# EDGAR Filing Document

**Accession Number:** 0001816937
**File Stem:** 0001641172-25-024796
**Filing Date:** 2025-8
**Character Count:** 217239
**Document Hash:** c3190ceeabd355aa8c2b1bc2e6720809
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001641172-25-024796.hdr.sgml**: 20250819

**ACCESSION NUMBER**: 0001641172-25-024796

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 86

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250819

**DATE AS OF CHANGE**: 20250819

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** BOXABL Inc.
- **CENTRAL INDEX KEY:** 0001816937
- **STANDARD INDUSTRIAL CLASSIFICATION:** GEN BUILDING CONTRACTORS - RESIDENTIAL BUILDINGS [1520]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 852511929
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-56579
- **FILM NUMBER:** 251231052

**BUSINESS ADDRESS:**
- **STREET 1:** 5345 E. N. BELT ROAD
- **CITY:** NORTH LAS VEGAS
- **STATE:** NV
- **ZIP:** 89115
- **BUSINESS PHONE:** 7025009000

**MAIL ADDRESS:**
- **STREET 1:** 5345 E. N. BELT ROAD
- **CITY:** NORTH LAS VEGAS
- **STATE:** NV
- **ZIP:** 89115

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Boxabl Inc.
- **DATE OF NAME CHANGE:** 20200707

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

For the quarterly period ended June 30, 2025

or

**☐** **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from to _________________________ to __________________________________

Commission file number: **000-56579**

**BOXABL Inc.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Nevada** | **85-2511929** |
| State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |
| **5345 E. N. Belt Road, North Las Vegas, NV** | **89115** |
| (Address of principal executive offices) | (Zip Code) |

---

---

| |
|:---|
| **(702) 500-9000** |
| Registrant's telephone number, including area code |

---

---

| |
|:---|
| **N/A** |
| (Former name, former address and former fiscal year, if changed since last report) |

---

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| N**/**A | **N/A** | **N/A** |

---

Securities registered pursuant to Section 12(g) of the Act:

---

| |
|:---|
| **Non-Voting Series A-3 Preferred Stock, $0.00001 par value** |
| (Title of class) |
| **Non-Voting Series A-2 Preferred Stock, $0.00001 par value** |
| (Title of class) |
| **Non-Voting Series A-1 Preferred Stock, $0.00001 par value** |
| (Title of class) |
| **Non-Voting Series A Preferred Stock, $0.00001 par value** |
| (Title of class) |
| **Common Stock, $0.00001 par value** |
| (Title of class) |

---

SEC 1296 (02-23) Potential persons who are to respond to the collection of information contained in this Form are not required to respond unless the Form displays a currently valid OMB control number.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Ex- change Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

As of August 19, 2025, the registrant had 3,000,000,000 shares of Common Stock outstanding.

**BOXABL Inc.**

**Form 10-Q**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| **PART I** | **[FINANCIAL INFORMATION](#a_001)** |  |
| Item 1. | [Financial Statements](#a_002) | 3 |
|  | [Interim Condensed Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024 (audited)](#a_003) | 3 |
|  | [Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2025 and 2024](#a_004) | 4 |
|  | [Unaudited Interim Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2025 and 2024](#a_005) | 5 |
|  | [Unaudited Interim Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024](#a_006) | 6 |
|  | [Notes to Unaudited Interim Condensed Consolidated Financial Statements](#a_007) | 7 |
| Item 2 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_008) | 31 |
| Item 3 | [Quantitative and Qualitative Disclosures About Market Risk](#a_009) | 41 |
| Item 4 | [Controls and Procedures](#a_010) | 41 |
| **PART II** | **[OTHER INFORMATION](#a_011)** |  |
| Item 1 | [Legal Proceedings](#a_012) | 43 |
| Item 1A | [Risk Factors](#a_013) | 45 |
| Item 2 | [Unregistered Sales of Equity Securities and Use of Proceeds](#a_014) | 45 |
| Item 3 | [Defaults Upon Senior Securities](#a_015) | 46 |
| Item 4 | [Mine Safety Disclosures](#a_016) | 46 |
| Item 5 | [Other Information](#a_017) | 46 |
| Item 6 | [Exhibits](#a_018) | 46 |
|  | [Signatures](#a_019) | 48 |

---

***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 statements. We have based these forward-looking statements largely on our current expectations and projections about future events and 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 make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

**PART I FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**BOXABL INC.**

**INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| <br>**(In Thousands, except share and per share amounts)** | **June 30,<br> 2025** | **December 31,<br> 2024** |
|  | (Unaudited) | (Audited) |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $14776 | $5752 |
| &nbsp;&nbsp;&nbsp;Short-term investments | 2023 | 15943 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash, cash equivalents and short-term investments | $**16799** | $**21695** |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 93 | 92 |
| &nbsp;&nbsp;&nbsp;Loan receivable - current | 76 | 270 |
| &nbsp;&nbsp;&nbsp;Escrow receivable | 21733 | 365 |
| &nbsp;&nbsp;&nbsp;Inventories, net | 16521 | 24261 |
| &nbsp;&nbsp;&nbsp;Other current assets | 1841 | 335 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | **57063** | **47018** |
| Non-current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Restricted cash | 3924 | 3878 |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 8136 | 8929 |
| &nbsp;&nbsp;&nbsp;Digital assets | 1071 |  |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 532 | 542 |
| &nbsp;&nbsp;&nbsp;Right of use assets, net | 8358 | 10026 |
| &nbsp;&nbsp;&nbsp;Deposits on equipment | 87 | 93 |
| &nbsp;&nbsp;&nbsp;Loan receivable – non-current | 903 | 850 |
| &nbsp;&nbsp;&nbsp;Security deposits | 1154 | 1400 |
| &nbsp;&nbsp;&nbsp;Other long-term assets | 34 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-current assets | **24199** | **25718** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $**81262** | $**72736** |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | 1705 | 1776 |
| &nbsp;&nbsp;&nbsp;Customer deposits | 3365 | 3550 |
| &nbsp;&nbsp;&nbsp;Deferred revenue | 2732 | 2286 |
| &nbsp;&nbsp;&nbsp;Lease liability- current | 3657 | 3493 |
| &nbsp;&nbsp;&nbsp;Subscription liability | 25 | 651 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 1344 | 688 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | **12828** | **12444** |
| Long-term liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Lease liability - non-current | 5300 | 7168 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $**18128** | $**19612** |
| Commitments and contingencies — See Note 13 |  |  |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;Series A Preferred Stock $0.00001 par, 0.25 billion shares authorized, 188,541 and 194,423 thousand shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | 2566 | 2671 |
| &nbsp;&nbsp;&nbsp;Series A-1 Preferred Stock $0.00001 par, 1.10 billion shares authorized, 854,004 thousand and 850,605 thousand shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | 632983 | 630265 |
| &nbsp;&nbsp;&nbsp;Series A-2 Preferred Stock $0.00001par, 2.05 billion shares authorized, 174,322 thousand and 174,160 thousand shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | 101003 | 100879 |
| &nbsp;&nbsp;&nbsp;Series A-3 Preferred Stock $0.00001 par, 8.75 billion shares authorized, 99,096 thousand and 29,016 thousand shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | 70284 | 18222 |
| &nbsp;&nbsp;&nbsp;Unclassified Preferred Stock $0.00001 par, 2.25 billion shares authorized, 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Common Stock $0.00001 par, 17.8billion shares authorized, 3.00 billion shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | 30 | 30 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 15766 | 19322 |
| &nbsp;&nbsp;&nbsp;Accumulated Other Comprehensive income | - | 170 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (759498) | (718435) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | **63134** | **53124** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and stockholders' equity** | $**81262** | $**72736** |

---

See accompanying notes to unaudited interim condensed consolidated financial statements

**BOXABL INC.**

**UNAUDITED INTERIM CONDENSED CONSOLIDATED Statements of COMPREHENSIVE LOSS**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Six Months Ended** | **For the Six Months Ended** | **For The Three Months Ended** | **For The Three Months Ended** |
| <br>**(In Thousands, except per share amounts)** | **June 30, 2025** | **June 30, 2024** | **June 30, 2025** | **June 30, 2024** |
| &nbsp;&nbsp;&nbsp;Revenues | $402 | $708 | $279 | $83 |
| &nbsp;&nbsp;&nbsp;Cost of goods sold | 11841 | 7332 | 9723 | 2921 |
| **Gross loss** | **11439** | **6624** | **9444** | **2838** |
| &nbsp;&nbsp;&nbsp;Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 7745 | 7571 | 5938 | 3842 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 21492 | 5060 | 15142 | 2201 |
| &nbsp;&nbsp;&nbsp;Research and development | 1259 | 3579 | 676 | 1332 |
| &nbsp;&nbsp;&nbsp;Impairment Loss | - | 12120 | - | 12120 |
| **Total operating expenses** | **30496** | **28330** | **21756** | **19495** |
| **Loss from operations** | **41935** | **34954** | **31200** | **22333** |
| &nbsp;&nbsp;&nbsp;Other income: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | (653) | (977) | (351) | (409) |
| &nbsp;&nbsp;&nbsp;Other income | (219) | (93) | (49) | (93) |
| **Total other income:** | **(872)** | **(1070)** | **(400)** | **(502)** |
| **Net loss attributed to common stockholders** | $**41063** | $**33884** | $**30800** | $**21831** |
| &nbsp;&nbsp;&nbsp;Weighted average common shares outstanding - basic and diluted | 3000000 | 3000000 | 3000000 | 3000000 |
| **Net loss per common share - basic and diluted** | **(0.01)** | $**(0.01)** | $**(0.01)** | $**(0.01)** |
| **Comprehensive Loss** |  |  |  |  |
| **Net Loss** | $**41063** | $**33884** | $**30800** | $**21831** |
| &nbsp;&nbsp;&nbsp;Unrealized net loss on investments | 170 | - | 135 | **-** |
| **Comprehensive Loss** | $**41233** | $**33884** | $**30935** | $**21831** |

---

See accompanying notes to unaudited interim condensed consolidated financial statements

