Exhibit 99.1 XPENG Reports Third Quarter 2025 Unaudited Financial Results GUANGZHOU, China, November 17, 2025 — XPeng Inc. ("XPENG" or the "Company," NYSE: XPEV and HKEX: 9868), a leading Chinese smart electric vehicle ("Smart EV") company, today announced its unaudited financial results for the three months ended September 30, 2025. Operational and Financial Highlights for the Three Months Ended September 30, 2025 | | 2025Q3 | 2025Q2 | 2025Q1 | 2024Q4 | 2024Q3 | 2024Q2 | | --- | --- | --- | --- | --- | --- ...

Financial Performance - Sales for the third quarter of 2025 were NIS 152.8 million (US$ 46.2 million), remaining at the same level compared to the third quarter of 2024[7] - Gross profit increased by 2.6% year-over-year to NIS 43.1 million (US$ 13.0 million), representing 28.2% of revenues[9] - Operating profit increased by 4.1% year-over-year to NIS 18.3 million (US$ 5.5 million)[11] - Net profit for the third quarter was NIS 19.2 million (US$ 5.8 million), or NIS 1.4 (US$ 0.4) per share[13] - Sales for the nine-month period ending September 30, 2025, increased by 5.2% to NIS 458.2 million (US$ 138.6 million)[15] - Gross profit for the first nine months of 2025 increased by 7.5% to NIS 131.7 million (US$ 39.8 million), or 28.7% of revenues[16] - Operating profit before other expenses for the first nine months of 2025 increased by 16.7% to NIS 58.8 million (US$ 17.8 million)[19] - Net profit increased by 52.9% year-over-year to NIS 70.6 million (US$ 21.3 million), or 15.4% of sales[22] Cash and Assets - Cash and securities balance was NIS 225.4 million (US$ 68.2 million) as of September 30, 2025[13] - Total current assets as of September 30, 2025, were NIS 512,859 thousand, slightly down from NIS 516,470 thousand as of September 30, 2024[30] - Total non-current assets increased to NIS 190,289 thousand as of September 30, 2025, from NIS 146,794 thousand in 2024, reflecting a growth of approximately 29.6%[30] - Total current liabilities decreased to NIS 51,941 thousand as of September 30, 2025, from NIS 63,276 thousand in 2024, a reduction of about 18%[30] - Shareholders' equity attributable to owners of the Company increased to NIS 634,616 thousand as of September 30, 2025, compared to NIS 588,794 thousand in 2024, indicating a growth of approximately 7.8%[30] Cash Flow and Receivables - Net cash from continuing operating activities for the nine months ended September 30, 2025, was NIS 38,789 thousand, significantly higher than NIS 16,122 thousand in the same period of 2024[34] - Net cash flows from operating activities for the nine months ended September 30, 2025, were negative at NIS 31,767 thousand, compared to negative NIS 30,029 thousand for the same period in 2024[35] - Cash generated from operations for the three months ended September 30, 2025, was NIS 24,279 thousand, a significant increase from NIS 14,933 thousand in the previous year[35] - The company reported an increase in trade receivables of NIS 17,135 thousand for the nine months ended September 30, 2025, compared to a decrease of NIS 1,764 thousand in the same period of 2024[35] Expenses and Tax - Depreciation and amortization expenses for the nine months ended September 30, 2025, were NIS 5,829 thousand, up from NIS 5,583 thousand in 2024[35] - Income tax paid for the nine months ended September 30, 2025, was NIS 16,757 thousand, compared to NIS 11,171 thousand in 2024[35] Inventory and Marketable Securities - The company experienced a decrease in inventories of NIS 10,177 thousand for the nine months ended September 30, 2025, compared to a decrease of NIS 35,321 thousand in the same period of 2024[35] - The unrealized gains on marketable securities increased to NIS 24,646 thousand for the nine months ended September 30, 2025, compared to NIS 13,058 thousand in 2024[35] Stock-Based Compensation and Exchange Loss - Stock-based compensation reserve increased to NIS 1,039 thousand