Expion360 Sales Surge, But Losses Persist Amidst Going Concern Warning

TL;DR

**XPON's sales are booming, but they're still bleeding cash and might not make it without more funding – proceed with extreme caution.**

AI Summary

Expion360 Inc. (XPON) reported a significant increase in net sales for the three and six months ended June 30, 2025, reaching $2,989,947 and $5,039,278 respectively, up from $1,278,109 and $2,249,967 in the prior year periods. Despite this revenue growth, the company continued to incur substantial net losses, with a net loss of $1,368,860 for the three months ended June 30, 2025, and $2,520,858 for the six months ended June 30, 2025. This represents an improvement from the $2,220,231 and $4,413,172 net losses in the corresponding 2024 periods. Gross profit also increased to $622,610 for the quarter and $1,124,177 for the six months. However, the company's accumulated deficit grew to $37.1 million as of June 30, 2025, and it continues to face a 'going concern' doubt due to recurring losses and negative cash flows from operations, which used $1,629,896 in the first six months of 2025. Strategic outlook involves potential additional debt or equity financing to fund growth and operations.

Why It Matters

Expion360's substantial revenue growth, with net sales more than doubling year-over-year, indicates strong market demand for its lithium batteries, which is a positive signal for investors and customers in the RV, marine, and off-grid sectors. However, the persistent net losses and the 'going concern' warning highlight significant financial instability, posing a high risk for investors. The company's ability to secure additional financing will be critical for its survival and competitive positioning against larger, more established battery manufacturers. Employees also face uncertainty given the company's financial health.

Risk Assessment

Risk Level: high — Expion360 has a history of losses, incurring a net loss of $1.4 million for the three months and $2.5 million for the six months ended June 30, 2025. The company's accumulated deficit reached $37.1 million as of June 30, 2025, and its audited financial statements include a 'substantial doubt about our ability to continue as a going concern,' indicating severe financial distress and high operational risk.

Analyst Insight

Investors should exercise extreme caution and consider this a highly speculative investment. Monitor closely for successful capital raises or a clear path to profitability, as the current 'going concern' warning suggests significant risk of further dilution or even bankruptcy without additional funding.

Financial Highlights

debt To Equity

3.16

revenue

$5,039,278

operating Margin

-49.6%

total Assets

$8,605,089

total Debt

$1,701,017

net Income

-$2,520,858

eps

N/A

gross Margin

22.3%

cash Position

$684,920

revenue Growth

124.0%

Key Numbers

• $2,989,947 — Net sales for Q2 2025 (Increased from $1,278,109 in Q2 2024, showing significant growth.)
• $5,039,278 — Net sales for H1 2025 (Increased from $2,249,967 in H1 2024, indicating strong revenue momentum.)
• $1,368,860 — Net loss for Q2 2025 (Improved from $2,220,231 in Q2 2024, but still a substantial loss.)
• $2,520,858 — Net loss for H1 2025 (Improved from $4,413,172 in H1 2024, but company remains unprofitable.)
• $37,096,098 — Accumulated deficit as of June 30, 2025 (Highlights the company's significant historical losses and ongoing financial challenges.)
• $1,629,896 — Net cash used in operating activities for H1 2025 (Indicates continued negative operational cash flow, contributing to going concern risk.)
• 3,474,720 — Shares of common stock outstanding as of August 8, 2025 (Reflects potential dilution from recent equity issuances.)

