Quarterly Report for Quarter Ending March 31 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The interim financial statements included in this Quarterly Report and this Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2025, and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in the Annual Report filed with the SEC on March 31, 2026 (as amended, the "Annual Report"). In addition to historical information, this discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements are subject to risks and uncertainties, including those under "Risk Factors" in this Quarterly Report and our Annual Report that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements.

Unless otherwise indicated, references in this section to "Nuburu," "we," "us," "our" and "the Company" refer to Nuburu, Inc. and its consolidated subsidiaries. Defined terms used herein and not otherwise defined are as defined in Part I, Item 1 of this Quarterly Report.

The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

On February 27, 2026, we effected a 1-for-4.99 reverse stock split of our Common Stock (the "2026 Reverse Stock Split"). The 2026 Reverse Stock Split has been reflected retroactively in all Common Stock and per share amounts for all periods presented. Proportional adjustments were made to the number of shares of Common Stock issuable upon exercise, vesting, or conversion of our outstanding stock options, restricted stock units, warrants, convertible notes, preferred stock, and other instruments convertible into or exercisable for Common Stock, as well as the applicable exercise prices, conversion prices, and per share grant date fair values. All share and per share amounts presented in this Quarterly Report, including but not limited to earnings per share, weighted-average shares outstanding, shares reserved under equity incentive plans and the employee stock purchase plan, and shares issuable under outstanding derivative and convertible instruments, have been retroactively adjusted to reflect the 2026 Reverse Stock Split for all periods presented.

LIQUIDITY CONSTRAINTS

We have not yet achieved full commercialization and expect continued losses until we can do so. We must rely on capital from investors to support operations. From inception, we have continued to incur operating losses and negative cash flows from operating activities. For the three months ended March 31, 2026 and 2025, we incurred a net loss of $459,898 and $16,611,425, respectively, and we had an accumulated deficit of $200,939,729 and $200,479,831 as of March 31, 2026 and December 31, 2025, respectively. We generated total revenue of $407,644 and nil during the three months ended March 31, 2026 and 2025, respectively.

In January 2025, the Company adopted a new business plan focused on building a stable foundation for the future business, including addressing outstanding payables, entering into joint development agreements, and acquiring controlling interests in strategic targets (the "Transformation Plan"). Management has implemented and continues to execute its Transformation Plan and has taken actions during 2025 and early 2026 to strengthen the Company's financial position and liquidity profile. These actions include balance sheet improvements, enhanced access to the capital markets, and the establishment of a platform-based operating model through strategic investments and acquisitions. In connection with the Transformation Plan, we agreed to certain governance changes, including the appointment of Alessandro Zamboni as our Executive Chairman and changes to our Board of Directors.

We expect to incur significant expenses and operating losses for the foreseeable future, as we devote substantial resources to implement our Transformation Plan, and operate as a public company. Until we can generate sufficient revenue, we plan to finance our business with the proceeds from the issuance and sale of debt or equity securities, including sales pursuant to the SEPA, as defined and discussed below, and borrowings under credit facilities. There is no assurance that management's plans to obtain additional debt or equity financing or credit facilities will be successfully implemented or implemented on terms favorable to us. Even if we generate revenue, there is no guarantee that we will ever become profitable. While we are pursuing a Transformation Plan intended to address aspects of our financial condition and operations, there can be no assurance that these efforts will be successful or that they will alleviate the substantial doubt regarding our ability to continue as a going concern. If we are unable to obtain additional financing, or otherwise implement our Transformation Plan, we will not be able to sustain operations and will need to consider alternatives, which could include a sale, liquidation, or dissolution of the business. For additional information, refer to Note 1 to the condensed consolidated financial statements included herein, for the Company's evaluation of the events and conditions and its plans regarding the going concern matter.

ACQUISITION, INVESTMENT AND JOINT VENTURE PLANS

Orbit (Related Party), Tekne, Lyocon, SYME (Related Party), Heckler & Koch and Maddox

For information related to certain acquisition, investment-related and joint venture transactions, including the January 2026 Orbit Change of Control, the Lyocon Acquisition, the Tekne Investment, the Tekne Letter, the H&K Investment, the Maddox JV and the Beryl Agreement, Notes 4, 6 and 7 to the condensed consolidated financial statements included herein.

For information regarding the SYME Convertible Note Receivable, the Tekne Convertible Note Receivable and the SYME Bonds, see Notes 4 and 6 to the condensed consolidated financial statements included herein.

