UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

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

For the transition period from ______ to ______.

Commission File Number 001-41347

EXPION360 INC.

(Exact name of registrant as specified in its charter)

Nevada

(state or other jurisdiction of incorporation or organization)

81-2701049

(IRS Employer Identification No.)

2025 SW Deerhound Ave. Redmond, OR 97756

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (541) 797-6714

N/A

(Former name, former address and former fiscal year, 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
Common Stock, par value $0.001 per share	XPON	The Nasdaq Capital Market

Indicate by check mark 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 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 check mark 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 any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of November 13, 2025, there were 9,656,739 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA	i
PART I - FINANCIAL INFORMATION	1
ITEM 1. FINANCIAL STATEMENTS	1
BALANCE SHEETS	1
STATEMENTS OF OPERATIONS (UNAUDITED)	2
STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)	3
STATEMENTS OF CASH FLOWS (UNAUDITED)	4
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)	6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36
ITEM 4. CONTROLS AND PROCEDURES	36
PART II - OTHER INFORMATION	36
ITEM 1. LEGAL PROCEEDINGS	36
ITEM 1A. RISK FACTORS	37
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	37
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	38
ITEM 4. MINE SAFETY DISCLOSURES	38
ITEM 5. OTHER INFORMATION	38
ITEM 6. EXHIBITS	39
SIGNATURES	40

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Quarterly Report on Form 10-Q (this “Quarterly Report”) includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions contained in 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”). All statements in this Quarterly Report, other than statements of historical fact, are forward-looking statements, including, without limitation, projections regarding the markets in which we operate, plans and objectives for future operations, estimates of future financial condition, results of operations or liquidity, proposed new products or services, expected capital expenditures, proposed financings, future economic conditions or performance, and any estimates or assumptions underlying any of the foregoing. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “should,” “anticipates,” “intends,” “seeks,” “believes,” “estimates,” “potential,” “forecasts,” “continue,” or the negative thereof, or other comparable terminology. All forward-looking statements included in this Quarterly Report are made as of the date hereof and are based on information available to us as of such date. Although we believe the expectations reflected in our forward-looking statements are reasonable, there can be no assurance that such expectations or any of our forward-looking statements will prove to be accurate. Actual results may differ, and could differ materially, from those results expressed in or implied by the forward-looking statements. Investors are cautioned not to unduly rely on any such forward-looking statements.

Forward-looking statements are neither statements of historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations, and assumptions regarding our business, industry, plans and strategies, anticipated events and trends, and other future conditions. Because forward-looking statements relate to the future, they are subject to considerable risks, uncertainties and changes in circumstances that are difficult to predict and may be outside our control. Our actual financial condition, results of operations, liquidity and business outcomes may differ materially from those expressed in or implied by these forward-looking statements.

Important factors that could cause our actual results to differ materially from those indicated in the forward-looking statements include, among others, the following:

We operate in an extremely competitive industry and are subject to pricing pressures.

We have a history of losses. 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.

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.

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.

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. 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.

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.

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.

Moreover, new risks and uncertainties emerge occasionally, and it is not possible for us to predict all risks and uncertainties, nor can we assess the impact of all factors on our business, or the extent to which any factor, or combination of factors, may cause our actual future results to be materially different from any results expressed in or implied by any forward-looking statements. Except as required by applicable law or the listing rules of the Nasdaq Stock Market, we expressly disclaim any intent or obligation to update any forward-looking statements. If we do update or correct any forward-looking statements, investors should not conclude we will make additional updates or corrections. We qualify all of our forward-looking statements by reference to these cautionary statements.

INDUSTRY AND MARKET DATA

This Quarterly Report includes statistical and other industry and market data that we obtained from industry publications and research, surveys, and studies conducted by third parties, as well as our own projections and estimates. All of the market data used in this report involve a number of assumptions and limitations, and investors are cautioned not to unduly rely on such data. Industry publications and research, surveys, and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information.