Key Players & Entities

• Expion360 Inc. (company) — registrant
• SEC (regulator) — Securities and Exchange Commission
• Nasdaq Capital Market (company) — exchange where XPON is registered
• Yozamp Products Company, LLC (company) — former name of Expion360 Inc.
• Nevada (person) — state of incorporation
• Redmond, Oregon (person) — location of principal executive offices

FAQ

Risk Factors

• Going Concern Risk [high — financial]: The company faces substantial going concern doubt due to recurring losses and negative operating cash flows, having used $1,629,896 in H1 2025. Historical funding relies on equity, debt, and working capital loans, indicating a continued need for external financing to sustain operations and growth.
• Accumulated Deficit [high — financial]: As of June 30, 2025, the company has an accumulated deficit of $37,096,098. This significant historical loss underscores the challenge of achieving profitability and the reliance on future funding to cover past operational shortfalls.
• Inventory Management [medium — operational]: Inventory levels increased from $4,831,461 at year-end 2024 to $5,138,263 as of June 30, 2025. While sales are growing, a significant portion of inventory is 'prepaid/in-transit,' which decreased substantially from $1,612,686 to $485,507, suggesting potential supply chain shifts or inventory valuation changes.
• High Operating Expenses [medium — financial]: Selling, general, and administrative expenses remain high, totaling $3,622,241 for H1 2025, despite a significant increase in net sales. This contributed to an operating loss of $2,498,064 for the same period, highlighting the challenge of scaling operations profitably.

Industry Context

Expion360 Inc. operates in the premium lithium battery market, targeting sectors like RVs, marine, and off-grid solutions. This market is characterized by growing demand for energy storage due to increased adoption of recreational vehicles and renewable energy solutions. Key competitors likely focus on battery technology, safety, and integration capabilities.

Regulatory Implications

As a publicly traded company, Expion360 Inc. must adhere to SEC reporting requirements, including timely and accurate financial disclosures. The 'going concern' note highlights potential scrutiny from regulators and investors regarding financial stability and future viability.

What Investors Should Do

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Key Dates

• 2025-06-30: End of Q2 2025 Reporting Period — Company reported significant revenue growth but continued net losses and negative operating cash flow, reinforcing going concern risks.
• 2025-03-31: Filing of Annual Report on Form 10-K — Provided full-year financial data and risk disclosures, setting the baseline for subsequent interim filings.
• 2024-12-31: End of Fiscal Year 2024 — Company had $4.8 million in inventory and $547,565 in cash, with an accumulated deficit of $34.6 million.

Glossary

Accumulated deficit

The total net losses of a company since its inception that have not been offset by net income. (Indicates the company's historical unprofitability and the extent of capital required to sustain operations to date.)

Going concern

An accounting assumption that a business will continue to operate for the foreseeable future. (The company's financial condition raises doubts about its ability to continue as a going concern, requiring disclosure and potential mitigation strategies.)

LiFePO4 batteries

Lithium iron phosphate batteries, a type of rechargeable battery known for safety, longevity, and energy density. (This is the core product technology of Expion360 Inc., used across various applications like RVs and marine.)

Prepaid/in-transit inventory

Inventory that has been paid for but has not yet been received by the company, or is in transit. (A significant component of current assets, its fluctuations can indicate changes in supply chain management or payment terms.)

Operating lease liability

The future payments a company is obligated to make for assets it leases and uses in its operations. (Represents a significant financial commitment for the company, impacting its current and long-term liabilities.)

Year-Over-Year Comparison

Compared to the prior year periods, Expion360 Inc. has demonstrated substantial revenue growth, with net sales more than doubling in both the three-month period (up 134%) and six-month period (up 124%). However, the company continues to operate at a significant loss, though the net loss has narrowed by approximately 38% in the quarter and 43% year-to-date. Gross margins have improved to 22.3% from approximately 19.5% in the prior year's comparable periods, but operating expenses remain a challenge, contributing to ongoing negative operating cash flows and reinforcing going concern risks.

