Revenue Performance - Revenue for the nine months ended September 30, 2025, was $107.4 million, compared to $74.8 million for the same period in 2024, representing a 43.6% increase[155]. - Total revenue for the three months ended September 30, 2025, was $42,850,000, a 57% increase from $27,360,000 in the same period of 2024[187]. - Total revenue for the nine months ended September 30, 2025, reached $107,401 million, a 44% increase from $74,765 million in the same period of 2024[204]. Net Loss - The company reported a net loss of $44.0 million for the nine months ended September 30, 2025, compared to a net loss of $38.3 million for the same period in 2024[155]. - The net loss for the three months ended September 30, 2025, was $1,796,000, a 94% improvement from a net loss of $30,443,000 in the same period of 2024[187]. - For the nine months ended September 30, 2025, the net loss increased to $44.0 million from $38.3 million for the same period in 2024[233]. Revenue Breakdown - Product revenue surged to $9,242,000, up 588% from $1,344,000 year-over-year, with a gross profit margin of 14% compared to a loss margin of 95% in the prior year[189]. - Subscription revenue increased by 27% to $22,685,000 from $17,909,000, with a gross profit margin of 52%, down from 59%[190]. - Service revenue for the three months ended September 30, 2025, was $7,808 million, a 28% increase from $6,085 million in the prior year[192]. - License fee and other revenue increased by 54% to $3,115 million for the three months ended September 30, 2025, compared to $2,022 million in 2024[193]. - Product revenue surged by 194% to $14,092 million for the nine months ended September 30, 2025, compared to $4,789 million in 2024[206]. - Subscription revenue increased to $62,122 million for the nine months ended September 30, 2025, up 30% from $47,783 million in 2024[207]. - Service revenue grew by 26% to $21,224 million for the nine months ended September 30, 2025, compared to $16,903 million in 2024[208]. - License fee and other revenue surged by 88% to $9,963 million for the nine months ended September 30, 2025, from $5,290 million in 2024[209]. Customer Growth - The company added 62 new customers during the three months ended September 30, 2025, contributing to revenue growth[188]. - The company added 179 new customers during the nine months ended September 30, 2025, contributing to increased adoption of its solutions[205]. Expenses and Cost Management - Research and development expenses are expected to decrease for the year ending December 31, 2025, due to cost-cutting measures including a reduction in force[171]. - Sales and marketing expenses are also projected to decline for the year ending December 31, 2025, as a result of similar cost-cutting initiatives[172]. - General and administrative expenses saw a significant increase in 2024 due to legal fees and consulting expenses, but are expected to remain lower in Q4 2025[174]. - Research and development expenses decreased by 16% to $15,207 million for the nine months ended September 30, 2025, down from $18,056 million in 2024[210]. - Sales and marketing expenses fell by 27% to $34,494 million for the nine months ended September 30, 2025, compared to $47,182 million in 2024[211]. - General and administrative expenses increased by 12% to $44,789 million for the nine months ended September 30, 2025, from $39,843 million in 2024[212]. Cash Flow and Liquidity - As of September 30, 2025, the company had $56.2 million in cash and cash equivalents, with outstanding debt of $28.5 million[219]. - The company had cash, cash equivalents, and marketable securities totaling $56.2 million as of September 30, 2025, which is expected to fund operating expenses and capital expenditures for at least twelve months[222][229]. - The company is required to maintain a minimum liquidity of $15.0 million, with actual liquidity reported at $71.1 million as of September 30, 2025[224][228]. - Cash used in investing activities for the nine months ended September 30, 2025, was $43.2 million, primarily for the purchase of property and equipment[236]. - Cash provided by financing activities for the nine months ended September 30, 2025, was $34.7 million, mainly from $30.0 million in proceeds from the Initial Term Loan[238]. Strategic Initiatives - The company entered into a non-exclusive contract manufacturing agreement with Plexus Corp. on November 5, 2025, aimed at enhancing scalability and operational resiliency[148]. - The company is focused on expanding its market presence internationally, with expectations of increased adoption of its products in foreign markets[154]. - The company has discontinued quoting under the Distribution and License Agreement, transitioning to a purchase subscription model for hardware sales[163]. - The company anticipates continued strategic investments to support growth in its emerging technology field[223]. Market Conditions - The company expects to continue experiencing fluctuations in revenue as venues shift towards touchless security screening solutions[151]. - The company anticipates fluctuations in gross margins based on customer demand and strategic management decisions affecting sales and fulfillment models[170]. - The company faces uncertainties related to trade restrictions and tariffs that could adversely affect its financial condition[225].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (State or Other Jurisdiction of Incorporation or Organization) (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to Commission file number: 001-39417 _____________________ ...