Our estimates of the potential market opportunities for our products include several key assumptions based on our industry knowledge, industry publications and research, and other surveys. While we believe our internal assumptions are reasonable, no independent source has verified such assumptions.

TRADEMARKS

This Quarterly Report includes trademarks, tradenames, and service marks that are our property or the property of others. Solely for convenience, such trademarks and tradenames sometimes appear without any “™” or “®” symbol. However, failure to include such symbols is not intended to suggest, in any way, that we will not assert our rights or the rights of any applicable licensor, to these trademarks and tradenames.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EXPION360 INC.

BALANCE SHEETS


	As of September 30, 2025 (Unaudited)			As of December 31, 2024
Assets
Current Assets
Cash and cash equivalents	$	4,293,797		$	547,565
Accounts receivable, net		567,991			613,022
Inventory		3,631,659			4,831,461
Prepaid/in-transit inventory		581,837			1,612,686
Prepaid expenses and other current assets		485,452			236,461
Total current assets		9,560,736			7,841,195

Property and equipment		807,082			914,081
Accumulated depreciation		(453,857	)		(430,191	)
Property and equipment, net		353,225			483,890

Other Assets
Operating leases – right-of-use assets		743,024			754,832
Deposits		32,016			27,471
Total other assets		775,040			782,303
Total assets	$	10,689,001		$	9,107,388

Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	522,794		$	338,091
Customer deposits		6,516			48,474
Accrued expenses and other current liabilities		154,426			187,464
Current portion of operating lease liability		327,683			256,153
Current portion of long-term debt		30,553			31,758
Suspended liability		—			4,985,948
Total current liabilities		1,041,972			5,847,888

Long-term debt, net of current portion and discount		175,022			198,412
Operating lease liability, net of current portion		459,942			542,764
Total liabilities		1,676,936			6,589,064

Stockholders’ equity
Preferred stock, par value $0.001 per share; 20,000,000 shares authorized; 0 shares issued and outstanding as of September 30, 2025 and December 31, 2024		—			—
Common stock, par value $0.001 per share; 200,000,000 shares authorized; 8,643,662 and 2,096,082 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		8,644			2,096
Additional paid-in capital		45,376,727			37,091,468
Accumulated deficit		(36,373,306	)		(34,575,240	)
Total stockholders’ equity		9,012,065			2,518,324
Total liabilities and stockholders’ equity	$	10,689,001		$	9,107,388

The accompanying notes are an integral part of these financial statements.

EXPION360 INC.

STATEMENTS OF OPERATIONS (UNAUDITED)


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2025			2024			2025			2024
Net sales	$	2,393,192		$	1,389,495		$	7,432,470		$	3,639,462
Cost of sales		1,850,709			1,220,804			5,765,810			2,922,786
Gross profit		542,483			168,691			1,666,660			716,676
Selling, general and administrative		3,544,666			2,096,468			7,166,907			6,290,202
Loss from operations		(3,002,183	)		(1,927,777	)		(5,500,247	)		(5,573,526	)

Other (income) / expense
Interest income		(23	)		(14,589	)		(24	)		(60,049	)
Interest expense		4,439			467,715			13,756			971,561
Loss on sale of property and equipment		—			146,454			13,353			146,760
Settlement expense		—			400,900			—			709,900
Other (income) / expense		(3,729,429	)		5,885,940			(3,729,379	)		5,884,751
Total other (income) / expense		(3,725,013	)		6,886,420			(3,702,294	)		7,652,923
Income / (Loss) before income taxes		722,830			(8,814,197	)		(1,797,953	)		(13,226,449	)

Franchise taxes		38			460			113			1,379
Net income / (loss)	$	722,792		$	(8,814,657	)	$	(1,798,066	)	$	(13,227,828	)

Net income / (loss) per share:
Basic	$	0.12		$	(24.55	)	$	(0.43	)	$	(78.63	)
Diluted	$	0.10		$	(24.55	)	$	(0.43	)	$	(78.63	)

Weighted-average number of common shares outstanding:
Basic		5,995,776			358,990			4,157,417			168,219
Diluted		7,567,322			358,990			4,157,417			168,219

The accompanying notes are an integral part of these financial statements.

