Aurora Technology Acquisition (ATAK) - 2025 Q3 - Quarterly Results

Executive Summary & Recent Highlights This section outlines DIH Holding US, Inc.'s core business, recent achievements, and the CEO's statement on strategic direction and NASDAQ listing Company Overview DIH Holding US, Inc. is a global leader in advanced robotic rehabilitation equipment, providing solutions for patients with mobility, balance, or arm function impairments through interactive visual stimulation technology - DIH Holding US, Inc. is a global leader in advanced robotic rehabilitation equipment, focusing on providing rehabilitation training for patients with mobility, balance, or arm function impairments through interactive visual stimulation technology[1][23] - The company aims to be a transformative rehabilitation solution provider, integrating a highly fragmented and labor-intensive industry[23] Recent Business Highlights & CEO Statement DIH's Chairman and CEO Jason Chen emphasized the company's commitment to innovation, value creation for patients and providers, and operational discipline, while awaiting a NASDAQ hearing panel decision on its listing status - CEO Jason Chen stated DIH is committed to driving innovation, creating value for patients and healthcare providers, and advancing key strategic initiatives while maintaining operational discipline[3] - The company is awaiting the NASDAQ hearing panel's decision regarding its listing status, following a hearing held on October 16, 2025[3] Financial Performance - Fiscal Year 2025 This section details DIH's full-year financial results for fiscal year 2025, including revenue, gross profit, operating expenses, and cash position Full Year Financial Overview For the fiscal year ended March 31, 2025, DIH's total revenue slightly decreased by 2.5% to $62.9 million, gross profit increased by 8.2% to $32.2 million, but operating loss expanded to $7.0 million, net loss was $8.7 million, and operating cash flow was negative $4.1 million | Metric | FY2025 (million USD) | FY2024 (million USD) | Y-o-Y Change (%) | | :-------------------- | :-------------------- | :-------------------- | :----------- | | Revenue | 62.9 | 64.5 | -2.5% | | Equipment Revenue | 49.7 | N/A | -2.8% | | Service Revenue | 12.0 | N/A | +8.4% | | Operating Cash Flow | -4.1 | 5.2 | -179.8% | | Metric | FY2025 (thousand USD) | FY2024 (thousand USD) | Y-o-Y Change (%) | | :-------------------- | :-------------------- | :-------------------- | :----------- | | Gross Profit | 32,214 | 29,771 | +8.2% | | Operating Loss | (7,024) | (2,614) | -168.7% | | Net Loss | (8,676) | (8,443) | -2.7% | Revenue Analysis (FY2025) Total revenue for FY2025 decreased by 2.5%, primarily due to a shift in product mix towards lower average selling price products, partially offset by price increases implemented in FY2024, with foreign exchange rates having a minor adverse impact - Total revenue decline was primarily attributed to a product mix shift, with customers purchasing a similar number of devices but at a lower average selling price[4] - Service revenue slightly increased as the company continued to focus on expanding its service division in established regions[4] - Foreign exchange rate changes had an adverse impact of approximately $0.2 million on net sales for FY2025, primarily driven by Euro valuation fluctuations[5] Gross Profit Analysis (FY2025) Gross profit for FY2025 increased by 8.2% to $32.2 million, driven by a $4.1 million reduction in cost of sales, primarily due to a $5.3 million lower equipment cost base from product mix changes and reduced inventory provisions | Metric | FY2025 (million USD) | FY2024 (million USD) | Y-o-Y Change (%) | | :----- | :-------------------- | :-------------------- | :----------- | | Gross Profit | 32.2 | 29.8 | +8.2% | - Gross profit growth was primarily driven by a $4.1 million reduction in cost of sales, including $5.3 million from a lower equipment cost base due to product mix changes and reduced inventory provisions in the current fiscal year[6] Operating Expenses (FY2025) Total operating expenses for FY2025 amounted to $39.2 million, a significant increase from the prior year, primarily due to higher selling, general and administrative expenses, increased R&D costs, and a $2.2 million impairment loss on long-lived assets | Metric | FY2025 (thousand USD) | FY2024 (thousand USD) | Y-o-Y Change (%) | | :-------------------- | :-------------------- | :-------------------- | :----------- | | Selling, General & Administrative Expenses | 29,982 | 25,776 | +16.3% | | Research & Development Expenses | 7,096 | 6,609 | +7.4% | | Impairment of Long-Lived Assets | 2,160 | 0 | N/A | Selling, General & Administrative (SG&A) SG&A expenses increased by 16.3% to $30.0 