Financial Performance - For the third quarter of 2025, Alumis reported total revenue of $2.1 million, compared to $0 for the same quarter in 2024[13]. - The net loss for Q3 2025 was $110.8 million, compared to a net loss of $93.1 million in Q3 2024[6][13]. - Alumis reported a revenue increase of 15% year-over-year, reaching $250 million in Q3 2023[15]. - The company provided guidance for Q4 2023, expecting revenue between $260 million and $270 million, indicating a potential growth of 4% to 8%[15]. - New product launch scheduled for Q1 2024, anticipated to contribute an additional $30 million in revenue[15]. - The company plans to enter the Asian market by mid-2024, targeting a revenue contribution of $50 million in the first year[15]. Research and Development - Research and development expenses increased to $97.8 million in Q3 2025, up from $87.8 million in Q3 2024, driven by higher clinical trial costs and severance expenses related to the merger with ACELYRIN[6][13]. - A-005, a novel TYK2 inhibitor, is expected to enter a Phase 2 clinical trial in multiple sclerosis in the first half of 2026[7][3]. - The company anticipates topline Phase 3 ONWARD data for envudeucitinib in moderate-to-severe plaque psoriasis to be announced in early Q1 2026[2][3]. - The company expects to establish a once-daily formulation for envudeucitinib in 2025[7][3]. - Investment in R&D increased by 25%, totaling $15 million, to enhance product offerings and technology[15]. Expenses and Costs - General and administrative expenses rose to $19.5 million in Q3 2025, compared to $10.6 million in Q3 2024, primarily due to severance costs and increased personnel-related expenses[6][13]. - Alumis recognized merger-related expenses of $6.3 million for Q3 2025, which included stock-based compensation expenses[8][6]. Market and User Growth - User base expanded to 1.5 million active users, representing a growth of 20% compared to the previous quarter[15]. - Market expansion efforts in Europe resulted in a 10% increase in market share[15]. - Customer retention rate improved to 85%, up from 80% in the previous quarter[15]. Operational Metrics - Operating margin improved to 18%, a 2% increase from the previous year[15]. - Collaboration revenue for Q3 2025 included $2.1 million from a licensing agreement with Kaken Pharmaceutical Co., Ltd.[6][13]. - As of September 30, 2025, Alumis had cash, cash equivalents, and marketable securities totaling $377.7 million, expected to support operations into 2027[9][6]. - Strategic acquisition of a tech startup completed, expected to enhance service capabilities and add $5 million in annual revenue[15].

