BOXABL's Losses Widen Amid Revenue Drop, Merger Looms

TL;DR

**BOXABL is burning cash and needs this merger to survive, but declining revenue makes it a risky bet.**

AI Summary

BOXABL Inc. reported a significant increase in net loss for the nine months ended September 30, 2025, reaching $51.845 million, up from $42.921 million in the same period of 2024. This 20.79% increase in net loss was primarily driven by a substantial rise in operating expenses, particularly sales and marketing, which surged to $24.957 million from $7.162 million year-over-year, a 248.45% increase. Revenue, however, declined sharply to $588,000 for the nine months ended September 30, 2025, compared to $1.562 million in 2024, representing a 62.48% decrease. Cost of goods sold also increased to $13.775 million from $10.651 million, leading to a gross loss of $13.187 million. The company's cash and cash equivalents significantly improved to $34.503 million as of September 30, 2025, from $5.752 million at December 31, 2024, largely due to $58.552 million in proceeds from preferred stock sales. A key strategic development is the proposed two-step merger with FG Merger II Corp., which would result in FGMC becoming the surviving public company and changing its name to BOXABL Inc., aiming to convert Company stock and preferred stock into Surviving Pubco common stock.

Why It Matters

BOXABL's widening losses and declining revenue signal significant operational challenges, raising red flags for investors. The proposed merger with FG Merger II Corp. is a critical strategic move, potentially offering a path to public market access and capital, but also introduces integration risks and uncertainty regarding valuation for existing shareholders. For employees and customers, the merger could stabilize the company's long-term prospects, but the current financial performance indicates a struggle to scale production and sales of its modular homes. The broader market for modular housing will be watching to see if BOXABL can overcome its financial hurdles and prove the viability of its innovative construction methods in a competitive landscape.

Risk Assessment

Risk Level: high — The company reported a net loss of $51.845 million for the nine months ended September 30, 2025, a 20.79% increase from the prior year, and revenues decreased by 62.48% to $588,000. This significant decline in revenue coupled with increasing losses, particularly a 248.45% surge in sales and marketing expenses to $24.957 million, indicates severe operational inefficiencies and a challenging path to profitability, despite a cash infusion from preferred stock sales.

Analyst Insight

Investors should exercise extreme caution and thoroughly evaluate the terms of the proposed merger with FG Merger II Corp. Given the substantial net losses and declining revenue, new investors should likely avoid BOXABL until there is clear evidence of improved operational efficiency and a viable path to profitability post-merger. Existing investors should consider the potential dilution and the strategic rationale behind the merger.

Financial Highlights

debt To Equity

N/A

revenue

$588,000

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

-$51,845,000

eps

N/A

gross Margin

-2242.7%

cash Position

$34,503,000

revenue Growth

-62.48%

Key Numbers

• $51.845M — Net Loss (Increased from $42.921M in 2024, a 20.79% increase year-over-year for the nine months ended September 30, 2025.)
• $588K — Revenue (Decreased from $1.562M in 2024, a 62.48% decrease year-over-year for the nine months ended September 30, 2025.)
• $24.957M — Sales and Marketing Expenses (Increased from $7.162M in 2024, a 248.45% increase year-over-year for the nine months ended September 30, 2025.)
• $13.187M — Gross Loss (Increased from $9.089M in 2024 for the nine months ended September 30, 2025.)
• $34.503M — Cash and Cash Equivalents (Increased from $5.752M at December 31, 2024, as of September 30, 2025.)
• $58.552M — Proceeds from Preferred Stock Sales (Net cash provided by financing activities for the nine months ended September 30, 2025.)
• 3,000,000,000 — Common Stock Outstanding (As of November 14, 2025.)

Key Players & Entities

• BOXABL Inc. (company) — registrant and target in merger
• FG Merger II Corp. (company) — acquiring company in proposed merger
• FG Merger Sub II Inc. (company) — wholly-owned subsidiary of FGMC, merging with BOXABL
• Nevada (location) — state of incorporation and headquarters
• Las Vegas (location) — headquarters location
• SEC (regulator) — filing authority
• Bloomberg (company) — publisher of analysis

FAQ

Risk Factors

• Significant Increase in Net Loss and Operating Expenses [high — financial]: The company reported a net loss of $51.845 million for the nine months ended September 30, 2025, a 20.79% increase from $42.921 million in the prior year. This was driven by a substantial surge in operating expenses, particularly sales and marketing, which escalated by 248.45% to $24.957 million from $7.162 million.
• Deteriorating Gross Margins and Revenue Decline [high — financial]: Revenue for the nine months ended September 30, 2025, plummeted by 62.48% to $588,000 from $1.562 million in the same period of 2024. Concurrently, the cost of goods sold increased to $13.775 million, resulting in a gross loss of $13.187 million, indicating a significant deterioration in profitability at the product level.
• Dependence on Equity Financing [medium — financial]: The company's improved cash position of $34.503 million as of September 30, 2025, up from $5.752 million at December 31, 2024, was primarily funded by $58.552 million in proceeds from preferred stock sales. This highlights a reliance on external equity financing rather than operational cash generation.
• Merger with FG Merger II Corp. [medium — regulatory]: The proposed two-step merger with FG Merger II Corp. involves FGMC becoming the surviving public company and changing its name to BOXABL Inc. This transaction is subject to regulatory approvals and shareholder votes, introducing execution risk and potential delays.
• Scaling Production and Sales [medium — operational]: The dramatic increase in sales and marketing expenses suggests efforts to scale operations, but this has not yet translated into revenue growth, with a significant decline reported. The company faces the challenge of effectively converting increased spending into sales and managing production costs to achieve profitability.