million, mainly due to a $1.9 million increase in personnel costs (including performance-based compensation, salary increases, and headcount additions) and a $0.5 million increase in share-based compensation, alongside a $1.1 million impairment of related party receivables - SG&A expenses increased by $1.9 million in personnel costs, including performance-based compensation, salary increases, and headcount additions, along with $0.5 million in share-based compensation expenses[7] - An impairment of $1.1 million for related party receivables was recognized in FY2025 due to the settlement of related party balances[7] Research & Development (R&D) R&D costs increased by 7.4% to $7.1 million, primarily driven by higher software costs - R&D costs increased by 7.4% to $7.1 million, primarily due to higher software costs[8] Impairment Losses Impairment losses of $2.1 million were recognized in FY2025, including $0.6 million from discontinuing SafeGait product development and commercialization, and $1.5 million from ceasing capitalized software development related to the HocoNet platform, with no such impairments in FY2024 | Impairment Type | FY2025 (million USD) | FY2024 (million USD) | | :--------- | :-------------------- | :-------------------- | | SafeGait Product | 0.6 | 0.0 | | HocoNet Platform Software | 1.5 | 0.0 | | Total | 2.1 | 0.0 | Cash and Cash Equivalents (FY2025) Cash and cash equivalents totaled $1.9 million as of March 31, 2025, a decrease from $3.2 million in the prior year, reflecting negative cash flow from operating activities during the fiscal year | Metric | As of March 31, 2025 (million USD) | As of March 31, 2024 (million USD) | Y-o-Y Change (%) | | :-------------------- | :----------------------------- | :----------------------------- | :----------- | | Cash and Cash Equivalents | 1.9 | 3.2 | -39.8% | Financial Performance - Fourth Quarter 2025 This section presents DIH's financial results for the fourth quarter of fiscal year 2025, covering revenue, gross profit, operating expenses, and net loss Q4 Financial Overview In Q4 FY2025, DIH's revenue decreased by 34.7% year-over-year to $12.6 million, and gross profit declined by 30.4% to $6.0 million, resulting in significant operating and net losses despite a decrease in selling, general and administrative expenses | Metric | Q4 2025 (thousand USD) | Q4 2024 (thousand USD) | Y-o-Y Change (%) | | :-------------------- | :------------------ | :------------------ | :----------- | | Revenue | 12,648 | 19,357 | -34.7% | | Gross Profit | 5,966 | 8,566 | -30.4% | | Operating Loss | (5,367) | (1,486) | -261.2% | | Net Loss | (4,404) | (6,015) | +26.8% | Revenue Analysis (Q4 2025) Q4 FY2025 revenue decreased by 34.7%, primarily due to lower equipment sales volume in the EMEA region, impacted by wartime import restrictions from the Russia-Ukraine conflict, with foreign exchange rates also contributing a minor adverse effect | Metric | Q4 2025 (million USD) | Q4 2024 (million USD) | Y-o-Y Change (%) | | :----- | :------------------ | :------------------ | :----------- | | Revenue | 12.6 | 19.4 | -34.7% | - Equipment revenue decline was primarily driven by reduced sales volume in the EMEA region, where a key sales partner was impacted by wartime import restrictions[11] - Foreign exchange rate changes had a minor adverse impact of approximately $0.3 million on net sales[12] Gross Profit Analysis (Q4 2025) Gross profit for Q4 FY2025 decreased by 30.4% to $6.0 million, directly related to changes in the product mix | Metric | Q4 2025 (million USD) | Q4 2024 (million USD) | Y-o-Y Change (%) | | :----- | :------------------ | :------------------ | :----------- | | Gross Profit | 6.0 | 8.6 | -30.4% | - The decrease in gross profit was directly related to changes in the product mix[12] Operating Expenses (Q4 2025) Total operating expenses for Q4 FY2025 were $11.3 million, an increase from the prior year, with SG&A decreasing due to non-recurring transaction costs and efficiency gains, offset by related party receivables impairment and increased compensation, while R&D remained stable and $2.1 million in impairment losses were recognized | Metric | Q4 2025 (thousand USD) | Q4 2024 (thousand USD) | Y-o-Y Change (%) | | :-------------------- | :------------------ | :------------------ | :----------- | | Selling, General & Administrative Expenses | 7,418 | 8,124 | -8.7% | | Research & Development Expenses | 1,755 | 1,928 | -9.0% | | Impairment of Long-Lived Assets | 2,160 | 0 | N/A | Selling, General & Administrative (SG&A) SG&A expenses decreased by 8.7% to $7.4 million, primarily due to the absence of $1.4 million in business combination-related transaction costs from FY2024 and $0.7 million in cost reductions from efficiency