Revenue Performance - Year-to-date revenue reached $184.8 million, reflecting an 88% increase compared to the previous year[1] - Third quarter revenues totaled $41.9 million, down 40% year-over-year, with procurement revenues at $31.1 million, down 49%[3] - Procurement revenues for the year-to-date were $154.3 million, up 100% from the previous year[3] - Gross profit for the year-to-date was $21.0 million, representing a 39% increase year-over-year[3] Profitability Metrics - Adjusted EBITDA for the year-to-date was $10.7 million, up 59% compared to the same period in 2024[3] - The company reported a net loss of $1.5 million in Q3 2025, compared to a net income of $2.6 million in Q3 2024[3] - The company expects a strong rebound in quarterly EBITDA in Q4 2025, with updated full-year Adjusted EBITDA growth guidance of 50% to 75% compared to 2024[5] Revenue Segmentation - Systems Integration revenues increased by 20% to $9.2 million in Q3 2025, while Facilities Management revenues decreased by 19% to $1.6 million[3] Asset Management - Total current assets increased to $100.3 million as of September 30, 2025, compared to $58.2 million at the end of 2024[13] Operational Improvements - The company has implemented new procedures to increase rack volumes in Q4 2025 after lower-than-expected integration volumes in Q3[2]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File No. 001-40111 __________________________ SABLE OFFSHORE CORP. (Exact name of registrant as specified ...

Business Combination and Financing - The Company completed the Business Combination on February 14, 2024, resulting in the issuance of 44,024,910 shares of Common Stock for gross proceeds of $440.2 million[210]. - The Second PIPE Investment raised approximately $150.0 million by issuing 7,500,000 shares at $20.00 per share on September 26, 2024[211]. - The Company entered into an Underwriting Agreement for the 2025 Offering, raising approximately $282.6 million in net proceeds from the sale of 10,000,000 shares at $29.50 per share[214]. - The company raised $295.0 million in gross proceeds from the sale of 10,000,000 shares of Common Stock in the 2025 Offering[280]. Production and Operations - The Company initiated oil production from six wells on Platform Harmony at SYU on May 15, 2025, with an initial production rate of approximately 6,000 barrels of oil per day[224]. - The Company plans to implement an offshore storage and treating vessel strategy, expecting to begin sales from all SYU platforms in Q4 2026, with anticipated production rates exceeding 50,000 barrels of oil per day[221]. - The Company has focused all operations on recommencing sales of production from the SYU Assets, pending necessary regulatory approvals[263]. - The company plans to recommence oil sales in the fourth quarter of 2026, contingent upon regulatory approvals[280]. Legal and Regulatory Matters - Sable submitted Restart Plans for the Pipelines to OSFM on July 29, 2024, and has conducted successful hydrotests on all segments of Line 324 and Line 325 as of May 27, 2025[226]. - On December 17, 2024, OSFM granted state waivers for enhanced pipeline integrity standards, which were later not objected to by PHMSA[227]. - Sable is facing two lawsuits challenging the issuance of State Waivers, with petitioners seeking to declare the waivers void[228]. - The Coastal Commission imposed an administrative penalty of approximately $18.0 million on Sable related to ongoing development in the Coastal Zone[237]. - Sable filed a complaint against the Coastal Commission on February 18, 2025, challenging the legality of the Notices of Violation and Cease and Desist Order[236]. - The court denied the Coastal Commission's request for a temporary restraining order against Sable on April 17, 2025[238]. - Sable's monetary damages related to the Coastal Commission's actions are quantified in excess of $347 million[240]. - The Center for Biological Diversity and the Wishtoyo Foundation filed complaints against BSEE and BOEM, alleging violations of NEPA and OCSLA related to Sable's operations[241][242]. - The Company is involved in litigation against the County of Santa Barbara regarding the transfer of Final Development Permits, with a hearing set for December 16, 2025[252]. - A putative class action complaint was filed against the Company on July 28, 2025, alleging violations of the Exchange Act and Securities Act[253]. - The Company intends to vigorously defend against claims in the Johnson class action lawsuit, with motions to dismiss due on November 24, 2025[254]. - The California Department of Conservation's CalGEM has asserted that the Company must post a bond of approximately $31.9 million and submit oil spill contingency response plans[257]. Financial Performance - The Company has not generated