to vote on those proposals. If you are a beneficial owner
and you do not provide instructions to your broker, bank or other nominee, your broker, bank or other nominee is permitted to vote your
shares for or against “routine” matters.
Shares represented by proxies
that are marked vote “withheld” with respect to the election of any nominee for director will not be considered in determining
whether such nominee has received the affirmative vote of a plurality of the shares. Except as otherwise specified above, shares represented
by proxies that are marked “abstain” with respect to any other matter to be voted upon at the Annual Meeting will not have
an effect on the outcome of the vote.
How can I vote my shares in person and participate
at the Annual Meeting?
If you plan to attend the
Annual Meeting and vote in person on December 10, 2024, or at a later date if the meeting is adjourned or postponed, we will give you
a ballot when you arrive. However, if your shares are held in the name of your broker, bank or other nominee, you must bring a power of
attorney executed by the broker, bank or other nominee that owns the shares of record for your benefit and authorizing you to vote the
shares. However, even if you plan to attend the Annual Meeting in person, the Company recommends that you vote your shares in advance,
so that your vote will be counted if you later decide not to attend the Annual Meeting.
How can I vote my shares without attending
the Annual Meeting?
If you are the stockholder
of record, you may vote by one of the following four methods as instructed on the Notice of Internet Availability:
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Online at the Annual Meeting; |
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Via the Internet; |
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By telephone; or |
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By mail. |
If you elect to vote by mail
and you requested and received a printed set of proxy materials, you may mark, sign, date and mail the proxy card you received from us
in the return envelope. If you did not receive a printed proxy card and wish to vote by mail, you may do so by requesting a paper copy
of the proxy materials (as described below), which will include a proxy card.
Whichever method of voting
you use, the proxies identified on the proxy card will vote the shares of which you are the stockholder of record in accordance with your
instructions. If you submit a proxy card properly voted and returned through available channels without giving specific voting instructions,
the proxies will vote the shares as recommended by our Board.
If you own your shares in
“street name,” that is, through a brokerage account or in another nominee form, you must provide instructions to the broker
or nominee as to how your shares should be voted. Your broker or nominee will usually provide you with the appropriate instruction forms
at the time you receive the proxy materials. If you own your shares in this manner, you cannot vote in person at the Annual Meeting unless
you receive a proxy to do so from the broker or the nominee.
How may I cast my vote over the Internet?
Voting over the Internet:
If you are a stockholder of record, you may use the Internet to transmit your vote up until 11:59 P.M., Eastern Time, December 9, 2024
(the day before the Annual Meeting). Visit https://www.cstproxy.com/neovolta/2024 and have your proxy card in hand when you access the
website and follow the instructions to obtain your records and to create an electronic voting instruction form.
If you hold your shares in
“street name,” that is through a broker, bank or other nominee, that institution will instruct you as to how your shares may
be voted by proxy, including whether Internet voting options are available.
How may a stockholder nominate someone at
the Annual Meeting to be a director or bring any other business before the Annual Meeting?
The Company’s Amended
and Restated Bylaws (the “Bylaws”) require advance notice to the Company if a stockholder intends to attend an annual meeting
of stockholders in person and to nominate someone for election as a director or to bring other business before the meeting. Such a notice
may be made only by a stockholder of record within the time period established in the Bylaws and described in each year’s Proxy
Statement. See the section titled “Stockholder Proposals and Director Nominations for the 2025 Annual Meeting” below
for additional information.
How may I revoke or change my vote?
If you are the record owner
of your shares, and you completed and submitted a proxy card, you may revoke your proxy at any time before it is voted at the Annual Meeting
by:
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submitting a new proxy card with a later date; |
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delivering written notice to our Corporate Secretary on or before 2:00 P.M. Pacific Time on December 10, 2024 (the Annual Meeting date and time), stating that you are revoking your proxy; |
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attending the Annual Meeting and voting your shares; or |
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if you are a record owner of your shares and you submitted your proxy by telephone or via the Internet, you may change your vote or revoke your proxy with a later telephone or Internet proxy, as the case may be. |
Please note that attendance
at the Annual Meeting will not, in itself, constitute revocation of your proxy.
If you own your shares in
“street name,” you may later revoke your voting instructions by informing the bank, broker or other holder of record in accordance
with that entity’s procedures.
Who is paying for the costs of this proxy
solicitation?
The Company will bear the
cost of preparing, printing and mailing the materials in connection with this solicitation of proxies. In addition to mailing these materials,
officers and https://www.cstproxy.com/neovolta/2024 regular employees of the Company may, without being additionally compensated, solicit
proxies personally and by mail, telephone, facsimile or electronic communication.
Are there any rights of appraisal?
The Board of Directors is
not proposing any action for which the laws of the State of Nevada, our Amended and Restated Articles of Incorporation or our Second Amended
and Restated Bylaws provide a right of a stockholder to obtain appraisal of or payment for such stockholder’s shares.
Who will count the votes?
The inspector of election
appointed for the Annual Meeting will receive and tabulate the ballots and voting instruction forms. The Board has appointed Continental
Stock Transfer and Trust to serve as the inspector of election.
Where do I find the voting results of the
Annual Meeting?
The voting results will be
disclosed in a Current Report on Form 8-K that we will file with the SEC within four business days after the Annual Meeting.
How can I obtain the Company’s corporate
governance information?
Our corporate governance information
is available on our website at www.neovolta.com under “Investors—Governance.” Our stockholders may also obtain written
copies at no cost by writing to us at NeoVolta, Inc., 13651 Danielson Street, Suite A, Poway, California 92064, Attention: Corporate Secretary,
or by calling (800) 364-5464.
How do I request electronic or printed copies
of this and future proxy materials?
You may request and consent
to delivery of electronic or printed copies of this and future proxy statements, annual reports and other stockholder communications by:
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visiting https://www.cstproxy.com/neovolta/2024; |
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calling 1-888-266-6791; or |
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sending an email to proxy@continentalstock.com with “Proxy Materials NeoVolta, Inc.” in the subject line along with your control number. Please include your full name and address. |
When requesting copies of
proxy materials and other stockholder communications, you should have available the control number located on the Notice of Internet Availability
or proxy card or, if shares are held in the name of a broker, bank or other nominee, the voting instruction form.
PROPOSAL 1: ELECTION OF DIRECTORS
Nominees for Election as Directors
Our Board has unanimously
approved the nomination of Brent Willson, Steve Bond, James Amos, Susan Snow, and John Hass for election as directors to serve until the
2025 Annual Meeting of Stockholders and until their successors are elected and have qualified. Our Board currently has five members.
Information about the principal
occupations, business experience and qualifications of each of our director nominees is provided below under the heading “Qualifications
of 2024 Director Nominees and Continuing Directors.”
Qualifications of 2024 Director Nominees and Continuing Directors
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Brent Willson
Age: 59
Director Since: 2018
Committees: None |
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Brent Willson has served as founder and a director since our inception. Col Willson served as our president and chief executive officer from inception until April 2024, and has served as our chief technology officer since April 2024. Col Willson retired after more than 31 years of distinguished service with the United States Marine Corps, in December 2017. Col Willson rose to the rank of USMC Colonel where he was responsible for large acquisitions, security, facilities and infrastructure, and was an aviator. At the Office of the Secretary of Defense for Acquisition, Col Willson was responsible for managing the Defense Department’s $100 billion portfolio of helicopters and tilt-rotor aircraft. In January 2018, Col Willson served as a director and as president and chief executive officer of Holly Brothers Pictures, Inc., a crypto-currency company. Col Willson resigned from Holly Brothers Pictures, Inc. on November 15, 2019. Col Willson holds a BS in Business Administration, a Masters of Military Science, a Masters of National Security and Strategic Studies, and is a Level II Program Manager. Col Willson also holds all military pilots ratings and FAA multi-engine airplane/helicopter with instrument license. We believe Col Willson’s background in managing large portfolios and his educational background qualifies him to serve as a director of the Company. |
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Steve Bond
Age: 50
Director Since: 2018
Committees: None |
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Steve Bond has served as a director and as our chief financial officer since May 2018. Over the last 15 years, Steve Bond has worked with over 100 companies as a consulting executive in finance, strategy and revenue growth. Mr. Bond resigned as a director and as chief financial officer of Holly Brothers Pictures, Inc., a crypto-currency company, on November 15, 2019. Mr. Bond has been active in the San Diego Rotary Club and served on the Board of Promises to Kids. Mr. Bond graduated Summa Cum Laude in Finance from San Diego State University in 2000. We believe Mr. Bond’s consulting experience and his educational background qualifies him to serve as a director of the Company. |
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James Amos
Age: 77
Director Since: 2021
Committees:
· Audit
· Compensation
· Nominating
and Governance (Chair) |
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James Amos has served as a director since January 2021. Gen Amos was nominated by President Barack Obama in 2010, and confirmed by Congress, as the 35th Commandant of the U.S. Marine Corps, the highest-ranking officer in the Marine Corps. Upon retirement in 2014, he joined the Board of Directors of LORD Corporation, a global leader in motion and control technologies, and later served as its Chairman of the Board of Directors prior to its acquisition by Parker Hannifin in 2019. Gen Amos currently serves as a strategic advisor to the President of ST Engineering - North America, a member of the President of Huntington Ingalls Shipbuilding Strategic Advisory Panel, a member of NOVANT Health’s Board of Trustees, a member of the Board of Advisors for the Jewish Institute for National Security in America (JINSA), a member of Charlotte’s Veterans Bridge Home Advisory Board, as well as Founder of Windsock LLC. Gen Amos graduated from the University of Idaho in 1970 with a Bachelor of Science degree in finance and economics. Gen Amos previously served as Chairman of the Board of Directors of the Semper Fi Fund/America’s Fund. We believe Gen Amos’s leadership in both his military and civilian endeavors qualifies him to serve as a director of the Company. |
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Susan Snow
Age: 66
Director Since: 2022
Committees:
· Audit
(Chair)
· Compensation
· Nominating
and Governance |
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Susan Snow has served as a director since July 2022. From January 2018 to December 2021, Ms. Snow served as Senior VP, Operations at Redhorse, a consulting firm specializing in contacts and relationships with U.S. governmental agencies. Previously, from May 2009 until January 2018, Ms. Snow was a principal at Transitional Finance Partners. Ms. Snow began her professional career and earned her CPA at KPMG, where she spent four years before leaving for a Chief Financial Officer role in private industry. Since December 2021, Ms. Snow has served as director of Creative Medical Technology Holdings, Inc. We believe Ms. Snow’s financial and corporate experience and expertise qualify her to serve as one of our directors. |
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John Hass
Age: 54
Director Since: 2022
Committees:
· Audit
· Compensation
(Chair)
· Nominating
and Governance |
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John Hass has served
as a director since July 2022. Mr. Hass has served as the Chief Product Officer for Shoals Technologies Group, Inc., a
Nasdaq-listed electrical Balance of Systems provider for solar, energy storage, and eMobility, since September
2021. Prior, he was Founder and CEO of ConnectPV, Inc., from January 2015 until September 2021, providing electrical
Balance of Systems products to the utility scale solar and white labelling Residential Energy Storage systems for
NeoVolta. Mr. Hass served as CEO of SolarBOS, also supporting electrical Balance of System products in the solar
industry, from March 2013 through November 2014. Mr. Hass began his professional career at TEAL Electronics in 1994 and
has a Bachelor of Science in Mechanical Engineering and a Masters in Business Administration from San Diego State University. We
believe that John’s experience that spans almost three decades in power systems development, renewable energy and
manufacturing qualify him to serve as one of our directors. |
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Executive Officers Who are Not Serving
as Directors
Below is information regarding each of our current
executive officers who are not directors of the Company, including their title, age and brief biography describing each executive officer’s
business experience. No executive officer has any family relationship with any other executive officer or any of our current directors
or director nominees.
| Name and Position |
Age |
Business Experience |
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Ardes Johnson.
Chief Executive Officer |
54 |
Ardes Johnson has
served as our chief executive officer since April 2024. Prior to joining the Company, Mr. Johnson served as president of the U.S.
subsidiary of Meyer Burger, a major manufacturer of solar cells and solar
modules based in Switzerland. Previously, he held executive sales positions with a number of industrial companies, including
General Electric and Tesla. Mr. Johnson holds a B.S. degree in engineering from Texas Tech University and an MBA degree from
Southern Methodist University. |
Corporate Governance and Board Matters
We are committed to sound
corporate governance principles, which are essential to running our business efficiently and maintaining our integrity in the marketplace.
Certain features of our corporate governance practices are provided below.
Director Qualifications
We believe that our directors
should have the highest professional and personal ethics and values. They should have broad experience at the policy-making level in business,
banking, real estate or technology. They should be committed to enhancing stockholder value and should have sufficient time to carry out
their duties and to provide insight and practical wisdom based on experience. Their service on boards of other companies should be limited
to a number that permits them, given their individual circumstances, to perform responsibly all director duties. Each director must represent
the interests of all stockholders. When considering potential director candidates, our Board also considers the candidate’s character,
judgment, diversity, skill set, specific business background and global or international experience in the context of our needs and those
of the Board.
Director Independence
The rules of the Nasdaq Stock
Market, or the Nasdaq Rules, require a majority of a listed company’s board of directors to be composed of independent directors.
