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What changed in ASPEN AEROGELS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ASPEN AEROGELS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+624 added−722 removedSource: 10-K (2026-03-13) vs 10-K (2025-02-27)

Top changes in ASPEN AEROGELS INC's 2025 10-K

624 paragraphs added · 722 removed · 481 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

126 edited+15 added−37 removed97 unchanged
Biggest changeOur ultra-thin, lightweight and flexible thermal barriers are designed to allow battery manufacturers to achieve critical safety goals without sacrificing energy density. We believe we offer the best technology available for the management of thermal runaway in the EV market.
Biggest changeThese properties enable EV manufacturers to achieve critical battery performance and safety goals by impeding the propagation of thermal runaway in lithium-ion battery systems at the battery cell, module, and pack levels across multiple lithium-ion battery system architectures. Our ultra-thin, lightweight, and flexible thermal barriers are designed to allow battery manufacturers to achieve critical safety goals without sacrificing energy density.
We believe that the potential for significant technological innovation in traditional materials is limited and that new high-performance materials will be required to meet evolving market requirements for energy efficient insulation and thermal barrier systems. Our line of high-performance aerogel products is positioned to meet these requirements.
We believe that the potential for significant technological innovation in traditional materials is limited and that new high-performance materials will be required to meet evolving market requirements for energy efficient insulation and thermal barrier systems. We believe our line of high-performance aerogel products is positioned to meet these requirements.
While we have agreed to purchase our requirement for certain Energy Industrial products from the contract manufacturer, we have no obligation to purchase any minimum quantity under the contract and we may terminate the contract at any time and for any or no reason.
While we have agreed to purchase our requirement for certain Energy Industrial products from the contract manufacturer, we have no obligation to purchase any minimum quantity under the contract and we may terminate the contract at any time and for any or no reason.
Over time, these companies have used our products in an increasing range of applications and throughout an increasing number of their facilities. • Petrochemical: We believe our aerogel blankets are used by all of the world’s 20 largest petrochemical companies including Reliance Industries, Formosa Petrochemical, and LyondellBasell Industries, among others. 13 • Natural Gas and LNG: Our products are in use at facilities operated by PTT LNG, ExxonMobil, and Dominion Energy, among others. • Onshore: Our aerogel blankets are in use in several Canadian oil sands facilities owned and operated by Suncor Energy, ConocoPhillips and Husky Energy, among others. • Offshore: Our products are currently used in subsea projects off the coast of Brazil, in the Gulf of Mexico, in the North Sea, off the coast of Malaysia and off the west coast of Africa.
Over time, these companies have used our products in an increasing range of applications and throughout an increasing number of their facilities. • Petrochemical: We believe our aerogel blankets are used by all of the world’s 20 largest petrochemical companies, including Reliance Industries, Formosa Petrochemical, and LyondellBasell Industries, among others. • Natural Gas and LNG: Our products are in use at facilities operated by PTT LNG, ExxonMobil, and Dominion Energy, among others. • Onshore: Our aerogel blankets are in use in several Canadian oil sands facilities owned and operated by Suncor Energy, ConocoPhillips, and Husky Energy, among others. • Offshore: Our products are currently used in subsea projects off the coast of Brazil, in the Gulf of Mexico, in the North Sea, off the coast of Malaysia, and off the west coast of Africa.
These customers include General Motors LLC (GM), Toyota, Scania, Automotive Cells Company, which is a battery cell joint venture between Stellantis N.V, Saft-TotalEnergies and Mercedes-Benz (ACC), Audi, a luxury brand of the Volkswagen Group, Volvo Truck, and a large EU battery manufacturer to supply a next generation vehicle platform of a major EU luxury sports car brand.
These customers include General Motors LLC (GM), Toyota, Scania, Automotive Cells Company, which is a battery cell joint venture between Stellantis N.V., Saft-TotalEnergies and Mercedes-Benz (collectively, ACC), Audi, a luxury brand of the Volkswagen Group, Volvo Truck, and a large EU battery manufacturer to supply a next generation vehicle platform of a major EU luxury sports car brand.
Financial information about our product revenues, net income (loss) per share and our total assets are provided in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Our Markets and Competition Our principal markets are the EV market and the energy industrial insulation market. These markets are global, well-established and include large and well-capitalized end-users.
Additional financial information about our product revenues, net income (loss) per share and our total assets are provided in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Our Markets and Competition Our principal markets are the EV market and the energy industrial insulation market. These markets are global, well-established and include large and well-capitalized end-users.
We expect to face increasing competition in the aerogel insulation market over the next several years as existing competitors and new entrants seek to develop and market their own aerogel products. In addition to other aerogel insulation products, we also encounter competition from innovatively packaged traditional insulation materials that compete with our products based on one or more performance factors.
We expect to face increasing competition in the aerogel insulation market over the next several years as existing competitors and new entrants develop and market their own aerogel products. In addition to other aerogel insulation products, we also encounter competition from innovatively packaged traditional insulation materials that compete with our products based on one or more performance factors.
We expect to face increasing competition within the thermal barrier market over the next several years as new entrants seek to develop and market their own technologies and solutions. In the energy industrial insulation market, we compete with traditional insulation materials based on product performance, price, availability and proximity to the customer.
We expect to face increasing competition within the thermal barrier market over the next several years as new entrants develop and market their own technologies and solutions. In the energy industrial insulation market, we compete with traditional insulation materials based on product performance, price, availability, and proximity to the customer.
Pursuant to our supply contract with this contract manufacturer, they are obligated to deliver products to us as we issue purchase orders on an as-needed basis through the term of the contract. The contract automatically renews year-to-year unless either party notifies the other of its intention not to renew the contract.
Pursuant to our supply contract with this contract manufacturer, they are obligated to deliver products to us as we issue purchase orders on an 13 as-needed basis through the term of the contract. The contract automatically renews year-to-year unless either party notifies the other of its intention not to renew the contract.
Ltd., IBIDEN Co., Ltd., Guangdong Alison Hi-Tech Co., Ltd. Nano Tech Co., Ltd., Beerenberg AS, IBIH Advanced Materials Co., Ltd., Nameite New Materials Technology Co., Ltd., Guizhou Aerospace Wujiang Electro-Mechanical Equipment Co., Ltd., Shenzhen Aerogel Technology Co., Ltd., and a growing number of other competitors that manufacture, sell or resell aerogel-based insulation products.
(Alkegen), IBIDEN Co., Ltd., Guangdong Alison Hi-Tech Co., Ltd., Nano Tech Co., Ltd., Beerenberg AS, IBIH Advanced Materials Co., Ltd., Nameite New Materials Technology Co., Ltd., Guizhou Aerospace Wujiang Electro-Mechanical Equipment Co., Ltd., Shenzhen Aerogel Technology Co., Ltd., and a growing number of other competitors that manufacture, sell, or resell aerogel-based insulation products.
Our sales force also works directly with end-users and engineering firms to promote qualification, specification, and wider acceptance of our products in existing and new applications. In the energy industrial market, we rely heavily on the existing and well-established channel of distributors and 11 contractors to deliver products to our customers.
Our sales force also works directly with end-users and engineering firms to promote qualification, specification, and wider acceptance of our products in existing and new applications. In the energy industrial market, we rely heavily on the existing and well-established channel of distributors and contractors to deliver products to our customers.
In general, insulation distributors stock, sell and distribute aerogel materials to insulation contractors and end-users. The distribution of our product outside of the United States is at times conducted under agreements that provide for exclusivity by geography linked to annual 12 purchase volume minimums.
In general, insulation distributors stock, sell, and distribute aerogel materials to insulation contractors and end-users. The distribution of our product outside of the United States is at times conducted under agreements that provide for exclusivity by geography linked to annual purchase volume minimums.
Aspen employees partner with community-based organizations to participate in local efforts to donate time, money, and goods. Workforce Health & Safety Aspen is committed to the health, safety and well-being of our employees and the communities in which we operate. Safety and health in our business must be part of every operation.
Aspen employees partner with community-based organizations to participate in local efforts to donate time, money, and goods. 16 Workforce Health & Safety Aspen is committed to the health, safety and well-being of our employees and the communities in which we operate. Safety and health in our business must be part of every operation.
We also will pursue high-value opportunities for our aerogel insulation products within the sustainable insulation materials market and a diverse set of new markets. In addition, we will leverage our Aerogel Technology Platform to develop innovative, aerogel-enhanced products for applications outside of the global insulation market.
We also plan to pursue high-value opportunities for our aerogel insulation products within the sustainable insulation materials market and a diverse set of new markets. In addition, we will leverage our Aerogel Technology Platform to develop innovative, aerogel-enhanced products for applications outside of the global insulation market.
The markets for these materials are generally competitive and multiple sources of supply exist for all of our raw 9 materials. However, from time-to-time, we have experienced a significant increase in the price of certain silica precursors due to supply imbalances in the silanes market.
The markets for these materials are generally competitive and multiple sources of supply exist for all of our raw materials. However, from time-to-time, we have experienced a significant increase in the price of certain silica precursors due to supply imbalances in the silanes market.
In new markets, research and development personnel seek to exploit the unique characteristics of aerogels, including low thermal conductivity, high surface area, and tunable electrical conductivity and porosity, to develop aerogel-enhanced products and next generation technology addressing complex and unmet market needs.
In new markets, research and development personnel seek to exploit the unique characteristics of aerogels, including low thermal conductivity, high surface area, and tunable porosity, to develop aerogel-enhanced products and next generation technology addressing complex and unmet market needs.
We believe that as the e-mobility and energy storage markets require increasingly powerful lithium-ion battery systems, the demand for our aerogel thermal barriers will grow rapidly as the market players seek to reduce the associated risk of thermal runaway.
We believe that as the e-mobility and energy storage markets require increasingly powerful lithium-ion battery systems, the demand for our aerogel thermal barriers will grow as the market players seek to reduce the associated risk of thermal runaway.
Our sales force establishes and maintains customer and partner relationships, delivers highly technical information and provides first-class customer service. We plan to expand our sales force and business development resources globally to support anticipated growth in customers and demand for our products.
Our sales force establishes and maintains customer and partner relationships, delivers highly technical information and provides first-class customer service. We plan to strategically expand our sales force and business development resources globally to support anticipated growth in customers and demand for our products.
To date, the majority of our energy industrial insulation market revenue has been generated from applications in refineries and petrochemical facilities. We will continue to pursue and expect greater adoption of our products for applications in the LNG and power markets.
To date, the majority of our energy industrial insulation market revenue has been generated from applications in refineries and petrochemical facilities. We will continue to pursue greater adoption of our products for applications in the LNG and power markets.
Our website includes an Investors section through which we make available, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and Forms 3, 4 and 5 filed on behalf of directors and executive officers, as well as any amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Our website includes an Investors section through which we make available, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements on Schedule 14A and Forms 3, 4 and 5 filed on behalf of directors and executive officers, as well as any amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
See “Risk Factors — Risks Related to Our Business and Strategy — Shortages of the raw materials used in the production of our products, increases in the cost of such materials or disruptions in our supply chain could adversely impact our financial condition and results of operations.” We seek to lower our manufacturing costs, while maintaining appropriate performance characteristics, and to improve the per square foot costs of our aerogel blankets by optimizing our formulations to reduce material costs, by enhancing manufacturing process controls to improve yields, by realizing price reductions from existing vendors, by qualifying new vendors and by reducing shipping costs.
For additional information, see “Risk Factors — Risks Related to Our Business and Strategy — Shortages of the raw materials used in the production of our products, increases in the cost of such materials or disruptions in our supply chain could adversely impact our financial condition and results of operations.” We seek to lower our manufacturing costs, while maintaining appropriate performance characteristics, and to improve the per square foot costs of our aerogel blankets by optimizing our formulations to reduce material costs by enhancing manufacturing process controls to improve yields, by realizing price reductions from existing vendors, by qualifying new vendors, and by reducing shipping costs.
In addition, our aerogel thermal barriers offer a combination of attributes that provide industry-leading protection against thermal runaway in lithium-ion batteries. We believe our thermal barriers provide the market-leading technological solution to combat thermal runaway and will help us gain share within the market for lithium-ion batteries used in the e-mobility and grid storage markets.
In addition, our aerogel thermal barriers offer a combination of attributes that provide protection against thermal runaway in lithium-ion batteries. We believe our thermal barriers provide the market-leading technological solution to combat thermal runaway and will help us gain a larger share within the market for lithium-ion batteries used in the e-mobility and grid storage markets.
Although competing materials may have one or more comparable attributes, we believe that no single insulation or thermal barrier material currently available offers all of the properties of our aerogel products. • Important End Markets. Our aerogel insulation products are primarily used in large-scale energy industrial facilities.
Although competing materials may have one or more comparable attributes, we believe that no single insulation or thermal barrier material currently available offers all of the properties of our aerogel products. • Important End Markets. Our aerogel insulation products are primarily used in large-scale energy industrial facilities. Our aerogel thermal barrier products are primarily used in the EV market.
While these are not presently our core markets, we anticipate that we may allocate a growing portion of our manufacturing capacity to serve these markets in the long term. We believe the key performance criteria for insulation in these markets and applications include thermal performance, compact design, durability and fire resistance.
While these are not presently the core markets we service, we anticipate that we may allocate a portion of our manufacturing capacity to serve these markets in the long-term. We believe the key performance criteria for insulation in these markets and applications include thermal performance, compact design, durability, and fire resistance.
Our objective is both to reduce costs to enhance our competitive position and to ensure we deliver high quality products to our customers. The materials used in the production of our silica aerogel products consist primarily of several silica precursors, fiber batting, and other additives.
Our objective is both to reduce costs to enhance our competitive position and to ensure we deliver high quality products to our customers. The materials used in the production of our silica aerogel products consist primarily of several silica precursors, fiber batting, CO 2 , and other additives.
A comprehensive paid parental leave program provides Aspen US employees the financial security and flexibility to provide necessary care for themselves and their families; flexibility that improves productivity, job satisfaction and increases employee retention and engagement. Employee Engagement and Workplace Culture We respect and celebrate our employees by striving to create an inclusive environment in which people thrive.
A comprehensive paid parental leave program provides Aspen U.S. employees the financial security and flexibility to provide necessary care for themselves and their families; flexibility that improves productivity, job satisfaction and increases employee retention and engagement. Employee Engagement and Workplace Culture We respect and celebrate our employees by striving to create an inclusive environment in which people thrive.
We are currently supplying thermal barrier production parts to GM, Toyota and Scania, among others. We are also supplying thermal barrier prototype parts to a number of other U.S., European and Asian manufacturers of EVs, grid storage and home battery systems.
We are currently supplying thermal barrier production parts to GM, Toyota, and ACC, among others. We are also supplying thermal barrier prototype parts to a number of other U.S., European and Asian manufacturers of EVs, grid storage, and home battery systems.
We will seek to exploit the unique characteristics of aerogels, including low thermal conductivity, high surface area, and tunable electrical conductivity and porosity to develop aerogel-enhanced products and next generation technology addressing complex and unmet market needs.
We will seek to exploit the unique characteristics of aerogels, including low thermal conductivity, high surface area, and porosity to develop aerogel-enhanced products and next generation technology addressing complex and unmet market needs.
Our salespeople work directly with end-user customers and engineering firms to promote the qualification, specification and acceptance of our aerogel and thermal barrier products. We also rely on an existing and well-established channel of qualified insulation distributors and contractors in more than 50 countries around the world to ensure rapid delivery of our aerogel products and strong end-user support.
Our salespeople work directly with end-user customers and engineering firms to promote the qualification, specification and acceptance of our aerogel and thermal barrier products. We also rely on an existing and well-established channel of qualified insulation distributors and contractors in more than 50 countries around the world to help provide rapid delivery of our aerogel products and strong end-user support.
In 2020 and 2021, we entered into contracts with GM to supply fabricated, multi-part thermal barriers for use in the battery system of its next-generation EVs. This relationship has helped to validate our thermal barrier technology with other companies providing products and solutions to the EV, lithium-ion battery and grid storage markets.
In 2020 and 2021, we entered into contracts with GM to supply fabricated, multi-part thermal barriers for use in the battery system of certain of its EVs. This relationship has helped to validate our thermal barrier technology with other companies providing products and solutions to the EV, lithium-ion battery and grid storage markets.
Competing technologies that outperform our insulation products in one or more performance attributes could be developed and successfully introduced. See “Risk Factors —The insulation markets we serve are highly competitive.
Competing technologies that outperform our insulation products in one or more performance attributes could be developed and successfully introduced. For more information, see “Risk Factors —The insulation markets we serve are highly competitive.
Many of our insulation products also offer strong fire protection, which is a critical performance requirement in our markets. We believe our array of product attributes provides strong competitive advantages over traditional insulation.
Many of our insulation products also offer strong fire protection, which is a critical performance requirement in the markets we service. We believe our array of product attributes provides strong competitive advantages over traditional insulation.
The energy industrial market includes companies operating refinery, petrochemical, oil production, and liquefied natural gas (LNG) production and storage facilities. The energy industrial market also includes firms operating gas, coal, nuclear, hydro and solar thermal power generating plants and district energy systems.
The energy industrial market includes companies operating refinery, petrochemical, oil production, and LNG production and storage facilities. The energy industrial market also includes firms operating gas, coal, nuclear, hydro, and solar thermal power generating plants and district energy systems.
Our Advanced Thermal Barrier Center (ATBC) is designed to be the engineering hub of PyroThin cell-to-cell barriers, which help manufacturers optimize the safety and performance of battery packs for eMobility and energy storage system (ESS) markets. We closely monitor all stages in the manufacture of our aerogel blankets.
Our Advanced Thermal Barrier Center (ATBC) is designed to be the engineering hub of PyroThin thermal barriers, which help manufacturers optimize the safety and performance of battery packs for EV and energy storage system (ESS) markets. We closely monitor all stages in the manufacture of our aerogel blankets.
Our aerogel insulation has undergone rigorous technical validation and is used by many of the world’s largest oil producers and the owners and operators of refineries, petrochemical plants, liquefied natural gas facilities and power generating and distribution assets, such as ExxonMobil, Reliance Industries, PTT LNG, and Royal Dutch Shell.
Our aerogel insulation has undergone rigorous technical validation and is used by many of the world’s largest oil producers and the owners and operators of refineries, petrochemical plants, LNG facilities and power generating and distribution assets, such as ExxonMobil, Reliance Industries, PTT LNG, and Royal Dutch Shell.
We have entered into production contracts with GM to supply fabricated, multi-part thermal barriers (the Barriers) for use in the battery system of its next-generation EVs (the GM Contracts).
We have entered into production contracts with GM to supply fabricated, multi-part thermal barriers (the Barriers) for use in the battery system of its current and next-generation EVs (the GM Contracts).
We have an installed base of more than 500 million square feet of insulation, representing more than $1.5 billion in cumulative product sales since 2008. Through our relationships with industry-leading energy industrial customers, our products have undergone rigorous testing and technical validation and are now in use at most of the world’s largest oil producers, refiners and petrochemical companies.
We have an installed base of more than 525 million square feet of insulation, representing more than $1.6 billion in cumulative product sales since 2008. Through our relationships with industry-leading energy industrial customers, our products have undergone rigorous testing and technical validation and are now in use at most of the world’s largest oil producers, refiners, and petrochemical companies.
Our products replace traditional insulation in existing facilities during regular maintenance, upgrades and capacity expansions. In addition, our aerogel products are increasingly being specified for use in new-build energy industrial facilities. We introduced our two key aerogel insulation product lines for the energy industrial market, Pyrogel® and Cryogel®, in 2008.
Our products replace traditional insulation in existing facilities during regular maintenance, upgrades, and capacity expansions. In addition, our aerogel products are also specified for use in new-build energy industrial facilities. In 2008, we introduced Pyrogel® and Cryogel® aerogel insulation, our two key aerogel insulation product lines for the energy industrial market.
See “Risk Factors — Shortages of the raw materials used in the production of our products, increases in the cost of such materials or disruptions in our supply chain could adversely impact our financial condition and results of operations.” Our aerogel blankets are reinforced with fiber batting.
For more information, see “Risk Factors — Shortages of the raw materials used in the production of our products, increases in the cost of such materials or disruptions in our supply chain could adversely impact our financial condition and results of operations.” Our aerogel blankets are reinforced with fiber batting.
While GM has agreed to purchase its requirement for the Barriers from us at locations to be designated from time to time by them, it has no obligation to purchase any minimum quantity of the Barriers under the GM Contracts. In addition, GM may unilaterally terminate the GM Contracts at any time and for any or no reason.
While GM has agreed to purchase its requirements for the Barriers from us at locations designated from time to time by them, it has no obligation to purchase any minimum quantity of the Barriers under the GM Contracts. In addition, GM may unilaterally terminate the GM Contracts at any time and for any or no reason.
While our competitors offer many traditional insulation products that are priced below our products on a per-unit basis, we believe our products have superior performance attributes and may have the lowest cost on a fully-installed basis or offer significant life-cycle cost savings. We compete in the aerogel materials market with Armacell International S.A., JIOS Aerogel Pte.
While our competitors offer many traditional insulation products that are priced below our products on a per-unit basis, we believe our products have superior performance attributes and may have the lowest cost on a fully-installed basis or offer significant life-cycle cost savings. We compete in the aerogel materials market with Armacell International S.A., JIOS Aerogel Pte. Ltd., Unifrax Holding Co.
As a result, thermal conductivity through the aerogel material itself is extremely low. • Convection. Heat convection in gases is through movement of gas molecules. Due to the restricted movement of gases in the nanoporous aerogel structure, thermal convection is eliminated inside the aerogels. • Radiation. Radiation requires no medium to transfer the heat.