substantial revenues since the shut-in, with operating expenses being the primary metrics for performance assessment[259]. - Operating and maintenance expenses increased to $79.4 million for the three months ended September 30, 2025, up $53.8 million or 210% from $25.6 million in the same period of 2024[265]. - Depletion, depreciation, amortization, and accretion rose to $3.3 million for the three months ended September 30, 2025, an increase of $0.5 million or 18% compared to $2.8 million for the same period in 2024[266]. - General and administrative expenses were $36.7 million for the three months ended September 30, 2025, reflecting a $10.5 million increase or 40% from $26.2 million in the same period of 2024[267]. - Total other income (expense), net was $15.6 million for the three months ended September 30, 2025, a change of $215.7 million compared to an expense of $200.1 million for the same period in 2024[268]. - Net loss for the three months ended September 30, 2025, was $110.4 million, a decrease of $145.2 million or 57% from a net loss of $255.6 million in the same period of 2024[265]. - Operating and maintenance expenses for the nine months ended September 30, 2025, were $164.2 million, an increase of $97.7 million or 147% compared to $59.2 million for the same period in 2024[272]. - General and administrative expenses decreased to $134.4 million for the nine months ended September 30, 2025, down $77.2 million from $211.6 million for the combined periods in 2024[274]. - Total other expense, net was $14.6 million for the nine months ended September 30, 2025, a decrease of $291.2 million compared to an expense of $305.8 million for the combined periods in 2024[275]. - The net loss for the nine months ended September 30, 2025, was $348.0 million, which includes a non-cash decrease of $40.7 million in fair value of warrants and non-cash stock-based compensation of $30.0 million[289]. - Cash flows used in operating activities for the nine months ended September 30, 2025, amounted to $253.6 million, representing an increase of $105.6 million, or 71%, compared to the previous periods[288]. - Net cash used in investing activities was $323.1 million for the nine months ended September 30, 2025, an increase of $100.4 million, or 45%, compared to the previous periods[290]. - The company has an accumulated deficit of $1.0 billion as of September 30, 2025[284]. Future Expectations and Strategic Plans - The Company expects to opportunistically acquire an existing OS&T vessel in Q1 2026, with delivery anticipated in Q3 2026[221]. - The company expects to incur approximately $450.0 million in remaining start-up expenses to recommence offshore oil sales under the OS&T strategy[281]. - The effective tax rate for the three months ended September 30, 2025, was negative 6.4%, reflecting ongoing assessments of deferred tax assets[269]. - The company expects elevated operating and maintenance expenses to continue for the remainder of 2025 due to restart efforts and increased headcount[265]. - The Senior Secured Term Loan matures on January 9, 2026, but is expected to be extended to March 31, 2027, or 90 days after first sales of hydrocarbons[284]. - The company has curtailed substantially all capital expenditures relating to the Onshore Pipeline and onshore processing facility[278]. - The company has oil inventory storage capacity of 540 MBbls onshore at LFC, with inventory volumes expected to fluctuate over time to maintain optimal operational efficiencies[304]. Accounting and Compliance - The company is classified as an "emerging growth company" and may remain so until the last day of the fiscal year following the fifth anniversary of the IPO, unless certain revenue or market value thresholds are exceeded[312]. - The company is also classified as a "smaller reporting company," allowing it to provide only two years of audited financial statements until specific market value or revenue thresholds are met[313]. - The company will cease to be an emerging growth company or smaller reporting company as of December 31, 2025, after which it will not benefit from reduced reporting requirements[314]. - Management estimates future undiscounted cash flows of affected properties to assess recoverability, based on assumptions consistent with investment evaluation criteria[306]. - Impairment assessments are conducted whenever events indicate that the carrying amounts of assets may not be recoverable, including significant decreases in market prices or adverse changes in usage[307]. - The company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks, and all outstanding warrants are recognized as derivative liabilities[310]. - The company does not anticipate that recently issued accounting standards will have a material effect on its financial statements[315].

