VTIX 10-K & 10-Q changes, risk factors and insider trading

Net sales for the nine months ended December 31, 2025, were $2,980,765, a 41% increase from sales of $2,110,889 for the nine months ended December 31, 2024. This increase is primarily attributable to new sales of Omni One, including resulting from a strong 2025 holiday season, and the fulfillment of legacy Omni One preorders that were placed during our preorder period that ended in September 2024. In the nine months ended December 31, 2025, net revenues of $405,656 were attributable to the fulfilment of outstanding Omni One preorders, with $264,990 of those net preorder revenues resulting from sales to investors who used an investor discount.

Cost of goods sold in the nine months ended December 31, 2025 was $2,107,718, a decrease of $358,774 from cost of goods sold of $2,466,492 in the nine months ended December 31, 2024. The decrease was primarily attributable to lower per-unit overhead costs recognized in the 2025 period compared to the 2024 period. Since shipments of Omni One only started ramping up in late 2024, manufacturing overhead incurred during the production ramp-up period in 2024 was absorbed into a relatively lower volume of units shipped during the 2024 period, resulting in a higher per-unit manufacturing cost. In contrast, manufacturing and shipment activity during the 2025 period was consistently higher, resulting in lower manufacturing overhead applied per unit.

As a result of the foregoing, net loss for the nine months ended December 31, 2025 was $(6,892,302) compared to $(12,024,068) for the nine months ended December 31, 2024, representing a decrease in net loss of $5,131,766. The net loss for the nine months ended December 31, 2024 included a one-time non-cash stock-based compensation expense of approximately $4.7 million, compared to non-cash stock-based compensation expense of approximately $270,000 for the nine months ended December 31, 2025.

Results of Operations

Comparison of the Three Months Ended December 31, 2025 and 2024

Net Revenues

Net sales for the three months ended December 31, 2025, were $963,817, a 24% decrease from sales of $1,264,122 for the three months ended December 31, 2024. This decrease is primarily attributable to the fulfillment of a large backlog of Omni One preorders, accumulated since the start of the preorder period in August 2023, during the three months ended December 31, 2024, whereas revenues in the three months ended December 31, 2025 result from sales to newly acquired customers, including resulting from a strong 2025 holiday season. New orders for Omni One and Omni One Core systems increased 60% in December 2025 compared to unit orders placed in December 2024.

Omni Arena revenue decreased during the three months ended December 31, 2025, as we transition the Omni Arena business to “maintenance mode”, supporting our existing customers and earning recurring revenues from the sale of parts, Omniverse Credits, and Omni Care maintenance program fees.

The following table summarizes our revenue by product line:

Cost of Goods Sold

Cost of goods sold primarily consists of material costs and shipping costs of Omni One and Omni Arena.

Cost of goods sold in the three months ended December 31, 2025 was $674,396, a decrease of $609,144 from cost of goods sold of $1,283,540 in the three months ended December 31, 2024. The decrease was primarily attributable to lower revenues during the current period compared to the prior period that included shipments of a large backlog of Omni One preorders. Additionally, the manufacturing overhead costs allocated per unit were lower in the 2025 period due to consistently higher production in the 2025 period compared to the production ramp-up period in 2024.

Gross profit in the three months ended December 31, 2025 increased by $308,839 compared to gross loss in the three months ended December 31, 2024, and gross margin as a percentage of revenues increased to 30% in the three months ended December 31, 2025 from -2% in the three months ended December 31, 2024. This increase in gross margin was the result of an increase in the selling price of the complete Omni One system from $2,595 to $3,495 plus shipping, effective since November 2024. The majority of Omni One revenue in the three months ended December 31, 2024 were for prepaid units sold at the lower price point, as well as delivery of discounted units to equity crowdfunding investors.

Operating Expenses

Operating expenses consist of general and administrative expenses, which are primarily salaries, professional fees, and expenses related to the administrative functions of the Company, research and development expenses, which consist primarily of product development costs and salaries, and sales and marketing expenses, which represent advertising and other marketing costs, as well as the associated personnel costs.