improvements, partially offset by a $1.1 million impairment of related party receivables and $0.5 million in performance-based compensation and headcount additions - SG&A expenses decreased primarily due to the absence of $1.4 million in non-recurring transaction costs from FY2024 and $0.7 million in cost reductions from efficiency improvements[13] - The decrease was partially offset by a $1.1 million impairment of related party receivables and $0.5 million in performance-based compensation, salary increases, and headcount additions[13] Research & Development (R&D) R&D expenses were $1.8 million, largely consistent with the prior year, with a slight decrease due to reduced personnel costs partially offset by increased depreciation and amortization expenses - R&D expenses were $1.8 million, largely consistent with the prior year, with a slight decrease due to reduced personnel costs partially offset by increased depreciation and amortization expenses[14] Impairment Losses Impairment losses of $2.1 million were recognized in Q4 FY2025, including $0.6 million from discontinuing SafeGait product development and commercialization, and $1.5 million from ceasing capitalized software development related to the HocoNet platform | Impairment Type | Q4 2025 (million USD) | Q4 2024 (million USD) | | :--------- | :------------------ | :------------------ | | SafeGait Product | 0.6 | 0.0 | | HocoNet Platform Software | 1.5 | 0.0 | | Total | 2.1 | 0.0 | Subsequent Events This section outlines significant events occurring after March 31, 2025, including debt and financing activities, corporate actions, and NASDAQ listing updates Debt and Financing Activities After March 31, 2025, DIH settled deferred redemptions of original convertible notes by issuing Class A common stock and privately placed $2.2 million in senior secured convertible notes, with expected net proceeds of $1.9 million, maturing in September 2026 and subject to monthly redemptions starting October 2025 - The company amended its securities purchase agreement on May 29, 2025, settling deferred May 1, 2025, redemptions by issuing 1,540,277 shares of Class A common stock[16] - On August 7, 2025, the company privately placed $2.2 million in senior secured convertible notes, with expected net proceeds of $1.9 million, and has funded $1.4 million in three tranches[17] - The newly issued convertible notes mature on September 21, 2026, are non-interest bearing for the first year, then bear 8% annual interest, and require monthly redemptions of $0.171 million starting October 1, 2025, payable in cash or stock[18] Corporate Actions & NASDAQ Listing DIH shareholders approved a 1-for-25 reverse stock split on September 25, 2025, effective October 20, 2025, reducing outstanding shares from approximately 52.3 million to 2.1 million, and the company entered an equity credit agreement with Five Narrow Lane, L.P. for up to $22.0 million, with a commitment fee of 2.5 million common shares refundable if NASDAQ listing is not retained - Company shareholders approved a 1-for-25 reverse stock split on September 25, 2025, which became effective and began trading on NASDAQ on an adjusted basis on October 20, 2025[20][21] - The reverse stock split reduced the number of issued and outstanding shares from approximately 52.3 million to 2.1 million[21] - On October 15, 2025, the company entered an equity credit agreement with Five Narrow Lane, L.P. to issue and sell up to $22.0 million of Class A common stock, not exceeding 10,458,031 shares (19.99% of voting power or common stock outstanding)[22] - The upfront commitment fee for the equity credit agreement was 2,500,000 shares of common stock and a prepaid warrant to purchase an additional 2,500,000 shares, which will be returned to the company if it fails to maintain its NASDAQ listing[22] Company Information This section provides an overview of DIH Holding US, Inc.'s mission and vision, along with important forward-looking statements and investor contact information About DIH Holding US, Inc. DIH Holding US, Inc. is dedicated to improving the daily lives of millions of patients with disabilities and functional impairments by providing advanced robotic equipment and solutions, aiming to be a transformative rehabilitation solution provider by integrating leading niche technology providers - DIH's vision is to 'Deliver Inspiration & Health' by providing advanced robotic rehabilitation equipment and solutions to improve the daily lives of millions of patients with disabilities and functional impairments[23] - The company aims to be a transformative rehabilitation solution provider by integrating global leading niche technology providers and consolidating a highly fragmented and labor-intensive