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What changed in Expion360 Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Expion360 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.

+301 added−357 removedSource: 10-K (2026-03-17) vs 10-K (2025-03-31)

Top changes in Expion360 Inc.'s 2025 10-K

301 paragraphs added · 357 removed · 213 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeHome Energy Integration We are currently having discussions with integration partners. This is key for the development of our home energy storage products and subsequent sales growth. Expion360 Products We have historically focused on the design, assembly, and sales of LiFePO4 batteries and supporting accessories for RV and marine applications, and have recently expanded into home energy storage solutions.
Biggest changeExpion360 Products We have historically focused on the design, assembly, and sale of LiFePO4 batteries and supporting accessories for RV and marine applications, and have recently expanded into home energy storage solutions and the industrial energy storage market. Our batteries are designed and engineered in-house using premium lithium iron phosphate cells with quality controls at every step.
Additionally, availability of the raw materials used to manufacture our products may be limited at times, resulting in higher prices and/or the need to find alternative suppliers. Our battery cell manufacturers have joint venture factories outside of Asia and have secured sourcing contracts from lithium suppliers in South America and Australia.
Additionally, availability of the raw materials used to manufacture our products may be limited at times, resulting in higher prices and/or the need to find alternative suppliers. Our battery cell manufacturers have joint venture factories outside of Asia and have sourcing contracts from lithium suppliers in South America and Australia.
Furthermore, our typical battery may provide three times the power of the typical, lead-acid battery despite being half the weight (comparing, for example, a typical lead-acid battery like the Renogy Deep Cycle AGM, which is rated at 100Ah, to our own LFP 100Ah battery and assuming slow discharge at a 0.1C rate).
Furthermore, our typical battery may provide three times the power of the typical, lead-acid battery despite being half the weight (comparing, for example, a typical lead-acid battery like the Renogy Deep Cycle AGM, which is rated at 100Ah, to our own LFP 100Ah battery and assuming slow discharge at a 1C rate).
See the section titled “ Risk Factors ” for additional information. Implications of Being an Emerging Growth Company and a Smaller Reporting Company We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”).
See the section titled “ Risk Factors ” for additional information. 10 Implications of Being an Emerging Growth Company and a Smaller Reporting Company We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”).
We also seek to protect our intellectual property rights through non-disclosure and invention assignment agreements with our employees and consultants and through non-disclosure agreements with business partners and other third parties. 10 We periodically review our development efforts to assess the existence and patentability of new intellectual property.
We also seek to protect our intellectual property rights through non-disclosure and invention assignment agreements with our employees and consultants and through non-disclosure agreements with business partners and other third parties. We periodically review our development efforts to assess the existence and patentability of new intellectual property.
Our website is found at expion360.com and on the Investor Relations section of our website, we post or will post, as applicable, the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the SEC: our Annual Reports on Form 10-K, our Proxy Statement on Schedule 14A, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.
Our website is found at expion360.com and on the Investor Relations section of our website, we post the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the SEC: our Annual Reports on Form 10-K, our Proxy Statement on Schedule 14A, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.
In addition to increased mining and newly located reserves, there is an industry push to provide more efficient ways to extract lithium from mined ore. Another development of the past few years is lithium cell recycling. This process will recapture the raw lithium from the cell for reuse in future cells.
In addition to increased mining and reserves, there is an industry push to provide more efficient ways to extract lithium from mined ore. Another development of the past few years is lithium cell recycling. This process will recapture the raw lithium from the cell for reuse in future cells.
Government Regulation We are subject to inspections by federal, state, and local regulators overseeing environmental health and safety, which could result in possible citations and/or fines. Lithium-ion battery shipments are categorized as “dangerous goods” and are subject to rules governing their transportation.
Government Regulations We are subject to inspections by federal, state, and local regulators overseeing environmental health and safety, which could result in possible citations and/or fines. Lithium-ion battery shipments are categorized as “dangerous goods” and are subject to rules governing their transportation.
Company Information Expion360 Inc. was initially organized as a limited liability company under the name Yozamp Products Company, LLC in the State of Oregon on June 16, 2016 and converted to a Nevada corporation on November 16, 2021.
Company Information Expion360 Inc. was initially organized as a limited liability company under the name Yozamp Products Company, LLC in the State of Oregon in June 2016 and converted to a Nevada corporation in November 2021.
The SEC also maintains a website found at http://www.sec.gov/ that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. 12
The SEC also maintains a website found at http://www.sec.gov/ that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. 11
Strong National Retail Customers and Distribution Channels We have sales relationships with many major RV and marine retailers and plan to use our strong reputation in the lithium battery space to create an even stronger distribution channel.
Strong National Retail Customers and Distribution Channels We maintain sales relationships with major RV and marine retailers and plan to use our strong reputation in the lithium battery space to create an even stronger distribution channel.
We pursue the registration of our domain names and trademarks and service marks in the United States and in an effort to protect our brand, as of December 31, 2024, we have 18 trademarks registered or pending registration to cover our house marks in the United States and have 9 trademarks registered or pending registration in Canada.
We pursue the registration of our domain names and trademarks and service marks in the United States and in an effort to protect our brand, as of December 31, 2025, we have 18 trademarks registered or pending registration to cover our house marks in the United States and have nine trademarks registered or pending registration in Canada.
The technology enables users to wirelessly monitor and manage e360 batteries, providing a comprehensive view of both individual battery conditions and performance, and a power bank consisting of multiple e360 batteries. The 48 Volt GC2 LiFePO4 battery was our first e360 SmartTalk Battery for powering electric golf carts and other light electric vehicles.
The technology enables users to wirelessly monitor and manage e360 batteries, providing a comprehensive view of both individual battery conditions and performance as well as information about a power bank consisting of multiple e360 batteries. Our 48 Volt GC2 LiFePO4 battery was the first model to incorporate e360 SmartTalk for electric golf carts and other light electric vehicle applications.
These provisions include: · the requirement that we provide only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure; · reduced disclosure about our executive compensation arrangements; · an exemption from the requirement that we hold a non-binding advisory vote on executive compensation or golden parachute arrangements; and · an exemption from the auditor attestation in the assessment of our internal control over financial reporting. 11 We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company.
These provisions include: ● the requirement that we provide only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure; ● reduced disclosure about our executive compensation arrangements; ● an exemption from the requirement that we hold a non-binding advisory vote on executive compensation or golden parachute arrangements; and ● an exemption from the auditor attestation in the assessment of our internal control over financial reporting.
Our customers consist of dealers, wholesalers, private-label customers, and original equipment manufacturers (“OEMs”) who then sell our products to end consumers and drive brand awareness nationally. Our primary target markets are currently the RV, marine, and home energy storage industries.
Our customers consist of dealers, wholesalers, private-label customers, and original equipment manufacturers (“OEMs”) who then sell our products to end consumers and drive brand awareness nationally. Our primary target markets include the RV, marine, and industrial power sectors.
Our lithium-ion batteries offer superior capacity to our lead-acid competitors with an expected lifespan of approximately 12 years—three to four times the lifespan of certain lead-acid batteries—and ten times the number of charging cycles.
Our lithium-ion batteries are designed to offer superior capacity to traditional lead-acid batteries, with an expected lifespan of approximately 12 years under standard operating conditions—three to four times that of certain lead-acid batteries—and ten times the number of charge cycles.
Current and former members of management have used their decades of experience in the energy and RV industries to cultivate relationships with numerous retailers in the space, including Camping World, a leading national RV retailer; and Meyer Distributing, Inc., a leading national marketer and distributor of automotive and RV specialty products.
We have decades of experience in the energy and RV industries and cultivate relationships with numerous retailers in the space, including Camping World, a leading national RV retailer; and Keystone Automotive, a leading national marketer and distributor of automotive and RV specialty products.
While we do not have long-term purchase agreements with these manufacturers and our purchases are completed on a purchase-order basis, we maintain strong relationships with our manufacturers and cell suppliers, reflected in our ability to increase our purchase order volumes (qualifying us for related volume-based discounts).
While we do not have long-term purchase agreements with these manufacturers and generally transact on a purchase order basis, we maintain strong relationships with our manufacturers and cell suppliers, which historically have enabled us to increase our purchase volumes and qualify for volume-based discounts.
Although we outsource our manufacturing, the manufacturing of our products by our third-party manufacturers and suppliers require the use of hazardous materials that similarly subject these third parties, and therefore our business, to such environmental laws and regulations.
Although we outsource our manufacturing, the manufacturing of our products by our third-party manufacturers and suppliers require the use of hazardous materials that similarly subject these third parties, and therefore our business, to such environmental laws and regulations. Noncompliance by us or third-party manufacturers with applicable environmental or safety regulations could result in regulatory actions, penalties, or operational disruptions.
Lead-acid battery manufactures also continue to have a presence in the marketplace. We have designed custom form factors in both the industry standard Group 24 and Group 27 battery sizes allowing us to visually and structurally differentiate Expion360 within the market space.
We have designed custom form factors in both the industry standard Group 24 and Group 27 battery sizes allowing us to visually and structurally differentiate Expion360 within the market space. We believe our custom EX1 battery also provides a unique capacity to footprint ratio compared to lead-acid and lithium battery competitors.
In addition, we also sell products directly to end consumers. We intend to continue to focus on our sales and distribution channels to develop existing customer relationships and grow our customer base. We also offer a high level of technical support to our customers before and after product sales.
We intend to continue to focus on our sales and distribution channels to develop existing customer relationships and grow our customer base. We also offer a high level of technical support to our customers before and after product sales. We currently derive a significant portion of our revenue from a limited number of customers.
However, notwithstanding any efforts to improve the sustainability and efficiency of lithium mining, the price of lithium is volatile. We continue to monitor developments that may adversely affect our supply chain. Management expects that products from our Asian third-party manufacturers will be subject to additional tariffs in 2025.
However, notwithstanding any efforts to improve the sustainability and efficiency of lithium mining, the price of lithium is volatile. We continue to monitor developments that may adversely affect our supply chain.
Our batteries are designed and engineered in-house using premium lithium iron phosphate cells with quality controls at every step. We use high-grade LiFePO4 batteries meeting the UL 1642 standard (UL File No. MH64383). We believe our materials and engineering enhance the reliability, stability, and safety of our products relative to those of our competitors.
We use high-grade LiFePO4 batteries meeting the UL 1642 standard (UL File No. MH64383). We believe our materials and engineering enhance the reliability, stability, and safety of our products relative to those of our competitors.
None of our employees are covered by collective bargaining agreements and we have never experienced an organized work stoppage, strike, or labor dispute. We believe working conditions and compensation packages are competitive with those offered by competitors and consider our relations with our employees to be good.
We believe working conditions and compensation packages are competitive with those offered by competitors and consider our relations with our employees to be good.
Our high-powered, lithium battery solutions incorporate innovative concepts and have been designed to include some of the most dense and minimal-footprint batteries in the RV and marine industries.
ITEM 1. BUSINESS Our Company Expion360 focuses on the design, assembly, manufacturing, and sale of lithium iron phosphate (“LiFePO4”) batteries and supporting accessories for recreational vehicles (“RVs”), marine, and industrial applications. Our high-powered lithium battery solutions incorporate innovative concepts and have been designed to include some of the most dense and minimal-footprint batteries in the RV and marine industries.
See the section above titled “ Competitive Strengths — Expansion into New Markets ” for additional information about the new home energy storage solutions. Competitors Our competitors include lithium-ion battery manufacturers, such as Relion (which was acquired by Brunswick Corporation in September 2021); Dragonfly Energy Holdings Corp (Nasdaq: DFLI), the manufacturer of Battle Born Batteries; Renogy; and Dakota Lithium.
Competitors Our competitors include lithium-ion battery manufacturers, such as Relion (which was acquired by Brunswick Corporation in September 2021); Dragonfly Energy Holdings Corp (Nasdaq: DFLI), the manufacturer of Battle Born Batteries; Renogy; and Dakota Lithium. Lead-acid battery manufactures also continue to have a presence in the marketplace.
Sales to each of our other customers did not exceed 10% during this period. Four other customers accounted for 60% of our accounts receivable as of December 31, 2024. Intellectual Property The success of our business and our technology leadership is supported by our proprietary battery technology.
Sales to each of our other customers did not exceed 10% during this period. 9 Intellectual Property The success of our business and our technology leadership is supported by our proprietary battery technology. We have filed 11 patent applications in the United States to provide protection for our technology, including seven design patent applications and four utility patent applications.
These new versions include higher amp-hour options (4.0Ah and 4.5Ah cell technology) and the latest advancements in power technology features, including Expion360’s proprietary Vertical Heat Conduction™ internal heating, Bluetooth®, and controller area network (“CANBus”) communication. We began delivering the new 12V GC2 and Group 27 batteries to customers in the second quarter of 2024.
In 2024, we introduced our next generation 12V GC2 and Group 27 series LiFePO4 batteries incorporating higher amp-hour cell options (4.0Ah and 4.5Ah) and the latest technology, including our proprietary Vertical Heat Conduction™ internal heating, Bluetooth®, and controller area network (“CANBus”) communication. We also launched the Edge battery in 2024, which offers a slim design designed to provide installation flexibility.
As of January 2025, we have begun shipping orders of our e360 Home Energy Storage Solutions. We currently operate Expion360 as one reportable business segment, Energy Storage (ES). Our products provide numerous advantages for various industries that are looking to migrate to lithium-based energy storage.
We currently operate Expion360 as one reportable business segment, Energy Storage (ES). Our products provide numerous advantages for various industries that are looking to migrate to lithium-based energy storage. They incorporate detailed design and engineering, strong case materials, optimized internal structural layouts, and are supported by responsive customer service.
We currently derive a significant portion of our revenue from a limited number of customers. During the year ended December 31, 2024, sales to one customer accounted for approximately 14% of our gross sales. This customer accounted for 6% of our accounts receivable as of December 31, 2024.
During the year ended December 31, 2025, sales to four customers accounted for approximately 60% of our gross sales. These customers accounted for 69% of our outstanding accounts receivable as of December 31, 2025.
We have implemented policies and procedures, trained our employees, and conducted internal audits to verify compliance with environmental health and safety regulations. Our Group 24 and Group 27 batteries and our custom 360Ah battery have passed UL 1973 certification. Employees As of December 31, 2024, we had 20 employees, all of whom worked for us full time.
We have implemented policies and procedures, trained our employees, and conducted internal audits to verify compliance with environmental health and safety regulations. As of December 31, 2025, our currently commercialized lithium iron phosphate batter models have achieved UL 1973 certification. Certain next-generation models remain subject to final certification.
Our sales are completed on a purchase order basis and most are without firm, long-term revenue commitments or sales arrangements. Expion360 has sales relationships with many major RV retailers, including Camping World, a leading national RV retailer and Meyer Distributing, Inc., a leading national marketer and distributor of automotive and RV specialty products.
Expion360 has sales relationships with many major RV retailers, including Camping World, a leading national RV retailer, and Keystone Automotive, a leading national marketer and distributor of automotive and RV specialty products. In addition, we also sell products directly to end consumers.