**BOXABL INC.**

**UNAUDITED INTERIM CONDENSED CONSOLIDATED statements of stockholders' equity**

---

| | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Series A-3<br> Preferred**<br> **Stock** | **Series A-3<br> Preferred**<br> **Stock** | **Series A-2<br> Preferred**<br> **Stock** | **Series A-2<br> Preferred**<br> **Stock** | **Series A-1<br> Preferred**<br> **Stock** | **Series A-1<br> Preferred**<br> **Stock** | **Series A<br> Preferred**<br> **Stock** | **Series A<br> Preferred**<br> **Stock** | **Common**<br> **Stock**  | **Common**<br> **Stock**  | | | | |
| <br>(In Thousands) | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Paid**<br> **-in** <br>**Capital** | **Accumulated**<br>**Deficit** | **Accumulated Other Comprehensive Income**<br>**(Loss)** | **Stockholders'**<br>**Equity** |
| **<u>Three Months Ended June 30</u>** |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Balance as of March 31, 2024** | **8343** | $**4020** | **173956** | $**100773** | **850605** | $**630265** | **194423** | $**2671** | **3000000** | $**30** | $**15118** | $**(679538)** | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $**73339** |
| &nbsp;&nbsp;&nbsp;Issuance of preferred Stock | 5338 | 3145 |  |  |  |  |  |  |  |  |  |  |  | 3145 |
| &nbsp;&nbsp;&nbsp;Offering Costs |  | (76) |  |  |  |  |  |  |  |  |  |  |  | (76) |
| &nbsp;&nbsp;&nbsp;Stock based compensation |  |  |  |  |  |  |  |  |  |  | 1881 |  |  | 1881 |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | - | - | - | - | - | - | - | - | - | (21831) | - | (21831) |
| **<u>Balance as of June 30, 2024</u>** | **13681** | $**7089** | **173956** | $**100773** | **850605** | $**630265** | **194423** | $**2671** | **3000000** | $**30** | $**16999** | $**(701369)** | $**-** | $**56458** |
| **Balance as of March 31, 2025** | **47680** | $**31865** | **174277** | $**100970** | **850605** | $**630265** | **188541** | $**2566** | **3000000** | $**30** | $**16379** | $**(728698)** | $**135** | $**53512** |
| &nbsp;&nbsp;&nbsp;Issuance of preferred stock | 51416 | 40079 | 45 | 35 | 3399 | 2718 |  |  |  |  |  |  |  | 42832 |
| &nbsp;&nbsp;&nbsp;Offering costs |  | (1660) |  | (2) |  |  |  |  |  |  |  |  |  | (1662) |
| &nbsp;&nbsp;&nbsp;Stock based compensation |  |  |  |  |  |  |  |  |  |  | (613) |  |  | (613) |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | - | - | - | - | - | - | - | - | - | (30800) | - | (30800) |
| &nbsp;&nbsp;&nbsp;Net loss on investments |  |  |  |  |  |  |  |  |  |  |  |  | (135) | (135) |
| **<u>Balance as of June 30, 2025</u>** | **99096** | $**70284** | **174322** | $**101003** | **854004** | $**632983** | **188541** | $**2566**  | **3000000** | $**30** | $**15766** | $**(759498)** | $**-**  | $**63134** |
| **<u>Six Months Ended June 30</u>** |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Balance as of January 1, 2024** | **8343** | $**4020** | **173956** | $**100773** | **850605** | $**630265** | **194423** | $**2671** | **3000000** | $**30** | $**12074** | $**(667485)** | $- | $**82348** |
| &nbsp;&nbsp;&nbsp;Issuance of preferred Stock | 5338 | 3145 |  |  |  |  |  |  |  |  |  |  |  | 3145 |
| &nbsp;&nbsp;&nbsp;Offering Costs |  | (76) |  |  |  |  |  |  |  |  |  |  |  | (76) |
| &nbsp;&nbsp;&nbsp;Stock based compensation |  |  |  |  |  |  |  |  |  |  | 4925 |  |  | 4925 |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | - | - | - | - | - | - | - | - | - | (33884) | - | (33884) |
| **<u>Balance as of June 30, 2024</u>** | **13681** | $**7089** | **173956** | $**100773** | **850605** | $**630265** | **194423** | $**2671** | **3000000** | $**30** | $**16999** | $**(701369)** | $**-** | $**56458** |
| **Balance as of January 1, 2025** | **29016** | $**18222** | **174160** | $**100879** | **850605** | $**630265** | **194423** | $**2671** | **3000000** | $**30** | $**19322** | $**(718435)** | $**170** | $**53124** |
| &nbsp;&nbsp;&nbsp;Issuance of preferred stock | 70083 | 54609 | 162 | 129 | 3399 | 2718 |  |  |  |  |  |  |  | 57456 |
| &nbsp;&nbsp;&nbsp;Shares Retired | (3) | (3) |  |  |  |  | (5882) | (105) |  |  |  |  |  | (108) |
| &nbsp;&nbsp;&nbsp;Offering costs |  | (2544) |  | (5) |  |  |  |  |  |  |  |  |  | (2549) |
| &nbsp;&nbsp;&nbsp;Stock based compensation |  |  |  |  |  |  |  |  |  |  | (3556) |  |  | (3556) |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | - | - | - | - | - | - | - | - | - | (41063) | - | (41063) |
| &nbsp;&nbsp;&nbsp;Net loss on investments |  |  |  |  |  |  |  |  |  |  |  |  | (170) | (170) |
| **<u>Balance as of June 30, 2025</u>** | **99096** | $**70284** | **174322** | $**101003** | **854004** | $**632983** | **188541** | $**2566** | **3000000** | $**30** | $**15766** | $**(759498)** | $**-**  | $**63134** |

---

See accompanying notes to unaudited interim condensed consolidated financial statements

**BOXABL INC.**

**UNAUDITED INTERIM CONDENSED CONSOLIDATED statements of cash flows**

---

| | | |
|:---|:---|:---|
| | **For The Six Months Ended** | **For The Six Months Ended** |
| <br>**(In Thousands)** | **June 30, 2025** | **June 30, 2024** |
| **<u>Cash flows from operating activities:</u>** |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(41063) | $(33884) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 933 | 953 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share settlements | 2613 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | (3556) | 4925 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit losses | 375 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accretion of investment discounts on debt securities |  | (108) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Realized gain on investments | 7 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory adjustments | 11794 | 198 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment loss |  | 12120 |
| **<u>Changes in operating assets and liabilities:</u>** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (1) | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (4054) | (1697) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan receivable | 141 | 231 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | (1881) | (505) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (71) | (1224) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 446 | (96) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customer deposits | (185) | (237) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security deposits | 212 | (259) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 656 | 277 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right of use assets and liabilities | (36) | 34 |
| **Net cash used in operating activities** | **(33670)** | **(19246)** |
| **<u>Cash flows provided by (used in) investing activities:</u>** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of property and equipment | (108) | (1363) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of intangible assets | (16) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross proceeds from sale and maturities of investments | 13750 | 21001 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross purchase of investments | (1078) | (13553) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by investing activities** | **12548** | **6085** |
| **<u>Cash flows provided by financing activities:</u>** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of preferred stock, net of offering costs | 30818 | 437 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Settlement of subscription liability | (626) | (141) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by financing activities** | **30192** | **296** |
| Change in cash, cash equivalents, and restricted cash | 9070 | (12865) |
| Cash, cash equivalents, and restricted cash beginning of year | 9630 | 22332 |
| **Cash, cash equivalents, and restricted cash end of the period** | $**18700** | $**9467** |
| **<u>Non cash investing and financing activities:</u>** |  |  |
| Unrealized losses in OCI | (170) | - |
| Investments held in escrow | $21368 | $2632 |
| Purchase of Asset from Deposit on Equipment | - | (2134) |
| Purchase of assets in accounts payable | $- | $490 |

---

**<u>The following table provides a reconciliation of cash, cash equivalents and restricted cash to the amounts recorded on the Company's unaudited interim consolidated balance sheets</u>**

---

| | | |
|:---|:---|:---|
| | **June 30,** | **June 30,** |
| <br>**(In Thousands)** | **2025** | **2024** |
| Cash and cash equivalents | $14776 | $5647 |
| Restricted cash | 3924 | 3820 |
| **Cash, cash equivalents, and restricted cash end of the period** | $**18700** | $**9467** |

---

See accompanying notes to unaudited interim condensed consolidated financial statements

**BOXABL INC.**

**notes to UNAUDITED INTERIM CONDENSED CONSOLIDATED financial statements**

**(Unaudited, all figures in thousands, except per share amounts and unit quantities unless otherwise indicated)**

**NOTE 1 – INCORPORATION AND NATURE OF OPERATIONS**

**Description of Business**

BOXABL Inc., is a Nevada Corporation originally organized as a Nevada limited liability company, on December 2, 2017. The corporation converted from a Nevada limited liability company to a Nevada corporation on June 16, 2020. These consolidated financial statements of BOXABL Inc., (which may be referred to as the "Company", "BOXABL", "we", "us" or "our") have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company's headquarters are in Las Vegas, Nevada.

BOXABL Inc. has developed a new type of building system using advanced manufacturing processes and by applying existing technology from the automotive industry. Its products, referred to as "Casitas" or "Boxes," result in sustainable high-quality buildings at lower cost, benefiting from mass production practices, resolving the problems of housing shortages by offering a quick solution, and reducing the carbon footprint. The Company has also developed patented folding and shipping technology, enabling the Company to transport its building solution on existing roadways to serve large geographic areas.

The Company's Casitas can be configured for sale in various ways, including Park Model RV and/or Modular, where a Statewide Modular program exists. The Company is approved to sell its product as a Park Model RV under ANSI A119.5 in the majority of US states.

Currently, the Company is approved to sell its product as a modular home into the following states:

● New Mexico

● Nevada

● California

● South Carolina

BOXABL also has the ability to sell its product in the following jurisdictions that do not currently have a state-regulated modular program:

● Oklahoma

● Utah

● Wyoming

● Kansas

● West Virginia

● Hawaii

● Vermont

● Alaska

● Oregon

● Connecticut

● Delaware

● New York

● Tribal Lands

**NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Basis of Presentation**

The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with GAAP for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the Company's management, all adjustments considered necessary for a fair statement have been included in the accompanying unaudited financial statements. All intercompany transactions and balances have been eliminated in consolidation. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025.

The financial data presented herein should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2024, included in the Company's Annual Report on the Form 10-K filed with the SEC on April 14, 2025.

The Company is an "emerging growth company," as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as modified by the Jumpstart Our Business Start-ups Act of 2012 (the "JOBS Act"). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Exchange Act for complying with new or revised accounting standards applicable to public companies. An emerging growth company may delay the adoption of certain accounting standards until those standards would otherwise apply to non-public companies. The Company has elected to take advantage of this extended transition period and as a result, the Company is not required to adopt new or revised accounting standards on effective dates as they become applicable to public companies. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Amounts are expressed in US dollars, rounded to the nearest Thousandth ('000'). The Company's fiscal year is December 31.

**Prior Period Reclassification**

Certain prior period amounts have been reclassified to conform to the current period presentation.

**Revision of Previously Issued Consolidated Financial Statements**

The Company had previously incorrectly reported $108 thousand of net gain on investments in cash flows from operating activities, which was comprised of $108 thousand for accretion of investment discounts on debt securities. The description of the $108 thousand accretion of investment discounts on debt securities, which is a non-cash item, has been changed on the Statement of Cash Flows to accurately describe the transaction. The Company has evaluated and concluded that these misstatements were not material, either individually, or in the aggregate to its previously issued unaudited interim condensed consolidated financial statements. However, the Company has revised its previously issued unaudited interim condensed consolidated financial statements to correct for such immaterial misstatements.

The Company has summarized the impact of this revision to its previously issued unaudited interim condensed consolidated financial statements, including the impacts to specific financial statement line items, and related footnotes, as follows:

SCHEDULE OF RESTATEMENT CONSOLIDATED FINANCIAL STATEMENTS

---

| | | | |
|:---|:---|:---|:---|
| **Statement of Cash Flows - For The Six Months Ended June 30, 2024** | **As Reported** | **Adj.** | **As Revised** |
| &nbsp;&nbsp;&nbsp;(In Thousands) |  |  |  |
| &nbsp;&nbsp;&nbsp;Net gains on marketable securities | $(108) | $108 | $- |
| &nbsp;&nbsp;&nbsp;Accretion of investment discounts on debt securities | $- | $(108) | $(108) |

---

**Use of Estimates**

The preparation of these unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures in the unaudited interim condensed consolidated financial statements and accompanying notes. Actual results could differ materially from these estimates. These estimates form the basis for judgements the Company makes about the carrying value of its assets and liabilities, which are not readily apparent from other sources. These estimates are based on information available as of the date of the unaudited interim condensed consolidated financial statements, including historical information and various other assumptions that the Company believes are reasonable under the circumstances. Actual results could differ materially from these estimates.

**Risks and Uncertainties**

The Company's business and operations are sensitive to general business and economic conditions in the US and worldwide along with local, state, and federal governmental policy decisions. A host of factors beyond the Company's control could cause fluctuations in these conditions. Adverse conditions may include recession, downturn or governmental policy decisions. These adverse conditions could affect the Company's financial condition, results of its operations and cash flows.

**Fair Value of Financial Instruments**

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

● Level 1 – Valuations based on quoted prices for identical assets and liabilities in active markets. Level 1 assets consist of investments.

● Level 2 – Valuations based on observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

● Level 3 – Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The Company valued its employee stock options (NQSO's and ISO's) and stock grants (RSU's) at grant date fair value using a Level 3 mark. Additionally, investments in digital assets are valued as Level 1 fair value financial instruments. *See Note 12 – Stockholders Equity – Stock Based Compensation.* 

**Restricted Cash and Deposits**

On June 1, 2023, the Company was required to make a security deposit related to the expansion of premises of $3,714 thousand pursuant to the terms of the lease agreement with the landlord. The Company re-allocated funds from its cash and cash equivalent balance and restricted these funds to act as the security deposits. The interest earned on this restricted cash account is also restricted for use by the landlord until the security deposit is settled. The interest rate on the security deposit was 3.15% as of June 30, 2024. On January 31, 2024, the Company also paid an additional security deposit of $259 thousand for additional tenant improvements to its existing leased facility. On June 12th, 2025, the Company received $245 thousand, as a partial refund of its security deposit. As of June 30, 2025 and December 31, 2024, the Company held $3,924 thousand and $3,878 thousand, respectively, as restricted cash.

**Accounts Receivable** 

Accounts receivable consists of transactions with customers, associated with the sales of Casitas. The portion of the accounts receivable estimated to be uncollectible is recorded as a credit loss provision, a contra receivable balance in accordance with ASC 326 (ASU 2016-13), Current Expected Credit Losses ("CECL"). As of the periods ended June 30, 2025 and December 31, 2024, management determined that it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the goods and services transferred to customers. As such, the Company does not require any allowance for credit losses associated with the accounts receivable balance as of June 30, 2025 and December 31, 2024.

**Investments in Marketable Debt Securities**

The Company generally invests its excess cash into marketable debt securities, which consist of short-term and long-term investments in U.S. treasury bills and notes that were classified as held-to-maturity at June 30, 2024. The Company prospectively re-classified its short-term investments in U.S. treasury bills and notes as available-for-sale debt securities during the quarter ended December 31, 2024. Available-for-sale debt securities are financial instruments that are reported at fair value, with unrealized gains/losses recorded in Other Comprehensive Loss.