Oncology Pipeline - Acrivon Therapeutics is focused on oncology, advancing its pipeline of preclinical and clinical-stage small molecule inhibitors, including ACR-368 and ACR-2316[100]. - ACR-368 is in a potentially registrational Phase 2B trial for endometrial cancer, with initial data showing a confirmed overall response rate (ORR) of 35% and a disease control rate (DCR) of 80% among 20 biomarker-positive patients[105]. - The company reported that 80% of biomarker-positive patients demonstrated tumor shrinkage, indicating significant anti-tumor activity in aggressive, refractory tumors[105]. - ACR-368 received Fast Track designation from the FDA for endometrial cancer and the OncoSignature test received Breakthrough Device Designation, reflecting its potential for effective treatment[102]. - ACR-2316, a selective WEE1/PKMYT1 inhibitor, is currently in Phase 1 trials, with initial clinical activity observed and a clinical data update expected in the second half of 2025[108]. - The company plans to continue exploring drug combinations and has initiated a Phase 2 trial of ACR-368 with ultra low-dose gemcitabine in endometrial cancer patients[106]. Financial Performance - Acrivon has incurred net losses of $58.9 million and $57.7 million for the nine months ended September 30, 2025, and 2024, respectively, with an accumulated deficit of $255.9 million as of September 30, 2025[113]. - The company raised $123.8 million in net proceeds from a PIPE transaction in April 2024, selling 8,235,000 shares at $8.50 per share[112]. - Research and development expenses for Q3 2025 were $13.6 million, a decrease of $5.2 million from $18.9 million in Q3 2024[137]. - The company reported a net loss of $18.2 million for Q3 2025, an improvement of $4.2 million compared to a net loss of $22.4 million in Q3 2024[135]. - Total operating expenses for the nine months ended September 30, 2025, were $63.998 million, a slight decrease of $0.247 million from $64.245 million in the same period of 2024[139]. - Interest income for Q3 2025 was $1.5 million, down from $2.7 million in Q3 2024, reflecting a decrease of $1.2 million[138]. - Total other income, net for the nine months ended September 30, 2025, was $5.1 million, compared to $6.5 million for the same period in 2024, a decrease of $1.4 million[143]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $48.4 million, slightly increasing from $48.3 million in the same period of 2024[146]. - Net cash provided by investing activities was $44.6 million for the nine months ended September 30, 2025, resulting from $114.5 million in proceeds from maturities of investments[148]. - Net cash used in financing activities was $0.6 million for the nine months ended September 30, 2025, primarily due to tax withholding payments[150]. Research and Development - Acrivon is leveraging its proprietary AP3 platform for drug discovery and optimization, which has enabled rapid advancement of its drug candidates[109]. - The company anticipates a substantial increase in research and development expenses as it continues the development of ACR-368 and ACR-2316[126]. - Research and development expenses for the nine months ended September 30, 2025, were $45.2 million, a decrease of $0.1 million from $45.4 million in the same period of 2024[142]. - ACR-368 direct research and development expenses for Q3 2025 were $3.985 million, down from $11.098 million in Q3 2024, a decrease of $7.113 million[136]. - The company experienced a $6.5 million net decrease in costs due to fewer scheduled milestones in the current period[147]. - A $3.8 million net increase in costs was related to the clinical trial of ACR-2316, initiated in Q3 2024[147]. Future Outlook - Acrivon anticipates significant ongoing expenses related to clinical development and commercialization efforts, necessitating additional funding to support its growth strategy[115]. - The company expects to incur significant expenses and operating losses as it advances drug candidates through clinical development and seeks regulatory approval[153]. - The company anticipates that existing cash will fund operations into the second quarter of 2027, based on current assumptions[152]. - The company may require additional capital for in-licenses or acquisitions of other drug candidates in the future[153]. - As of September 30, 2025, the company had cash, cash equivalents, and investments totaling $134.4 million, expected to fund operations into Q2 2027[118]. - The company is classified as a "smaller reporting company," with a market value of stock held by non-affiliates below $700 million[164].