We are deploying multiple intellectual property strategies with research and products to sustain and scale our business. This includes design, development and collaboration, using our IP to bring safety, quality and service to our customers.
In addition, we deploy intellectual property strategies to support product development, enhance safety and performance, and strengthen relationships across our target markets. This includes design, development and collaboration, using our IP to bring safety, quality and service to our current customers and to build relationships with customers in a variety of industries.
We believe that we can protect our margins through a combination of supplier concessions, customer price increases and efficiencies gained as sales continue to grow. Customers We currently have more than 300 customers across the United States consisting of dealers, wholesalers, private-label customers and OEMs who then sell our products to end consumers.
However, there can be no assurance that such efforts will fully offset increased costs. Customers We currently have around 300 customers across the United States consisting of dealers, wholesalers, private-label customers and OEMs who then sell our products to end consumers. Our sales are completed on a purchase-order basis and most are without firm, long-term revenue commitments or sales arrangements.
Furthermore, our typical battery may provide three times the power of the typical lead-acid battery despite being half the weight (comparing, for example, a typical lead-acid battery like Renogy Deep Cycle AGM, which is rated at 100Ah, to our own LFP 100Ah battery and assuming slow discharge at a 0.1C rate). 9 Manufacturing and Supply Chain Our batteries are manufactured by multiple third-party manufacturers located in Asia, which also produce our battery cells.
Our lithium iron phosphate batteries are designed to provide improved cycle life, energy density, and weight relative to traditional lead-acid batteries. 8 Manufacturing and Supply Chain Our batteries are manufactured by multiple third-party manufacturers located in Asia, which also produce our battery cells.
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ITEM 1. BUSINESS Our Company Expion360 focuses on the design, assembly, manufacturing, and sale of lithium iron phosphate (“LiFePO4”) batteries and supporting accessories for recreational vehicles (“RVs”), marine applications and home energy storage products with plans to expand into industrial applications.
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We believe the ongoing transition from traditional lead-acid batteries to LiFePO4 battery systems as the preferred power storage solution presents growth opportunities across these industries. In addition to the RV and marine markets, we are expanding our focus to include industrial, construction, surveillance, remote monitoring, and other mission-critical applications requiring reliable, high-energy-density battery systems.
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In addition, in January 2025 we began selling our e360 Home Energy Storage Solutions, which consist of two LiFePO4 battery storage solutions and seek to provide consumers with a cost-effective, low barrier of entry, flexible system to power their homes utilizing solar energy, wind, or grid back-up.
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We are also pursuing opportunities within the electric forklift and industrial material handling markets, where lithium battery adoption continues to increase. We launched our e360 product line in December 2020, initially targeting the RV and marine industries. Through continued sales growth and product development, the e360 product line has gained adoption among customers transitioning from lead-acid battery systems.
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We believe we are well-positioned to capitalize on the rapid market conversion from lead-acid to lithium batteries as the primary method of power sourcing in these industries.
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We have since expanded our product portfolio to include next-generation lithium battery models designed to increase capacity, improve energy density, enhance manufacturability, and expand integration capabilities for OEM and industrial applications. These products are intended to support mobile and off-grid systems for construction, industrial power, surveillance, and remote monitoring applications.
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We are also focused on expanding into the home energy storage market with the introduction of our e360 Home Energy Storage Solutions, and we hope to establish a new standard in the industry for barrier price, flexibility, and integration with this offering.
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Our Market Opportunity Lithium-based batteries power a broad range of applications, from consumer electronics to transportation systems and national defense infrastructure. They support electrification trends across multiple industries and enable both mobile and stationary energy storage solutions.
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Along with the RV, marine and home energy storage markets, we aim to provide additional capacities to the expanding electric forklift and industrial material handling markets. We launched our e360 product line, which is manufactured for the RV and marine industries, in December 2020.
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The United States maintains a strong research ecosystem and an emerging domestic battery manufacturing base, supported by federal initiatives aimed at strengthening supply chains and advancing battery technology, according to the U.S. Department of Energy.
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The e360 product line, through its sales growth, has shown to be a preferred conversion solution for lead-acid batteries.
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Expion360 currently focuses on the deep cycle, off-grid, RV, marine, industrial, and specialty vehicle markets, where high-performance LiFePO4 battery systems are increasingly displacing legacy lead-acid solutions. These applications require lightweight, high-energy-density, and durable power systems capable of operating in varied and demanding environmental conditions.
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In December 2023, we announced our entrance into the home energy storage market with our introduction of two LiFePO4 battery storage solutions that enable residential and small business customers to create their own stable micro-energy grid and lessen the impact of increasing power fluctuations and outages.
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The global RV market was valued at approximately $60.7 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 11.5% from 2023 through 2030, reaching an estimated $144.55 billion by 2031, according to Grand View Research. Increasing electrification within RV platforms, including off-grid and extended-runtime applications, continues to support adoption of lithium-based battery systems.
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They incorporate detailed-oriented design and engineering, strong case materials, and internal and structural layouts, and are backed by responsive customer service. Our Market Opportunity The trend of vehicle electrification is expected to be a significant growth catalyst for lithium compounds over the next decade and beyond.
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More broadly, trends toward equipment electrification, reduced generator runtime, remote monitoring infrastructure, and mobile industrial applications are contributing to sustained demand for advanced battery systems.
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According to ReportLinker, the global light electric vehicle market is growing at a 9.4% compound annual growth rate (“CAGR”) and is expected to reach $122.7 billion by 2027. Similarly, the global golf cart battery market is growing at a 5.9% CAGR and is anticipated to reach $216.5 million by 2031 according to Allied Market Research.
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According to IMARC, the global lithium-ion battery market exceeded $150 billion in 2025 and continues to expand as electrification advances across transportation, industrial, and specialty equipment sectors. 6 Beyond our established presence in RV and marine applications, we are evaluating opportunities in adjacent light electric vehicle, surveillance, and remote monitoring applications that require high-reliability battery systems.
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Furthermore, the global RV market was $57.3 billion in 2021, and is anticipated to have a CAGR of 7.6% from 2022 to 2031, with an anticipated market of $117.0 billion by 2031, per Allied Market Research.
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According to Precedence Research, the global light electric vehicle market was estimated at $107 billion in 2025 and is projected to reach $268 billion by 2035. While these adjacent markets represent potential long-term growth opportunities, our current commercial focus remains concentrated in deep-cycle, recreational, and specialty-use applications.
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In addition, the global residential solar energy storage market is expected to increase from $20.5 billion in 2023, to an anticipated $518.8 billion in 2032, a CAGR of 43.16%, according to Market Data Forecast. At the intersection of both these trends lies the rapidly expanding lithium battery market.
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We believe the compact form factor, modularity, and high energy density of our lithium battery systems position us to address applications requiring lightweight, high-capacity power solutions across RVs, marine systems, industrial equipment, and remote monitoring applications.
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According to IMARC, the market for lithium-ion batteries is projected to grow at 13.2% CAGR to reach $93.3 billion by 2028. 6 The vast expansion of the lithium battery market can be attributed to global trends promoting clean energy, as well as the compact and flexible nature of lithium battery packs, which make them easy to install in RVs and boats.
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While we do not currently manufacture battery cells domestically, we monitor developments in U.S. supply chain policy and manufacturing initiatives that may influence the industry over time. We periodically evaluate strategic opportunities that could align with our long-term objectives; however, our current operations rely primarily on established offshore third-party manufacturing partners.
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Our technology, which we believe offers industry-leading battery pack flexibility for the most efficient energy storage, is poised to be able to offer power to these large vehicles such as RVs and recreational boats. Expion360 is focused on expanding its position in the deep cycle, off-grid, and stationary energy storage markets.
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Domestic supply chain initiatives represent potential future developments rather than current operational drivers.
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According to the Federal Consortium for Advanced Batteries, the United States has five goals in mind to secure battery materials and the U.S. technology supply chain.
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The Edge is offered in both 12V and 48V configurations. In February 2026, we announced plans to release three next-generation lithium-ion battery models expected to be commercially available in the second half of 2026. The new models include upgraded Group 27 (12.8V 140Ah), GC2H (12.8V 180Ah), and EX1 (12.8V 420Ah) batteries, each designed to increase capacity relative to prior generations.
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They include (i) securing access to raw materials; (ii) support of the U.S. materials-processing base; (iii) stimulation of U.S. electrode, cell, and pack manufacturing; (iv) enabling recycling and reuse of critical materials; and (v) support of scientific R&D, STEM education and workforce development. Expion360 is well-positioned to benefit from this national focus.
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These platforms incorporate our VHC™ internal heating technology, SmartTalk™ Bluetooth connectivity, and CANBus communication, and are engineered to meet UL 1973 safety standards, with final certification pending.
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Lithium-based batteries power our daily lives, from consumer electronics to national defense. They enable electrification of the transportation sector and provide stationary grid storage, critical to developing the clean-energy economy. The U.S. has a strong research community, a robust innovation infrastructure for technological advancement of batteries, and an emerging lithium-based battery manufacturing industry, according to the U.S. Department of Energy.
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The redesigned batteries are also intended to support manufacturing efficiencies and margin improvement initiatives. 7 Also in February 2026, we entered into a strategic partnership with Dealer Accessory Supply (“DAS”) related to the launch of the DASGen Hybrid Energy Storage System, representing our entry into the industrial energy storage market.
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It is our objective to work closely with federal, state and local governments, as well as private industry to help America be the leader in lithium battery technology.
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DASGen is designed to function as an energy buffer between diesel generators and jobsite electrical loads and is intended to support reduced generator runtime, subject to site conditions and usage. Under the partnership, DAS serves as the final system assembler, while we supply the battery technology and lead sales and marketing efforts.
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In December 2023, we entered the home energy storage market with our introduction of two LiFePO4 battery storage solutions comprising our e360 Home Energy Storage Solution: a wall mounted all-in-one inverter and 10kWh battery and an expandable server rack style battery cabinet system.
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The system utilizes our lithium iron phosphate battery platform and is integrated with industrial power electronics. Initial field deployments have been completed, with performance dependent on site-specific operating conditions.
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We believe our new home energy storage product line will benefit from a fast-growing battery energy storage market, which is forecasted by Markets and Markets to grow at a 26.4% CAGR to reach $17.5 billion by 2028.
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While we expect that products from our Asian third-party manufacturers will be subject to additional tariffs in 2026, we believe that we can protect our margins through a combination of supplier concessions, customer price increases and operational efficiencies gained as sales continue to grow. U.S. trade policy has been subject to significant legislative, regulatory, and judicial developments in recent years.
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Further, according to Clean Energy Group, approximately 3.2 million homes in the United States have solar panels installed, but only about 6% of residential solar systems have battery storage.
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For example, in February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the President to impose tariffs. While that decision invalidated certain tariffs imposed under that authority, tariffs and other trade measures may continue to be imposed under other statutory authorities or through future legislation.
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Our home energy storage products are currently completing UL testing and certification, as well as other requirements for various Authorities Having Jurisdiction. 7 In January 2024, we introduced our next generation 12V GC2 and Group 27 series LiFePO4 batteries.
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Employees As of December 31, 2025, we had 22 employees, all of whom worked for us full time. None of our employees are covered by collective bargaining agreements and we have never experienced an organized work stoppage, strike, or labor dispute.
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In July 2024, we launched our new Edge battery, which offers a slim design and adds greater flexibility during installation. The Edge is offered in both 12V and 48V versions. We are seeing high customer interest and started shipping the new Edge in July 2024.
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We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company.
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As of December 31, 2024, we offered the following products for sale: 12V Batteries: · Group 24: o e360 60Ah LiFePO4 battery o e360 80Ah LiFePO4 battery o e360 95Ah LiFePO4 battery · Group 27: o e360 100Ah LiFePO4 battery o e360 120Ah LiFePO4 battery o e360 100Ah LiFePO4 battery with SmartTalk, CANBus, and VHS Internal Heating o e360 100Ah LiFePO4 battery with SmartTalk, CANBus, and VHS Internal Heating · GC2: o e360 162Ah LiFePO4 battery with SmartTalk, CANBus, and VHC Internal Heating · EX1 Custom: o e360 368Ah LiFePO4 battery o e360 368Ah LiFePO4 battery with SmartTalk o e360 450Ah LiFePO4 battery with SmartTalk · EX2 Edge Custom: o e360 240Ah LiFePO4 battery with SmartTalk, CANBus, and VHC Internal Heating 48V Batteries: · GC2: o e360 36Ah LiFePO4 battery with SmartTalk and CANBus · EX2 Edge Custom: o e360 60Ah LiFePO4 battery with SmartTalk, CANBus, and VHC Internal Heating · 3U Server Rack Home Energy Battery: o e360 100Ah Home Energy LiFePO4 battery with CANBus Accessories: · Battery Monitors · DC-DC Battery Chargers · AC-DC Battery Chargers · Solar Charge Controller Battery Chargers · CANBus Communication Cables · 120W Portable Solar Panel · Industrial Battery Mounting Kits – 10 models · Terminal Blocks · Bus Bars · AURA Powercap 600W Inverter · e360 SmartTalk mobile app 8 As of December 31, 2024, we had the following products in our pipeline: · In September 2023, we introduced a new 4.5 Ah 26650 lithium-ion phosphate battery cell and 12 Volt 450 Ah e360 SmartTalk™ lithium-ion battery.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur substantial lease and debt obligations could have important consequences, including: · our ability to obtain additional debt or equity financing for working capital, capital expenditures, debt service requirements, acquisitions, and general corporate or other purposes may be limited; · a portion of our cash flows from operations will be dedicated to payments on our lease and debt obligations and will not be available for other purposes, including operations, capital expenditures and future business opportunities; · we may be vulnerable in a downturn in general economic conditions or in business or may be unable to carry on capital spending that is important to our growth; · restrictive covenants in our debt documents may impose significant operating and financial restrictions on us, including our ability to pay dividends and make other restricted payments or sell our collateral (other than inventory in the ordinary course of business); · our ability to introduce new products or new technologies or exploit business opportunities may be restricted; and · we may be placed at a disadvantage compared with competitors that have proportionately less lease and debt obligations.
Biggest changeOur lease and debt obligations we have or may incur in the future could have important consequences, including: ● our ability to obtain additional debt or equity financing for working capital, capital expenditures, debt service requirements, acquisitions, and general corporate or other purposes may be limited; ● a portion of our cash flows from operations will be dedicated to payments on our lease and debt obligations and will not be available for other purposes, including operations, capital expenditures, and future business opportunities; ● we may be vulnerable in a downturn in general economic conditions or in business or may be unable to carry on capital spending that is important to our growth; ● any debt agreements we enter into may contain restrictive covenants that impose operating and financial restrictions on us, including limitations on our ability to incur additional indebtedness, pay dividends, or enter into certain transactions; ● our ability to introduce new products or new technologies or exploit business opportunities may be restricted; and ● we may be placed at a disadvantage compared with competitors that have proportionately less lease and debt obligations. 29 Our Articles of Incorporation provide that the Nevada Eighth Judicial District Court of Clark County, Nevada shall be the exclusive forum for certain litigation that may be initiated by our stockholders, including claims under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
In addition, all of the shares of common stock issuable upon exercise of outstanding stock options under the 2021 Incentive Award Plan and all of the shares of common stock issuable pursuant to the 2021 Employee Stock Purchase Plan have been registered for public resale under the Securities Act.