Industry Context

BOXABL Inc. operates in the modular and prefabricated housing sector, an industry experiencing growing demand driven by housing shortages and affordability concerns. Competitors range from large, established construction firms to specialized modular builders. Key industry trends include technological advancements in construction, sustainability initiatives, and supply chain management challenges.

Regulatory Implications

The proposed merger with FG Merger II Corp. is subject to SEC regulations, shareholder approvals, and stock exchange listing requirements. Any misstatement or omission in the filings related to this transaction could lead to regulatory scrutiny. Compliance with building codes and environmental regulations in various jurisdictions where homes are deployed is also critical.

What Investors Should Do

1. Monitor the progress and outcome of the proposed merger with FG Merger II Corp., as it represents a significant strategic shift and potential liquidity event.
2. Analyze the sustainability of the company's current operating model, given the sharp increase in operating expenses and continued gross losses, to assess future profitability potential.
3. Evaluate the company's ability to generate revenue growth and manage costs effectively, particularly in light of the significant decline in revenue and the surge in sales and marketing spend.
4. Assess the dilution impact of future financing activities, especially if the company continues to rely on equity raises to fund operations.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Period reflects significant revenue decline, increased net loss, and substantial increase in sales and marketing expenses, offset by improved cash position due to preferred stock sales.
• 2024-09-30: Nine months ended September 30, 2024 — Prior period comparison showing higher revenue and lower net loss, providing context for the current period's negative trends.
• 2024-12-31: As of December 31, 2024 — Baseline for cash position comparison, showing a significant increase by September 30, 2025.
• 2025-11-14: As of November 14, 2025 — Indicates 3,000,000,000 common shares outstanding, relevant for potential dilution discussions related to the merger.

Glossary

Comprehensive Loss

Includes net loss plus other comprehensive income (or loss) items that are not recognized in net income but affect equity. (Indicates the total change in equity from non-owner sources during the period, providing a broader view of financial performance than net loss alone.)

Cost of Goods Sold (COGS)

The direct costs attributable to the production or purchase of the goods sold by a company. (An increase in COGS relative to revenue, as seen in the gross loss, highlights inefficiencies or rising input costs in the production process.)

Preferred Stock

A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. (Proceeds from preferred stock sales were a major source of cash, indicating a key financing strategy for the company.)

Merger

The combination of two or more companies into a single new entity. (The proposed merger with FG Merger II Corp. is a significant strategic event that could alter the company's structure, governance, and public listing.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, BOXABL Inc. has experienced a significant downturn in financial performance. Revenue has decreased by 62.48%, while the net loss has widened by 20.79%. This is primarily driven by a dramatic 248.45% increase in sales and marketing expenses, which has not yet translated into revenue growth, leading to a substantial gross loss. The company's cash position has improved significantly, but this is attributed to equity financing rather than operational improvements.

Key Financial Figures

• $0.00001 — Non-Voting Series A-3 Preferred Stock, $0.00001 par value (Title of class) Non-Voti
• $1,000 — herwise indicated, dollar amounts above $1,000 in this Report have been rounded to the

Filing Documents

• form10-q.htm (10-Q) — 1589KB
• ex31-1.htm (EX-31.1) — 18KB
• ex31-2.htm (EX-31.2) — 11KB
• ex31-3.htm (EX-31.3) — 18KB
• ex32-1.htm (EX-32.1) — 6KB
• ex32-2.htm (EX-32.2) — 6KB
• ex32-3.htm (EX-32.3) — 6KB
• 0001493152-25-023573.txt ( ) — 7427KB
• bxbl-20250930.xsd (EX-101.SCH) — 53KB
• bxbl-20250930_cal.xml (EX-101.CAL) — 71KB
• bxbl-20250930_def.xml (EX-101.DEF) — 252KB
• bxbl-20250930_lab.xml (EX-101.LAB) — 407KB
• bxbl-20250930_pre.xml (EX-101.PRE) — 342KB
• form10-q_htm.xml (XML) — 1210KB

Financial Statements

Financial Statements 3 Interim Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 (audited) 3 Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2025 and 2024 4 Unaudited Interim Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024 5 Unaudited Interim Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 6 Notes to Unaudited Interim Condensed Consolidated 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 33 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 45 Item 4

Controls and Procedures

Controls and Procedures 45 PART II OTHER INFORMATION Item 1

Legal Proceedings

Legal Proceedings 47 Item 1A

Risk Factors

Risk Factors 49 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 49 Item 3 Defaults Upon Senior Securities 50 Item 4 Mine Safety Disclosures 50 Item 5 Other Information 50 Item 6 Exhibits 51

Signatures

Signatures 54 Unless expressly indicated or the context requires otherwise, the terms "BOXABL," "the Company," "we," "us," and "our" in this document refer to BOXABL Inc., a Nevada corporation, and, where appropriate, its subsidiaries. Unless otherwise indicated, dollar amounts above $1,000 in this Report have been rounded to the nearest thousand, million or billion, as applicable. NOTE ABOUT FORWARD-LOOKING STATEMENTS This Report may contain forward-looking statements and information relating to, among other things, the Company, its business plan and strategy, and its industry. These forward-looking statements are based on the beliefs of, assumptions made by, and information currently available to the Company's management. All statements contained in this Report other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, 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 actual results to differ materially from those contained in any forward-looking statements we may ma

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