In addition, the Nasdaq Rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation
and nominating and governance committees be independent. Under the Nasdaq Rules, a director will only qualify as an independent director
if, in the opinion of our Board of Directors, that person does not have a relationship that would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director. The Nasdaq Rules also require that audit committee members satisfy independence
criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In order to be considered
independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity
as a member of the audit committee, the board of directors, or any other board committee, accept, directly or indirectly, any consulting,
advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed
company or any of its subsidiaries. In considering the independence of compensation committee members, the Nasdaq Rules require that our
board of directors must consider additional factors relevant to the duties of a compensation committee member, including the source of
any compensation we pay to the director and any affiliations with our company.
Our board of directors undertook
a review of the composition of our board of directors and its committees and the independence of each director. Based upon information
requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our
board of directors has determined that each of our directors, with the exception of Col Willson and Mr. Bond, are independent as defined
under the Nasdaq Rules.
Insider Trading Policy
Our Board has adopted an Insider
Trading Policy that applies to all of our directors and employees. The policy attempts to establish standards that will avoid even the
appearance of improper conduct on the part of insiders.
Hedging and Pledging Policy
We do not permit our directors
and employees to enter into hedging and monetization transactions or to engage in short sale transactions in the Company’s securities.
We believe that such transactions can mitigate or eliminate the economic risk of ownership and disincentivize such individuals from seeking
to improve the Company’s performance and, consequently impair their alignment with our stockholders’ interests.
We also do not permit our
directors and executive officers to enter into pledging arrangements involving their shares of our common stock. We believe such arrangements
present a risk that the individual could be pressured or forced to sell our stock to meet loan requirements, which we believe would be
inconsistent with our belief in aligning their interests with long-term stockholder interests, and potentially could cause us reputational
harm and violate internal policies regarding transacting in our stock when such person is aware of material nonpublic information or otherwise
prohibited from trading in our common stock.
Leadership Structure
We do not currently have a
chairperson of the board. From the time the Company began its operations in 2018 until April 29, 2024, Col Willson served as our CEO.
Since April 29, 2024, Mr. Johnson has served as our CEO.
We believe that independent
and effective oversight of the Company’s business and affairs is maintained through the composition of the Board, the leadership
of our independent directors and Board committees and our governance structures and processes. The Board consists of a majority of independent
directors, and the Board’s Audit, Compensation and Nominating and Governance Committees are composed solely of independent directors.
Diversity of Directors
The following table summarizes certain self-identified
characteristics of our directors, utilizing the categories and terms set forth in applicable Nasdaq rules and related guidance:
|
Board Diversity Matrix (As of October 18, 2024)
|
| Total Number of Directors |
5 |
| |
Male |
Female |
| Gender |
|
|
| Directors |
4 |
1 |
| Number of Directors who identify in Any of the Categories Below: |
|
|
| White |
4 |
1 |
Code of Ethics
Our Board of Directors has
adopted a written Code of Business Conduct and Ethics applicable to all officers, directors and employees, which is available on our website
at www.neovolta.com under “Governance Documents” within the “Corporate Governance” section. We intend to satisfy
the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of this Code and by posting
such information on the website address and location specified above.
Compensation Committee Interlocks and Insider Participation
None of the members of our
Compensation Committee are or have been one of our officers or employees. In addition, none of our executive officers serves or has served
as a member of the Compensation Committee or other board committee performing equivalent functions of any entity that has one or more
executive officers serving as one of our directors or on our Compensation Committee.
Risk Management and Oversight
Our Board oversees our risk
management process, which is a company-wide approach to risk management that is carried out by our management. Our full Board determines
the appropriate risk for us generally, assesses the specific risks faced by us, and reviews the steps taken by management to manage those
risks. While our full Board maintains the ultimate oversight responsibility for the risk management process, its committees oversee risk
within their specific area of concern. Pursuant to our Board’s instruction, management regularly reports on applicable risks to
the relevant committee or the full Board, as appropriate, with additional review or reporting on risks conducted as needed or as requested
by our Board and its committees.
Stockholder Communications and Annual Meeting Attendance
Stockholders may communicate
with our Board by contacting the Corporate Secretary, NeoVolta, Inc., 13651 Danielson Street, Suite A, Poway, California 92064. All communications
will be forwarded directly to the Chairman for consideration.
The Board members are not
required to attend our annual meetings of stockholders. However, all directors are encouraged to attend every annual meeting of stockholders
as we believe that the annual meeting is an opportunity for stockholders to communicate directly with directors. We did not hold a formal
annual meeting last year prior to our listing on the Nasdaq Stock Market.
Committees of the Board of Directors
We established a Nominating
and Corporate Governance Committee, an Audit Committee and a Compensation Committee. Our Board of Directors has adopted and approved a
charter for each of these standing committees. The charters, which include the functions and responsibilities of each of the committees,
can be found in the “Investors - Governance” section on our web site at www.neovolta.com.
The names of the current members
(chairs specifically noted) and highlights of some of the key oversight responsibilities of the Board committees are set forth below.
| Audit Committee |
|
| Members: |
Key Oversight Responsibilities: |
| |
|
|
|
| |
· |
Susan Snow (Chair) |
|
· |
overseeing the compensation and work of and performance by our independent auditor and |
| |
· |
John Hass |
|
|
any other registered public accounting firm
performing audit, review or attestation services for us; |
| |
· |
James Amos |
|
· |
engaging, retaining and terminating our independent auditor and determining the terms thereof; |
| |
|
|
|
· |
assessing the qualifications, performance and independence of the independent auditor; |
| Meetings in fiscal 2024: four |
|
· |
evaluating whether the provision of permitted non-audit services is compatible with maintaining |
| |
|
|
|
|
the auditor’s independence; |
| ✔
All members of the Audit Committee |
|
· |
reviewing and discussing the audit results, including any comments and recommendations
of |
| are independent |
|
|
the independent auditor and the responses of management to such recommendations; |
| |
|
· |
reviewing and discussing the annual and quarterly financial statements with management and |
| ✔ All members of the Audit Committee |
|
|
the independent auditor; |
| are financially literate |
|
· |
producing a committee report for inclusion in applicable SEC filings; |
| |
|
· |
reviewing the adequacy and effectiveness of internal controls and procedures; |
| ✔ Ms. Snow is considered an “audit |
|
· |
establishing procedures regarding the receipt, retention and treatment of complaints received |
| committee financial expert” with |
|
|
regarding the accounting, internal
accounting controls, or auditing matters and conducting |
| accounting or related financial management |
|
|
or authorizing investigations into any matters within the scope of the responsibility
of |
| expertise in accordance with the
U.S. |
|
|
the audit committee; and |
| Securities and Exchange Commission’s |
|
· |
reviewing transactions with related persons for potential conflict of interest situations. |
| (“SEC”) rules and regulations and |
|
|
|
| NASDAQ rules |
|
|
|
| Compensation Committee |
|
| Members: |
Key Oversight Responsibilities: |
| |
|
|
|
| |
· |
John Hass (Chair) |
|
· |
reviewing and recommending all elements and amounts of compensation for each executive |
| |
· |
Susan Snow |
|
|
officer, including any performance goals
applicable to those executive officers; |
| |
· |
James Amos |
|
· |
reviewing and recommending for approval the adoption, any amendment and termination of |
| |
|
|
|
|
all cash and equity-based incentive compensation
plans; |
| Meetings in fiscal 2024: one |
|
· |
once required by applicable law, causing to be prepared a committee report for inclusion in |
| |
|
|
|
|
applicable SEC filings; |
| ✔
All members of the Compensation |
|
· |
approving any employment agreements, severance agreements or change of control agreements |
| Committee are independent |
|
|
that are entered into with the CEO and
certain executive officers; and |
| |
|
· |
reviewing and recommending the level and form of non-employee director compensation and |
| ✔ All members of the Compensation |
|
|
benefits. |
| Committee qualify as “nonemployee” |
|
|
|
| directors within the meaning of |
|
|
Our Chief Executive Officer reviews the performance of our other executive officers (other than |
| Rule 16b-3 under the Exchange
Act |
himself) and, based on that review, our Chief Executive Officer makes recommendations to the |
| |
Compensation Committee
about the compensation of executive officers (other than himself). Our Chief |
| |
Executive Officer does not participate in any
deliberations or approvals by the Board or the |
| |
Compensation Committee with respect to his own compensation. |
| Nominating and Governance Committee |
|
| Members: |
Key Oversight Responsibilities: |
| |
|
|
|
| |
· |
James Amos (Chair) |
|
· |
recommending persons for election as directors by the stockholders; |
| |
· |
Susan Snow |
|
· |
recommending persons for appointment as directors to the extent necessary to fill any vacancies |
| |
· |
John Hass |
|
|
or newly created directorships; |
| |
|
|
|
· |
reviewing annually the skills and characteristics required of directors and each incumbent |
| Meetings in fiscal 2024: one |
|
|
director’s continued service on
the board; |
| |
|
|
|
· |
reviewing any stockholder proposals and nominations for directors; |
| ✔
All members of the Nominating |
|
· |
advising the board of directors on the appropriate structure and operations of the board and |
| and Governance Committee are |
|
|
its committees; |
| independent |
|
· |
reviewing and recommending standing board committee assignments; |
| |
|
· |
developing and recommending to the board Corporate Governance Guidelines, a Code of |
| |
|
|
Business Conduct and Ethics and other corporate
governance policies and programs and |
| |
|
|
reviewing such guidelines, code and any other policies and programs at least annually; |
| |
|
· |
making recommendations to the board as to determinations of director independence; and |
| |
|
· |
making recommendations to the board regarding corporate governance based upon |
| |
|
|
developments, trends, and best practices. |
Selecting and Nominating Director Candidates
In carrying out its functions,
the Nominating and Governance Committee develops qualification criteria for all potential nominees for election, including incumbent directors,
board nominees and stockholder nominees to be included in the Company’s future proxy statements. These criteria may include the
following attributes:
| |
· |
adherence to high ethical standards and high standards of integrity; |
| |
· |
sufficient educational background, professional experience, business experience, service on other boards of directors and other experience, qualifications, diversity of viewpoints, attributes and skills that will allow the candidate to serve effectively on the Board and the specific committee for which he or she is being considered; |
| |
· |
evidence of leadership, sound professional judgment and professional acumen; |
| |
· |
evidence the nominee is well recognized in the community and has a demonstrated record of service to the community; |
| |
· |
a willingness to abide by any published code of conduct or ethics for the Company and to objectively appraise management performance; |
| |
· |
the ability and willingness to devote sufficient time to carrying out the duties and responsibilities required of a director; |
| |
· |
any related party transaction in which the candidate has or may have a material direct or indirect interest and in which we participate; and |
| |
· |
the fit of the individual’s skills and personality with those of other directors and potential directors in building a Board of Directors that is effective, collegial and responsive to the needs of the Company and the interests of our stockholders. |
The Nominating and Governance
Committee also evaluates potential nominees for the Company’s Board to determine if they have any conflicts of interest that may
interfere with their ability to serve as effective board members and to determine whether they are “independent” in accordance
with applicable SEC and NASDAQ rules (to ensure that, at all times, at least a majority of our directors are independent). Although we
do not have a separate diversity policy, the Nominating and Governance Committee considers the diversity of the Company’s directors
and nominees in terms of knowledge, experience, skills, expertise and other factors that may contribute to the effectiveness of the Company’s
Board.
Prior to nominating or, if
applicable, recommending an existing director for re-election to the Company’s Board, the Nominating and Governance Committee considers
and reviews the following attributes with respect to each sitting director:
| |
· |
attendance and performance at meetings of the Company’s Board and the committees on which such director serves; |
| |
· |
length of service on the Company’s Board; |
| |
· |
experience, skills and contributions that the sitting director brings to the Company’s Board; |
| |
· |
independence and any conflicts of interest; and |
| |
· |
any significant change in the director’s status, including with respect to the attributes considered for initial membership on the Company’s Board. |
Board and Committee Meetings
Our Board held four meetings
during fiscal year 2024. In fiscal year 2024, each incumbent director attended [100]% of the aggregate of (1) the total number of meetings
of the Board (held during the period for which that person served as a director) and (2) the total number of meetings held by all committees
of the Board on which that person served (held during the period served).
REPORT
OF THE AUDIT COMMITTEE
The Audit Committee has (i)
reviewed and discussed our audited financial statements for fiscal year ended June 30, 2024 with our management; (ii) discussed with MaloneBailey,
LLP, our independent registered public accounting firm, all matters required to be discussed by the applicable requirements of the Public
Company Accounting Oversight Board (“PCAOB”) and the SEC; and (iii) received the written disclosures and the letter from MaloneBailey,
LLP required by applicable requirements of the PCAOB regarding MaloneBailey, LLP’s communications with the Audit Committee concerning
independence, and discussed with MaloneBailey, LLP its independence. Based on the foregoing review and discussions, the Audit Committee
recommended to the Board that our audited financial statements for the year ended June 30, 2024 be included in our Annual Report on Form
10-K for the year ended June 30, 2024.
| Audit Committee |
| |
| By: |
Susan Snow, Chair |
| |
John Hass |
| |
James Amos |
ANNUAL
REPORT TO STOCKHOLDERS
Our 2024 Annual Report has
been made available to stockholders and is posted on our website www.neovolta.com under “Investors—SEC Filings.”
Additional copies of the
2024 Annual Report may be obtained without charge upon written request to Investor Relations, NeoVolta, Inc., 13651 Danielson Street,
Suite A, Poway, California 92064.
