Financial Analysis

"NOTE 4. ACQUISITIONS AND INVESTMENTS Orbit Investment (Related-Party) Orbit Equity Method Investment On October 31, 2025, the Company, Nuburu Defense, Alessandro Zamboni (the Company's Executive Chairman and Co-Chief Executive Officer), and Vanguard Holdings S.r.l. (Vanguard), a newly-formed Italian limited liability company wholly owned by Alessandro Zamboni, entered into a Sale, Purchase and Investment Agreement (the Orbit Agreement) for the sale of all of the ownership interests in Orbit to Nuburu Defense (the Orbit Transaction). Equity Infusion . Nuburu Defense may make up to a $ 5,000,000 equity investment in Orbit (the Equity Infusion). Under the Orbit Agreement, the Company has agreed to consummate the Equity Infusion in tranches, with the final tranche closing no later than October 7, 2028 . During the fourth quarter of 2025, the Company paid $ 1,500,000 of the Equity Infusion amount in connection with the signing of the Orbit Agreement, resulting in its holding a 10.7 % ownership interest in Orbit. Orbit Consideration . In addition to athe Equity Infusion, Nuburu Defense plans to acquire, in tranches by December 31, 2026 , all outstanding capital stock of Orbit from Vanguard for an aggregate purchase price of $ 12,500,000 , consisting of (i) $ 3,750,000 in cash and (ii) non-cash consideration worth $ 8,750,000 in the form of, (a) subject to obtaining stockholder approval, a variable number of preferred shares, or (b) if such stockholder approval is not obtained, an …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

"NOTE 8. COMMITMENTS AND CONTINGENCIES Liqueous Settlement Agreement In January 2025 and April 2025, in connection with a settlement and mutual release agreement entered into between the Company and Liqueous LP (Liqueous) (the ""Liqueous Settlement Agreement""), as amended, the parties provided an immediate mutual release of claims and obligations through payments from Liqueous to the Company in an aggregate $ 1,450,000 , of which $ 1,000,000 was paid during the first quarter of 2025. Such payment was made in connection with the issuance of the remaining 46,025 shares issued to extinguish an aggregate $ 411,865 of principal and accrued interest under the Junior Notes (the secured notes issued by the Company in 2023 and 2024 pursuant to the Junior Note Purchase Agreements) and, accordingly, reduced the loss on extinguishment of debt recorded in the six months ended June 30, 2025. In April 2025, the Company received $ 300,000 of the remaining $ 450,000 agreed upon under the Liqueous Settlement Agreement, which was recorded with other income (loss), net as a gain on settlement during the three and six months ended June 30, 2025. Legal Proceedings In the normal course of business, the Company may become involved in legal proceedings. The Company will accrue a liability for legal proceedings when it is probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. When …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"NOTE 10. DEBT As of June 30, 2026 and December 31, 2025, the Company's outstanding debt consisted of the following: June 30, 2026 December 31, 2025 Current portion of debt: December 2025 YA Debenture $ 15,500,305 $ 25,255,308 2026 Brick Lane H&K Investment Note 14,025,000 Lyocon Convertible Notes 1,250,000 2025 Brick Lane Convertible Notes 191,179 2025 Indigo Capital Convertible Notes 51,059 2025 Diagonal Convertible Notes 285,662 Agile Note 8,140 2025 Bomore Convertible Notes 48,169 2025 Torcross Convertible Note 24,084 Liqueous Obligation 10,545 10,545 Current portion of debt $ 30,785,850 $ 25,874,146 Extinguishment of Junior and Senior Notes Issued in 2023 and 2024 During the three and six months ended June 30, 2025 , the Company issued nil and 56,302 shares of Common Stock to noteholders to extinguish principal and accrued interest under the Junior and Senior Notes. The reacquisition value of the debt was higher than the related carrying value, and thus resulted in an aggregate net loss on extinguishment of debt of $ 1,691,520 recorded in the condensed consolidated statement of operations and comprehensive for the six months ended June 30, 2025. Foreclosure Collateral Sale On March 5, 2025, as part of the foreclosure process initiated by the lead investor (the Foreclosure), the lenders holding the outstanding Senior Convertible Notes (the senior secured convertible notes issued by the Company in 2023 and 2024) held an auction for the sale of collateral securing the C …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table presents revenue from contracts with customers disaggregated by the timing of revenue recognition: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Revenue recognized at a point in time $ 419,771 $ $ 760,136 $ Revenue recognized over time 105,156 172,435 Total $ 524,927 $ $ 932,571 $ …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