Prior to October 1, 2024, all investments in U.S. treasury bills and notes were classified as Held-to-maturity debt securities, which are financial instruments for which the Company has the intent and ability to hold to maturity and are reported at amortized cost. The Company reserves for expected credit losses on held-to-maturity debt securities through the allowance for expected credit losses. The Company utilizes a probability-of-default ("PD") and loss-given-default ("LGD") methodology to calculate the allowance for expected credit losses. The allowance for expected credit losses estimate reflects a lifetime loss estimate and is based on historical loss information for assets with similar risk characteristics, adjusted for management's expectations. Adjustments for management's expectations may be based on factors such as investee earnings performance, potential refinancing events, changes in the regulatory, economic or technological environment of an investee or doubt about an investee's ability to continue as a going concern. An increase or a decrease in the allowance for expected credit losses is recorded through other gain (loss) as a credit loss expense or a reversal thereof. The allowance for expected credit losses is presented as a deduction from the amortized cost. A debt security is written off when deemed uncollectible. The Company's investments in U.S. treasury bills and notes represent debt securities issued by the U.S government and as such, have a low level of inherent risk; generally any changes in their value are attributable to changes in interest rates and market liquidity.

*Short-Term Investments in U.S. Treasury Notes, Available-for-Sale*

Short-term investments in U.S. Treasury bills and notes are classified as available-for-sale when the Company does not have both the intent and ability to hold them to maturity. Available-for-sale debt securities are reported at fair value, with unrealized gains and losses recorded in Other Comprehensive Loss.

*Short-Term Investments in U.S. Treasury Notes, Held-to-Maturity*

Short-term investments in U.S. treasury notes include U.S treasury notes with maturities of less than 12 months. Where the Company has both the intent and ability to hold debt securities to maturity, these debt securities are carried at amortized cost. If a U.S. treasury note has an unrealized loss and we either intend to sell the security or it is more likely than not that we will be required to sell the security before its anticipated recovery, we will record an impairment charge to investment and other income (expense), net for the entire amount of the unrealized loss and adjust the amortized cost basis of the security.

*Long-Term Investments in U.S. Treasury Notes, Held-to-Maturity*

Long-term investments in U.S. treasury notes include U.S Treasury notes with maturities of 12 months or more. Where the Company has both the intent and ability to hold debt securities to maturity, these debt securities are carried at amortized cost. If a U.S. treasury note has an unrealized loss and we either intend to sell the security or it is more likely than not that we will be required to sell the security before its anticipated recovery, we will record an impairment charge to investment and other income (expense), net for the entire amount of the unrealized loss and adjust the amortized cost basis of the security.

**Inventories, net**

Inventories consist of raw materials, in-bound freight and duties, work in progress, and finished goods. Inventories available for sale are valued at the lower of cost or net realized value. Cost is determined using the weighted average method. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, bulk sales, and the expected recoverable values for each disposition category. On a periodic basis, the Company performs a physical count of its inventory and records an inventory valuation allowance for inventory that has become obsolete or inventory that has a cost basis in excess of the expected net realizable value. Damaged and obsolete inventory are valued based on specific identification and management's estimate of net realizable value, including consideration of whether the items are usable in current or future production. Any difference between cost and estimated realizable value is recognized as an expense.

**Loan Receivables, net**

Loan receivables consist of formal credit sales in transactions with customers, where a portion of the sales proceeds consist of an interest-bearing loan originated by the Company. Loan receivables are recognized on the balance sheet and classified as long-term or short-term, respectively, based on the term of the loan. A portion of the loan receivable estimated to be uncollectible is recorded as a credit loss provision, a contra receivable balance in accordance with ASC 326 (ASU 2016-13), Current Expected Credit Losses ("CECL"). To reduce instances of credit losses, the Company performs a review of the borrower's creditworthiness, credit terms are agreed by both parties and formally documented before any sale is completed. We generally mitigate potential credit losses by requiring an unlimited personal guarantee from the borrower's sponsor/owner and the loan is also secured by the underlying asset(s).

**Property and Equipment, net**

Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance, repairs, and minor improvements are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation and amortization are removed from the respective accounts, and any gain or loss is included within gain/loss on disposal of assets within the consolidated statements of comprehensive loss. Major improvements with economic lives greater than one year are capitalized. Leasehold improvements are depreciated over the lesser of the lease term or the estimated useful life. Depreciation is computed using the straight-line method over the following estimated useful lives:

SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT

---

| | |
|:---|:---|
| Computers and other peripheral equipment | 3 years |
| Furniture and fixtures | 7 years |
| Machinery and equipment | 5-15 years |
| Tenant improvements | 2-5 years |
| Vehicles | 5 years |
| Casita fixed assets | 25 years |

---

**Digital Assets**

The Company adopted a Bitcoin treasury reserve strategy in May 2025, allowing for a percentage of its assets to acquire Bitcoin (BTC). The Company accounts for its digital assets, which are comprised solely of Bitcoin (BTC), as indefinite-lived intangible assets in accordance with Accounting Standards Update No 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (ASU 2023-08). ASU 2023-08 requires in-scope crypto assets (including the Company's bitcoin holdings) to be measured at fair value in the balance sheets, with gains and losses from changes in the fair value of such crypto assets recognized in net income each reporting period. The Company determines the fair value of its Bitcoin in accordance with ASC 820, Fair Value Measurement, using the specific identification method, based on quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company has determined is its principal market for Bitcoin (Level 1 input). Changes in fair value are recognized as incurred in the Company's Consolidated Statements of Operations, within Other Income.

The Company establishes a deferred tax liability if the market value of bitcoin at the reporting date is greater than the average cost basis of the Company's bitcoin holdings at such reporting date, and any subsequent increases or decreases in the market value of bitcoin increases or decreases the deferred tax liability. In determining the gain (loss) to be recognized upon sale, the Company calculates the difference between the sales price and carrying value of the specific bitcoin sold immediately prior to sale.

The Company's Bitcoin purchased for investment purposes are initially recorded at cost, inclusive of transaction costs and fees. Subsequently, the Company remeasures its Bitcoin investment at fair value at the end of each reporting period with changes recognized in net income through other (expense) income, net on the Company's Condensed Consolidated Statements of Comprehensive Loss. As of June 30, 2025, the Company held 10 Bitcoins with a cost basis of $1,078 thousand and a fair value of $1,071 thousand.

The following table summarizes the Company's digital asset purchases, losses (gains) on digital assets, for the three months ended:

SCHEDULE OF DIGITAL ASSETS PURCHASE

---

| | | |
|:---|:---|:---|
|  | **Six and Three Months Ended** | **Six and Three Months Ended** |
| (In Thousands, except number of Bitcoins) | **June 30, 2025** | **June 30, 2024** |
| Bitcoins Purchased | 10 |  |
| Digital asset purchases | $1078 | $- |
| Unrealized gain (loss) on digital assets | (7) | - |
| **Digital asset carrying value** | $**1071** | $- |

---

The Company did not sell any of its bitcoins during the three and six months ended June 30, 2025 and 2024, respectively.

**Intangible Assets**

The Company has intangible assets that are amortized over the respective estimated lives on a straight-line basis unless the lives are determined to be indefinite and reviewed for impairment whenever events or other changes in circumstances indicate that the carrying amount may not be recoverable. The Company's intangible assets include intellectual property associated with Patents and Trademarks that are amortized over their estimated useful life of 14 years, or the stated expiration date, whichever is more determinable. The Company also has implementation costs for cloud computing and hosting arrangements for software-as-a-service arrangements that are recorded as an intangible asset on the balance sheet, and subsequently amortized over their economic or legal life, whichever is shorter. The Company applies the following useful lives to its intangible assets:

SCHEDULE OF USEFUL LIVES OF INTANGIBLE ASSETS

Intellectual property 14 years <br> Software 1-3 years <br> Domain 5 years

The Company has also incurred costs to develop software that are being developed for sale and/or external-use. These software development costs are recognized in research and development expenses on the Company's Statement of Comprehensive Loss, as these costs do not qualify for capitalization until the software has reached the point of technological feasibility, which is determined after the planning, designing, coding, and testing phases have been completed.

**Revenue Recognition**

Revenue is measured based on the amount of consideration that we expect to receive, reduced by allowance for estimated returns, chargebacks, promotional discounts, markdowns, and rebates based on management's estimates and the Company's historical experience. Revenue also excludes any amounts collected on behalf of third parties, including sales and indirect taxes. In arrangements where we have multiple performance obligations, the transaction price is allocated to each performance obligation using the relative stand-alone selling price. We generally determine stand-alone selling prices based on the prices charged to customers.

The Company determines revenue recognition through the following steps in accordance with ASC Topic 606, Revenue from Contracts with Customers:

● Identification of a contract with a customer.

● Identification of the performance obligations in the contract.

● Determination of the transaction price.

● The customer has the ability and intent to pay the contractual amount.

● Allocation of the transaction price to the performance obligations in the contract.

● Recognition of revenue when or as the performance obligations are satisfied.

Revenues are recognized when performance obligations are satisfied through the sale and transfer of Casitas, services or parts to the Company's customers. Generally, control transfers upon shipment of the Casita to the customer and the transfer of legal title and risk and rewards of ownership to the customer. Occasionally, performance obligations for the Company may also include the delivery, installation and other services. The Company records a liability for customer deposits received prior to delivery of the Casita or fulfilment of the service. The liability is relieved, with revenue being recognized, once the performance obligations to the customer are satisfied. Generally, this occurs after the customer has paid the contracted amount and the product has been shipped.

**Cost of Goods Sold**

Cost of goods sold consists primarily of the cost of products used in the production of the Company's finished products, inbound and outbound shipping costs, the related labor, and indirect overhead costs associated with that production.

On a periodic basis, the Company performs a physical count of its inventory and records an inventory valuation allowance for inventory that has become obsolete or inventory that has a cost exceeding expected net realizable value. Damaged and obsolete inventory are valued based on specific identification and management's estimate of net realizable value, including consideration of whether the items are usable in current or future production. The difference between cost and estimated realizable value is charged to expense.

**Advertising Costs**

The Company incurs third party advertising costs as well as payroll-related costs for its marketing personnel engaged in promotional activities. Advertising and promotion costs to market our products and services are expensed as incurred. Certain marketing costs related to the issuance of the Company's securities are accounted for as a reduction to the proceeds from the equity offering and not included in sales and marketing expenses.

**Research and Development**

Research and development costs consisting of design, materials, and consultants related to prototype and process improvements and developments are expensed as incurred.

**Concentration of Credit Risk**

*Cash and Cash Equivalents:*

Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash and cash equivalents. The Company classifies all highly liquid instruments with an original maturity of three months or less as cash equivalents. Due to the short maturity of these cash equivalents, the carrying amounts of these instruments approximate their fair values. Cash and cash equivalents are maintained at high quality financial institutions. As of June 30, 2025 and 2024, the Company's deposits exceeded the Federal Deposit Insurance Corporation (FDIC) limit. The Company has not experienced any losses with respect to its cash balances. Based upon assessment of the financial condition of these institutions, management considers that the risk of loss of any uninsured balances does not have a significant impact on the Company's operations.

*Customers:*

During the three months ended June 30, 2025, revenues from four customers made up 89% of the Company's revenues. During the six months ended June 30, 2025, revenues from four customers was approximately 77% of the Company's revenues. As of June 30, 2025 and December 31, 2024, loan receivables from two customers represented 86% and 100% of the Company's loan receivable.

**Stock-Based Compensation**

The Company applies ASC 718, *Stock-Based Compensation* for all stock-based awards, including stock options and restricted stock, that are measured at fair value on the date of grant and recognized over the associated vesting periods. The fair value of stock options is estimated on the date of grant using a Black-Scholes model. The fair value of restricted stock awards is estimated on the date of the grant based on the fair value of the Company's underlying common stock. The Company recognizes compensation expense for stock options on a straight-line basis over the associated service or vesting periods. Effective October 18, 2024, restricted stock awards became subject to a performance condition, which defers vesting of restricted stock awards until a monetization event. Accordingly, the Company shall not recognize stock-based compensation from restricted stock awards until a monetization event becomes probable.

See *Note 12 – Stockholders' Equity – Preferred and Common Stock* for a description of the amendments to the Company's articles of incorporation and *Note 12 – Stockholders' Equity – Stock-based Compensation* for a description of our amended and restated Plan, each of which became effective October 18, 2024

Determining the grant date fair value of options using the Black-Scholes option-pricing model requires management to make assumptions and judgments. These estimates involve inherent uncertainties and, if different assumptions had been used, stock-based compensation expense could have been materially different from the amounts recorded.

**Income Taxes**

The Company accounts for income taxes in accordance with Accounting Standards Codification ("ASC") Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Tax positions initially must be recognized in the consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions initially and subsequently are to be measured at the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority, assuming full knowledge of the position and relevant facts.

