NeoVolta has secured a $20 million senior credit facility from Horizon/RoHo; an additional $10 million may be added. The funds are intended primarily to support the ramp-up of U.S. BESS production in Georgia.
For me, however, the terms are crucial:
10% interest, maturity as early as March 3, 2028, and amortization beginning December 4, 2026. A minimum of $1.25 million must be repaid monthly—and up to $2 million, depending on stock trading volume.
In addition, virtually all of NeoVolta’s assets are secured as first-lien collateral.
There is also the potential for direct dilution:
The lenders received 1,454,545 five-year warrants at $3.30. If the facility is increased to $30 million, an additional 727,273 warrants may be issued. This could result in a total of approximately 2.18 million additional shares from this financing.
The financing eliminates part of the liquidity risk in the short term and enables the production ramp-up.
For a small-cap company like NeoVolta, however, the combination of 10% debt + rapid repayment + warrants is by no means cheap.
For me, though, this will only become a problem if operating cash flow—or the Georgia ramp-up—cannot cover the repayments, making another round of significant equity financing necessary.
On the positive side: The Georgia plant is still designed for an initial annual capacity of up to 2 GWh and could later be scaled up to 8 GWh.