Financial Performance - For the three months ended March 31, 2025, net revenues decreased by $5,072,000 to $5,503,000, a decline of 48.0% compared to $10,575,000 for the same period in 2024, primarily due to significant shipments of over $13 million to federal government agency customers in the prior year [170]. - Gross profit for the three months ended March 31, 2025, was $2,235,000, down 15.0% from $2,628,000 in 2024 [170]. - The company reported an operating loss of $1,714,000 for the three months ended March 31, 2025, which is a 22.3% increase in loss compared to $1,402,000 in 2024 [170]. - Net income for the period was $23,708,000, a turnaround from a net loss of $31,964,000 in the same quarter of the previous year, representing a 174.2% improvement [170]. - Net income for the three months ended March 31, 2025 was $23,708,000, a significant improvement compared to a net loss of $31,964,000 for the same period in 2024 [177]. Expenses - Cost of net revenues for the same period decreased by $4,679,000 to $3,268,000, a reduction of 58.9% compared to $7,947,000 in 2024, attributed to lower sales and decreased equipment purchases [172]. - Research and development expenses increased by $24,000 to $719,000, reflecting higher product development costs compared to $695,000 in the previous year [173]. - Selling, general and administrative expenses decreased by $105,000 to $3,230,000, influenced by reduced professional service and insurance expenses, offset by increased stock-based compensation and sales and marketing expenses [174]. Other Income and Gains - Other income for the period included a gain from the change in fair value of earnout liability of $9,824,000, compared to a loss of $21,485,000 in the prior year, marking a 145.7% improvement [170]. - The total income (other expense), net for the three months ended March 31, 2025, was $25,422,000, a significant increase of 183.2% from a loss of $30,562,000 in 2024 [170]. - Other income for the three months ended March 31, 2025 was $25,422,000, compared to other expense of $30,562,000 for the same period in 2024, primarily due to gains from changes in fair value of financial instruments [175]. - Noncash items contributing to net income in Q1 2025 included a gain from change in warrant liability of $15,521,000 and a gain from change in earnout liability of $9,824,000 [177]. Cash Flow and Financing - Net cash used in operating activities for the three months ended March 31, 2025 was $2,098,000, influenced by net income and reductions in working capital [180]. - Net cash used in financing activities for the three months ended March 31, 2025 was $497,000, primarily due to repayment of advances by founders [182]. - The company closed an $8 million public offering in September 2024, generating approximately $7.3 million in net proceeds [179]. Liquidity and Deficits - The company had an accumulated deficit of $8.8 million as of March 31, 2025, indicating ongoing challenges in achieving profitability [179]. - The company evaluated its liquidity and cash position in May 2025, concluding no substantial doubt about its ability to continue as a going concern [179]. Lease and Operational Changes - The company entered into a new lease for 15,567 square feet of office and warehouse space in Redmond, WA, starting October 1, 2023, with a monthly payment of $25,000 [183]. Noncash Charges - Noncash charges for the three months ended March 31, 2024 totaled $30,881,000, significantly impacting the net loss for that period [178].
BYTE Acquisition (BYTS) - 2025 Q1 - Quarterly Report