In addition, all of the shares of common stock issuable upon exercise of outstanding options under the 2021 Incentive Award Plan and all of the shares of common stock issuable pursuant to the 2021 Employee Stock Purchase Plan have been registered for public resale under the Securities Act.
Before you make a decision to buy our common stock, in addition to the risks and uncertainties discussed below under “ Cautionary Note Regarding Forward-Looking Statements, ” you should carefully consider the specific risks set forth below, as well as the other information in this Annual Report, including our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” If any of these risks actually occur, it may materially and adversely affect our business, financial condition, liquidity, results of operations, and prospects.
Before you make a decision to buy our common stock, in addition to the risks and uncertainties discussed below under “ Cautionary Note Regarding Forward-Looking Statements, ” you should carefully consider the specific risks set forth below, as well as the other information in this Annual Report, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” If any of these risks actually occur, it may materially and adversely affect our business, financial condition, liquidity, results of operations, and prospects.
The trading price of our securities may be volatile and subject to wide price fluctuations in response to various factors, including: · market conditions in the broader stock market; · actual or anticipated fluctuations in our quarterly financial condition and results of operations, or those of other companies in our industry; · actual or anticipated strategic, technological, or regulatory threats, whether or not warranted by actual events; · whether any securities analysts cover our stock; · issuance of new or changed securities analysts’ reports or recommendations, if any; · investor perceptions of our Company, the lithium battery and accessory industry; · the volume of trading in our stock; · changes in accounting standards, policies, guidance, interpretations, or principles; · sales, or anticipated sales, of large blocks of our stock; · additions or departures of key management personnel, creative, or other talent; · regulatory or political developments, including changes in laws or regulations that are applicable to our business; · litigation and governmental investigations; · sales or distributions of our common stock by significant stockholders, the entity through which our controlling stockholder holds its investment, or other insiders; · natural disasters and other calamities; and · macroeconomic conditions. 25 Furthermore, the stock market has experienced extreme volatility that in some cases has been unrelated or disproportionate to the operating performance of particular companies.
The trading price of our securities may be volatile and subject to wide price fluctuations in response to various factors, including: ● market conditions in the broader stock market; ● actual or anticipated fluctuations in our quarterly financial condition and results of operations, or those of other companies in our industry; ● actual or anticipated strategic, technological, or regulatory threats, whether or not warranted by actual events; ● whether any securities analysts cover our stock; ● issuance of new or changed securities analysts’ reports or recommendations, if any; ● investor perceptions of our Company, the lithium battery and accessory industry; ● the volume of trading in our stock; ● changes in accounting standards, policies, guidance, interpretations, or principles; ● sales, or anticipated sales, of large blocks of our stock; ● additions or departures of key management personnel, creative, or other talent; ● regulatory or political developments, including changes in laws or regulations that are applicable to our business; ● litigation and governmental investigations; ● sales or distributions of our common stock by significant stockholders, the entity through which our controlling stockholder holds its investment, or other insiders; ● natural disasters and other calamities; and ● macroeconomic conditions. 24 Furthermore, the stock market has experienced extreme volatility that in some cases has been unrelated or disproportionate to the operating performance of particular companies.
Furthermore, there is inherent risk associated with accounts receivable concentration as a deterioration in the financial condition of a limited number of account debtors, or any other factor which affects their ability or willingness to pay could in turn have a material adverse effect on our financial condition. 17 We may not be able to successfully manage our growth.
Furthermore, there is inherent risk associated with accounts receivable concentration as a deterioration in the financial condition of a limited number of account debtors, or any other factor which affects their ability or willingness to pay could in turn have a material adverse effect on our financial condition. We may not be able to successfully manage our growth.
Alternatively, if a court were to find the choice of forum provision contained in our Articles of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition. 31 I TEM 1B. UNRESOLVED STAFF COMMENTS None.
Alternatively, if a court were to find the choice of forum provision contained in our Articles of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition. I TEM 1B. UNRESOLVED STAFF COMMENTS None.
Any such action could have a material adverse effect on our business, prospects, results of operations, and financial condition. If our shares become subject to the penny stock rules, it would become more difficult to trade our shares. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.
Any such action could have a material adverse effect on our business, prospects, results of operations, and financial condition. 28 If our shares become subject to the penny stock rules, it would become more difficult to trade our shares. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.
Although we believe we could locate alternative suppliers to fulfill our needs, we may be unable to find a sufficient alternative supply in a reasonable time or on commercially reasonable terms. 15 Further, our dependence on these third-party suppliers entails additional risks, including: · inability, failure, or unwillingness of third-party suppliers to comply with regulatory requirements; · breach of supply agreements by the third-party supplies; · misappropriation or disclosure of our proprietary information, including our trade secrets and know-how; · relationships that third-party suppliers may have with others, which may include our competitors, and failure of third-party suppliers to adequately fulfill contractual duties, resulting in the need to enter into alternative arrangements, which may not be available, desirable, or cost-effective; and · termination or non-renewal of agreements by third-party suppliers at times that are costly or inconvenient for us.
Although we believe we could locate alternative suppliers to fulfill our needs, we may be unable to find a sufficient alternative supply in a reasonable time or on commercially reasonable terms. 14 Further, our dependence on these third-party suppliers entails additional risks, including: ● inability, failure, or unwillingness of third-party suppliers to comply with regulatory requirements; ● breach of supply agreements by the third-party supplies; ● misappropriation or disclosure of our proprietary information, including our trade secrets and know-how; ● relationships that third-party suppliers may have with others, which may include our competitors, and failure of third-party suppliers to adequately fulfill contractual duties, resulting in the need to enter into alternative arrangements, which may not be available, desirable, or cost-effective; and ● termination or non-renewal of agreements by third-party suppliers at times that are costly or inconvenient for us.
However, OEM sales typically result in lower average selling prices and related margins, which could result in overall margin erosion, affect our growth, or require us to raise our prices. As a result, we may be unable to our competitive advantage. Our current competitors have, and future competitors may have, greater resources than we do.
However, OEM sales typically result in lower average selling prices and related margins, which could result in overall margin erosion, affect our growth, or require us to raise our prices. As a result, we may be unable to maintain our competitive advantage. Our current competitors have, and future competitors may have, greater resources than we do.
The costs of these raw materials, particularly lithium-ion batteries, are volatile and beyond our control. Additionally, availability of the raw materials used to manufacture our products may be limited at times resulting in higher prices and/or the need to find alternative suppliers. Furthermore, the cost of raw materials may also be influenced by transportation costs.
The costs of these raw materials, particularly lithium-ion batteries, are volatile and beyond our control. Additionally, availability of the raw materials used to manufacture our products may be limited at times resulting in higher prices and/or the need to find alternative suppliers. Furthermore, the cost of raw materials may also be influenced by transportation and freight costs.
To the extent we raise additional capital by issuing equity securities, our stockholders may also experience substantial additional dilution. Sales of substantial amounts of our securities in the public markets, or the perception that such sales might occur, could reduce the price of our securities and may dilute your voting power and your ownership interest in us.
To the extent we raise additional capital by issuing equity securities, our stockholders may also experience substantial additional dilution. 25 Sales of substantial amounts of our securities in the public markets, or the perception that such sales might occur, could reduce the price of our securities and may dilute your voting power and your ownership interest in us.
In addition, we will need to manage potential conflicts between our direct sales force and any third-party reselling efforts. There can be no assurances that any of our efforts to expand our sales and distribution channels will be successful. 18 Our ability to expand into international markets is uncertain. Our strategy is to expand our operations into international markets.
In addition, we will need to manage potential conflicts between our direct sales force and any third-party reselling efforts. There can be no assurances that any of our efforts to expand our sales and distribution channels will be successful. Our ability to expand into international markets is uncertain. Our strategy is to expand our operations into international markets.
Our Articles of Incorporation provides that, subject to limited exceptions, the Nevada Eighth Judicial District Court of Clark County, Nevada shall be, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action or proceeding brought in the name or right of the Corporation or on its behalf, (ii) any action asserting a claim for breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of Nevada Revised Statutes Chapters 78 or 92A, our Articles of incorporation or our Bylaws, (iv) any action to interpret, apply, enforce or determine the validity of our Articles of Incorporation or Bylaws, or (v) any action asserting a claim governed by the internal affairs doctrine.
Our Articles of Incorporation provide that, subject to limited exceptions, the Nevada Eighth Judicial District Court of Clark County, Nevada shall be, to the fullest extent permitted by law, the sole and exclusive forum for: (i) any derivative action or proceeding brought in the name or right of the Corporation or on its behalf, (ii) any action asserting a claim for breach of a fiduciary duty owed by any of our directors, officers, employees, or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of Nevada Revised Statutes Chapters 78 or 92A, our Articles of incorporation, or our Bylaws, (iv) any action to interpret, apply, enforce, or determine the validity of our Articles of Incorporation or Bylaws, or (v) any action asserting a claim governed by the internal affairs doctrine.
See the section titled “ Legal Proceedings ” for further information on the delisting notice. 27 While shares of our common stock continue to be listed and traded on Nasdaq, there can be no assurance that we will continue to meet Nasdaq listing standards.
See the section titled “ Legal Proceedings ” for further information on the delisting notice. While shares of our common stock continue to be listed and traded on Nasdaq, there can be no assurance that we will continue to meet Nasdaq listing standards.
Our management team has limited experience managing a public company. Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies.
Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies.
These factors raise substantial doubt about our ability to continue as a going concern over the next 12 months and our independent auditors have included a “going concern” explanatory paragraph in their report on our financial statements as of and for the years ended December 31, 2024 and 2023.
These factors raise substantial doubt about our ability to continue as a going concern over the next 12 months and our independent auditors have included a “going concern” explanatory paragraph in their report on our financial statements as of and for the years ended December 31, 2025 and 2024.
For example, changes to U.S. tax laws enacted in December 2017 had a significant impact on our tax obligations and effective tax rate beginning 2018, and the full consequences of the significant changes to U.S. tax laws as a result of the Tax Cuts and Jobs Act of 2017 (the “Tax Cuts and Jobs Act”) have not yet been fully determined.
For example, changes to U.S. tax laws enacted in December 2017 had a significant impact on our tax obligations and effective tax rate beginning 2018, and the full consequences of the significant changes to U.S. tax laws as a result of the Tax Cuts and Jobs Act of 2017 have not yet been fully determined.
We cannot assure you that our portfolio of primarily lithium-ion products will remain competitive with products based on new technologies. 22 We may not be able to adequately protect our proprietary intellectual property and technology and we may need to defend ourselves against intellectual property infringement claims.
We cannot assure you that our portfolio of primarily lithium-ion products will remain competitive with products based on new technologies. 21 We may not be able to adequately protect our proprietary intellectual property and technology and we may need to defend ourselves against intellectual property infringement claims.
As our costs increase, we may not be able to generate sufficient revenue to achieve and sustain profitability. · Our audited financial statements include a statement that there is a substantial doubt about our ability to continue as a going concern and a continuation of negative financial trends could result in our inability to continue as a going concern. · Our results of operations could be adversely affected by changes in the cost and availability of raw materials and we are dependent on third-party manufacturers and suppliers. · Increases in costs, disruption of supply or shortage of any of our battery components, such as electronic and mechanical parts, or raw materials used in the production of such parts, could harm our business. · Our business and future growth depends on the needs and success of our customers. · We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our sales in 2024 and 2023. · If we fail to expand our sales and distribution channels, our business could suffer. · The uncertainty in global economic conditions could negatively affect our results of operations. · We are currently, and will likely continue to be, dependent on our two warehouse facilities.
As our costs increase, we may not be able to generate sufficient revenue to achieve and sustain profitability. ● Our audited financial statements include a statement that there is a substantial doubt about our ability to continue as a going concern and a continuation of negative financial trends could result in our inability to continue as a going concern. ● Our results of operations could be adversely affected by changes in the cost and availability of raw materials and our reliance on third-party manufacturers and suppliers. ● Increases in costs, disruption of supply, or shortage of any of our battery components such as electronic and mechanical parts could harm our business. ● Our business and future growth depends on the needs and success of our customers. ● We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our sales in 2025 and 2024. ● If we fail to expand our sales and distribution channels, our business could suffer. ● The uncertainty in global economic conditions could negatively affect our results of operations. ● We are currently, and will likely continue to be, dependent on a limited number of warehouse facilities.
Any of the above factors could, in turn, negatively impact our sales and earnings generation and result in a material adverse effect on our business, cash flow, results of operations and financial position. Government reviews, inquiries, investigations, and actions could harm our business or reputation.
Any of the above factors could, in turn, negatively impact our sales and earnings generation and result in a material adverse effect on our business, cash flows, results of operations, and financial position. Government reviews, inquiries, investigations, and actions could harm our business or reputation.
While we devote significant resources to security measures to protect our systems and data, these measures cannot provide absolute security. 23 In addition, we provide confidential and proprietary information to our third-party business partners in certain cases where doing so is necessary to conduct our business.
While we devote significant resources to security measures to protect our systems and data, these measures cannot provide absolute security. 22 In addition, we provide confidential and proprietary information to our third-party business partners in certain cases where doing so is necessary to conduct our business.
Our audited financial statements as of and for the years ended December 31, 2024 and 2023 were prepared on the assumption that we would continue as a going concern. For the years ended December 31, 2024 and 2023, we sustained recurring losses and negative cash flows from operations.
Our audited financial statements as of and for the years ended December 31, 2025 and 2024 were prepared on the assumption that we would continue as a going concern. For the years ended December 31, 2025 and 2024, we sustained recurring losses and negative cash flows from operations.
Our common stock currently is listed on Nasdaq. We are required to meet specified financial requirements in order to maintain such listing, including a requirement that the bid price for our common stock remain above $1.00.
Our common stock is currently listed on the Nasdaq Capital Market. We are required to meet specified financial requirements in order to maintain such listing, including a requirement that the bid price for our common stock remain above $1.00.
There is an ongoing risk of new or additional tariffs being put in place on lithium-ion batteries or related parts which would significantly increase our cost of goods sold, which could require us to increase prices to our customers or, if we are unable to do so, result in lower gross margins on the products sold by us.
There is an ongoing risk of new or additional tariffs being imposed on lithium-ion batteries or related parts which would significantly increase our cost of goods sold, which could require us to increase prices to our customers or, if we are unable to do so, result in lower gross margins on the products sold by us.
The summary should be read in conjunction with the more detailed risk factors set forth in this “Risk Factors” section and the other information contained in this Annual Report. Risks Related to Our Business · We operate in an extremely competitive industry and are subject to pricing pressures. · We have a history of losses.