The 2024 Annual Report
shall not be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, whether made before or after
the date hereof and irrespective of any general incorporation language in any such filing (except to the extent that we specifically incorporate
this information by reference) and shall not otherwise be deemed “soliciting material” or “filed” with the SEC
or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act (except to the extent that we specifically
request that this information be treated as soliciting material or specifically incorporate this information by reference).
BENEFICIAL OWNERSHIP
OF COMMON STOCK
The following table sets forth
information regarding the beneficial ownership of our common stock as of October 18, 2024:
| · | each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common
stock; |
| · | each of our named executive officers and directors; and |
| · | all our executive officers and directors as a group. |
Beneficial ownership is determined
in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Except as otherwise indicated,
each person or entity named in the table has sole voting and investment power with respect to all shares of our capital shown as beneficially
owned, subject to applicable community property laws.
In computing the number and
percentage of shares beneficially owned by a person, shares that may be acquired by such person within 60 days of the date of this prospectus
are counted as outstanding, although such shares are not counted as outstanding for computing the percentage ownership of any other person.
The percentage of shares beneficially owned is computed on the basis of 33,361,711 shares of our common stock outstanding. Unless otherwise
indicated, the address of each person listed below is c/o NeoVolta, Inc., 13651 Danielson Street, Suite A, Poway, California 92064.
| Name of Beneficial Owner | |
Shares of Common Stock Beneficially Owned | |
Percentage of Class (1) |
| Executive officers and directors: | |
| | | |
|
| Brent Willson | |
| 4,050,000 | (2) | |
12.1% |
| Ardes Johnson | |
| – | (3) | |
– |
| Steve Bond | |
| 800,000 | | |
2.4% |
| James F. Amos | |
| 34,966 | | |
* |
| Susan Snow | |
| 39,876 | (4) | |
* |
| John Hass | |
| 56,966 | | |
* |
All Executive Officers and Directors as a group
(6 persons) | |
| 5,081,808 | | |
15.2% |
| * | Less than 1%. |
| (1) | Based on 33,361,711 shares to be outstanding as of October 18, 2024. |
| (2) | Includes shares held by Canmore International, Inc., an entity affiliated with Col Willson. |
| (3) | Pursuant to his employment agreement, in April 2024 Mr. Johnson received a restricted stock unit award for 1,280,000 shares of common
stock that will vest over a four-year period. |
| (4) | Includes shares held by The Susan Hegarty Snow Trust, of which Ms. Snow is a beneficiary. |
Compensation of Non-Employee Directors
Our non-employee directors
received compensation either in the form of all stock, or a combination of cash and stock, at their election, beginning in the third
quarter of 2022 in addition to reimbursement for travel costs to attend meetings. Each non-employee director receives the cash equivalent
of $65,000 per year for being a member of the board, and no additional fees are paid to them for service on our Board committees. Calculation
of the stock portion of fees elected by non-employee directors is made quarterly and such shares are issued annually. Payment of the
cash portion of fees elected by non-employee directors is made by the Company quarterly.
The following table sets forth compensation paid or awarded to, or earned by, each of our directors (except for Col Willson and Mr. Bond,
whose compensation is disclosed under “Executive Compensation—Summary Compensation Table” below) during
2024:
| Name | |
Stock Awards | | |
Fees
earned
or paid in cash | | |
Total | |
| James Amos(1) | |
$ | 65,000 | | |
$ | – | | |
$ | 65,000 | |
| Susan Snow(2) | |
$ | 45,500 | | |
$ | 19,500 | | |
$ | 65,000 | |
| John Hass(3) | |
$ | 65,000 | | |
$ | – | | |
$ | 65,000 | |
_____________________
| (1) |
Gen Amos received 36,609 shares of stock and zero cash for Board service in the year ended June 30, 2024. |
| (2) |
Ms. Snow received 25,626 shares of stock and $19,500 of cash for Board service in the year ended June 30, 2024. |
| (3) |
Mr. Hass received 36,609 shares of stock and zero cash for Board service in the year ended June 30, 2024. |
EXECUTIVE
COMPENSATION
Our named executive officers
named in the Summary Compensation Table (such executive officers are referred to herein as the “Named Executive Officers”
or ”NEOs”) for 2024 and 2023, which consist of all individuals serving as our principal executive officer during the year
and the Company’s one other most highly compensated executive officer, are:
| |
· |
Ardes Johnson, CEO (since April 29, 2024) |
| |
· |
Brent Willson, CEO (before April 29, 2024); and |
| |
· |
Steve Bond, CFO. |
Summary Compensation Table
The following table shows
the compensation awarded to or earned in the last two fiscal years by our NEOs. We did not have any other employees that received more
than $100,000 in compensation during fiscal 2024 or 2023.
| Name and Principal Position |
|
Year |
|
Salary
($) |
|
Stock
Awards
($)(2) |
|
Total
($) |
| Ardes Johnson, Chief Executive Officer (since April 29, 2024) |
|
2024 |
|
58,333 |
|
2,854,000 |
|
2,912,333 |
| |
|
|
|
|
|
|
|
|
| Brent Willson, Director |
|
2024 |
|
165,000 |
(1) |
– |
|
165,000 |
| President and Chief Executive Officer (before April 29, 2024) |
|
2023 |
|
165,000 |
(1) |
– |
|
165,000 |
| |
|
|
|
|
|
|
|
|
| Steve Bond, Director and |
|
2024 |
|
125,000 |
(3) |
– |
|
125,000 |
| Chief Financial Officer |
|
2023 |
|
125,000 |
(3) |
– |
|
125,000 |
| (1) |
The amounts shown in the first column represent the payments made or accrued by the Company to Col Willson in the period from July 1, 2023 through June 30, 2024 and in the period from July 1, 2022 through June 30, 2023. |
| (2) |
Represents the full grant date fair value of the stock awards and do not necessarily correspond to the actual value that may be realized by the holder. |
| |
In April
2024, we entered into an employment agreement with our new Chief Executive Officer, Ardes Johnson, 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, Mr. Johnson 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. |
| (3) |
The amounts shown in the first column represent the payments made or accrued by the Company to Mr. Bond in the period from July 1, 2023 through June 30, 2024 and in the period from July 1, 2022 through June 30, 2023. |
Narrative Disclosure to Summary Compensation Table
General
We have compensated our NEOs
through a combination of base salary and equity awards. Each of our NEOs has substantial responsibilities relating to our day-to-day operations.
Base Salary
The Compensation Committee
reviews and approves base salaries of our NEOs. In setting the base salary of each NEO for the periods presented above, the Compensation
Committee relied on market data. The Compensation Committee also may retain independent consultants as it deems appropriate. Salary levels
are typically considered annually as part of our regularly scheduled performance review process and otherwise upon a promotion or other
change in job responsibility.
Equity Awards
The stock option awards reflected
in the table above were issued pursuant to the 2019 Stock Plan, which, as described more fully below, allows the Compensation Committee
to establish the terms and conditions of the awards, subject to the plan terms. In February 2019, we adopted the 2019 Stock Plan, which
permits either the Compensation Committee or our entire Board, for the period prior to the establishment of the Compensation Committee,
to grant stock options. We believe these awards to our executive officers help align the interests of management and our stockholders
and reward our executive officers for improved Company performance.
401(k) Retirement Plan
The Company participates in
a 401(k) plan that allows all employees, including NEOs, to contribute part of their compensation, up to specified IRS limitations. For
fiscal 2024, the Company did not provide any matching contributions to the 401(k) plan.
Health and Welfare Benefits
Our NEOs are eligible to participate
in the same benefit plans designed for all of our full-time employees, including health, dental, vision, and basic group life insurance
coverage. The purpose of our employee benefit plans is to help us attract and retain quality employees, including executives, by offering
benefit plans similar to those typically offered by our competitors.
Executive Agreements
Employment Agreement with Ardes Johnson, CEO
In April 2024, we entered
into an employment agreement with Ardes Johnson pursuant to which Mr. Johnson agreed to serve as our CEO. The employment agreement provides
for compensation consisting of base salary of $350,000, a target cash annual bonus of 100% of base salary with a maximum annual bonus
of 150% of base salary, and an annual equity grant based on the achievement of certain goals with a target value of $660,000. For the
year ending June 30, 2025, the employment agreement provides that the performance goals for the achievement of the cash bonus and equity
grant will be the sale of 1,200 units during such fiscal year (excluding those sold through a specified distributor). Pursuant to the
employment agreement, Mr. Johnson received a restricted stock unit award for 1,280,000 shares of common stock that will vest over a four-year
period. The employment agreement provides for an initial term of through June 30, 2027, which will be automatically renewed for additional
one-year terms unless either party chooses not to renew the agreement. If Mr. Johnson’s employment is terminated at our election
without “cause” (as defined in the employment agreement), or by Mr. Johnson for “good reason” (as defined in the
employment agreement), Mr. Johnson shall be entitled to receive severance payments equal to six months of base salary and a prorated amount
of the annual bonus for such fiscal year.
Employment Agreement with Brent Willson, Former CEO
We entered into an employment
agreement with Colonel Brent Willson, effective April 1, 2022, pursuant to which Col Willson agreed to continue to serve as our Chief
Executive Officer and President. As noted above, we engaged Ardes Johnson as our new CEO effective April 29, 2024, replacing Col Willson
who remains as Chairman of the Board and chief technology officer. Except for the change in responsibilities, all other terms and conditions
of the employment agreement with Col Willson remain in full force and effect. The initial term of the employment agreement with Col Willson
was one year and is automatically renewable for additional one-year terms unless either party chooses not to renew the agreement. The
agreement provides for an initial annual salary of $165,000. Pursuant to the agreement, we issued Col Willson a restricted stock unit
award for up to 150,000 shares of our common stock upon achieving the following milestones: (i) Milestone 1 - Successfully complete the
uplisting offering in 2022 (which occurred in July 2022) and continue his employment with our company until January 1, 2023: 50,000 shares
(these shares were issued January 1, 2023); and (ii) Milestone 2 - Produce 2,000 ESSs in 2022 and continue his employment with our company
until January 1, 2023: 100,000 shares. Since the production target was not met by the target date, Milestone 2 was not achieved and is
no longer achievable. Any shares of common stock issued pursuant to the foregoing restricted stock unit award shall be subject to a further
lock-up arrangement restricting the sale of such shares of common stock to 25% of the total shares issued on the three-, six-, nine- and
twelve-month anniversary of issuance. If Col Willson’s employment is terminated at our election without “cause” (as
defined in the agreement), Col Willson shall be entitled to receive severance payments equal to three months of Col Willson’s base
salary. Col Willson will agree not to compete with us until twelve months after the termination of his employment.
Employment Agreement with Steve Bond, CFO
In February 2022, we entered
into a new employment agreement with Steve Bond pursuant to which Mr. Bond agreed to continue to serve as our Chief Financial Officer,
effective March 1, 2022. The initial term of the employment agreement is one year and will be automatically renewable for additional one-year
terms unless either party chooses not to renew the agreement. The agreement provides for an initial annual salary of $125,000. Pursuant
to the agreement, we issued Mr. Bond a restricted stock unit award for up to 300,000 shares of our common stock upon achieving the following
milestones (which achievements shall be determined by the Board): (i) Milestone 1 - Successfully complete the uplisting offering in 2022
(which occurred in July 2022) and continue his employment with our company until January 1, 2023: 250,000 shares (these shares were issued
January 1, 2023); and (ii) Milestone 2 - successfully complete and file the Company’s Form 10-K for the year ended June 30, 2023
no later than September 29, 2023 and continue his employment with our company until January 1, 2024: 50,000 shares. Milestone 1 was achieved
as of January 1, 2023, and the underlying 250,000 shares of common stock earned under Milestone 1 were issued to Mr. Bond as of that date.
Milestone 2 was achieved as of January 1, 2024, and the underlying 50,000 shares of common stock earned under Milestone 2 are expected
to be issued to him at a later date. If Mr. Bond’s employment is terminated at our election without “cause” (as defined
in the agreement), Mr. Bond shall be entitled to receive severance payments equal to three months of Mr. Bond’s base salary. Mr.
Bond will agree not to compete with us until twelve months after the termination of his employment.
2019 Stock Plan
In February 2019, we adopted
the NeoVolta, Inc. 2019 Stock Plan (the “2019 Plan”). The Plan is a stock-based compensation plan that provides for discretionary
grants of stock options, stock awards and stock unit awards to key employees and non-employee directors. The purpose of the Plan is to
recognize contributions made to our Company by key employees and non-employee directors and to provide them with additional incentive
to achieve the objectives of our Company. The following is a summary of the Plan.
Administration. The
2019 Plan is administered by our board of directors or, once established, the compensation committee of the board of directors (we refer
to the body administering the 2019 Plan as the “Committee”). The Committee has full authority to select the individuals who
will receive awards under the 2019 Plan, determine the form and amount of each of the awards to be granted and establish the terms and
conditions of awards.
Limit on Non-Employee Director
Compensation. Under the 2019 Plan, the following limits apply to non-employee directors. The aggregate value of all compensation granted
or paid, as applicable, to any individual for service as a non-employee director with respect to any calendar year, including awards granted
under the 2019 Plan and cash fees paid to such non-employee director, will not exceed $300,000 in total value. For purposes of these limitations,
the value of awards is calculated based on the grant date fair value of such awards for financial reporting purposes.