"NOTE 14.STOCK-BASED COMPENSATION As of June 30, 2026, the Company had an active stock-based incentive compensation plan and an employee stock purchase plan: the 2022 Equity Incentive Plan (the 2022 Plan) and the 2022 Employee Stock Purchase Plan (the ESPP). All new equity compensation grants were issued under these two plans; however, outstanding awards previously issued under inactive plans will continue to vest and remain exercisable in accordance with the terms of the respective plans. The 2022 Plan provides for the grant of stock and stock-based awards including stock options, restricted stock, restricted stock units, performance awards, and stock appreciation rights. As of June 30, 2026 , there were approximately 400 shares available for grant under the 2022 Plan and approximately 3,800 shares available for grant under the ESPP. Effective July 1, 2026, the shares available for grant under the 2022 Plan and the ESPP increased by approximately 900 and 200 shares, respectively, in accordance with the terms of the respective plans. Stock-Based Compensation Expense Total stock-based compensation expense recognized in the Companys condensed consolidated statements of operations and comprehensive loss is classified as follows: Three Months Ended June 30, Six months ended June 30, 2026 2025 2026 2025 Cost of revenue $ $ $ $ 105,734 Research and development 93,425 Selling and marketing 191,375 6,381 382,750 202,869 General and administrative 9,755 291,101 20,941 392,618 Total st …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

NOTE 7. FAIR VALUE MEASUREMENTS The Companys financial instruments that are carried at fair value consist of Level 1 and Level 3 assets and liabilities: Level 1. Level 1 assets include (i) the H&K Investment and (ii) highly liquid bank deposits and money market funds, which were not material in any period presented herein. The fair value of the H&K Investment is determined using Level 1 quoted market prices on Euronext Paris, which was determined to be Level 1 as it uses unadjusted quoted prices in active markets. Level 3. Level 3 assets and liabilities are included in the table below, and are classified as Level 3 due to the use of unobservable inputs in the valuation of the asset or liability. Defined and Described in Note(s) Gains or Losses from the Remeasurement included in: Assets: SYME Convertible Note Receivable (related party) 6 Change in fair value of convertible notes receivable Tekne Convertible Note Receivable 4 Change in fair value of convertible notes receivable Tekne Investment 4 Change in fair value of investments SYME Bonds (related party) 4 Change in fair value of SYME Bonds (related party) Liabilities: Fair value debt 10 Change in fair value of debt SEPA liability 13 Change in fair value of SEPA liability February 2026 Offering Common Warrants 11 & 12 Change in fair value of warrant liabilities February 2026 Offering Pre-Funded Warrants 11 & 12 Change in fair value of warrant liabilities 2025 Offering Common Stock Warrants 11 & 12 Change …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

NOTE 5. GOODWILL AND INTANGIBLE ASSETS Goodwill Changes in the carrying amount of the Company's goodwill are set forth below: Orbit Change of Control Lyocon Acquisition Total Balance as of December 31, 2025 $ $ $ Acquisitions 17,487,693 1,775,158 19,262,851 Balance as of June 30, 2026 $ 17,487,693 $ 1,775,158 $ 19,262,851 Intangible Assets Subject to Amortization, Net The details of the Company's intangible assets subject to amortization are set forth below: June 30, 2026 Weighted-average amortization period Gross carrying amount Accumulated amortization Net carrying amount Developed technology 5.4 years $ 2,441,040 $ ( 211,775 ) $ 2,229,265 Customer relationships 7.3 years 406,840 ( 25,972 ) 380,868 Trade names / trademarks 5 years 62,770 ( 5,754 ) 57,016 Total $ 2,910,650 $ ( 243,501 ) $ 2,667,149 Amortization expense related to intangible assets with finite useful lives was $ 132,819 and nil for the three months ended June 30, 2026 and 2025, respectively, and $ 243,501 and nil for the six months ended June 30, 2026 and 2025, respectively . Based on the Company's amortizable intangible asset balances at June 30, 2026, the Company expects that amortization expense will be as follows for the next five years and thereafter: Amount Remainder of 2026 265,637 2027 531,275 2028 531,275 2029 531,275 2030 531,275 Thereafter 276,412 Total $ 2,667,149 …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

