SOLESENCE Swings to Q3 Loss Amid Revenue Dip, Soaring Expenses

Ticker: SLSN · Form: 10-Q · Filed: Nov 12, 2025 · CIK: 883107

Sentiment: bearish

Topics: Earnings Miss, Revenue Decline, Increased Expenses, Liquidity Concerns, Related Party Debt, Beauty & Life Sciences, Small Cap

Related Tickers: SLSN

TL;DR

**SLSN's Q3 loss and cash burn are flashing red; related-party debt is a band-aid, not a cure.**

AI Summary

SOLESENCE, INC. (SLSN) reported a significant net loss of $1.12 million for the three months ended September 30, 2025, a sharp decline from a net income of $3.045 million in the same period of 2024. Total revenue decreased by 13.4% to $14.597 million for the quarter, down from $16.866 million year-over-year, primarily due to a drop in product revenue from $16.785 million to $14.533 million. Despite the quarterly loss, the nine-month period showed a net income of $1.627 million, though this is a substantial decrease from $4.793 million in the prior year. Gross profit for the quarter fell by 44.8% to $3.37 million, while selling, general and administrative expenses surged by 58.7% to $3.069 million. The company's cash position significantly deteriorated, with cash decreasing from $1.409 million at December 31, 2024, to $429,000 by September 30, 2025. This was partially offset by increased related-party lines of credit, totaling $14.816 million as of September 30, 2025, up from $4.0 million at December 31, 2024, indicating reliance on related-party financing.

Why It Matters

SOLESENCE's sharp decline into a net loss and significant revenue drop in Q3 2025, coupled with increased reliance on related-party financing, signals potential operational challenges and liquidity concerns for investors. The substantial increase in selling, general, and administrative expenses, alongside a deteriorating cash position, could erode investor confidence and impact the company's ability to compete effectively in the beauty and life sciences markets. This performance contrasts with its Nasdaq uplisting in April 2025, suggesting that market access alone isn't translating into improved financial health. Competitors might capitalize on SLSN's struggles, potentially impacting its market share and long-term growth prospects.

Risk Assessment

Risk Level: high — The company reported a net loss of $1.12 million for the three months ended September 30, 2025, a significant reversal from a $3.045 million net income in the prior year. Cash decreased by 69.5% from $1.409 million at December 31, 2024, to $429,000 at September 30, 2025, while total current liabilities increased to $17.864 million, indicating potential liquidity issues and a heightened reliance on related-party financing, which now totals $14.816 million.

Analyst Insight

Investors should exercise extreme caution and consider reducing exposure to SLSN given the significant Q3 net loss, declining revenue, and deteriorating cash position. The increased reliance on related-party debt suggests underlying financial strain, and further due diligence is warranted before any new investment.

Financial Highlights

debt To Equity
1.10
revenue
$14.597M
operating Margin
-5.35%
total Assets
$53.987M
total Debt
$24.632M
net Income
$(1.12M)
eps
$(0.02)
gross Margin
23.09%
cash Position
$429K
revenue Growth
-13.4%

Revenue Breakdown

SegmentRevenueGrowth
Product Revenue$14,533M-13.4%
Other Revenue$64M-21.0%

Key Numbers

Key Players & Entities

FAQ

What were SOLESENCE's key financial results for the three months ended September 30, 2025?

SOLESENCE reported a net loss of $1.12 million for the three months ended September 30, 2025, a significant reversal from a net income of $3.045 million in the same period of 2024. Total revenue decreased by 13.4% to $14.597 million from $16.866 million year-over-year.

How did SOLESENCE's cash position change during the nine months ended September 30, 2025?

SOLESENCE's cash position significantly deteriorated, decreasing from $1.409 million at December 31, 2024, to $429,000 by September 30, 2025. This represents a 69.5% decline in cash over the nine-month period.

What is the trend in SOLESENCE's selling, general and administrative expenses?

Selling, general and administrative expenses for SOLESENCE increased substantially, rising by 58.7% from $1.934 million for the three months ended September 30, 2024, to $3.069 million for the same period in 2025.

What is the significance of SOLESENCE's related-party lines of credit?

SOLESENCE's reliance on related-party lines of credit has increased, with the total amount rising from $4.0 million at December 31, 2024, to $14.816 million at September 30, 2025. This indicates a growing dependence on internal or affiliated financing sources.

Did SOLESENCE experience a change in its gross profit for the quarter?