The summary should be read in conjunction with the more detailed risk factors set forth in this “ Risk Factors ” section and the other information contained in this Annual Report. Risks Related to Our Business ● We operate in an extremely competitive industry and are subject to pricing pressures. ● We have a history of losses.
Our ability to achieve significant and sustained penetration of key developing markets, including the RV marine, and home energy markets, will depend upon our success in developing or acquiring these and other technologies, either independently, through joint ventures, or through acquisitions, which in each case may require significant capital.
Our ability to achieve significant and sustained penetration of key developing markets, including the RV, marine, and industrial markets, will depend upon our success in developing or acquiring these and other technologies, either independently, through joint ventures, or through acquisitions, which in each case may require significant capital.
We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our sales in 2024 and 2023. We currently derive a significant portion of our revenue from a limited number of customers.
We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our sales in 2025 and 2024. We currently derive a significant portion of our revenue from a limited number of customers.
In addition, during the years ended December 31, 2024 and 2023, approximately 82% and 70%, respectively, of inventory purchases were made from foreign suppliers in Asia. Our dependence on a limited number of key third-party manufacturers and suppliers exposes us to challenges and risks in ensuring that we maintain adequate supplies required to produce our batteries.
In addition, during the years ended December 31, 2025 and 2024, approximately 55% and 82%, respectively, of inventory purchases were made from foreign suppliers in Asia. Our dependence on a limited number of key third-party manufacturers and suppliers exposes us to challenges and risks in ensuring that we maintain adequate supplies required to produce our batteries.
Any failure by us to successfully launch new products, or a failure by us to meet our customers criteria in order to accept such products, could adversely affect our results.
Any failure by us to successfully launch new products, or a failure by us to meet our customers’ criteria in order to accept such products, could adversely affect our results.
Even if an inquiry does not result in these types of determinations, regulatory authorities could cause us to incur substantial costs or require us to change our business practices in a manner materially adverse to our business, and it potentially could create negative publicity which could harm our business and/or reputation. 19 We are currently, and will likely continue to be, dependent on our two warehouse facilities.
Even if an inquiry does not result in these types of determinations, regulatory authorities could cause us to incur substantial costs or require us to change our business practices in a manner materially adverse to our business, and it potentially could create negative publicity which could harm our business and/or reputation. 18 We are currently, and will likely continue to be, dependent on a limited number of warehouse facilities.
Any potential delisting of our common stock from Nasdaq may have materially adverse consequences to our stockholders, including: a reduced market price and liquidity with respect to our shares of common stock, which could make our ability to raise new investment capital more difficult; limited dissemination of the market price of our common stock; limited news coverage; limited interest by investors in our common stock; volatility of the prices of our common stock due to low trading volume; our common stock being considered a “penny stock,” which would result in broker-dealers participating in sales of our common stock being subject to the regulations set forth in Rules 15g-2 through 15g-0 promulgated under the Exchange Act; increased difficulty in selling our common stock in certain states due to “blue sky” restrictions; and limited ability to issue additional securities or secure additional financing.
Any potential delisting of our common stock from Nasdaq may have materially adverse consequences to our stockholders, including: a reduced market price and liquidity with respect to our shares of common stock, which could make our ability to raise new investment capital more difficult; limited dissemination of the market price of our common stock; limited news coverage; limited interest by investors in our common stock; volatility of the prices of our common stock due to low trading volume; our common stock being considered a “penny stock,” which would result in broker-dealers participating in sales of our common stock being subject to the regulations set forth in Rules 15g-2 through 15g-0 promulgated under the Exchange Act; increased difficulty in selling our common stock in certain states due to “blue sky” restrictions; and limited ability to issue additional securities or secure additional financing. 26 The exercise of outstanding warrants may result in a substantial increase in the number of shares of our common stock that are outstanding.
We have been required to make assumptions and apply judgments, including the durability and reliability of our products, regarding their performance over the estimated warranty period and our anticipated rate of warranty claims.
We have been required to make assumptions and apply judgments, including the durability and reliability of our products, regarding their performance over the estimated warranty period and the anticipated number and value of warranty claims.
We generated net losses of $13.5 million and $7.5 million for the years ended December 31, 2024 and 2023, respectively. 14 Part of our business strategy is to focus on our long-term growth. As a result, our profitability may be lower in the near-term than it would be if our strategy were to maximize short-term profitability.
We generated net losses of $6.2 million and $13.5 million for the years ended December 31, 2025 and 2024, respectively. 13 Part of our business strategy is to focus on our long-term growth. As a result, our profitability may be lower in the near-term than it would be if our strategy were to maximize short-term profitability.
If our facilities become inoperable for any reason, our ability to produce our products could be negatively impacted. · We could face potential product liability or warranty claims relating to our products, including the components thereof, which could reduce market adoption, result in reputation damage, and result in significant costs and liabilities, which would reduce our profitability. · Our operations expose us to litigation, tax, environmental, and other legal compliance risks. · Our failure to introduce new products and product enhancements that respond to customer and end consumer demand, and any broad market acceptance of new technologies introduced by our competitors, could adversely affect our business. · We may not be able to adequately protect our proprietary intellectual property and technology and we may need to defend ourselves against intellectual property infringement claims. · Any acquisitions that we complete may dilute stockholder ownership interests in the Company, may have adverse effects on our financial condition and results of operations and may cause unanticipated liabilities. · If our electronic data is compromised, or we experience a failure in our information technology or storage systems, our business could be significantly harmed. · Our ability to raise capital in the future may be limited, which could make us unable to fund our capital requirements and our stockholders may be diluted by future securities offerings. · We depend on our senior management team and other key employees, and significant attrition within our management team or unsuccessful succession planning could adversely affect our business. 13 Risks Related to Ownership of our Common Stock · Our stock price may fluctuate significantly, and you may lose all or a part of your investment. · Sales of substantial amounts of our securities in the public markets, or the perception that such sales might occur, could reduce the price of our securities and may dilute your voting power and your ownership interest in us. · The exercise of outstanding warrants may result in a substantial increase in the number of shares of our common stock that are outstanding. · The Series A Warrants and Series B Warrants may have an adverse effect on the market price of our common stock and make it more difficult to effect a business combination. · The Reverse Stock Split cash true-up payment provision in the Series A Warrants we sold in the August 2024 Public Offering may have a material adverse impact on our financial condition, may impede our ability to raise additional capital, and may discourage an acquisition of us by a third party.
If our facilities become inoperable for any reason, our ability to produce our products could be negatively impacted. ● We could face potential product liability or warranty claims relating to our products, including the components thereof, which could reduce market adoption, result in reputation damage, and result in significant costs and liabilities, which would reduce our profitability. ● Our operations expose us to litigation, tax, environmental, and other legal compliance risks. ● Our failure to introduce new products and product enhancements that respond to customer and end consumer demand, and any broad market acceptance of new technologies introduced by our competitors, could adversely affect our business. ● We may not be able to adequately protect our proprietary intellectual property and technology and we may need to defend ourselves against intellectual property infringement claims. ● Any acquisitions that we complete may dilute stockholder ownership interests in the Company, may have adverse effects on our financial condition and results of operations and may cause unanticipated liabilities. ● If our electronic data is compromised, or we experience a failure in our information technology or storage systems, our business could be significantly harmed. ● Our ability to raise capital in the future may be limited, which could make us unable to fund our capital requirements and our stockholders may be diluted by future securities offerings. ● We depend on our senior management team and other key employees, and significant attrition within our management team or unsuccessful succession planning could adversely affect our business. 12 Risks Related to Ownership of Our Common Stock ● Our stock price may fluctuate significantly, and you may lose all or a part of your investment. ● Sales of substantial amounts of our securities in the public markets, or the perception that such sales might occur, could reduce the price of our securities and may dilute your voting power and your ownership interest in us. ● The exercise of outstanding warrants may result in a substantial increase in the number of shares of our common stock that are outstanding.
These laws may also assess costs to repair damage to natural resources. We may be responsible for remediating damage to our properties caused by former owners by our existing operations or by our future operations. Changes in environmental and climate laws or regulations could lead to new or additional investment in production designs and could increase environmental compliance expenditures.
We may be responsible for remediating damage to our properties caused by former owners by our existing operations or by our future operations. 20 Changes in environmental and climate laws or regulations could lead to new or additional investment in production designs and could increase environmental compliance expenditures.
In addition to general risks associated with international expansion, such as foreign currency fluctuations and political and economic instability, we face the following risks and uncertainties any of which could prevent us from selling our products in a particular country or harm our business operations once we have established operations in that country: the difficulties and costs of localizing products for foreign markets; the need to modify our products to comply with local requirements in each country; and our lack of a direct sales presence in other countries, our need to establish relationships with distribution partners to sell our products in these markets and our reliance on the capabilities and performance of these distribution partners.
In addition to general risks associated with international expansion, such as foreign currency fluctuations and political and economic instability, we face the following risks and uncertainties any of which could prevent us from selling our products in a particular country or harm our business operations once we have established operations in that country: the difficulties and costs of localizing products for foreign markets; the need to modify our products to comply with local requirements in each country; and our lack of a direct sales presence in other countries, our need to establish relationships with distribution partners to sell our products in these markets and our reliance on the capabilities and performance of these distribution partners. 17 If we are unable to expand into international markets in the manner expected, our business, financial condition, results of operations and prospects may be materially and adversely affected.
Our expansion plans may also adversely affect our existing operations and thereby have a material adverse effect on our business, prospects, financial condition and results of operations. Our results of operations may be negatively impacted by public health epidemics or outbreaks. We are exposed to risks associated with public health crises and epidemics or pandemics.
Our expansion plans may also adversely affect our existing operations and thereby have a material adverse effect on our business, prospects, financial condition and results of operations. 16 Our results of operations may be negatively impacted by public health epidemics or outbreaks.
During the year ended December 31, 2023, sales to two customers totaled approximately 21% of our gross sales, and four other customers had accounts receivable balances representing 92% of total accounts receivable as of December 31, 2023. There are inherent risks whenever a large percentage of gross sales are concentrated with a limited number of customers.
During the year ended December 31, 2024, sales to one customer represented approximately 14% of our gross sales, and four other customers had accounts receivable balances representing 60% of total accounts receivable as of December 31, 2024. There are inherent risks whenever a large percentage of gross sales are concentrated with a limited number of customers.
Sales to one customer totaled approximately 14% of our gross sales during the year ended December 31, 2024, and four other customers had accounts receivable balances representing 60% of our total accounts receivable as of December 31, 2024.
Sales to four customers totaled approximately 60% of our gross sales during the year ended December 31, 2025, and these customers had accounts receivable balances representing 69% of our total accounts receivable as of December 31, 2025.
We are subject to a variety of litigation, tax, environmental, health and safety and other legal compliance risks. These risks include, among other things, possible liability relating to product liability matters, personal injuries, intellectual property rights, contract-related claims, government contracts, taxes, health and safety liabilities, environmental matters and compliance with competition laws and laws governing improper business practices.
These risks include, among other things, possible liability relating to product liability matters, personal injuries, intellectual property rights, contract-related claims, government contracts, taxes, health and safety liabilities, environmental matters, and compliance with competition laws and laws governing improper business practices. We could be charged with wrongdoing as a result of such matters.
If our existing stockholders sell substantial amounts of our securities in the public market, including the shares of common stock issued or issuable upon the exercise of the August 2024 Pre-Funded Warrants, Series A Warrants and Series B Warrants issued in the August 2024 Public Offering, as well as shares of common stock issued in the January 2025 Registered Direct Offering (including the January 2025 Pre-Funded Warrant Shares) and upon the issuance of shares of common stock upon the exercise, if any, of the January 2025 Warrants, and shares issued as consideration in any future acquisitions, or the market perceives that such sales may occur, the market price of our securities could fall and we may be unable to sell our securities in the future.
If our existing stockholders sell substantial amounts of our securities in the public market, including the shares of common stock issued or issuable upon the exercise of outstanding warrants or warrants that may be issued in the future, and shares issued as consideration in any future acquisitions, or the market perceives that such sales may occur, the market price of our securities could fall and we may be unable to sell our securities in the future.
The perception in the public market that our stockholders might sell securities could also depress our market price. As of March 25, 2025, we had 3,144,468 shares of common stock outstanding.
The perception in the public market that our stockholders might sell securities could also depress our market price. As of March 11, 2026, we had 10,846,135 shares of common stock outstanding.
An increase in our estimates of future warranty obligations could cause us to increase the amount of warranty obligations. If our warranty reserves are inadequate to cover future warranty claims on our energy storage products, our financial condition and results of operations could be adversely affected. Our operations expose us to litigation, tax, environmental and other legal compliance risks.
If our warranty reserves are inadequate to cover future warranty claims on our energy storage products, our financial condition and results of operations could be adversely affected. Our operations expose us to litigation, tax, environmental and other legal compliance risks. We are subject to a variety of litigation, tax, environmental, health and safety and other legal compliance risks.
If we cannot generate sufficient cash flow from operations to service our lease and debt obligations or the Reverse Stock Split cash true-up payment, we may need to further refinance our debt, dispose of assets or issue equity to obtain necessary funds.
If we cannot generate sufficient cash flow from operations to service our lease and any current or future debt obligations, we may need to refinance such obligations, dispose of assets, or issue equity to obtain necessary funds.
We rely on a combination of copyright, trademark, patent and trade secret laws, non-disclosure agreements and other confidentiality procedures and contractual provisions to establish, protect and maintain our proprietary intellectual property and technology and other confidential information. Certain of these technologies, especially battery case construction, are important to our business and are not protected by patents.
We rely on a combination of copyright, trademark, patent and trade secret laws, non-disclosure agreements, and other confidentiality procedures and contractual provisions to establish, protect, and maintain our proprietary intellectual property and technology and other confidential information.
If our facilities become inoperable for any reason, our ability to produce our products could be negatively impacted. We have a warehouse location in Redmond, Oregon and another in Elkhart, Indiana.
If our facilities become inoperable for any reason, our ability to produce our products could be negatively impacted. We have two adjacent warehouse facilities in Redmond, Oregon and a third warehouse facility in Elkhart, Indiana, which support the storage, assembly, and distribution of our products.
The demand for our products ultimately depends on consumers in our current end markets (primarily owners of RVs and marine vessels). These markets can be impacted by numerous factors, including, consumer spending, travel restrictions, fuel costs and energy demands (including an increasing trend towards the use of green energy) and overall economic conditions.
These markets can be impacted by numerous factors, including, consumer spending, travel restrictions, fuel costs and energy demands (including an increasing trend towards the use of green energy) and overall economic conditions. Increases or decreases in these variables may significantly impact the demand for our products.
As of December 31, 2024, we had 200,000,000 shares of common stock authorized, of which 2,096,082 were issued.
As of December 31, 2025, we had 200,000,000 shares of common stock authorized, of which 9,781,739 were issued.
We continue to incur considerable legal costs as a result of operating as a public company, and our management will be required to devote substantial time to comply with public company regulations.