RECENT FINANCING TRANSACTIONS AND DEBT EXTINGUISHMENTS

Transfer of Outstanding Preferred Stock

As part of our ongoing efforts to eliminate liabilities and return to compliance with NYSE American stockholder equity requirements, on February 6, 2026, we entered into an exchange agreement with Indigo Capital LP ("Indigo"), pursuant to which we agreed to issue a

pre-funded warrant to Indigo in exchange for the extinguishment and cancellation of 844,938 shares of our Series A Preferred Stock held by Indigo.

For additional information, see Notes 11 and 12 to the condensed consolidated financial statements included herein.

February 2026 Offering and 2025 Offerings

In February 2026 and September 2025, we consummated best efforts public offerings of Common Stock and certain warrants. For additional information, see Notes 11 and 12 to the condensed consolidated financial statements included herein.

Debt Instruments

During the three months ended March 31, 2026, we entered into certain debt instruments with various third parties. For additional information, see Note 10 to the condensed consolidated financial statements included herein.

ADDITIONAL RECENT DEVELOPMENTS

Halting of Trading on NYSE American and February 2026 Reverse Stock Split

Trading of our Common Stock was halted by NYSE American on February 13, 2026, because the trading price dropped below NYSE American's Minimum Trading Price of $0.10. On February 27, 2026, we effected a 1-for-4.99 reverse stock split (the "2026 Reverse Stock Split") in order to return to compliance with the Minimum Trading Price requirement. Our Common Stock resumed trading on March 2, 2026.

For additional information, see Note 2 to the condensed consolidated financial statements included herein.

NYSE Regulation Notice of Noncompliance

On April 29, 2025, we received a Notice of Noncompliance (the "Notice") from NYSE Regulation indicating that we were not in compliance with Section 1003(a)(i) of the NYSE American LLC Company Guide (the "Company Guide"), which requires a company to maintain stockholders' equity of $2,000,000 or more if it has reported losses from continuing operations or net losses in two of its three most recent fiscal years. As of March 31, 2026 and December 31, 2025, total stockholders' equity (deficit) was $2,172,572 and $(15,182,173), respectively.

As required by the Company Guide, we submitted a detailed plan on May 29, 2025. The detailed plan advised NYSE Regulation of actions we have taken or will take to regain compliance with the continued listing standards by the compliance deadline of October 29, 2026. On July 22, 2025, the NYSE American notified us that it had accepted our plan outlining definitive actions that we have taken or will take to regain compliance with NYSE American's continued listing standards (the "Compliance Plan") and granted a plan period through October 29, 2026 (the "Plan Period").

On May 12, 2026, we received a Notice of Noncompliance (the "2026 Notice") from NYSE Regulation indicating that we were not in compliance with Section 1003(a)(ii) of the Company Guide, which requires a company to maintain stockholders' equity of $4.0 million or more if it has reported losses from continuing operations or net losses in three of its four most recent fiscal years. In connection with the 2026 Notice, the NYSE American is not requiring that a new compliance plan be provided by us and we will continue to operate in accordance with the Compliance Plan previously accepted by NYSE American.

NYSE American will review us periodically for compliance with the Compliance Plan. If we are not in compliance with the continued listing standards by October 29, 2026, or if we do not make progress consistent with the Compliance Plan during the Plan Period, NYSE American may initiate delisting proceedings as appropriate. However, we may appeal a staff delisting determination in accordance with the Company Guide.

The Notice, 2026 Notice and NYSE's acceptance of the Compliance Plan have no immediate effect on the listing or trading of our securities and our Common Stock will continue to trade on the NYSE American under the symbol "BURU" during the Plan Period with the designation of ".BC" to indicate that we are not in compliance with the NYSE American's continued listing standards.

Components of Statements of Operations and Comprehensive Loss

Revenue

Following the Lyocon Acquisition and the Orbit Transaction, our revenue consists of (i) product sales and related professional services from Lyocon and (ii) software-as-a-service and hosted software subscriptions, application maintenance services and professional services from Orbit. We had no revenue during the three months ended March 31, 2025. For additional information, refer to Notes 2 and 9 to the condensed consolidated financial statements included herein.

Cost of Revenue

Cost of revenue primarily consists of materials, direct labor, direct job costs and manufacturing overhead associated with the products and services sold by Lyocon and Orbit, as well as, historically, the cost of materials, overhead and employee compensation associated with the manufacturing of our high-powered lasers. Product cost also includes lower of cost or net realizable value inventory ("LCNRV") adjustments if the carrying value of the inventory is greater than its net realizable value as well as adjustments for excess or obsolete inventory.