Revenue and Market Performance - AXT's substrate product group generated 68% of consolidated revenue in 2024, while the raw materials product group accounted for 32%[145]. - The demand for InP substrates is expected to increase due to growth in AI applications and high-speed data transfer needs in data centers[144]. - In 2024, 8% of the Company's total worldwide revenue was generated from sales in North America, primarily from indium phosphide substrates, which have been significantly impacted by tariffs and export controls[162]. - Revenue for the three months ended September 30, 2025, increased by $4.3 million, or 18.2%, to $27.955 million compared to $23.645 million for the same period in 2024[205]. - Substrate revenue for the three months ended September 30, 2025, increased by $6.252 million, or 41.7%, primarily due to higher demand for InP wafer substrates used in data center applications[205]. - Revenue from raw materials decreased by $1.942 million, or 22.5%, to $6.696 million for the three months ended September 30, 2025, attributed to weaker market demand for refined gallium and pBN crucibles[205]. - For the nine months ended September 30, 2025, total revenue decreased by $9.0 million, or 12.1%, to $65.285 million from $74.256 million in the same period in 2024[206]. - Revenue in China for the three months ended September 30, 2025, decreased by $0.662 million, or 4.8%, primarily due to lower demand for Ge wafer substrates[208]. - Revenue in Taiwan increased by $6.905 million, or 322.7%, for the three months ended September 30, 2025, primarily due to additional export approvals from the Chinese government[208]. - North America revenue decreased by $2.418 million, or 94.5%, for the three months ended September 30, 2025, primarily due to the impact of China export restrictions[208]. Operational Efficiency and Capacity - AXT has completed the relocation of its gallium arsenide production lines, enhancing manufacturing efficiency and capacity[151]. - The company has invested in advanced equipment and additional facilities to support future capacity needs[151]. - AXT's consolidated subsidiaries produce and sell raw materials used in substrate manufacturing, contributing to operational efficiency[142]. - The company is focused on expanding its market presence and increasing sales through new product development and technological advancements[140]. Supply Chain and Geopolitical Factors - AXT's supply chain strategy includes partial ownership of raw material companies in China, providing pricing advantages and reliable supply[149]. - The company anticipates that geopolitical tensions and export restrictions in China may impact operations and market conditions[140]. - The PRC government has imposed new export control regulations affecting materials used in military applications, impacting Tongmei's operations[161]. - The Company has created a vertically integrated supply chain, utilizing transfer pricing arrangements and licensing intellectual property to its PRC subsidiaries[167]. - The political tensions between China and the U.S. are affecting the company's ability to secure necessary export permits, impacting revenue and operations[198]. Financial Position and Cash Flow - The company believes it has adequate cash and investments to meet operational needs over the next 12 months[140]. - As of September 30, 2025, the principal source of liquidity was $31.2 million, consisting of cash of $23.1 million and restricted cash of $8.1 million[231]. - Cash and restricted cash decreased by $2.6 million in the nine months ended September 30, 2025, primarily due to net cash used in operating activities of $17.1 million[231]. - Net cash used in operating activities was $17.1 million for the nine months ended September 30, 2025, primarily due to a net loss before income attributable to noncontrolling interest of $19.4 million[233]. - Net cash used in investing activities was $3.8 million for the nine months ended September 30, 2025, primarily from the purchase of property, plant, and equipment of $3.0 million[235]. - Net cash provided by financing activities was $11.8 million for the nine months ended September 30, 2025, consisting of proceeds from short-term loans of $43.3 million[237]. Investment and Financing Activities - Tongmei has secured approximately $49 million in investments from 10 private equity funds to support its IPO on the STAR Market, with a 7.28% redeemable noncontrolling interest granted to investors[153]. - The IPO application for Tongmei was accepted for review by the Shanghai Stock Exchange on January 