"NOTE 15.INCOME TAXES Due to its current operating losses, the Company recorded no provision for or benefit from income taxes during the three and six months ended June 30, 2026 and 2025 . Accordingly, the Companys effective tax rate was 0 % for each of those periods. During the three and six months ended June 30, 2026, the Company recognized discrete tax items related to shortfalls from share-based compensation. The tax effects of these items were fully offset by corresponding changes in the valuation allowance and, therefore, did not result in income tax expense or benefit for the periods presented. Following the January 2026 Orbit Change of Control and Lyocon Acquisition, the Company has Italian operations; however, the related pre-tax income and loss were not significant for the three and six months ended June 30, 2026, and the Companys tax activity remained limited to U.S. federal and state jurisdictions. In connection with the Lyocon Acquisition, the Company recognized a deferred tax liability of approximately $ 173,000 primarily related to differences between the financial reporting values and tax bases of acquired indefinite-lived intangible assets. The deferred tax liability was recorded as part of the acquisition-date purchase accounting, with a corresponding increase to goodwill. Because the related temporary differences do not have a predictable reversal date, the liability was not considered a source of future taxable income in evaluating the realizability of cer …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"Recently Adopted Accounting Pronouncements ASU 2024-04 In December 2024, the Financial Accounting Standards Board (FASB"") issued ASU 2024-04, DebtDebt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments , which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions. The amendments expand the application of the induced conversion guidance to instruments with cash conversion features and establish three criteria that must be met for a settlement to qualify as an induced conversion: (1) the conversion privileges must be changed and exercisable only for a limited period of time, (2) the form and amount of consideration offered must be preserved from the original terms, and (3) the conversion feature must be substantive at both the issuance date and the date the offer is accepted. The Company adopted ASU 2024-04 effective January 1, 2026 on a prospective basis. The adoption of ASU 2024-04 did no t have an impact on the Company's condensed consolidated financial statements. New Accounting Pronouncements Not Yet Adopted ASU 2024-03 In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which is intended to provide more detailed information about specified categories of expenses (purchases of inventor …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

NOTE 9. REVENUE The Companys primary revenue-generating activity involves the sale of directed-energy systems, high-powered laser solutions, and integrated defense and security technologies, as well as related installation, support, and service offerings. The Company operates a dual-use business model, serving both defense and commercial markets across Europe and the United States. The Company disaggregates revenue by product and service type, client industry/market, and geographic region, as presented in the tables below. The following table presents revenue from contracts with customers disaggregated by geography: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Europe $ 520,875 $ $ 919,739 $ United States 4,052 12,832 Total $ 524,927 $ $ 932,571 $ The following table presents revenue from contracts with customers disaggregated by product and service type: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Orbit: SaaS and hosted software subscriptions $ 85,661 $ $ 134,160 $ Application maintenance services 19,495 38,275 Total 105,156 172,435 Lyocon: Product sales 380,121 697,709 Professional services revenue 39,650 62,427 Total 419,771 760,136 Total revenue $ 524,927 $ $ 932,571 $ The following table presents revenue from contracts with customers disaggregated by the timing of revenue recognition: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Revenue recognized at a point in time $ 419,771 $ $ 760,1 …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"NOTE 17.SEGMENT REPORTING Operating segments are defined as components of an entity about which discrete financial information is evaluated regularly by the Chief Operating Decision Maker (""CODM"") in deciding how to allocate resources and assess performance. The Company currently operates and manages its business as one business segment, which is dual-use, non-kinetic, and software-orchestrated solutions addressing modern security and resilience challenges across military, governmental, and civilian domains. Accordingly, the Company has one reportable segment. Following the Orbit Change of Control and Lyocon Acquisition, the Company is in the process of reassessing its operating and reportable segments. The integration of the acquired businesses is ongoing, and the financial information regularly reviewed by the CODM to allocate resources and assess performance is being evaluated and may be modified to reflect the expanded operations. The Company's reassessment may result in the identification of additional operating and reportable segments and corresponding changes to the segment disclosures in subsequent filings. The Company has a single management team that reports to the Executive Chairman and Co-Chief Executive Officer , the Company's CODM, who comprehensively manages the entire Company. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. When evaluating the Companys financial performance, the CODM …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (""SEC""). These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including Lyocon beginning January 15, 2026 (see Note 4), as well as entities in which the Company has a controlling financial interest, including Orbit, which was consolidated beginning January 15, 2026 (see Note 4 ). All significant intercompany balances and transactions have been eliminated. February 2026 Reverse Stock Split On February 27, 2026, the Company effected a 1-for-4.99 reverse stock split of its Common Stock (the February 2026 Reverse Stock Split) in order to return to compliance with NYSE Americans Minimum Trading Price requirement. Trading of the Companys Common Stock was halted by NYSE American on February 13, 2026, because the …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