**Contingencies**

The Company is involved in lawsuits, claims, and proceedings, which arise in the ordinary course of business. In accordance with the FASB ASC Topic 450 Contingencies, the Company shall make a provision for a liability when it is both probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company believes it has adequate provisions for any such matters. The Company reviews these provisions in conjunction with any related provisions on assets related to the claims at least quarterly and adjusts these provisions to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other pertinent information related to the case. Should developments in any of these matters outlined below cause a change in the Company's determination as to an unfavorable outcome and result in the need to recognize a material provision, or, should any of these matters result in a final adverse judgment or be settled for significant amounts, they could have a material adverse effect on the Company's results of operations, cash flows, and financial position in the period or periods in which such a change in determination, settlement or judgment occurs.

**Basic and Diluted Net Loss Per Share**

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. Diluted net loss per share reflects the actual weighted average of common shares issued and outstanding during the period plus potential common shares. Stock options and convertible instruments are considered potential common shares and are included in the calculation of diluted net loss per share when their effect is dilutive. As all potentially dilutive securities are anti-dilutive for the periods presented as a result of the net loss, diluted net loss per share is the same as basic net loss per share for each period.

The following table summarizes potentially dilutive securities, and the resulting common share equivalents outstanding as of June 30, 2025 and June 30, 2024, respectively:

SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES OUTSTANDING

---

| | | |
|:---|:---|:---|
| | **Balance as of** | **Balance as of** |
| <br>(In Thousands) | **June 30, 2025** | **June 30, 2024** |
| Stock options | 46264 | 52076 |
| Restricted stock units | 130805 | 53000 |
| Warrants | 18573 | 18322 |
| Preferred stock | 1315963 | 1232666 |
| Potentially dilutive shares | 1511605 | 1356064 |

---

**Leases**

The Company leases some items of property, plant and equipment, including manufacturing and office space. On the lease commencement date, a lease is classified as a finance lease or an operating lease based on the classification criteria of the lease guidance under ASC 842. In accordance with ASC 842, the Company has recorded right-of-use ("ROU") assets for all of its leased assets classified as operating leases. The Company has no finance leases. The ROU assets were computed as the present value of future minimum lease payments, including additional payments resulting from a change in an index such as a consumer price index or an interest rate, plus any prepaid lease payments minus any lease incentives received.

**Warranty Provision**

The Company generally offers its customers a manufacturers' warranty on Casita products sold for a period of one year. Management records an expense to cost of goods sold for the costs of warranty repairs at the time of sale. Management's estimate for warranties is based on sales levels and historical costs of providing warranties. As of June 30, 2025 and December 31, 2024, respectively, the Company's reserve for warranty totaled $594 thousand and $594 thousand, respectively, and is reflected in "accrued expenses and other current liabilities" in the consolidated balance sheets.

**Recent Accounting Pronouncements**

As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

On May 2025, the Financial Accounting Standards Board ("FASB") issued ASU 2025-04, *Compensation – Stock Compensation and Revenue from Contracts with Customers – Clarifications to Share-Based Consideration Payable to a Customer*, which requires the Company to account for share-based consideration payable to a Customer as a reduction of the transaction price and a reduction of revenue, unless the payment to the customer is in exchange for a distinct good or service. Under the amendments in this update, revenue recognition will no longer be delayed when an entity grants awards that are not expected to vest. ASU 2025-04 is effective for annual and interim reporting periods beginning after December 15, 2026, and may be applied on a modified retrospective or retrospective basis. The Company is currently evaluating the potential impact of this update on its consolidated financial statements and does not expect the impact to be material.

On May 2025, the Financial Accounting Standards Board ("FASB") issued ASU 2025-03, *Business Combinations and Consolidation – Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity*, which requires the Company involved in an acquisition transaction effected primarily by exchanging equity interests to consider certain factors to determine which entity is the accounting acquirer. The amendments enhance the comparability of financial statements of Companies engaging in acquisition transactions, but do not change the accounting for a transaction determined to be a reverse acquisition or a transaction in which the legal acquirer is not a business and is determined to be the accounting acquiree. ASU 2025-03 is effective for annual and interim reporting periods beginning after December 31, 2026, and applied prospectively. The Company is currently evaluating the potential impact of this update on its consolidated financial statements and does not expect the impact to be material.

On November 2024, the Financial Accounting Standards Board ("FASB") issued ASU 2024-03, *Disaggregation of Income Statement Expenses*, which requires the Company to make disclosures about specific types of expenses included in the expense captions presented on the face of its consolidated income statement as well as disclosures about its selling expenses. These new requirements, as amended by ASU 2025-01, will be effective for annual periods beginning after December 15, 2026 and interim periods within fiscal periods beginning after December 15, 2027, with early adoption permitted and can be applied on either a prospective or retrospective basis. The Company is currently evaluating the potential impact of this update on its consolidated financial statements and does not expect the impact to be material.

On December 2023 the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). The standard requires enhanced annual disclosures regarding the rate reconciliation and income taxes paid information. ASU 2023-09 was effective for annual periods beginning after December 15, 2024 and may be adopted on a prospective or retrospective basis. The adoption of ASU 2023-09 did not have a material impact on the Company's consolidated financial statements and related disclosures.

On November 2023 the FASB issued improvements to reportable segment disclosures ASU 2023-07, Segment Reporting. The standard requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss (collectively referred to as the "significant expense principle"). It also requires disclosure of other segment items by reportable segment and a description of its composition, whereas the other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss. It also requires interim period disclosures about a reportable segment's P&L and Assets and requires disclosure of the title and position of the Chief Operating Decision Maker (CODM) as well as how the CODM uses the segment P&L in assessing segment performance and deciding how to allocate resources. ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This ASU was applied on a retroactive basis, to all prior periods presented in the unaudited interim condensed consolidated financial statements, but did not have a material impact on the Company's segment disclosures. The adoption of 2023-07 did not change the way that the Company identifies its reportable segment. However, it has resulted in incremental disclosures within the notes of the Company's unaudited interim condensed consolidated financial statements (Note 15).

Management does not believe that any other recently issued, but not effective, accounting standards have a material impact on the consolidated financial statements.

**NOTE 3 – GOING CONCERN**

These unaudited interim condensed consolidated financial statements have been prepared under the assumption that the Company will be able to continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company's ability to continue as a going concern is probable. Primarily due to limited sales associated with delays in obtaining US statewide modular approvals, the Company reported a net loss of $41,063 thousand, and operating cash outflow of $33,670 thousand for the six months ended June 30, 2025. At June 30, 2025, the Company had an accumulated deficit of $759,498 thousand. Absent any other action, the Company will require additional liquidity to continue its operations over the next 12 months.

The continuing viability of the Company and its ability to continue as a going concern is dependent on the Company being successful in its continued efforts in growing its revenue and/or accessing additional sources of capital. Management's plan to address this need includes (a) continued exercise of tight controls to conserve cash, (b) accelerating sales of Casitas to generate revenue, and (c) raising funds through equity financing. The Company anticipates current capital on hand and expected future funding will be sufficient to fund the Company's operations in excess of twelve months. From June 2024 to June 2025, the Company sold shares of its preferred stock through Regulation A and Regulation D offerings in the United States. Management believes that the actions presently being taken by the Company will provide sufficient liquidity for the Company to continue to execute its business plan over the next year. However, there can be no assurances that management's plans will be achieved.

**NOTE 4 – INVESTMENTS**

As of June 30, 2025 and December 31, 2024, investments in securities consists of U.S. Treasury Notes carried at fair value and amortized cost, respectively, consisted of the following:

SCHEDULE OF INVESTMENT IN SECURITIES

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| | | |
|:---|:---|:---|
| | **Balance as of** | **Balance as of** |
| <br>**(In Thousands)** | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
| Investments in short-term U.S. Treasury Notes | $2023 | $15943 |
| **Total investments in U.S. Treasury Notes** | $**2023** | $**15943** |

---

The long-term investments include maturities extending beyond 12 months from the balance sheet date.

The cost basis of investments held is determined by the Company using the specific identification method.

Interest Income on the consolidated Statement of Comprehensive Loss includes the accrued interest and realized interest earned on Treasuries. Unrealized gains and losses on treasuries, classified as available-for-sale, are reported within "unrealized net gains/losses" on the consolidated Statement of Comprehensive Loss.

The amortized cost, gross unrealized gains and losses, fair value, and the allowance for credit losses of those investments classified as available-for-sale at June 30, 2025 are summarized as follows:

SCHEDULE OF UNREALIZED NET GAINS AND LOSSES

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(In Thousands)** | **Amortized cost** | **Allowance for credit losses** | **Net Carrying Amount** | **Gross unrealized (loss)** | **Gross unrealized gains** | **Fair value** |
| U.S. Government securities | $2023 | - | $2023 | $- | $- | $2023 |
| **Total as of June 30, 2025** | $**2023** | $**-** | $**2023** | $**-** | $**-** | $**2023** |

---

The amortized cost, gross unrealized gains and losses, fair value, and the allowance for credit losses of those investments classified as available-for-sale at December 31, 2024 are summarized as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(In Thousands)** | **Amortized cost** | **Allowance for credit losses** | **Net Carrying Amount** | **Gross unrealized (loss)** | **Gross unrealized gains** | **Fair value** |
| U.S. Government securities | $15773 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $15773 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $170 | $15943 |
| **Total as of December 31, 2024** | $**15773** | $**-** | $**15773** | $**-** | $**170** | $**15943** |

---

All available-for-sale debt securities have a weighted average maturity of one year or less.

During 2024 the Company re-classified its short-term investments in U.S. treasury bills and notes as available-for-sale. Available-for-sale debt securities are financial instruments that are reported at fair value, with unrealized gains/losses recorded in Other Comprehensive Loss. Unrealized losses on available-for-sale securities was $135 thousand and $170 thousand for the three and six months periods ended June 30, 2025, respectively. No allowance for credit losses was recorded for these securities as of the three and six months ended June 30, 2025 as all unrealized losses were considered immaterial.

**NOTE 5 – INVENTORIES, NET**

Inventories are stated at the lower of cost or net realizable value, with cost determined using the standard costing method, which approximates actual cost. Inventories are classified into raw materials, inventory in transit, work-in-process (WIP), consignment, and finished goods. The Company recently obtained modular approval for its Casita in all climate zones in California in 2025 and, as a result, it has decided to rework certain of its existing units to meet the California modular specification so that these units are able to be sold in California. As a result, in the second quarter of 2025, approximately $7.1 million of inventory was reclassified from Finished Goods to Work-in-Process on the consolidated balance sheet.

The Company determined that this change represents a change in presentation rather than a change in accounting principle under ASC 250-10-45-12, and therefore did not require retrospective application.

As of June 30, 2025 and December 31, 2024, inventory consists of the following:

SCHEDULE OF INVENTORY

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| | | |
|:---|:---|:---|
| | **Balance as of** | **Balance as of** |
| <br>**(In Thousands)** | **June 30,<br> 2025** | **December 31,<br> 2024** |
| &nbsp;&nbsp;&nbsp;Raw material | $2813 | $3606 |
| &nbsp;&nbsp;&nbsp;Inventory in-transit |  | 110 |
| &nbsp;&nbsp;&nbsp;Work-in progress | 7212 | 119 |
| &nbsp;&nbsp;&nbsp;Consignment | 29 |  |
| &nbsp;&nbsp;&nbsp;Finished goods | 6467 | 20426 |
| **Total inventory** | $**16521** | $**24261** |

---

Inventories are written down for any obsolescence or when the net realizable value considering future events and conditions is less than the carrying value. During the three months ended June 30, 2025, following an inventory slow movement analysis, the Company determined to write down 68 units that had been held in inventory for an extended time period and for which the Company determined that it was not cost effective to rework. Accordingly, for the six months ended June 30, 2025 and 2024, the Company recorded $8,430 thousand and $198 thousand, respectively, related to obsolete and damaged inventory in cost of goods sold on the consolidated statements of comprehensive loss. In addition, during the six months ended June 30, 2025 and 2024, the Company recognized $3,364 thousand and $0, respectively, in inventory valuation adjustments within cost of goods sold related to adjusting the carrying value of finished goods inventory to its net realizable value.

For the three months ended June 30, 2025 and 2024, the Company recorded $8,346 thousand and $182 thousand, respectively, related to obsolete and damaged inventory in cost of goods sold on the consolidated statements of comprehensive loss. In addition, during the three months ended June 30, 2025 and 2024, the Company recognized $1,300 thousand and $0, respectively, in inventory valuation adjustments within cost of goods sold related to adjusting the carrying value of finished goods inventory to its net realizable value.