for the nine months ended September 30, 2025, from NIS 392 thousand in 2024[35] - Exchange loss on cash and cash equivalents was NIS 1,225 thousand for the nine months ended September 30, 2025, compared to a gain of NIS 1,629 thousand in 2024[35] Capital Gains - The company reported a capital gain on the disposal of property, plant, and equipment of NIS 95 thousand for the nine months ended September 30, 2025, down from NIS 143 thousand in 2024[35] Future Developments - The new refrigerated logistics center is expected to open toward the end of the first quarter of 2026, enhancing logistical capabilities and product availability[6]

Financial Performance - Total vehicle deliveries reached 116,007 in Q3 2025, a 149.3% increase from 46,533 in Q3 2024[2] - Quarterly total revenues were RMB20.38 billion (US$2.86 billion), representing a 101.8% year-over-year increase[7] - Gross margin for Q3 2025 was 20.1%, up 4.8 percentage points from 15.3% in Q3 2024[4] - Vehicle margin was 13.1% for Q3 2025, an increase of 4.5 percentage points from 8.6% in Q3 2024[12] - Net loss for Q3 2025 was RMB0.38 billion (US$0.05 billion), a significant reduction of 78.9% from RMB1.81 billion in Q3 2024[20] - Non-GAAP net loss was RMB0.15 billion (US$0.02 billion) for Q3 2025, down 90.1% from RMB1.53 billion in Q3 2024[21] - Revenues from vehicle sales were RMB18.05 billion (US$2.54 billion) for Q3 2025, a 105.3% increase from RMB8.80 billion in Q3 2024[8] - The Company reported total revenues of RMB20.4 billion (approximately US$2.9 billion) for Q3 2025, up from RMB18.3 billion in Q2 2025[40] - Vehicle sales for Q3 2025 reached RMB18.1 billion (approximately US$2.5 billion), compared to RMB16.9 billion in Q2 2025[40] - Gross profit for Q3 2025 was RMB4.1 billion (approximately US$576.5 million), reflecting an increase from RMB3.2 billion in Q2 2025[40] Operational Metrics - Cash and cash equivalents totaled RMB48.33 billion (US$6.79 billion) as of September 30, 2025, compared to RMB35.75 billion a year earlier[25] - Cash and cash equivalents as of September 30, 2025, were RMB17.5 billion (approximately US$2.5 billion)[35] - The Company incurred a loss from operations of RMB751 million (approximately US$105.5 million) in Q3 2025, an improvement from a loss of RMB934.6 million in Q2 2025[40] - XPENG's physical sales network expanded to 690 stores across 242 cities as of September 30, 2025[2] Future Projections - For Q4 2025, the Company expects vehicle deliveries between 125,000 and 132,000, a year-over-year increase of approximately 36.6% to 44.3%[26] - Total revenues are projected to be between RMB21.5 billion and RMB23.0 billion, representing a year-over-year increase of approximately 33.5% to 42.8%[26] Research and Development - Research and development expenses increased by 48.7% year-over-year to RMB2.43 billion (US$0.34 billion) in Q3 2025[14] - The Company is focused on developing in-house advanced driver-assistance systems and intelligent operating systems for its Smart EVs[30] Losses and Challenges - XPeng Inc. reported a net loss of RMB 1,807,720,000 for the three months ended September 30, 2025, compared to a net loss of RMB 477,754,000 in the previous quarter, representing a significant increase in losses[41] - The company's total comprehensive loss attributable to ordinary shareholders was RMB 2,092,063,000 for the same period, up from RMB 494,168,000 in the previous quarter[43] - Loss from operations was RMB 1,847,096,000, compared to RMB 934,649,000 in the previous quarter, indicating a worsening operational performance[44] - Non-GAAP net loss attributable to ordinary shareholders was RMB 1,531,572,000, compared to RMB 385,283,000 in the previous quarter, reflecting increased operational challenges[45] Shareholder Information - The weighted average number of ordinary shares used in computing net loss per ordinary share was approximately 1,893,857,778 for the