If and to the extent the Series A Warrants and Series B Warrants are exercised, our investors may experience dilution to their holdings. We continue to incur considerable legal costs as a result of operating as a public company, and our management will be required to devote substantial time to comply with public company regulations.
We have a relatively limited operating history and must project how our offerings will perform over the estimated warranty period and the estimated reserve may have material changes. Historically, there have been very few claims and costs for repairs or replacement parts have been nominal.
We have a relatively limited operating history and must project how our offerings will perform over the estimated warranty period and the estimated reserve may have material changes.
See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—January 2025 Registered Direct Offering and Warrant Private Placement ” for additional information regarding the offering. 26 Our Articles of Incorporation authorizes us to issue shares of common stock and options, rights, warrants and appreciation rights relating to common stock for the consideration and on the terms and conditions established by our Board in its sole discretion, whether in connection with our incentive plans, acquisitions or otherwise.
Our Articles of Incorporation authorizes us to issue shares of common stock and options, rights, warrants, and appreciation rights relating to common stock for the consideration and on the terms and conditions established by our Board in its sole discretion, whether in connection with our incentive plans, acquisitions, or otherwise.
Our lithium-ion batteries use LiFePO4 as the cathode material for lithium-ion cells. On rare occasions, lithium-ion cells can rapidly release the energy they contain by releasing smoke and flames in a manner that can ignite nearby materials and other lithium-ion cells.
Our lithium-ion batteries use LiFePO4 as the cathode material for lithium-ion cells. On rare occasions, lithium-ion cells can rapidly release the energy they contain by releasing smoke and flames in a manner that can ignite nearby materials and other lithium-ion cells. This could subject us to lawsuits, product recalls, or redesign efforts, all of which would be time-consuming and expensive.
From time to time, we receive formal and informal inquiries from various government regulatory authorities, as well as self-regulatory organizations, about our business and compliance with local laws, regulations or standards.
The regulatory environment with regard to our business is evolving, and officials often exercise broad discretion in deciding how to interpret and apply applicable regulations. From time to time, we receive formal and informal inquiries from various government regulatory authorities, as well as self-regulatory organizations, about our business and compliance with local laws, regulations or standards.
In addition, 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.
In addition, 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 as well as concerns or rumors regarding such events, could adversely affect the financial services industry generally and our liquidity and financial condition.
However, if we are unable to enter into or maintain commercial arrangements with these suppliers on favorable terms, or if any of these suppliers experience unanticipated delays, disruptions or shutdowns or other difficulties ramping up their supply of products or materials to meet our requirements, our assembly operations and customer deliveries would be seriously impacted, potentially resulting in liquidated damages and harm to our customer relationships.
However, if we are unable to enter into or maintain commercial arrangements with these suppliers on favorable terms, our assembly operations and customer deliveries would be seriously impacted, potentially resulting in contractual penalties or other liabilities and harm to our customer relationships.
If we are unable to expand our sales and distribution channels, we may not be able to increase revenue or achieve market acceptance of our products. We are expanding our direct sales force and plan to recruit additional sales personnel.
If we are unable to expand our sales and distribution channels, we may not be able to increase revenue or achieve market acceptance of our products. The company may expand its direct sales force by recruiting additional sales personnel. Newly-hired sales personnel will require training and may take time to achieve full productivity.
These systems and technologies must be refined, updated and replaced with more advanced systems on a regular basis in order for us to meet our customers’ demands and expectations.
A failure to keep pace with developments in technology could impair our operations or competitive position. Our business continues to demand the use of sophisticated systems and technology. These systems and technologies must be refined, updated, and replaced with more advanced systems on a regular basis in order for us to meet our customers’ demands and expectations.
In addition, our sales are completed on a purchase order basis and most are without firm, long-term revenue commitments or sales arrangements. It is not possible for us to predict the future level of demand for our products and services that will be generated by our customers or the future demand for the products and services of our other customers.
It is not possible for us to predict the future level of demand for our products and services that will be generated by our customers or the future demand for the products and services of our other customers.
Sales of our RV and marine power products, for example, depend significantly on demand for new electric products for RVs and marine applications, which, in turn, depends on end-user demand for RVs and boats. The uncertainty in global economic conditions varies by geographic location and can result in substantial volatility in global credit markets, particularly in the United States.
Sales of our RV and marine power products, for example, depend significantly on demand for new electric products for RVs and marine applications, which, in turn, depends on end-user demand for RVs and boats.
We may not be successful in continuing to implement these requirements and implementing them could adversely affect our business, results of operations and financial condition. In addition, if we fail to implement the requirements with respect to our internal accounting and audit functions, our ability to report our financial results on a timely and accurate basis could be impaired.
We may not be successful in continuing to implement these requirements and implementing them could adversely affect our business, results of operations, and financial condition.
However, warranty reserves include our management’s best estimates of the projected costs to repair or replace items under warranty, which is based on estimated failure rates. Our assumptions could prove to be materially different from the actual performance of our products, causing us to incur substantial expense to repair or replace defective products in the future.
Our assumptions could prove to be materially different from the actual performance of our products, causing us to incur substantial expense to repair or replace defective products in the future. An increase in our estimates of future warranty obligations could cause us to increase the amount of warranty obligations.
In the area of taxes, changes in tax laws and regulations, as well as changes in related interpretations and other tax guidance could materially impact our tax receivables and liabilities and our deferred tax assets and tax liabilities.
If convicted or found liable, we could be subject to significant fines, penalties, repayments, or other damages (in certain cases, treble damages). In the area of taxes, changes in tax laws and regulations, as well as changes in related interpretations and other tax guidance could materially impact our tax liabilities and our deferred tax assets and tax liabilities.
For example, the COVID-19 global pandemic adversely impacted our operations, supply chains, and distribution systems as well as those of our third-party suppliers and manufacturers, which are located in the United States, Asia and Europe.
For example, the COVID-19 global pandemic adversely impacted our operations, supply chains, and distribution systems as well as those of our third-party suppliers and manufacturers, and similar disruptions could occur in the future due to other public health events or comparable global disruptions.
In addition, private parties, including employees, could bring personal injury or other claims against us due to the presence of, or exposure to, hazardous substances used, stored or disposed of by us or contained in our products. 21 Certain environmental laws assess liability on owners or operators of real property for the cost of investigation, removal or remediation of hazardous substances at their current or former properties or at properties at which they have disposed of hazardous substances.
In addition, private parties, including employees, could bring personal injury or other claims against us due to the presence of, or exposure to, hazardous substances used, stored or disposed of by us or contained in our products.
If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile. 29 Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We choose to avail ourselves of this extended transition period and defer adoption of certain changes in accounting standards.
We currently rely on multiple third-party manufacturers located in Asia to manufacture our batteries and battery cells, and we intend to continue to rely on these suppliers going forward. Lithium-ion batteries are our most significant raw material and are used along with significant amounts of plastics, steel, copper and other materials in our assembly and manufacturing processes.
Lithium-ion batteries are our most significant raw material and are used along with significant amounts of plastics, steel, copper and other materials in our assembly and manufacturing processes.
The exercise of the Series A Warrants and, to a lesser extent, the Series B Warrants and January 2025 Warrants could result and have resulted in a substantial increase in the number of shares of common stock outstanding and therefore materially dilute the ownership percentage of currently outstanding shares of common stock.
The exercise of these warrants could result and have resulted in a substantial increase in the number of shares of common stock outstanding and therefore materially dilute the ownership percentage of currently outstanding shares of common stock. See “ Note 7, Equity and Debt Financings ” for additional information regarding the offerings.
Any insurance we maintain may not be available on terms acceptable to us or such coverage may not be adequate for liabilities actually incurred. Further, any claim or product recall could result in adverse publicity against us, which could adversely affect our sales or increase our costs.
In the event that any of our products prove to be defective, we may be required to recall or redesign such products, which would result in significant unexpected costs. Any insurance we maintain may not be available on terms acceptable to us or such coverage may not be adequate for liabilities actually incurred.
If we are unsuccessful in our succession planning efforts, the continuity of our business and results of operations could be adversely affected. 24 Changes in tax laws or tax rulings could materially affect our financial position, results of operations, and cash flows.
Any additional attrition among senior management or key employees, or any failure of our succession planning efforts, could adversely affect our business, financial condition, and results of operations. 23 Changes in tax laws or tax rulings could materially affect our financial position, results of operations, and cash flows.
Increases in costs, disruption of supply or shortage of any of our battery components, such as electronic and mechanical parts, or raw materials used in the production of such parts, could harm our business. From time to time, we may experience increases in the cost or a sustained interruption in the supply or shortage of battery components.
From time to time, we may experience increases in the cost or a sustained interruption in the supply or shortage of battery components.
New sales personnel will require training and take time to achieve full productivity, and there is strong competition for qualified sales personnel in our business. In addition, we believe our future success is dependent upon establishing successful relationships with a variety of distribution partners. To date, we have entered into agreements with only a small number of these distribution partners.
The Company operates in a competitive market for experienced sales professionals, which may impact recruiting efforts. In addition, we believe our future success is dependent upon establishing successful relationships with a variety of distribution partners. To date, we have entered into agreements with only a small number of these distribution partners.
Any such litigation or claims, whether or not valid or successful, could result in substantial costs and diversion of resources and our management’s attention.
In addition, entities holding intellectual property rights relating to our technology may bring suits alleging infringement of such rights or otherwise asserting their rights and seeking licenses. Any such litigation or claims, whether or not valid or successful, could result in substantial costs and diversion of resources and our management’s attention.
As we operate in various locations around the world, our operations in certain countries are subject to significant governmental scrutiny and may be adversely impacted by the results of such scrutiny. The regulatory environment with regard to our business is evolving, and officials often exercise broad discretion in deciding how to interpret and apply applicable regulations.
As we operate in various locations around the world, our operations in certain countries are subject to significant governmental scrutiny and may be adversely impacted by the results of such scrutiny, including regulations relating to environmental compliance, hazardous materials, product safety, and international trade.
We cannot predict if investors will find our securities less attractive because we chose to rely on these exemptions.
We cannot predict if investors will find our securities less attractive because we chose to rely on these exemptions. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
Our product offerings and energy storage solutions, which are complex, could contain design- or manufacturing-related defects, or may not operate at expected performance levels.
Our product offerings and energy storage solutions, which are complex, could contain design- or manufacturing-related defects, or may not operate at expected performance levels. We face an inherent business risk of exposure to product liability claims in the event that the use of any of our products results in personal injury or property damage.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares. 30 Risks Related to Our Capital Structure Our long-term lease and debt obligations could adversely affect our ability to raise additional capital to fund operations and limit our ability to enter into certain transactions.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.
The imposition of additional tariffs by the United States could trigger the adoption of tariffs by other countries as well. Any resulting escalation of trade tensions, including a “trade war,” could have a significant adverse effect on world trade and the world economy, as well as on our results of operations.
Any resulting escalation of trade tensions, including a “trade war,” could have a significant adverse effect on world trade and the world economy, as well as on our results of operations. At this time, we cannot predict whether additional tariffs or trade restrictions will be imposed or the extent to which they may impact our business.
As of December 31, 2024, we had total liabilities of $6.6 million, of which $5.0 million is the suspended liability for the true-up payment related to the August 8, 2024 capital raise, $799,000 was related to operating lease liabilities, and $230,000 was related to debt obligations.
As of December 31, 2025, we had total liabilities of $1.5 million, of which $710,000 was related to operating lease liabilities and $197,000 was related to debt obligations.
Any such cost increase or supply interruption could materially and negatively impact our business, prospects, financial condition and results of operations. 16 The prices for our battery components fluctuate depending on market conditions and global demand, and could adversely affect our business, prospects, financial condition and results of operations.
The timing, duration and magnitude of any such disruptions are uncertain and may vary by component type. For example, shortages could affect the supply of electronic components used in the manufacture of our battery components. Any such cost increase or supply interruption could materially and negatively impact our business, prospects, financial condition and results of operations.
At this time, we cannot predict how such enacted tariffs will impact our business. We may otherwise experience supply disruptions or delays, and although we carefully manage our inventory and lead-times, our suppliers may not continue to provide us with battery components in our required quantities, to our required specifications and quality levels or at attractive prices.
In addition, although we carefully manage our inventory and supplier lead times, our suppliers may not continue to provide us with battery components in the quantities we require, to our required specifications and quality standards, or at commercially reasonable prices. Our business and future growth depends on the needs and success of our customers.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−1 removed11 unchanged
Biggest changeWhile we do not believe that our business strategy, results of operations or financial condition have been materially adversely affected by any cybersecurity incidents, cybersecurity threats are pervasive and, similar to other global financial institutions, we, as well as our employees, customers, regulators, service providers, and other third parties have experienced a significant increase in information security and cybersecurity risk in recent years and will likely continue to be the target of cyber attacks.
Biggest changeIf a cybersecurity incident is determined to be a potentially material cybersecurity incident, our disclosure controls and procedures define the steps to determine materiality and disclose such a material cybersecurity incident. 30 While we do not believe that our business strategy, results of operations, or financial condition have been materially adversely affected by any cybersecurity incidents, cybersecurity threats are pervasive and, similar to other global financial institutions, we, as well as our employees, customers, regulators, service providers, and other third parties have experienced a significant increase in information security and cybersecurity risk in recent years and will likely continue to be the target of cyber attacks.
Our Audit Committee has the authority to oversee and review the adequacy of our cybersecurity, information and technology security, and data privacy programs, procedures, and policies. 32 The Audit Committee regularly receives updates from management with respect to our efforts to manage data protection, cybersecurity, and information and technology risks, and assesses the results of reviews from internal audits.
Our Audit Committee has the authority to oversee and review the adequacy of our cybersecurity, information and technology security, and data privacy programs, procedures, and policies. The Audit Committee regularly receives updates from management with respect to our efforts to manage data protection, cybersecurity, and information and technology risks, and assesses the results of reviews from internal audits.
While regular meetings of the Audit Committee are scheduled on a quarterly cadence, the Audit Committee is authorized to meet with management or individual directors at any time it deems appropriate to discuss matters relevant to the committee.
While regular meetings of the Audit Committee are scheduled on a quarterly cadence, the Audit Committee is authorized to meet with management or individual director s at any time it deems appropriate to discuss matters relevant to the committee.
Removed
If a cybersecurity incident is determined to be a potentially material cybersecurity incident, our disclosure controls and procedures define the steps to determine materiality and disclose such a material cybersecurity incident.

Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−3 removed1 unchanged
Biggest changeCurrently, it is primarily used for office space and as a backup location for warehousing and distribution to local customers. The square footage of this facility is approximately 7,000 square feet, leased at a cost of $4,900 per month.
Biggest changeElkhart is a hub for RV manufacturing in the United States. The square footage of this facility is approximately 7,000 square feet and rental cost is approximately $4,900 per month.
We believe these facilities are sufficient to meet our current and anticipated needs in the near term and that additional space can be obtained on commercially reasonable terms as needed.