EXPION360 INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)


	Common Stock			Additional Paid-in Capital			Accumulated Deficit			Total Stockholders’ Equity
	Shares		Amount	Additional Paid-in Capital			Accumulated Deficit			Total Stockholders’ Equity
Balance at December 31, 2023	69,230	$	69	$	26,445,378		$	(21,095,765	)	$	5,349,682
Stock issued under equity line of credit	382		—		125,153			—			125,153
Proceeds received from cashless exercise of warrants	16		—		(4	)		—			(4	)
Stock issued for interest payment	107		—		41,250			—			41,250
Stock-based compensation	—		—		35,127			—			35,127
Issuance of stock options	—		—		218,219			—			218,219
Issuance of RSUs	—		—		51,647			—			51,647
Settlement of vested RSUs	99		—		46,889			—			46,889
Settlement of commitment shares	635		1		(1	)		—			—
Net loss	—		—		—			(2,192,940	)		(2,192,940	)
Balance at March 31, 2024	70,469		70		26,963,658			(23,288,705	)		3,675,023
Stock issued for ELOC	3,954		4		703,334			—			703,338
Stock issued for interest payment	153		—		34,561			—			34,561
Issuance of stock options	—		—		69,416			—			69,416
Issuance of RSUs	—		—		53,654			—			53,654
Settlement of vested RSUs	20		—		—			—			—
Stock issued as a result of settlement	1,000		1		208,999			—			209,000
Net loss	—		—		—			(2,220,231	)		(2,220,231	)
Balance at June 30, 2024	75,596		75		28,033,622			(25,508,936	)		2,524,761
Stock issued for interest payment	154		—		15,028			—			15,028
Issuance of stock options	—		—		71,116			—			71,116
Issuance and settlement of RSUs	386		—		35,488			—			35,488
Issuance of shares and pre-funded warrants, follow-on offering, net of issuance costs	500,000		500		8,681,190			—			8,681,690
Proceeds from exercise of Series B warrants	342,588		344		31,080			—			31,424
Net loss	—		—		—			(8,814,657	)		(8,814,657	)
Balance at September 30, 2024	918,724	$	919	$	36,867,524		$	(34,323,593	)	$	2,544,850


Balance at December 31, 2024	2,096,082	$	2,096	$	37,091,468		$	(34,575,240	)	$	2,518,324
Issuance of shares, net of issuance costs	474,193		474		355,084			—			355,558
Issuance of pre-funded warrants	574,193		574		1,423,425			—			1,423,999
Issuance of stock options	—		—		50,721			—			50,721
Net loss	—		—		—			(1,151,998	)		(1,151,998	)
Balance at March 31, 2025	3,144,468		3,144		38,920,698			(35,727,238	)		3,196,604
Issuance and settlement of RSUs	105,000		105		80,745			—			80,850
Issuance of stock options	—		—		52,379			—			52,379
Issuance of shares in exchange for services	125,000		125		106,125			—			106,250
Net loss	—		—		—			(1,368,860	)		(1,368,860	)
Balance at June 30, 2025	3,374,468		3,374		39,159,947			(37,096,098	)		2,067,223
Issuance of stock options	—		—		267,887			—			267,887
Issuance of shares in exchange for services	200,000		200		241,800			—			242,000
Proceeds from exercise of warrants, net of costs	5,069,194		5,070		5,707,093			—			5,712,163
Net income	—		—		—			722,792			722,792
Balance at September 30, 2025	8,643,662	$	8,644	$	45,376,727		$	(36,373,306	)	$	9,012,065

The accompanying notes are an integral part of these financial statements.

EXPION360 INC.

STATEMENTS OF CASH FLOWS (UNAUDITED)


	For the Nine Months Ended September 30,
	2025			2024
Cash flows from operating activities

Net loss	$	(1,798,066	)	$	(13,227,828	)
Adjustments to reconcile net loss to net cash used in operating activities:

SEC Form 10-Q filed by Expion360 Inc.