Yes, SOLESENCE's gross profit for the three months ended September 30, 2025, decreased by 44.8% to $3.37 million, down from $6.102 million in the corresponding period of 2024.

What was SOLESENCE's net income for the nine months ended September 30, 2025?

For the nine months ended September 30, 2025, SOLESENCE reported a net income of $1.627 million. This is a significant decrease compared to the $4.793 million net income reported for the nine months ended September 30, 2024.

How many shares of common stock were outstanding for SOLESENCE as of November 12, 2025?

As of November 12, 2025, there were 70,536,845 shares outstanding of SOLESENCE's common stock, with a par value of $.01 per share.

What is SOLESENCE's primary strategic focus and business description?

SOLESENCE is a science-driven company focused on beauty- and life-science markets, with skin health and medical diagnostics making up the majority of its business. Its primary strategic focus has been the North American market, but it is working to expand its reach within foreign markets.

When did SOLESENCE's securities uplist to Nasdaq?

SOLESENCE's securities were uplisted to Nasdaq trading under the symbol SLSN on April 8, 2025. Prior to this, its common stock traded on the OTCQB marketplace under the symbol NANX.

What was the change in SOLESENCE's trade accounts receivable, net, for the nine months ended September 30, 2025?

SOLESENCE's trade accounts receivable, net, increased by $4.840 million during the nine months ended September 30, 2025, contributing to a decrease in cash from operating activities.

Risk Factors

Industry Context

Solsence operates in the beauty and life sciences markets, focusing on skin health and medical diagnostics. The company leverages materials science and nanotechnology for applications in sunscreens, cosmetics, and diagnostic ingredients. The beauty and personal care industry is highly competitive, driven by innovation and consumer trends, while the medical diagnostics sector is subject to stringent regulatory requirements and technological advancements.

Regulatory Implications

As a company involved in medical diagnostics and consumer health products, Solsence is subject to regulations from bodies like the FDA. Compliance with manufacturing standards (e.g., GMP) and product safety regulations is critical. Any failure to comply could result in product recalls, fines, or reputational damage, impacting market access and financial performance.

What Investors Should Do

  1. Monitor SG&A Expense Control
  2. Assess Related-Party Financing Sustainability
  3. Evaluate Revenue Recovery and Diversification
  4. Analyze Gross Margin Improvement Potential
  5. Scrutinize Cash Burn Rate

Key Dates

Glossary

Accumulated Deficit
The total cumulative net losses of a company that have not been offset by net income. (Solsence has an accumulated deficit of $98.801 million as of September 30, 2025, indicating that the company has historically incurred more losses than profits.)
Deferred Revenue
Revenue that has been received by a company for goods or services that have not yet been delivered or rendered. (Deferred revenue decreased significantly from $5.571 million at December 31, 2024, to $1.197 million at September 30, 2025, suggesting a reduction in future revenue commitments.)
Line of credit – accounts receivable, related party
A revolving loan facility provided by a related party, secured by the company's accounts receivable. (This line of credit increased to $5.316 million as of September 30, 2025, highlighting the company's reliance on related-party financing for working capital.)
Line of credit – inventory, related party
A revolving loan facility provided by a related party, secured by the company's inventory. (This line of credit has a long-term portion of $9.500 million and a current portion of $0 as of September 30, 2025, indicating a significant financing arrangement with a related party.)
Net loss per share - basic
The net loss of a company divided by the weighted average number of outstanding common shares. (Solsence reported a basic net loss per share of $(0.02) for Q3 2025, reflecting the company's profitability during the period.)
Provision for income taxes
The amount of income tax expense recognized by a company for a given period. (The company recorded a $390,000 provision for income taxes for the nine months ended September 30, 2025, despite a net loss for the quarter, suggesting potential tax implications from other income or prior periods.)
Stock-based compensation
Compensation provided to employees in the form of stock or stock options. (Stock-based compensation was $369,000 for the nine months ended September 30, 2025, and is a non-cash expense that impacts net income.)
Trade accounts receivable, net
The total amount owed to a company by its customers for goods or services delivered, net of an allowance for doubtful accounts. (Net trade accounts receivable increased significantly from $4.869 million at December 31, 2024, to $9.709 million at September 30, 2025, indicating higher sales on credit or slower collections.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, Solsence, Inc. has experienced a significant downturn. Total revenue decreased by 13.4% to $14.597 million, and the company swung from a net income of $3.045 million to a net loss of $1.12 million. Gross profit saw a substantial decline of 44.8%, while SG&A expenses surged by 58.7%. The company's cash position has also deteriorated significantly, from $1.409 million at year-end 2024 to $429,000, while its reliance on related-party debt has increased.