We believe these facilities are sufficient to meet our current and anticipated needs in the near term and that additional space can be obtained on commercially reasonable terms as needed. 31
From January 31, 2024 to January 30, 2025, the rental cost of our headquarters was approximately $19,600 per month. We previously leased a facility in Redmond, Oregon, which was primarily used for warehousing.
From January 31, 2025 to January 30, 2026, the rental cost of our headquarters is approximately $20,200 per month. In May of 2025, we leased a warehouse facility next door to our existing warehouse in Redmond, Oregon.
Removed
The square footage of this facility is approximately 33,770 square feet, and from February 1, 2024 to September 30, 2024, the rental cost of this facility was approximately $33,340 per month. On September 24, 2024, we voluntarily terminated the lease, effective as of October 1, 2024 as part of an effort to identify cost reduction opportunities.
Added
The square footage of this facility is approximately 6,545 square feet, and from May 1, 2025 to April 30, 2028, the rental cost of this warehouse is approximately $6,545 per month. We also lease a property in Elkhart, Indiana that provides office space for sales associates and a stocking location for several large manufacturers in the area.
Removed
We plan to continue operating our warehousing out of its Redmond, Oregon headquarters and Elkhart, Indiana locations. In connection with the termination of the lease, we paid one extra month’s rent, a $30,000 fee, and a broker commission of approximately $89,000.
Removed
The lease termination is expected to result in approximately $40,000 of cost savings per month over the 51 months following its termination. We also lease a property in Elkhart, Indiana. In 2024, it served to provide a stocking location for several large manufacturers in the area. Elkhart is a hub for RV manufacturing in the United States.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+2 added−2 removed1 unchanged
Biggest changeOn September 6, 2024, we received a staff determination from The Nasdaq Listing Qualifications Department of Nasdaq to delist our Common Stock from Nasdaq indicating that (i) we were not in compliance with Nasdaq Listing Rule 5550(a)(2) because the closing bid price per share for our Common Stock had closed below $1.00 for the previous 30 consecutive business days, and (ii) we are subject to the provisions contemplated under Nasdaq Listing Rule 5810(c)(3)(A)(iii) because, as of September 5, 2024, our Common Stock had a closing bid price of $0.10 or less for at least ten consecutive trading days (the “Staff Determination”).
Biggest changeOn January 29, 2026, we received a determination from the Staff that the bid price of the common stock had closed below the $1.00 minimum required by Nasdaq Listing Rule 5550(a)(2) for the prior 30 consecutive business days (the “Minimum Bid Price Requirement”) and that the Staff had determined to delist our securities from the Nasdaq Capital Market subject to a compliance period.
Removed
On September 12, 2024, the Company requested an appeal hearing on the Staff Determination from a Hearings Panel (the “Panel”) by filing a hearing request with Nasdaq pursuant to the procedures set forth in the Nasdaq Listing Rules, staying the delisting of the Company’s common stock pending the Panel’s decision Upon successful completion of the Reverse Stock Split, we received a letter from the Nasdaq Office of General Counsel on October 23, 2024, advising us that we had regained compliance with the minimum bid price continued listing requirements in Listing Rule 5550(a)(2) and that we are therefore in compliance with Nasdaq’s listing requirements.
Added
Nasdaq provided us with a 180-calendar day compliance period, or until July 28, 2026, to regain compliance with the listing rule. We are currently evaluating options to regain compliance and intend to timely regain compliance with the Minimum Bid Price Requirement.
Removed
Consequently, the scheduled hearing before the Panel on October 24, 2024 was cancelled. Our Common Stock continues to be listed and traded on Nasdaq. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 33 PART II
Added
Under Nasdaq rules, we are currently eligible to conduct a reverse stock split of our common stock to regain compliance if necessary.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−1 removed3 unchanged
Biggest changeStock Performance Graph As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by Item 201(e) of Regulation S-K.
Biggest changeStock Performance Graph As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by Item 201(e) of Regulation S-K. Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. [RESERVED]
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock began trading on Nasdaq on April 1, 2022 under the symbol “XPON.” As of March 25, 2025, there were approximately 16 registered holders of our common stock, which does not include beneficial owners of our common stock whose shares are held in the names of various securities brokers, dealers, and registered clearing agencies .
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock began trading on Nasdaq on April 1, 2022 under the symbol “XPON.” As of March 11, 2026, there were approximately 17 registered holders of our common stock, which does not include beneficial owners of our common stock whose shares are held in the names of various securities brokers, dealers, and registered clearing agencies .
Removed
Recent Sales of Unregistered Securities from Registered Securities There were no sales of unregistered equity securities during the fiscal year ended December 31, 2024 that were not previously reported in a Quarterly Report on Form 10-Q or Current Report on Form 8-K. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

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

79 edited+41 added−76 removed21 unchanged
Biggest changeThe information presented on an adjusted cost of sales basis, as we present such information, may not necessarily be comparable to similarly titled information presented by other companies, and may not be appropriate measures for comparing our performance relative to other companies. 41 Results of Operations Year Ended December 31, 2024, Compared to the Year Ended December 31, 2023 The following table sets forth certain operational data as a percentage of sales: Fiscal Years Ended December 31, 2024 2023 $ % of Net sales $ % of Net sales Net sales $ 5,624,939 100.0 % $ 5,981,134 100.0 % Cost of sales 4,469,711 79.5 4,405,611 73.7 Gross profit 1,155,228 20.5 1,575,523 26.3 Selling, general, and administrative expenses 7,909,219 140.6 8,745,135 146.2 Loss from operations (6,753,991 ) (120.1 ) (7,169,612 ) (119.9 ) Other expense - net 6,727,032 119.6 283,369 4.7 Loss before income taxes (13,481,023 ) (239.7 ) (7,452,981 ) (124.6 ) Net loss (13,479,475 ) (239.6 ) (7,456,274 ) (124.7 ) Net Sales Net sales for the year ended December 31, 2024 decreased by $356,000, or 6.0%, compared to the year ended December 31, 2023.
Biggest changeResults of Operations Year Ended December 31, 2025, Compared to the Year Ended December 31, 2024 The following table sets forth certain operational data as a percentage of sales: Years Ended December 31, 2025 2024 $ % of Net sales $ % of Net sales Net sales $ 9,651,870 100.0 % $ 5,624,939 100.0 % Cost of sales 8,314,472 86.1 4,469,711 79.5 Gross profit 1,337,398 13.9 1,155,228 20.5 Selling, general, and administrative expenses 12,040,903 124.8 7,909,219 140.6 Loss from operations (10,703,505 ) (110.9 ) (6,753,991 ) (120.1 ) Other (income) / expense - net (4,468,468 ) (46.3 ) 6,727,032 119.6 Loss before income taxes (6,235,037 ) (64.6 ) (13,481,023 ) (239.7 ) Net loss (6,235,187 ) (64.6 ) (13,479,475 ) (239.6 ) 38 Net Sales Net sales for the year ended December 31, 2025 increased by $4.0 million, or 71.6%, compared to the year ended December 31, 2024.
Our actual results may differ from these estimates under different assumptions or conditions. On a recurring basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in an estimate, if any, will be reflected in the consolidated financial statements prospectively from the date of the change in the estimate.
Our actual results may differ from these estimates under different assumptions or conditions. On a recurring basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in an estimate, if any, will be reflected in the financial statements prospectively from the date of the change in the estimate.
Now that these certifications have been completed, all of the batteries produced by us will have a UL Safety Certification, emphasizing our commitment to quality, safety and service for our customers. 39 Key Line Items Net Sales Our revenue is generated from the sale of products consisting primarily of batteries and accessories.
Now that these certifications have been completed, all of the batteries produced by us will have a UL Safety Certification, emphasizing our commitment to quality, safety and service for our customers. Key Line Items Net Sales Our revenue is generated from the sale of products consisting primarily of batteries and accessories.
Changes in assumptions used to estimate fair value could occur from stock pricing volatility depending on our performance and our position in the industry and changes in market interest rates which can result in materially different results. 47 Stock-Based Compensation We use the Black-Scholes option-pricing model to determine the fair value of option grants.
Changes in assumptions used to estimate fair value could occur from stock pricing volatility depending on our performance and our position in the industry and changes in market interest rates which can result in materially different results. Stock-Based Compensation We use the Black-Scholes option-pricing model to determine the fair value of option grants.
We expect to continue to incur additional losses for the foreseeable future, and we may need to raise additional debt or equity financing to expand our presence in the marketplace, develop new products, achieve operating efficiencies, and accomplish our long-term business plans over the next several years.
We expect to continue to incur additional losses for the foreseeable future, and we may need to raise additional debt or equity financing to expand 40 our presence in the marketplace, develop new products, achieve operating efficiencies, and accomplish our long-term business plans over the next several years.
For this reason, percentage amounts in this section may vary from those obtained by performing the same calculations using the figures in our consolidated financial statements included elsewhere in this Annual Report. Certain other amounts that appear in this section may not sum due to rounding.
For this reason, percentage amounts in this section may vary from those obtained by performing the same calculations using the figures in our financial statements included elsewhere in this Annual Report. Certain other amounts that appear in this section may not sum due to rounding.
We recognize revenue when control of goods or services is transferred to our customers in an amount that reflects the consideration it is expected to be entitled to in exchange for those goods or services. All of our sales are primarily within the United States.
We recognize revenue when control of goods or services is transferred to our customers in an amount that reflects the consideration it is expected to be entitled to in exchange for those goods or services. Our sales are primarily within the United States.
The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of US GAAP and complex tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our financial condition and results of operations.
The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of GAAP and complex tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our financial condition and results of operations.
We believe evaluating certain financial and operating measures on an adjusted basis is important as it excludes liquidation costs that are not indicative of our core results of operations and are largely outside of our control.
We believe evaluating certain financial and operating measures on an adjusted basis is important as it excludes costs that are not indicative of our core results of operations and are largely outside of our control.
These factors raise substantial doubt about our ability to continue as a going concern within 12 months after the date the financial statements for the year ended December 31, 2024 are issued. However, management is working to address its cash flow challenges, including by raising additional capital, managing inventory levels, identifying alternative supply chain resources, and managing operational expenses.
These factors raise substantial doubt about our ability to continue as a going concern within 12 months after the date the financial statements for the year ended December 31, 2025 are issued. However, management is working to address its cash flow challenges, including by raising additional capital, managing inventory levels, identifying alternative supply chain resources, and managing operational expenses.
Selling, General, and Administrative Expenses Selling, general, and administrative expenses consist primarily of salaries and benefits, legal and professional fees, and sales and marketing costs. Other costs include facility and related costs, research and development, software and information technology, and insurance.
Selling, General, and Administrative Expenses Selling, general, and administrative expenses consist primarily of salaries and benefits, legal and professional fees, and sales and marketing costs. Other significant costs include research and development, software and information technology, insurance, and facility and related costs.
Interest and Other Income, net Interest expense consists of interest costs on loans with interest rates ranging from 3.75% to 10.0% and amortization of convertible note costs. The amortized convertible note costs were $667,000 and $0 for the years ended December 31, 2024 and 2023, respectively. Provision for Income Taxes We are subject to corporate federal and state income taxes.
Interest and Other Income, net Interest expense consists of interest costs on loans with interest rates ranging from 3.75% to 10.0% and amortization of convertible note costs. The amortized convertible note costs were $0 and $667,000 for the years ended December 31, 2025 and 2024, respectively. Provision for Income Taxes We are subject to corporate federal and state income taxes.
This was offset by net proceeds of $132,000 received for the sale and disposal of property and equipment during the year ended December 31, 2024, which included property and equipment and leasehold improvements related to the warehouse lease terminated in September 2024, as well as the sale of three vehicles.
This was offset by net proceeds of $133,000 received for the sale and disposal of property and equipment during the year ended December 31, 2024, which included property and equipment and leasehold improvements related to the warehouse lease terminated in September 2024, as well as the sale of three vehicles.
In addition, in April 2022, the Company secured a commercial line of up to $300,000 to be used to finance vehicle purchases, which was increased to $350,000 in April 2023, renewed in April 2024 for the same amount, and expires in April 2025, which we plan to renew again.
In April 2022, the Company secured a commercial line of up to $300,000 to be used to finance vehicle purchases, which was increased to $350,000 in April 2023, renewed in April 2024 and April 2025 for the same amount, and expires in April 2026, which we plan to renew again for the same amount.
We had no accrual for interest or penalties on our balance sheet at December 31, 2024 or December 31, 2023, and did not recognize any interest or penalties in our statement of operations for the years ended December 31, 2024 or 2023, since there are no material unrecognized tax benefits.
We had no accrual for interest or penalties on our balance sheet at December 31, 2025 or December 31, 2024, and did not recognize any interest or penalties in our statement of operations for the years ended December 31, 2025 or 2024, since there are no material unrecognized tax benefits.
There can be no assurance as to the availability or terms upon which such financing and capital might be available to us. For the years ended December 31, 2024 and 2023, we sustained recurring losses and negative cash flows from operations.
There can be no assurance as to the availability or terms upon which such financing and capital might be available to us. For the years ended December 31, 2025 and 2024, we sustained recurring losses and negative cash flows from operations.
We have concluded there were no material unrecognized tax benefits as of December 31, 2024 or December 31, 2023. Our practice is to recognize interest and/or penalties related to income tax matters as income tax expense.
We have concluded there were no material unrecognized tax benefits as of December 31, 2025 or December 31, 2024. Our practice is to recognize interest and/or penalties related to income tax matters as income tax expense.
The net loss in the year ended December 31, 2024 was primarily the result of the $5.0 million in suspended liability expense due to the Reverse Stock Split cash true-up payment provision in the Series A Warrants we sold in the August 2024 Public Offering, as well as the increased interest due to the 3i Note (as defined in Note 7, “ Equity and Debt Financings—Convertible Note Financing ”) and increased settlement expense.
The net loss in the year ended December 31, 2024 was primarily the result of the $5.0 million in suspended liability expense due to the Reverse Stock Split cash true-up payment provision in the Series A Warrants we sold in the August 2024 Public Offering, as well as increased interest associated with the 3i Note (as defined in “ Note 7, Equity and Debt Financings ”) and increased settlement expense.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and related notes for the fiscal years ended December 31, 2024 and 2023, included in this Annual Report.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and related notes for the years ended December 31, 2025 and 2024, included in this Annual Report.
In estimating fair value, management is required to make certain assumptions and estimates such as the expected life of units, volatility of our future share price, risk-free rates, future dividend yields and estimated forfeitures at the initial grant date. Restricted stock unit awards are valued based on the closing trading price of our common stock on the date of grant.
In estimating fair value, management is required to make certain assumptions and estimates such as the expected life of options, volatility of our stock price, risk-free interest rates, future dividend yields and estimated forfeitures at the initial grant date. Restricted stock unit awards are valued based on the closing trading price of our common stock on the date of grant.
We recognize operating lease assets and lease liabilities in the consolidated balance sheets on the lease commencement date, based on the present value of the outstanding lease payments over the reasonably certain lease term.