As a result, thermal conductivity through the aerogel material itself is extremely low. • Convection. Heat convection in gases is through movement of gas molecules. Due to the restricted movement of gases in the nanoporous aerogel structure, thermal convection is eliminated inside the aerogels. • Radiation. Radiation requires no medium to transfer heat. Thermal radiation is partially absorbed by aerogels.
To meet expected demand for our aerogel products, we plan to make additional productivity improvements in our existing East Providence facility and utilize a flexible supply strategy, including but not limited to use of our external manufacturing capabilities in China, which currently support Aspen’s Energy Industrial segment and are capable of delivering increased aerogel production capacity.
To meet expected demand for our aerogel products, we continue to make productivity improvements in our existing East Providence facility and utilize a flexible supply strategy, including but not limited to use of our external manufacturing capabilities in China, which currently support our Energy Industrial segment and are capable of delivering increased aerogel production capacity.
PyroThin thermal barriers are our new generation of ultra-thin flexible aerogel products engineered to satisfy the needs of the EV and energy storage industries to address thermal runaway issues in lithium-ion batteries. PyroThin thermal barriers can be used to provide passive fire protection at the cell, module or pack level within multiple lithium-ion battery system architectures.
PyroThin thermal barriers are ultra-thin flexible aerogel products engineered to satisfy the needs of the EV and energy storage industries to address thermal runaway issues in lithium-ion batteries. PyroThin thermal barriers can be 9 used to provide passive fire protection at the cell, module, or pack level within multiple lithium-ion battery system architectures.
We believe the following combination of capabilities distinguishes us from our competitors and positions us to continue to gain market share in the energy industrial, sustainable insulation materials and EV markets: • Disruptive Products with a Compelling Value Proposition.
We believe the following combination of capabilities distinguishes us from our competitors and positions us to grow our market share in the energy industrial, sustainable insulation materials, and EV markets: • Disruptive Products with a Compelling Value Proposition.
See “Risk Factors — A substantial portion of our revenue comes from sales in foreign countries, and we may expand our operations outside of the United States, which subjects us to increased economic, foreign exchange, operational, and political risks that could increase our costs and make it difficult for us to operate profitably.” End-Users The end-users of our aerogel blankets and thermal barriers include some of the largest and most well-capitalized companies in the world.
For more information, see “Risk Factors — A substantial portion of our revenue comes from sales in foreign countries, and we are planning to further expand our operations outside of the United States, which subjects us to increased economic, foreign exchange, operational, and political risks that could increase our costs and make it difficult for us to operate profitably.” End-Users The end-users of our aerogel blankets and thermal barriers include some of the largest and most well-capitalized companies in the world.
We plan to add resources to continue to grow our share of the energy industrial insulation market, both through increased sales to our existing customers and through sales to new customers. We plan to continue to expand and enhance our global sales and distribution network and seek to promote greater enterprise-wide adoption of our products by existing end-user customers.
We plan to add resources to grow our share of the energy industrial insulation market, both through increased sales to our existing customers and through sales to new customers. 8 We plan to continue to leverage our global sales and distribution network and seek to promote greater enterprise-wide adoption of our products by existing end-user customers.
The scope of each of our patents varies in accordance with local law. We have successfully enforced our patent rights against Chinese aerogel manufacturers in the U.S. at the International Trade Commission and in Europe at the District Court in Mannheim, Germany.
The scope of each of our patents varies in accordance with local law. We have successfully enforced our patent rights against Chinese aerogel manufacturers in the United States at the International Trade Commission and in Europe at the District Court in Mannheim, Germany.
We have grown our business by forming technical and commercial relationships with industry leaders, which has allowed us to optimize our products to meet the particular demands of targeted market sectors. We have benefited from our technical and commercial relationships with ExxonMobil in the oil refinery and petrochemical sector, and with TechnipFMC in the offshore oil sector.
We have grown our business by forming technical and commercial relationships with industry leaders that have allowed us to optimize our products to meet the particular demands of target market sectors. We have benefited from our technical and commercial relationships with ExxonMobil in the oil refinery and petrochemical sectors, and with TechnipFMC in the offshore oil sector.
Manufacturing We manufacture our products using our proprietary technology at our facility located in East Providence, Rhode Island. We have operated the East Providence facility since 2008 and have significantly increased manufacturing capacity and productivity during the period. Our manufacturing process is proven and has been scaled to meet increasing demand.
Manufacturing We manufacture our products using our proprietary technology at our facility located in East Providence, Rhode Island. We have operated the East Providence facility since 2008 and have significantly increased manufacturing capacity and productivity since then. Our manufacturing process is proven and has been scaled over time to meet increasing demand.
We also sell our products for use in the sustainable insulation materials and other end markets, including for the fabrication of insulation parts by OEMs. These OEMs develop products incorporating our aerogel blankets for applications in a diverse set of markets including military aircraft, trains, buses, appliances, apparel, footwear and outdoor gear.
We also sell our products for use in the sustainable insulation materials and other end markets, including for the fabrication of insulation parts by OEMs. These OEMs develop products incorporating our aerogel blankets for applications in a diverse set of markets, including military aircraft, trains, and buses.
Our process allows the ethanol to be extracted without causing the solid matrix in the gel to collapse from capillary forces. Our material costs were 38%, 36%, and 51% of product revenue for the years ended December 31, 2024, 2023 and 2022, respectively.
Our process allows the ethanol to be extracted without causing the solid matrix in the gel to collapse from capillary forces. Our material costs were 42%, 38%, and 36% of product revenue for the fiscal years ended December 31, 2025, 2024 and 2023, respectively.
During this period, we have sold over $1.5 billion of our insulation products globally, representing an installed base of more than 500 million square feet of insulation. We believe that our long-term record of success positions us for future growth and continued gain in market share in the energy industrial and sustainable insulation markets.
During this period, we have sold over $1.6 billion of our insulation products globally, representing an installed base of more than 525 million square feet of insulation. We believe that our long-term record of success positions us for future growth and the opportunity to gain market share in the energy industrial and sustainable insulation markets.
Our Aerogel Technology Platform ® is the result of extensive research and development dedicated to new aerogel compositions, form factors and manufacturing technologies. Our intellectual property portfolio is supported by 354 issued patents, with an additional 435 pending, in U.S. and foreign jurisdictions in areas related to product design, chemistry, process technology and market applications.
Our Aerogel Technology Platform ® is the result of extensive research and development dedicated to new aerogel compositions, form factors, and manufacturing technologies. Our intellectual property portfolio is supported by 400 issued patents as of December 31, 2025, with an additional 438 pending in U.S. and foreign jurisdictions in areas related to product design, chemistry, process technology, and market applications.
Thermal Barrier We are actively developing a number of promising aerogel products and technologies for the EV market. We have developed and are commercializing our proprietary line of PyroThin aerogel thermal barriers for use in battery packs in EVs.
Thermal Barrier We have developed a number of promising aerogel products and technologies for the EV market, including our proprietary line of PyroThin aerogel thermal barriers for use in battery packs in EVs.
We employ statistical processes and quality controls in our manufacturing systems. We routinely measure and monitor thermal conductivity, hydrophobicity and other key properties of the aerogel blankets produced in our manufacturing operations. We are ISO 9001:2015 certified. We have operated the East Providence facility since 2008 and have increased our capacity in phases since that time.
We routinely measure and monitor thermal conductivity, hydrophobicity and other key properties of the aerogel blankets produced in our manufacturing operations. We are ISO 9001:2015 and ISO 14001:2015 certified. We have operated the East Providence facility since 2008 and have increased our capacity in phases since that time.
Pursuant to the GM Contracts, we are obligated to supply the Barriers at fixed annual prices and at volumes to be specified by GM up to a daily maximum quantity through the respective terms of the agreements, which expire at various times from 2026 through 2034.
Pursuant to the GM Contracts, we are obligated to supply the Barriers at fixed annual prices and at volumes specified by GM up to a daily maximum quantity through the respective terms of the agreements, which expire at various times from 2030 through 2034 and, in certain cases, may be extended by GM.
To meet expected demand for our aerogel products, we plan to make additional productivity improvements in our existing East Providence facility and utilize a flexible supply strategy, including but not limited to use of our external manufacturing capabilities in China, which currently support Aspen’s Energy Industrial segment and are capable of delivering increased aerogel production capacity.
To meet expected demand for our aerogel products, we continue to make productivity improvements in our existing East Providence facility and utilize a flexible supply strategy, including, but not limited to, use of our external manufacturing capabilities in China, which currently support our Energy Industrial segment and are capable of delivering increased aerogel production capacity. • Protected Technology Platform and Proprietary Manufacturing Capability.
We expect that the productivity improvements in our existing East Providence facility as well as the supply from our external manufacturing facility will permit us to achieve our target revenue capacity in 2025.
We expect that the current manufacturing capacity in our existing East Providence facility, as well as the supply from our external manufacturing facility, will permit us to achieve our target revenue capacity in 2026.
In these instances, our end-users directly manage and control specification, logistic, installation, inspection, maintenance and fabrication activities of our aerogel products. Additional Customer Information GM represented 64% of our total revenue in 2024 and was our only customer representing 10% or more of our revenue for that period. In 2023, GM and Distribution International, Inc.
In these instances, our end-users directly manage and control specification, logistic, installation, inspection, maintenance, and fabrication activities of our aerogel products. Additional Customer Information GM represented 59% of our total revenue in 2025 and was our only customer representing 10% or more of our revenue for that period.
The lower a material’s thermal conductivity, the more slowly heat is transferred through the material. R-values are a commonly used measure of an insulating material’s resistance to heat transfer. R-value is calculated as the thickness of an insulation material divided by the thermal conductivity of the insulation material. Materials with higher R-values have lower thermal conductivity and are better insulators.
R-values are a commonly used measure of an insulating material’s resistance to heat transfer. R-value is calculated as the thickness of an insulation material divided by the thermal conductivity of the insulation material. Materials with higher R-values have lower thermal conductivity and are better insulators. Traditional and specialty insulation materials provide a range of R-values.
The members of our Board of Directors and the designated chairs of the committees of the Board of Directors are reflected on the signature page of this Annual Report on Form 10-K.
The members of our Board of Directors are reflected on the signature page of this Annual Report on Form 10-K.
Pyrogel and Cryogel have undergone rigorous technical validation by industry-leading end-users and achieved significant market adoption. Our insulation product revenue has grown from $17.2 million in 2008 to $145.9 million in 2024, representing a compound annual growth rate of 15%.
Pyrogel and Cryogel aerogel insulation products have undergone rigorous technical validation by industry-leading end-users and achieved significant market adoption. Our insulation product revenue has grown from $17.2 million in 2008 to $102.2 million in 2025, representing a compound annual growth rate of 11%.
We have also entered into thermal barrier production contracts with Toyota, Scania, ACC, and Audi, a luxury brand of the Volkswagen Group, Volvo Truck, and a large EU battery manufacturer to supply a next generation vehicle platform of a major EU luxury sports car brand. During 2024, we sold $306.8 million of our PyroThin thermal barriers.
We have also entered into thermal barrier production contracts with Toyota, Scania, ACC, and Audi, a luxury brand of the Volkswagen Group, Volvo Truck, and a large EU battery manufacturer to supply a next generation vehicle platform of a major EU luxury sports car brand.
Our research and development expenditures were $18.1 million, $16.4 million, and $16.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Our research and development expenditures were $13.4 million, $18.1 million, and $16.4 million for the fiscal years ended December 31, 2025, 2024 and 2023, respectively.
Many of our competitors have greater market presence, larger market share, longer operating histories, stronger name recognition, larger customer bases and significantly greater financial, technical, sales and marketing, manufacturing and other resources than we have and may be better able to withstand volatility within the industry and throughout the economy as a whole, while retaining greater operating and financial flexibility.
If we are unable to compete successfully, we may not be able to increase or maintain our market share and revenues.” 6 Many of our competitors have greater market presence, larger market share, longer operating histories, stronger name recognition, larger customer bases, and significantly greater financial, technical, sales and marketing, manufacturing, and other resources than we have and may be better able to withstand volatility within the industry and throughout the economy as a whole, while retaining greater operating and financial flexibility.
To meet expected demand for our aerogel products, we plan to make additional productivity improvements in our existing East Providence facility and utilize a flexible supply strategy, including but not limited to use of our external manufacturing capabilities in China, which currently support Aspen’s Energy Industrial segment and are capable of delivering increased aerogel production capacity.
Demand for our aerogel products has grown significantly since our inception. We continue to make productivity improvements in our existing East Providence facility and utilize a flexible supply strategy, including, but not limited to, use of our external manufacturing capabilities in China, which currently support our Energy Industrial segment and are capable of delivering increased aerogel production capacity.
As of December 31, 2024, we had eight trademark registrations in the United States, and 81 trademark registrations in foreign jurisdictions, including the European Union, United Kingdom, Japan, China, Canada, Mexico, India, South Korea and Brazil. Additionally, we had one pending US trademark applications and two pending foreign trademark applications.
As of December 31, 2025, we had seven trademark registrations in the United States and 81 trademark registrations in foreign jurisdictions, including the European Union, United Kingdom, Japan, China, Canada, Mexico, India, South Korea, and Brazil. Additionally, we had four pending foreign trademark applications.
We also rely on trade secrets, trademarks, licensing agreements, confidentiality and nondisclosure agreements and continuing technological innovation to safeguard our intellectual property rights and develop and maintain our competitive edge. As of December 31, 2024, we owned 83 issued U.S. patents, 63 pending U.S. patent applications, 271 issued foreign patents and 372 pending foreign patent applications.
We also rely on trade secrets, trademarks, licensing agreements, confidentiality and nondisclosure agreements and continuing technological innovation to safeguard our intellectual property rights and develop and maintain our competitive edge. As of December 31, 2025, we owned 90 issued U.S. patents, 85 pending U.S. patent applications, 310 issued foreign patents and 353 pending foreign patent applications.
For the years ended December 31, 2024, 2023 and 2022, based on shipment destination, our U.S. revenue was $258.5 million, $151.0 million, and $114.0 million, respectively, and our international revenue was $194.2 million, $87.7 million, and $66.4 million, respectively.
For the years ended December 31, 2025, 2024 and 2023, based on shipment destination, our U.S. revenue was $172.1 million, $258.5 million, and $151.0 million, respectively, and our international revenue was $99.0 million, $194.2 million, and $87.7 million, respectively.
We believe our dedicated and experienced team is an important competitive asset. Our Growth Strategy Our strategy is to create economic value by leveraging our technological and market leadership in aerogels to be the premier provider of high-performance aerogel products serving the global EV and energy industrial markets.
Our Growth Strategy Our strategy is to create economic value by leveraging our technological and market leadership in aerogels to be the premier provider of high-performance aerogel products serving the global EV and energy industrial markets.
Our direct ownership of manufacturing operations in East Providence allows us to maintain control of proprietary process technologies and to control product quality. We also closely monitor the manufacturing process and quality control of the aerogels supplied by our external manufacturing facilities in China.
Our direct ownership of manufacturing operations in East Providence allows us to maintain control of proprietary process technologies and to control product quality. We also closely monitor the manufacturing process and quality control of the aerogels supplied by our external manufacturing facilities in China. Our production of aerogel blankets consists of the following key steps: • Sol Preparation.
Total revenue generated from outside of the United States amounted to $194.2 million or 43% of total revenue, $87.7 million or 37% of total revenue and $66.4 million or 37% of total revenue, in the years ended December 31, 2024, 2023 and 2022, respectively. As we grow, we may continue to expand our operations outside of the United States.
Total revenue 12 generated from outside of the United States amounted to $99.0 million or 37% of total revenue, $194.2 million or 43% of total revenue, and $87.7 million or 37% of total revenue, in the fiscal years ended December 31, 2025, 2024 and 2023, respectively. We may continue to expand our operations outside of the United States.
During 2023 and 2022, we sold $110.1 and $55.6 million of our 7 PyroThin thermal barriers, respectively. We are engaged in system development and quoting activities with a wide range of additional prospective customers in the broader e-mobility and energy storage markets. • Proven, Scalable Business Model.
During 2025, 2024 and 2023, we sold $168.9 million, $306.8 million, and $110.1 million of our PyroThin thermal barriers, respectively, primarily to GM. We are engaged in system development and quoting activities with a wide range of additional prospective customers in the broader e-mobility and energy storage markets. 7 • Proven, Scalable Business Model.
We maintain our corporate offices in Northborough, Massachusetts. We are required to file annual, quarterly and current reports, proxy statements and other information required by the Securities Exchange Act of 1934, as amended (the Exchange Act), with the SEC. SEC filings are available at the SEC’s website at https://www.sec.gov.
We are required to file annual, quarterly and current reports, proxy statements and other information required by the Securities Exchange Act of 1934, as amended (the Exchange Act), with the U.S. Securities and Exchange Commission (the SEC). SEC filings are available at the SEC’s website at https://www.sec.gov.
Financial Summary Total revenue for the years ended December 31, 2024, 2023 and 2022 was $452.7 million, $238.7 million, and $180.4 million, respectively.
Financial Summary Total revenue for the years ended December 31, 2025, 2024 and 2023 was $271.1 million, $452.7 million, and $238.7 million, respectively.
Qualification for Use Our products have undergone rigorous testing and are qualified for global usage in both routine maintenance and in capital projects at many of the world’s largest oil producers, refiners, and petrochemical companies, and within the next-generation lithium-ion battery systems of five of the largest global automotive manufacturers.
Aerogels have the highest R-value per unit of thickness in comparison to traditional insulation materials. 10 Qualification for Use Our products have undergone rigorous testing and are qualified for global usage in both routine maintenance and in capital projects at many of the world’s largest oil producers, refiners, and petrochemical companies, and within the next-generation lithium-ion battery systems of five of the largest global automotive manufacturers.
We are currently supplying thermal barrier production parts to both General Motors and Toyota, and thermal barrier prototype parts to a number of global manufacturers of EVs, grid storage and home battery systems. During 2024, 2023 and 2022, we sold $306.8 million, $110.1 million and $55.6 million, respectively, of our PyroThin thermal barriers.
We are currently supplying thermal barrier production parts to GM, Toyota, and ACC, and thermal barrier prototype parts to a number of global manufacturers of EVs, grid storage and home battery systems. During 2025, 2024 and 2023, we sold $168.9 million, $306.8 million and $110.1 million, respectively, of our PyroThin thermal barriers, primarily to GM.
Additionally, we have entered into a contract with Prodensa Servicios de Consultora (Prodensa) to establish OPE Manufacturer Mexico S de RL de CV, a maquiladora located in Mexico (OPE), which assembles thermal barrier PyroThin products and operates an automated fabrication facility for PyroThin.
Additionally, we previously entered into a contract with Prodensa Servicios de Consultora (Prodensa) to establish OPE Manufacturer Mexico S de RL de CV, a maquiladora located in Mexico (OPE), which assembles thermal barrier PyroThin products 4 and operates an automated fabrication facility for PyroThin. We subsequently purchased OPE for a nominal value in accordance with the terms of the agreement.
Thermal radiation is partially absorbed by aerogels. Our aerogel products also contain infrared absorbing additives to reduce radiant heat transfer significantly. We believe our aerogel products offer the lowest levels of thermal conductivity, or best insulating performance, of any widely used insulation or thermal barrier available on the market today.
Our aerogel products also contain infrared absorbing additives to reduce radiant heat transfer significantly. We believe our aerogel products offer the lowest levels of thermal conductivity, or best insulating performance, of any widely used insulation or thermal barrier available on the market today. The lower a material’s thermal conductivity, the more slowly heat is transferred through the material.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we are unable to compete successfully, we may not be able to increase or maintain our market share and revenues. • The qualification process for our products can be lengthy and unpredictable, potentially delaying adoption of our products and causing us to incur significant expense, potentially without recovery. • Our revenue may fluctuate, which may result in a high degree of variability in our results of operations and make it difficult for us to plan based on our future outlook and to forecast our future performance. 19 • The results of our operations could be materially adversely affected if our operating expenses incurred do not correspond with the timing of our revenues. • If we fail to achieve the increase in production capacity that our long-term growth requires in a timely manner, or at all, our growth may be hindered and our business or results of operations may be materially adversely affected. • If the expected growth in the demand for our products does not follow each of our planned capacity expansions, then our business and results of operations will be materially adversely affected. • A substantial portion of our revenue comes from sales in foreign countries and we are planning to expand our operations outside of the United States, which subjects us to increased economic, trade, foreign exchange, operational, and political risks that could materially adversely impact our business, financial conditions and results of operations and also increase our costs and make it difficult for us to operate profitably. • We may face certain product liability or warranty claims on our products, including from improper installation of our products by third parties.
Biggest changeIf we are unable to compete successfully, we may not be able to increase or maintain our market share and revenues. • The qualification process for our products can be lengthy and unpredictable, potentially delaying adoption of our products and causing us to incur significant expense, potentially without recovery. • Our revenue may fluctuate, which may result in a high degree of variability in our results of operations and make it difficult for us to plan based on our future outlook and to forecast our future performance, and the results of our operations could be materially adversely affected if our operating expenses incurred do not correspond with the timing of our revenues. • We may face certain product liability or warranty claims on our products, including from improper installation of our products by third parties.
As a result of our existing contract with GM and other OEMs, current sales to others in the EV market and any future supply of our products to the automotive industry, including through specific contracts, we are subject to a number of risks, including, but not limited to: • Under our contracts with the GM, they are not obligated to make any purchases from us and may terminate the contract at any time.
As a result of our existing contract with GM and other OEMs, current sales to others in the EV market and any future supply of our products to the automotive industry, including through specific contracts, we are subject to a number of risks, including, but not limited to: • Under our contracts with GM, they are not obligated to make any purchases from us and may terminate the contracts at any time.
Cost-cutting initiatives adopted by our customers in the EV market or our automotive OEM customers result in increased downward pressure on pricing. In addition, our customers in the EV market often reserve the right to terminate their supply contracts for convenience, which enhances their ability to obtain price reductions.