Research and Development

Research and development expenses ("R&D") consist primarily of compensation and related costs for personnel, including stock-based compensation, employee benefits, training, travel, third-party consulting services, laboratory supplies, and research and development equipment depreciation incurred to further our commercialization development efforts. We anticipate R&D to increase significantly as we expand our product portfolio. R&D is charged to the statement of operations as incurred and is included in operating expenses.

Selling and Marketing

Selling and marketing expenses consist primarily of compensation and related costs for our direct sales force, sales management, and marketing and include stock-based compensation, employee benefits, and travel for selling and marketing employees as well as costs related to trade shows, marketing programs, third-party consulting expenses, branding and public relations activities, and application lab depreciation expenses. We expect selling and marketing expenses to increase in future periods as we expand our sales force, marketing, and customer support organizations and increase our participation in trade shows and marketing programs. Selling and marketing costs are charged to the statement of operations as incurred and are included in operating expenses.

General and Administrative

Our general and administrative expenses consist primarily of compensation and related costs for our finance, human resources and other administrative personnel, and include stock-based compensation, employee benefits and travel expenses. In addition, general and administrative expenses include our third-party consulting and advisory services, legal, audit, accounting services and facilities costs, as well as transaction expenses. We expect our general and administrative expenses to increase for the foreseeable future as we scale headcount with the growth of our business through acquisitions and investments, and as a result of operating as a public company, including compliance with the rules and regulations of the SEC, legal, audit, additional insurance expenses, investor relations activities, and other administrative and professional services. General and administrative costs are charged to the statement of operations as incurred and are included in operating expenses.

Interest Income

Interest income consists primarily of interest income received on our cash and cash equivalents.

Interest Expense

Interest expense consists primarily of (i) interest owed on our outstanding debt, (ii) interest accrued on the Orbit Preferred Obligation, (iii) through the first quarter of 2025, amortization of deferred financing costs and (iv) during 2025, interest expense incurred in connection with the amounts payable to the landlord as part of the lease settlement for our expired lease in Centennial, Colorado. For additional information related to our lease settlement and debt obligations, see Notes 3 and 10, respectively, to the condensed consolidated financial statements included herein.

Change in Fair Value of Warrant Liabilities

Change in fair value of warrant liabilities consists of non-cash gains or losses recognized based on the change in the fair value of our liability-classified warrants, which are re-measured to fair value at each balance sheet date with the corresponding gain or loss from the adjustment. For additional information, refer to Notes 7 and 12 to the condensed consolidated financial statements included herein.

Loss on Issuance of Warrants and Related Costs

Loss on issuance of warrants represents (i) the excess of the initial fair value of the liability-classified February 2026 Offering Warrants over the allocated net proceeds and (ii) allocated transaction costs incurred in connection with the issuance of liability-classified warrants, which are expensed as incurred rather than capitalized. For additional information, refer to Notes 7 and 12 to the condensed consolidated financial statements included herein.

Change in Fair Value of Debt

Change in fair value of debt relates to the unrealized gain or loss resulting from the change in fair value of debt instruments for which the fair value option was elected. This amount reflects the remeasurement of such liabilities to their current fair value as of the reporting date. For additional information, refer to Notes 7 and 10 to the condensed consolidated financial statements included herein.

Loss on Issuance of Debt

Loss on issuance of debt relates to the excess of the initial fair value of certain debt instruments accounted for under the fair value option over the proceeds received. For additional information, refer to Note 10 to the condensed consolidated financial statements included herein.

Gain on Initial Recognition of Tekne Investment

Gain on initial recognition of Tekne Investment represents the difference between the initial fair value of the Tekne Investment acquired and the initial fair value of the Tekne Subordinated Convertible Note issued as consideration in connection with the Tekne Purchase Agreement. For additional information, see Notes 4 and 7 to the condensed consolidated financial statements included herein.

Change in Fair Value of Investments

Change in fair value of investments relates to the unrealized gain or loss resulting from the change in fair value of investments for which the fair value option was elected. This amount reflects the remeasurement of such investments to their current fair value as of the reporting date. For additional information, refer to Note 7 to the condensed consolidated financial statements included herein.

Gain on Issuance of SYME Bonds (Related Party)

Gain on issuance of SYME Bonds relates to the excess of the initial fair value of the SYME Bonds at issuance, for which the fair value option was elected, over the carrying value of the SYME Inventory Advance applied as consideration for the subscription. For additional information, refer to Notes 4 and 7 to the condensed consolidated financial statements included herein.