**NOTE 6 – LOAN RECEIVABLES, NET**

The Company has originated two loan receivables comprised of formal credit sales in transactions with its customers. Based on the loan terms, $903 thousand of these loan receivables have been classified as long-term and $451 thousand of these loan receivables have been classified as short-term, respectively. The current balance of loan receivables includes $47 thousand of interest receivable on loans and $404 thousand related to the loan receivable outstanding balance. A portion of the loan receivable estimated to be uncollectible is recorded as a credit loss provision of $375 thousand, recognized as a contra receivable balance in accordance with ASC 326 (ASU 2016-13), Current Expected Credit Losses ("CECL") as of June 30, 2025.

The Company has initiated loans to specific customers to assist them in their financing. The loans were negotiated on an arm's length basis, accrue interest income, and were originated at market rates. Accordingly, there are no ASC 606 impacts related to a financing component embedded in the loan. Considering that the Company does not have a significant portfolio of loans, or any loss history, it does not have any basis to establish any anticipated expected credit loss. The Company has an on-going business relationship with these Customers and expects to deliver additional units in the future.

An aging analysis was performed using historical and forecasted credit loss rates across various delinquency buckets, resulting in a total expected credit loss estimate of $75 thousand, which was recorded as a CECL reserve as of June 30, 2025. In addition, the CECL reserve includes specific reserves of $300 thousand related to two delinquent loans. Previously, the Company had concluded that no CECL reserve was required as of December 31, 2024.

SCHEDULE OF ALLOWANCE OF CREDIT LOSSES

---

| | |
|:---|:---|
| **Allowance for Credit Losses** | |
| Balance as of March 31, 2025 | $- |
| Provision for credit losses | 375 |
| Write-offs |  |
| Recoveries | - |
| Balance as of June 30, 2025 | $375 |

---

---

| | |
|:---|:---|
| **Allowance for Credit Losses** | |
| Balance as of December 31, 2024 | $- |
| Provision for credit losses | 375 |
| Write-offs |  |
| Recoveries | - |
| Balance as of June 30, 2025 | $375 |

---

**NOTE 7 – PROPERTY AND EQUIPMENT, NET**

The Company's property and equipment consists of the following amounts as of June 30, 2025 and December 31, 2024:

SCHEDULE OF PROPERTY AND EQUIPMENT

---

| | | |
|:---|:---|:---|
| | **Balance as of** | **Balance as of** |
| <br>**(In Thousands)** | **June 30,<br> 2025** | **December 31,<br> 2024** |
| &nbsp;&nbsp;&nbsp;Computers and other peripheral equipment | $404 | $404 |
| &nbsp;&nbsp;&nbsp;Furniture and fixtures | 182 | 182 |
| &nbsp;&nbsp;&nbsp;Machinery and equipment | 7945 | 7880 |
| &nbsp;&nbsp;&nbsp;Tenant improvements | 2847 | 2804 |
| &nbsp;&nbsp;&nbsp;Vehicles | 748 | 748 |
| &nbsp;&nbsp;&nbsp;Casita fixed assets | 834 | 834 |
|  | 12960 | 12852 |
| &nbsp;&nbsp;&nbsp;Less: Accumulated depreciation | (4824) | (3923) |
| **Property, plant and equipment, net** | $**8136** | $**8929** |

---

**Depreciation**

During the six months ended June 30, 2025 and 2024, the Company recognized $901 thousand and $953 thousand, respectively, in depreciation expense. During the three months ended June 30, 2025 and 2024, the Company recognized $435 thousand and $467 thousand, respectively, in depreciation expense.

**Deposits on Equipment**

As of June 30, 2025 and December 31, 2024, the Company recorded $87 thousand and $93 thousand, respectively, for deposits on equipment which is reported within "Deposits on equipment" on the consolidated balance sheets.

**NOTE 8 – INTANGIBLE ASSETS, NET**

The Company held the following intangible assets as of June 30, 2025 and December 31, 2024:

SCHEDULE OF INTANGIBLE ASSETS

---

| | | |
|:---|:---|:---|
| | **As of,** | **As of,** |
| <br>**Asset (In Thousands)** | **June 30,<br> 2025** | **December 31,<br> 2024** |
| &nbsp;&nbsp;&nbsp;Intellectual property | $426 | $&nbsp;&nbsp;&nbsp;&nbsp; 418 |
| &nbsp;&nbsp;&nbsp;Software | 269 | 261 |
| &nbsp;&nbsp;&nbsp;Domain | 50 | 50 |
|  | 745 | 729 |
| &nbsp;&nbsp;&nbsp;Less: Accumulated amortization | (213) | (187) |
| &nbsp;&nbsp;&nbsp;**Total** | $**532** | $**542** |

---

During the six months ended June 30, 2025 and 2024, the Company recognized $26 thousand and $13 thousand in amortization expense, respectively. During the three months ended June 30, 2025 and 2024, the Company recognized $13 thousand and $7 thousand, respectively, in amortization expense.

**NOTE 9 – CURRENT LIABILITIES**

As of June 30, 2025 and December 31, 2024, respectively, current liabilities were comprised primarily of accounts payable, customer deposits and deferred revenue, the current portion of lease liabilities (See Note 10 – Leases), and subscription liabilities (See Note 12 – Stockholders' Equity).

**Accounts Payable**

Accounts payable as of June 30, 2025 and December 31, 2024 consisted of the following:

SCHEDULE OF ACCOUNTS PAYABLE

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| | | |
|:---|:---|:---|
| | **As of,** | **As of,** |
| <br>(In Thousands) | **June 30,<br> 2025** | **December 31, 2024** |
| &nbsp;&nbsp;&nbsp;Outstanding vendor bills | $1607 | $1514 |
| &nbsp;&nbsp;&nbsp;Sales tax payable | 90 | 38 |
| &nbsp;&nbsp;&nbsp;Credit card balances | 8 | 224 |
| **Total** | $**1705** | $**1776** |

---

**Customer Deposits**

Customer Deposits are comprised of pre-order deposits from customers and prepayments in advance of attendance at on-site installer training. As of June 30, 2025 and December 31, 2024, Customer Deposits were reported at $3.4 million and $3.6 million, respectively. This decrease is due to refunds and/or application of customer deposits to customer orders that were fulfilled during 2025.

**Deferred Revenue**

Deferred revenue is comprised of prepayments on unfulfilled purchase orders and prepayments for Site Surveys. During 2024, the Company began accepting $500 payments from customers beginning the B2C order process, which are used to conduct site surveys for the location or site of the sale. Deferred revenue consisted of the following as of June 30, 2025 and December 31, 2024:

SCHEDULE OF DEFERRED REVENUE

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| | | |
|:---|:---|:---|
| | **As of,** | **As of,** |
| <br>(In Thousands) | **June 30,<br> 2025** | **December 31,<br> 2024** |
| &nbsp;&nbsp;&nbsp;Customer prepayments | $2673 | $2241 |
| &nbsp;&nbsp;&nbsp;Site surveys | 59 | 45 |
| **Total** | $**2732** | $**2286** |

---

**NOTE 10 –LEASES**

On December 29, 2020, the Company signed a 65-month lease for its 173,000 sq. ft. factory facility, commencing on May 1, 2021. As of December 31, 2020, a $525 thousand security deposit, first month's rent, $87 thousand, and first-month's Tenant's Percentage of Operating Expense Fees ("CAM") $19 thousand, had been paid to the landlord. The monthly CAM varies from month to month. After December 31, 2022, the Company amended the lease agreement to obtain additional space in a neighboring warehouse for four years, with the first month's base rent of $116 thousand, increasing by 4% annually. During the year ended December 31, 2024, the Company performed improvements to the leased facility. In connection with these improvements, the Company made an additional security deposit of $259 thousand to the landlord.

On June 10, 2022, the Company signed a 73-month lease for a 132,960 sq. ft warehouse, commencing the earlier of (a) 30 days after substantial completion of tenant work by the landlord or (b) tenant commencing operation in the building. The lease commencement date was determined to be February 1, 2023. The initial base rent is $104 thousand and will increase 4% every year.

Effective as of January 1, 2023, the Company leased to Supercar System four support squares located in the Company's main property located at 5435 E. N. Belt Road, Las Vegas, Nevada for $7 thousand per month. The agreement terminates December 31, 2026, and the Company retains the right to unilaterally terminate the agreement upon thirty days' written notice. Supercar System is controlled by the Company's Co-CEO, Paolo Tiramani.

The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term. Most leases include one or more options to renew, with renewal terms that can extend the lease term. The Company has determined that it was reasonably certain that the renewal options would be exercised based on previous history and knowledge, current understanding of future business needs and the level of investment in leasehold improvements, among other considerations. The incremental borrowing rate used in the calculation of the lease liability is based on the rate available to the Company. The depreciable life of assets and leasehold improvements are limited by the expected lease term. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Certain subsidiaries of the Company rent or sublease certain office space to/from other subsidiaries of the Company.

Maturities of lease liabilities for operating leases as of June 30, 2025, were as follows:

SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES

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| | |
|:---|:---|
| **Remaining lease payments (In Thousands)** | **Fiscal year** |
| &nbsp;&nbsp;&nbsp;2025 | $2019 |
| &nbsp;&nbsp;&nbsp;2026 | 3839 |
| &nbsp;&nbsp;&nbsp;2027 | 2102 |
| &nbsp;&nbsp;&nbsp;2028 | 1509 |
| &nbsp;&nbsp;&nbsp;Thereafter | 258 |
| Total lease payments | $9727 |
| &nbsp;&nbsp;&nbsp;Less: Imputed interest | (770) |
| Total lease liability | $**8957** |

---

As of June 30, 2025 and December 31, 2024, the weighted average remaining lease term was 2.7 years and 3.1 years, respectively. As of June 30, 2025 and December 31, 2024, the weighted average incremental borrowing rate was 5.6% and 5.5%, respectively.

No ROU asset is recorded for leases with a lease term, including any reasonably assured renewal terms, of 12 months or less. Upon adoption of ASC 842, the Company also recorded lease liabilities computed as the present value of future minimum lease payments, including reductions from any landlord incentives, plus any additional direct costs from executing the leases. Lease liabilities are amortized using the effective interest method using a discount rate of 4%. Depreciation on the ROU asset is calculated as the difference between the expected straight-line rent expense over the lease term less the accretion on the lease liability. The Company recognizes a right-of-use asset and a lease liability for these operating leases in its consolidated balance sheets. The Company's lease agreements also include obligations for the Company to pay for other services, including operations and maintenance. The Company accounts for these services separately.

**NOTE 11 – RELATED PARTY TRANSACTIONS**

The Company had the following transactions with related parties:

SCHEDULE OF RELATED PARTY TRANSACTIONS IN FINANCIAL STATEMENTS

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
| <br>**(In Thousands)** | **2025** | **2024** | **2025** | **2024** |
| **Consolidated Statement of Comprehensive Loss** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Rental income (1) | $44 | $44 | $22 | $22 |

---

---

| | | |
|:---|:---|:---|
| | **Balance as of** | **Balance as of** |
| <br>**(In Thousands)** | **June 30,<br> 2025** | **December 31,<br> 2024** |
| **Consolidated Balance Sheets** |  |  |
| &nbsp;&nbsp;&nbsp;Preferred Stock (2) | $1719 | $1719 |
| &nbsp;&nbsp;&nbsp;Accounts Receivable (1) | $- | $6 |

---

(1) The
 Company has a contract with the majority shareholder and Co-CEO to share certain costs related to office space, support staff, and consultancy
 services. Refer to Note 10 for details of lease to Supercar System. In addition, under the services agreement between the Company
 and Supercar System, effective January 1, 2023, the Company receives reimbursements for the Company's employees who provide
 services to Supercar System's business. Supercar System is controlled by the Company's Co-CEO, Paolo Tiramani. As of June
 30, 2025 and December 31, 2024, Supercar System had a balance due to BOXABL of $0 and $5.7 thousand, respectively, related to payroll
 costs funded by the Company, that were included in Accounts Receivable.

(2) As
 of June 30, 2025 and December 31, 2024, the Company had 26,726 thousand shares outstanding of Series A Preferred Stock, representing
 an initial cost of $427 thousand held by certain related parties including the spouse and in-laws to the Co-Chief Executive Officer
 and Chief Marketing and Strategy Officer. As of June 30, 2025 and December 31, 2024, the Company had 5,884 thousand shares outstanding
 of Series A-1 Preferred Stock, representing an initial cost of $372 thousand held by certain related parties including the in-laws
 to the Co-Chief Executive Officer and Chief Marketing and Strategy Officer and a former Director of the Company. As of June 30, 2025
 and December 31, 2024, the Company had 12,834 thousand Nonqualified Stock Options representing an initial grant date fair value of
 $920 thousand held by certain related parties including the spouse to the Co-Chief Executive Officer and Chief Marketing and Strategy
 Officer of the Company. See Note 12 – Stockholders' Equity.