"NOTE 11. EQUITY Common Stock February 2026 Reverse Stock Split On February 27, 2026, the Company effected a 1-for-4.99 reverse stock split of its Common Stock (the February 2026 Reverse Stock Split) in order to regain compliance with the NYSE American Minimum Trading Price requirement, following a trading halt on February 13, 2026. All share and per share amounts of Common Stock and Common Stock equivalents included in these condensed consolidated financial statements have been retroactively adjusted to reflect the February 2026 Reverse Stock Split for all periods presented. Fractional shares resulting from the February 2026 Reverse Stock Split were rounded up to one whole share. The February 2026 Reverse Stock Split did not change the number of authorized shares of Common Stock or the par value per share. For additional information, see Note 2. September 2026 Reverse Stock Split On September 1, 2026, the Company effected the September 2026 Reverse Stock Split. All share and per share amounts of Common Stock and Common Stock equivalents included in these condensed consolidated financial statements have been retroactively adjusted to reflect the September 2026 Reverse Stock Split for all periods presented. Fractional shares resulting from the September 2026 Reverse Stock Split were rounded up to one whole share. The September 2026 Reverse Stock Split did not change the number of authorized shares of Common Stock or the par value per share. For additional information, see Note …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 19.SUBSEQUENT EVENTS July 2026 Offering On July 17, 2026, the Company consummated a best efforts public offering (the July 2026 Offering) of an aggregate of (i) 2,934,135 shares (the July 2026 Offering Shares) of Common Stock, (ii) pre-funded warrants (the July 2026 Offering Pre-Funded Warrants) to purchase up to 3,175,191 shares of Common Stock (the July 2026 Offering Pre-Funded Warrant Shares), (iii) 733,853 shares of Series B Preferred Stock, par value $ 0.0001 per share (Series B Preferred Stock) and (iv) 5,140,676 shares of Common Stock (the Registered Conversion Shares) issuable upon conversion of the Series B Preferred Stock. Each July 2026 Offering Share or July 2026 Offering Pre-Funded Warrant was sold together with a 0.12012 share of Series B Preferred Stock. The combined offering price for each July 2026 Offering Share and accompanying 0.12012 share of Series B Preferred Stock was $ 6.22 , and the combined offering price for each July 2026 Offering Pre-Funded Warrant and accompanying 0.12012 share of Series B Preferred Stock was $ 6.216 . Each share of Series B Preferred Stock is convertible into shares of Common Stock (the Conversion Shares) in accordance with the Certificate of Designations of the Series B Preferred Stock, which was filed with the Secretary of State of the State of Delaware on July 16, 2026 (the Series B Certificate of Designations). The net proceeds of the July 2026 Offering, after deducting (i) the fees and expenses of the July 2026 Offeri …

SubsequentEventsTextBlock · excerpt; the full note is in the filing