Number of Shares of Common
Stock. The number of shares of the common stock that may be issued under the 2019 Plan is currently 2,500,000, but will be increased
to 7,500,000 if Proposal 3 is approved. If there is a lapse, forfeiture, expiration, termination or cancellation of any award made under
the 2019 Plan for any reason, the shares subject to the award will again be available for issuance. Any shares subject to an award that
are delivered to us by a participant, or withheld by us on behalf of a participant, as payment for an award or payment of withholding
taxes due in connection with an award will not again be available for issuance, and all such shares will count toward the number of shares
issued under the 2018 Plan. The number of shares of common stock issuable under the 2019 Plan is subject to adjustment, in the event of
any reorganization, recapitalization, stock split, stock distribution, merger, consolidation, split-up, spin-off, combination, subdivision,
consolidation or exchange of shares, any change in the capital structure of the company or any similar corporate transaction. In each
case, the Committee has the discretion to make adjustments it deems necessary to preserve the intended benefits under the 2019 Plan. No
award granted under the 2019 Plan may be transferred, except by will, the laws of descent and distribution.
Eligibility. All employees
designated as key employees for purposes of the 2019 Plan, all non-employee directors and consultants are eligible to receive awards under
the 2019 Plan.
Awards to Participants.
The 2019 Plan provides for discretionary awards of stock options, stock awards, stock unit awards and stock appreciation rights to participants.
Each award made under the 2019 Plan will be evidenced by a written award agreement specifying the terms and conditions of the award as
determined by the Committee in its sole discretion, consistent with the terms of the 2019 Plan.
Stock Options. The
Committee has the discretion to grant non-qualified stock options or incentive stock options to participants and to set the terms and
conditions applicable to the options, including the type of option, the number of shares subject to the option and the vesting schedule;
provided that the exercise price of each stock option will be the closing price of the common stock on the date on which the option is
granted (“fair market value”), each option will expire ten years from the date of grant and no dividend equivalents may be
paid with respect to stock options.
In addition, an incentive
stock option granted to a key employee is subject to the following rules: (i) the aggregate fair market value (determined at the time
the option is granted) of the shares of common stock with respect to which incentive stock options are exercisable for the first time
by a key employee during any calendar year (under all incentive stock option plans of the company and its subsidiaries) cannot exceed
$100,000, and if this limitation is exceeded, that portion of the incentive stock option that does not exceed the applicable dollar limit
will be an incentive stock option and the remainder will be a non-qualified stock option; (ii) if an incentive stock option is granted
to a key employee who owns stock possessing more than 10% of the total combined voting power of all class of stock of the company, the
exercise price of the incentive stock option will be 110% of the closing price of the common stock on the date of grant and the incentive
stock option will expire no later than five years from the date of grant; and (iii) no incentive stock option can be granted after ten
years from the date the 2019 Plan was adopted.
Stock Appreciation Rights.
The Committee has the discretion to grant stock appreciation rights to participants. The Committee determines the exercise price for a
stock appreciation right, which cannot be less than 100% of the fair market value of our common stock on the date of grant. Upon the exercise
of a stock appreciation right, we will pay the participant in common stock or in cash, at our discretion, an amount equal to the product
of (1) the excess of the per share fair market value of our common stock on the date of exercise over the exercise price, multiplied by
(2) the number of shares of common stock with respect to which the stock appreciation right is exercised. The Committee has the discretion
to set the terms and conditions applicable to the award, including the number of shares subject to the stock appreciation right and the
vesting schedule, provided that each stock appreciation right will expire not more than ten years from the date of grant and no dividends
or dividend equivalents shall be paid with respect to any stock appreciation right prior to the exercise of the stock appreciation right.
Stock Awards. The Committee
has the discretion to grant stock awards to participants. Stock awards will consist of shares of common stock granted without any consideration
from the participant or shares sold to the participant for appropriate consideration as determined by the Board. The number of shares
awarded to each participant, and the restrictions, terms and conditions of the award, will be at the discretion of the Committee. Subject
to the restrictions, a participant will be a shareholder with respect to the shares awarded to him or her and will have the rights of
a shareholder with respect to the shares, including the right to vote the shares and receive dividends on the shares; provided that dividends
otherwise payable on any stock award subject to restrictions will be held by us and will be paid to the holder of the stock award only
to the extent the restrictions on such stock award lapse.
Stock Units. The Committee
has the discretion to grant stock unit awards to participants. Each stock unit entitles the participant to receive, on a specified date
or event set forth in the award agreement, one share of common stock or cash equal to the fair market value of one share on such date
or event, as provided in the award agreement. The number of stock units awarded to each participant, and the terms and conditions of the
award, will be at the discretion of the Committee. Unless otherwise specified in the award agreement, a participant will not be a shareholder
with respect to the stock units awarded to him prior to the date they are settled in shares of common stock. The award agreement may provide
that until the restrictions on the stock units lapse, the participant will be paid an amount equal to the dividends that would have been
paid had the stock units been actual shares; provided that such dividend equivalents will be held by us and paid only to the extent the
restrictions lapse.
Payment for Stock Options
and Withholding Taxes. The Committee may make one or more of the following methods available for payment of any award, including the
exercise price of a stock option, and for payment of the tax obligation associated with an award: (i) cash; (ii) cash received from a
broker-dealer to whom the holder has submitted an exercise notice together with irrevocable instructions to deliver promptly to us the
amount of sales proceeds from the sale of the shares subject to the award to pay the exercise price or withholding tax; (iii) by directing
us to withhold shares of common stock otherwise issuable in connection with the award having a fair market value equal to the amount required
to be withheld; and (iv) by delivery of previously acquired shares of common stock that are acceptable to the Committee and that have
an aggregate fair market value on the date of exercise equal to the exercise price or withholding tax, or certification of ownership by
attestation of such previously acquired shares.
Provisions Relating to
a “Change in Control” of the Company. Notwithstanding any other provision of the 2019 Plan or any award agreement, in
the event of a “Change in Control” of the company, the Committee has the discretion to provide that all outstanding awards
will become fully exercisable, all restrictions applicable to all awards will terminate or lapse, and performance goals applicable to
any stock awards will be deemed satisfied at the target level. In addition, upon such Change in Control, the Committee has sole discretion
to provide for the purchase of any outstanding stock option for cash equal to the difference between the exercise price and the then fair
market value of the common stock subject to the option had the option been currently exercisable, make such adjustment to any award then
outstanding as the Committee deems appropriate to reflect such Change in Control and cause any such award then outstanding to be assumed
by the acquiring or surviving corporation after such Change in Control.
Amendment of Award Agreements;
Amendment and Termination of the 2019 Plan; Term of the 2019 Plan. The Committee may amend any award agreement at any time, provided
that no amendment may adversely affect the right of any participant under any agreement in any material way without the written consent
of the participant, unless such amendment is required by applicable law, regulation or stock exchange rule.
The Board may terminate, suspend
or amend the 2019 Plan, in whole or in part, from time to time, without the approval of the stockholders, unless such approval is required
by applicable law, regulation or stock exchange rule, and provided that no amendment may adversely affect the right of any participant
under any outstanding award in any material way without the written consent of the participant, unless such amendment is required by applicable
law, regulation or rule of any stock exchange on which the shares are listed.
Notwithstanding the foregoing,
neither the 2019 Plan nor any outstanding award agreement can be amended in a way that results in the repricing of a stock option. Repricing
is broadly defined to include reducing the exercise price of a stock option or stock appreciation right or cancelling a stock option or
stock appreciation right in exchange for cash, other stock options or stock appreciation rights with a lower exercise price or other stock
awards. (This prohibition on repricing without stockholder approval does not apply in case of an equitable adjustment to the awards to
reflect changes in the capital structure of the company or similar events.)
No awards may be granted under
the 2019 Plan on or after the tenth anniversary of the initial effective date of the 2019 Plan.
Outstanding Equity Awards
The following table sets forth certain information
concerning our outstanding equity awards for our named executive officers on June 30, 2024.
Outstanding Equity Awards at Fiscal Year-End
- 2024
| Name |
Number of shares
or units of stock that
have not vested
(#) |
Market value of
shares of units
of stock that
have not vested
($) |
Equity
incentive
plan awards:
Number of unearned
shares, units or
other rights that
have not vested
(#) |
Equity
incentive
plan awards:
Market or payout
value of
unearned
shares, units or
other rights that
have not vested
($) (1) |
| Ardes Johnson |
-- |
-- |
1,280,000 (2) |
3,379,200 |
| Brent Willson |
-- |
-- |
-- |
-- |
| Steve Bond |
-- |
-- |
-- |
-- |
| (1) |
Based on the closing price of the Company’s common stock on June 30, 2024, of $2.64. |
| (2) |
Consists of an RSU award that vests over a four-year period beginning April 29,2024, subject to his continued employment with the Company. |
CERTAIN RELATIONSHIPS AND RELATED PARTY
TRANSACTIONS
Policies and Procedures for Related Party Transactions
Our audit committee charter
provides that our audit committee is responsible for reviewing and approving in advance any related party transaction. This will cover,
with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship,
or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved
exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases
of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees
of indebtedness and employment by us of a related person. In determining whether to approve a proposed transaction, our Audit Committee
will consider all relevant facts and circumstances including: (i) the materiality and character of the related party’s direct or
indirect interest; (ii) the commercial reasonableness of the terms; (iii) the benefit or perceived benefit, or lack thereof, to us; (iv)
the opportunity cost of alternate transactions; and (v) the actual or apparent conflict of interest of the related party.
SECTION
16(A) REPORTS
Section 16(a) of the Exchange
Act requires our directors and executive officers and persons who own more than 10% of the outstanding shares of common stock to file
reports with the SEC disclosing their ownership of common stock at the time they become subject to Section 16(a) and changes in such ownership
that occur during the year. Based solely on a review of copies of such reports furnished to us, or on written representations that no
reports were required, we believe that all directors, executive officers and holders of more than 10% of the common stock complied in
a timely manner with the filing requirements applicable to them with respect to transactions during the year ended June 30, 2024.
PROPOSAL 2: RATIFICATION OF THE APPOINTMENT
OF MALONEBAILEY, LLP
AS THE COMPANY’S INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
FOR THE FISCAL YEAR ENDING JUNE 30, 2025
Stockholders will also be
asked to ratify the Audit Committee’s appointment of MaloneBailey, LLP to audit the books and accounts of the Company for the fiscal
year ending June 30, 2025. MaloneBailey, LLP has served as the Company’s independent registered public accounting firm since inception.
A representative of MaloneBailey,
LLP is expected to be present virtually at the Annual Meeting, will have an opportunity to make a statement if he or she desires to do
so, and will be available to respond to appropriate questions.
Because your vote is advisory,
it will not be binding upon the Audit Committee, overrule any decision made by the Audit Committee, or create or imply any additional
fiduciary duty by the Audit Committee. The Audit Committee may, however, take into account the outcome of the vote when considering future
auditor appointments.
Audit Fees and Services
Aggregate fees for professional
services rendered by MaloneBailey, LLP for their services for the fiscal years ended June 30, 2024 and 2023, respectively, were as follows:
| | |
2024 | | |
2023 | |
| Audit Fees | |
$ | 128,618 | | |
$ | 119,818 | |
| Audit-related fees | |
| – | | |
| 35,000 | |
| Tax fees | |
| 3,090 | | |
| 2,500 | |
| All other fees | |
| – | | |
| – | |
| TOTAL | |
$ | 131,708 | | |
$ | 157,318 | |
Audit Fees
Audit fees represent the aggregate
fees billed for professional services rendered by our independent accounting firm for the audit of our annual financial statements, review
of financial statements included in our quarterly reports, or services that are normally provided in connection with statutory and regulatory
filings or engagements for those fiscal years.
Audit-Related Fees
Audit-related fees represent
the aggregate fees billed for reviews of registration statements as well as assurance and related services that are reasonably related
to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.”
Tax Fees
Tax fees represent the aggregate
fees billed for professional services rendered by our principal accountants for tax compliance, tax advice, and tax planning for such
years.
All Other Fees
All other fees represent the
aggregate fees billed for products and services other than the services reported in the other categories.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee on an
annual basis reviews audit and non-audit services performed by the independent auditors. All audit and non-audit services are pre-approved
by the Audit Committee, which considers, among other things, the possible effect of the performance of such services on the auditors’
independence.
All services provided by the
independent auditors during the years ended June 30, 2024, and 2023 were approved by the Audit Committee in accordance with our pre-approval
policy and applicable SEC regulations.
PROPOSAL 3: TO APPROVE THE AMENDMENT TO THE
NEOVOLTA, INC. 2019 STOCK PLAN
Our Board and the Compensation
Committee of the Board approved an increase in number of shares of common stock authorized for issuance under the NeoVolta, Inc. 2019
Stock Plan (the “Existing 2019 Plan”) by 5,000,000 shares, subject to the receipt of stockholder approval, which the Company
is seeking at this stockholders’ meeting. The complete text of the amendment is set forth in the NeoVolta, Inc. 2019 Stock Plan,
as amended, a copy of which is attached as Annex A to this proxy statement (the “Amended 2019 Plan”).
Overview
Equity awards have been historically
and, we believe, will continue to be, an integral component of our overall compensation program for our employees, directors, and consultants.