quarter[43] - Basic and diluted net loss per ordinary share attributable to ordinary shareholders was RMB (0.95), compared to RMB (0.25) in the previous quarter[43] Other Financial Metrics - The company experienced a fair value loss on derivative liability relating to contingent consideration of RMB 162,185,000 during the quarter[44] - Share-based compensation expenses amounted to RMB 113,963,000, slightly down from RMB 126,475,000 in the previous quarter[44] - XPeng Inc. reported an investment loss on long-term investments of RMB (216,768,000) for the quarter, a significant decline from a gain of RMB 24,401,000 in the previous quarter[41] - The company recorded an exchange gain from foreign currency transactions of RMB 47,565,000, down from RMB 142,684,000 in the previous quarter[41]

Financial Performance - For the three months ended September 30, 2025, total revenue decreased by 3% to $12.4 million, with streaming and digital revenue declining by 5% to $9.6 million [146]. - The company experienced a 39% increase in base distribution revenue for the three months ended September 30, 2025, totaling $1.8 million, primarily due to theatrical releases [146]. - For the six months ended September 30, 2025, total revenue increased by 7% to $23.5 million, with streaming and digital revenue rising by 5% to $18.7 million [154]. - The company reported a net loss attributable to common stockholders of $9.3 million for the three months ended September 30, 2025 [139]. - The company reported a net loss of $9.1 million for the six months ended September 30, 2025, compared to a net loss of $4.3 million in 2024 [165]. - Adjusted EBITDA for the six months ended September 30, 2025, was a loss of $5.8 million, compared to a loss of $0.9 million in the same period of 2024 [165]. Expenses - Direct operating expenses decreased by 17% to $5.2 million for the three months ended September 30, 2025, driven by lower variable costs [150]. - Selling, general and administrative expenses increased by 79% to $11.4 million for the three months ended September 30, 2025, largely due to higher compensation and marketing expenses [151]. - For the six months ended September 30, 2025, total Selling, General and Administrative expenses increased by $7.4 million, or 57%, compared to the same period in 2024, reaching $20.4 million [157]. - Compensation expenses rose by $2.6 million, or 31%, primarily due to an increase in employee headcount [157]. - Marketing expenses surged by $3.3 million, or 7427%, largely attributed to the promotion of Toxic Avenger [157]. - Interest expense decreased by $0.2 million to $0.1 million for the three months ended September 30, 2025, due to a lower average balance on the Line of Credit Facility [153]. - Interest expense decreased by $0.9 million for the six months ended September 30, 2025, primarily due to higher outstanding debt balances and increased interest rates in 2024 [160]. - Amortization of intangible assets increased by $0.5 million, or 31%, during the six months ended September 30, 2025, primarily due to higher capitalized content costs [159]. Cash Flow and Financing - Net cash used in operating activities for the six months ended September 30, 2025, was $21.7 million, compared to $2.4 million in 2024 [166]. - Net cash provided by financing activities increased to $11.0 million for the six months ended September 30, 2025, from $0.5 million in 2024 [166]. - The company has a Line of Credit Facility with East West Bank, allowing borrowings of up to $12.5 million, with $6.6 million outstanding as of September 30, 2025 [140]. - The company plans to continue investing in content development and acquisitions, with short-term content advances of $5.4 million as of September 30, 2025 [141]. Accumulated Deficit and Working Capital - As of September 30, 2025, the company reported an accumulated deficit of $510.2 million and negative working capital of $1.3 million [139].