**NOTE 12 – STOCKHOLDERS' EQUITY**

**Preferred and Common Stock**

The Company was converted to a C-Corporation in the state of Nevada on June 16, 2020. In conjunction with the conversion, the Company authorized the issuance of 4.25 billion of common stock with a par value of $0.00001 and 750 million shares of preferred stock with a par value of $0.00001. The Company initially designated all shares of preferred stock as "Series A Preferred Stock", see below for rights and preferences.

On February 24, 2021, the Company filed an amendment to the articles of incorporation which increased the number of authorized preferred shares to 850 million, for which 202,517 thousand and 647,483 thousand shares were classified as Series A Preferred Stock and Series A-1 Preferred Stock, respectively.

On November 19, 2021, the Board of Directors approved a 10-for-1 stock split of the outstanding shares of the Company, and decided to increase the number of shares to the following: 6.6 billion shares of Common Stock of $0.00001 par value, 250 million shares of Series A Preferred Stock of $0.00001 par value, 1.1 billion shares of Series A-1 Preferred Stock of $0.00001 par value, 2.05 billion shares of Series A-2 Preferred Stock of $0.00001 par value, and 900 million shares of unclassified Preferred Stock of $0.00001 par value.

On September 1, 2023, the Company filed an amendment to the articles of incorporation which authorized the issuance of 8.75 billion shares of Series A-3 Preferred Stock of $0.00001 par value and increased the amount of authorized unclassified Preferred Stock to 1.25 billion shares. On May 3, 2024, this amendment was refiled and accepted by the state of Nevada following completion of certain validation procedures under Nevada law associated with correcting defective corporate acts as discussed in the Company's Definitive Information Statement filed with the Commission on March 29, 2024.

Effective October 21, 2024, the Company filed an amendment to the articles of incorporation which increased the authorized Common Stock from 6.6 billion shares to 17.8 billion shares of Common Stock, $0.00001 par value per share, and increased the authorized Preferred Stock from 13.4 billion shares to 14.4 billion shares of Preferred Stock, $0.00001 par value per share. The number of authorized Preferred Stock designated as Non-Voting Series A, A-1, A-2, and A-3 did not change, but the undesignated Preferred Stock of 1.25 billion shares was increased to an authorized 2.25 billion shares of undesignated Preferred Stock, $0.00001 par value per share.

**Preferred Stock Liquidation Preference**

The following table summarizes the liquidation preferences as of June 30, 2025, in order of liquidation:

SUMMARY OF LIQUIDATION PREFERENCES

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| | | | |
|:---|:---|:---|:---|
| **(In Thousands)** | **Shares<br> Authorized** | **Shares Issued <br> and Outstanding** | **Liquidation<br> Preference<br> Balance** |
| Series A-3 Preferred Stock | 8750000 | 99096 | $79277 |
| Series A-2 Preferred Stock | 2050000 | 174322 | 139458 |
| Series A-1 Preferred Stock | 1100000 | 854004 | 67466 |
| Series A Preferred Stock | 250000 | 188541 | 3205 |
| Non-classified Preferred Stock | 2250000 | - | - |
| **Total Preferred Stock** | **14400000** | **1315963** | $**289406** |

---

**Sales of Preferred Stock**

On June 25, 2024, the Company commenced an offering of up to 88,095 thousand shares of its Non-Voting Series A-3 Preferred Stock under Regulation A of the Securities Act of 1933, as amended (the "Securities Act"), at a per share price of $0.80, plus 4,404 thousand Bonus Shares (as defined in the Offering Circular on file in the Company's Form 1-A Offering Statement (Commission File No. 024-12402) (the "Form 1-A Offering Statement")) for a maximum potential raise of $74 million(the "Regulation A Offering").

In June 2025, the Company terminated its offering being conducted pursuant to Regulation A of the Securities Act of 1933, as amended, as well as terminated the concurrent offering being conducted pursuant to Rule 506(c) of Regulation D. No new investor subscriptions are currently being accepted in these offerings.

During the six months ended June 30, 2025 and 2024, the Company issued 70,083 thousand and 5,338 thousand shares of Series A-3 Preferred Stock for gross proceeds of $54,608 million and $3,145 thousand, respectively.

During the six months ended June 30, 2025 and 2024, the Company issued 162 thousand, and 0 shares of Series A-2 preferred stock for gross proceeds of $129 thousand and $0, respectively.

Specifically, during the six months ended June 30, 2025, the Company issued:

---

| |
|:---|
| 63,304,168 shares of Series A-3 Preferred Stock for gross proceeds of $49,507 thousand through Regulation A. |
| 6,778,832 shares of Series A-3 Preferred Stock for gross proceeds of $5,101 thousand through Regulation D. |
| 161,801 shares of Series A-2 Preferred Stock for gross proceeds of $129 thousand through Canadian Offering. |

---

**Warrants**

In connection with the issuance of certain A-3 shares, as of June 30, 2025 and December 31, 2024, respectively, the Company has issued 18,573 thousand and 18,573 thousand warrants that are exercisable at a price of $0.80 per share. Warrants are exercisable for three years from the date of purchase (the "Exercise Period"); provided, however, that the Company may call the warrants, in its sole discretion, at any time upon 30 days written notice to the Shareholders. If redeemed, each warrant shall be redeemed for one share of A-3 Preferred Stock. All unexercised warrants will expire and are subject to certain transfer restrictions.

**Escrow Receivable**

As of June 30, 2025 and December 31, 2024, the Company recorded $21,733 thousand and $365 thousand, respectively, of investment holdbacks in escrow receivable on its consolidated balance sheets. These amounts represent cash balances held by third party custodians on behalf of the broker-dealer associated with the Company's equity offerings, for the benefit of BOXABL. For share sales that have closed during the quarter, Company accrues an escrow receivable to account for the gross proceeds of the equity offering that are held by the third party Custodian. This escrow receivable is settled when cash is received by the Company.

**Offering Costs and Deferred Offering Costs**

For the three and six months ended June 30, 2025, the Company incurred offering costs of $1,661 thousand and $2,549 thousand, respectively, compared to the three and six months ended June 30. 2024 offering costs of $76 thousand. These costs include legal fees, targeted marketing and other deferred costs related directly to the open offerings.

**Subscription Liability**

As of June 30, 2025 and December 31, 2024, the Company had $25 thousand and $651 thousand, respectively, in a subscription liability pertaining to proceeds received, but the Preferred shares were not yet issued by the Company. These amounts represent funds from equity offerings paid to the Company prior to the issuance of shares. The Company has an obligation to issue the corresponding shares related to these proceeds. In relation to the Regulation A, Preferred A Stock Offering by certain selling shareholders of the Company, DealMaker had remitted shareholder funds to the Company, which had all been paid to the selling shareholders as of June 30, 2025.

**Stock-based Compensation**

On August 12, 2024, the Company amended and restated the Amended 2021 Stock Incentive Plan ("Plan") to increase the number of shares of Common Stock reserved for issuance under the Plan to 550 million shares (previously 150 million shares were reserved for issuance under the 2021 Stock Incentive Plan), as well as certain other amendments, subject to stockholder approval and notice. The Plan, as amended and restated, became effective on October 18, 2024.

*Administration:*

The Board of Directors delegated to the Compensation Committee of the Board of Directors the authority to administer the Plan (the "Plan Administrator"), which includes the authority to interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to the Plan, to provide for conditions and assurances deemed necessary or advisable to protect the interest of the Company, and to make all other determinations necessary for the administration of the Plan to the extent not contrary to the express provisions of the Plan.

*Eligibility:*

Eligible participants in this Plan include employees of, non-employee directors of, and consultants to the Company. To the extent permitted by applicable law, awards may also be granted to prospective employees and non-employee members of the Board, but no portion of any such award shall vest, become exercisable, be issued or become effective prior to the date on which such individual begins providing services to the Company.

The Plan Administrator has the sole discretion to determine which participants will receive an award, including the determination of whether an award to an eligible participant will further the Plan's purposes of providing incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the Company's success by offering them an opportunity to participate in the Company's future performance through the grant of awards, as well as the type of any award to be granted, the number of shares of Common Stock subject to any award, and the terms and conditions of any award.

*Awards:*

As of June 30, 2025, only Stock Options and Restricted Stock Units ("RSUs") were outstanding under the Plan.

The Plan permits the following types of awards:

*Stock Appreciation Rights:*

Stock Appreciation Rights ("SARs") may be granted to Participants and shall have a per-share base value equal to the Fair Market Value of a share of Common Stock on the Grant Date. SARs may be settled at such times, and subject to restrictions and conditions, which need not be the same for all Participants; provided that no SAR shall settle later than ten (10) years from the Grant Date. Upon settlement, the Participant shall be entitled to receive payment of an amount determined by multiplying (a) the difference, if any, between the Fair Market Value of one share of Common Stock on the date of settlement and the base value of one share of Common Stock on the Grant Date; and (b) the number of shares of Common Stock with respect to which the SAR is settled. Payment for SARs shall be in cash, shares of Common Stock of equivalent value, or in a combination thereof. As of June 30, 2025, the Company has not issued any SARs.

*Restricted Stock Unit:*

Restricted Stock Unit awards may be subject to transfer and other restrictions including, without limitation, continued employment, performance conditions, or limitations on voting and/or dividend rights. Restricted Stock awards will be forfeited if the restrictions imposed on the Grant Date have not expired at the time of termination of employment or service in the case of a non-employee director or consultant. As of June 30, 2025 and December 31, 2024, the Company had granted (net of forfeitures) 130,805,000 and 173,571,508 Restricted Stock Units, respectively, which are subject to time and performance vesting conditions.

*Stock Grant Awards:*

Stock Grant Awards grant the Participant the right to receive (or purchase at such price as previously determined in the award) a designated number of shares of Common Stock free of any vesting restrictions. The purchase price, if any, shall be payable in cash or other form of consideration. Stock Grant Awards may be granted or sold in respect of past services or other valid consideration, or in lieu of any cash compensation due to the Participant. As of June 30, 2025 and December 31, 2024, respectively, the Company has not issued any Stock Grant Awards.

*Stock Options:*

Under the Plan, Stock Options may be granted to Eligible Participants at a per-share exercise no less than 100% of the Fair Market Value of one share of Common Stock as of the Grant Date. The Administrator shall determine when the Stock Option may be exercised, including any performance, vesting or other conditions, provided the term does not exceed ten (10) years from the Grant Date. If the Participant's employment or service is terminated for cause, their unexercised Stock Options immediately lapse, including any vested Stock Options. Incentive Stock Options ("ISOs") may only be granted to Participants who are also employees. The exercise price of ISOs shall equal the Fair Market Value of one share of Common Stock as of the Grant Date and shall expire upon the earlier of ten (10) years from the Grant Date (unless a shorter time is set in the Participant's award agreement), provided that, ISOs granted to an employee who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company must have a per-share exercise price of no less than 110% of the Fair Market Value of one share of Common Stock as of the Grant Date and cannot have a term exceeding five (5) years from the Grant Date. The vested portion of a Stock Option lapses three (3) months following the effective date of the Participant's termination of employment or twelve (12) months following the effective date of the Participant's termination of employment due to death or disability, as defined in the Plan (in each case, unless a shorter time is set in the Participant's award agreement) but in no event later than the expiration of the Stock Option.

A summary of Stock Option activity as of June 30, 2025 and December 31, 2024 is as follows:

SUMMARY OF STOCK OPTIONS ACTIVITY

---

| | | | |
|:---|:---|:---|:---|
| | **Weighted Average Exercise Price per Share** | **Weighted Average Exercise Price per Share** | **Weighted Average Exercise Price per Share** |
| <br>**(In Thousands except for per share price)** | **Stock Options** | **Exercise Price**<br> **per Share** | **Term (in years)** |
| Outstanding as of December 31, 2024 | 50196 | $0.17 | 7.65 |
| Granted |  |  |  |
| Exercised |  |  |  |
| Forfeited/cancelled | (3932) | $0.32 |  |
| Outstanding as of June 30, 2025 | 46264 | $0.11 | 6.39 |
| Exercisable as of June 30, 2025 | 44974 | $0.10 | 6.37 |

---

The Company accounts for share-based compensation arrangements using a fair value method which requires the recognition of compensation expense for costs related to all share-based payments, including stock options. The fair value method requires the Company to estimate the fair value of share-based payment awards on the date of grant using an option pricing model. The Company uses the Black-Scholes pricing model to estimate the fair value of Stock Options granted that are then expensed on a straight-line basis over the vesting period. The Company accounts for forfeitures as they occur in the year of forfeiture and share-based compensation expense adjusted accordingly. Option valuation models, including the Black-Scholes option-pricing model, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant-date fair value of an award. These assumptions include the risk-free rate of interest, expected dividend yield, expected volatility, and the expected life of the award.