We recognize operating lease assets and lease liabilities in the balance sheet on the lease commencement date, based on the present value of the outstanding lease payments over the reasonably certain lease term.
For additional information regarding, see the section titled “ Risk Factors—Our results of operations could be adversely affected by changes in the cost and availability of raw materials and we are dependent on third-party manufacturers and suppliers ” and “ Risk Factors—Increases in costs, disruption of supply or shortage of any of our battery components, such as electronic and mechanical parts, or raw materials used in the production of such parts could harm our business .” Product and Customer Mix As of December 31, 2024, we sell 15 models of LiFEPO4 batteries, the Aura 600, and various individual or bundled accessories for battery systems.
For additional information regarding supply chain risks, see the section titled “ Risk Factors—Our results of operations could be adversely affected by changes in the cost and availability of raw materials our reliance on third-party manufacturers and suppliers ” and “ —Increases in costs, disruption of supply, or shortage of any of our battery components such as electronic and mechanical parts could harm our business .” Product and Customer Mix As of December 31, 2025, we sell 14 models of LiFEPO4 batteries, the Aura 600, and various individual or bundled accessories for battery systems.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reverse Stock Split and Reverse Stock Split True-Up Payment” below for additional information about the Reverse Stock Split. 34 Overview Expion360 focuses on the design, assembly, manufacturing, and sale of lithium iron phosphate (“LiFePO4”) batteries and supporting accessories for recreational vehicles (“RVs”), marine applications and home energy storage products with plans to expand into industrial applications.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reverse Stock Split and Reverse Stock Split True-Up Payment” below for additional information about the Reverse Stock Split. 33 Overview Expion360 focuses on the design, assembly, manufacturing, and sale of lithium iron phosphate (“LiFePO4”) batteries and supporting accessories for recreational vehicles (“RVs”), marine applications, and industrial energy storage products.
Our products are sold to different customers (i.e., dealers, wholesalers, private-label customers, OEMs, etc.) at differing prices and have varying costs. The average selling price and costs of goods sold for a particular product will vary with changes in the sales channel mix, volume of products sold, and the prices of such products sold relative to other products.
Our products are sold to dealers, wholesalers, private-label customers, and OEMs at differing prices and with varying cost structures. The average selling price and costs of goods sold for a particular product will vary with changes in the sales channel mix, volume of products sold, and the prices of such products sold relative to other products.
Unless otherwise noted, all references to shares and per share amounts for the years ended December 31, 2024 and 2023 presented in this section have been adjusted retroactively to reflect a 1-for-100 reverse stock split, which was effective at 5:00 p.m. Pacific Time on October 8, 2024 (the “Reverse Stock Split”).
Unless otherwise noted, all references to share and per share data, as well as stockholders’ equity balances for the years ended December 31, 2025 and 2024 presented in this section, have been adjusted retroactively to reflect a 1-for-100 reverse stock split, which was effective at 5:00 p.m. Pacific Time on October 8, 2024 (the “Reverse Stock Split”).
We do not expect any material change to the amount of unrecognized tax benefits to occur within the next 12 months.
We do not expect any material change to the amount of unrecognized tax benefits to occur within the next 12 months. Off-Balance Sheet Arrangements We do not have any material off-balance sheet arrangements.
Other expense for the year ended December 31, 2024 was made up of $5.0 million in suspended liability expense due to the Reverse Stock Split cash true-up payment provision in the Series A Warrants we sold in the August 2024 Public Offering, as well as $977,000 in interest expense and $709,000 in settlement expense.
Other expense for the year ended December 31, 2024 was made up of $5.0 million in suspended liability expense associated with the Reverse Stock Split cash true-up payment provision in the Series A Warrants, as well as approximately $977,000 in interest expense and $709,000 in settlement expense.
Income Taxes Effective November 1, 2021, the Company converted from an LLC to a C corporation and, as a result, became subject to corporate federal and state income taxes. Income taxes are accounted for using the asset and liability method.
Changes to these assumptions or estimates could result in significant changes in the valuations. Income Taxes Effective November 1, 2021, the Company converted from an LLC to a C corporation and, as a result, became subject to corporate federal and state income taxes. Income taxes are accounted for using the asset and liability method.
Key Factors Affecting Our Results of Operations Our results of operations and financial performance are significantly dependent on the following factors: Consumer Demand Although our sales are primarily generated from dealers, wholesalers, private-label customers and OEMs focused on the RV, marine, and home energy markets, the demand for our products from these customers depends on consumer demand.
Key Factors Affecting Our Results of Operations Our results of operations and financial performance are significantly dependent on the following factors: Consumer Demand Our sales are primarily generated from dealers, wholesalers, private-label customers, and OEMs serving the RV, marine, and industrial markets.
Factors affecting operating cash flows during the periods included: · For the year ended December 31, 2024, our net loss of $13.5 million was reduced by non-cash transactions including approximately $5.0 million in suspended liability expense due to the Reverse Stock Split cash true-up payment provision in the Series A Warrants we sold in the August 2024 Public Offering, amortization of convertible note costs of approximately $667,000, stock-based compensation of $617,000, stock-based settlement of $209,000, and depreciation of $174,000.
For the year ended December 31, 2024, our net loss of $13.5 million included several non-cash items, including approximately $5.0 million in suspended liability expense due to the Reverse Stock Split cash true-up payment provision in the Series A Warrants we sold in the August 2024 Public Offering, amortization of convertible note costs of approximately $667,000, stock-based compensation of $617,000, stock-based settlement of $209,000, and depreciation of $174,000. ● Cash provided by a decrease in inventory for the year ended December 31, 2025 was $2.0 million, and cash used by an increase in inventory for the year ended December 31, 2024 was $1.0 million, while cash provided by a decrease in prepaid inventory for the year ended December 31, 2025 was $1.3 million, and cash used by an increase in prepaid inventory for the year ended December 31, 2024 was $1.4 million.
Cost of Sales Cost of sales for the year ended December 31, 2024 increased by $64,000, or 1.5%, compared to the year ended December 31, 2023. Cost of sales were $4.5 million for the year ended December 31, 2024 and $4.4 million for the year ended December 31, 2023.
Cost of Sales Cost of sales for the year ended December 31, 2025 increased by $3.8 million, or 86.0%, compared to the year ended December 31, 2024. Cost of sales were $8.3 million for the year ended December 31, 2025 and $4.5 million for the year ended December 31, 2024.
Gross profit as a percentage of sales decreased by 5.8% for the year ended December 31, 2024, to 20.5% compared to 26.3% for the year ended December 31, 2023.
Gross profit as a percentage of sales decreased by 6.7% for the year ended December 31, 2025, to 13.9% compared to 20.5% for the year ended December 31, 2024.
While we do not have long-term purchase agreements with these manufacturers and our purchases are completed on a purchase-order basis, we maintain strong relationships with our manufacturers and cell suppliers, reflected in our ability to increase our purchase order volumes (qualifying us for related volume-based discounts).
While we do not have long-term purchase agreements with these manufacturers and generally transact on a purchase order basis, we maintain strong relationships with our manufacturers and cell suppliers, which have historically enabled us to increase our purchase volumes and qualify for volume-based discounts.
Our competitors may source products or components at lower costs than us, which may require us to evaluate our own costs, lower our product prices, or increase our sales volume to maintain our expected profitability levels.
These companies may have more resources than us and be able to allocate more resources to their current and future products. Our competitors may source products or components at lower costs than us, which may require us to evaluate our own costs, lower our product prices, or increase our sales volume to maintain our expected profitability levels.
We have adopted the provisions in ASC 740, Income Taxes , related to accounting for uncertain tax positions, which require recognition of the impact of a tax position in the financial statements if the position is more likely than not to be sustained upon examination and on the technical merits of the position.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. 37 We have adopted the provisions in ASC 740, Income Taxes , related to accounting for uncertain tax positions, which require recognition of the impact of a tax position in the financial statements if the position is more likely than not to be sustained upon examination and on the technical merits of the position.
Operating Lease Liabilities Our estimated future obligations consist of total operating lease liabilities. As of December 31, 2024, we had $799,000 in total operating lease liabilities, including the current portion. Other Indebtedness As of December 31, 2024, our long-term debt totaled $230,170, including the current portion, which consists of $31,758.
As of December 31, 2025, we had $710,000 in total operating lease liabilities, including the current portion. Other Indebtedness As of December 31, 2025, our long-term debt totaled $197,000, including the current portion, which consists of $31,000.
Our primary use of cash for operating activities are related to legal and professional fees, sales and marketing expenses, and research and development. In the last several years, we have generated negative cash flows from operating activities and have supplemented working capital requirements through net proceeds from sales of our common stock.
In the last several years, we have generated negative cash flows from operating activities and have supplemented working capital requirements through net proceeds from sales of our common stock.
Cash Flows The following table shows a summary of our cash flows for the periods presented: Years Ended December 31, 2024 2023 Net cash used in operating activities $ (9,562,545 ) $ (5,531,232 ) Net cash provided by investing activities $ 113,408 $ 16,578 Net cash provided by financing activities $ 6,064,004 $ 2,246,108 Cash flows used in operating activities Our largest source of operating cash is cash collection from sales of our products.
Cash Flows The following table shows a summary of our cash flows for the periods presented: Years Ended December 31, 2025 2024 Net cash used in operating activities $ (6,149,263 ) $ (9,562,545 ) Net cash provided by investing activities $ 4,250 $ 113,408 Net cash provided by financing activities $ 8,566,544 $ 6,064,004 41 Cash flows used in operating activities Our largest source of operating cash is cash collected from sales of our products.
Off-Balance Sheet Arrangements We do not have any material off-balance sheet arrangements. 40 Use of Non-GAAP Financial Measures We disclose financial measures calculated and presented in accordance with generally accepted accounting principles in the United States (US GAAP); however, we provide certain financial information on a non-GAAP basis (non-GAAP financial measures).
Use of Non-GAAP Financial Measures We disclose financial measures calculated and presented in accordance with the generally accepted accounting principles in the United States (“GAAP”); however, we provide certain financial information on a non-GAAP basis (“non-GAAP financial measures”).
Our customers consist of dealers, wholesalers, private-label customers, and original equipment manufacturers (“OEMs”) who then sell our products to end consumers and drive brand awareness nationally. Our primary target markets are currently the RV, marine, and home energy storage industries.
This includes design, development, and collaboration, using our IP to bring safety, quality, and service to our customers. Our customers consist of dealers, wholesalers, private-label customers, and original equipment manufacturers (“OEMs”) who then sell our products to end consumers and drive brand awareness nationally. Our primary target markets include the RV, marine, industrial, and commercial energy storage industries.
Cash used for capital purchases of property and equipment for quality assurance and leasehold improvements to our testing lab totaled $19,000 during the year ended December 31, 2023.
Cash flows provided by investing activities Cash provided by investing activities was $4,000 for the year ended December 31, 2025 and was related to selling some small vehicles. Cash used for capital purchases of property and equipment for quality assurance and leasehold improvements to our testing lab totaled $19,000 during the year ended December 31, 2024.
Our high-powered, lithium battery solutions incorporate innovative concepts and have been designed to include some of the most dense and minimal-footprint batteries in the RV and marine industries.
Our high-powered, lithium battery solutions incorporate innovative concepts and have been designed to include some of the most dense and minimal-footprint batteries in the RV and marine industries. We deploy intellectual property strategies to support product development, enhance safety and performance, and strengthen relationships across our target markets.
For the year ended December 31, 2024, we paid down debt principal of $3.6 million, which was offset by net cash proceeds of $9.5 million from issuance of common stock and $185,000 net cash proceeds from exercise of warrants. Cash provided by financing activities was $2.2 million for the year ended December 31, 2023.
For the year ended December 31, 2024, we paid down debt principal of $3.6 million, which was offset by net cash proceeds of $9.5 million from issuance of common stock and $185,000 net cash proceeds from exercise of warrants. 42 Critical Accounting Estimates The above discussion and analysis of our financial condition and results of operations is based upon our financial statements.
The notes are payable in aggregate monthly installments of approximately $2,560, including interest at rates ranging from 6.1% to 7.3% per annum, mature at various dates from October 2027 to May 2028, and are secured by the related vehicles. Two of the notes are personally guaranteed by a co-founder of the Company.
The notes are payable in aggregate monthly installments of approximately $2,560, including interest at rates ranging from 6.1% to 7.3% per annum, mature at various dates from October 2027 to May 2028, and are secured by the related vehicles. See “ Note 5, Long-Term Debt.” Operating Lease Liabilities Our estimated future obligations consist of total operating lease liabilities.
While we work with our suppliers to limit price and supply cost increases, our products may see price increases resulting from a rise in supply costs due to currency fluctuations, inflation, and tariffs.
While we work with our suppliers to limit price and supply cost increases, our products may see price increases resulting from a rise in supply costs due to currency fluctuations, inflation, and tariffs, which may affect pricing and gross margins. Accessory and OEM sales typically have lower average selling prices and resulting margins relative to other distribution channels.
However, our non-GAAP financial measures are not intended to represent and should not be considered more meaningful measures than, or alternatives to, measures of financial or operating performance as determined in accordance with US GAAP.
However, our non-GAAP financial measures are not intended to represent and should not be considered more meaningful measures than, or alternatives to, measures of financial or operating performance as determined in accordance with GAAP. We calculate our adjusted cost of sales non-GAAP financial measures for current period financial information by excluding the effect of an adjustment related to obsolete inventory.
Gross Profit Our gross profit for the year ended December 31, 2024 decreased by $420,000, or 26.7%, compared to the year ended December 31, 2023. Gross profit was $1.2 million for the year ended December 31, 2024 and $1.6 million for the year ended December 31, 2023.
Gross Profit Our gross profit for the year ended December 31, 2025 increased by $0.2 million, or 15.8%, compared to the year ended December 31, 2024. Gross profit was $1.3 million for the year ended December 31, 2025 and $1.2 million for the year ended December 31, 2024.
Operating leases are included in ROU assets, current operating lease liabilities, and long-term operating lease liabilities on our balance sheets. We do not have any finance leases.
Operating lease right-of-use (“ROU”) assets represent our right to use an underlying asset during the lease term, and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating leases are included in ROU assets, current operating lease liabilities, and long-term operating lease liabilities on our balance sheets. We do not have any finance leases.
Financing Obligations As of December 31, 2024, our long-term debt totaled $230,000, comprised of $143,000 outstanding under a COVID-19 Economic Injury Disaster Loan, $84,000 outstanding under vehicle financing arrangements, and an equipment loan for $3,000.
Financing Obligations As of December 31, 2025, our long-term debt totaled $197,000, comprised of $139,000 outstanding under a COVID-19 Economic Injury Disaster Loan and $58,000 outstanding under vehicle financing arrangements. In August 2025, we repaid an equipment loan with an interest rate of 5.8%.