industry[23] Forward-Looking Statements & Investor Contact This press release contains forward-looking statements subject to various risks and uncertainties, where actual results may differ materially from expectations, and DIH disclaims any obligation to update these statements; investors can obtain more information via provided contact details - This press release contains forward-looking statements subject to risks and uncertainties, including economic, political, and business conditions, and the company's ability to achieve anticipated revenues, where actual results may differ materially from expectations[24] - DIH expressly disclaims any obligation to update these forward-looking statements in the future[24] - Investors can contact Greg Chodaczek at 332-895-3230 or via email at Investor.relations@dih.com[25] Consolidated Financial Statements This section presents DIH's consolidated financial statements, including the balance sheets, statements of operations, comprehensive loss, and cash flows for the fiscal year 2025 Consolidated Balance Sheets As of March 31, 2025, DIH's total assets decreased from $35.7 million in 2024 to $26.8 million, primarily due to reductions in cash, accounts receivable, inventory, and related party receivables, along with impairment of capitalized software and other intangible assets; total liabilities also decreased from $68.3 million to $63.9 million | Metric (thousand USD) | As of March 31, 2025 | As of March 31, 2024 | Change | | :-------------------------- | :------------------- | :------------------- | :----- | | Total Assets | 26,752 | 35,735 | (8,983) | | Total Liabilities | 63,887 | 68,281 | (4,394) | | Total Stockholders' Deficit | (37,135) | (32,546) | (4,589) | - Cash and cash equivalents decreased from $3.225 million to $1.939 million; net accounts receivable decreased from $5.197 million to $3.249 million; inventory decreased from $7.830 million to $7.048 million[27] - Net capitalized software decreased from $2.131 million to zero; net other intangible assets decreased from $0.380 million to zero[27] Consolidated Statements of Operations For FY2025, DIH reported a net loss of $8.7 million, slightly higher than FY2024's $8.4 million; revenue decreased by 2.5%, but gross profit increased by 8.2%, while operating expenses significantly rose due to increased SG&A and impairment losses, leading to an expanded operating loss | Metric (thousand USD) | FY2025 | FY2024 | Change | | :-------------------------- | :------- | :------- | :----- | | Revenue | 62,864 | 64,473 | (1,609) | | Cost of Sales | 30,650 | 34,702 | (4,052) | | Gross Profit | 32,214 | 29,771 | 2,443 | | Operating Loss | (7,024) | (2,614) | (4,410) | | Net Loss | (8,676) | (8,443) | (233) | | Net Loss Per Share (Basic and Diluted) | (6.07) | (8.00) | 1.93 | Consolidated Statements of Comprehensive Loss DIH's comprehensive loss for FY2025 expanded to $10.5 million, compared to $8.1 million in FY2024, primarily due to a shift from foreign currency translation gains to losses and the impact of pension liability adjustments | Metric (thousand USD) | FY2025 | FY2024 | Change | | :-------------------------- | :-------- | :-------- | :------- | | Net Loss | (8,676) | (8,443) | (233) | | Other Comprehensive Income (Loss) | (1,787) | 339 | (2,126) | | Comprehensive Loss | (10,463) | (8,104) | (2,359) | - Foreign currency translation adjustments shifted from a $1.455 million gain in FY2024 to a $1.300 million loss in FY2025[31] - Pension liability adjustments changed from a $1.116 million loss in FY2024 to a $0.487 million loss in FY2025[31] Consolidated Statements of Cash Flows In FY2025, DIH's cash flow from operating activities shifted from a $5.2 million net inflow in FY2024 to a $4.1 million net outflow; investing activities continued to use cash, while financing activities turned from a $4.9 million net outflow in FY2024 to a $3.4 million net inflow in FY2025, mainly from proceeds of common stock, warrants, and convertible notes | Cash Flow Activities (thousand USD) | FY2025 | FY2024 | Change | | :-------------------------- | :------- | :------- | :------- | | Net Cash from Operating Activities | (4,144) | 5,192 | (9,336) | | Net Cash from Investing Activities | (536) | (202) | (334) | | Net Cash from Financing Activities | 3,393 | (4,945) | 8,338 | | Net (Decrease) Increase in Cash and Cash Equivalents | (1,314) | 50 | (1,364) | - Operating cash flow turned negative, primarily influenced by net loss, impairment of related party receivables, and impairment of long-lived assets[35] - Financing cash flow turned positive, mainly from proceeds from the issuance of common stock and warrants ($3.911 million) and proceeds from the issuance of convertible notes ($3.109 million)[35]