Change in Fair Value of SYME Bonds (Related Party)

Change in fair value of SYME Bonds relates to the unrealized gain or loss resulting from the change in fair value of the SYME Bonds for which the fair value option was elected. This amount reflects the remeasurement of the SYME Bonds to their current fair value as of the reporting date. For additional information, refer to Notes 4 and 7 to the condensed consolidated financial statements included herein.

Change in Fair Value of Contingent Consideration

Change in fair value of contingent consideration represents the period change in the fair value of contingent consideration obligations recognized in connection with our acquisitions, which are remeasured to fair value at each reporting date with the corresponding gain or loss recorded in the condensed consolidated statement of operations. For additional information, refer to Notes 4 and 7 to the condensed consolidated financial statements included herein.

Change in Fair Value of Derivative Liability

Change in fair value of derivative liability consists of non-cash gains or losses recognized on the remeasurement of liability-classified derivatives, including, (i) during the three months ended March 31, 2026, the amended Orbit Preferred Obligation, which was accounted for as a derivative liability under ASC 815 between the February 9, 2026 amendment and stockholder approval of the share issuance in March 2026, and (ii) historically the embedded derivatives bifurcated from the August 2024 Convertible Notes. The instruments are remeasured to fair value at each reporting date with the corresponding gain or loss recorded on the condensed consolidated statement of operations. For additional information, refer to Notes 7 and 12 to the condensed consolidated financial statements included herein.

Change in Fair Value of Convertible Notes Receivable

Change in fair value of convertible notes receivable relates to the unrealized gain or loss resulting from the change in fair value of the SYME Convertible Note Receivable, which is a related-party instrument, and the Tekne Convertible Note Receivable, in each case for which the fair value option was elected. This amount reflects the remeasurement of the assets to their current fair value as of the reporting date. For additional information, see Note 6 to the condensed consolidated financial statements included herein.

Remeasurement of Subscription for Orbit Shares (Related Party)

Remeasurement of subscription for Orbit shares represents the gain recognized on the remeasurement of our subscription right for additional shares of Orbit to its acquisition-date fair value in connection with the Orbit Change of Control. For additional information, refer to Note 4 to the condensed consolidated financial statements included herein.

Remeasurement of Orbit Equity Method Investment (Related Party)

Remeasurement of Orbit equity method investment represents the loss recognized on the remeasurement of our previously held 10.7% equity interest in Orbit to its acquisition-date fair value in connection with the Orbit Change of Control. For additional information, refer to Note 4 to the condensed consolidated financial statements included herein.

Change in Fair Value of SEPA Liability

Change in fair value of SEPA liability relates to the unrealized gain or loss resulting from the change in the fair value of the SEPA liability, which includes (i) the fair value of the put option and (ii) related to the June 30, 2025 valuation, the fair value related to the unissued shares for the commitment fee. For additional information, refer to Notes 7 and 13 to the condensed consolidated financial statements included herein.

Loss on Extinguishment of Debt

Loss on extinguishment of debt consists of losses incurred to extinguish debt. For additional information, refer to Note 10 to the condensed consolidated financial statements included herein.

Gain on Sale of Intellectual Property Intangible Assets

Gain on sale of intellectual property intangible assets primarily relates to the sale of collateral to the lenders holding both the outstanding Senior Convertible Notes and Junior Notes in exchange for a full discharge and extinguishment of our Junior Notes and Senior Convertible Notes, as further described in Note 10 to the condensed consolidated financial statements included herein.

Loss on Impairment of Inventories, Property and Equipment and Operating Lease Right-of-Use Asset

Loss on impairment of inventories, property and equipment and operating lease right-of-use asset relates to write-downs and impairments recorded on our inventories, property and equipment and right-of-use-asset in connection with our default under our lease in Centennial, Colorado, and ultimate judgment obtained by the landlord in April 2025. For additional information, see Notes 1 and 3 to the condensed consolidated financial statements included herein.

Interest Expense Recognized on Remeasurement of Preferred Stock Liability

Interest expense recognized on remeasurement of preferred stock liability relates to the subsequent remeasurement of the preferred stock liability after issuance through March 31, 2025 in connection with the reclassification of the preferred stock from mezzanine equity to a current liability on January 31, 2025. For additional information, see Note 11 to the condensed consolidated financial statements included herein.

Other Loss, Net

Other loss, net consists largely of foreign currency transaction gains or losses and, historically, issuance costs incurred in connection with the issuance of certain debt instruments.

