Financial Performance - Net revenues for the nine months ended December 31, 2025, were $2,980,765, a 41% increase from $2,110,889 for the same period in 2024, primarily driven by new sales of Omni One and fulfillment of legacy preorders[191] - Gross profit for the nine months ended December 31, 2025, increased by $1,228,650, with gross margin improving from -17% in 2024 to 29% in 2025, attributed to higher selling prices and reduced manufacturing overhead costs[197] - The company reported a net loss of $(6,892,302) for the nine months ended December 31, 2025, a decrease of $5,131,766 compared to $(12,024,068) for the same period in 2024[200] - Omni One hardware sales generated net revenues of $2,126,985 for the nine months ended December 31, 2025, compared to $1,355,640 in the same period of 2024[194] - Operating expenses decreased to $6,292,648 for the nine months ended December 31, 2025, from $11,357,777 in 2024, largely due to a reduction in general and administrative expenses[199] - Net loss for Q4 2025 was $(2,730,944), an increase of $760,331 compared to $(1,970,613) in Q4 2024, despite improved gross profit[211] - Adjusted EBITDA for Q4 2025 was $(1,624,814), slightly better than $(1,632,849) in Q4 2024[214] Revenue and Sales Growth - New orders for Omni One and Omni One Core systems increased by 60% in December 2025 compared to December 2024, indicating strong demand[201] - Omni Arena revenue decreased as the business transitions to maintenance mode, focusing on supporting existing customers and earning recurring revenues[202] - The Company recognized revenue of $2,517,806 during the nine months ended December 31, 2025, from deferred revenue at the beginning of the period, compared to $1,617,995 for the same period in 2024[278] - Revenue from Omni Care services is recognized ratably over the first 12 months of the contract term, with an observable standalone pricing of $2,000 per quarter[264] Funding and Capital Structure - The company raised $8,000,000 in January 2026 through a Securities Purchase Agreement with Streeterville, along with additional proceeds from warrant exercises totaling $2,553,127[221] - The company issued a total of $2,220,000 in secured promissory notes to Streeterville, with an original issue discount of $200,000[225] - The company anticipates requiring additional funding of approximately $2,000,000 to continue operations for the next 12 months[234] - The company raised $6,219,758 from financing activities for the nine months ended December 31, 2025, compared to $8,023,827 for the same period in 2024[236] - The company has entered into an Equity Purchase Agreement with Streeterville to purchase up to $50,000,000 of Class A common stock over a 24-month period, with an initial advance of $8,000,000[229] Internal Controls and Compliance - The Company identified material weaknesses in internal control over financial reporting, including insufficient written policies and inadequate segregation of duties[299] - Measures have been implemented to improve internal controls, including formalizing policies and enhancing controls for related-party transactions[300] - The Company is committed to continuously evaluating and improving its internal control over financial reporting to address identified deficiencies[301] Future Outlook - The company anticipates continued operating losses as it pursues market penetration and revenue growth in 2026[184] - The company aims to achieve sustainable profitability by scaling Omni One sales and securing defense contracts for VTW[188] - The development of VTW, a multi-user mission planning system for the defense market, is ongoing, with meaningful sales expected no earlier than fiscal year 2027[186] - The company expects to incur additional losses while scaling sales, marketing, and production of its product, Omni One[234] Cash and Liquidity - As of December 31, 2025, the company had cash on hand of $1,074,638, up from $477,908 as of March 31, 2025[220] - The company reported an accumulated deficit of $(69,384,892) as of December 31, 2025, compared to $(62,492,590) as of March 31, 2025[220] - The company’s net cash used in operating activities was $(5,535,794) for the nine months ended December 31, 2025, compared to $(6,342,683) for the same period in 2024[236] - Cash and cash equivalents amounted to $111,802 and $196,962 as of December 31, 2025, and March 31, 2025, respectively, with foreign deposits not insured by the FDIC[261] Accounting Standards and Policies - The Company applies a five-step model for revenue recognition under ASC 606, ensuring that revenue reflects the consideration expected from customers[254] - The Company adopted ASU 2016-13 effective April 1, 2023, resulting in a decrease to receivables and a cumulative-effect adjustment to retained earnings of $22,483[289] - The Company adopted ASU 2017-04 effective April 1, 2023, concluding that the adoption did not have a material impact on its consolidated financial statements[290] - The Company is currently evaluating the impact of ASU 2023-05 on its consolidated financial statements, which is effective for joint venture formations on or after January 1, 2025[291] - The Company adopted ASU 2023-07 on April 1, 2024, requiring disclosure of significant expenses and other segment items for reportable segments[292] - The Company is evaluating the impact of ASU 2023-09, effective for fiscal years beginning after December 15, 2025, which enhances transparency regarding income tax disclosures[293] - The Company is assessing the impact of ASU 2024-03, effective for fiscal years beginning after December 15, 2026, which requires significant expense categories to be disclosed in a tabular format[294] Deferred Revenue and Advertising Expenses - The Company reported deferred revenue of $727,266 as of December 31, 2025, down from $1,769,556 on March 31, 2025[278] - Total advertising expense for the nine months ended December 31, 2025, was $1,270,723, significantly higher than $130,170 for the same period in 2024[282]
Virtuix(VTIX) - 2026 Q3 - Quarterly Report