Financial Performance - For the three months ended September 30, 2025, total revenue decreased by 3% to $12.4 million, with streaming and digital revenue declining by 5% to $9.6 million [146]. - The company experienced a 39% increase in base distribution revenue for the three months ended September 30, 2025, totaling $1.8 million, primarily due to theatrical releases [146]. - For the six months ended September 30, 2025, total revenue increased by 7% to $23.5 million, with streaming and digital revenue rising by 5% to $18.7 million [154]. - The company reported a net loss attributable to common stockholders of $9.3 million for the three months ended September 30, 2025 [139]. - Adjusted EBITDA for the six months ended September 30, 2025, was a loss of $5.8 million, compared to a loss of $0.9 million in the same period of 2024 [165]. Expenses - Direct operating expenses decreased by 17% to $5.2 million for the three months ended September 30, 2025, driven by lower variable costs [150]. - Selling, general and administrative expenses increased by 79% to $11.4 million for the three months ended September 30, 2025, largely due to higher compensation and marketing expenses [151]. - For the six months ended September 30, 2025, Selling, General and Administrative expenses increased by $7.4 million, or 57%, compared to the same period in 2024, totaling $20.4 million [157]. - Compensation expenses rose by $2.6 million, or 31%, primarily due to an increase in employee headcount [157]. - Marketing expenses surged by 7427%, increasing by $3.3 million, largely attributed to the Toxic Avenger campaign [157]. - Interest expense decreased by $0.2 million to $0.1 million for the three months ended September 30, 2025, due to a lower average balance on the Line of Credit Facility [153]. - Interest expense decreased by $0.9 million for the six months ended September 30, 2025, primarily due to higher outstanding debt balances and increased interest rates in 2024 [160]. - Amortization of intangible assets increased by $0.5 million, or 31%, totaling $2.0 million for the six months ended September 30, 2025 [159]. Cash Flow - Net cash used in operating activities for the six months ended September 30, 2025, was $21.7 million, compared to $2.4 million in 2024 [166]. - Net cash provided by financing activities was $11.0 million for the six months ended September 30, 2025, compared to $0.5 million in 2024 [166]. - Cash used in investing activities was $0.9 million for the six months ended September 30, 2025, compared to $0.8 million in 2024, mainly for long-lived intangible and fixed assets [167]. Debt and Financing - The company has a Line of Credit Facility with East West Bank, allowing borrowings of up to $12.5 million, with $6.6 million outstanding as of September 30, 2025 [140]. - The company plans to continue investing in content development and acquisitions, with short-term content advances of $5.4 million as of September 30, 2025 [141]. Equity Interest - The company holds a 100% equity interest in CDF2 Holdings, an unconsolidated variable interest entity, but is not the primary beneficiary [169]. Accumulated Deficit - As of September 30, 2025, the company reported an accumulated deficit of $510.2 million and negative working capital of $1.3 million [139].

Clinical Trial Results - Benitec Biopharma achieved a 100% responder rate in Cohort 1 of the Phase 1b/2a trial for BB-301, with all six patients meeting the formal statistical criteria for response[1]. - The first patient in Cohort 2 of the BB-301 trial was successfully treated in Q4 2025[1]. - The FDA granted Fast Track Designation to BB-301 for the treatment of dysphagia associated with Oculopharyngeal Muscular Dystrophy[5]. Financial Performance - Total expenses for Q1 2026 were $9.8 million, up from $5.8 million in Q1 2025, with general and administrative expenses increasing to $6.4 million from $2.2 million[6]. - The net loss attributable to shareholders for Q1 2026 was $9.0 million, or $(0.22) per share, compared to a net loss of $5.1 million, or $(0.18) per share in Q1 2025[7]. - Benitec's total comprehensive loss for Q1 2026 was $8.9 million, compared to a loss of $5.2 million in Q1 2025[7]. - Benitec's accumulated deficit as of September 30, 2025, was $(237.1) million, up from $(228.2) million as of June 30, 2025[9]. Funding and Financial Strategy - The company raised approximately $100 million in an oversubscribed public offering to fund the advancement of the BB-301 program[2]. - The company plans to use net proceeds from the recent financing to support the continued development and registration of BB-301, working capital, and other general corporate purposes[5]. - As of September 30, 2025, the company had $94.5 million in cash and cash equivalents[7].