In addition, cost-cutting initiatives adopted by our customers in the EV market or our automotive OEM customers result in increased downward pressure on pricing. In addition, our customers in the EV market often reserve the right to terminate their supply contracts for convenience, which enhances their ability to obtain price reductions.
The loss of the services of any of key employees or our inability to recruit and retain qualified personnel or advisors might impede our operations or the achievement of our strategic and financial objectives.
The loss of the services of any of our key employees or our inability to recruit and retain qualified personnel or advisors might impede our operations or the achievement of our strategic and financial objectives.
We are subject to the risks arising from adverse changes in market and economic and political conditions, both domestically and globally, including trends toward protectionism and nationalism, other unfavorable changes in economic conditions as well as disruptions in global credit and financial markets, such as inflation, failures and instability in U.S. and international banking systems, downgrades of the U.S. credit rating, rising interest rates, slower economic growth or a recession, and other events beyond our control, such as natural disasters, pandemics, epidemics, political instability, and armed conflicts and wars, including the ongoing conflict between Russia and Ukraine, the conflict in the Middle East and tensions between China and Taiwan.
We are subject to the risks arising from adverse changes in market and economic and political conditions, both domestically and globally, including trends toward protectionism and nationalism, other unfavorable changes in economic conditions as well as disruptions in global credit and financial markets, such as inflation, failures and instability in U.S. and international banking systems, downgrades of the U.S. credit rating, rising interest rates, slower economic growth or a recession, and other events beyond our control, such as natural disasters, pandemics, epidemics, political instability, and armed conflicts and wars, including the ongoing conflict between Russia and Ukraine, the conflicts in the Middle East and tensions between China and Taiwan.
Our restated certificate of incorporation provides that, subject to limited exceptions, a state or federal court located within the State of Delaware will be the exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our restated certificate of incorporation or our restated bylaws, or (4) any other action asserting a claim against us that is governed by the internal affairs doctrine.
Our Certificate of Incorporation provides that, subject to limited exceptions, a state or federal court located within the State of Delaware will be the exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our Certificate of Incorporation or our restated bylaws, or (4) any other action asserting a claim against us that is governed by the internal affairs doctrine.
As a result, we are subject to a number of risks, including, but not limited to: • the effect of applicable U.S. and foreign tax structures, including tax rates that may be higher than tax rates in the United States or taxes that may be duplicative of those imposed in the United States; • trade relations among the United States and those foreign countries in which our customers and suppliers have operations, including protectionist measures such as tariffs and import or export licensing requirements, whether imposed by the United States or such foreign countries, in particular the strained trade relations between the United States and China since 2018; • general economic and political conditions in each country, which may interfere with, among other things, our supply chain, our customers and all of our activities in a particular location; • difficulty in the enforcement of contractual obligations in non-U.S. jurisdictions and the collection of accounts receivable from foreign accounts; • different regulatory regimes in the various countries in which we operate or sell our products; • inadequate intellectual property protection in foreign countries; • the difficulties and increased expense in complying with multiple and potentially conflicting domestic and foreign laws, regulations, product approvals and trade standards, including the U.S.
As a result, we are subject to a number of risks, including, but not limited to: • the effect of applicable U.S. and foreign tax structures, including tax rates that may be higher than tax rates in the United States or taxes that may be duplicative of those imposed in the United States; • trade relations among the United States and those foreign countries in which our customers and suppliers have operations, including protectionist measures such as tariffs and import or export licensing requirements, whether imposed by the United States or such foreign countries, in particular the strained trade relations between the United States and China since 2018; • general economic and political conditions in each country, which may interfere with, among other things, our supply chain, our customers and all of our activities in a particular location; • difficulty in the enforcement of contractual obligations in non-U.S. jurisdictions and the collection of accounts receivable from foreign accounts; • different regulatory regimes in the various countries in which we operate or sell our products; • inadequate intellectual property protection in foreign countries; 29 • the difficulties and increased expense in complying with multiple and potentially conflicting domestic and foreign laws, regulations, product approvals and trade standards, including the U.S.
Such risks include, but are not limited to: • We have previously incurred annual net losses, and we may continue to incur net losses in the future and may never reach profitability. • We will require additional capital to pursue our growth strategy, but we may not be able to obtain additional financing on acceptable terms or at all. • Our efforts in developing, selling, and supplying products in EV market may subject us to increased financial, operational, and legal risks that could materially adversely impact our business, financial conditions, and results of operations and may also increase our costs and make it difficult for us to operate profitably. • We have engaged third-party external manufacturing facilities in China to supplement our supply of our aerogel products.
Such risks include, but are not limited to: • We previously incurred annual net losses, and we may incur net losses in the future and may never reach profitability. • We will require additional capital to pursue our growth strategy, but we may not be able to obtain additional financing on acceptable terms or at all. • Our efforts in developing, selling, and supplying products in EV market may subject us to increased financial, operational, and legal risks that could materially adversely impact our business, financial conditions, and results of operations and may also increase our costs and make it difficult for us to operate profitably. • We have engaged third-party external manufacturing facilities in China to supplement our supply of our aerogel products.
Any such security breach or interruption, as well as any action by us or our employees or contractors that might be inconsistent with the rapidly evolving data privacy and security laws and regulations applicable within the United States and elsewhere where we conduct business, could result in enforcement actions by U.S. states, the U.S. federal government or foreign governments, liability or sanctions under data privacy laws that protect personally identifiable information, regulatory penalties, other legal proceedings such as but not limited to private litigation, the incurrence of significant remediation costs, disruptions to our development programs, business operations and collaborations, diversion of management efforts and damage to our reputation, which could harm our business and operations.
Any such security breach or interruption, as well as any action by us or our employees or contractors that might be inconsistent with the rapidly evolving data privacy and security laws and regulations applicable within the United States and elsewhere where we conduct business, could result in enforcement actions by U.S. states, the U.S. federal government or foreign governments, liability or sanctions under data privacy laws that protect personally identifiable information, regulatory penalties, other legal proceedings such as but not limited to private litigation, the incurrence of significant remediation costs, disruptions to our development programs, business operations and collaborations, diversion of management efforts and damage to our reputation, which could harm our business and 46 operations.
Any significant disruption to these facilities or the failure of any one of our three production lines in our East Providence, RI facility to operate according to our expectation could have a material adverse effect on our business and results of operations. • A sustained downturn in the energy industry, due to lower oil and gas prices or reduced energy demand, could decrease demand for some or all of our products and services, which could have a material adverse effect on our business, financial condition and results of operations. • The insulation markets we serve are highly competitive.
Any significant disruption to these facilities or the failure of any one of our three production lines in our East Providence, RI facility to operate 18 according to our expectation could have a material adverse effect on our business and results of operations. • A sustained downturn in the energy industry, due to lower oil and gas prices or reduced energy demand, could decrease demand for some or all of our products and services, which could have a material adverse effect on our business, financial condition and results of operations. • The insulation markets we serve are highly competitive.
In addition, there is a risk that one or more of our current service providers, external manufacturing facilities or other third parties with which we conduct business may not survive difficult economic times, the ongoing conflict between Russia and Ukraine, the conflict in the Middle East, the tensions in Asia, the instability of the banking sector, and the uncertainty associated with current worldwide economic conditions, which could directly affect our ability to attain our operating goals on schedule and on budget.
In addition, there is a risk that one or more of our current service providers, external manufacturing facilities or other third parties with which we conduct business may not survive difficult economic times, the ongoing conflict between Russia and Ukraine, the conflicts in the Middle East, the tensions in Asia, the instability of the banking sector, and the uncertainty associated with current worldwide economic conditions, which could directly affect our ability to attain our operating goals on schedule and on budget.
The volatility in oil prices and declines in oil prices, which are often associated with unrelated world events, such as the tensions between Russia and Ukraine and political instability in Ukraine, as well as the conflict in the Middle East and tensions between China and Taiwan, and other areas in the world, have resulted, from time to time, in a reduction in capital expenditures by many companies in the energy industry, and in particular by end-users of our products involved in the construction and expansion of offshore and onshore oil and gas production facilities.
The volatility in oil prices and declines in oil prices, which are often associated with unrelated world events, such as the conflict between Russia and Ukraine and political instability in Ukraine, as well as the conflicts in the Middle East and tensions between China and Taiwan, and other areas in the world, have resulted, from time to time, in a reduction in capital expenditures by many companies in the energy industry, and in particular by end-users of our products involved in the construction and expansion of offshore and onshore oil and gas production facilities.
Therefore, a significant decrease in demand for certain key models or group of related models sold by any of our automotive OEM customers, a shift in our automotive OEM customers’ strategy or change in their battery form factor, or the ability of a manufacturer to re-source and discontinue purchasing from us, for a particular model or group of models, could have a material adverse effect on us and reduce the value of the awarded business.
Therefore, a significant decrease in demand for certain key models or groups of related models sold by any of our automotive OEM customers, a shift in our automotive OEM customers' purchasing strategy, or change in their battery form factor, or the ability of a manufacturer to re-source and discontinue from us for a particular model or group of models, could have a material adverse effect on us and reduce the value of the awarded business.
A substantial portion of our revenue comes from sales in foreign countries, and we are planning to expand our operations outside of the United States, which subjects us to increased economic, trade, foreign exchange, operational, and political risks that could materially adversely impact our business, financial conditions and results of operations and also increase our costs and make it difficult for us to operate profitably.
A substantial portion of our revenue comes from sales in foreign countries, and we are planning to further expand our operations outside of the United States, which subjects us to increased economic, trade, foreign exchange, operational, and political risks that could materially adversely impact our business, financial conditions and results of operations and also increase our costs and make it difficult for us to operate profitably.
For example, a prolonged conflict may result in challenges associated with timely receipt of customer payments and banking transactions, increased inflation, escalating energy prices and constrained availability, and thus increasing costs, of raw materials. Increases in inflation have the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure.
For example, a prolonged conflict may result in challenges associated with timely receipt of customer payments and banking transactions, increased inflation, escalating energy prices and constrained availability, and thus increasing costs, of raw materials. 38 Increases in inflation have the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure.
If such disturbances persist and manifest in different forms, they present additional substantial operational difficulties that would have a material adverse effect on our ability to meet our customer demands or fulfill our contractual obligations to our customers. 29 Additionally, our suppliers may prioritize their resources for any long-term commitments to third parties and to our detriment.
If such disturbances persist and manifest in different forms, they present additional substantial operational difficulties that would have a material adverse effect on our ability to meet our customer demands or fulfill our contractual obligations to our customers. Additionally, our suppliers may prioritize their resources for any long-term commitments to third parties and to our detriment.
Accordingly, in the event of a significant disruption to our sole manufacturing facility or third-party external manufacturing facilities in China, or breakdown of any of the production lines at our sole manufacturing facility in East Providence, we currently do not expect 27 that we would have sufficient inventory in stock to meet demand until the production lines return to operation or our third-party external manufacturing facilities in China deliver the required aerogel products.
Accordingly, in the event of a significant disruption to our sole manufacturing facility or third-party external manufacturing facilities in China, or breakdown of any of the production lines at our sole manufacturing facility in East Providence, we currently do not expect that we would have sufficient inventory in stock to meet demand until the production lines return to operation or our third-party external manufacturing facilities in China deliver the required aerogel products.
However, due to the safety issues, we believe that some vehicle manufacturers tend to select less thermally demanding and inherently safer cell chemistries and design choices at the expense of lower energy densities and lower driving range. Such systems may not present a demanding thermal problem requiring solutions like our thermal barrier products.
Due to the safety issues, we believe that some vehicle manufacturers tend to select less thermally demanding and inherently safer cell chemistries and design choices at the expense of lower energy densities and lower driving range. Such systems may not present a demanding thermal problem requiring solutions like our thermal barrier products.
In light of the increased demand for many of our raw materials, we have expanded our supplier base beyond North America, to Europe and Asia, and specifically to China. We do not have considerable experience managing issues arising out of this globalized supply chain and these risks are significantly magnified during current global supply chain disturbances.
In light of the increased demand for many of our raw materials, we have expanded our supplier base beyond North America, to Europe and Asia, and specifically to China. We do not have considerable experience managing issues arising out of this globalized supply chain and these risks are significantly magnified during global supply chain disturbances.
These uncertainties could have a material adverse effect on the continuity of our business and our results of operations and financial condition. From time to time we have had difficulty in consistently producing products that meet applicable product specifications and technical and delivery requirements, and such difficulties could expose us to financial, contractual, or other liabilities.
These uncertainties could have a material adverse effect on the continuity of our business and our results of operations and financial condition. 28 From time to time, we have had difficulty in consistently producing products that meet applicable product specifications and technical and delivery requirements, and such difficulties could expose us to financial, contractual, or other liabilities.
We may incur significant additional costs to comply with these requirements, which are becoming stringent in a progressive manner. If we fail to comply with these current and new requirements, we could be subject to civil or criminal liability, damages and fines, require substantial capital investment to remedy non-compliance, and our operations could be curtailed, suspended, or shutdown.
We may incur significant additional costs to comply with these requirements, which are becoming stringent in a progressive manner. If we fail to comply with these current and new requirements, we could be subject to civil or criminal liability, damages and 44 fines, require substantial capital investment to remedy non-compliance, and our operations could be curtailed, suspended, or shutdown.
There may be existing patents of which we are unaware that we may inadvertently infringe, resulting in claims against us or our customers. In recent years, Chinese, Japanese and South Korean entities have filed a significant number of patent applications related to aerogel products in both their home countries and in foreign countries.
There may be existing patents of which we are unaware that we may inadvertently infringe, resulting in claims against us or our customers. In recent years, Chinese, Japanese and South Korean entities have filed a significant number of patent 48 applications related to aerogel products in both their home countries and in foreign countries.
Alternatively, if a court were to find these provisions of our restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
Alternatively, if a court were to find these provisions of our Certificate of Incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
We expect to meet our long-term aerogel demand by maximizing capacity at our East Providence facility and utilizing a flexible supply strategy, including but not limited to using our external manufacturing capabilities in China, which currently support Aspen’s Energy Industrial segment and are capable of delivering increased aerogel production capacity.
We expect to meet our long-term aerogel demand by maximizing capacity at our East Providence facility and utilizing a flexible supply strategy, including but not limited to using our external manufacturing capabilities in China, which currently support our Energy Industrial segment and are capable of delivering increased aerogel production capacity.
If our products do not function as represented as a result of such changes in formulations, we may face warranty claims on our products. In addition, we may be named directly in product liability suits relating to our products, even for defects resulting from errors of our distributors, contractors, OEMs, partners, or end-user customers.
If our products do not function as represented as a result of such changes in formulations, we may face warranty claims on our products. In addition, we may be named directly in product 43 liability suits relating to our products, even for defects resulting from errors of our distributors, contractors, OEMs, partners, or end-user customers.
This could expose us to significantly greater risk of liability for warranty expenses and/or for defects, failures or accidents involving the final products sold to the consumer. 21 • Automotive OEMs purchasing from us may have certain rights to intellectual property developed by us in connection with our work for that OEM.
This could expose us to significantly greater risk of liability for warranty expenses and/or for defects, failures or accidents involving the final products sold to the consumer. • Automotive OEMs purchasing from us may have certain rights to intellectual property developed by us in connection with our work for that OEM.
Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the 39 financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
There has been an increase in consumer preferences for mobility on demand services, such as car- and ride-sharing, as opposed to automobile ownership, which may result in a long-term reduction in the number of vehicles per capita and in turn result in lower demand for our products in the EV market.
In addition, there has been an increase in consumer preferences for mobility on demand services, such as car- and ride-sharing, as opposed to automobile ownership, which may result in a long-term reduction in the number of vehicles per capita and in turn result in lower demand for our products in the EV market.
Our strategy may not be adequate to protect our brands in all circumstances, especially in foreign jurisdictions. In certain jurisdictions, third parties may seek to register trademarks on the names of our products and brands before we do, thus requiring us to change branding strategies or otherwise deal with the issue.
Our strategy may not be adequate to protect our brands in all circumstances, especially in foreign jurisdictions. In certain jurisdictions, third parties may seek to register 47 trademarks on the names of our products and brands before we do, thus requiring us to change branding strategies or otherwise deal with the issue.
Our actual or perceived failure to comply with such obligations could result in liability or reputational harm and could harm our business. Ensuring compliance with such laws could also impair our efforts to maintain and expand our customer base, and thereby decrease our revenue. We are subject to data protection laws and regulations that address privacy and data security.
Our actual or perceived failure to comply with such obligations could result in liability or reputational harm and could harm our business. Ensuring compliance with such laws could also impair our efforts to maintain and expand our customer base, and thereby decrease our revenue. 50 We are subject to data protection laws and regulations that address privacy and data security.
Any delay in the development or launch of a new product could result in our not being the first to market, which could compromise our competitive position. Even if we manage to develop and 36 introduce new products, such products may not address market needs or otherwise compete with third-party products.
Any delay in the development or launch of a new product could result in our not being the first to market, which could compromise our competitive position. Even if we manage to develop and introduce new products, such products may not address market needs or otherwise compete with third-party products.
The forward-looking statements contained in this report are made as of the date of this report, and we do not assume, and specifically disclaim, any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Item 1B. UNRESOLVE D STAFF COMMENTS None. 56
The forward-looking statements contained in this report are made as of the date of this report, and we do not assume, and specifically disclaim, any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Item 1B. UNRESOLVE D STAFF COMMENTS None.
Failure to remain profitable may adversely affect the market price of our common stock and our ability to raise capital and continue operations. 20 We will require additional capital to pursue our growth strategy, but we may not be able to obtain additional financing on acceptable terms or at all.
Failure to remain profitable may adversely affect the market price of our common stock and our ability to raise capital and continue operations. We will require additional capital to pursue our growth strategy, but we may not be able to obtain additional financing on acceptable terms or at all.
The term of the contract will automatically extend for additional one-year periods unless either party notifies the other of its intention not to renew the contract. While we have agreed to purchase our requirement for certain aerogel products, we have no obligation to purchase any minimum quantity under the contract.
The term of the contract will automatically extend for additional one-year periods unless either party notifies the other of its intention not to renew the contract. While we have agreed to purchase our requirement for certain aerogel products, 27 we have no obligation to purchase any minimum quantity under the contract.
Our external manufacturing facility in China is subject to risks and uncertainties relating to the laws and regulations of China and the changes in relations between the United States and China. If the Chinese government determines that our manufacturing facility does not comply with applicable regulations, our business could be adversely affected.
Furthermore, our external manufacturing facility in China is subject to risks and uncertainties relating to the laws and regulations of China and the changes in relations between the United States and China. If the Chinese government determines that our manufacturing facility does not comply with applicable regulations, our business could be adversely affected.
Furthermore, we rely on our external manufacturing capabilities in China, which currently support Aspen’s Energy Industrial segment and are capable of delivering increased aerogel production capacity. In addition, we began operating an automated fabrication facility in Mexico and commenced operations during 2022.
Furthermore, we rely on our external manufacturing capabilities in China, which currently support our Energy Industrial segment and are capable of delivering increased aerogel production capacity. In addition, we began operating an automated fabrication facility in Mexico and commenced operations during 2022.
Based on these factors, and the fact that our automotive OEM customers’ product programs are anticipated to encompass large volumes, our customers are able to negotiate favorable pricing. Accordingly, we are subject to substantial continuing pressure from automotive OEMs to reduce the price of our products.
Based on these factors, and the fact that our automotive OEM customers' product programs are anticipated to encompass large volumes, our customers are able 24 to negotiate favorable pricing. Accordingly, we are subject to substantial continuing pressure from automotive OEMs to reduce the price of our products.
Although none of our non-U.S. distributors are located in, or to our knowledge, conduct business with Iran, Cuba, Sudan, or Syria, we may not be successful in ensuring compliance with limitations or restrictions on business with these or other countries subject to economic sanctions.
Although none of our non-U.S. distributors are located in, or to our knowledge, conduct business with Iran, Cuba, Sudan, or Syria, we may not be successful in ensuring compliance with limitations or restrictions 42 on business with these or other countries subject to economic sanctions.
Regulatory changes contemplated in several regions may substantially increase these risks. Changes in the products or manufacturing processes may require the customers to perform an extensive re-qualification process, which our customers may not want to undertake for various reasons, resulting in the 41 customer switching to competing products.
Regulatory changes contemplated in several regions may substantially increase these risks. Changes in the products or manufacturing processes may require the customers to perform an extensive re-qualification process, which our customers may not want to undertake for various reasons, resulting in the customer switching to competing products.
The 51 listing of our common stock on The New York Stock Exchange does not assure that a meaningful, consistent and liquid trading market currently exists or will exist in the future. We cannot predict whether a more active market for our common stock will develop in the future.
The listing of our common stock on The New York Stock Exchange does not assure that a meaningful, consistent and liquid trading market currently exists or will exist in the future. We cannot predict whether a more active market for our common stock will develop in the future.
Any potential greenhouse gas regulations, while potentially helpful in the adoption of EVs, could have the impact of increasing energy costs, reducing the demand for hydrocarbons, decreasing profitability and return on 32 investment in the energy industry, and leading to a sustained downturn in the energy industry.
Any potential greenhouse gas regulations, while potentially helpful in the adoption of EVs, could have the impact of increasing energy costs, reducing the demand for hydrocarbons, decreasing profitability and return on investment in the energy industry, and leading to a sustained downturn in the energy industry.
Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and its financial condition and results of operations.
Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our financial condition and results of operations.
In some instances, the research and development activities that we conduct under contract with private 48 third parties may produce intellectual property to which we may not have ownership or exclusive rights and will be unable to protect or monetize.