The Company uses the Black-Scholes option pricing model to estimate the fair value of the Stock Options on the date of grant under the following assumptions:

SCHEDULE OF OPTIONS VALUATION ASSUMPTIONS

---

| | |
|:---|:---|
| Expected life (years) (1) | 5-6.5 |
| Risk-free interest rate (2) | 1.03-4.34% |
| Expected volatility (3) | 50.3-54.9% |
| Annual dividend yield (4) | 0% |
| Weighted average fair value of options granted | $0.14 |

---

(1) In
 accordance with SAB Topic 14, the expected life of employee stock options was estimated using the "simplified method,"
 as the Company has no historical information to develop reasonable expectations about future exercise patterns and employment duration
 for its stock option grants. The simplified method is based on the average of the vesting tranches and the contractual life of each
 grant. The Company believes the use of the simplified method is appropriate due to the employee stock options qualifying as "plain-vanilla"
 options under the criteria established by SAB Topic 14.

(2) The
 risk-free rate was based on the United States bond yield rate at the time of grant of the award, whose term is consistent with expected
 life of the stock options.

(3) Based
 on historical experience over a term consistent with the expected life of the stock options.

(4) Expected
 annual rate of dividends is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash
 dividends in the foreseeable future.

Share-based compensation expense is not adjusted for estimated forfeitures but instead adjusted upon an actual forfeiture of a stock option. Amounts recorded for forfeited or expired unexercised options are accounted for in the year of forfeiture.

*Restricted Stock Units:*

Restricted Stock Units ("RSUs") grant the Participant the right to receive a certain number of shares of Common Stock, a cash payment equal to the Fair Market Value of that number of shares of Common Stock (determined as of a specified date), or a combination thereof, based on the terms and conditions of the award, as determined by the Plan Administrator. Upon termination of employment (or service as a non-employee director or consultant), unvested RSUs shall be forfeited.

RSUs represent a right to receive a single common share. Vesting of RSU awards is generally subject to a 3-year service period and effective October 18, 2024, also subject to a performance condition. Accordingly, stock-based compensation is recognized upon satisfaction of the service and performance condition.

The Company granted no RSUs during the three and six months ended June 30, 2025 and 2024, respectively.

A summary of RSU activity as of June 30, 2025 and December 31, 2024 is as follows:

SUMMARY OF RSU ACTIVITY

---

| | | |
|:---|:---|:---|
| | | **Weighted-Average<br> Grant Date** |
| <br>**(In Thousands except for per share amounts)** |<br>**RSU's** | **Fair Value per** <br> **Share** |
| Outstanding as of December 31, 2024 | 173572 | $0.79 |
| Awarded | 5562 | $0.80 |
| Vested |  |  |
| Cancelled/Forfeited | (48329) | 0.80 |
| Outstanding as of June 30, 2025 | 130805 | $0.79 |

---

During the three and six months ended June 30, 2025 and 2024, respectively, the Company recognized stock compensation expense related to stock options and RSU's, as follows:

SCHEDULE OF RECOGNIZED STOCK COMPENSATION EXPENSE RELATED TO STOCK OPTIONS AND RSU

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Six Months Ended<br> June 30** | **For the Six Months Ended<br> June 30** | **For the Three Months Ended**<br> **June 30,** | **For the Three Months Ended**<br> **June 30,** |
| <br>**(In Thousands)** | **2025** | **2024** | **2025** | **2024** |
| &nbsp;&nbsp;&nbsp;Cost of Goods Sold | $(187) | $1669 | $(128) | $693 |
| &nbsp;&nbsp;&nbsp;General and Administrative | (1398) | 1347 | (221) | 491 |
| &nbsp;&nbsp;&nbsp;Sales and Marketing | (1116) | 605 | (233) | 222 |
| &nbsp;&nbsp;&nbsp;Research and Development | (855) | 1304 | (31) | 475 |
| **Total Stock-Based Compensation Expense** | $**(3556)** | $**4925** | $**(613)** | $**1881** |

---

The expected life of employee stock options was estimated using the "simplified method," as the Company has no historical information to develop reasonable expectations about future exercise patterns and employment duration for its stock option grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. The expected life of awards that vest immediately use the contractual maturity since they are vested when issued. For stock price volatility, the Company uses public company compatibles as a basis for its expected volatility to calculate the fair value of option grants. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the option at the grant-date.

The Company recognizes stock option forfeitures as they occur as there is insufficient historical data to accurately determine an estimate of future forfeiture rates.

During the three and six months ended June 30, 2025, no new expense was recognized for RSU awards based on the Company's conclusion that the performance condition for the RSUs was not probable of being satisfied at such time, as discussed below. However, forfeitures of previously granted RSUs resulted in a reversal of $613 thousand and $3,556 thousand in stock-based compensation expense, respectively, for the three and six months ended June 30, 2025. The amount of future stock-based compensation expense may be impacted by additional option or RSU grants, or further forfeitures.

Stock-based compensation expense for all stock-based awards, including stock options and restricted stock units ("RSUs"), is measured at fair value on the date of grant. The fair value of stock options is estimated on the date of grant using a Black-Scholes option-pricing model. The fair value of RSUs is estimated on the date of grant based on the fair value of the underlying common stock.

The Company has elected to recognize compensation expense for stock options granted to employees on a straight-line basis over the requisite service period, which is generally the vesting period. Compensation expense for RSUs is amortized using the accelerated attribution approach over the requisite service period as long as the performance condition in the form of a specified liquidity event is probable to occur.

The fair value of stock options granted to non-employees is calculated at each grant date and re-measured at each reporting date using the Black-Scholes option-pricing model and the resulting change in value, if any, is recognized in the consolidated statements of operations and comprehensive loss for the periods in which the related services are rendered.

During the six months ended June 30, 2025, the Company granted Restricted Stock Units (RSUs) that vest upon the satisfaction of both a service-based and a performance-based requirement. The service condition is a stated service period generally requiring 36 months of service, with the total number of RSUs awarded vesting on a cliff basis after the 36-month anniversary date of the grant. The performance-based condition is an event-based criteria that will be satisfied as to any then-outstanding RSUs on the first to occur of a 'Qualifying Transaction" defined as: (1) the closing date of a transaction resulting in a change in control; or (2) the effective date of an IPO.

The RSUs vest on the date upon which both the service-based and performance-based requirements are satisfied. If a Qualifying Transaction occurs prior to the Vesting Date, the RSUs shall fully (100%) vest effective immediately prior to and contingent upon the Qualifying Transaction. If the Grantee's employment by the Company terminates for any reason prior to a Qualifying Transaction, such termination shall result in the immediate forfeiture and cancellation of the RSUs, which means the Grantee will not be entitled to any payment pursuant to this Agreement after the date of such termination. If the RSUs vest, the Company will deliver one share of common stock for each vested RSU on the settlement date. The unvested RSUs expire ten years from the grant date.

As of June 30, 2025 and December 31, 2024, respectively, the Company concluded that the performance condition described above for the RSUs was not probable of being satisfied at such time. As a result, the Company has not recognized any compensation cost to date for any RSUs outstanding. In the period in which the performance-based condition is achieved, the Company will accelerate all vesting and record the stock-based compensation expense using the accelerated attribution method, based on the grant date fair value of the RSUs.

SCHEDULE OF GRANT DATE FAIR VALUE OF RSU

---

| | | |
|:---|:---|:---|
| **(In Thousands)** | **Number of Units** | **Weighted-<br> Average <br> Grant Date <br> Fair Value** |
| **Outstanding and unvested at December 31, 2024** | 173572 | $137122 |
| **RSUs Granted** | 5562 | $4450 |
| **RSUs Forfeited** | (48329) | $(38663) |
| **Outstanding and unvested at June 30, 2025** | 130805 | $102909 |

---

As of June 30, 2025 and December 31, 2024, respectively, all stock-based compensation expenses related to the Company's RSUs remained unrecognized because the performance-based condition was not satisfied. No RSUs had met their service-based vesting condition as of December 31, 2024; also, no RSUs had met the performance vesting condition as of December 31, 2024 or June 30, 2025.

If the performance vesting condition had been satisfied on June 30, 2025, the Company would have recorded $102.9 million of stock-based compensation expense using the accelerated attribution method related to RSUs. Due to the nature of the acceleration clause, upon a Qualified Transaction, 100% of the stock-based compensation expense on these RSUs will be recognized.

**NOTE 13 – COMMITMENTS AND CONTINGENCIES**

In the ordinary course of business, the Company enters into contractual agreements with third parties that include non-cancelable payment obligations, for which it is liable in future periods. These arrangements can include terms binding the Company to minimum payments and/or penalties if it terminates the agreement for any reason other than an event of default as described in the agreement.

In the course of business, the Company is party to various legal proceedings and claims from time to time. A liability will be accrued when a loss is both probable and can be reasonably estimated. Management believes that the probability of a material loss is remote. However, litigation is inherently uncertain, and it is not possible to predict the ultimate disposition of these proceedings. There are no legal proceedings, which the Company believes will have a material adverse effect on the Company's financial position.

In 2025, the U.S. government implemented new tariff measures affecting a broad range of imported materials. The Company has evaluated the potential impact of these actions on its operations and supply chain and does not expect them to have a material impact on its financial position or results of operations in the near term. The Company's operations are currently supported by a substantial inventory of completed units manufactured prior to the effective dates of the tariff adjustments, which reduces our near-term exposure to increased costs associated with imported materials. Additionally, as the Company transitions into the next phase of its product development, including Phase 2, its sourcing strategy reflects a greater emphasis on domestic procurement. This shift is expected to further mitigate exposure to international trade disruptions and tariff-related cost volatility. The Company will continue to monitor developments in U.S. trade policy and adjust its supply chain strategy as necessary.

**Legal Proceedings**

*Claims filed by the Company*

&nbsp;&nbsp;&nbsp;&nbsp;(i) The
 Company initiated legal action against former employees who violated their agreements post-termination. Specifically, the Company
 filed two lawsuits against former employees alleging claims including breach of contract, violations of the Computer Fraud &
 Abuse Act, violations of the Defend Trade Secrets Act, conversion, unjust enrichment, breach of covenant of good faith and fair dealing,
 and demand for temporary and permanent injunctive relief. These litigation matters remain pending. Management does not anticipate
 these matters will have a material impact on the Company's results of operations or financial condition. Quantifying the resulting
 harm is complex and ongoing. The Company anticipates that judgment will be entered in its favor for a sum less than $250 thousand .

(ii) The
 Company engaged in litigation with an Internet Blogger who posted defamatory information regarding the Company. On August 5, 2024,
 the court entered a default judgment in favor of the Company, awarding $50 thousand in damages.
 A judgment lien has been placed on property owned by the defendant and the Company is in the process of filing a foreclosure action
 against the property.

(iii) On
 April 30, 2024, the Company filed a lawsuit against Brave Control Solutions, Inc. and individual Brent McPhail in US District Court.
 The Company seeks damages equal to all amounts paid under the contracts, among other relief, to recover from these breaches and misrepresentations.
 The Company anticipates a judgment in its favor, but recovery of these assets is uncertain.

*Claims filed against the Company*

&nbsp;&nbsp;&nbsp;&nbsp;(i) The
 Company received notifications of employment-related charges filed by former employees with the Equal Employment Opportunity Commission
 ("EEOC") and the National Labor Relations Board ("NLRB"). The allegations involve various issues such as
 discrimination and interference with employee rights. The Company provided responses to both agencies and is awaiting further developments.
 The Company does not expect a material impact to its financial position.

(ii) The
 Company's former Chief Operating Officer, terminated for cause after seven months of employment, filed a civil complaint in
 Nevada alleging various claims against the Company and its directors. The Company settled this matter in March 2025 without a material
 impact to its financial position. The Company paid $105 thousand to this former employee in exchange for the surrender of 5,882,353 shares of the Company's Preferred A Stock.

(iii) Leader
 Capital is a shareholder of the Company and has filed suit against the Company and its previous transfer agent, Transfer Online,
 Inc. The Company is defending itself and Transfer Online in this lawsuit, which has a potential loss range of between $1 and $3.7 million, but the Company believes it has a good probability of success on summary judgment and a good probability of success at trial.
 Accordingly, the Company has not accrued a loss contingency for this matter.

(iv) Ro-Matt
 International Inc. and Electra-Tech Manufacturing Inc. ("Applicants") filed a lawsuit against Brave Control Solutions,
 Inc., BOXABL Inc., and Royal Bank of Canada in Ontario, Canada, in the Superior Court of Justice. This case was dismissed, with no
 damages asserted against BOXABL.

&nbsp;&nbsp;&nbsp;&nbsp;(v) The
 Company has received claims from various parties alleging that BOXABL violated certain California Laws, including the Trap and Trace
 Law and California Privacy Laws relating to its Facebook postings. The Company does not expect a material impact to its financial
 position.