Accounts Receivable and Inventory - Accounts receivable increased to $2,807,406 as of September 30, 2025, compared to $1,696,436 as of December 31, 2024, reflecting a growth of 65.6%[108] - The allowance for doubtful accounts decreased to $69,181 from $81,772, indicating improved credit quality[108] - Inventory rose to $340,018 at September 30, 2025, up from $126,400 at December 31, 2024, representing a 168.5% increase[112] - Bad debt expense for the nine months ended September 30, 2025, was $(5,654), a significant improvement compared to $50,581 for the same period in 2024[108] - The company did not record any provisions for inventory obsolescence or impairment for the nine months ended September 30, 2025, and 2024[111] Revenue and Sales - For the nine months ended September 30, 2025, the Company reported total sales of $58,824,282, a significant increase from $20,977,860 in the same period of 2024, representing a growth of approximately 179%[163] - Fuel sales accounted for $56,758,393, or 96.49% of total revenues in the nine months ended September 30, 2025, compared to $20,249,066, or 96.53% in 2024[163] - Customer A accounted for 48.85% of total sales for the nine months ended September 30, 2025, significantly impacting revenue concentration[118] - Revenue from fuel sales is recognized at the time of delivery, while membership revenue is recognized at the end of each month, reflecting a one-month membership cycle[145] Expenses and Costs - Total Sales and Marketing expenses for the nine months ended September 30, 2025, were $300,181, compared to $168,068 for the same period in 2024, representing an increase of approximately 78.5%[178] - Depreciation and amortization expense for the nine months ended September 30, 2025, was $1,826,259, compared to $1,173,269 for the same period in 2024, indicating an increase of approximately 55.7%[212] - The Company recognized marketing and advertising costs during the nine months ended September 30, 2025, which were classified within general and administrative expenses[178] Assets and Liabilities - The total property and equipment, net as of September 30, 2025, was $2,481,963, down from $7,539,507 as of December 31, 2024[208] - As of September 30, 2025, total accounts payable and accrued liabilities increased to $4,806,220 from $1,721,527 as of December 31, 2024, representing a growth of approximately 179%[217] - The total accounts payable and accrued liabilities to related parties rose to $3,292,100 as of September 30, 2025, compared to $1,546,451 as of December 31, 2024, marking an increase of approximately 113%[217] Debt and Financing - The company has multiple unsecured loans with a 0% interest rate, with various maturity dates extending into 2027[222] - The company executed an asset purchase agreement with Shell for 73 vehicles and storage tanks, totaling $5,219,877, as part of its growth and expansion plan[209] - The company reported a repayment obligation that typically exceeds the net funds received under MCA agreements[224] - The company executed a loan for $5,000,100 in December 2024, due March 31, 2025, and is currently negotiating an extension[246] Stock and Equity - The Company increased its authorized common stock from 50,000,000 to 500,000,000 shares on June 14, 2024, to support future equity financings[279] - The Company has four classes of stock, including undesignated preferred stock, which provides flexibility for future corporate financing[280] - The Company recognized stock-based compensation costs over the requisite service period, typically the vesting period, in accordance with ASC 718[179] Lease Agreements - The operating lease - ROU asset - non-current increased to $3,426,961 as of September 30, 2025, compared to $61,151 in 2024[268] - Total operating lease costs for the nine months ended September 30, 2025, were $295,555, an increase from $184,333 in the same period of 2024[268] - The present value of operating lease liability as of September 30, 2025, is $239,481, with a long-term operating lease liability of $126,427[276] Legal and Compliance - As of September 30, 2025, the Company is not aware of any pending litigation or transactions requiring accrual or disclosure[278] - The Company records litigation accruals for legal matters that are probable and estimable, without reducing liabilities for potential recoveries[277]