In some instances, the research and development activities that we conduct under contract with private third parties may produce intellectual property to which we may not have ownership or exclusive rights and will be unable to protect or monetize.
We are aware of patents and patent applications generally relating to aspects of our technologies filed by, and issued to, third parties. We cannot determine with certainty whether patents or patent applications of other parties may 47 materially affect our ability to conduct our business.
We are aware of patents and patent applications generally relating to aspects of our technologies filed by, and issued to, third parties. We cannot determine with certainty whether patents or patent applications of other parties may materially affect our ability to conduct our business.
Even if our new products are adopted by the market, we may not achieve the growth in revenue that we expect from such new products and our investment in these efforts may not be proportional to our expected or actual revenue growth.
Even if our new products are adopted by the market, we may not achieve the growth in 35 revenue that we expect from such new products and our investment in these efforts may not be proportional to our expected or actual revenue growth.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our restated certificate of incorporation described above.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our Certificate of Incorporation described above.
While we seek to reformulate our products to reduce our reliance on materials that are susceptible to significant price fluctuations, while maintaining appropriate performance characteristics, our efforts may not be successful.
While we seek to reformulate our products to 32 reduce our reliance on materials that are susceptible to significant price fluctuations, while maintaining appropriate performance characteristics, our efforts may not be successful.
For example, a party with whom we conduct business may fail to make payments when due, default under their agreements with us, become insolvent or declare bankruptcy.
For example, a 40 party with whom we conduct business may fail to make payments when due, default under their agreements with us, become insolvent or declare bankruptcy.
It could apply, however, to a suit that falls within one or more of the categories enumerated in the exclusive forum provision and asserts claims under the Securities Act, inasmuch as Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rule and regulations thereunder.
It could apply, however, to a suit that falls within one or more of the categories enumerated in the exclusive forum provision and asserts claims under the Securities Act of 1933, as amended (the Securities Act), inasmuch as Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rule and regulations thereunder.
To the extent that we do not maintain our existing business with our automotive OEM customers because of a decline in their production requirements or because the contracts expire or are terminated for convenience, we will need to attract new customers or win new business with existing customers, or our results of operations and financial condition as well as the value of the awarded business will be adversely affected.
To the extent that we do not maintain our existing business with our automotive OEM customers because of a decline in their production requirements or because the contracts expire or are terminated for convenience, we will need to attract new customers or gain new business with existing customers, or our results of operations and financial condition as well as the value of the awarded business will be adversely affected.
These factors could involve financial institutions or financial services industry companies with which we 31 have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.
These factors could involve financial institutions or financial services industry companies with which we have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.
While we expect our operating cash flow will be positive on an annual basis during 2025, we may not achieve sufficient revenue growth to generate positive cash flow in any future year. As a result, we may need to raise additional capital from investors to achieve our expected growth or to fund the working capital investment necessary to maintain operations.
While we expect our operating cash flow will be positive on an annual basis during 2026, we may not achieve sufficient revenue growth to generate positive cash flow in any future year. As a result, we may need to raise additional capital from investors to achieve our expected growth or to fund the working capital investment necessary to maintain operations.
We take certain measures designed to ensure our compliance with U.S. export and economic sanctions law, and we believe that we have never sold our products to Iran, Cuba, Sudan, or Syria through third-party agents or intermediaries or made any effort to attract business from any of these countries.
We take certain measures designed to ensure our compliance with U.S. export and economic sanctions law, and we believe that we have never sold our products to Iran, Cuba, Sudan, North Korea or Syria through third-party agents or intermediaries or made any effort to attract business from any of these countries.
These applications and data encompass a wide variety of business-critical information including research and development information, 43 commercial information, and business and financial information. We face four primary risks relative to protecting this critical information: loss of access; inappropriate or unauthorized disclosure; inappropriate or unauthorized modification; and inadequate monitoring of our controls over the first three risks.
These applications and data encompass a wide variety of business-critical information including research and development information, commercial information, and business and financial information. We face four primary risks relative to protecting this critical information: loss of access; inappropriate 45 or unauthorized disclosure; inappropriate or unauthorized modification; and inadequate monitoring of our controls over the first three risks.
If our internal controls over financial reporting are determined to be ineffective, or if our auditors are otherwise unable to attest to their effectiveness, investor confidence in our company, and our common stock price, may be adversely affected. • Our shareholders may experience future dilution as a result of future equity offerings.
If our internal controls over financial reporting are determined to be ineffective, or if our auditors are otherwise unable to attest to their effectiveness, investor confidence in our company, and our common stock price, may be adversely affected. • Our stockholders may experience future dilution as a result of future equity offerings.
During 2014 and in 2024, we performed analyses pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code, as well as similar state provisions, in order to determine whether any limitations might exist on the utilization of net operating losses and other tax attributes.
During 2014 and in 2024, we performed analyses pursuant to Section 382 of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), as well as similar state provisions, to determine whether any limitations might exist on the utilization of net operating losses and other tax attributes.
Pursuant to Section 404(a) of the Sarbanes-Oxley Act, we have furnished a report by management on the effectiveness of our internal control over financial reporting for the fiscal year ended December 31, 2024 and will continue to do so in each year thereafter.
Pursuant to Section 404(a) of the Sarbanes-Oxley Act, we have furnished a report by management on the effectiveness of our internal control over financial reporting for the fiscal year ended December 31, 2025 and will continue to do so in each year thereafter.
We are party to a production contract with a contract manufacturer in China to produce certain of our aerogel products. Pursuant to the contract, the contract manufacturer is obligated to deliver products to us as we issue purchase orders on an as needed basis through the term of the agreement, which expires in 2025.
We are party to a production contract with a contract manufacturer in China to produce certain of our aerogel products. Pursuant to the contract, the contract manufacturer is obligated to deliver products to us as we issue purchase orders on an as needed basis through the term of the agreement, which expires in 2026.
In addition, as a Delaware corporation, we are subject to Delaware law, including Section 203 of the DGCL.
In addition, as a Delaware corporation, we are subject to Delaware law, including Section 203 of the Delaware General Corporation Law (DGCL).
Item 1A. RI SK FACTORS Summary of Risk Factors Our business is subject to numerous risks and uncertainties, including those highlighted in this section below, that represent challenges that we face in connection with the successful implementation of our strategy.
Item 1A. RISK FACTORS Summary of Risk Factors Our business is subject to numerous risks and uncertainties, including those highlighted in this section below, that represent challenges that we face in connection with the successful implementation of our strategy.
We are currently selling thermal barrier production parts to GM, Toyota and Scania, among others, and prototype thermal barrier parts to a number of other companies. We are also continuing our efforts to develop additional thermal barrier products for sale to others in the EV market.
We are currently selling thermal barrier production parts to GM, Toyota, and ACC, among others, and prototype thermal barrier parts to a number of other companies. We are also continuing our efforts to develop additional thermal barrier products for sale to others in the EV market.
These forward-looking statements include, among other things, statements about: • the expected future growth of the market for our aerogel products and our continued gain in market share, in particular in the EV market, the energy industrial insulation market, the lithium-ion battery thermal barrier markets, and other markets we target; • our beliefs about the competitive strengths and value propositions of our technology and our products and our ability to gain additional market share and enter into new markets based on those strengths; • our expectation that our investment in incremental manufacturing and operating expense will sustain long-term growth in our existing markets and develop new business opportunities; • our plans to continue to develop and optimize aerogel products for high-value applications within the sustainable insulation materials market and our plan to realize revenue from this market; • our plans and expectations to partner with industry leaders in the battery and EV market or such partnerships resulting in products and technologies or otherwise resulting in meaningful financial results; • our expectations about the size and timing of awarded business in the EV market, future revenues and profit margins, arising from our supply relationship and contract with automotive OEMs and our ability to win more business and increase revenue in the EV market; • our pursuit of high-value opportunities for our aerogel products within different segments of the EV market, the global insulation market, including the sustainable insulation materials market, and our plans to leverage our aerogel technology platform to develop innovative, aerogel enhanced products for applications in new markets; • our plans to focus additional resources to continue to grow our share of the EV market and the energy industrial insulation market; • the current or future trends in the energy, energy industrial, chemical and refinery, LNG, sustainable insulation materials, EV thermal barrier, EV battery materials or other markets and the impact of these trends on our business; • our investments in the EV market and aerogel technology platform; • our pursuit of and the expected greater adoption of our products in the LNG and power generation markets and our expectation that product revenue will be generated in large part by demand for insulation associated with scheduled plant shutdowns, or turnarounds, and other maintenance-related projects; 54 • our expectation that our products will be specified during the design phase in a growing number of new plant construction and capital expansion projects and our expectation that we will have an increasing percentage of our products sold for use in capital projects; • our expectation that the growth in global energy demand and EV market will result in increased new-build and large capacity expansion projects, driving demand for our aerogel products; • our plans to continue our strategy of working with innovative companies to target and penetrate additional market opportunities; • our plans to develop strategic partnerships to facilitate market penetration beyond the energy industrial and sustainable insulation materials market, as well as the expected goals and priorities of such strategic partnerships; • our belief that an adequate long-term supply of silica-precursors and other raw materials is available and that our plans to reduce reliance on precursors susceptible to significant price fluctuations will be successful; • our belief that we can strategically increase our capacity to meet the demand or that we will be able to make such capacity increases in a timely manner; • our expectation in our ability to implement lower cost product formulations and realize material purchasing efficiencies; • our belief that our portfolio of patents, trade secrets and know-how present a significant barrier to potential new entrants in the production of aerogel blanket insulation; • our expectation that we will be successful in enforcing and defending our patents against competitors and that such patents are valid and enforceable, as well as our expectations about the costs and consequences of our current or potential future patent litigation and the potential for additional patent litigation; • our belief that our products possess strong competitive advantages over traditional insulation materials, including the superior thermal performance and the thin, easy-to-use and durable blanket form of our products; • our belief that we can make additional productivity improvements in our existing East Providence facility and utilize a flexible supply strategy, including but not limited to use of our external manufacturing capabilities in China, which currently support Aspen’s Energy Industrial segment and are capable of delivering increased aerogel production capacity for 2025 and beyond; • our belief that our end-use customers will continue to invest in major energy industrial projects; • our expectation that we will continue to sell our products in the sustainable insulation materials and other end markets; • our expectations that our work with partners will accelerate the commercialization of these carbon aerogel anode materials in the EV market; • our belief that the potential for significant technological innovation in traditional insulation materials is limited and that new high-performance materials will be required to meet evolving market requirements for energy efficient insulation systems; • our belief that our aerogel products and manufacturing processes are proprietary and that we can protect our patents, trade secrets and know-how associated therewith; • our belief that we can continue to improve the cost efficiency of our manufacturing process, that our current expansion plans offer attractive returns on incremental invested capital, and that we will focus our development efforts on new products and next generation technology with application in new, high value market segments; • our belief that we will have opportunities to address additional high value applications in the multi-billion dollar global insulation market, and that we are well-positioned to leverage a decade’s worth of research and development to design and commercialize disruptive aerogel products for a wide array of new markets; • our expectations about future material costs and manufacturing expenses as a percentage of revenue, including the impact of engaging one or more external manufacturing facilities in China for the supplemental supply of our aerogel products; our expectation about the ability of the Chinese external manufacturing facilities that we engage to consistently supply the aerogel product that we order in a timely manner; • our belief that our products have the lowest cost on a fully-installed basis or offer significant life-cycle cost savings in energy industrial and certain other applications as compared to traditional insulation materials; 55 • our plans to continue to expand our global sales force and distribution network to support anticipated growth in customers and demand for our products and our plans to seek to promote greater enterprise-wide utilization of our products by existing end-use customers; • our expectations and projections about future revenues, revenue growth, costs, expenses, production volumes, manufacturing productivity, gross profit, profitability, net loss, loss per share and Adjusted EBITDA, sources and uses of cash, liquidity, cash flow, capital requirements and the sufficiency of our existing cash balance and available credit; • our expectations that most of our revenue will continue to come from a relatively small number of customers for the foreseeable future; • our expectations of long-term revenue growth, with increasing levels of gross profit and improved cash flows from operations and our expectations that we will incur significant capital expenditures related to the expansion of our manufacturing capacity to support this expected long-term growth in demand; • our expectations that the operating expenses will decrease in absolute dollars and decrease as a percentage of revenue in 2025, our research and development expenses will decrease in absolute dollars and increase as a percentage of revenue in 2025, our sales and marketing expenses will decrease in absolute dollars and decrease as a percentage of revenue in 2025, and our general and administrative expenses will decrease in absolute dollars and decrease as a percentage of revenue in 2025; • our expectation to continue to increase investment in research and development in our efforts to enhance and expand our aerogel technology platform; • our expectations about the impact of new accounting pronouncements on our consolidated financial statements and related disclosures; • our belief that our experienced and dedicated leadership team will provide us with a competitive advantage in the industry; • our belief of our technological and market leadership in aerogels; • the expected future development of new aerogel technologies; • our expectations about limitations of net operating losses; • our expectation of rising interest rates and operating costs; • rising inflation; • our expectation of starting up our planned second plant and our ability to do so at a cost consistent with our prior estimates; • our beliefs about our Mexico thermal barrier assembly facility and our external manufacturing facility in China, and their timely operations, their ability to meet the demand, the growth in thermal barrier demand to match the assembly operation and vice versa; and • our ability to shift thermal barrier assembly operations from East Providence, Rhode Island to Mexico in a timely manner.
These forward-looking statements include, among other things, statements about: • the expected future growth of the market for our aerogel products and our continued gain in market share, in particular in the EV market, the energy industrial and sustainable insulation market, the lithium-ion battery thermal barrier markets, and other markets we target; • our beliefs about the competitive strengths and value propositions of our technology and our products and our ability to gain additional market share and enter into new markets based on those strengths; • our expectation that our investment in incremental manufacturing and operating expense will sustain long-term growth in our existing markets and develop new business opportunities; • our plans to continue to develop and optimize aerogel products for high-value applications within the sustainable insulation materials market and our plan to realize revenue from this market; • our plans and expectations to partner with industry leaders in the battery and EV market or such partnerships resulting in products and technologies or otherwise resulting in meaningful financial results; • our expectations about the size and timing of awarded business in the EV market, future revenues and profit margins, arising from our supply relationship and contract with automotive OEMs and our ability to win more business and increase revenue in the EV market; • our pursuit of high-value opportunities for our aerogel products within different segments of the EV market, the global insulation market, including the sustainable insulation materials market, and our plans to leverage our aerogel technology platform to develop innovative, aerogel enhanced products for applications in new markets; • our plans to focus additional resources to continue to grow our share of the EV market and the energy industrial insulation market; • the current or future trends in the energy, energy industrial, chemical and refinery, LNG, sustainable insulation materials, EV thermal barrier or other markets and the impact of these trends on our business; • our investments in the EV market and aerogel technology platform; • our pursuit of and the expected greater adoption of our products in the LNG and power generation markets and our expectation that product revenue will be generated in large part by demand for insulation associated with scheduled plant shutdowns, or turnarounds, and other maintenance-related projects; • our expectation that our products will be specified during the design phase in a growing number of new plant construction and capital expansion projects and our expectation that we will have an increasing percentage of our products sold for use in capital projects; • our expectation that the growth in global energy demand and EV market will result in increased new-build and large capacity expansion projects, driving demand for our aerogel products; • our plans to continue our strategy of working with innovative companies to target and penetrate additional market opportunities; 57 • our plans to develop strategic partnerships to facilitate market penetration beyond the energy industrial and sustainable insulation materials market, as well as the expected goals and priorities of such strategic partnerships; • our belief that an adequate long-term supply of silica-precursors and other raw materials is available and that our plans to reduce reliance on precursors susceptible to significant price fluctuations will be successful; • our belief that we can strategically increase our capacity to meet the demand or that we will be able to make such capacity increases in a timely manner; • our expectation in our ability to implement lower cost product formulations and realize material purchasing efficiencies; • our belief that our portfolio of patents, trade secrets and know-how present a significant barrier to potential new entrants in the production of aerogel blanket insulation; • our expectation that we will be successful in enforcing and defending our patents against competitors and that such patents are valid and enforceable, as well as our expectations about the costs and consequences of our current or potential future patent litigation and the potential for additional patent litigation; • our belief that our products possess strong competitive advantages over traditional insulation materials, including the superior thermal performance and the thin, easy-to-use and durable blanket form of our products; • our belief that we can make additional productivity improvements in our existing East Providence facility and utilize a flexible supply strategy, including but not limited to use of our external manufacturing capabilities in China, which currently support Aspen’s Energy Industrial segment and are capable of delivering increased aerogel production capacity for 2026 and beyond; • our belief that our end-use customers will continue to invest in major energy industrial projects; • our expectation that we will continue to sell our products in the sustainable insulation materials and other end markets; • our expectations that our work with partners will accelerate the commercialization of these carbon aerogel anode materials in the EV market; • our belief that the potential for significant technological innovation in traditional insulation materials is limited and that new high-performance materials will be required to meet evolving market requirements for energy efficient insulation systems; • our belief that our aerogel products and manufacturing processes are proprietary and that we can protect our patents, trade secrets and know-how associated therewith; • our belief that we can continue to improve the cost efficiency of our manufacturing process, that our current expansion plans offer attractive returns on incremental invested capital, and that we will focus our development efforts on new products and next generation technology with application in new, high value market segments; • our belief that we will have opportunities to address additional high value applications in the multi-billion dollar global insulation market, and that we are well-positioned to leverage a decade’s worth of research and development to design and commercialize disruptive aerogel products for a wide array of new markets; • our expectations about future material costs and manufacturing expenses as a percentage of revenue, including the impact of engaging one or more external manufacturing facilities in China for the supplemental supply of our aerogel products; • our expectation about the ability of the Chinese external manufacturing facilities that we engage to consistently supply the aerogel product that we order in a timely manner; • our belief that our products have the lowest cost on a fully-installed basis or offer significant life-cycle cost savings in energy industrial and certain other applications as compared to traditional insulation materials; • our plans to continue to expand our global sales force and distribution network to support anticipated growth in customers and demand for our products and our plans to seek to promote greater enterprise-wide utilization of our products by existing end-use customers; • our expectations and projections about future revenues, revenue growth, costs, expenses, production volumes, manufacturing productivity, gross profit, profitability, net loss, loss per share and Adjusted EBITDA, sources and uses of cash, liquidity, cash flow, capital requirements and the sufficiency of our existing cash balance and available credit; • our expectations that most of our revenue will continue to come from a relatively small number of customers for the foreseeable future; 58 • our expectations of long-term revenue growth, with increasing levels of gross profit and improved cash flows from operations and our expectations that we will incur significant capital expenditures related to the expansion of our manufacturing capacity to support this expected long-term growth in demand; • our expectations that our material costs will drop in absolute dollars and remain stable as a percentage of revenue in 2026 and our manufacturing expense will decrease in absolute dollars and increase as a percentage of revenue in 2026; • our expectation to continue to increase investment in research and development in our efforts to enhance and expand our aerogel technology platform; • our expectations about the impact of new accounting pronouncements on our consolidated financial statements and related disclosures; • our belief that our experienced and dedicated leadership team will provide us with a competitive advantage in the industry; • our belief of our technological and market leadership in aerogels; • the expected future development of new aerogel technologies; • our expectations about limitations of net operating losses; • our expectation of rising interest rates and operating costs; • rising inflation; and • our beliefs about our Mexico thermal barrier assembly facility and our external manufacturing facility in China, and their timely operations, their ability to meet the demand, the growth in thermal barrier demand to match the assembly operation and vice versa.
Our estimates regarding market opportunity for our products in the EV market, the assumptions underlying our estimates regarding market opportunity and our financial targets, including any revenue targets we may provide from time to time, are dependent on certain estimates and assumptions related to, among other things, demand for our products from our automotive OEM customers, development and launch of innovative new products, market share projections, product pricing and sale, volume and product mix, volatility, material prices, distribution, cost savings, and our ability to generate sufficient cash flow to reinvest in our existing business.
Our estimates regarding market opportunity for our products in the EV market, the estimated awarded business of our thermal barrier business, the assumptions underlying our estimates regarding market opportunity, awarded business and our financial targets, including any revenue targets we may provide from time to time, are dependent on certain estimates and assumptions related to, among other things, demand for our products from our automotive OEM customers, development and launch of innovative new products, market share projections, product pricing and sale, volume and product mix, volatility, material prices, distribution, cost savings, and our ability to generate sufficient cash flow to reinvest in our existing business.
If we violate such regulations, we could face penalties and fines or be required to curtail or cease operations. We are subject to numerous health and safety laws and regulations in each of the jurisdictions in which we operate.
Our activities and operations are subject to numerous health and safety laws and regulations. If we violate such regulations, we could face penalties and fines or be required to curtail or cease operations. We are subject to numerous health and safety laws and regulations in each of the jurisdictions in which we operate.
Power failures or disruptions, the breakdown, failure, or substandard performance of equipment, or the damage or destruction of buildings and other facilities due to fire or natural disasters could severely affect our ability to continue our operations.
In addition, power failures or disruptions, the breakdown, failure, or substandard performance of equipment, or the damage or destruction of buildings and other facilities due to fire or natural disasters could severely affect our ability to continue our operations.
In particular, many investment banking firms are required to contract with independent financial analysts for their stock 52 research. It may be difficult for companies such as ours, with smaller market capitalizations, to attract independent financial analysts that will cover our common stock. This could have a negative effect on the market price of our stock.
Many investment banking firms are required to contract with independent financial analysts for their stock research. It may be difficult for companies such as ours, with smaller market capitalizations, to attract independent financial analysts that will cover our common stock. This could have a negative effect on the market price of our stock.
This assessment is required to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Our independent registered public accounting firm is required to formally attest to the effectiveness of our internal control over financial reporting for the year ended December 31, 2024 and subsequent years.
