CLOUDASTRUCTURE, INC. 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-42494

CLOUDASTRUCTURE, INC.

(Exact name of registrant as specified in its charter)

Delaware		87-0690564
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

228 Hamilton Rd., Palo Alto, CA		94301
(Address of principal executive offices)		(Zip Code)

	(650) 644-4160
	(Registrant’s telephone number, including area code)

	NONE
	(Former name or former address, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange On Which Registered

Class A Common Stock

CSAI

Nasdaq Capital Market

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ☐	Accelerated Filer ☐	Non-Accelerated Filer ☒	Smaller Reporting Company ☒
			Emerging Growth Company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with a new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


	Class		Outstanding as of September 30, 2025
	Class A Common Stock		19,516,540
	Class B Common Stock		63,972

CLOUDASTRUCTURE, INC.

TABLE OF CONTENTS

			Page No.

PART I.		FINANCIAL INFORMATION	5

	Item 1.	Financial Statements	5

		Condensed Consolidated Unaudited Balance Sheets at September 30, 2025 and December 31, 2024	5

		Condensed Consolidated Unaudited Statements of Operations for the Three and Nine Months Ended September 30, 2025 and September 30, 2024	6

		Condensed Consolidated Unaudited Statements of Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2025 and September 30, 2024	7

		Condensed Consolidated Unaudited Statements of Cash Flows for the Nine Months Ended September 30, 2025 and September 30, 2024	9

		Notes to Interim Condensed Consolidated Unaudited Financial Statements	10

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

	Item 4.	Controls and Procedures	27

PART II.		OTHER INFORMATION	28

	Item 1.	Legal Proceedings	28

	Item 1A.	Risk Factors	28

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

	Item 5.	Other Information	28

	Item 6.	Exhibits	29

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that can involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this report are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “can,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future”, “goal,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements contained in this report may include, but are not limited to, statements about:

the implementation of our business model and our strategic plans for our business, product, services and technology;

our commercialization and marketing capabilities and strategy;

our ability to establish or maintain collaborations or strategic relationships or obtain additional funding;

our competitive position;

the scope of protection that we able to establish and maintain for intellectual property rights covering our products, services and technology;

developments and projections relating to our competitors and our industry;

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements;

our ability to access additional financing to support our operations; and

the impact of new or existing laws and regulations on our business and strategy.

We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate, and financial trends that we believe may affect our business, financial condition, results of operations, and prospects, but these forward-looking statements are not guarantees of future performance or development. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this report, whether as a result of any new information, future events, or otherwise.

There are a number of risks, uncertainties, and other important factors that could cause our actual results to differ materially from the forward-looking statements contained in this report, including, among others, those factors set forth in the “Risk Factors” section of our Annual Report on Form 10-K, as updated by information filed in our Forms 10-Q and Forms 8-K. A non-exhaustive summary of principal risk factors that make investing in our securities risky and may cause actual results to differ materially are set forth below:

Our technology continues to be developed, and it is unlikely that we will ever develop our technology to a point at which no further development is required;

If our security measures are breached or unauthorized access to individually identifiable biometric or other personally identifiable information is otherwise obtained, our reputation may be harmed, and we may incur significant liabilities;

Our collection, processing, use and disclosure of individually identifiable biometric or other personally identifiable information is subject to evolving and expanding privacy and security regulations;

Our success is highly dependent on our ability to attract and retain highly skilled executive officers and employees;

Privacy and data security laws and regulations could require us to make changes to our business, impose additional costs on us and reduce the demand for our software solutions;

Issues raised by the use of artificial intelligence (including machine learning) in our platforms may result in reputational harm or liability or affect our ability to operate profitably and sustainably;

We operate in a highly competitive industry that is dominated by multiple very large, well-capitalized market leaders and is constantly evolving;

Successful infringement claims against us could result in significant monetary liability or prevent us from selling some of our products;

We rely on other companies to provide certain hardware and software solutions for our products;

We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives;

Intellectual property rights do not necessarily address all potential threats to our competitive advantage;

We have a limited operating history, which may make it difficult for you to evaluate our current business and predict our future success and viability;

We have historically operated at a loss, which has resulted in an accumulated deficit;

We anticipate sustaining operating losses for the foreseeable future;

We will require substantial additional capital to finance our operations;

Raising additional capital may cause dilution to our existing stockholders;

We have a substantial customer concentration, with a limited number of customers accounting for a substantial portion of our revenue;

An active trading market for our Class A common stock may not be sustained, and the market price of shares of our Class A common stock may be volatile;

Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our Class A common stock;

Our internal computer systems, or those of any of our manufacturers, contractors, consultants, collaborators or potential future collaborators, may fail or suffer security or data privacy breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data or personal data, which could result in additional costs, loss of revenue, significant liabilities, harm to our brand and material disruption of our operations; and

Our operations are vulnerable to interruption by fire, severe weather conditions, power loss, telecommunications failure, terrorist activity, pandemics/epidemics and other events beyond our control, which could harm our business.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share numbers)


	September 30, 2025			December 31, 2024
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	6,403		$	52
Accounts receivable		1,388			196
Inventory		322			249
Other current assets		295			38
Total current assets		8,409			535

Non-current assets:
Fixed assets, net		276			80
Intangible assets, net		–			–

TOTAL ASSETS	$	8,685		$	615

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	199		$	629
Accrued expenses		174			–
Preferred dividends payable		157			–
Deferred revenue		1,363			489
Total current liabilities		1,892			1,118

TOTAL LIABILITIES		1,892			1,118

Stockholders’ equity:
Class A common stock, $0.0001 par value; 250,000,000 shares authorized; 19,516,540 and 14,020,543 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		2			1
Class B common stock, $0.0001 par value; 100,000,000 shares authorized; 63,972 and 571,011 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		–			–
Preferred Stock, $0.0001 par value; 150,000 shares authorized; 5,185 and 0 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		–			–
Additional paid-in capital		54,275			40,351
Accumulated deficit		(47,484	)		(40,856	)
TOTAL STOCKHOLDERS’ EQUITY		6,792			(503	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	8,685		$	615

SEC Form 10-Q filed by Cloudastructure Inc.