Results of Operations

The following table sets forth our results of operations for the three months ended March 31, 2026 and March 31, 2025:

Revenue. Revenue increased $407,644 during the three months ended March 31, 2026 compared to the same period in 2025, which is due entirely to an increase in revenue resulting from the Orbit Change of Control and Lyocon Acquisition.

Cost of Revenue. Cost of revenue increased $417,043 during the three months ended March 31, 2026 compared to the same period in 2025, which includes an approximate $653,000 increase due to the Orbit Change of Control and Lyocon Acquisition. Excluding the effects of these transactions, cost of revenue decreased $235,717. This decrease is primarily due to a period-over-period decrease of approximately (i) $120,000 of direct labor and job costs and (ii) $111,000 in overhead, due to continued reduced production volumes following the suspension of laser-system manufacturing operations in 2024, together with further reductions in production-related headcount and overhead during late 2025 and the first quarter of 2026.

Research and Development. Research and development expenses decreased $117,063 during the three months ended March 31, 2026 compared to the same period in 2025, which is primarily due to decreases in (i) stock-based compensation expenses of approximately $93,000, due primarily to research and development workforce reductions, (ii) depreciation expenses of approximately $41,000 due to the write-down

of property and equipment to a net book value of zero during the first quarter of 2025, and (iii) personnel costs of approximately $27,000 due primarily to lower research and development headcount, partially offset by (iv) an increase of approximately $44,000 in research and development spending related to the Maddox Program, which commenced in the first quarter of 2026. For additional information regarding the Maddox Program, see Note 4 to the condensed consolidated financial statements included herein. For additional information on the write-down of property and equipment, see Notes 1 and 3 to the condensed consolidated financial statements included herein.

Selling and Marketing. Selling and marketing expenses increased $1,434,188 during the three months ended March 31, 2026 compared to the same period in 2025, which includes an insignificant increase due to the Orbit Change of Control and Lyocon Acquisition. Excluding the effects of these transactions, selling and marketing increased $1,434,024. This increase is primarily due to the net effect of (i) an increase in professional and consulting related expenses of approximately $1,096,000, primarily related to an increase in branding and public relations consulting expenses as part of our Transformation Plan, and (ii) an increase in marketing expenses of approximately $385,000, partially offset by (iii) a decrease in depreciation expense of approximately $35,000, due to the write-down of property and equipment to a net book value of zero during the first quarter of 2025. For additional information on the write-down of property and equipment, see Notes 1 and 3 to the condensed consolidated financial statements included herein.

General and Administrative. General and administrative expenses increased $3,535,881 during the three months ended March 31, 2026 compared to the same period in 2025, which includes an approximate $91,000 increase due to the Orbit Change of Control and Lyocon Acquisition. Excluding the effects of these transactions, general and administrative increased $3,445,258. This increase is primarily driven by (i) an increase in acquisition-related expenses of approximately $1,054,000, (ii) an increase in personnel costs of approximately $1,002,000 primarily related to an increase in bonus expense paid to executives, (iii) an increase in accounting and audit services of approximately $889,000 related to our Transformation Plan, (iv) an increase in professional and consulting services of approximately $319,000, and (v) an increase in legal expenses of approximately $309,000.

Change in Fair Value of Warrant Liabilities. We recorded a gain of $11,396,260 during the three months ended March 31, 2026, which is primarily related to (i) a decrease of approximately $8,975,000 in the fair value of the February 2026 Offering Common Warrants and (ii) a decrease of approximately $2,184,000 in the fair value of the February 2026 Offering Pre-Funded Warrants, each largely due to a decrease in our share price from the time of issuance through March 31, 2026. During the three months ended March 31, 2025, we recorded a gain of $127,300, which largely resulted from a decrease in the Company's share price during the first quarter of 2025.

Loss on Issuance of Warrants and Related Costs. We recorded a loss of $8,206,193 during the three months ended March 31, 2026, representing (i) the excess of the initial fair value of the liability-classified February 2026 Offering Warrants over the allocated net proceeds and (ii) the portion of issuance costs allocated to the liability-classified February 2026 Offering Warrants and expensed as incurred, compared to no comparable loss during the three months ended March 31, 2025. For additional information, refer to Note 12 to the condensed consolidated financial statements included herein.