This assessment is required to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Our independent registered public accounting firm is required to formally attest to the effectiveness of our internal control over financial reporting for the fiscal year ended December 31, 2025 and subsequent years.
We face competition from other manufacturers of insulation, thermal barriers, battery materials, and similar products in seeking out and entering into such partnerships and relationships with industry leaders in our targeted EV market and we may therefore not be successful in establishing strategic relationships in those markets.
We face competition from other manufacturers of insulation, thermal barriers and similar products in seeking out and entering into such partnerships and relationships with industry leaders in our targeted EV market and we may therefore not be successful in establishing and maintaining strategic relationships in those markets.
The short and long-term implications of Russia’s invasion of Ukraine, the conflict in the Middle East and tensions between China and Taiwan are difficult to predict at this time.
The short and long-term implications of Russia’s invasion of Ukraine, the conflicts in the Middle East and tensions between China and Taiwan are difficult to predict at this time.
Anti-takeover provisions in our restated certificate of incorporation and restated bylaws, and Delaware law, could delay or discourage a takeover. Anti-takeover provisions in our restated certificate of incorporation and restated bylaws and Delaware law may have the effect of deterring or delaying attempts by our stockholders to remove or replace management, engage in proxy contests and effect changes in control.
Anti-takeover provisions in our Certificate of Incorporation and restated bylaws, and Delaware law, could delay or discourage a takeover. 54 Anti-takeover provisions in our restated certificate of incorporation, as amended (our Certificate of Incorporation), and restated bylaws and Delaware law may have the effect of deterring or delaying attempts by our stockholders to remove or replace management, engage in proxy contests and effect changes in control.
A substantial amount of our expected sales in the EV market in 2025 are expected to be to a single customer. The substantial majority of our sales to distributors are transacted on a purchase order basis.
A substantial amount of our expected sales in the EV market in 2026 are expected to be to a single customer. The substantial majority of our sales to distributors are transacted on a purchase order basis.
Investors purchasing shares or other securities in the future could have rights, preferences or privileges senior to those of our shareholders and our shareholders may experience dilution.
Investors purchasing shares or other securities in the future could have rights, preferences or privileges senior to those of our stockholders and our stockholders may experience dilution.
To develop and expand our business, we have made, and will need to continue to make, significant up-front investments in our manufacturing capacity and have incurred research and development, sales and marketing and general and administrative expenses. In addition, our growth has required a significant investment in working capital.
To develop and expand our business, we have made significant up-front investments in our manufacturing capacity and have incurred, and will continue to incur, research and development, sales and marketing and general and administrative expenses. In addition, our growth has required a significant investment in working capital.
These competitors are engaged in significant development work on these various insulation products. Competing technologies that outperform our insulation in one or more performance attributes could be developed and successfully introduced. We are also aware of certain companies, including Armacell International S.A., Beerenberg AS, JIOS Aerogel Pte.
These competitors are engaged in significant development work on these various insulation products. Competing technologies that outperform our insulation in one or more performance attributes could be developed and successfully introduced. We are also aware of certain companies, including Armacell International S.A., Beerenberg AS, JIOS Aerogel Pte. Ltd., Unifrax Holding Co.
The MidCap Loan Facility is guaranteed by Aspen Mexico Holdings (together with the Borrowers and any future subsidiaries that are required to become guarantors or borrowers pursuant to the terms of the Credit Agreement, collectively, the “Loan Parties”) and is secured by a lien on substantially all existing and after-acquired assets of the Loan Parties, including the equity interest in Aspen RI, Aspen Mexico Holdings and Aspen Aerogels Georgia owned by us, in each case, subject to customary exceptions.
The Amended MidCap Loan Facility is guaranteed by Aspen Mexico and Aspen Georgia (together with the Borrowers and any future subsidiaries that are required to become guarantors or borrowers pursuant to the terms of the Credit Agreement, collectively, the Loan Parties) and is secured by a lien on substantially all existing and after-acquired assets of the Loan Parties, including the equity interest in Aspen RI, Aspen Mexico and Aspen Georgia owned by us, in each case, subject to customary exceptions.
A substantial majority of our revenue is generated from sales to a limited number of direct customers, including distributors, contractors, OEMs, partners and end-user customers. For the years ended December 31, 2024, 2023 and 2022, total revenue from our top ten direct customers represented 84%, 80%, and 72% of our revenues, respectively.
A substantial majority of our revenue is generated from sales to a limited number of direct customers, including distributors, contractors, OEMs, partners and end-user customers. For the fiscal years ended December 31, 2025, 2024 and 2023, total revenue from our top ten direct customers represented 84%, 84% and 80% of our revenues, respectively.
If we are found to infringe any patents, regardless of whether litigation is brought against us by third parties or, as in the case of our ongoing patent enforcement actions described above, brought by us against third parties, we could be required to: • pay substantial monetary damages, including lost profits, reasonable royalties and/or treble damages if an infringement is found to be willful; • totally discontinue or substantially modify any products or processes that are found to be in violation of another party’s intellectual property rights; and/or • seek a license to continue making and selling our products and/or using our manufacturing processes, which we may not be able to obtain on reasonable terms, if at all, which could significantly increase our operating expenses and/or decrease our revenue.
If we are found to infringe any patents, regardless of whether litigation is brought against us by third parties or brought by us against third parties, we could be required to: • pay substantial monetary damages, including lost profits, reasonable royalties and/or treble damages if an infringement is found to be willful; • totally discontinue or substantially modify any products or processes that are found to be in violation of another party’s intellectual property rights; and/or • seek a license to continue making and selling our products and/or using our manufacturing processes, which we may not be able to obtain on reasonable terms, if at all, which could significantly increase our operating expenses and/or decrease our revenue.
Ltd., IBIDEN Co., Ltd., Guangdong Alison Hi-Tech Co, Ltd., Nano Tech Co, Ltd, IBIH Advanced Materials Co., Ltd., Nameite New 40 Materials Technology Co., Ltd., Guizhou Aerospace Wujiang Electro-Mechanical Equipment Co., Ltd., Shenzhen Aerogel Technology Co., Ltd., and a variety of other companies based in Asia that have developed or are developing and/or marketing products using aerogel technology similar to our technology.
(Alkegen), IBIDEN Co., Ltd., Guangdong Alison Hi-Tech Co, Ltd., Nano Tech Co, Ltd, IBIH Advanced Materials Co., Ltd., Nameite New Materials Technology Co., Ltd., Guizhou Aerospace Wujiang Electro-Mechanical Equipment Co., Ltd., Shenzhen Aerogel Technology Co., Ltd., and a variety of other companies that have developed or are developing and/or marketing products using aerogel technology similar to our technology.
In the actions brought by us against third parties, including our ongoing patent enforcement actions described above, we may be required to pay costs and expenses of opposing parties, including attorney fees, if we lose. If our competitors are able to use our technology without payment to us, our ability to compete effectively could be materially harmed.
In the actions brought by us against third parties we may be required to pay costs and expenses of opposing parties, including attorney fees, if we lose. If our competitors are able to use our technology without payment to us, our ability to compete effectively could be materially harmed.
If GM reduces their demand for our aerogel products, it could have a significant adverse impact on our business and operations. • In order to support the projections and estimates of our product demand that our potential automotive customers present to us, we may need to make substantial capital and other investments without any assurance that such potential demand will materialize.
If GM further reduces their demand for our aerogel products, it could have a further adverse impact on our business and operations. • In order to support the projections and estimates of our product demand that our potential automotive customers present to us, we made substantial capital and other investments without any assurance that such potential demand will materialize.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo provide for the availability of critical data and systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and protect against and respond to cybersecurity incidents, we undertake the following activities: • monitor emerging data protection laws and implement changes to our processes that are designed to comply with such laws; • through our policies, practices and contracts (as applicable), require employees, as well as third parties that provide services on our behalf, to treat confidential information and data with care; • employ technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence; • provide regular, mandatory training for our employees, Board members and certain contractors regarding cybersecurity threats as a means to equip them with effective tools to address cybersecurity threats and incident response preparedness, and to communicate our evolving information security policies, standards, processes and practices; • conduct regular phishing email simulations for all employees and contractors with access to our email systems to enhance awareness and responsiveness to possible threats; • conduct annual cybersecurity management and incident training for current employees involved in our systems and processes that handle sensitive data; • run tabletop exercises to simulate a response to a cybersecurity incident and use the findings to improve our processes and technologies; • leverage the NIST incident handling framework to help us identify, protect, detect, respond and recover when there is an actual or potential cybersecurity incident; and • carry cybersecurity risk insurance that provides protection against the potential losses arising from a cybersecurity incident. 57 Our incident response plan coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate damage to our business and reputation.
Biggest changeTo provide for the availability of critical data and systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and protect against and respond to cybersecurity incidents, we undertake the following activities: • monitor emerging data protection laws and implement changes to our processes that are designed to comply with such laws; • through our policies, practices and contracts (as applicable), require employees, as well as third parties that provide services on our behalf, to treat confidential information and data with care; • employ technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence; • provide regular, mandatory training for our employees, Board members and certain contractors regarding cybersecurity threats as a means to equip them with effective tools to address cybersecurity threats and incident response preparedness, and to communicate our evolving information security policies, standards, processes and practices; • conduct regular phishing email simulations for all employees and contractors with access to our email systems to enhance awareness and responsiveness to possible threats; • conduct annual cybersecurity management and incident training for current employees involved in our systems and processes that handle sensitive data; • run tabletop exercises to simulate a response to a cybersecurity incident and use the findings to improve our processes and technologies; • leverage the NIST incident handling framework to help us identify, protect, detect, respond and recover when there is an actual or potential cybersecurity incident; and • carry cybersecurity risk insurance that provides protection against the potential losses arising from a cybersecurity incident.
We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “Risks Related to Our Business and Strategy” which disclosures are incorporated by reference herein.
We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of 60 operations, or financial condition, under the heading “Risks Related to Our Business and Strategy” which disclosures are incorporated by reference herein.
Such individuals have collectively over 30 years of prior work experience in various roles involving managing information security, developing cybersecurity strategy, implementing effective information and cybersecurity programs, as well as several relevant degrees and certifications, including Certified Information Security Manager, Certified Information Systems Auditor, Certified Information Systems Security Professional, Global Information Assurance Certification, Certified Professional Hacker.
Such individuals have collectively over 30 years of prior work experience in various roles involving managing information security, developing cybersecurity strategy, implementing effective information and cybersecurity programs, as well as several relevant degrees and certifications, including Certified Information Security Manager, Certified Information Systems Auditor, Certified Information Systems Security Professional, Global Information Assurance Certification, and Certified Ethical Hacker.
Cybersecurity Risk Management and Strategy; Effect of Risk We face risks related to cybersecurity such as unauthorized access, cybersecurity attacks and other security incidents, including as perpetrated by hackers and unintentional damage or disruption to hardware and software systems, loss of data, and misappropriation of confidential information.
Cybersecurity Risk Management and Strategy; Effect of Risk We face risks related to cybersecurity such as unauthorized access, cybersecurity attacks and other security incidents, including as perpetrated by hackers and unintentional damage or disruption to hardware and software systems, loss of data, and misappropriation 59 of confidential information.
At least quarterly, our Audit Committee receives an update from management of our cybersecurity threat risk management and strategy processes covering topics such as data security posture, results from third-party assessments, progress towards pre-determined risk-mitigation-related goals, our incident response plan, and material cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks.
At least quarterly, our Nominating, Governance and Risk Committee receives an update from management of our cybersecurity threat risk management and strategy processes covering topics such as data security posture, results from third-party assessments, progress towards pre-determined risk-mitigation-related goals, our incident response plan, and material cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks.
Our cybersecurity risk management and strategy processes , which are discussed in greater detail above, are led by our Director of Information Security, Chief Financial Officer and Chief Legal Officer.
Our cybersecurity risk management and strategy processes , which are discussed in greater detail above, are led by our Director of Information Security, Chief Financial Officer and Chief Administrative Officer.
Members of our Audit Committee and Board of Directors are also encouraged to regularly engage in conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs.
Members of our Nominating, Governance and Risk Committee and Board of Directors are also encouraged to regularly engage in conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs.
Our Audit Committee receives prompt and timely information regarding any known or suspected cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed.
Our Nominating, Governance and Risk Committee receives prompt and timely information regarding any known or suspected cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed.
Members of our Audit Committee and Board of Directors continue to receive updates around the cybersecurity threat landscape and ongoing best practices as a means of continuing education in the area.
Members of our Nominating, Governance and Risk Committee and Board of Directors continue to receive updates around the cybersecurity threat landscape and ongoing best practices as a means of continuing education in the area.
As discussed in more detail under “Cybersecurity Governance” below, our Audit Committee provides oversight of our cybersecurity risk management and strategy processes, which are led by our Director of Information Security, our Chief Financial Officer and our Chief Legal Officer.
As discussed in more detail under “Cybersecurity Governance” below, our Nominating, Governance and Risk Committee provides oversight of our cybersecurity risk management and strategy processes, which are led by our Director of Information Security, our Chief Financial Officer and our Chief Administrative Officer.
As discussed above, these management team members and other relevant subject matter experts report to the Audit Committee of our Board of Directors, as well as the Cybersecurity Subcommittee of the Audit Committee , about material cybersecurity threat risks, among other cybersecurity related matters, on a quarterly basis. 58
As discussed above, these management team members and other relevant subject matter experts report to the Nominating, Governance and Risk Committee of our Board of Directors about material cybersecurity threat risks, among other cybersecurity related matters, on a quarterly basis.
Our Audit Committee, and its Cybersecurity Subcommittee receive materials discussing current and emerging material cybersecurity threat risks, and describing our ability to mitigate those risks, as well as recent developments, evolving standards, technological developments and information security considerations arising with respect to our peers and third parties.
Our Nominating, Governance and Risk Committee receives materials discussing current and emerging material cybersecurity threat risks, and describing our ability to mitigate those risks, as well as recent developments, evolving standards, technological developments and information security considerations arising with respect to our peers and third parties.
The Audit Committee of our Board of Directors is responsible for the oversight of risks from cybersecurity threats.
The Nominating, Governance and Risk Committee of our Board of Directors is responsible for the oversight of risks from cybersecurity threats.
In addition, our Audit Committee has established a Cybersecurity Subcommittee, comprised of four Audit Committee members and members of management, including the Director of Information Security, Chief Financial Officer, and Chief Legal Officer, which meets quarterly to review materials concerning the ongoing maturation of the Company’s cybersecurity program, the effectiveness of its information security controls, and current and emerging material cybersecurity threat risks.
In addition, the Chairperson of our Nominating, Governance and Risk Committee meets quarterly with our Director of Information Security, Chief Financial Officer, and Chief Legal Officer to review materials concerning the ongoing maturation of the Company’s cybersecurity program, the effectiveness of its information security controls, and current and emerging material cybersecurity threat risks.
Added
Our incident response plan coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate damage to our business and reputation.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease additional spaces for research, administrative, manufacturing, and warehousing purposes in six locations in the United States and two in Mexico under leases expiring between March 31, 2025 and April 30, 2034.
Biggest changeWe lease additional spaces for research, administrative, manufacturing, and warehousing purposes in four 61 locations in the United States and two locations in Mexico under leases expiring between July 31, 2026 and April 30, 2034.
The table below shows a summary of the square footage of these locations as of December 31, 2024: Leased Properties by Location (In square ft.) East Providence, RI 200,569 Marlborough, MA 58,965 Monterrey, MX 266,381 Northborough, MA 56,650 Statesboro, GA 62,031
The table below shows a summary of the square footage of these locations as of December 31, 2025: Leased Properties by Location (In square ft.) East Providence, RI 196,969 Marlborough, MA 58,965 Monterrey, MX 266,381 Northborough, MA 51,650 Statesboro, GA 53,015

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn November 2024, the Korean IPTAB issued a decision in the invalidation action filed in September 2023 by LG Chem Ltd. against one of the Korean patents opposed by Beerenberg, also finding the patent invalid. In December 2024, the Korean IPTAB issued decisions in invalidation actions filed by Bronx (China) Co., Ltd. against our process patents finding the patents invalid.
Biggest changeIn October 2024, the Korean Intellectual Property Trial and Appeal Board (IPTAB) issued decisions in invalidation actions filed by Beerenberg Korea Ltd. finding our patents invalid. In November 2024, the Korean IPTAB issued a decision in an invalidation action filed by LG Chem Ltd. against one of the Korean patents opposed by Beerenberg, also finding the patent invalid.
On May 30, 2023, we learned of a decision by the KTC to institute an investigation against Beerenberg Korea Ltd. and Bronx (China) Co., Ltd. on the basis of our petition.
In May 2023, we learned of a decision by the KTC to institute an investigation against Beerenberg Korea Ltd. and Bronx (China) Co., Ltd. on the basis of our petition.
The asserted patents include (a) Korean patents related to high performance reinforced aerogel compositions and (b) Korean counterparts of the patents previously successfully asserted against Nano Tech Co., Ltd. and Guangdong Alison Hi Tech., Ltd. in Germany and the US. We are seeking injunctive relief and monetary damages against the defendants.
The asserted patents include (a) Korean patents related to high performance reinforced aerogel compositions and (b) Korean counterparts of the patents previously successfully asserted against Nano Tech Co., Ltd. and Guangdong Alison Hi Tech., Ltd. in Germany and the United States. We are seeking injunctive relief and monetary damages against the defendants.
To the extent APN seeks to pursue claims in an arbitration proceeding, Aspen intends to continue to vigorously defend this matter, including seeking its legal costs. Due to their nature, it is difficult to predict the outcome or the costs involved in any litigation or administrative proceedings, including any appeals process.
To the extent APN seeks to pursue claims in an arbitration proceeding, we intend to continue to vigorously defend this matter, including seeking our legal costs. Due to their nature, it is difficult to predict the outcome or the costs involved in any litigation or administrative proceedings, including any appeals process.
In April 2024, the Korea Trade Commission (“KTC”) concluded its investigation into unfair international trade practices by Beerenberg Korea Ltd. and Bronx (China) Co., Ltd., with a decision that our asserted composition patent claims were invalid and our asserted process patent claims were not infringed. The KTC decision is under appeal in the Seoul Administrative Court.
In April 2024, the KTC concluded its investigation into unfair international trade practices by Beerenberg Korea Ltd. and Bronx (China) Co., Ltd., with a decision that our asserted composition patent claims were invalid and our asserted process patent claims were not infringed. In August 2024, we appealed the KTC decision at the Seoul Administrative Court.
The Bronx opposition decisions are also subject to appeal to the Korean IP High Court. Our patent infringement case against Beerenberg Services AS and Beerenberg Korea Ltd. at the Seoul District Court remains stayed pending the final outcome of the IPTAB proceedings and the associated appeals.
Our patent infringement case against Beerenberg Services AS and Beerenberg Korea Ltd. at the Seoul District Court and our appeal of the KTC decision against Beerenberg Korea Ltd. and Bronx (China) Co., Ltd. at the Seoul Administrative Court are stayed pending the final outcome of the IPTAB appeals.
Furthermore, the counterparties in these proceedings may have significant resources and interest to litigate and therefore, these litigation matters could be protracted and may ultimately involve significant legal expenses. 60 In addition to the foregoing, we have been and may be from time to time a party to other legal proceedings that arise in the ordinary course of business and to other patent enforcement actions to assert our patent rights.
Furthermore, the counterparties in these proceedings may have significant resources and interest to litigate and therefore, these litigation matters could be protracted and may ultimately involve significant legal expenses.
This settlement concludes our legal action against AMA regarding the unauthorized sale of infringing aerogel insulation materials in Europe. • On April 18, 2023, we filed a patent infringement complaint at the Seoul Central District Court and a petition for investigation of unfair trade practices in the Korea Trade Commission (KTC).
Item 3. LEGAL PROCEEDINGS Patent Enforcement Actions Initiated by Aspen • In April 2023, we filed a patent infringement complaint at the Seoul Central District Court and a petition for investigation of unfair trade practices in the Korea Trade Commission (KTC).
Removed
Item 3. LEGAL PROCEEDINGS Patent Enforcement Actions Initiated by Aspen • On January 28, 2021, a search order was executed and relevant evidence secured at the principal places of business of AMA S.p.A. and AMA Composites S.r.l.
Added
In December 2024, the Korean IPTAB issued decisions in invalidation actions filed by Bronx (China) Co., Ltd. against our process patents finding the patents invalid. During 2025, we filed appeals at the Korean IP High Court against the Beerenberg, LG Chem, and Bronx IPTAB decisions. These appeals remain pending as of the date of this Annual Report on Form 10-K.
Removed
(collectively, AMA) in San Martino in Rio and Campogalliano, respectively, based on an ex-parte search order issued by the Court of Genoa, Italy at our request in connection with alleged infringement of the Italian part of our patents previously asserted successfully against Nano and Alison in Germany.
Added
In addition to the foregoing, we have been and may be from time to time a party to other legal proceedings that arise in the ordinary course of business and to other patent enforcement actions to assert our patent rights. 62 Item 4. MINE SAF ETY DISCLOSURES Not applicable. 63 PART II
Removed
The Court of Genoa subsequently held a hearing and confirmed the validity of the search order and its execution. While the search proceedings do not take a position on the infringement issues, we may use any evidence collected during the search proceedings to prove infringement.
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As a result, on May 3, 2021, we filed an infringement complaint, a writ of summons, as known in Italy, at the Court of Genoa alleging that AMA has infringed the Italian part of three European patents (same patents asserted in the German litigation) and a patent on composition of aerogel-based composites in connection with AMA’s resale of aerogel products supplied by Chinese companies and sale of any products derived therefrom.
Removed
We are seeking monetary damages and preliminary injunction of AMA’s alleged infringing activities. We issued a press release on May 6, 2021 describing the patent enforcement action of May 3, 2021, or the Press Release.