Key Financial Figures

• $0.001 — ch registered Common Stock, par value $0.001 per share XPON The Nasdaq Capital Mar

Filing Documents

• xpon_10q.htm (10-Q) — 919KB
• ex31_1.htm (EX-31.1) — 9KB
• ex32_1.htm (EX-32.1) — 5KB
• image_001.jpg (GRAPHIC) — 3KB
• 0001903596-25-000401.txt ( ) — 5615KB
• xpon-20250630.xsd (EX-101.SCH) — 46KB
• xpon-20250630_cal.xml (EX-101.CAL) — 54KB
• xpon-20250630_def.xml (EX-101.DEF) — 190KB
• xpon-20250630_lab.xml (EX-101.LAB) — 390KB
• xpon-20250630_pre.xml (EX-101.PRE) — 327KB
• xpon_10q_htm.xml (XML) — 785KB

- FINANCIAL

PART I - FINANCIAL INFORMATION 1

FINANCIAL

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

MANAGEMENT'S

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 23

QUANTITATIVE

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 35

CONTROLS

ITEM 4. CONTROLS AND PROCEDURES 35

- OTHER

PART II - OTHER INFORMATION 35

LEGAL

ITEM 1. LEGAL PROCEEDINGS 35

RISK

ITEM 1A. RISK FACTORS 35

UNREGISTERED

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 36

DEFAULTS

ITEM 3. DEFAULTS UPON SENIOR SECURITIES 36

MINE

ITEM 4. MINE SAFETY DISCLOSURES 36

OTHER

ITEM 5. OTHER INFORMATION 36

EXHIBITS

ITEM 6. EXHIBITS 36

SIGNATURES

SIGNATURES 37 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. Investors are cautioned not to unduly rely on any such forward-looking statements.

Forward-looking statements are neither statements of historical

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. 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

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS EXPION360 INC. BALANCE SHEETS As of June 30, 2025 (Unaudited) As of December 31, 2024 Assets Current Assets Cash and cash equivalents $ 684,920 $ 547,565 Accounts receivable, net 715,724 613,022 Inventory 5,138,263 4,831,461 Prepaid/in-transit inventory 485,507 1,612,686 Prepaid expenses and other current assets 350,848 236,461 Total current assets 7,375,262 7,841,195 Property and equipment 807,082 914,081 Accumulated depreciation ( 427,459 ) ( 430,191 ) Property and equipment, net 379,623 483,890 Other Assets Operating leases – right-of-use assets 818,188 754,832 Deposits 32,016 27,471 Total other assets 850,204 782,303 Total assets $ 8,605,089 $ 9,107,388 Liabilities and stockholders' equity Current liabilities Accounts payable $ 675,351 $ 338,091 Customer deposits 48,693 48,474 Accrued expenses and other current liabilities 250,390 187,464 Current portion of operating lease liability 318,335 256,153 Current portion of long-term debt 30,772 31,758 Suspended Liability 4,485,948 4,985,948 Total current liabilities 5,809,489 5,847,888 Long-term debt, net of current portion and discount 182,842 198,412 Operating lease liability, net of current portion 545,535 542,764 Total liabilities $ 6,537,866 $ 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 June 30, 2025 and December 31, 2024 — — Common stock, par value $ 0.001 per share; 200,000,000 shares authorized; 3,374,468 and 2,096,082 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively 3,374 2,096 Additional paid-in capital 39,159,947 37,091,468 Accumulated deficit ( 37,096,098 ) ( 34,575,240 ) Total stockholders' equity 2,067,223 2,518,324 Total liabilities and stockholders' equity $ 8,605,089 $ 9,107,388 The accompanying notes a

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. Organization and Nature of Operations Expion360 Inc. (formerly Yozamp Products Company, LLC) (the "Company") was incorporated in the State of Nevada in November 2021. Effective November 1, 2021, the Company converted to a C corporation. Upon conversion, all of the members were issued shares of the Company's common stock, par value $0.001 per share, and became stockholders of the Company. The Company designs, assembles, and distributes premium lithium batteries for recreational vehicles ("RVs"), marine, golf, industrial, residential, and off-the-grid needs. The Company uses lithium iron phosphate ("LiFePO4") batteries. LiFePO4 batteries are considered a top choice for high energy density, dependability, longevity, and safety, providing the ability to power anything, anywhere. The Company is located in Redmond, Oregon. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information, and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statement presentation. However, the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for the three- and six-month periods ended June 30, 2025 and 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or for any other reporting period. The unaudited interim financial sta