Change in Fair Value of Debt. We recorded a gain of $8,279,246 during the three months ended March 31, 2026, which primarily resulted from (i) a gain of approximately $9,249,000 due to the decrease in fair value of the 2026 Brick Lane H&K Investment Note driven by a decline in our share price from issuance through March 31, 2026, partially offset by a (ii) a loss of approximately $951,000 due to the increase in the fair value of the December 2025 YA Debenture, largely due to an increase in our share price during the three months ended March 31, 2026. We recorded a gain of $256,522 during the three months ended March 31, 2025, which resulted from (i) a gain of $132,508 related to the decrease in the fair value of the Indigo Capital Convertible Notes, largely due to a decrease in the Company's share price from the time of the issuance in early March 2025 through March 31, 2025, and (ii) a gain of $124,014 related to the conversion of $307,320 of contractual principal under the Indigo Capital Exchange Convertible Notes. For additional information, see Notes 7 and 10 to the condensed consolidated financial statements included herein.

Loss on Issuance of Debt. We recorded a loss of $11,661,274 during the three months ended March 31, 2026, representing the excess of the issuance date fair value of the 2026 Brick Lane H&K Investment Note over the fair value of the H&K Investment received in exchange. We recorded a loss of $707,800 during the three months ended March 31, 2025 related to the excess of the initial fair value of $2,207,800 of the Indigo Capital Convertible Note over the proceeds received. For additional information, see Note 10 to the condensed consolidated financial statements included herein.

Gain on Initial Recognition of Tekne Investment. We recognized a gain of $84,000 during the three months ended March 31, 2026, representing the excess of the initial fair value of the Tekne Investment over the Tekne Subordinated Convertible Note issued as consideration, compared to no comparable gain during the three months ended March 31, 2025. For additional information, refer to Note 6 to the condensed consolidated financial statements included herein.

Change in Fair Value of Contingent Consideration. We recorded a gain of $300,364 during the three months ended March 31, 2026, which primarily resulted from a gain of approximately $304,000 driven by a decrease in the fair value of the RegTech Contingent Consideration, primarily due to a downward revision of expected future collections used in the earnout calculation based on first-quarter post-acquisition actuals, partially compounded by an increase in the discount rate applied to the expected payments. For additional information, refer to Notes 4 and 7 to the condensed consolidated financial statements included herein.

Change in Fair Value of Derivative Liability. We recorded a gain of $4,909,820 during the three months ended March 31, 2026, related to the remeasurement of the amended Orbit Preferred Obligation upon stockholder approval of the share issuance in March 2026, compared to a gain of $37,900 during the three months ended March 31, 2025. For additional information, refer to Note 4 to the condensed consolidated financial statements included herein.

Change in Fair Value of Convertible Notes Receivable. We recorded a gain of $1,073,803 during the three months ended March 31, 2026, which primarily relates to the net effect of (i) an increase of approximately $811,000 in the fair value of the Tekne Convertible Note Receivable, primarily due to an increase in our pro-rata equity entitlement upon the Capital Increase resulting from additional fundings under the Tekne

Convertible Note Receivable during the period, (ii) interest accrued on the Tekne Convertible Note Receivable during the period of approximately $307,000, which includes interest related to the Network Contract, partially offset by (iii) a decrease of approximately $219,000 in the fair value of the SYME Convertible Note Receivable, primarily due to the potential dilutive impact on SYME's market value of the expected future conversion of the SYME Convertible Note Receivable into SYME ordinary shares and warrants. For additional information, see Note 6 to the condensed consolidated financial statements included herein.

Remeasurement of Subscription for Orbit Shares. We recorded a gain of $1,189,837 during the three months ended March 31, 2026 related to the remeasurement of our subscription right for additional shares of Orbit to its acquisition-date fair value in connection with the Orbit Change of Control, primarily due to the increase in our share price between the inception of the Orbit Preferred Obligation and the Orbit Change of Control date. For additional information, refer to Note 4 to the condensed consolidated financial statements included herein.

Change in Fair Value of SEPA Liability. We recorded a gain of $228,935 during the three months ended March 31, 2026 related to the decrease in the fair value of the SEPA liability, primarily due to changes in the expected timing and amount of remaining dollar draws under the SEPA.

Loss on Extinguishment of Debt. During the three months ended March 31, 2025, we recorded a loss on the extinguishment of debt of $5,497,516, which primarily related to the issuance of shares to noteholders of the Senior Notes and Junior Notes to extinguish principal and accrued interest under the Senior Notes and Junior Notes. For further information, see Note 10 to the condensed consolidated financial statements included herein. There was no loss on the extinguishment of debt recorded for the three months ended March 31, 2026.

Gain on Sale of Intellectual Property Intangible Assets. We recorded a gain on the sale of intellectual property of $8,961,872 during the three months ended March 31, 2025, which primarily related to the sale of collateral to extinguish the remaining outstanding Junior Notes and Senior Convertible Notes, as further described in Note 10 to the condensed consolidated financial statements included herein.