Removed
On June 7, 2021, AMA served us a copy of a request it previously filed with the Court of Genoa seeking an ex-parte preliminary injunction, or PI, against us alleging the Press Release constituted anti-competitive conduct and that it infringed AMA’s trademark rights.
Removed
The service of the request followed the court’s prior denial of the ex-parte order and an order requiring AMA to serve the request on us. The court subsequently conducted an oral hearing on June 15, 2021.
Removed
On June 24, 2021, the court denied AMA’s request for a PI, reasoning that our Press Release was factually accurate, was not misleading, distinguished facts from opinions and that it was neither anti-competitive nor did it infringe trademark rights of AMA. The Court also ordered AMA to pay certain of our legal fees.
Removed
On July 5, 2021, AMA informed us that it has decided not to appeal the denial of June 24, 2021. We subsequently learned that AMA had also made a criminal complaint against our chief executive officer for defamation in connection with the Press Release.
Removed
On December 31, 2021, the local prosecutor, after reviewing the underlying facts, rejected AMA’s arguments and requested the judge overseeing the matter to dismiss the complaint against our chief executive officer, which the judge did in April 2022. In November 2022, we learned that AMA had filed a second criminal complaint in a different jurisdiction in Italy.
Removed
The second criminal complaint contains the same allegations based on the same underlying facts as the first, however; the judge in this jurisdiction has ordered the local prosecutor to carry out additional investigations and to identify the address of our chief executive officer for service. In March 2023, we learned the prosecutor requested dismissal of the second criminal complaint.
Removed
In June 2023, we learned the judge formally dismissed the second criminal complaint. In response to our infringement complaint, AMA also added as a counter-claim in connection with its claims regarding the Press Release, those same claims that it previously sought a preliminary injunction, which was denied by the court.
Removed
On April 15, 2022, the judge in the infringement case appointed two technical experts to provide a technical assessment of validity and infringement. On December 31, 2022, we and AMA each filed the first technical briefs to the experts detailing our positions on validity and infringement.
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In January and February 2023, we and AMA each filed second and third technical briefs to the experts addressing further arguments on validity and infringement.
Removed
In May 2023, the technical experts issued their preliminary report on validity and infringement in which they found that two of the asserted manufacturing patents were valid and that the third would be valid with a minor correction.
Removed
The experts also found that two of the manufacturing patents were infringed by AMA products purchased from Nano Tech Co., Ltd. but that the scope of the composition patent was limited such that AMA’s products did not infringe the claims. In June 2023, we and AMA each filed observations on the preliminary report from the technical experts.
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In July 2023, the experts filed their final report, 59 which confirmed the conclusions from their preliminary report. On July 26, 2023, we filed a motion for preliminary injunction requesting the court to enjoin AMA’s sale of infringing aerogel products supplied by Nano Tech Co. Ltd.
Removed
During September 2023, we and AMA submitted technical briefs regarding our motion for preliminary injunction. On October 27, 2023, the judge issued an order dismissing our motion. On November 7, 2023, we appealed the judge’s decision to a panel of the Court of Genoa and a hearing was held on November 29, 2023.
Removed
In February 2024, the Court issued an order dismissing our appeal, and the proceedings continued throughout 2024. In January 2025, we reached a mutual agreement to resolve our patent infringement action against AMA, and the Court issued an order removing the case from the docket on January 28, 2025.
Removed
On August 4, 2023, Beerenberg Korea Ltd. and Bronx (China) Co., Ltd. submitted answers to our petition in which they confirmed that the accused infringing products are manufactured in China by Bronx (China) Co., Ltd. and imported into Korea by Beerenberg Korea Ltd. On August 17, 2023, we submitted responses to the answers from Beerenberg and Bronx.
Removed
In October 2024, the Korean Intellectual Property Trial and Appeal Board (“IPTAB”) issued decisions in invalidation actions filed by Beerenberg Korea Ltd. against our patents finding the patents invalid.
Removed
We disagree with the IPTAB decisions in the Beerenberg, LG Chem, and Bronx oppositions. We disagree with the IPTAB decisions in both the Beerenberg and LG Chem oppositions. Pro forma appeals at the Korean IP High Court were filed in January 2025 in the Beerenberg oppositions and in February 2025 in the LG Chem opposition.
Removed
The opposition filed in August 2023 by LG Chem Ltd. at the Japanese Patent Office against a Japanese counterpart of the Korean patents was concluded in our favor with a decision to maintain the patent and issuance of new Certificate of Patent on May 3, 2024.
Removed
Item 4. MINE SAF ETY DISCLOSURES Not applicable. 61 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Dividend Policy Our common stock is trading on The New York Stock Exchange (NYSE), under the symbol “ASPN.” As of February 25, 2025, there were approximately 31 stockholders of record of our common stock.
Biggest changeItem 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Dividend Policy Our common stock is trading on The New York Stock Exchange (NYSE) under the symbol “ASPN.” As of March 10, 2026, there were approximately 19 stockholders of record of our common stock.
(c) Purchases of Equity Securities By the Issuer and Affiliated Purchasers . We did not repurchase any of our equity securities during the year ended December 31, 2024. 62 Item 6. [RESERVED]
(c) Purchases of Equity Securities By the Issuer and Affiliated Purchasers . We did not repurchase any of our equity securities during the year ended December 31, 2025. 64 Item 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

114 edited+63 added−70 removed55 unchanged
Biggest changeWe did not incur income tax expense for the comparable period in 2023. 74 Year ended December 31, 2023 compared to year ended December 31, 2022 The following tables set forth our results of operations for the periods presented: Year Ended December 31, Year Ended December 31, 2023 2022 $ Change % Change 2023 2022 ($ in thousands) (Percentage of total revenue) Revenue $ 238,718 $ 180,364 $ 58,354 32% 100% 100% Cost of revenue 181,797 175,388 6,409 4% 76% 97% Gross profit 56,921 4,976 51,945 1,044% 24% 3% Operating expenses Research and development 16,356 16,930 (574 ) (3)% 7% 9% Sales and marketing 33,008 28,792 4,216 15% 14% 16% General and administrative 56,760 38,499 18,261 47% 24% 21% Total operating expenses 106,124 84,221 21,903 26% 44% 47% Loss from operations (49,203 ) (79,245 ) 30,042 (38)% (21)% (44)% Other income (expense) Interest expense, convertible note - related party (5,328 ) (5,110 ) (218 ) 100% (2)% -3% Interest income (expense), net 6,534 1,617 4,917 304% 3% 1% Gain on extinguishment of debt 2,186 — 2,186 100% 1% —% Total other income (expense) 3,392 (3,493 ) 6,885 (197)% 1% (2)% Net loss $ (45,811 ) $ (82,738 ) $ 36,927 45% (19)% (46)% Revenue Year Ended December 31, Change 2023 2022 Amount Percentage of Revenue Amount Percentage of Revenue Amount Percentage ($ in thousands) Revenue: Energy industrial $ 128,639 54% $ 124,807 69% $ 3,832 3% Thermal barrier 110,079 46% 55,557 31% 54,522 98% Total revenue $ 238,718 100% $ 180,364 100% $ 58,354 32% Total revenue increased $58.3 million, or 32%, to $238.7 million in 2023 from $180.4 million in 2022.
Biggest changeNet operating losses of $227.3 million generated from 2018 through 2025 have an unlimited carryforward . 72 Results of Operations The following tables set forth our results of operations for the periods presented: Year Ended December 31, 2025 2024 2023 ($ in thousands) Revenue $ 271,103 $ 452,699 $ 238,718 Cost of revenue 225,105 269,802 181,797 Gross profit 45,998 182,897 56,921 Operating expenses Research and development 13,416 18,050 16,356 Sales and marketing 28,200 35,677 33,008 General and administrative 55,774 71,125 56,760 Restructuring and demobilization costs 17,510 — — Loss on disposal of property, plant and equipment 18,162 — — Impairment of property, plant and equipment 291,164 3,510 — Total operating expenses 424,226 128,362 106,124 Income (loss) from operations (378,228 ) 54,535 (49,203 ) Other income (expense) Interest expense, convertible note - related party — (7,550 ) (5,328 ) Interest income (expense), net (10,716 ) (4,409 ) 6,534 Income from Employee Retention Credits — — 2,186 Loss on extinguishment of debt — (27,487 ) — Other income 1,786 Total other income (expense) (8,930 ) (39,446 ) 3,392 Income tax expense (2,394 ) (1,714 ) — Net income (loss) $ (389,552 ) $ 13,375 $ (45,811 ) 73 Year ended December 31, 2025 compared to year ended December 31, 2024 The following tables set forth our results of operations for the periods presented: Year Ended December 31, Year Ended December 31, 2025 2024 $ Change % Change 2025 2024 ($ in thousands) (Percentage of total revenue) Revenue $ 271,103 $ 452,699 $ (181,596 ) (40 )% 100 % 100 % Cost of revenue 225,105 269,802 (44,697 ) (17 )% 83 % 60 % Gross profit 45,998 182,897 (136,899 ) (75 )% 17 % 40 % Operating expenses Research and development 13,416 18,050 (4,634 ) (26 )% 5 % 4 % Sales and marketing 28,200 35,677 (7,477 ) (21 )% 10 % 8 % General and administrative 55,774 71,125 (15,351 ) (22 )% 21 % 16 % Restructuring and demobilization costs 17,510 — 17,510 100 % 6 % — % Loss on disposal of property, plant and equipment 18,162 — 18,162 100 % 7 % — % Impairment of equipment under development 291,164 3,510 287,654 NM 107 % 1 % Total operating expenses 424,226 128,362 295,864 230 % 156 % 28 % Income (loss) from operations (378,228 ) 54,535 (432,763 ) (794 )% 140 % 12 % Other income (expense) Interest expense, convertible note - related party — (7,550 ) 7,550 100 % — % 2 % Interest expense, net (10,716 ) (4,409 ) (6,307 ) 143 % 4 % 1 % Loss on extinguishment of debt — (27,487 ) 27,487 100 % — % 6 % Other income 1,786 — 1,786 100 % 1 % — % Total other income (expense) (8,930 ) (39,446 ) 30,516 (77 )% 3 % 9 % Income tax expense (2,394 ) (1,714 ) (680 ) 40 % 1 % 0 % Net income (loss) $ (389,552 ) $ 13,375 $ (402,927 ) 3,013 % 144 % 3 % Revenue Year Ended December 31, 2025 2024 Change Percentage of Percentage of Amount Revenue Amount Revenue Amount Percentage ($ in thousands) Revenue: Energy industrial $ 102,198 38% $ 145,867 32% $ (43,669 ) (30)% Thermal barrier 168,905 62% 306,832 68% (137,927 ) (45)% Total revenue $ 271,103 100% $ 452,699 100% $ (181,596 ) (40)% Total revenue decreased $181.6 million, or 40%, to $271.1 million in 2025 from $452.7 million in 2024.
MidCap Loan Facility On August 19, 2024, we and Aspen Aerogels Rhode Island, LLC, a Rhode Island limited liability company (Aspen RI and, together with the Company, each, a Borrower and collectively, the Borrowers) entered into a Credit, Security and Guaranty Agreement (the Credit Agreement and the facilities provided thereunder, collectively, the MidCap Loan Facility), by and among the Borrowers, MidCap Funding IV Trust, as agent (the Agent), MidCap Financial Trust, as term loan servicer, the financial institutions or other entities from time to time party thereto as lenders (the Lenders), and the other parties party thereto as additional guarantors and/or borrowers from time to time.
MidCap Loan Facility On August 19, 2024, we and Aspen Aerogels Rhode Island, LLC, a Rhode Island limited liability company (Aspen RI and, together with the Company, each, a Borrower and collectively, the Borrowers) entered into a Credit, Security and Guaranty Agreement (the Credit Agreement and the facilities provided thereunder, collectively, the MidCap Loan Facility), by and among the Borrowers, MidCap Funding IV Trust, as agent (the Agent), MidCap Financial Trust, as term loan servicer (the Term Loan Servicer), the financial institutions or other entities from time to time party thereto as lenders (the Lenders), and the other parties party thereto as additional guarantors and/or borrowers from time to time.
Cost of Revenue Year Ended December 31, 2024 2023 Change % of Related % of Related Amount Revenue Amount Revenue Amount Percentage ($ in thousands) Cost of revenue: Energy industrial $ 87,425 60% $ 94,477 73% $ (7,052 ) (7)% Thermal barrier 182,377 59% 87,320 79% 95,057 109% Total cost of revenue $ 269,802 60% $ 181,797 76% $ 88,005 48% Total cost of revenue increased $88.0 million, or 48%, to $269.8 million in 2024 from $181.8 million in 2023.
Cost of Revenue Year Ended December 31, Change 2024 2023 Amount Percentage of Related Revenue Amount Percentage of Related Revenue Amount Percentage ($ in thousands) Cost of revenue: Energy industrial $ 87,425 60% $ 94,477 73% $ (7,052 ) (7)% Thermal barrier 182,377 59% 87,320 79% 95,057 109% Total cost of revenue $ 269,802 60% $ 181,797 76% $ 88,005 48% Total cost of revenue increased $88.0 million, or 48%, to $269.8 million in 2024 from $181.8 million in 2023.
Purchase obligations are entered into with various vendors in the normal course of business and are consistent with our expected requirements. Recently Issued Accounting Standards From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies. Recently issued standards typically do not require adoption until a future effective date.
Purchase obligations are entered into with various vendors in the normal course of business and are consistent with our expected requirements. Recently Issued Accounting Standards From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies. Recently issued standards typically do not require adoption until a future effective date.
The $42.8 million increase was the result of a $27.5 million loss on extinguishment of debt, $6.1 million net impact of capitalized interest relating to our Convertible Note in the comparable period in 2023, $1.8 million of deferred financing costs related to the GM Loan Agreement (which was terminated on August 16, 2024), a $2.2 million income from Employee Retention Credits in the comparable period in 2023 not repeated in 2024, a $0.9 million decrease of interest income, and a $4.3 million increase of interest expense.
The $42.8 million increase was the result of a $27.5 million loss on extinguishment of debt, $6.1 million net impact of capitalized interest relating to our 2022 Convertible Note in the comparable period in 2023, $1.8 million of deferred financing costs related to the GM Loan Agreement (which was terminated on August 16, 2024), $2.2 million of income from Employee Retention Credits in the comparable period in 2023 not repeated in 2024, a $0.9 million decrease of interest income, and a $4.3 million increase of interest expense.
Gross Profit Year Ended December 31, 2024 2023 Change Percentage Percentage Amount of Revenue Amount of Revenue Amount Percentage ($ in thousands) Gross profit: Energy industrial $ 58,442 40% $ 34,162 27% $ 24,280 71% Thermal barrier 124,455 41% 22,759 21% 101,696 447% Total gross profit $ 182,897 40% $ 56,921 24% $ 125,976 221% Gross profit increased $126.0 million, or 221%, to $182.9 million in 2024 from $56.9 million in 2023.
Gross Profit Year Ended December 31, Change 2024 2023 Amount Percentage of Revenue Amount Percentage of Revenue Amount Percentage Gross profit: Energy industrial $ 58,442 40% $ 34,162 27% $ 24,280 71% Thermal barrier 124,455 41% 22,759 21% 101,696 447% Total gross profit $ 182,897 40% $ 56,921 24% $ 125,976 221% Gross profit increased $126.0 million, or 221%, to $182.9 million in 2024 from $56.9 million in 2023.
These customers include General Motors LLC (GM), Toyota, Scania, Automotive Cells Company, which is a battery cell joint venture between Stellantis N.V, Saft-TotalEnergies and Mercedes-Benz (ACC), Audi, a luxury brand of the Volkswagen Group, Volvo Truck, and a large EU battery manufacturer to supply a next generation vehicle platform of a major EU luxury sports car brand.
These customers include General Motors LLC (GM), Scania, Automotive Cells Company, which is a battery cell joint venture between Stellantis N.V, Saft-TotalEnergies and Mercedes-Benz (ACC), Audi, a luxury brand of the Volkswagen Group, Volvo Truck, and a large EU battery manufacturer to supply a next generation vehicle platform of a major EU luxury sports car brand.
We use Adjusted EBITDA: • as a measure of operating performance because it does not include the impact of items that we do not consider indicative of our core operating performance; • for planning purposes, including the preparation of our annual operating budget; • to allocate resources to enhance the financial performance of our business; and • as a performance measure used under our bonus plan.
We use Adjusted EBITDA: • as a measure of operating performance because it does not include the impact of items that we do not consider indicative of our core operating performance; • for planning purposes, including the preparation of our annual operating budget; 67 • to allocate resources to enhance the financial performance of our business; and • as a performance measure used under our bonus plan.
Energy Industrial We also design, develop and manufacture innovative, high-performance aerogel insulation used primarily in the energy industrial market. We believe our aerogel blankets deliver the best thermal performance of any widely used insulation product available on the market today and provide a combination of performance attributes unmatched by traditional insulation materials.
Energy Industrial We design, develop and manufacture innovative, high-performance aerogel insulation used primarily in the energy industrial market. We believe our aerogel blankets deliver the best thermal performance of any widely used insulation product available on the market today and provide a combination of performance attributes unmatched by traditional insulation materials.
We based the simulation model on the Black Scholes option-pricing model and a number of other complex assumptions including (i) whether the vesting condition would be satisfied within the time-vesting periods, and (ii) the date the common stock price target would be achieved per the terms of the agreement. 83
We based the simulation model on the Black Scholes option-pricing model and a number of other complex assumptions including (i) whether the vesting condition would be satisfied within the time-vesting periods, and (ii) the date the common stock price target would be achieved per the terms of the agreement.
Key Metrics and Non-GAAP Financial Measures We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. 65 Adjusted EBITDA We use Adjusted EBITDA, a non-GAAP financial measure, as a means to assess our operating performance.
Key Metrics and Non-GAAP Financial Measures We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. Adjusted EBITDA We use Adjusted EBITDA, a non-GAAP financial measure, as a means to assess our operating performance.
The MidCap Loan Facility under the Credit Agreement is comprised of (i) the Term Loan Facility in an aggregate principal amount of $125.0 million and (ii) the Revolving Facility in an aggregate principal amount not to exceed the lesser of $100.0 million and the value of the Borrowing Base (as defined in the Credit Agreement).
The Amended MidCap Loan Facility under the Credit Agreement is comprised of (i) the Term Loan Facility in an aggregate principal amount of $125.0 million and (ii) the Revolving Facility in an aggregate principal amount not to exceed the lesser of $100.0 million and the value of the Borrowing Base (as defined in the Credit Agreement).
While the OEM has agreed to purchase its requirement for Barriers for locations to be designated from time to time by the OEM, it has no obligation to purchase any minimum quantity of Barriers under the 80 Contracts. In addition, the OEM may terminate the Contracts any time and for any or no reason.
While the OEM has agreed to purchase its requirement for Barriers for locations to be designated from time to time by the OEM, it has no obligation to purchase any minimum quantity of Barriers under the Contracts. In addition, the OEM may terminate the Contracts any time and for any or no reason.
The increase in product volume had the effect of increasing product revenue by approximately $0.7 million for the year ended December 31, 2024. Thermal barrier revenue was $306.8 million for the year ended December 31, 2024, as compared to $110.1 million for the year ended December 31, 2023.
The increase in product volume had the effect of increasing product revenue by approximately $0.7 million for the year ended December 31, 2024. 78 Thermal barrier revenue was $306.8 million for the year ended December 31, 2024, as compared to $110.1 million for the year ended December 31, 2023.
The increase in average selling price reflected the impact of price increases enacted in 2024 and a change in the mix of products sold, as we strive to maximize capacity in our aerogel manufacturing facility. This increase in average selling price had the effect of increasing product revenue by approximately $16.6 million for the year ended December 31, 2024.
The increase in average selling price reflected the impact of price increases enacted in 2024 and a change in the mix of products sold, as we strived to maximize capacity in our aerogel manufacturing facility. This increase in average selling price had the effect of increasing product revenue by approximately $16.6 million for the year ended December 31, 2024.
See “Risk Factors - Risks Related to Our Business and Strategy – We will require additional capital to pursue our growth strategy, but we may not be able to obtain additional financing on acceptable terms or at all” in this Annual Report on Form 10-K for the year ended December 31, 2023.
See “Risk Factors - Risks Related to Our Business and Strategy – We will require additional capital to pursue our growth strategy, but we may not be able to obtain additional financing on acceptable terms or at all” in this Annual Report on Form 10-K for the year ended December 31, 2025.
The net proceeds to us from the Offering were approximately $93.2 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.
The net proceeds to us from the Offering were approximately $93.2 million, after deducting underwriting discounts and commissions and offering expenses payable by us.
Our ten largest customers accounted for approximately 84% of our total revenue during the year ended December 31, 2024, and we expect that most of our revenue will continue to come from a relatively small number of customers for the foreseeable future. In 2024, sales to GM and Distribution International, Inc.
Our ten largest customers accounted for approximately 84% of our total revenue during the year ended December 31, 2025, and we expect that most of our revenue will continue to come from a relatively small number of customers for the foreseeable future. In 2025, sales to GM and Distribution International, Inc.
Compensation and related costs include $2.0 million of charge from the cancellation of the unearned performance-based restricted shares. General and administrative expenses as a percentage of total revenue decreased to 16% in 2024 from 24% in 2023 primarily due to the 90% increase in revenue from the comparable period in 2023.
Compensation and related costs included a $2.0 million charge from the cancellation of the unearned performance-based restricted shares. General and administrative expenses as a percentage of total revenue decreased to 16% in 2024 from 24% in 2023 primarily due to the 90% increase in revenue from the comparable period in 2023.