We utilize our Existing 2019 Plan for awards, but this plan no longer has sufficient shares for issuance. As of the Record Date, our Existing
2019 Plan has 507,377 shares available for issuance. Approval of the Amended 2019 Plan will allow us to continue to grant equity awards
at levels we determine to be appropriate in order to attract new employees and directors, retain our existing employees and directors,
and to provide incentives for such persons to exert maximum efforts for our success. The Amended 2019 Plan will allow us to continue to
utilize a broad array of equity incentives with flexibility in designing equity incentives, including stock option grants, stock appreciation
rights, stock awards, and stock unit awards.
We believe it is critical
for our long-term success that the interests of our employees and directors are tied to our success as “owners” of our business.
The equity incentive programs we have in place are intended to build stockholder value by attracting and retaining talented employees
and directors. We believe we must continue to offer competitive equity compensation packages in order to retain and motivate the talent
necessary for our continued growth and success. We carefully monitor the equity compensation and equity holdings of our employees, directors
and consultants as well as the type of equity awards we grant to ensure these awards continue to provide incentives for the recipients
to work towards our success. To date, [stock options and restricted stock units] have been the sole component of our equity program. The
potential value of stock options is realized only if our share price increases, and so stock options provide a strong incentive for individuals
to work to build stockholder value.
We have and we expect to continue
to experience some growth in personnel as we progress our business and advance our drug candidates through clinical trials. Additionally,
we aim to conserve cash for clinical trials and use equity as a significant part of our employee compensation. If our stockholders do
not approve the Amended 2019 Plan we believe that we will be unable to successfully use equity as part of our compensation program, as
most of our competitors in the industry do, putting us at a significant disadvantage. Additionally, we would then have to utilize more
cash to compensate our employees. Therefore, we believe that approval of this request is in the best interest of our stockholders and
our company.
Key Features Designed to Protect Stockholders’ Interests
The design of the Amended
2019 Plan reflects our commitment to corporate governance and the desire to preserve stockholder value as demonstrated by the following
features of the plan:
Independent administrator.
The Compensation Committee of the board of directors, which is comprised of at least two non-employee directors, will administer the Amended
2019 Plan.
No evergreen feature.
The maximum number of shares available for issuance under the Amended 2019 Plan is fixed and cannot be increased without stockholder approval.
Repricing prohibited.
Stockholder approval is required for any repricing of any stock options or stock appreciation rights.
Limitations on Dividend
Payments on Awards. Dividends and dividend equivalents on all stock units and stock awards are paid only to the extent the awards
vest, and no dividends or dividend equivalents are ever paid on stock options or stock appreciation rights prior to exercise.
No discount awards; maximum
term specified. Stock options and stock appreciation rights must have an exercise price or base price no less than the fair market
value on the date the award is granted and a term no longer than ten years’ duration.
Award design flexibility.
Different kinds of awards may be granted under the Amended 2019 Plan, giving us the flexibility to design our equity incentives to compliment
the other elements of compensation and to support the attainment of our strategic goals.
Share counting. The
number of shares available for grant under the Amended 2019 Plan is reduced by the gross number of shares subject to awards, and shares
withheld for taxes in connection with awards or tendered in payment of an option’s exercise price cannot be used for future grants.
Non-employee director limits.
The 2019 Plan contains a limit on the compensation that may be paid to any non-employee member of our Board in any calendar year.
No tax gross-ups. The
Amended 2019 Plan does not provide for tax gross-ups.
Fixed term. The Amended
2019 Plan has a fixed term of ten years from its initial effective date, or February 21, 2029.
Description of the Amended 2019 Plan
The Amended 2019 Plan is a
stock-based compensation plan that provides for discretionary grants of stock options, stock awards, stock unit awards and stock appreciation
rights to key employees, non-employee directors and consultants. The material features of the Amended 2019 Plan are outlined below. The
following description of the Amended 2019 Plan is a summary only and is qualified in its entirety by reference to the complete text of
the Amended 2019 Plan. Stockholders are urged to read the actual text of the Amended 2019 Plan in its entirety, which is appended to this
Proxy Statement as Annex A.
Administration. The
Amended 2019 Plan is administered by our board of directors or, once established, the compensation committee of the board of directors
(we refer to the body administering the Amended 2019 Plan as the “Committee”). The Committee has full authority to select
the individuals who will receive awards under the Amended 2019 Plan, determine the form and amount of each of the awards to be granted
and establish the terms and conditions of awards.
Limit on Non-Employee Director
Compensation. Under the Amended 2019 Plan, the following limits apply to non-employee directors. The aggregate value of all compensation
granted or paid, as applicable, to any individual for service as a non-employee director with respect to any calendar year, including
awards granted under the Amended 2019 Plan and cash fees paid to such non-employee director, will not exceed $300,000 in total value.
For purposes of these limitations, the value of awards is calculated based on the grant date fair value of such awards for financial reporting
purposes.
Number of Shares of Common
Stock. Assuming this proposal is approved, the number of shares of the common stock that may be issued under the Amended 2019 Plan
is 7,500,000. If there is a lapse, forfeiture, expiration, termination, or cancellation of any award made under the Amended 2019 Plan
for any reason, the shares subject to the award will again be available for issuance. Any shares subject to an award that are delivered
to us by a participant, or withheld by us on behalf of a participant, as payment for an award or payment of withholding taxes due in connection
with an award will not again be available for issuance, and all such shares will count toward the number of shares issued under the Amended
2019 Plan. The number of shares of common stock issuable under the Amended 2019 Plan is subject to adjustment, in the event of any reorganization,
recapitalization, stock split, stock distribution, merger, consolidation, split-up, spin-off, combination, subdivision, consolidation
or exchange of shares, any change in the capital structure of the company or any similar corporate transaction. In each case, the Committee
has the discretion to make adjustments it deems necessary to preserve the intended benefits under the Amended 2019 Plan. No award granted
under the Amended 2019 Plan may be transferred, except by will, the laws of descent and distribution.
Eligibility. All employees
designated as key employees for purposes of the Amended 2019 Plan, all non-employee directors and consultants are eligible to receive
awards under the Amended 2019 Plan.
Awards to Participants.
The Amended 2019 Plan provides for discretionary awards of stock options, stock awards, stock unit awards and stock appreciation rights
to participants. Each award made under the Amended 2019 Plan will be evidenced by a written award agreement specifying the terms and conditions
of the award as determined by the Committee in its sole discretion, consistent with the terms of the Amended 2019 Plan.
Stock Options. The
Committee has the discretion to grant non-qualified stock options or incentive stock options to participants and to set the terms and
conditions applicable to the options, including the type of option, the number of shares subject to the option and the vesting schedule;
provided that the exercise price of each stock option will be the closing price of the common stock on the date on which the option is
granted (“fair market value”), each option will expire ten years from the date of grant and no dividend equivalents may be
paid with respect to stock options.
In addition, an incentive
stock option granted to a key employee is subject to the following rules: (i) the aggregate fair market value (determined at the time
the option is granted) of the shares of common stock with respect to which incentive stock options are exercisable for the first time
by a key employee during any calendar year (under all incentive stock option plans of the company and its subsidiaries) cannot exceed
$100,000, and if this limitation is exceeded, that portion of the incentive stock option that does not exceed the applicable dollar limit
will be an incentive stock option and the remainder will be a non-qualified stock option; (ii) if an incentive stock option is granted
to a key employee who owns stock possessing more than 10% of the total combined voting power of all class of stock of the company, the
exercise price of the incentive stock option will be 110% of the closing price of the common stock on the date of grant and the incentive
stock option will expire no later than five years from the date of grant; and (iii) no incentive stock option can be granted after ten
years from the date the Amended 2019 Plan was adopted.
Stock Appreciation Rights.
The Committee has the discretion to grant stock appreciation rights to participants. The Committee determines the exercise price for a
stock appreciation right, which cannot be less than 100% of the fair market value of our common stock on the date of grant. Upon the exercise
of a stock appreciation right, we will pay the participant in common stock or in cash, at our discretion, an amount equal to the product
of (1) the excess of the per share fair market value of our common stock on the date of exercise over the exercise price, multiplied by
(2) the number of shares of common stock with respect to which the stock appreciation right is exercised. The Committee has the discretion
to set the terms and conditions applicable to the award, including the number of shares subject to the stock appreciation right and the
vesting schedule, provided that each stock appreciation right will expire not more than ten years from the date of grant and no dividends
or dividend equivalents shall be paid with respect to any stock appreciation right prior to the exercise of the stock appreciation right.
Stock Awards. The Committee
has the discretion to grant stock awards to participants. Stock awards will consist of shares of common stock granted without any consideration
from the participant or shares sold to the participant for appropriate consideration as determined by the Board. The number of shares
awarded to each participant, and the restrictions, terms and conditions of the award, will be at the discretion of the Committee. Subject
to the restrictions, a participant will be a shareholder with respect to the shares awarded to him or her and will have the rights of
a shareholder with respect to the shares, including the right to vote the shares and receive dividends on the shares; provided that dividends
otherwise payable on any stock award subject to restrictions will be held by us and will be paid to the holder of the stock award only
to the extent the restrictions on such stock award lapse.
Stock Units. The Committee
has the discretion to grant stock unit awards to participants. Each stock unit entitles the participant to receive, on a specified date
or event set forth in the award agreement, one share of common stock or cash equal to the fair market value of one share on such date
or event, as provided in the award agreement. The number of stock units awarded to each participant, and the terms and conditions of the
award, will be at the discretion of the Committee. Unless otherwise specified in the award agreement, a participant will not be a shareholder
with respect to the stock units awarded to him prior to the date they are settled in shares of common stock. The award agreement may provide
that until the restrictions on the stock units lapse, the participant will be paid an amount equal to the dividends that would have been
paid had the stock units been actual shares; provided that such dividend equivalents will be held by us and paid only to the extent the
restrictions lapse.
Payment for Stock Options
and Withholding Taxes. The Committee may make one or more of the following methods available for payment of any award, including the
exercise price of a stock option, and for payment of the tax obligation associated with an award: (i) cash; (ii) cash received from a
broker-dealer to whom the holder has submitted an exercise notice together with irrevocable instructions to deliver promptly to us the
amount of sales proceeds from the sale of the shares subject to the award to pay the exercise price or withholding tax; (iii) by directing
us to withhold shares of common stock otherwise issuable in connection with the award having a fair market value equal to the amount required
to be withheld; and (iv) by delivery of previously acquired shares of common stock that are acceptable to the Committee and that have
an aggregate fair market value on the date of exercise equal to the exercise price or withholding tax, or certification of ownership by
attestation of such previously acquired shares.
Provisions Relating to
a “Change in Control” of the Company. Notwithstanding any other provision of the Amended 2019 Plan or any award agreement,
in the event of a “Change in Control” of the company, the Committee has the discretion to provide that all outstanding awards
will become fully exercisable, all restrictions applicable to all awards will terminate or lapse, and performance goals applicable to
any stock awards will be deemed satisfied at the target level. In addition, upon such Change in Control, the Committee has sole discretion
to provide for the purchase of any outstanding stock option for cash equal to the difference between the exercise price and the then fair
market value of the common stock subject to the option had the option been currently exercisable, make such adjustment to any award then
outstanding as the Committee deems appropriate to reflect such Change in Control and cause any such award then outstanding to be assumed
by the acquiring or surviving corporation after such Change in Control.
Amendment of Award Agreements;
Amendment and Termination of the Amended 2019 Plan; Term of the Amended 2019 Plan. The Committee may amend any award agreement at
any time, provided that no amendment may adversely affect the right of any participant under any agreement in any material way without
the written consent of the participant, unless such amendment is required by applicable law, regulation or stock exchange rule.
The Board may terminate, suspend
or amend the 2019 Plan, in whole or in part, from time to time, without the approval of the stockholders, unless such approval is required
by applicable law, regulation or stock exchange rule, and provided that no amendment may adversely affect the right of any participant
under any outstanding award in any material way without the written consent of the participant, unless such amendment is required by applicable
law, regulation or rule of any stock exchange on which the shares are listed.
Notwithstanding the foregoing,
neither the Amended 2019 Plan nor any outstanding award agreement can be amended in a way that results in the repricing of a stock option.
Repricing is broadly defined to include reducing the exercise price of a stock option or stock appreciation right or cancelling a stock
option or stock appreciation right in exchange for cash, other stock options or stock appreciation rights with a lower exercise price
or other stock awards. (This prohibition on repricing without stockholder approval does not apply in case of an equitable adjustment to
the awards to reflect changes in the capital structure of the company or similar events.)
No awards may be granted under
the Amended 2019 Plan on or after the tenth anniversary of the initial effective date of the Amended 2019 Plan.
U.S. Federal Income Tax Consequences
The information set forth
below is a summary only and does not purport to be complete. The information is based upon current U.S. federal income tax rules and therefore
is subject to change when those rules change. Because the tax consequences to any recipient of an award may depend on his or her particular
situation, each recipient should consult the recipient’s tax adviser regarding the federal, state, local, and other tax consequences
of the grant or exercise of an award or the disposition of shares acquired as a result of an award. The 2019 Plan will not be qualified
under the provisions of section 401(a) of the Code and will not be subject to any of the provisions of the Employee Retirement Income
Security Act of 1974, as amended.
Non-Qualified Stock
Options. A participant will not recognize any income at the time of grant. On the date the participant exercises the non-qualified
stock option, the participant will recognize ordinary income in an amount equal to the excess of the fair market value of the shares on
the date of exercise over the exercise price. The participant will be responsible for remitting to us the withholding tax obligation that
arises at the time the option is exercised. We generally will receive a tax deduction for the same amount of ordinary income recognized
by the participant. When the participant sells these shares, any gain or loss recognized by the participant is treated as either short-term
or long-term capital gain or loss depending on whether the participant has held the shares more than one year.