Loss on Impairment of Inventories, Property and Equipment and Operating Lease Right-of-Use Asset. We recorded a loss on impairment of inventories, property and equipment and operating lease right-of-use asset of $6,064,823 during the three months ended March 31, 2025 related to write-downs and impairments recorded on our inventories, property and equipment and right-of-use asset in connection with our default under our lease in Centennial, Colorado, and ultimate judgment obtained by the landlord, in April 2025. For additional information, see Notes 1, 3, and 8 to the condensed consolidated financial statements included herein.

Interest Expense Recognized on Remeasurement of Preferred Stock Liability. We recorded non-cash interest expense of $10,398,050 during the three months ended March 31, 2025 related to the subsequent remeasurement of the preferred stock liability after issuance through March 31, 2025 in connection with the reclassification of the preferred stock from mezzanine equity to a current liability on January 31, 2025. For additional information, see Note 11 to the condensed consolidated financial statements included herein.

Liquidity and Capital Resources

Overview

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, contractual obligations, and other commitments. As of the date of this Quarterly Report, we have yet to generate meaningful revenue from our business operations and have funded capital expenditure and working capital requirements through debt and equity financing.

As of March 31, 2026, we had cash and cash equivalents of $8,267,110 as compared to $24,661,284 as of December 31, 2025. During the three months ended March 31, 2026, our principal sources of liquidity were gross cash proceeds of (i) $11,994,929 related to the February 2026 Offering, as further described in Note 11 to the condensed consolidated financial statements, (ii) $2,172,771 under the SEPA, as further described in Note 13 to the condensed consolidated financial statements, and (iii) $764,018 of proceeds from warrant exercises. Our cash flows from operations are not sufficient to fund our current operating model and expansion plans. As of January 31, 2025, we were also required to redeem the Preferred Stock as permitted by law in cash at an amount equal to $10.00 per share. Notwithstanding the foregoing, we are not required to redeem any shares of Preferred Stock to the extent we do not have legally available funds to effect such redemption.

From inception through March 31, 2026, we have incurred operating losses and negative cash flows from operating activities. For the three months ended March 31, 2026 and 2025, we have incurred net losses of $459,898 and $16,611,425, respectively, and we have an accumulated deficit of $200,939,729 as of March 31, 2026. The net loss for the three months ended March 31, 2025 included $10,398,050 of non-cash interest expense recognized on remeasurement of the preferred stock liability. For additional information on this interest expense, see Note 11 to the condensed consolidated financial statements included herein.

We anticipate that we will incur net losses for the foreseeable future and, even if we generate revenue, there is no guarantee that we will ever become profitable. While we are pursuing a Transformation Plan intended to address aspects of our financial condition and operations, there can be no assurance that these efforts will be successful or that they will alleviate the substantial doubt regarding our ability to continue as a going concern. For additional information, refer to Note 1 to the condensed consolidated financial statements included herein, for the Company's evaluation of the events and conditions and its plans regarding the going concern matter.

Until we can generate sufficient revenue, we plan to finance our business with the proceeds from the issuance and sale of debt or equity securities, including sales pursuant to the SEPA, or borrowings under credit facilities. There is no assurance our management's plans to obtain additional debt or equity financing or credit facilities will be successfully implemented or implemented on terms favorable to us.

The further development of our products, commencement of commercial operations and expansion of our business will require a significant amount of cash for expenditures. Our ability to successfully manage this growth will depend on many factors, including our working capital needs, the availability of equity or debt financing and, over time, our ability to generate cash flows from operations.

Given our current liquidity position, we will need to raise additional capital. If we raise additional funds by issuing equity securities, this would result in dilution to our stockholders. If we raise additional funds by issuing any additional preferred stock, such securities may also provide for rights, preferences, or privileges senior to those of holders of Common Stock. If we raise additional funds by issuing debt securities, such debt securities would have rights, preferences and privileges senior to those of holders of Common Stock. The terms of debt securities or borrowings could impose significant restrictions on our operations. The credit market and financial services industry have in the past, and may in the future, experience periods of uncertainty that could impact the availability and cost of equity and debt financing.

Cash Flows

The following table summarizes our cash flows from operating, investing and financing activities for the periods presented.