GAAP financial statements included elsewhere in this Annual Report on Form 10-K, and not to rely on any single financial measure to evaluate our business. 66 The following table presents a reconciliation of net loss, the most directly comparable U.S.
GAAP financial statements included elsewhere in this Annual Report on Form 10-K, and not to rely on any single financial measure to evaluate our business. The following table presents a reconciliation of net income (loss), the most directly comparable U.S.
Stock-based Compensation We maintain an equity incentive plan pursuant to which our Board of Directors may grant qualified and nonqualified stock options, restricted stock, restricted stock units and other stock-based awards to board members, officers, key employees and others who provide or have provided service to us.
Stock-based Compensation We maintain an equity incentive plan pursuant to which our Board of Directors may grant qualified and nonqualified stock options, restricted stock, RSUs and other stock-based awards to board members, officers, key employees and others who provide or have provided service to us.
As indicated in the overview of the liquidity and capital resources section, to meet expected demand for our aerogel products, we plan to make additional productivity improvements in our existing East Providence facility and utilize a flexible supply strategy, including but not limited to use of our external manufacturing capabilities in China, which currently support Aspen’s Energy Industrial segment and are capable of delivering increased aerogel production capacity.
As indicated in the overview of the liquidity and capital resources section, to meet expected demand for our aerogel products, we plan to make additional productivity improvements in our existing East Providence facility and utilize a flexible supply strategy, including but not limited to use of our external manufacturing capabilities in China, which currently supports our Energy Industrial segment and are capable of delivering increased aerogel production capacity.
In December 2023, we sold 6,060,607 shares of our common stock at an offering price of $12.38 per share in a registered direct offering for net proceeds of $74.4 million, after deducting offering expenses of approximately $0.6 million.
Financial Summary In December 2023, we sold 6,060,607 shares of our common stock at an offering price of $12.38 per share in a registered direct offering for net proceeds of $74.4 million, after deducting offering expenses of approximately $0.6 million.
We believe this is a better representation of the estimated life than our actual limited historical exercise behavior. • For the years ended December 31, 2024, 2023 and 2022, we used our historical volatility as a basis to estimate expected volatility in the valuation of stock options. • The risk-free interest rate is based on U.S.
We believe this is a better representation of the estimated life than our actual limited historical exercise behavior. • For the years ended December 31, 2025, 2024 and 2023, we used our historical volatility as a basis to estimate expected volatility in the valuation of stock options. 85 • The risk-free interest rate is based on U.S.
Purchase commitments related to capital expenditures are anticipated to be spent over the next three years, while our remaining purchase commitments are anticipated to be spent throughout 2025. Purchase obligations relate primarily to open purchase orders for capital expenditures, inventories, and goods and services.
Purchase commitments related to capital expenditures are anticipated to be spent over the next three years, while our remaining purchase commitments are anticipated to be spent throughout 2026. Purchase obligations relate primarily to open purchase orders for capital expenditures, inventories, and goods and services.
The decrease in manufacturing and other operating costs and 72 increase in material costs was the result of lower volume of energy industrial products manufactured at our plant as we move manufacturing to the external manufacturing facility. Thermal barrier cost of revenue increased $95.1 million to $182.4 million as compared to $87.3 million in the comparable period in 2023.
The decrease in manufacturing and other operating costs and increase in material costs was the result of lower volume of energy industrial products manufactured at our plant as we moved manufacturing to the external manufacturing facility. Thermal barrier cost of revenue increased $95.1 million to $182.4 million as compared to $87.3 million in the comparable period in 2023.
LLC (collectively, the Underwriters), pursuant to which we issued and sold an aggregate of 4,887,500 shares of our common stock, which included 637,500 shares pursuant to the Underwriters’ option to purchase additional shares of our common stock, to the Underwriters in a registered underwritten offering (the Offering). The price to the public in the Offering was $20.00 per share.
LLC (the Underwriters), pursuant to which we issued and sold an aggregate of 4,887,500 shares of our common stock, which included 637,500 shares pursuant to the Underwriters’ option to purchase additional shares of our common stock, to the Underwriters in an underwritten registered direct offering (the Offering). The price to the public in the Offering was $20.00 per share.
The MidCap Loan Facility is guaranteed by Aspen Aerogels Mexico Holdings and is secured by a lien on substantially all existing and after-acquired assets of the Loan Parties, including the equity interest in Aspen RI, Aspen Aerogels Mexico Holdings and Aspen Aerogels Georgia owned by us, in each case, subject to customary exceptions.
The Amended MidCap Loan Facility is guaranteed by Aspen Mexico and Aspen Georgia and is secured by a lien on substantially all existing and after-acquired assets of the Loan Parties, including the equity interest in Aspen RI, Aspen Mexico and Aspen Georgia owned by us, in each case, subject to customary exceptions.
Convertible Note - Related Party On August 19, 2024, we entered into the Note Repurchase Agreement with Wood River, pursuant to which we repurchased from Wood River the Convertible Note), such aggregate amount being the entire outstanding amount of the Convertible Note, for a total purchase price of $150.0 million in cash, which amount equals to the Redemption Price (as defined in the Convertible Note).
Convertible Note - Related Party On August 19, 2024, we entered into the Note Repurchase Agreement with Wood River, pursuant to which we repurchased from Wood River $123.9 million in aggregate capitalized principal amount of the 2022 Convertible Note, such aggregate amount being the entire outstanding amount of the 2022 Convertible Note, for a total purchase price of $150.0 million in cash, which amount equals to the Redemption Price (as defined in the 2022 Convertible Note).
Material costs as a percentage of product revenue were 38%, 36% and 51% for the years ended December 31, 2024, 2023 and 2022, respectively. Material costs as a percentage of product revenue vary from product to product due to differences in average selling prices, material requirements, product thicknesses, and manufacturing yields.
Material costs as a percentage of product revenue were 42%, 38% and 36% for the years ended December 31, 2025, 2024 and 2023, respectively. Material costs as a percentage of product revenue vary from product to product due to differences in average selling prices, material requirements, product thicknesses, and manufacturing yields.
Accordingly, we expect our gross profit to vary significantly in absolute dollars and as a percentage of revenue from period to period. Gross profit as a percentage of total revenue was 40%, 24%, and 3% for the years ended December 31, 2024, 2023 and 2022, respectively.
Accordingly, we expect our gross profit to vary significantly in absolute dollars and as a percentage of revenue from period to period. Gross profit as a percentage of total revenue was 17%, 40%, and 24% for the years ended December 31, 2025, 2024 and 2023, respectively.
Manufacturing expense includes labor, utilities, maintenance expense, and depreciation on manufacturing assets. Manufacturing expense also includes stock-based compensation of 68 manufacturing employees and shipping costs. Manufacturing expense as a percentage of product revenue was 22%, 46% and 44% for the years ended December 31, 2024, 2023 and 2022, respectively.
Manufacturing expense includes labor, utilities, maintenance expense, and depreciation on manufacturing assets. Manufacturing expense also includes stock-based compensation of manufacturing employees and shipping costs. Manufacturing expense as a percentage of product revenue was 33%, 22% and 46% for the years ended December 31, 2025, 2024 and 2023, respectively.
MidCap Loan Facility On August 19, 2024, we and Aspen RI entered into the Credit Agreement, by and among the Borrowers, the Agent, MidCap Financial Trust, as term loan servicer, the Lenders, and the other parties party thereto as additional guarantors and/or borrowers from time to time.
MidCap Loan Facility On August 19, 2024, we and Aspen RI entered into the Credit Agreement and the facilities provided thereunder, by and among the Borrowers, the Agent, the Term Loan Servicer, the Lenders, and the other parties party thereto as additional guarantors and/or borrowers from time to time.
We expect that material costs will increase in absolute dollars during 2025 due to projected growth in product shipments and contracts but remain stable as a percentage of revenue due to improved manufacturing, and fabrication yields and a favorable mix of products sold. Manufacturing expense is also a significant component of cost of revenue.
We expect that material costs will decrease in absolute dollars during 2026 due to projected decline in product shipments and contracts but remain stable as a percentage of revenue due to improved manufacturing, and fabrication yields and a favorable mix of products sold. Manufacturing expense is also a significant component of cost of revenue.
Financing Activities Net cash provided by financing activities in 2024 totaled $122.0 million and consisted of $14.9 million in proceeds from a sales leaseback, $10.4 million in proceeds from employee stock option exercises, $120.1 million in proceeds from the term loan, net of issues costs, and $42.1 in proceeds from the revolver, net of issuance costs, $93.2 million in proceeds from the registered direct offering of common stock. net of issuance costs, offset by $150.0 million in cash used for the repayment of the convertible note, $6.5 million in cash used for repayments from the term loan, $1.3 million in cash used for payments made for employee tax withholdings associated with the vesting of restricted stock units, and $0.9 million in repayments of a sales leaseback.
Net cash provided by financing activities in 2024 totaled $122.0 million and consisted of $14.9 million in proceeds from a sales leaseback, $10.4 million in proceeds from employee stock option exercises, $120.1 million in proceeds from the Term Loan, net of issues costs, and $42.1 in proceeds from the revolving line of credit, net of issuance costs, $93.2 million in proceeds from the registered direct offering of common stock, net of issuance costs, partially offset by $150.0 million in cash used for the repayment of the 2022 Convertible Note, $6.5 million in cash used for repayments from the Term Loan Facility, $1.3 million in cash used for payments made for employee tax withholdings associated with the vesting of RSUs, and $0.9 million in repayments of a sales leaseback.
Underwritten Offering In October 2024, we entered into an underwriting agreement (the Underwriting Agreement) with Goldman Sachs & Co. LLC and Morgan Stanley & Co.
In October 2024, we entered into an underwriting agreement with Goldman Sachs & Co. LLC and Morgan Stanley & Co.
Total revenue from outside of the United States, based on shipment destination, amounted to $194.2 million, or 43% of our total revenue, $87.7 million, or 37% of our total revenue, and $66.4 million, or 37% of our total revenue, in the years ended December 31, 2024, 2023 and 2022, respectively.
Total revenue from outside of the United States, based on shipment destination, amounted to $99.0 million, or 37% of our total revenue, $194.2 million, or 43% of our total revenue, and $87.7 million, or 37% of our total revenue, in the years ended December 31, 2025, 2024 and 2023, respectively.
Net operating losses of $159.0 million generated from 2018 through 2023 have an unlimited carryforward . 70 Results of Operations The following tables set forth our results of operations for the periods presented: Year Ended December 31, 2024 2023 2022 ($ in thousands) Revenue $ 452,699 $ 238,718 $ 180,364 Cost of revenue 269,802 181,797 175,388 Gross profit 182,897 56,921 4,976 Operating expenses Research and development 18,050 16,356 16,930 Sales and marketing 35,677 33,008 28,792 General and administrative 71,125 56,760 38,499 Impairment of equipment under development 3,510 — — Total operating expenses 128,362 106,124 84,221 Income (loss) from operations 54,535 (49,203 ) (79,245 ) Other income (expense) Interest expense, convertible note - related party (7,550 ) (5,328 ) (5,110 ) Interest income (expense), net (4,409 ) 6,534 1,617 Loss on extinguishment of debt (27,487 ) — — Income from Employee Retention Credits — 2,186 — Total other income (expense) (39,446 ) 3,392 (3,493 ) Income tax expense (1,714 ) — — Net income (loss) $ 13,375 $ (45,811 ) $ (82,738 ) Year ended December 31, 2024 compared to year ended December 31, 2023 The following tables set forth our results of operations for the periods presented: Year Ended December 31, Year Ended December 31, 2024 2023 $ Change % Change 2024 2023 ($ in thousands) (Percentage of total revenue) Revenue $ 452,699 $ 238,718 $ 213,981 90 % 100 % 100 % Cost of revenue 269,802 181,797 88,005 48 % 60 % 76 % Gross profit 182,897 56,921 125,976 221 % 40 % 24 % Operating expenses Research and development 18,050 16,356 1,694 10 % 4 % 7 % Sales and marketing 35,677 33,008 2,669 8 % 8 % 14 % General and administrative 71,125 56,760 14,365 25 % 16 % 24 % Impairment of equipment under development 3,510 — 3,510 NM 1 % 0 % Total operating expenses 128,362 106,124 22,238 21 % 28 % 44 % Income (loss) from operations 54,535 (49,203 ) 103,738 (211 )% 12 % (21 )% Other income (expense) Interest expense, convertible note - related party (7,550 ) (5,328 ) (2,222 ) 42 % (2 )% (2 )% Interest income, net (4,409 ) 6,534 (10,943 ) (167 )% (1 )% 3 % Loss on extinguishment of debt (27,487 ) — (27,487 ) NM (6 )% 0 % Income from Employee Retention Credits — 2,186 (2,186 ) (100 )% — % 1 % Total other income (expense) (39,446 ) 3,392 (42,838 ) (1,263 )% (9 )% 1 % Income tax expense (1,714 ) — (1,714 ) NM (0 )% (— )% Net income (loss) $ 13,375 $ (45,811 ) $ 59,186 129 % 3 % (19 )% 71 Revenue Year Ended December 31, 2024 2023 Change Percentage of Percentage of Amount Revenue Amount Revenue Amount Percentage ($ in thousands) Revenue: Energy industrial $ 145,867 32% $ 128,639 54% $ 17,228 13% Thermal barrier 306,832 68% 110,079 46% 196,753 179% Total revenue $ 452,699 100% $ 238,718 100% $ 213,981 90% Total revenue increased $214.0 million, or 90%, to $452.7 million in 2024 from $238.7 million in 2023.
We incurred $1.7 million of income tax expense related to our maquiladora operations in Mexico for the comparable period in 2024. 77 Year ended December 31, 2024 compared to year ended December 31, 2023 The following tables set forth our results of operations for the periods presented: Year Ended December 31, Year Ended December 31, 2024 2023 $ Change % Change 2024 2023 ($ in thousands) (Percentage of total revenue) Revenue $ 452,699 $ 238,718 $ 213,981 90 % 100 % 100 % Cost of revenue 269,802 181,797 88,005 48 % 60 % 76 % Gross profit 182,897 56,921 125,976 221 % 40 % 24 % Operating expenses Research and development 18,050 16,356 1,694 10 % 4 % 7 % Sales and marketing 35,677 33,008 2,669 8 % 8 % 14 % General and administrative 71,125 56,760 14,365 25 % 16 % 24 % Impairment of equipment under development 3,510 — 3,510 100 % 1 % — % Total operating expenses 128,362 106,124 22,238 21 % 28 % 44 % Income (loss) from operations 54,535 (49,203 ) 103,738 (211 )% 12 % 21 % Other income (expense) Interest expense, convertible note - related party (7,550 ) (5,328 ) (2,222 ) 42 % 2 % 2 % Interest income, net (4,409 ) 6,534 (10,943 ) (167 )% 1 % 3 % Loss on extinguishment of debt (27,487 ) — (27,487 ) (100 )% 6 % — % Income from Employee Retention Credits — 2,186 (2,186 ) (100 )% — % 1 % Total other income (expense) (39,446 ) 3,392 (42,838 ) (1,263 )% 9 % 1 % Income tax expense (1,714 ) — (1,714 ) (100 )% 0 % — % Net income (loss) $ 13,375 $ (45,811 ) $ 59,186 129 % 3 % 19 % Revenue Year Ended December 31, Change 2024 2023 Amount Percentage of Revenue Amount Percentage of Revenue Amount Percentage ($ in thousands) Revenue: Energy industrial $ 145,867 32% $ 128,639 54% $ 17,228 13% Thermal barrier 306,832 68% 110,079 46% 196,753 179% Total revenue $ 452,699 100% $ 238,718 100% $ 213,981 90% Total revenue increased $214.0 million, or 90%, to $452.7 million in 2024 from $238.7 million in 2023.
We record deferred revenue for product sales when (i) we have delivered products but other revenue recognition criteria have not been satisfied or (ii) payments have been received in advance of the completion of required performance obligations.
Revenue is recognized upon the satisfaction of contractual performance obligations. 69 We record deferred revenue for product sales when (i) we have delivered products but other revenue recognition criteria have not been satisfied or (ii) payments have been received in advance of the completion of required performance obligations.
We record tax expenses in connection with our Mexican maquiladora operations. At December 31, 2024, we had $315.3 million of net operating losses available to offset future federal income tax, if any, of which $156.3 million expire on various dates through December 31, 2037.
We record tax expenses in connection with our Mexican maquiladora operations. At December 31, 2025, we had $372.3 million of net operating losses available to offset future federal income tax, if any, of which $145.0 million expire on various dates through December 31, 2037.
Loss on Extinguishment of Debt On August 19, 2024, we entered into the Note Purchase Agreement, pursuant to which we repurchased from Wood River $123.9 million in aggregate capitalized principal amount (inclusive of PIK interest paid through June 30, 2024) of the 2022 Convertible Note, such aggregate amount being the entire outstanding amount of the 2022 Convertible Note, for a total purchase price of $150.0 million in cash, which amount equals to the Redemption Price (as defined in the 2022 Convertible Note).
Loss on Extinguishment of Debt On August 19, 2024, we entered into a note purchase and sale agreement (the Note Repurchase Agreement) with Wood River, LLC (Wood River), an entity affiliated with Koch Disruptive Technologies, LLC (Koch), pursuant to which we repurchased from Wood River $123.9 million in aggregate capitalized principal amount (inclusive of PIK interest paid through June 30, 2024) of the 2022 Convertible Note, such aggregate amount being the entire outstanding amount of the 2022 Convertible Note, for a total purchase price of $150.0 million in cash, which amount equals to the Redemption Price (as defined in the 2022 Convertible Note).
The following assumptions were used to estimate the fair value of the option awards: Year Ended December 31, 2024 2023 2022 Weighted-average assumptions: Expected term (in years) 5.99 6.12 5.97 Expected volatility 75.04 % 70.04 % 61.85 % Risk free rate 4.11 % 4.08 % 2.13 % Expected dividend yield — % — % — % 82 • The expected term represents the period that our stock-based awards are expected to be outstanding and is determined using the simplified method described in ASC Topic 718, Compensation — Stock Compensation , for all grants.
The following assumptions were used to estimate the fair value of the option awards: Year Ended December 31, 2025 2024 2023 Weighted-average assumptions: Expected term (in years) 5.95 5.99 6.12 Expected volatility 79.77 % 75.04 % 70.04 % Risk free interest rate 4.03 % 4.11 % 4.08 % Expected dividend yield — % — % — % • The expected term represents the period that our stock-based awards are expected to be outstanding and is determined using the simplified method described in ASC Topic 718, Compensation — Stock Compensation , for all grants.
Cost of Revenue Cost of product revenue consists primarily of materials and manufacturing expense. Cost of product revenue is recorded when the related product revenue is recognized. Material is a significant component of cost of product revenue and includes fibrous batting, silica materials and additives.
Cost of Revenue Cost of product revenue consists primarily of materials and manufacturing expenses. Cost of product revenue is recorded when the related product revenue is recognized. Material is a significant component of cost of product revenue and includes fibrous batting, silica materials, CO 2 and other additives.
Impairment of Equipment Under Development The $3.5 million impairment of equipment under development was the result of a charge for impairment of assets due to obsolescence following development of new and more efficient equipment.
Impairment of $3.5 million for the comparable period in 2024 was the result of a charge for impairment of assets due to obsolescence following development of new and more efficient equipment.
Pursuant to the Contracts, we are obligated to supply Barriers at fixed annual prices and at volumes to be specified by the OEM up to a daily maximum quantity through the respective terms of the agreements, which expire at various times from 2026 through 2034.
Pursuant to the Contracts, we are obligated to supply Barriers at fixed annual prices and at volumes to be specified by the OEM up to a daily maximum quantity through the respective terms of the agreements, which expire at various times from 2030 through 2034 and, in certain cases, may be extended by GM.
Capital Spending and Future Capital Requirements We have made capital expenditures primarily to develop and expand our manufacturing capacity. Our capital expenditures totaled $86.3 million in 2024, $175.5 million in 2023 and $178.0 million in 2022.
Capital Spending and Future Capital Requirements We have made capital expenditures primarily to develop and expand our manufacturing capacity. Our capital expenditures totaled $37.4 million in 2025, $86.3 million in 2024 and $175.5 million in 2023.
As of December 31, 2024, we had capital commitments of approximately $172.4 million, which included commitments for which we have entered into contracts as well as commitments authorized by our Board of Directors.
As of December 31, 2025, we had capital commitments of approximately $12.3 million, which included commitments for which we have entered into contracts as well as commitments authorized by our Board of Directors.
Cash and cash equivalents consist primarily of cash, money market accounts, and sweep accounts on deposit with banks. As of December 31, 2024, we had $220.9 million of cash and cash equivalents and $16.7 million of availability under the Revolving Facility.
Cash and cash equivalents consist primarily of cash, money market accounts, and sweep accounts on deposit with banks. As of December 31, 2025, we had $156.9 million of cash and cash equivalents and $9.5 million of availability under the Revolving Facility.
Sales and marketing expenses as a percentage of total revenue decreased to 14% in 2023 from 16% in 2022 primarily due to the 32% increase in revenue from the comparable period in 2022.
Sales and marketing expenses as a percentage of total revenue decreased to 8% in 2024 from 14% in 2023 primarily due to the 90% increase in revenue from the comparable period in 2023.
Pursuant to the Note Repurchase Agreement, all rights and obligations, covenants and agreements under the Convertible Note and the underlying note purchase agreement were satisfied and discharged. Purchase Commitments As of December 31, 2024, we had purchase commitments of approximately $243.3 million, which included capital commitments of $172.4 million.
Pursuant to the Note Repurchase Agreement, all rights and obligations, covenants and agreements under the 2022 Convertible Note and the underlying note purchase agreement were satisfied and discharged. Purchase Commitments As of December 31, 2025, we had purchase commitments of approximately $36.2 million, which included capital commitments of $12.3 million.