Incentive Stock Options. A
participant will not recognize any income at the time of grant. If the participant is issued shares pursuant to the exercise of an incentive
stock option, and if the participant does not make a disqualifying disposition of the shares within one year after the date of exercise
or within two years after the date of grant, the participant will not recognize any income, for federal income tax purposes, at the time
of the exercise. When the participant sells the shares issued pursuant to the incentive stock option, the participant will be taxed, for
federal income tax purposes, as a long-term capital gain on any amount recognized by the participant in excess of the exercise price,
and any loss sustained by the participant will be a long-term capital loss. No deduction will be allowed to us for federal income tax
purposes. If, however, the participant sells the shares before the expiration of the holding periods, the participant will recognize ordinary
income on the difference between the exercise price and the fair market value at exercise, and we generally will receive a tax deduction
in the same amount. Upon exercise of an incentive stock option, the excess of the fair market value over the exercise price is an item
of tax preference to the participant for purposes of determining the alternative minimum tax.
In order to qualify as an
incentive stock option, the option must be exercised within three months after the participant’s termination of employment for any
reason other than death or disability and within one year after termination of the participant’s employment due to disability. If
the option is not exercised within this time period, it will be treated as a non-qualified stock option and taxed accordingly.
Stock Awards/Stock Units. If
a participant receives a stock award, the participant will recognize ordinary income upon becoming entitled to transfer the shares at
the end of the restriction period without forfeiture. A participant generally will recognize ordinary income when he receives cash or
shares pursuant to the settlement of stock units, provided that if the shares are subject to any further restrictions on transfer, the
participant will recognize ordinary income upon becoming entitled to transfer the shares at the end of the restriction period without
forfeiture. The amount of income the participant recognizes will be equal to the fair market value of the shares on such date, or the
amount of cash received less the amount paid by the participant for the shares. This amount will also be the participant’s tax basis
for the shares. The participant will be responsible for remitting to us the withholding tax obligation that arises at the time the ordinary
income is recognized. In addition, the holding period begins on the day the restrictions lapse, or the date the shares are received if
not subject to any restrictions, for purposes of determining whether the participant has long-term or short-term capital gain or loss
on a subsequent sale of the shares. We generally will be entitled to a deduction with respect to the ordinary income recognized by the
participant.
If a participant who receives
a stock award subject to restrictions makes an election under Section 83(b) of the Code within 30 days after the date of the grant, the
participant will have ordinary income equal to the fair market value on the date of grant, less the amount paid by the participant for
the shares, and the participant will recognize no additional income until the participant subsequently sells the shares. The participant
will be responsible for remitting to us the withholding tax obligation that arises at the time the ordinary income is recognized. When
the participant sells the shares, the tax basis will be equal to the fair market value on the date of grant and the holding period for
capital gains purposes begins on the date of the grant. If the participant forfeits the shares subject to the Section 83(b) election,
the participant will not be entitled to any deduction, refund, or loss for tax purposes (other than a capital loss with respect to the
amount previously paid by the participant), and we will have to include the amount that was previously deducted from our gross income
in the taxable year of the forfeiture.
Stock Appreciation Rights.
A participant will not recognize any income at the time of the grant of a stock appreciation right. Upon exercise of the stock appreciation
right, the participant will recognize ordinary income equal to the amount received upon exercise. The participant will be responsible
for remitting to us the withholding tax obligation that arises at the time the ordinary income is recognized. We generally will be entitled
to a deduction with respect to the ordinary income recognized by the participant.
Awards Granted Under the Amended 2019 Plan
Awards Granted Under the 2019 Plan
The following awards have been granted
under the 2019 Plan:
| Name and Position |
Number of Units |
| Ardes Johnson, Chief Executive Officer |
1,280,000 RSUs |
| Brent Willson, Chairman and Chief Technology Officer |
- |
| Steve Bond, Chief Financial Officer |
- |
| Executive Group: |
1,280,000 RSUs |
| Non-Executive Director Group: |
- |
| Non-Executive Officer Employee Group: |
- |
Vote Required and Recommendation of the Board
of Directors
The approval of Proposal 3
requires the affirmative vote of the holders of a majority in voting power of the votes cast (excluding abstentions and broker non-votes) on
the matter. Broker non-votes and abstentions will not be taken into account in determining the outcome of the proposal.
The Board recommends that stockholders vote
FOR the approval of the Amended 2019 Plan.
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
FOR THE 2024 ANNUAL MEETING
Stockholder Proposals
Business must be properly
brought before an annual meeting in order to be considered by stockholders. Any stockholder desiring to present a proposal pursuant to
Rule 14a-8 of the Exchange Act to be included in the definitive proxy statement and voted on by the stockholders at the 2025 Annual Meeting
of stockholders must submit a written proposal, including all supporting information, to the Company at its principal executive offices
no later than July 3, 2025, which is 120 days prior to the anniversary date that we released the notice of meeting and this Proxy Statement
to our stockholders for the Annual Meeting, and must meet all other requirements for inclusion in the proxy statement.
As provided in our Bylaws,
if a stockholder intends to present a proposal for new business to be considered at the 2025 Annual Meeting of stockholders but does not
seek inclusion of the proposal in the Company’s proxy statement for that meeting, then such proposal, including all supporting information,
must be delivered to and received by the Company at our principal executive offices no earlier than July 3, 2025, which is 120 days prior
to the anniversary date that we released the notice of meeting and this Proxy Statement to our stockholders for the Annual Meeting.
Director Nominations
The Company’s Bylaws
govern the submission of nominations for directors that a stockholder wishes to have considered at a meeting of stockholders, but that
are not included in the Company’s proxy materials. To nominate a director under our Bylaws, stockholders must submit a written proposal,
including all supporting information, to the Company at its principal executive offices not less than 120 days prior to the one-year anniversary
date of the Company’s notice of meeting and this Proxy Statement, the notice must contain the information required by our Bylaws,
and the stockholder must be entitled to vote and comply with other applicable requirements set forth in our Bylaws. Accordingly, we must
receive notice of director nominations proposed by stockholders pursuant to our Bylaws for the 2025 Annual Meeting of Stockholders no
later than July 3, 2025.
In addition to satisfying
the foregoing requirements under our Bylaws, stockholders who intend to solicit proxies in support of director nominees other than our
nominees must comply with the additional requirements of Rule 14a-19(b) under the Exchange Act to comply with the universal proxy rules.
The requirements under the universal proxy rules are in addition to the applicable procedural requirements under our Bylaws described
above.
OTHER BUSINESS
As of the date of this Proxy
Statement, management does not know of any other matters that will be brought before the Annual Meeting requiring action of the stockholders.
However, if any other matters requiring the vote of the stockholders properly come before the Annual Meeting, it is the intention of the
persons named in the enclosed form of proxy to vote the proxies in accordance with the discretion of management. The persons designated
as proxies will also have the right to approve any and all adjournments of the Annual Meeting for any reason.
STOCKHOLDERS SHARING THE SAME ADDRESS
The SEC has adopted rules
that permit companies and intermediaries (such as brokers, banks and other nominees) to implement a delivery procedure called “householding.”
Under this procedure, multiple stockholders who reside at the same address may receive a single copy of the Proxy Statement, the 2024
Annual Report and other proxy materials, unless the affected stockholder has provided contrary instructions. This procedure reduces printing
costs and postage fees.
Under applicable law, if you
consented or were deemed to have consented, your broker, bank or other intermediary may send only one copy of the Proxy Statement, the
2024 Annual Report, and other proxy materials to your address for all residents that own shares of the Company’s common stock in
street name. If you wish to revoke your consent to householding, you must contact your broker, bank or other intermediary. If you are
receiving multiple copies of the Proxy Statement, the 2024 Annual Report, and other proxy materials, you may be able to request householding
by contacting your broker, bank or other intermediary. Upon written or oral request, we will promptly deliver a separate set of the Proxy
Statement, the 2024 Annual Report or other proxy materials to any beneficial owner at a shared address to which a single copy of any of
those documents was delivered. If you wish to request copies free of charge of the Proxy Statement, the 2024 Annual Report or other proxy
materials, please send your request to Investor Relations, NeoVolta, Inc., 13651 Danielson Street, Suite A, Poway, California 92064 or
call the Company with your request at (800) 364-5464.
By Order of the Board of Directors,
/s/ Brent Willson
Director and Chief Executive Officer
October 31, 2024
Annex A
NEOVOLTA, INC.
2019 STOCK PLAN
(Amended and restated as of December 10,
2024)
______________________
Section 1.
Establishment and Purpose.
1.1
The Board of Directors of NeoVolta, Inc. (the “Company”) previously established the NeoVolta, Inc. 2019 Stock Plan
(as amended and restated, the “Plan”) effective as of February 21, 2019. On October 29, 2024, the Board of Directors of the
Company adopted an amendment to the Plan, subject to approval by the Company’s stockholders at the Company’s annual meeting
on December 10, 2024 Awards granted prior to the effective date of the Plan’s amendment and restatement shall be governed by the
terms of the Plan as in effect on the grant date of the award.
1.2
The purpose of the Plan is to attract and retain outstanding individuals as Key Employees, Directors and Consultants of the Company
and its Subsidiaries, to recognize the contributions made to the Company and its Subsidiaries by Key Employees, Directors and Consultants,
and to provide such Key Employees, Directors and Consultants with additional incentive to expand and improve the profits and achieve the
objectives of the Company and its Subsidiaries, by providing such Key Employees, Directors and Consultants with the opportunity to acquire
or increase their proprietary interest in the Company through receipt of Awards.
Section 2.
Definitions.
As used in the Plan, the following
terms shall have the meanings set forth below:
2.1
“Award” means any award or benefit granted under the Plan, which shall be a Stock Option, a Stock Award, a Stock
Unit Award or an SAR.
2.2
“Award Agreement” means, as applicable, a Stock Option Agreement, Stock Award Agreement, Stock Unit Award Agreement
or SAR Agreement evidencing an Award granted under the Plan.
2.3
“Board” means the Board of Directors of the Company.
2.4
“Change in Control” has the meaning set forth in Section 8.2 of the Plan.
2.5
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
2.6
“Committee” means the Compensation Committee of the Board or such other committee as may be designated by the
Board from time to time to administer the Plan, or, if no such committee has been designated at the time of any grants, it shall mean
the Board.
2.7
“Common Stock” means the Common Stock, par value $0.001 per share, of the Company.
2.8
“Company” means NeoVolta, Inc., a Nevada corporation.
2.9
“Consultant” means any person, including an advisor, who is engaged by the Company or an affiliate to render
consulting or advisory services and is compensated for such services. However, service solely as a Director, or payment of a fee for such
service, will not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing,
a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to
register either the offer or the sale of the Company’s securities to such person.
2.10
“Director” means a director of the Company who is not an employee of the Company or a Subsidiary.
2.11
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
2.12
“Fair Market Value” means as of any date, the closing price of a share of Common Stock on the national securities
exchange on which the Common Stock is listed, or, if the Common Stock is not listed on a national securities exchange, the over-the-counter
market on which the Common Stock trades, or, if the Common Stock is not listed on a national securities exchange or an over-the-counter
market, as determined by the Board as of such date, or, if no trading occurred on such date, as of the trading day immediately preceding
such date.
2.13
“Incentive Stock Option” or “ISO” means a Stock Option granted under Section 5 of the Plan
that meets the requirements of Section 422(b) of the Code or any successor provision.
2.14
“Key Employee” means an employee of the Company or any Subsidiary selected to participate in the Plan in accordance
with Section 3. A Key Employee may also include a person who is granted an Award (other than an Incentive Stock Option) in connection
with the hiring of the person prior to the date the person becomes an employee of the Company or any Subsidiary, provided that such Award
shall not vest prior to the commencement of employment.
2.15
“Non-Qualified Stock Option” or “NSO” means a Stock Option granted under Section 5 of the
Plan that is not an Incentive Stock Option.
2.16
“Participant” means a Key Employee, Director or Consultant selected to receive an Award under the Plan.
2.17
“Plan” means the NeoVolta, Inc. 2019 Stock Plan.
2.18
“Stock Appreciation Right” or “SAR” means a grant of a right to receive shares of Common
Stock or cash under Section 8 of the Plan.
2.19
“Stock Award” means a grant of shares of Common Stock under Section 6 of the Plan.
2.20
“Stock Option” means an Incentive Stock Option or a Non-Qualified Stock Option granted under Section 5 of the
Plan.
2.21
“Stock Unit Award” means a grant of a right to receive shares of Common Stock or cash under Section 7 of the
Plan.
2.22
“Subsidiary” means an entity of which the Company is the direct or indirect beneficial owner of not less than
50% of all issued and outstanding equity interest of such entity.
Section 3.
Administration.
3.1
The Board.
The Plan shall be administered
by the Committee, which shall be comprised of at least two members of the Board who satisfy the “non-employee director” definition
set forth in Rule 16b-3 under the Exchange Act, unless the Board otherwise determines.
3.2
Authority of the Committee.
(a)
The Committee, in its sole discretion, shall determine the Key Employees and Directors to whom, and the time or times at which
Awards will be granted, the form and amount of each Award, the expiration date of each Award, the time or times within which the Awards
may be exercised, the cancellation of the Awards and the other limitations, restrictions, terms and conditions applicable to the grant
of the Awards. The terms and conditions of the Awards need not be the same with respect to each Participant or with respect to each Award.