Revenue and Financial Performance - Revenue for the three months ended September 30, 2025, was $0, consistent with the same period in 2024, primarily derived from the PURE EP™ Platform and related services [267]. - Revenue for the nine months ended September 30, 2025, was $0, down from $27 in the same period of 2024 [275]. - Net loss attributable to common shareholders for the three months ended September 30, 2025, was $15,586 compared to a net loss of $1,940 for the same period in 2024 [274]. - Net loss attributable to common shareholders for the nine months ended September 30, 2025, was $38,774 compared to a net loss of $9,395 for the same period in 2024 [283]. Expenses - Research and development expenses for the three months ended September 30, 2025, were $6, a decrease of $150, or 96%, from $156 in the same period of 2024 [268]. - General and administrative expenses for the three months ended September 30, 2025, were $4,619, an increase of $1,856 or 67% from $2,763 in the prior year [269]. - Depreciation and amortization expense for the three months ended September 30, 2025, totaled $1,488, an increase of $1,457, or 4700%, over the expense of $31 in the same period of 2024 [270]. - Research and development expenses for the nine months ended September 30, 2025, were $31, a decrease of $705, or 96%, from $736 in the prior year [276]. - General and administrative expenses for the nine months ended September 30, 2025, were $27,365, an increase of $16,806 or 159% from $10,559 in the same period of 2024 [277]. Capital and Financing - As of September 30, 2025, the company had a working capital deficit of approximately $111 million and cash of $11.0 million [284]. - The company entered into a Secured Convertible Debenture Purchase Agreement allowing for up to $100 million in secured convertible debentures, with the first closing resulting in a $25 million issuance [290]. - A public offering completed on August 15, 2025, generated gross proceeds of approximately $15 million from the sale of 3,852,149 shares at a price of $3.90 per share [302]. - For the nine months ended September 30, 2025, the company sold 4,403,166 At The Market Offering Shares at an average price of $0.91 per share, generating net proceeds of approximately $3.88 million [303]. Internal Controls and Compliance - The company has identified material weaknesses in internal controls over financial reporting, including inadequate segregation of duties and ineffective review processes [320]. - Management plans to add sufficient staff and oversight in 2026 to address identified deficiencies in internal controls [323]. - The company identified a material weakness related to ineffective review controls over accounting for business combinations and related financial instruments [326]. - Management plans to implement remediation plans in 2025 to address the identified material weakness [326]. - There have been no changes in internal control over financial reporting that materially negatively affected the company during the last completed fiscal quarter [326]. Legal Proceedings - The company believes that ongoing legal proceedings will not have a material adverse effect on its financial position, results of operations, or liquidity [327]. - No material changes in legal proceedings have occurred since the last quarterly report filed on August 15, 2025 [328]. Future Outlook - The company expects to incur operating losses and negative cash flows until its products achieve sustained commercial success, with initial revenue anticipated from the launch of a tokenized gold financing product currently under development [287]. - The liquidity forecast indicates that delays in product commercialization or capital raising could materially impact the company's ability to continue as a going concern [300]. - As of September 30, 2025, the aggregate stated value of the Series C Preferred Stock was $105 million, with triggering events that may require redemption at the option of the holders [291]. - The fair value of the derivative liability associated with Exchangeable Shares was $115.7 million as of September 30, 2025, with a change of $10.2 million recognized in other income [308].

Portfolio Performance - As of September 30, 2025, approximately 60% of the portfolio's annualized base rent (ABR) was derived from tenants with an investment grade credit rating of "BBB-" or better[147] - The portfolio is 98.6% leased and occupied, indicating strong demand for the properties[147] - Average effective annual rental per square foot is $16.30, reflecting the rental income potential of the portfolio[147] - Approximately 92% of the leases in the current portfolio provide for increases in contractual base rent during future years[147] - The largest tenants contributing to the portfolio's ABR include the General Service Administration, Dollar General, and Kohl's Corporation, with the City of San Antonio contributing approximately 59% of the ABR[147] Financial Performance - Total revenue for the three months ended September 30, 2025, was $2,470,109, an increase of $69,827 (approximately 2.9%) compared to $2,400,282 for the same period in 2024[165] - Total revenue for the nine months ended September 30, 2025, was $7,283,974, an increase of $191,284 (approximately 2.7%) compared to $7,092,690 for the same period in 2024[165] - Total operating expenses for the three months ended September 30, 2025, were $4,169,441, an increase of $399,726 (approximately 10.6%) compared to $3,769,715 for the same period in 2024[166] - Total operating expenses for the nine months ended September 30, 2025, were $12,832,102, an increase of $1,698,716 (approximately 15.3%) compared to $11,133,386 for the same period in 2024[166] - Net loss attributable to common shareholders for the three months ended September 30, 2025, was $2,826,960, compared to a net loss of $2,969,596 for the same period in 2024[169] - Net loss attributable to common shareholders for the nine months ended September 30, 2025, was $9,981,447, compared to a net loss of $8,151,538 for the same period in 2024[169] Cash and Debt Management - As of September 30, 2025, the company had total cash of $281,788 and outstanding mortgage loans with a principal balance of $55,762,746[170] - The company entered into a loan agreement for $21.0 million on August 10, 2023, to finance the acquisition of the Modiv Portfolio, with a fixed interest rate of 7.47% per annum[173] - The company incurred interest expense, net of $4,429,454 for the nine months ended September 30, 2025, an increase of $1,286,965 (approximately 41%) compared to $3,142,489 for the same period in 2024[166] - As of September 30, 2025, the company had outstanding mortgage loans payable totaling $71,599,000, with various interest rates and maturity dates[185] - The company recorded a related party payable of $2,912,300 upon execution of a Redemption Agreement, which was paid in full by September 30, 2025[180] Equity and Financing Activities - The company completed an underwritten public offering of 1,665,000 units at $10 per unit, generating net proceeds of $13.8 million[145] - The company primarily obtains capital through equity offerings, debt financings, and undistributed operational funds[182] - The company has the right to extend the Mandatory Redemption Date for the Preferred Interest for two consecutive 12-month periods, with an extension fee of 0.01% of the outstanding amount[191] Concerns and Compliance - The company expressed substantial doubt about its ability to continue as a going concern due to recurring losses and liquidity concerns[183] - The company’s projected cash needs are less than the principal balance of its obligations, indicating potential liquidity challenges[183] - The company maintained compliance with all covenants related to mortgage loans, including a debt service coverage ratio (DSCR) requirement of 1.50[188] Operational Metrics - Net cash provided by operating activities was $415,553 for the nine months ended September 30, 2025, compared to $783,511 for the same period in 2024[198] - Net cash provided by investing activities was $10,333,595 for the nine months ended September 30, 2025, contrasting with a cash outflow of ($5,960,892) in 2024[199] - Net cash used in financing activities was ($11,114,799) for the nine months ended September 30, 2025, compared to a cash inflow of $3,607,045 in 2024[200] Funds From Operations - Funds From Operations (FFO) for Q3 2025 was $(419,486), a decline from $(301,352) in Q3 2024, indicating a 39.2% increase in losses[208] - Core Funds From Operations (Core FFO) for Q3 2025 was $47,548, compared to $(145,885) in Q3 2024, showing a significant recovery[208] - Adjusted Funds From Operations (AFFO) for Q3 2025 was $(117,838), a decrease from $5,509 in Q3 2024, reflecting a 2,174.5% decline[208] - Core Adjusted Funds From Operations for Q3 2025 was $175,647, up from $100,444 in Q3 2024, indicating a 74.7% increase[208] Other Financial Metrics - Depreciation and amortization expenses increased to $1,287,112 in Q3 2025 from $1,068,081 in Q3 2024, a rise of 20.5%[208] - Loss on derivative valuation for Q3 2025 was $11,256, compared to a gain of $734,116 in Q3 2024, indicating a significant shift in valuation[208] - Total adjustments to net loss amounted to $1,600,016 in Q3 2025, compared to $2,109,058 in Q3 2024, a decrease of 24.1%[208] - Non-cash stock compensation for Q3 2025 was $0, down from $94,935 in Q3 2024, reflecting a complete elimination of this expense[208] - The company reported a loss on extinguishment of debt of $926,398 for the nine months ended September 30, 2025, with no such loss reported in the same period of 2024[208]