Total operating expenses increased to $2,132,565 in the three months ended December 31, 2025, from $1,815,540 in the three months ended December 31, 2024.

Net Loss

During the nine months ended December 31, 2025, the Company raised the following additional proceeds from financing activities:

As an additional inducement for certain investors to participate in our Series B preferred stock financing, we issued warrants to purchase shares of our common stock. At the time of issuance, these warrants were exercisable for an aggregate of 313,153 shares of common stock of Virtuix at an exercise price of $0.01 per share. As of December 31, 2025, all 313,153 common stock warrants had been exercised.

In association with various agreements to obtain financing with Western Technology Investment between September 2014 and April 2022, the Company has granted warrants to Western Technology Investment to purchase stock in Virtuix. As of December 31, 2025, these warrants were exercisable for an aggregate of 178,712 shares of common stock of Virtuix, of which 128,646 at an exercise price of $2.332 per share and 50,066 at an exercise price of $2.996 per share.

On August 25, 2025, we entered into a Securities Purchase Agreement with Streeterville, pursuant to which Virtuix issued the First Note in the principal amount of $2,220,000. The First Note includes an original issue discount of $200,000 and additional closing costs of $20,000. The First Note bears interest at a rate of 6% per annum, is secured by all assets of the Company, and matures nine months from the funding date. The Company received $2,000,000 in gross proceeds at closing. In addition, Streeterville received the Debt Financing Warrant. On October 30, 2025, we entered into a Securities Purchase Agreement with Streeterville, pursuant to which we issued (i) the Second Note in the principal amount of $560,000, bearing interest at 6% per annum and secured by substantially all of our assets and (ii) a common stock purchase warrant to purchase a number of shares of our Class A common stock equal to $1,000,000 divided by the reference price established in connection with our direct listing. The Second Note includes an original issue discount of $50,000 and additional closing costs of $10,000. The Company received $500,000 in gross proceeds at closing of the Second Note. On December 19, 2025, we entered into a Securities Purchase Agreement with Streeterville, pursuant to which we issued (i) the Third Note in the principal amount of $560,000, bearing interest at 6% per annum and secured by substantially all of our assets and (ii) a common stock purchase warrant to purchase a number of shares of our Class A common stock equal to $1,000,000 divided by the reference price established in connection with our direct listing. The Third Note includes an original issue discount of $50,000 and additional closing costs of $10,000. The Company received $500,000 in gross proceeds at closing of the Third Note.

The Streeterville Notes are convertible into shares of common stock at a price equal to 85% of the reference price established in connection with the Company’s direct listing. The Streeterville Notes are our only secured debt. They contain customary events of default, including failure to make payments or deliver shares, and provide for increased interest and penalties in the event of default. The Streeterville Notes may be prepaid at a premium, subject to certain conditions, and are subject to ownership and selling limitations. The shares underlying the Streeterville Notes and warrants will be registered for resale in connection with our direct listing. Ten days following the date on which the Resale Registration Statement providing for the registration of shares issuable pursuant to the Equity Purchase Agreement is declared effective, the Streeterville Notes will automatically be exchanged for and applied to the purchase price of a pre-paid purchase under the Equity Purchase Agreement in an aggregate principal amount equal to the outstanding balance then due under the Streeterville Notes.

Under applicable rules of the Nasdaq Stock Market, in no event may the Company issue more than the number of shares of its common stock which equals 19.99% of the pre-transaction common stock outstanding in a private transaction (the “Exchange Cap”) at a price less than the “Minimum Price” (as defined in the Nasdaq 5600 Series listing rules), unless the Company first obtains stockholder approval to issue shares of common stock in excess of the Exchange Cap in accordance with applicable Nasdaq listing rules. Furthermore, pursuant to the Debt Financing transaction documents, the Company must seek stockholder approval to exceed the Exchange Cap at its next annual or special meeting of stockholders. Accordingly, on January 21, 2026, the Company obtained stockholder approval to issue common stock, including the issuance of common stock upon conversion, exercise, or settlement of warrants, in an amount that may exceed 19.99% of the Company’s issued and outstanding common stock where the issue price is less than the Minimum Price.