10, 2022, and was approved on July 12, 2022[155]. - The Company filed a "shelf" registration statement with the SEC to offer up to $100 million in various securities for working capital and capital expenditures[253]. - The Company has a targeted investment of approximately $90 million in a new wafer processing production line in Dingxing, China, with local government support including tax credits[258]. Regulatory and Compliance Issues - The company has faced challenges due to complex and evolving regulations in China, which could materially affect its operations and stock value[169]. - The audit report is prepared by BPM LLP, which is registered with the PCAOB, mitigating some risks associated with foreign operations[170]. Expenses and Profitability - Selling, general and administrative expenses increased by $684,000, or 12.1%, to $6.3 million for the three months ended September 30, 2025, and increased by $247,000, or 1.4%, to $17.9 million for the nine months[215][216]. - Research and development expenses decreased by $2.4 million, or 70.5%, to $1.0 million for the three months ended September 30, 2025, and decreased by $3.8 million, or 36.1%, to $6.7 million for the nine months[217][218]. - Gross profit for the three months ended September 30, 2025 increased by $0.5 million, or 9.5%, to $6.2 million, while gross profit for the nine months decreased by $13.0 million, or 67.0%, to $6.4 million[211][212]. Credit and Loan Information - The Company secured a new line of credit amounting to $9.7 million, structured as a five-year bank loan with an interest rate of 6.5% per annum[249]. - As of September 30, 2025, $4.7 million is included in "Other long-term liabilities" and $0.7 million in "Short-term loans" related to the new credit facility[249]. - ChaoYang XinMei secured a loan of approximately $2.1 million, with an option to repurchase the production line and related equipment for $14.00 at the end of a 30-month period[250]. - The Company secured a fourteen-month unsecured bank loan totaling $2.7 million at an interest rate of 3.2%[251]. - A four-year bank loan totaling $0.4 million was entered into at an interest rate of 3.1%, with $0.3 million included in "Other long-term liabilities" and $0.1 million in "Short-term loans" as of September 30, 2025[252].

Financial Performance - Net Power Inc. reported financial results for Q3 2025, with a revenue of $25 million, representing a 15% increase year-over-year[5] - The company achieved a gross margin of 30%, up from 25% in the same quarter last year, indicating improved operational efficiency[5] - Net Power Inc. provided guidance for Q4 2025, projecting revenue between $28 million and $30 million, which would represent a growth of 12% to 20% compared to Q4 2024[5] - Operational costs were reduced by 8% compared to the previous quarter, reflecting effective cost management strategies[5] Customer Growth - User data showed a 20% increase in active customers, reaching a total of 10,000 users by the end of Q3 2025[5] Investment and Development - The company is investing $5 million in R&D for new product development, focusing on advanced energy solutions[5] - The company plans to launch a new product line in Q1 2026, expected to contribute an additional $10 million in revenue in the first year[5] Market Expansion - Market expansion efforts include entering two new states, aiming to increase market share by 10% in the next fiscal year[5] - Net Power Inc. is exploring potential acquisition opportunities to enhance its technology portfolio and expand its service offerings[5] Sustainability Commitment - The company remains committed to sustainability, with 50% of its energy sourced from renewable resources as of Q3 2025[5]

Financial Performance - Revenue for Q3 2025 was $8.793 million, a decrease of 38.1% compared to $14.219 million in Q3 2024[17] - Gross profit for Q3 2025 was $4.499 million, down 29.2% from $6.362 million in Q3 2024[17] - Net loss for Q3 2025 was $6.169 million, compared to a net income of $43.370 million in Q3 2024[17] - For the nine months ended September 30, 2025, zSpace reported a net loss of $18,103,000, compared to a net loss of $17,197,000 for the same period in 2024[22] - For the three months ended September 30, 2025, the company reported a net loss of $6,169,000 compared to a net loss of $204,000 for the same period in 2024[134] - Total revenues for the three months ended September 30, 2025, were $8,793,000, a decrease of 38.1% from $14,219,000 in 2024[145] - The gross profit for the three months ended September 30, 2025, was $4,499,000, down from $6,362,000 in 2024, reflecting a gross margin decline[145] - The company incurred total operating expenses of $9,293,000 for the three months ended September 30, 2025, an increase of 46.3% compared to $6,338,000 in 2024[145] Operating Expenses - Total operating expenses increased to $9.293 million in Q3 2025, up 46.4% from $6.338 million in Q3 2024[17] - Selling and marketing expenses increased to $4.340 million in Q3 2025, compared to $3.265 million in Q3 2024[17] - Research and development expenses for Q3 2025 were $1.568 million, up 50.5% from $1.040 million in Q3 2024[17] - The company incurred total operating expenses of $9,293,000 for the three months ended September 30, 2025, an increase of 46.3% compared to $6,338,000 in 2024[145] Assets and Liabilities - Total current assets as of September 30, 2025, were $13.340 million, slightly down from $13.511 million as of December 31, 2024[14] - Total liabilities increased to $33.143 million as of September 30, 2025, compared to $28.220 million as of December 31, 2024[14] - The company reported a significant increase in accounts payable, which rose to $3.965 million from $5.656 million[14] - The company’s accumulated deficit reached $308.503 million as of September 30, 2025, compared to $290.400 million as of December 31, 2024[14] Cash Flow and Financing - The company experienced a net cash used in operating activities of $14,025,000 for the nine months ended September 30, 2025, significantly higher than $3,850,000 for the same period in 2024[22] - zSpace's cash, cash equivalents, and restricted cash at the end of the period were $4,271,000, an increase from $3,204,000 at the end of September 2024[22] - The company raised $13,000,000 from convertible debt in 2025, compared to $5,000,000 in 2024[22] - The company issued common stock under an equity line of credit, generating proceeds of $3,605,000 in 2025[22] - The company raised $13,000,000 from the Senior Secured Convertible Note Financing, which closed on April 11, 2025[81] Revenue Recognition - The Company recognized revenue using a five-step model in accordance with ASC Topic 606, which includes identifying contracts and performance obligations[43] - Revenue is recognized when the obligation under the terms of the Company's contract with its customer is satisfied, reflecting the consideration expected to be received[45] - The Company offers standard warranty coverage on substantially all products, which is accounted for as an assurance warranty and not considered a separate performance obligation[46] Market and Product Information - zSpace's primary product is a mixed reality hardware device aimed at K-12 education, generating revenue from both hardware sales and recurring software revenue[25] - The total addressable market (TAM) for the K-12 market is estimated at approximately $21.4 billion in the United States, $29.0 billion in EMEA, and $5.6 billion in APAC, with a global TAM exceeding $68 billion[160][161] - The company has implemented its platform in over 3,500 U.S. public school districts, representing a significant market penetration[158] Stock and Equity - As of September 30, 2025, a total of 8,692,379 shares were authorized for issuance under the Stock Plans, with 7,473,415 shares granted or issued, leaving 1,218,964 shares available for future awards[121] - The Company granted 724,646 Restricted Stock Units (RSUs) to executive officers and Board members at a fair market value of $12.9 million on February 13, 2025[120] - The intrinsic value of RSUs as of September 30, 2025, was $1.3 million, with total unrecognized stock-based compensation cost for RSUs at approximately $13.4 million expected to be recognized over a weighted average period of 1.7 years[124] Challenges and Risks - The Company has incurred operating losses and negative cash flows from operations since inception, raising substantial doubt about its ability to continue as a going concern for at least twelve months[30] - The company faces potential adverse impacts from U.S. tariffs on imports, particularly from China, which could affect supply chain, pricing, and gross margin[187] Bookings and Retention - Bookings for the three months ended September 30, 2025, were $7.436 million, a decrease from $11.736 million in the same period of 2024; for the nine months ended September 30, 2025, bookings were $35.173 million compared to $22.746 million in 2024[169] - The net dollar revenue retention rate (NDRR) for customers with at least $50,000 of ACV was 77% for the trailing twelve-month period ended September 30, 2025, compared to 102% in 2024[177]