Filing Stats: 4,677 words · 19 min read · ~16 pages · Grade level 15.7 · Accepted 2025-11-12 09:07:20

Key Financial Figures

Filing Documents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 3 Consolidated Balance Sheets (Unaudited Consolidated Condensed) as of September 30, 2025, and December 31, 2024 3 Consolidated Statements of Operations (Unaudited Consolidated Condensed) for the three and nine months ended September 30, 2025, and 2024 4 Consolidated Statements of Shareholders' Equity (Unaudited Consolidated Condensed) for the three and nine months ended September 30, 2025, and 2024 5 Consolidated Statements of Cash Flows (Unaudited Consolidated Condensed) for nine months ended September 30, 2025, and 2024 6 Notes to Unaudited Consolidated Condensed Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 16 Item 4.

Controls and Procedures

Controls and Procedures 16

– OTHER INFORMATION

PART II – OTHER INFORMATION 16 Item 1.

Legal Proceedings

Legal Proceedings 16 Item 1A.

Risk Factors

Risk Factors 17 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 17 Item 3. Defaults Upon Senior Securities 17 Item 4. Mine Safety Disclosures 17 Item 5. Other Information 17 Item 6. Exhibits 17

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements SOLSENCE, INC. CONSOLIDATED BALANCE SHEETS (Unaudited Consolidated Condensed) As of September 30, 2025 December 31, 2024 (in thousands except share and per share data) ASSETS Current assets: Cash $ 429 $ 1,409 Trade accounts receivable 11,438 5,655 Allowance for credit losses ( 1,729 ) ( 786 ) Trade accounts receivable, net 9,709 4,869 Inventories, net 18,869 20,267 Prepaid expenses and other current assets 3,785 2,803 Total current assets 32,792 29,348 Equipment and leasehold improvements, net 13,938 12,734 Operating leases, right of use 7,257 7,917 Other assets, net — 3 Total assets $ 53,987 $ 50,002 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Line of credit – accounts receivable, related party $ 5,316 $ — Current portion of line of credit – inventory, related party — 4,000 Current portion of term debt, related party — 1,000 Current portion of operating lease obligations 1,224 1,260 Accounts payable 4,826 9,093 Deferred revenue 1,197 5,571 Accrued expenses 5,301 4,849 Total current liabilities 17,864 25,773 Long-term portion of operating lease obligations 8,144 9,037 Long-term portion of line of credit– inventory, related party 9,500 — Long-term portion of term debt, related party 1,000 — Asset retirement obligations 252 246 Total long-term liabilities 18,896 9,283 Stockholders' equity: Preferred stock, $ .01 par value, 24,088 shares authorized, and no shares issued and outstanding — — Common stock, $ .01 par value, 95,000,000 shares authorized; 70,536,845 and 70,103,279 shares issued and outstanding on September 30, 2025 and December 31 2024, respectively 705 700 Additional paid-in capital 115,323 114,674 Accumulated deficit ( 98,801 ) ( 100,428 ) Total stockholders' equity 17,227 14,946 Total liabilities and stockholders' equity $ 53,987 $ 50,002 (See accompanying Notes to Con

Financial Statements)