Proceeds from the Debt Financing were used to pay off existing indebtedness, including but not limited to retiring the Company’s only secured indebtedness outstanding prior to the Debt Financing, with the remaining proceeds used or to be used for working capital and general corporate purposes.

On August 25, 2025, we entered into the Equity Purchase Agreement with Streeterville, pursuant to which Streeterville committed to purchase up to $50,000,000 of Class A common stock through one or more prepaid advances over a 24-month period. The initial advance of $8,000,000 (net of original issue discount) was funded at the closing of our direct listing, with subsequent advances subject to certain conditions, including minimum market capitalization, trading volume, and compliance with Nasdaq listing standards. Each advance includes an 8% original issue discount and bears interest at 6% per annum. Streeterville will also receive the Equity Financing Warrant. The conversion price for the advances is set at 120% of the reference price, with, subject to certain triggers, an alternate conversion price based on 90% of the lowest volume-weighted average price during the ten trading days prior to conversion, subject to a $2.00 price floor. The Equity Purchase Agreement includes customary events of default, selling and ownership limitations, Company covenants, and a prepayment option for the Company. The shares underlying the advances will be registered for resale following our direct listing. The shares underlying the warrants will be registered for resale in connection with our direct listing.

We may request advances up to an aggregate of $50,000,000 over the term of the Equity Purchase Agreement; however, Streeterville’s obligation to fund advances is not solely at the discretion of the Company. Each advance is subject to a number of conditions, including that our market capitalization is at least $95,000,000 and both our 20-day and 60-day median and average daily trading volumes are at least $350,000 at the time of any request for a subsequent advance. Additional requirements include compliance with continued listing standards and an effective registration statement for the resale of shares issuable pursuant to the outstanding advances. If we fail to meet any of these conditions at the time of a request, Streeterville may decline to provide the requested funds. As a result, there is no assurance that we will be able to access the full $50,000,000 or any specific amount under the Equity Purchase Agreement, and our ability to request subsequent advances may be limited by market conditions, our performance, or other factors outside our control.

In October and November 2025, we issued unsecured promissory notes (the “Second 2025 Notes”) to investors in a transaction exempt from registration under Section 4(a)(2) of the Securities Act, and Rule 506(b) promulgated under Regulation D for total proceeds of $1,500,000. The Second 2025 Notes bear principal equal to 110% of each investor’s cash investment, accrue simple interest at 6.0% per annum, and mature on March 31, 2026 (as extended by the Company, in its sole discretion, from December 31, 2025). At or before maturity, the Company may repay the full outstanding principal and interest in cash or convert that amount into Common Stock at a price equal to 85% of the NASDAQ valuation price of $8.75; beginning on the date of our direct listing and continuing until full repayment, the noteholder may likewise elect to convert outstanding indebtedness at the same conversion price. As of December 31, 2025, the principal amount of $1,650,000 remains outstanding.

We anticipate incurring additional losses for the foreseeable future, and we may never become profitable. Furthermore, while we have decreased our operating expenses by reducing our personnel following the launch of Omni One, we nevertheless expect expenses to increase in connection with scaling sales, marketing, and production of Omni One, and in connection with being a public company. As of the date of this filing, following (i) the funding of the initial $8,000,000 advance from Streeterville related to our direct listing, (ii) proceeds of $3,138,125 from Streeterville warrant exercises, (iii) proceeds of $300,002 from Western Technology Investments warrant exercises, and (iv) a reduction of debt principal of $715,000 resulting from the conversion by certain holders of the Second 2025 Notes, and assuming a refinancing of the 2024 Notes and the payoff of the Second 2025 Notes due March 31, 2026, we estimate we’ll have the resources to conduct our planned operations for at least 9 months. To continue as a going concern and execute our operating plan for the next 12 months, we estimate we’ll require additional funding of approximately $2,000,000. We are evaluating financing alternatives for the 2024 Notes, which may include exchanges of a portion of the outstanding notes for equity or equity-linked securities. We have not entered into any definitive agreements, and there can be no assurance that any such transaction will be completed on favorable terms, or at all. Any such transaction could result in dilution to existing stockholders.