Additionally, we have entered into a contract with Prodensa Servicios de Consultora (Prodensa) to establish OPE Manufacturer Mexico S de RL de CV, a maquiladora located in Mexico (OPE), which assembles thermal barrier PyroThin products and operates an automated fabrication facility for PyroThin.
Additionally, we entered into a contract with Prodensa Servicios de Consultora (Prodensa) to establish OPE Manufacturer Mexico S de RL de CV, a maquiladora located in Mexico (OPE), which assembles thermal barrier PyroThin products and operates an automated fabrication facility for PyroThin. We subsequently purchased OPE for a nominal value in accordance with the terms of the agreement.
These commitments relate to the enhancement of our existing production lines in our East Providence facility and our fabrication operation in Mexico, and the previously planned aerogel manufacturing facility in Statesboro, Georgia and consist primarily of costs for equipment and construction.
These commitments relate to the enhancement of our existing production lines in our East Providence facility and our fabrication operation in Mexico, and consist primarily of costs for equipment.
We experienced a 90% increase in total revenue during 2024 driven by the increase in our energy industrial business, particularly in North America, and continued growth in the EV market. A substantial majority of our revenue is generated from a limited number of direct customers, including distributors, contractors, fabricators, OEMs, partners and end-user customers.
We experienced a 40% decrease in total revenue during 2025 driven by the decreases in our EV business and energy industrial business, particularly in Latin and North America. A substantial majority of our revenue is generated from a limited number of direct customers, including distributors, contractors, fabricators, OEMs, partners and end-user customers.
We are currently supplying thermal barrier production parts to both General Motors and Toyota, and thermal barrier prototype parts to a number of global manufacturers of EVs, grid storage and home battery systems. During 2024, 2023 and 2022, we sold $306.8 million, $110.1 million and $55.6 million, respectively, of our PyroThin thermal barriers.
We are currently supplying thermal barrier production parts to GM, Toyota, and ACC, and thermal barrier prototype parts to a number of global manufacturers of EVs, grid storage, and home battery systems. During 2025, 2024 and 2023, we sold $168.9 million, $306.8 million and $110.1 million, respectively, of our PyroThin thermal barriers, primarily to GM.
(Distribution) represented 64% and 6% of our total revenue, respectively. In 2023, sales to GM and Distribution represented 41% and 14% of our total revenue, respectively. In 2022, sales to GM and Distribution represented 25% and 22% of our total revenue, respectively.
(Distribution) represented 59% and 9% of our total revenue, respectively. In 2024, sales to GM and Distribution represented 64% and 6% of our total revenue, respectively. In 2023, sales to GM and Distribution represented 41% and 14% of our total revenue, respectively.
Other Income (Expense), net Year Ended December 31, Change 2024 2023 Amount Percentage of Revenue Amount Percentage of Revenue Amount Percentage ($ in thousands) Other income (expense): Interest expense, related party $ (7,550 ) (2)% $ (5,328 ) (2)% $ (2,222 ) 42% Interest income (expense), net (4,409 ) (1)% 6,534 3% (10,943 ) (167)% Loss on extinguishment of debt (27,487 ) (6)% — 0% (27,487 ) NM Income from Employee Retention Credits — 0% 2,186 1% (2,186 ) NM Total other income (expense), net $ (39,446 ) (9)% $ 3,392 1% $ (42,838 ) (1,263)% Other income (expense), net decreased by $42.8 million to $39.4 million in 2024 from $3.4 million in 2023.
Impairment of Property, Plant and Equipment The $3.5 million impairment of property, plant and equipment for the year ended December 31, 2024 was the result of a charge for impairment of assets due to obsolescence following development of new and more efficient equipment. 80 Other Income (Expense), net Year Ended December 31, Change 2024 2023 Amount Percentage of Revenue Amount Percentage of Revenue Amount Percentage ($ in thousands) Other income (expense): Interest expense, related party $ (7,550 ) 2% $ (5,328 ) 2% $ (2,222 ) 42% Interest income (expense), net (4,409 ) 1% 6,534 3% (10,943 ) (167)% Loss on extinguishment of debt (27,487 ) 6% — 0% (27,487 ) (100)% Income from Employee Retention Credits — 0% 2,186 1% (2,186 ) (100)% Total other income (expense), net $ (39,446 ) 9% $ 3,392 1% $ (42,838 ) (1,263)% Other income (expense), net decreased by $42.8 million to $39.4 million in 2024 from $3.4 million in 2023.
Sales and marketing expenses as a percentage of total revenue decreased to 8% in 2024 from 14% in 2023 primarily due to the 90% increase in revenue from the comparable period in 2023. 73 General and Administrative Expenses Year Ended December 31, Change 2024 2023 Amount Percentage of Revenue Amount Percentage of Revenue Amount Percentage ($ in thousands) General and administrative expenses $ 71,125 16% $ 56,760 24% $ 14,365 25% General and administrative expenses increased by $14.3 million, or 25%, to $71.1 million in 2024 from $56.8 million in 2023.
General and Administrative Expenses Year Ended December 31, Change 2024 2023 Amount Percentage of Revenue Amount Percentage of Revenue Amount Percentage ($ in thousands) General and administrative expenses $ 71,125 16% $ 56,760 24% $ 14,365 25% General and administrative expenses increased by $14.3 million, or 25%, to $71.1 million in 2024 from $56.8 million in 2023.
The Redemption Price less capitalized principal amount and accrued interest to redemption date, of $24.6 million along with unamortized deferred issuance costs was classified in the income statement as Loss on Extinguishment of Debt. Income from Employee Retention Credit Employee retention credit consists of other income related to our submitted filings for CARES Employee Retention Credits.
The Redemption Price less capitalized principal amount and accrued interest to redemption date, of $24.6 million along with unamortized deferred issuance costs was classified in the income statement as Loss on Extinguishment of Debt.
In the meantime, we expect to be able to substantially reduce our planned capital expenditures for 2025. We intend to fund capital expenditures related to the expansion of capacity of our existing manufacturing facility with our existing cash balance and anticipated cash flows from operations.
Accordingly, we expect to be able to substantially reduce our planned capital expenditures for 2026. We intend to fund capital expenditures related to additional productivity improvements in our manufacturing facility with our existing cash balance and anticipated cash flows from operations.
The following table sets forth the total revenue for the periods presented: Year Ended December 31, 2024 2023 2021 ($ in thousands) Revenue: Energy industrial $ 145,867 $ 128,639 $ 124,807 Thermal barrier 306,832 110,079 55,557 Total $ 452,699 $ 238,718 $ 180,364 Energy industrial revenue accounted for 32%, 54%, and 69% of total revenue for the years ended December 31, 2024, 2023 and 2022, respectively.
The following table sets forth the total revenue for the periods presented: Year Ended December 31, 2025 2024 2023 ($ in thousands) Revenue: Energy industrial $ 102,198 $ 145,867 $ 128,639 Thermal barrier 168,905 306,832 110,079 Total $ 271,103 $ 452,699 $ 238,718 Energy industrial revenue accounted for 38%, 32%, and 54% of total revenue for the years ended December 31, 2025, 2024 and 2023, respectively.
Income Tax Expense The $1.7 million of income tax expense for the year ended December 31, 2024 is related to our maquiladora operations in Mexico.
Income Tax Expense The $1.7 million of income tax expense for the year ended December 31, 2024 was related to our maquiladora operations in Mexico. We did not incur income tax expense for the comparable period in 2023.
Net cash used in investing activities for 2024 and 2023 totaled $86.3 million and $175.5 million, respectively.
Net cash used in investing activities for 2025 and 2024 totaled $37.4 million and $86.3 million, respectively.
See note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information about these critical accounting policies, as well as a description of our other significant accounting policies. Revenue Recognition We recognize revenue from the sale of our energy industrial aerogel products and thermal barriers.
See Note (2) to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information about these critical accounting policies, as well as a description of our other significant accounting policies.
Analysis of Cash Flow The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2024 2023 2022 ($ in thousands) Net cash provided by (used in): Operating activities $ 45,549 $ (42,612 ) $ (94,399 ) Investing activities (86,262 ) (175,455 ) (177,974 ) Financing activities 122,018 75,477 478,370 Net increase (decrease) in cash 81,305 (142,590 ) 205,997 Cash and cash equivalents, beginning of period 139,971 282,561 76,564 Cash and cash equivalents, end of period $ 221,276 $ 139,971 $ 282,561 Operating Activities During 2024, we provided $45.5 million in net cash from operating activities, as compared to the use of $42.6 million in net cash during 2023, a decrease in the use of cash of $88.2 million.
Analysis of Cash Flow The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2025 2024 2023 ($ in thousands) Net cash provided by (used in): Operating activities $ 32,872 $ 45,549 $ (42,612 ) Investing activities (37,449 ) (86,262 ) (175,455 ) Financing activities (58,129 ) 122,018 75,477 Net increase (decrease) in cash (62,706 ) 81,305 (142,590 ) Cash and cash equivalents, beginning of period 221,276 139,971 282,561 Cash and cash equivalents, end of period $ 158,570 $ 221,276 $ 139,971 Operating Activities During 2025, we generated $32.9 million in net cash from operating activities, as compared to the generation of $45.5 million in net cash during 2024, a decrease in cash provided by operations of $12.6 million.
Interest Expense, Convertible Note - Related Party Interest expense, convertible note - related party is net of the capitalized interest related to the $100.0 million in aggregate principal amount of our Convertible Senior PIK Toggle Notes. 69 Interest Income (Expense) Interest expense consists of interest expense and amortization or write-off of deferred financing costs related to our other financing arrangements including a failed sale and leaseback arrangement accounted as a financing transaction and interest earned on the cash balances invested in deposit accounts, money market accounts, and high-quality debt securities issued by the U.S. government.
Interest Income (Expense) Interest expense consists of interest expense and amortization or write-off of deferred financing costs related to our other financing arrangements, including our Amended MidCap Loan Facility, a failed sale and leaseback arrangement accounted as a financing transaction and interest earned on the cash balances invested in deposit accounts, money market accounts, and high-quality debt securities issued by the U.S. government.
In volume terms, product shipments decreased by 4.2 million square feet, or 13%, to 28.4 million square feet of aerogel products for the year ended December 31, 2023, as compared to 32.6 million square feet in the year ended December 31, 2022.
In volume terms, product shipments decreased by 7.9 million square feet, or 28%, to 20.6 million square feet of aerogel products for the year ended December 31, 2025, as compared to 28.5 million square feet for the year ended December 31, 2024.
Research and development expenses as a percentage of total revenue decreased to 7% during the year ended December 31, 2023 from 9% in the comparable period in 2022, primarily due to the decrease in professional fees.
Research and development expenses as a percentage of total revenue increased to 5% during the year ended December 31, 2025 from 4% in the comparable period in 2024 primarily due to the 40% decrease in revenue from the comparable period in 2024.
Products Our core businesses are organized into two reportable segments: Thermal Barrier and Energy Industrial. The following describes our key product offerings and new product innovations by reportable segment. Thermal Barrier We are actively developing a number of promising aerogel products and technologies for the electric vehicle (EV) market.
Products Our core businesses are organized into two reportable segments: Thermal Barrier and Energy Industrial. The following describes our key product offerings and new product innovations by reportable segment.
Although there are several other new accounting pronouncements issued by the FASB, we do not believe any of these accounting pronouncements had or will have a material impact on our Consolidated Financial Statements. Critical Accounting Policies and Estimates Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America.
We believe that the impact of recently issued accounting standards that are not yet effective will not have a material impact on our consolidated financial statements. Critical Accounting Policies and Estimates Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America.
We also expect that the patent enforcement actions, described in more detail under “Legal Proceedings” in Part I, Item 3 of this Annual Report on Form 10-K, if protracted, could result in significant legal expense over the medium to long-term.
We expect our general and administrative expenses to decrease as we continue our ongoing cost reduction measures, including reduced headcount. We also expect that the patent enforcement actions, described in more detail under “Legal Proceedings” in Part I, Item 3 of this Annual Report on Form 10-K, if protracted, could result in significant legal expenses over time.
Accordingly, we expect that our net income (loss), earnings per share and Adjusted EBITDA will vary from period to period. During 2024, we experienced strong volume growth in our thermal barrier products. As a result, we experienced total revenue growth of 90% during the year.
Accordingly, we expect that our net income (loss), earnings per share and Adjusted EBITDA will vary from period to period. During 2025, we experienced a significant decline in volume for our thermal barrier products, primarily driven by lower North American EV production levels. As a result, total revenue decreased by 40% compared to the prior year.
Thermal barrier revenue for the year ended December 31, 2023 included $97.5 million to a major U.S. 75 automotive OEM and $5.5 million to a major Asian automotive OEM. Thermal barrier revenue for the year ended December 31, 2022 included $45.8 million to a major U.S. automotive OEM and $5.1 million to a major Asian automotive OEM.
Thermal barrier revenue for the year ended December 31, 2025 included $160.3 million to a major U.S. automotive OEM. Thermal barrier revenue for the year ended December 31, 2024 included $291.2 million to a major U.S. automotive OEM and $5.9 million to a major Asian automotive OEM.
The $0.5 million decrease was the result of decreases in professional fees of $1.5 million, operating material and supplies costs of $0.7 million, compensation and related costs of $0.6 million, partially offset by an increase in depreciation and facility related expenses of $2.1 million and other research and development expenses of $0.2 million.
The $4.7 million decrease was the result of decreases in compensation and related costs of $4.4 million, driven by a headcount reduction, operating supplies and equipment of $0.4 million, and professional fees of $0.2 million, partially offset by an increase in other expenditures of $0.3 million.
The proceeds of the MidCap Loan Facility have been used in connection with the transaction contemplated by the Note Repurchase Agreement, the payment of related fees and expenses and for working capital of the Company and its subsidiaries. Loans borrowed under the MidCap Loan Facility mature on August 19, 2029.
The proceeds of the MidCap Loan Facility were used to repurchase our outstanding convertible note, the payment of related fees and expenses and for working capital. Loans borrowed under the MidCap Loan Facility mature on August 19, 2029.
During 2023, we used $42.6 million in net cash in operating activities, as compared to the use of $94.4 million in net cash during 2022, a decrease in the use of cash of $51.8 million.
During 2024, we generated $45.5 million in net cash from operating activities, as compared to the use of $42.6 million in net cash during 2023, a decrease in the use of cash of $88.2 million.
The $6.9 million increase was the result of $4.9 million of interest income, $2.2 million of Employee Retention Credits and a $(0.2) million net impact of capitalized interest relating to our Convertible Note in the comparable period in 2022. 77 Liquidity and Capital Resources Overview We have experienced significant losses and invested substantial resources since our inception to develop, commercialize and protect our aerogel technology and to build a manufacturing infrastructure capable of supplying aerogel products at the volumes and costs required by our customers.
Liquidity and Capital Resources Overview We have experienced significant losses and invested substantial resources since our inception to develop, commercialize and protect our aerogel technology and to build a manufacturing infrastructure capable of supplying aerogel products at the volumes and costs required by our customers.
GAAP measure, to Adjusted EBITDA for the years presented: Year Ended December 31, 2024 2023 2022 ($ in thousands) Net income (loss) $ 13,375 $ (45,811 ) $ (82,738 ) Depreciation and amortization 22,526 15,318 9,222 Stock-based compensation (1) 12,855 10,954 9,385 Other (income) expense 11,959 (3,392 ) 3,493 Loss on extinguishment of debt 27,487 — — Income tax expense 1,714 — — Adjusted EBITDA $ 89,916 $ (22,931 ) $ (60,638 ) (1) Represents non-cash stock-based compensation related to vesting and modifications of stock option grants, vesting of restricted stock units and vesting and modification of restricted common stock.
GAAP measure, to Adjusted EBITDA for the years presented: Year Ended December 31, 2025 2024 2023 ($ in thousands) Net income (loss) $ (389,552 ) $ 13,375 $ (45,811 ) Depreciation and amortization 45,157 22,526 15,318 Stock-based compensation (1) 9,173 12,855 10,954 Other (income) expense 8,930 11,959 (3,392 ) Loss on extinguishment of debt — 27,487 — Income tax expense 2,394 1,714 — Restructuring and demobilization costs 17,510 — — Loss on disposal of property, plant and equipment 18,162 — — Impairment of property, plant and equipment 291,164 — — Adjusted EBITDA $ 2,938 $ 89,916 $ (22,931 ) (1) Represents non-cash stock-based compensation related to vesting and modifications of stock option grants, restricted stock units (RSUs) and restricted common stock, and cash settled RSUs issued in March 2025. 68 The following table presents a reconciliation of net income (loss), the most directly comparable U.S.
We are also continuing to monitor the impact on our material costs, manufacturing expense, and cost of product revenue from engaging one or more external manufacturing facilities in China to supply our aerogel products.
We expect that manufacturing expense will decline in absolute dollars, due to ongoing cost reduction efforts, and increase as a percentage of revenue during 2026 due to lower expected revenues from the thermal barrier business. 70 We are also continuing to monitor the impact on our material costs, manufacturing expense, and cost of product revenue from engaging one or more external manufacturing facilities in China to supply our aerogel products.
Sales and Marketing Expenses Sales and marketing expenses consist primarily of personnel costs, incentive compensation, marketing programs, travel and related costs, consulting expenses and facilities related costs.
We expect to continue to devote substantial resources to the development of new aerogel technologies. Sales and Marketing Expenses Sales and marketing expenses consist primarily of personnel costs, incentive compensation, marketing programs, travel and related costs, consulting expenses and facilities related costs.
This ASU is effective for our fiscal year 2024 and interim periods in fiscal year 2025. 81 Standards to be Implemented In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures that requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.
Prior to their effective date, we evaluate the pronouncements to determine the potential effects of adoption to our consolidated financial statements. 84 Standards Implemented Since December 31, 2024 In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures (ASU 2023-09) that requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures including additional information about income taxes paid.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeLoans borrowed under the Revolving Facility will bear an interest rate equal to Term SOFR plus 4.60% per year, subject to a Term SOFR floor of 2.50%. Therefore, fluctuations in interest rates will impact our consolidated financial statements. A rising interest rate environment will increase the amount of interest paid on these loans.
Biggest changeOur Revolving Facility bears interest at the Term SOFR plus 5.10% per annum. Under the terms of the Credit Agreement, as amended by Amendment No. 1, the Revolving Facility is subject to a Term SOFR floor of 2.50%. Interest is paid monthly. Therefore, fluctuations in interest rates will impact our consolidated financial statements.
As we expand our presence in international markets, to the extent we are required to enter into agreements denominated in a currency other than the US dollar, our results of operations and cash flows may increasingly be subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates.
As we expand our presence in international markets, to the extent we are required to enter into agreements denominated in a currency other than the U.S. dollar, our results of operations and cash flows may increasingly be subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates.
Interest Rate Risk We are exposed to changes in interest rates in the normal course of our business. At December 31, 2024, we had unrestricted cash and cash equivalents of $220.9 million.
Interest Rate Risk We are exposed to changes in interest rates in the normal course of our business. At December 31, 2025, we had unrestricted cash and cash equivalents of $156.9 million.
Due to the short-term nature of these investments, we believe that our exposure to changes in the fair value of our cash as a result of changes in interest rates is not material. As of December 31, 2024, we had $0.4 million of restricted cash to support our outstanding letters of credit.
Due to the short-term nature of these investments, we believe that our exposure to changes in the fair value of our cash as a result of changes in interest rates is not material. As of December 31, 2025, we had $1.7 million of restricted cash to support our outstanding letters of credit.
A hypothetical 100 basis point increase or decrease in interest rates would not have a material effect on the results of our operations.
A rising interest rate environment will increase the amount of interest paid on these loans. A hypothetical 100 basis point increase or decrease in interest rates would not have a material effect on the results of our operations.
Loans borrowed under the Term Loan Facility will bear interest rate equal to Term SOFR (as defined in the Credit Agreement) for a one-month interest period plus 4.50% per year, subject to a Term SOFR floor of 4.50% and a Term SOFR cap of 7.50%.
Under the terms of the Credit Agreement, as amended by Amendment No. 1, the Term Loan Facility bears an interest rate equal to Term SOFR (as defined in the Credit Agreement) for a one-month interest period plus 5.00% per year, subject to a Term SOFR floor of 4.50% and a Term SOFR cap of 7.50%. Interest is paid monthly.
During the fiscal year ended December 31, 2024, our largest exposures to foreign exchange rates consisted primarily of the Mexican Peso against the U.S. dollar. For the fiscal years ended December 31, 2024 and 2022, we had foreign exchange losses of $2.8 million and $0.2 million.
Certain of our and our subsidiaries’ transactions are denominated in currencies other than the functional currency. During the fiscal year ended December 31, 2025, our largest exposures to foreign exchange rates consisted primarily of the Mexican Peso against the U.S. dollar.
For the fiscal year ended December 31, 2023, we had foreign exchange gains of $0.5 million. 84
For the fiscal years ended December 31, 2025 and 2024, we had foreign exchange losses of $0.5 million and $2.8 million, respectively. For the fiscal year ended December 31, 2023, we had foreign exchange gains of $0.5 million. The foreign currency transaction gains and losses were recorded within operating expenses on the consolidated statements of operations.
As of December 31, 2024, we had $114.7 million of term loan outstanding and $42.1 million of revolver loan outstanding.
As of December 31, 2025, we had $90.6 million of Term Loan outstanding and $14.3 million of revolving line of credit outstanding.
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Capital Market Risk We generate our revenue from the sale of our products, but in the future we may raise funds through other sources. One possible source of funding is through further securities offerings. Our ability to raise funds in this manner depends upon capital market forces affecting our stock price among other things. 87

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