Revenue Performance - Total revenues for the three months ended September 30, 2025, were $6.9 million, a decrease from $8.8 million in the same period of 2024, while total revenues for the nine months ended September 30, 2025, were $21.4 million, down from $24.0 million in 2024[158]. - Recurring treatment revenue for the three months ended September 30, 2025, was $5.5 million, representing approximately 67,000 XTRAC treatments, compared to $5.4 million for approximately 64,000 treatments in the same period of 2024[159]. - Dermatology procedures equipment revenues for Q3 2025 were $1.4 million, a decrease from $3.4 million in Q3 2024, representing a 58.8% decline[164]. - Dermatology recurring procedures revenues for Q3 2025 were $5.5 million, slightly up from $5.4 million in Q3 2024, with a gross profit percentage of 61.6% compared to 65.4%[170]. Device Placement and Usage - The number of XTRAC systems placed in dermatologists' offices decreased from 864 as of December 31, 2024, to 838 as of September 30, 2025[146]. - As of September 30, 2025, there were 161 TheraClear devices placed in dermatologists' offices, an increase from 135 devices in the same period of 2024[161]. - International sales included 8 systems in Q3 2025 (6 XTRAC and 2 VTRAC) compared to 20 systems in Q3 2024 (20 XTRAC)[165]. Financial Performance - Gross profit for Q3 2025 decreased to $4.2 million from $5.3 million in Q3 2024, with a gross profit percentage of 60.4% compared to 60.1%[168]. - For the nine months ended September 30, 2025, gross profit was $12.3 million, down from $13.5 million in the same period in 2024, with a gross profit percentage increase to 57.3% from 56.1%[169]. - As of September 30, 2025, the company reported a net loss of $1.622 million, an improvement from a net loss of $2.074 million for the same period in 2024[182]. - The company had negative working capital of $0.8 million as of September 30, 2025, compared to positive working capital of $3.2 million as of December 31, 2024[183]. - Cash and cash equivalents decreased to $7.1 million as of September 30, 2025, down from $8.6 million as of December 31, 2024[183]. - Net cash used in operating activities increased to $2.6 million for the nine months ended September 30, 2025, compared to $0.5 million for the same period in 2024[191]. Expenses and Gains - Selling and marketing expenses increased to $3.2 million in Q3 2025 from $3.0 million in Q3 2024, driven by higher employee-related expenses and advertising campaigns[175]. - General and administrative expenses decreased to $2.7 million in Q3 2025 from $3.6 million in Q3 2024, primarily due to an increase in sales tax accrual in 2024[177]. - Settlement gains for Q3 2025 were $0.7 million, compared to no settlement gains in Q3 2024, due to supplier obligation settlements[178]. - Engineering and product development expenses for the nine months ended September 30, 2025, were $0.4 million, down from $0.7 million in the same period in 2024[174]. - Interest expense remained stable at $0.5 million for Q3 2025 and Q3 2024, with a total of $1.5 million for the nine months ended September 30, 2025, compared to $1.6 million in the same period in 2024[179]. Market and Operational Challenges - The impact of the COVID-19 pandemic has led to the suspension of elective procedures and the temporary closure of many physician practices, affecting operational and financial performance[150]. - The company has faced supply chain challenges due to the Russia-Ukraine war, impacting the availability and price of essential gases for laser operations[151]. - The U.S. introduced trade policy actions in 2025 that increased import tariffs, potentially affecting product costs and demand in the dermatology procedures equipment segment[153]. Future Plans and Financing - The company plans to increase direct-to-patient advertising for XTRAC treatments targeting psoriasis and vitiligo patients through various media, including social media platforms[162]. - The company expects to write off a product technology intangible asset with a net carrying value of $0.7 million and derecognize a liability for contingent consideration of $1.2 million in Q4 2025[187]. - Net cash provided by financing activities was $2.2 million for the nine months ended September 30, 2025, compared to $1.9 million for the same period in 2024[193]. - The company amended its credit facility in November 2025, pausing the measurement of net revenue for financial covenant compliance through September 30, 2026[186]. - The company has the potential to incur a royalty of 5% on sales of TheraClear® X devices starting January 1, 2027, contingent on achieving certain revenue milestones[188]. - The company may sell up to an additional $6.5 million of its common stock under an existing equity distribution agreement as of September 30, 2025[189].