Financial Statements) 4 SOLSENCE, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited Consolidated Condensed) (in thousands except share data) Preferred Stock Common Stock Additional Paid-in Accumulated Description Shares Amount Shares Amount Capital Deficit Total Balance on December 31, 2023 — $ — 49,627,254 $ 496 $ 106,069 $ ( 104,663 ) $ 1,902 Issuance of shares and stock option exercises — — 5,233,730 52 1,944 — 1,996 Stock-based compensation — — — — 160 — 160 Net income for the three months ended March 31, 2024 — — — — — 893 893 Balance on March 31, 2024 — $ — 54,860,984 $ 548 $ 108,173 $ ( 103,770 ) 4,951 Issuance of shares and stock option exercises — — 15,000,000 150 5,810 — 5,960 Stock-based compensation — — — — 157 — 157 Net income for the three months ended June 30, 2024 — — — — — 856 856 Balance on June 30, 2024 — $ — 69,860,984 $ 698 $ 114,140 $ ( 102,914 ) $ 11,924 Issuance of shares and stock option exercises — — 88,662 1 39 — 40 Stock-based compensation — — — — 160 — 160 Net income for the three months ended September 30, 2024 — — — — — 3,045 3,045 Balance on September 30, 2024 — $ — 69,949,646 $ 699 $ 114,339 $ ( 99,869 ) $ 15,169 Balance on December 31, 2024 — $ — 70,103,279 $ 700 $ 114,674 $ ( 100,428 ) $ 14,946 Issuance of shares and stock option exercises — — — — 3 — 3 Stock-based compensation — — — — 127 — 127 Net income for the three months ended March 31, 2025 — — — — — 80 80 Balance on March 31, 2025 — $ — 70,103,279 $ 700 $ 114,804 $ ( 100,348 ) 15,156 Issuance of shares and stock option exercises — — 378,666 4 241 — 245 Stock-based compensation — — — — 120 — 120 Net income for the three months ended June 30, 2025 — — — — — 2,667 2,667 Balance on June 30, 2025 — $ — 70,481,945 $ 704 $ 115,165 $ ( 97,681 ) $ 18,

Financial Statements)

Financial Statements) 5 SOLSENCE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited Consolidated Condensed) Nine months ended September 30, 2025 2024 (in thousands) Operating activities: Net income $ 1,627 $ 4,793 Adjustments to reconcile net income to cash used in operating activities: Depreciation and amortization 676 700 Stock-based compensation 369 477 Changes in assets and liabilities related to operations: Trade accounts receivable, net ( 4,840 ) ( 5,265 ) Inventories, net 1,398 ( 5,012 ) Prepaid expenses and other assets ( 982 ) ( 1,979 ) Accounts payable ( 4,449 ) 7 Accrued expenses 452 2,345 Deferred revenue ( 4,368 ) 3,875 Change in right of use asset and lease liability, net ( 269 ) ( 159 ) Net cash used in operating activities ( 10,386 ) ( 218 ) Investing activities: Acquisition of equipment and leasehold improvements ( 1,693 ) ( 1,965 ) Net cash used in investing activities ( 1,693 ) ( 1,965 ) Financing activities: Proceeds from line of credit - inventory, related party 5,500 200 Proceeds from line of credit – accounts receivable, related party 5,313 14,875 Payments to line of credit – accounts receivable, related party — ( 17,685 ) Payments to term loans, related party — ( 2,000 ) Proceeds from issuance of mezzanine preferred stock — 6,000 Proceeds from issuance of stock and exercise of stock options 286 1,996 Net cash provided by financing activities 11,099 3,386 (Decrease) increase in cash ( 980 ) 1,203 Cash at beginning of period 1,409 1,722 Cash at end of period $ 429 2,925 Supplemental cash flow information: Interest paid $ 690 $ 516 Income Taxes Paid $ 325 $ — Supplemental non-cash investing and financing activities: Accounts payable incurred for the purchase of equipment and leasehold improvements $ 182 $ 295 Conversion of mezzanine preferred stock $ — $ 6,000 (See accompanying Notes to Consolidated

Financial Statements)

Financial Statements) 6 SOLSENCE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited Consolidated Condensed) (In thousands, except share and per share data or as otherwise noted herein) (1) Basis of Presentation The accompanying unaudited consolidated condensed interim financial statements of Solsence, Inc. ("Solsence", "Company", "we", "our", or "us") reflect all adjustments (consisting of normal recurring adjustments) which, in the opinion of management, are necessary for a fair statement of our financial position and operating results for the interim periods presented. All statements include the results from both Solsence, Inc. and our wholly-owned subsidiary, Solsence, LLC. Operating results for the three and nine months ended September 30, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. These financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31, 2024, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission. (2) Description of Business Solsence, Inc. ("Solsence", "Company", "we", "our", or "us") is a science-driven company which, along with its wholly owned subsidiary, Solsence, LLC (our "Solsence beauty science subsidiary"), is focused in various beauty- and life-science markets. Using consumer health as our end-goal and science and innovation to guide the path, skin health and medical diagnostics combined currently make up the majority of our business and drive our forward growth strategy. We offer engineered materials, formulation development and commercial manufacturing through an integrated family of technologies. Our expertise in materials engineering allows us to effectively coat and disperse particles on a nano and "non-nano" scale for use in a variety of skin health markets, including for use in sunscreens as active ingredients and as fully

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