(b)
To the extent permitted by applicable law, regulation, and rules of a stock exchange on which the Common Stock is listed or traded,
the Committee may delegate its authority to grant Awards to Key Employees and to determine the terms and conditions thereof to such officer
of the Company as it may determine in its discretion, on such terms and conditions as it may impose, except with respect to Awards to
officers subject to Section 16 of the Exchange Act.
(c)
The Committee may, subject to the provisions of the Plan, establish such rules and regulations as it deems necessary or advisable
for the proper administration of the Plan, and may make determinations and may take such other action in connection with or in relation
to the Plan as it deems necessary or advisable. Each determination or other action made or taken pursuant to the Plan, including interpretation
of the Plan and the specific terms and conditions of the Awards granted hereunder, shall be final and conclusive for all purposes and
upon all persons.
(d)
No member of the Board or the Committee shall be liable for any action taken or determination made hereunder in good faith. Service
on the Committee shall constitute service as a Director so that the members of the Committee shall be entitled to indemnification and
reimbursement as Directors of the Company pursuant to the Company’s Certificate of Incorporation and By-Laws.
3.3
Award Agreements.
(a)
Each Award shall be evidenced by a written Award Agreement specifying the terms and conditions of the Award. In the sole discretion
of the Committee, the Award Agreement may condition the grant of an Award upon the Participant’s entering into one or more of the
following agreements with the Company: (i) an agreement not to compete with the Company and its Subsidiaries which shall become effective
as of the date of the grant of the Award and remain in effect for a specified period of time following termination of the Participant’s
employment with the Company; (ii) an agreement to cancel any employment agreement, fringe benefit or compensation arrangement in effect
between the Company and the Participant; and (iii) an agreement to retain the confidentiality of certain information. Such agreements
may contain such other terms and conditions as the Committee shall determine. If the Participant shall fail to enter into any such agreement
at the request of the Committee, then the Award granted or to be granted to such Participant shall be forfeited and cancelled.
Section 4.
Shares of Common Stock Subject to Plan.
4.1
Total Number of Shares.
(a)
The total number of shares of Common Stock that may be issued under the Plan shall be 7,500,000 (which reflects the 2,500,000 shares
previously authorized under the Plan and 5,000,000 shares to be issued under the Plan pursuant to this amendment and restatement). Such
shares may be either authorized but unissued shares or treasury shares, and shall be adjusted in accordance with the provisions of Section
4.3 of the Plan.
(b)
The number of shares of Common Stock delivered by a Participant or withheld by the Company on behalf of any such Participant as
full or partial payment of an Award, including the exercise price of a Stock Option or of any required withholding taxes, shall not again
be available for issuance pursuant to subsequent Awards, and shall count towards the aggregate number of shares of Common Stock that may
be issued under the Plan. Any shares of Common Stock purchased by the Company with proceeds from a Stock Option exercise shall not again
be available for issuance pursuant to subsequent Awards, shall count against the aggregate number of shares that may be issued under the
Plan and shall not increase the number of shares available under the Plan.
(c)
If there is a lapse, forfeiture, expiration, termination or cancellation of any Award for any reason (including for reasons described
in Section 3.3), or if shares of Common Stock are issued under such Award and thereafter are reacquired by the Company pursuant to rights
reserved by the Company upon issuance thereof, the shares of Common Stock subject to such Award or reacquired by the Company shall again
be available for issuance pursuant to subsequent Awards, and shall not count towards the aggregate number of shares of Common Stock that
may be issued under the Plan.
4.2
Shares Under Awards.
Of the shares of Common Stock
authorized for issuance under the Plan pursuant to Section 4.1:
(a)
The maximum number of shares of Common Stock as to which a Key Employee may receive Stock Options or SARs in any calendar year
is 1,500,000, except that the maximum number of shares of Common Stock as to which a Key Employee may receive Stock Options or SARs in
the calendar year in which such Key Employee begins employment with the Company or its Subsidiaries is 1,000,000.
(b)
The maximum number of shares of Common Stock that may be subject to Stock Options (ISOs and/or NSOs) is 7,500,000.
(c)
The maximum number of shares of Common Stock that may be used for Stock Awards and/or Stock Unit Awards that may be granted to
any Key Employee in any calendar year is 1,500,000, or, in the event the Award is settled in cash, an amount equal to the Fair Market
Value of such number of shares on the date on which the Award is settled.
(d)
The maximum number of shares of Common Stock subject to Awards granted under the Plan or otherwise during any one calendar year
to any Director, taken together with any cash fees paid by the Company to such Director during such calendar year for service on the Board,
will not exceed $300,000 in total value (calculating the value of any such Awards based on the grant date fair value of such Awards for
financial reporting purposes).
The numbers of shares described
herein shall be as adjusted in accordance with Section 4.3 of the Plan.
4.3
Adjustment.
In the event of any reorganization,
recapitalization, stock split, stock distribution, merger, consolidation, split-up, spin-off, combination, subdivision, consolidation
or exchange of shares, any change in the capital structure of the Company or any similar corporate transaction, the Committee shall make
such adjustments as it deems appropriate, in its sole discretion, to preserve the benefits or intended benefits of the Plan and Awards
granted under the Plan. Such adjustments may include: (a) adjustment in the number and kind of shares reserved for issuance under the
Plan; (b) adjustment in the number and kind of shares covered by outstanding Awards; (c) adjustment in the exercise price of outstanding
Stock Options or SARs or the price of Stock Awards or Stock Unit Awards under the Plan; (d) adjustments to any of the shares limitations
set forth in Section 4.1 or 4.2 of the Plan; and (e) any other changes that the Committee determines to be equitable under the circumstances.
Section 5.
Grants of Stock Options.
5.1
Grant.
Subject to the terms of the
Plan, the Committee may from time to time grant Stock Options to Participants. Unless otherwise expressly provided at the time of the
grant, Stock Options granted under the Plan to Key Employees will be NSOs. Stock Options granted under the Plan to Directors who are not
employees of the Company or any Subsidiary will be NSOs.
5.2
Stock Option Agreement.
The grant of each Stock Option
shall be evidenced by a written Stock Option Agreement specifying the type of Stock Option granted, the exercise period, the exercise
price, the terms for payment of the exercise price, the expiration date of the Stock Option, the number of shares of Common Stock to be
subject to each Stock Option and such other terms and conditions established by the Committee, in its sole discretion, not inconsistent
with the Plan.
5.3
Exercise Price and Exercise Period.
With respect to each Stock
Option granted to a Participant:
(a)
The per share exercise price of each Stock Option shall be the Fair Market Value of the Common Stock subject to the Stock Option
on the date on which the Stock Option is granted.
(b)
Each Stock Option shall become exercisable as provided in the Stock Option Agreement; provided that the Committee shall have the
discretion to accelerate the date as of which any Stock Option shall become exercisable in the event of the Participant’s termination
of employment with the Company, or service on the Board, without cause (as determined by the Board in its sole discretion).
(c)
No dividends or dividend equivalents shall be paid with respect to any shares subject to a Stock Option prior to the exercise of
the Stock Option.
(d)
Each Stock Option shall expire, and all rights to purchase shares of Common Stock thereunder shall expire, on the date ten years
after the date of grant.
5.4
Required Terms and Conditions of ISOs.
In addition to the foregoing,
each ISO granted to a Key Employee shall be subject to the following specific rules:
(a)
The aggregate Fair Market Value (determined with respect to each ISO at the time such Option is granted) of the shares of Common
Stock with respect to which ISOs are exercisable for the first time by a Key Employee during any calendar year (under all incentive stock
option plans of the Company and its Subsidiaries) shall not exceed $100,000. If the aggregate Fair Market Value (determined at the time
of grant) of the Common Stock subject to an ISO which first becomes exercisable in any calendar year exceeds the limitation of this Section
5.4(a), so much of the ISO that does not exceed the applicable dollar limit shall be an ISO and the remainder shall be a NSO; but in all
other respects, the original Stock Option Agreement shall remain in full force and effect.
(b)
Notwithstanding anything herein to the contrary, if an ISO is granted to a Key Employee who owns stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company (or its parent or subsidiaries within the meaning of Section
422(b)(6) of the Code): (i) the purchase price of each share of Common Stock subject to the ISO shall be not less than 110% of the Fair
Market Value of the Common Stock on the date the ISO is granted; and (ii) the ISO shall expire, and all rights to purchase shares of Common
Stock thereunder shall expire, no later than the fifth anniversary of the date the ISO was granted.
(c)
No ISOs shall be granted under the Plan after ten years from the earlier of the date the Plan is adopted or approved by shareholders
of the Company.
5.5
Exercise of Stock Options.
(a)
A Participant entitled to exercise a Stock Option may do so by delivering written notice to that effect specifying the number of
shares of Common Stock with respect to which the Stock Option is being exercised and any other information the Committee may prescribe.
All notices or requests provided for herein shall be delivered to the Chief Financial Officer of the Company.
(b)
The Committee in its sole discretion may make available one or more of the following alternatives for the payment of the Stock
Option exercise price: (i) in cash; (ii) in cash received from a broker-dealer to whom the Participant has submitted an exercise notice
together with irrevocable instructions to deliver promptly to the Company the amount of sales proceeds from the sale of the shares subject
to the Stock Option to pay the exercise price; (iii) by directing the Company to withhold such number of shares of Common Stock otherwise
issuable in connection with the exercise of the Stock Option having an aggregate Fair Market Value equal to the exercise price; (iv) by
delivering previously acquired shares of Common Stock that are acceptable to the Committee and that have an aggregate Fair Market Value
on the date of exercise equal to the Stock Option exercise price; or (v) by certifying to ownership by attestation of such previously
acquired shares of Common Stock.
The Committee shall have the
sole discretion to establish the terms and conditions applicable to any alternative made available for payment of the Stock Option exercise
price.
Section 6.
Stock Awards.
6.1
Grant.
The Committee may, in its
discretion, (a) grant shares of Common Stock under the Plan to any Participant without consideration from such Participant or (b) sell
shares of Common Stock under the Plan to any Participant for such amount of cash, Common Stock or other consideration as the Committee
deems appropriate.
6.2
Stock Award Agreement.
Each share of Common Stock
granted or sold hereunder shall be subject to such restrictions, conditions and other terms as the Board may determine at the time of
grant or sale, the general provisions of the Plan, the restrictions, terms and conditions of the related Stock Award Agreement, and the
following specific rules:
(a)
The Award Agreement shall specify whether the shares of Common Stock are granted or sold to the Participant and such other provisions,
not inconsistent with the terms and conditions of the Plan, as the Committee shall determine.
(b)
The restrictions to which the shares of Common Stock awarded hereunder are subject shall lapse as provided in Stock Award Agreement;
provided that the Committee shall have the discretion to accelerate the date as of which the restrictions lapse with respect to any Award
held by a Participant in the event of the Participant’s termination of employment with the Company, or service on the Board, without
cause (as determined by the Committee in its sole discretion).
(c)
Except as provided in this subsection (c) and unless otherwise set forth in the related Stock Award Agreement, the Participant
receiving a grant of or purchasing Common Stock shall thereupon be a stockholder with respect to such shares and shall have the rights
of a stockholder with respect to such shares, including the right to vote such shares and to receive dividends and other distributions
paid with respect to such shares; provided that any dividends or other distributions payable with respect to the Stock Award shall be
accumulated and held by the Company and paid to the Participant only upon, and to the extent, the restrictions lapse in accordance with
the terms of the applicable Stock Award Agreement. Any such dividends or other distributions held by the Company attributable to the portion
of a Stock Award that is forfeited shall also be forfeited.
Section 7.
Stock Unit Awards.
7.1
Grant.
The Committee may, in its
discretion, grant Stock Unit Awards to any Participant. Each Stock Unit subject to the Award shall entitle the Participant to receive,
on the date or the occurrence of an event (including the attainment of performance goals) as described in the Stock Unit Award Agreement,
a share of Common Stock or cash equal to the Fair Market Value of a share of Common Stock on the date of such event as provided in the
Stock Unit Award Agreement.
7.2
Stock Unit Agreement.
Each Stock Unit Award shall
be subject to such restrictions, conditions and other terms as the Committee may determine at the time of grant, the general provisions
of the Plan, the restrictions, terms and conditions of the related Stock Unit Award Agreement and the following specific rules:
(a)
The Stock Unit Agreement shall specify such provisions, not inconsistent with the terms and conditions of the Plan, as the Committee
shall determine.
(b)
The restrictions to which the shares of Stock Units awarded hereunder are subject shall lapse as provided in Stock Unit Agreement;
provided that the Committee shall have the discretion to accelerate the date as of which the restrictions lapse with respect to any Award
held by a Participant in the event of the Participant’s termination of employment with the Company, or service on the Board, without
cause (as determined by the Board in its sole discretion).
(c)
Except as provided in this subsection (c) and unless otherwise set forth in the Stock Unit Agreement, the Participant receiving
a Stock Unit Award shall have no rights of a stockholder, including voting or dividends or other distributions rights, with respect to
any Stock Units prior to the date they are settled in shares of Common Stock; provided that a Stock Unit Award Agreement may provide that
until the Stock Units are settled in shares or cash, the Participant shall be entitled to receive on each dividend or distribution payment
date applicable to the Common Stock an amount equal to the dividends or other distributions that the Participant would have received had
the Stock Units held by the Participant as of the related record date been actual shares of Common Stock. Such amounts shall be accumulated
and held by the Company and paid to the Participant only upon, and to the extent, the restrictions lapse in accordance with the terms
of the applicable Stock Unit Award Agreement. Such amounts held by the Company attributable to the portion of the Stock Unit Award that
is forfeited shall also be forfeited.