Presented in the table below is the composition of selling, general and administrative expenses: Fiscal Years Ended December 31, 2024 2023 Salaries and benefits $ 3,260,866 $ 3,681,410 Legal and professional 1,584,589 2,034,374 Sales and marketing 926,430 929,220 Rents, maintenance, utilities 449,997 573,652 Research and development 295,292 397,662 Software, fees, tech support 274,780 234,285 Insurance 263,930 179,989 Depreciation 155,315 182,825 Travel expenses 137,298 199,845 Supplies, office 23,876 58,049 Other 536,846 273,824 Total $ 7,909,219 $ 8,745,135 Other Expense Other expense for the years ended December 31, 2024 and 2023 was $6.7 million and $283,000, respectively.
Presented in the table below is the composition of selling, general and administrative expenses: Years Ended December 31, 2025 2024 Salaries and benefits $ 6,417,659 $ 3,260,866 Legal and professional 2,736,199 1,584,589 Sales and marketing 1,001,730 926,430 Research and development 558,882 295,292 Software, fees, tech support 290,023 274,780 Insurance 273,702 263,930 Rents, maintenance, utilities 233,843 449,997 Travel expenses 199,583 137,298 Depreciation 105,616 155,315 Office Supplies 24,144 23,876 Other 199,522 536,846 Total $ 12,040,903 $ 7,909,219 39 Other (Income) / Expense Other income and expense for the year ended December 31, 2025 was income of $4.5 million and for the year ended December 31, 2024 was expense of $6.7 million.
We generated negative cash flows from operating activities of $9.6 million for the year ended December 31, 2024, compared to negative cash flows of $5.5 million for the corresponding period in 2023.
We generated negative cash flows from operating activities of $6.1 million for the year ended December 31, 2025, compared to negative cash flows of $9.6 million for the corresponding period in 2024. The decrease in cash used in operating activities was primarily attributable to lower net losses and favorable changes in working capital during 2025.
Accordingly, we may need to seek additional debt and equity financing to fund our research and development efforts and planned growth. Certifications We have completed the final requirements to obtain UL Safety Certifications on our new 12V Group 27 100Ah and 132Ah batteries, and on our 12V GC2 battery.
Our research and development spending may fluctuate depending on product development cycles, customer requirements, and broader market conditions. Certifications We have completed the final requirements to obtain UL Safety Certifications on our new 12V Group 27 100Ah and 132Ah batteries, and on our 12V GC2 battery.
See “ Note 7—Equity and Debt Financings ” and “Note 9—Stockholders’ Equity” in our accompanying consolidated financial statements for information on the warrants.
Warrants Warrants are measured at fair value upon issuance and are not subsequently remeasured unless they are required to be reclassified. See “ Note 7, Equity and Debt Financings ” and “Note 9, Stockholders’ Equity” in our accompanying financial statements for information on the warrants.
We consider the following policies to be the most critical in understanding the judgments that are involved in preparing the financial statements. 46 Property and Equipment Property and equipment are stated at cost less depreciation calculated on the straight-line basis over the estimated useful lives of the related assets as follows: Vehicles and transportation equipment 5 – 7 years Office furniture and equipment 3 – 7 years Manufacturing equipment 3 – 10 years Warehouse equipment 3 – 10 years QA equipment 3 – 10 years Tooling and molds 5 – 10 years Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives.
See “ Note 8, Commitments and Contingencies,” to our financial statements within this Annual Report for additional information, including more details of our accounting policy elections and disclosures and remaining minimum operating lease commitments. 43 Property and Equipment Property and equipment are stated at cost less depreciation calculated on the straight-line basis over the estimated useful lives of the related assets as follows: Vehicles and transportation equipment 5 – 7 years Manufacturing equipment 3 – 10 years Office furniture and equipment 3 – 7 years Warehouse equipment 3 – 10 years QA equipment 3 – 10 years Tooling and molds 5 – 10 years Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives.
The preparation of financial statements in conformity with the generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and disclosures of contingent assets and liabilities.
The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and disclosures of contingent assets and liabilities. These estimates involve judgments that are inherently uncertain and subject to change as future events and conditions evolve.
The strength of these relationships has helped us moderate increased supply-related costs associated with inflation, currency fluctuations, and U.S. government tariffs imposed on our imports, and avoid potential shipment delays. We aim to maintain an appropriate level of inventory to satisfy our expected supply requirements. We believe we could locate suitable alternative third-party manufacturers to fulfill our requirements if needed.
The strength of these relationships, together with ongoing supplier negotiations and purchasing strategies, have supported our efforts to manage supply-related costs associated with inflation, currency fluctuations, and U.S. government tariffs imposed on our imports, as well as to mitigate potential shipment delays. We aim to maintain an appropriate level of inventory to satisfy our expected supply requirements.
Our activities are subject to significant risks and uncertainties, including failing to secure additional funding before we achieve sustainable revenue and profit from operations.
We generally consider our long-term liquidity requirements to consist of those items that are expected to be incurred beyond the next 12 months. Our activities are subject to significant risks and uncertainties, including failing to secure additional funding before we achieve sustainable revenue and profit from operations.
We estimate that raw material costs account for over half of our cost of goods sold.
Accordingly, pricing for certain raw materials and components is influenced by market conditions and supplier negotiations. We estimate that raw material costs account for over half of our cost of goods sold.
Selling, general, and administrative expenses were $7.9 million for the year ended December 31, 2024 and $8.7 million for the year ended December 31, 2023.
Selling, General, and Administrative Expenses Selling, general, and administrative expenses for the year ended December 31, 2025 increased by $4.1 million, or 52.2%, compared to the year ended December 31, 2024. Selling, general, and administrative expenses were $12.0 million for the year ended December 31, 2025 and $7.9 million for the year ended December 31, 2024.
As we introduce new products, we may see a change in product and sales channel mix, which could result in period-to-period fluctuations in our overall gross margin. Competition We compete with both traditional lead-acid and lithium-ion battery manufacturers that primarily either import their products and/or components or manufacture their products and/or components under a private label.
Competition We compete with both traditional lead-acid and lithium-ion battery manufacturers that primarily either import their products and/or components or manufacture their products and/or components under a private label. As we develop new products and expand into new markets, we may experience competition with a broader range of companies.
Critical accounting estimates are those that we consider to be the most important in portraying our financial condition and results of operations and also require the greatest number of judgments by management. Judgments or uncertainties regarding the application of these policies may result in materially different amounts being reported under different conditions or using different assumptions.
The critical accounting estimates below are those that we consider to be the most important in portraying our financial condition and results of operations and also require the greatest number of judgments by management. Inventory Inventory is stated at the lower of cost or net realizable value. Cost is determined using first-in, first-out method.
This was offset by net proceeds of $37,000 received for the sale and disposal of property and equipment during the year ended December 31, 2023. Cash flows provided by financing activities Cash provided by financing activities was $6.1 million for the year ended December 31, 2024.
Cash provided by financing activities was $6.1 million for the year ended December 31, 2024.
As of January 2025, we have begun shipping orders of our e360 Home Energy Storage Solutions. We currently operate Expion360 as one reportable business segment, Energy Storage (ES). Our products provide numerous advantages for various industries that are looking to migrate to lithium-based energy storage.
We currently operate Expion360 as one reportable business segment, Energy Storage (ES). Our products provide numerous advantages for various industries that are looking to migrate to lithium-based energy storage. They incorporate detailed design and engineering, strong case materials, optimized internal structural layouts, and are supported by responsive customer service.
Our third-party manufacturers source the raw materials and battery components required for the production of our batteries directly from third-party suppliers that meet our approval and quality standards and, as a result, we may have limited control over the agreed pricing for these raw materials and battery components.
While we believe we could locate suitable alternative third-party manufacturers to fulfill our requirements if needed, transitioning suppliers could require time and result in additional costs. Our third-party manufacturers source the raw materials and battery components required for the production of our batteries directly from third-party suppliers that meet our approval and quality standards.
The tax benefits recorded in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”).
The tax benefits recorded in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. 44 See “Note 11, Income Taxes” to our financial statements within this Annual Report for further information on our income taxes.
Accessory and OEM sales typically have lower average selling prices and resulting margins, which could decrease our margins and negatively affect our growth or require us to increase the prices of our products. However, the benefits of increased sales volumes typically offset these reductions. The relative margins of products sold also impact our results of operations.
As a result, shifts in customer mix could decrease our margins and negatively affect our growth or require us to increase the prices of our products. However, the benefits of increased sales volumes and broader customer penetration typically has, and may continue to, offset the impact of lower-margin product and customer mix.
These changes are primarily due to the timing of significant purchases and prepayments of inventory. Turnaround time for receiving inventory from foreign sources can take up to 120 days, with prepayments required. 45 Cash flows provided by / (used in) investing activities Cash provided by investing activities was $113,000 for the year ended December 31, 2024.
Turnaround time for receiving inventory from foreign sources can take up to 120 days, with prepayments required. ● Cash provided by / (used in) other operating activities such as changes in accounts receivable and accounts payable primarily reflect normal timing differences in customer collections and vendor payments and were not significant drivers of operating cash flows during the periods presented.
Cost of sales would have been $4.4 million for the year ended December 31, 2024 and $4.4 million for the year ended December 31, 2023. Cost of sales as a percentage of sales would have increased by 4.5% in the year ended December 31, 2024 compared to the prior year.
Cost of sales as a percentage of sales increased by 6.7 percentage points in 2025, to 86.1% compared to 79.5% in 2024. Cost of sales for the year ended December 31, 2025 includes a one-time $0.9 million adjustment related to obsolete inventory.
However, notwithstanding efforts to improve the sustainability and efficiency of lithium mining, the price of lithium is volatile. We continue to monitor developments that may adversely affect our supply chain. 38 Management expects that products from our Asian third-party manufacturers will be subject to additional tariffs in 2025.
Another development of the past few years is lithium cell recycling, which recaptures raw lithium from the cell for reuse in future cells. However, notwithstanding efforts to improve the sustainability and efficiency of lithium mining, the price of lithium remains subject to market volatility. We continue to monitor developments that may affect our supply chain.
Additionally, availability of the raw materials used to manufacture our products may be limited at times, resulting in higher prices and/or the need to find alternative suppliers. Our battery cell manufacturers have joint venture factories outside of Asia and have secured sourcing contracts from lithium suppliers in South America and Australia.
Certain of our battery cell manufacturers have factories outside of Asia and have secured sourcing contracts from lithium suppliers in South America and Australia.
Liquidity and Capital Resources Overview Our operations have been financed primarily through net proceeds from sales of our common stock and equity and debt financings. As of December 31, 2024 and 2023, our current assets exceeded current liabilities by $2.0 million and $4.3 million, respectively, and we had cash and cash equivalents of $548,000 and $3.9 million, respectively.
As of December 31, 2025 and 2024, our current assets exceeded current liabilities by $6.0 million and $2.0 million, respectively, and we had cash and cash equivalents of $3.0 million and $0.5 million, respectively.
The e360 product line, through its sales growth, has shown to be a preferred conversion solution for lead-acid batteries.
While we continue to assess these adjacent markets, our current commercial activities remain concentrated in our established RV, marine, and industrial segments. We launched our e360 product line in December 2020, initially targeting the RV and marine industries. The line, through its sales growth, has shown to be a preferred conversion solution for lead-acid batteries.
For the year ended December 31, 2023, we paid down debt principal of $224,000, which was offset by net cash proceeds of $2.4 million from incurrence of short-term debt and net cash proceeds of $50,000 from the exercise of warrants.
Cash flows provided by financing activities Cash provided by financing activities was $8.6 million for the year ended December 31, 2025. During that year, we had net proceeds from exercise of warrants totaling $5.7 million, net proceeds from the issuance of common stock totaling $2.9 million, offset by principal payments on long-term debt totaling $33,000.
Lithium, which is extracted from mined ore, is a key raw material used to produce our battery cells and, as a result, the cost of our battery cells is dependent on the price and availability of lithium, which may be volatile and unpredictable and beyond our control.
Lithium, which is extracted from mined ore, is a key raw material used to produce our battery cells and fluctuations in lithium pricing can affect our battery cell costs. From time to time, changes in raw material availability may influence pricing dynamics or sourcing strategies.
Management believes that orders resulting from these new relationships will result in significant new revenue streams in the year ending December 31, 2025. In addition, Expion360 began shipping Home Energy Storage Systems in January 2025. Manufacturing and Supply Chain Our batteries are manufactured by multiple third-party manufacturers located in Asia, which also produce our battery cells.
Manufacturing and Supply Chain Our batteries are manufactured by multiple third-party manufacturers located in Asia, which also produce our battery cells.
Other expense for the year ended December 31, 2023 was made up almost entirely of settlement expense, with interest income and interest expense offsetting each other at $126,000 and $125,000, respectively. Net Loss Our net loss for the years ended December 31, 2024 and 2023 was $13.5 million and $7.5 million, respectively.
Net Loss Our net loss for the years ended December 31, 2025 and 2024 was $6.2 million and $13.5 million, respectively.
We discount unpaid lease payments using the interest rate implicit in the lease or, if the rate cannot be readily determined, our incremental borrowing rate (IBR). See Note 8, “Commitments and Contingencies,” of our consolidated financial statements within this Annual Report for further information, including more details of our accounting policy elections and disclosures and remaining minimum operating lease commitments.
We discount unpaid lease payments using the interest rate implicit in the lease or, if the rate cannot be readily determined, our incremental borrowing rate.
Recent Developments January 2025 Registered Direct Offering and Warrant Private Placement On January 3, 2025, we sold to certain institutional investors, in a registered direct offering, an aggregate of (i) 474,193 shares of common stock; and (ii) 574,193 pre-funded warrants (the “January 2025 Pre-Funded Warrants”) to purchase up to 574,193 shares of common stock (the “January 2025 Pre-Funded Warrant Shares”).
October 2025 Private Placement and Management Transition On October 16, 2025, we entered into a securities purchase agreement (the “Purchase Agreement”) with two institutional investors pursuant to which we agreed to sell in a private placement (the “October 2025 Private Placement”) an aggregate of (i) 613,077 shares of common stock, and (ii) a pre-funded warrant (the “October 2025 Pre-Funded Warrant”) to purchase up to 144,498 shares of common stock.
Stockholder Promissory Notes Stockholder promissory notes had an outstanding principal balance of $0 as of December 31, 2024, as they were repaid in August 2024. See Note 6 - Stockholder Promissory Notes for further information on stockholder promissory notes. Vehicle Financing Arrangements As of December 31, 2024, the Company has three notes payable to GM Financial for vehicles.
This represents reduction of debt by $3.0 million and additional reduction in lease liability of $2.3 million in 2024 and 2025, an overall improvement to our liquidity over the past two years. Vehicle Financing Arrangements As of December 31, 2025, the Company has three notes payable to GM Financial for vehicles.
Removed
In addition, in January 2025 we began selling our e360 Home Energy Storage Solutions, which consist of two LiFePO4 battery storage solutions and seek to provide consumers with a cost-effective, low barrier of entry, flexible system to power their homes utilizing solar energy, wind, or grid back-up.

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