Cash flows from operating activities

Net cash used in operating activities was $9,105,949 and $1,927,792 for the three months ended March 31, 2026 and 2025, respectively. The increase in cash used from operating activities is primarily the result of the net effect of (i) a net increase in cash used from non-cash expenses of $21,370,894 including (a) an increase in cash used from an increase in the gain on change in fair value of warrant liabilities of $11,268,960, (b) a decrease in cash used related to the increase in the loss on issuance of debt of $10,953,474, (c) an increase in cash used from the interest expense recognized on remeasurement of preferred stock liability of $10,398,050 that was recognized during the three months ended March 31, 2025, (d) a decrease in cash used due to the decrease in the gain on sale of intellectual property intangible assets of $8,961,872 that was recognized during the three months ended March 31, 2025, (e) an increase in cash used due to an increase in the gain related to the change in fair value of debt of $8,022,724, (f) a decrease in cash used due to the loss on issuance of warrants and related costs of $8,206,193 recorded during the three months ended March 31, 2026, (g) an increase in cash used due to the loss on impairment of inventories, property and equipment and operating lease right-of-use asset of $6,064,823 recognized during the three months ended March 31, 2025, (h) an increase in cash used due to the loss on extinguishment of debt of $5,497,516 recognized during the three months ended March 31, 2025 and (i) an increase in cash used due to the increase in the gain related to the change in fair value of derivative liability of $4,871,920, (ii) a decrease in cash used from a decrease in net loss of $16,151,527 and (iii) an increase in cash used from a change in working capital of $1,958,790.

Cash flows from investing activities

Net cash used in investing activities was $19,366,330 and $750,000 for the three months ended March 31, 2026 and 2025, respectively. The amount used in investing activities for the three months ended March 31, 2026 relates to (i) $18,075,510 of payments under the SYME Convertible Note Receivable and Tekne Convertible Note Receivable, (ii) $749,905 of cash paid for the Lyocon Acquisition, net of cash acquired, and (iii) $540,915 of cash paid for the acquisition of a controlling financial interest in Orbit, net of cash acquired. The amount used in investing activities for the three months ended March 31, 2025 relates to $600,000 of cash paid for the deposit on the anticipated acquisition of Trumar Capital LLC and $150,000 of payments under the SYME Convertible Note Receivable.

Cash flows from financing activities

Net cash provided by financing activities was $12,082,288 and $2,539,392 for the three months ended March 31, 2026 and 2025, respectively.

Net cash provided by financing activities during the three months ended March 31, 2026 is comprised primarily of (i) $11,994,929 of proceeds from the February 2026 Offering, as further described in Note 11 to the condensed consolidated financial statements included herein, (ii) $2,172,771 of proceeds from the SEPA, partially offset by a decrease in cash provided of (iii) $1,712,314 from repayments of debt and (iv) $1,137,116 from payments of debt and equity issuance costs.

Net cash provided by financing in activities during the three months ended March 31, 2025 is comprised primarily of (i) $2,394,708 of proceeds from the issuance of the Indigo Capital Convertible Notes, (ii) $1.0 million in proceeds from the Liqueous Settlement Agreement, partially offset by (iii) a payment on debt borrowings of $835,316 related to the extinguishment of the remaining August 2024 Convertible Notes.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2026. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements, other than our variable interest in SYME 3, an unconsolidated variable interest entity described in Note 4 to the condensed consolidated financial statements included herein. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

For our contractual obligations that are expected to have an effect on our liquidity and cash flow, refer to Notes 8, 10, 11 and 13 to the condensed consolidated financial statements.

Critical Accounting Estimates

Our condensed consolidated financial statements are prepared in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. We evaluate our estimates and assumptions on an ongoing basis. Our estimates and assumptions are based on historical experience and on various other factors that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

In connection with the business combinations, fair value option elections, and other significant transactions completed during the three months ended March 31, 2026 described within the condensed consolidated financial statements, we have identified additional critical accounting estimates relating to (i) business combinations, including the determination of fair value of identifiable assets acquired, liabilities assumed and contingent consideration as of the acquisition date, (ii) the assessment of impairment of goodwill and intangible assets and (iii) the subsequent remeasurement of contingent consideration liabilities. We expect to provide a full discussion of these matters as critical accounting estimates in our Annual Report on Form 10-K for the year ending December 31, 2026. Other than the foregoing, there have been no significant changes to our accounting policies during the three months ended March 31, 2026, as compared to the critical accounting policies described in our audited financial statements included in the Annual Report.

Recently Issued and Adopted Accounting Pronouncements

We review new accounting standards to determine the expected financial impact, if any, that the adoption of each new standard will have. For the recently issued and adopted accounting standards that we believe may have an impact on our condensed consolidated financial statements, refer to Note 2 to the condensed consolidated financial statements.