Section 8.
SARs.
8.1
Grant.
The Committee may grant SARs
to Participants. Upon exercise, an SAR entitles the Participant to receive from the Company the number of shares of Common Stock having
an aggregate Fair Market Value equal to the excess of the Fair Market Value of one share as of the date on which the SAR is exercised
over the exercise price, multiplied by the number of shares with respect to which the SAR is being exercised. The Committee, in its discretion,
shall be entitled to cause the Company to elect to settle any part or all of its obligations arising out of the exercise of an SAR by
the payment of cash in lieu of all or part of the shares it would otherwise be obligated to deliver in an amount equal to the Fair Market
Value of such shares on the date of exercise. Cash shall be delivered in lieu of any fractional shares. The terms and conditions of any
such Award shall be determined at the time of grant.
8.2
SAR Agreement.
(a)
Each SAR shall be evidenced by a written SAR Agreement specifying the terms and conditions of the SAR as the Committee may determine,
including the SAR exercise price, expiration date of the SAR, the number of shares of Common Stock to which the SAR pertains, the form
of settlement and such other terms and conditions established by the Committee, in its sole discretion, not inconsistent with the Plan.
(b)
The per Share exercise price of each SAR shall not be less than 100% of the Fair Market Value of a Share on the date the SAR is
granted.
(c)
Each SAR shall expire and all rights thereunder shall cease on the date fixed by the Committee in the related SAR Agreement, which
shall not be later than the ten years after the date of grant; provided however, if a Participant is unable to exercise an SAR because
trading in the Common Stock is prohibited by law or the Company’s insider-trading policy, the SAR exercise date shall be extended
to the date that is 30 days after the expiration of the trading prohibition.
(d)
Each SAR shall become exercisable as provided in the related SAR Agreement; provided that notwithstanding any other Plan provision,
the Committee shall have the discretion to accelerate the date as of which any SAR shall become exercisable in the event of the Participant’s
termination of employment, or service on the Board, without cause (as determined by the Committee in its sole discretion).
(e)
No dividends or dividend equivalents shall be paid with respect to any SAR prior to the exercise of the SAR.
(f)
A person entitled to exercise an SAR may do so by delivery of a written notice in accordance with procedures established by the
Committee specifying the number of shares of Common Stock with respect to which the SAR is being exercised and any other information the
Committee may prescribe. As soon as reasonably practicable after the exercise of an SAR, the Company shall (i) issue the total number
of full shares of Common Stock to which the Participant is entitled and cash in an amount equal to the Fair Market Value, as of the date
of exercise, of any resulting fractional share, and (ii) if the Committee causes the Company to elect to settle all or part of its obligations
arising out of the exercise of the SAR in cash, deliver to the Participant an amount in cash equal to the Fair Market Value, as of the
date of exercise, of the shares it would otherwise be obligated to deliver.
Section 9.
Change in Control.
9.1
Effect of a Change in Control.
(a)
Notwithstanding any of the provisions of the Plan or any outstanding Award Agreement, upon a Change in Control of the Company (as
defined in Section 9.2), the Board is authorized and has sole discretion to provide that (i) all outstanding Awards shall become fully
exercisable, (ii) all restrictions applicable to all Awards shall terminate or lapse and (iii) performance goals applicable to any Awards
shall be deemed satisfied at the highest level, as applicable, in order that Participants may realize the benefits thereunder.
(b)
In addition to the Board’s authority set forth in Section 3, upon such Change in Control of the Company, the Board is authorized
and has sole discretion as to any Award, either at the time such Award is granted hereunder or any time thereafter, to take any one or
more of the following actions: (i) provide for the purchase of any outstanding Stock Option, for an amount of cash equal to the difference
between the exercise price and the then Fair Market Value of the Common Stock covered thereby had such Stock Option been currently exercisable;
(ii) make such adjustment to any such Award then outstanding as the Board deems appropriate to reflect such Change in Control; and (iii)
cause any such Award then outstanding to be assumed by the acquiring or surviving corporation after such Change in Control.
9.2
Definition of Change in Control.
“Change in Control”
of the Company shall be deemed to have occurred if at any time during the term of an Award granted under the Plan any of the following
events occurs:
(a)
any Person (other than the Company, a trustee or other fiduciary holding securities under an employee benefit plan of the Company,
or a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership
of shares of Common Stock of the Company) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing
30% or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election
of directors (“Person” and “Beneficial Owner” being defined in Rule 13d-3 of the General Rules and Regulations
of the Exchange Act);
(b)
the Company is party to a merger, consolidation, reorganization or other similar transaction with another corporation or other
Person unless, following such transaction, more than 50% of the combined voting power of the outstanding securities of the surviving,
resulting or acquiring corporation or Person or its parent entity entitled to vote generally in the election of directors (or Persons
performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities
who were the beneficial owners of the Company’s outstanding securities entitled to vote generally in the election of directors immediately
prior to such transaction, in substantially the same proportions as their ownership, immediately prior to such transaction, of the Company’s
outstanding securities entitled to vote generally in the election of directors;
(c)
the election to the Board, without the recommendation or approval of two-thirds of the incumbent Board, of the lesser of: (i) three
Directors; or (ii) Directors constituting a majority of the number of Directors of the Company then in office; provided, however, that
Directors whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited
to a consent solicitation, relating to the election of Directors of the Company will not be considered as incumbent members of the Board
for purposes of this Section; or
(d)
there is a complete liquidation or dissolution of the Company, or the Company sells all or substantially all of its business and/or
assets to another corporation or other Person unless, following such sale, more than 50% of the combined voting power of the outstanding
securities of the acquiring corporation or Person or its parent entity entitled to vote generally in the election of directors (or Persons
performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities
who were the beneficial owners of the Company’s outstanding securities entitled to vote generally in the election of directors immediately
prior to such sale, in substantially the same proportions as their ownership, immediately prior to such sale, of the Company’s outstanding
securities entitled to vote generally in the election of directors.
In no event, however, shall
a Change in Control be deemed to have occurred, with respect to a Participant, if that Participant is part of a purchasing group which
consummates the Change in Control transaction. A Participant shall be deemed “part of a purchasing group” for purposes of
the preceding sentence if the Participant is an equity participant or has agreed to become an equity participant in the purchasing company
or group (except for (a) passive ownership of less than 3% of the shares of the purchasing company; or (b) ownership of equity participation
in the purchasing company or group which is otherwise not deemed to be significant, as determined prior to the Change in Control by a
majority of the disinterested Directors).
Section 10.
Payment of Taxes.
(a)
In connection with any Award, and as a condition to the issuance or delivery of any shares of Common Stock to the Participant in
connection therewith, the Company shall require the Participant to pay the Company the minimum amount of federal, state, local or foreign
taxes required to be withheld, and in the Company’s sole discretion, the Company may permit the Participant to pay the Company up
to the maximum individual statutory rate of applicable withholding.
(b)
The Company in its sole discretion may make available one or more of the following alternatives for the payment of such taxes:
(i) in cash; (ii) in cash received from a broker-dealer to whom the Participant has submitted notice together with irrevocable instructions
to deliver promptly to the Company the amount of sales proceeds from the sale of the shares subject to the Award to pay the withholding
taxes; (iii) by directing the Company to withhold such number of shares of Common Stock otherwise issuable in connection with the Award
having an aggregate Fair Market Value equal to the minimum amount of tax required to be withheld; (iv) by delivering previously acquired
shares of Common Stock of the Company that are acceptable to the Board that have an aggregate Fair Market Value equal to the amount required
to be withheld; or (v) by certifying to ownership by attestation of such previously acquired shares of Common Stock.
The Committee shall have the
sole discretion to establish the terms and conditions applicable to any alternative made available for payment of the required withholding
taxes.
Section 11.
Postponement.
The Committee may postpone
any grant or settlement of an Award or exercise of a Stock Option or SAR for such time as the Board in its sole discretion may deem necessary
in order to permit the Company:
(a)
to effect, amend or maintain any necessary registration of the Plan or the shares of Common Stock issuable pursuant to an Award,
including upon the exercise of a Stock Option or SAR, under the Securities Act of 1933, as amended, or the securities laws of any applicable
jurisdiction;
(b)
to permit any action to be taken in order to (i) list such shares of Common Stock on a stock exchange if shares of Common Stock
are then listed on such exchange or (ii) comply with restrictions or regulations incident to the maintenance of a public market for its
shares of Common Stock, including any rules or regulations of any stock exchange on which the shares of Common Stock are listed; or
(c)
to determine that such shares of Common Stock and the Plan are exempt from such registration or that no action of the kind referred
to in (b)(ii) above needs to be taken; and the Company shall not be obligated by virtue of any terms and conditions of any Award or any
provision of the Plan to sell or issue shares of Common Stock in violation of the Securities Act of 1933 or the law of any government
having jurisdiction thereof.
Any such postponement shall
not extend the term of an Award and neither the Company nor its Directors or officers shall have any obligation or liability to a Participant,
the Participant’s successor or any other person with respect to any shares of Common Stock as to which the Award shall lapse because
of such postponement.
Section 12.
Nontransferability.
Awards granted under the Plan,
and any rights and privileges pertaining thereto, may not be transferred, assigned, pledged or hypothecated in any manner, or be subject
to execution, attachment or similar process, by operation of law or otherwise, other than by will or by the laws of descent and distribution.
Section 13.
Delivery of Shares.
Shares of Common Stock issued
pursuant to a Stock Award, the exercise of a Stock or SAR or the settlement of a Stock Unit Award shall be represented by stock certificates
or on a non-certificated basis, with the ownership of such shares by the Participant evidenced solely by book entry in the records of
the Company’s transfer agent; provided, however, that upon the written request of the Participant, the Company shall issue, in the
name of the Participant, stock certificates representing such shares of Common Stock. Notwithstanding the foregoing, shares granted pursuant
to a Stock Award shall be held by the Secretary of the Company until such time as the shares are forfeited or settled.
Section 14.
Termination or Amendment of Plan and Award Agreements.
14.1
Termination or Amendment of Plan.
(a)
Except as described in Section 14.3 below, the Board may terminate, suspend, or amend the Plan, in whole or in part, from time
to time, without the approval of the stockholders of the Company, unless such approval is required by applicable law, regulation or rule
of any stock exchange on which the shares of Common Stock are listed. No amendment or termination of the Plan shall adversely affect the
right of any Participant under any outstanding Award in any material way without the written consent of the Participant, unless such amendment
or termination is required by applicable law, regulation or rule of any stock exchange on which the shares of Common Stock are listed.
Subject to the foregoing, the Committee may correct any defect or supply an omission or reconcile any inconsistency in the Plan or in
any Award granted hereunder in the manner and to the extent it shall deem desirable, in its sole discretion, to effectuate the Plan.
(b)
The Board shall have the authority to amend the Plan to the extent necessary or appropriate to comply with applicable law, regulation
or accounting rules in order to permit Participants who are located outside of the United States to participate in the Plan.
14.2
Amendment of Award Agreements.
The Committee shall have the
authority to amend any Award Agreement at any time; provided however, that no such amendment shall adversely affect the right of any Participant
under any outstanding Award Agreement in any material way without the written consent of the Participant, unless such amendment is required
by applicable law, regulation or rule of any stock exchange on which the shares of Common Stock are listed.
14.3
No Repricing of Stock Options.
Notwithstanding the foregoing,
and except as described in Section 4.3, there shall be no amendment to the Plan or any outstanding Stock Option Agreement or SAR Agreement
that results in the repricing of Stock Options or SARs without stockholder approval. For this purpose, repricing includes (i) a reduction
in the exercise price of the Stock Option or SARs or (ii) the cancellation of a Stock Option in exchange for cash, Stock Options or SARs
with an exercise price less than the exercise price of the cancelled Options or SARs, other Awards or any other consideration provided
by the Company, but does not include any adjustment described in Section 4.3.
Section 15.
No Contract of Employment.
Neither the adoption of the
Plan nor the grant of any Award under the Plan shall be deemed to obligate the Company or any Subsidiary to continue the employment of
any Participant for any particular period, nor shall the granting of an Award constitute a request or consent to postpone the retirement
date of any Participant.
Section 16.
Applicable Law.
All questions pertaining to
the validity, construction and administration of the Plan and all Awards granted under the Plan shall be determined in conformity with
the laws of the State of Nevada, without regard to the conflict of law provisions of any state, and, in the case of Incentive Stock Options,
Section 422 of the Code and regulations issued thereunder.
Section 17.
Effective Date and Term of Plan.
17.1
Effective Date.
(a)
The Plan as amended and restated has been adopted by the Board, and is effective, as of December 10, 2024, subject to the approval
of the Plan by the stockholders of the Company.
(b)
In the event the Plan is not approved by stockholders of the Company within 12 months of the date hereof, the Plan as amended and
restated shall have no effect, and the plan as in effect prior to December 10, 2024 shall continue.
17.2
Term of Plan.
Notwithstanding anything to
the contrary contained herein, no Awards shall be granted on or after February 21, 2029.
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