(vi) Pronghorn
 Homes, LLC, a party to the Arizona mining project, filed a lawsuit against the Company in the State of Arizona, which has a potential
 loss exposure of up to $295 thousand. The Company denies liability and intends to defend against this claim. Accordingly, the Company
 has not accrued a loss contingency for this matter.

(vii) The
 Company entered into an agreement with a RV Park for the sale of certain PMRV units. It appears that the RV Park did not obtain required
 zoning and land use permits to install and use the units at their site in Arizona. The State of Arizona 'red tagged'
 the units and the RV Park asserted claims against the Company, demanding that the Company immediately remove the units. The Company
 has denied all liability and is negotiating a resolution of the dispute with the RV Park. Accordingly, the Company has not accrued
 a loss contingency for this matter.

*Other Matters*

The Company uncovered potential misconduct by a former employee related to a stock scheme, the impact of which is challenging to measure. The Company anticipates that judgment will be entered in its favor for a sum less than $1 million, but the investigation and extent of damages is ongoing. After discovering the misconduct, the Company received a claim from a plaintiff that purchased fraudulent shares of the Company's stock from the former employee of the Company, at a discounted price, incurring a loss of approximately $144 thousand. The Plaintiff claims that he purchased shares by writing a check to an entity that was controlled by the former employee and alleges negligence and violations of Nevada Revised Statute (NRS) 90.9570. The Company denies liability and intends to defend against this claim. Accordingly, the Company has not accrued a loss contingency for this matter. Separate from the claim filed against the Company, the Company has also entered into settlement agreements with various parties who may have been impacted by the former employee. This resulted in the recognition of $2.4 million of legal settlement expenses recorded in General and administrative expenses, settled with 3,043,788 shares of the Company's Preferred A-1 Stock, during the three months ended June 30, 2025.

**NOTE 14 – INCOME TAXES**

The Company has not recorded any income tax expense for the three and six months ended June 30, 2025 and 2024.

**Deferred Tax Assets and Liabilities**

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

A valuation allowance is required to be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. A full review of all positive and negative evidence needs to be considered. The Company has established a full valuation allowance against the net deferred tax assets as of June 30, 2025 and December 31, 2024 due to historical losses and uncertainty surrounding the use of such assets.

**NOTE 15 - SEGMENTS**

The Company operates as one operating segment. The Company's chief operating decision maker ("CODM") is its Chief Financial Officer, who performs quarterly reviews of the financial information presented on a consolidated basis. The CODM utilizes the Company's strategic plan, which includes product development roadmaps and the Company's long-range financial model, including key inputs for resource allocation. Significant expenses include research and development, sales and marketing, and general and administrative expenses, which are each separately presented on the Company's Consolidated Statements of Comprehensive Loss. See the unaudited interim condensed consolidated financial statements for other financial information regarding the Company's single operating segment.

The Company has no significant long-lived assets recognized on the Consolidated Balance Sheets outside of the US jurisdiction.

**NOTE 16– SUBSEQUENT EVENTS**

The Company has evaluated subsequent events from June 30, 2025 through August 19, 2025, the issuance date of these unaudited interim condensed consolidated financial statements.

**Merger Agreement**

On August 4, 2025, the Company entered into an Agreement and Plan of Merger (the "<u>Merger Agreement</u>") by and among the Company, FG Merger II Corp., a Nevada corporation ("<u>FGMC</u>"), and FG Merger Sub II Inc., a Nevada corporation and wholly-owned subsidiary of FGMC ("<u>Merger Sub</u>"). The Merger Agreement provides for a two-step merger transaction (the "<u>Mergers</u>") in which, first, Merger Sub will merge with and into the Company (the "<u>First Merger</u>"), with the Company surviving as a wholly-owned subsidiary of FGMC, and, immediately thereafter, the Company (as the surviving company in the First Merger) will merge with and into FGMC (the "<u>Second Merger</u>"), with FGMC continuing as the surviving public company (the "<u>Surviving Pubco</u>"). By virtue of the consummation of the Mergers, the Surviving Pubco will change its name to BOXABL Inc. The Boards of Directors of the Company, FGMC, and Merger Sub have unanimously approved the Merger Agreement and the transactions contemplated thereby.

At the effective time of the First Merger, each share of the Company's common stock (other than certain excluded shares and any shares held by stockholders who properly exercise and do not lose their dissenter's rights under applicable Nevada law) will be converted into the right to receive a number of shares of common stock of the Surviving Pubco, as determined by the exchange ratio set forth in the Merger Agreement. Each share of the Company's preferred stock will be converted into the right to receive the applicable merger consideration as set forth in the Merger Agreement. Outstanding Company warrants and other convertible securities will be assumed by the Surviving Pubco and become exercisable for shares of Surviving Pubco common stock, subject to adjustment as provided in the Merger Agreement. The transaction is intended to qualify as a "reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a)of the Internal Revenue Code for U.S. federal income tax purposes. The aggregate merger consideration to be received by Company shareholders is equal to a combination of preferred and common shares of FGMC that equals a total of $3,500,000,000, each at a deemed value of $10 per share.

The closing of the Mergers is subject to customary closing conditions, including, among others, approval of the transaction by the stockholders of the Company and FGMC, effectiveness of a registration statement on Form S-4 to be filed by FGMC with the SEC in connection with the transaction, expiration or termination of any applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, accuracy of representations and warranties, approval for listing of the Surviving Pubco common shares on Nasdaq or NYSE, absence of any law or order prohibiting the consummation of the transaction, and other conditions as set forth in the Merger Agreement.

The Merger Agreement may be terminated and the transactions contemplated thereby abandoned at any time prior to the closing under certain specified circumstances. Either the Company or FGMC may terminate the agreement by written notice if the closing has not occurred on or before December 31, 2025 (the "<u>Agreement End Date</u>"), provided that the right to terminate on this basis is not available to any party whose breach of the agreement has proximately caused the failure of the closing to occur by such date. Termination is also permitted by mutual written consent of the parties, or by either party if a governmental authority enacts a law or order that makes consummation of the transactions illegal or otherwise prohibits the transaction, so long as the terminating party or its subsidiaries did not cause such prohibition by their own breach.

Additional termination rights include the ability for either party to terminate if the required stockholder approvals from either the Company or FGMC are not obtained at their respective stockholder meetings, unless the failure to obtain such approval is due to the action or inaction of the party seeking termination. The agreement may also be terminated by one party if the other party has committed a material breach of its representations, warranties, or covenants that would prevent the satisfaction of closing conditions, subject to a cure period of up to thirty (30) days (or any shorter period remaining before the Agreement End Date) after notice of such breach. Upon termination, the agreement becomes void and has no further effect, except for certain provisions that expressly survive, and subject to liability for any willful and material breach or actual fraud occurring prior to termination. Each party is responsible for its own fees and expenses incurred in connection with the agreement and the contemplated transactions, except as otherwise provided.

**Related Agreements**

In connection with the execution of the Merger Agreement, FG Merger Investors II LLC, the sponsor of FGMC, entered into a support agreement pursuant to which it agreed to vote its shares of FGMC in favor of the transaction and take certain other actions in support of the Mergers. Certain stockholders of the Company entered into a support agreement pursuant to which they agreed to vote their shares of the Company in favor of the transaction and take certain other actions in support of the Mergers. At closing, the Company and FGMC will enter into lock-up agreements with certain Company stockholders and with the sponsor, restricting the transfer of certain shares for specified periods following the closing. The Company and FGMC previously entered into a confidentiality and non-disclosure agreement in connection with the transaction.

**Sales**

Between July 1, 2025 and August 19, 2025, the Company shipped 1 unit. As of August 19, 2025, there are currently 216 units that are under contract.

**Equity Events**

Subsequent to June 30, 2025, the Company issued the following:

---

| |
|:---|
| 6,651 thousand shares of Series A-3 Preferred Stock for gross proceeds of $5,166 thousand through Regulation A. |
| 2,438 thousand shares of Series A-3 Preferred Stock for gross proceeds of $1,817 thousand through Regulation D. |

---

For awards previously issued under the Company's Amended 2021 Stock Incentive Plan, the Company recognized employee forfeitures of 2,012 thousand RSUs and 88 thousand Stock Options subsequent to June 30, 2025. Additional grants of 4,187 thousand RSUs were made under the Plan. No additional grants of Stock Options were made, however.

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.**

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes included elsewhere herein and our audited consolidated financial statements and related notes for the year ended December 31, 2024 included in our most recent annual report on Form 10-K filed on the Securities and Exchange Commission ("SEC") on April 14, 2025. The condensed consolidated financial statements of the Company appearing in this Quarterly Report on Form 10-Q are unaudited, and may not include year-end adjustments necessary to make those financial statements comparable to audited results, although, in the opinion of management, all adjustments and disclosures necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the full year.*

*Please note that certain prior period amounts have been reclassified to conform to the current period presentation. See* "Note 2 – Summary of Significant Accounting Policies – Revision of Previously Issued Consolidated Financial Statements" *for a description of these changes*.

*Unless otherwise indicated, dollar amounts above $1,000 in this Report have been rounded to the nearest thousand, million or billion, as applicable.*

*In addition to our consolidated financial statements, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. See above* Note About Forward-Looking Statements*.*

**Overview**

***General***

The Company is a manufacturer of building systems and is in the process of aligning our production levels to match the demand for our products. In addition to our first Nevada manufacturing facility ("Factory 1"), which we took possession of in May 2021, we expanded our production capacity by signing leases for additional Nevada facilities ("Factory 2") in June 2022 and ("Factory 3") in May 2023, respectively. While our growth has mainly been funded by our capital raising activities as described below in "Liquidity," we anticipate our increased manufacturing capacity will allow us to build Boxes more efficiently, and, in doing so generate additional revenue and profit in the future. We continue to improve our workforce, including the expansion of our business development and sales teams to focus and better support the outreach to B2B, B2C, and B2G sales channels, respectively.

The majority of US states have a statewide modular program which requires approval of a specific product prior to the product being able to be sold and installed within the state. The requirements to obtain these approvals vary across each state, and the approval process has resulted in delays in the Company's ability to deliver the product across the country, which has impacted the timing and amount of the Company's revenues.

The Company has obtained state modular approvals under state-wide modular housing programs in New Mexico, California, Nevada and South Carolina. The approvals were obtained as follows:

● During May 2024, we received approval to sell Casitas as Modular homes in California in certain climate zones.

● During July 2024, we received approval to sell Casitas under the Statewide Modular Program in New Mexico.

● During January 2025, we received approval to sell Casitas in Nevada under the Residential building code.

● During January 2025, we received approval to sell Casitas under the Statewide Modular Program in all climate zones in California.

● During June 2025, we received approvals of plan sets for the Casita in South Carolina under the Statewide Modular Program, and our manufacturers license; factory certification is pending and the Company expects this within the next 6 months.

The Company had originally obtained approval for its Casita in Arizona in December 2023. However, the Arizona Department of Housing revoked this approval in May 2024 due to installation issues identified at one customer site in Arizona. The Company has assessed that these issues resulted from improper installation rather than the Company's product and it is in active discussions with officials in Arizona to resolve the matter.

New sales within recently approved states and jurisdictions may continue to face delays due to the time needed for site preparation, arranging funding for the project the purchaser, and other preparatory steps that are required to arrange delivery and installation of the units.

BOXABL also has been focused on selling its products in multiple jurisdictions that do not have a statewide modular housing program. In these areas, the ultimate approval comes down to the local jurisdiction and is determined on a site-by-site basis. This pertains to the following areas:

● Oklahoma

● Utah

● Wyoming

● Kansas

● West Virginia

● Hawaii

● Vermont

● Alaska

● Oregon

● Connecticut

● Delaware

● New York

● Tribal Lands

BOXABL is generally also able to sell its Casita, by adding a permanent chassis, as a Park Model RV under ANSI A119.5 in the majority of US states.

The Company retained multiple third-party inspection agencies to assist in achieving certification in multiples states with modular housing legislation simultaneously.

***Merger Agreement***

On August 4, 2025, the Company entered into an Agreement and Plan of Merger (the "<u>Merger Agreement</u>") by and among the Company, FG Merger II Corp., a Nevada corporation ("<u>FGMC</u>"), and FG Merger Sub II Inc., a Nevada corporation and wholly-owned subsidiary of FGMC ("<u>Merger Sub</u>"). The Merger Agreement provides for a two-step merger transaction (the "<u>Mergers</u>") in which, first, Merger Sub will merge with and into the Company (the "<u>First Merger</u>"), with the Company surviving as a wholly-owned subsidiary of FGMC, and, immediately thereafter, the Company (as the surviving company in the First Merger) will merge with and into FGMC (the "<u>Second Merger</u>"), with FGMC continuing as the surviving public company (the "<u>Surviving Pubco</u>"). By virtue of the consummation of the Mergers, the Surviving Pubco will change its name to BOXABL Inc. The Boards of Directors of the Company, FGMC, and Merger Sub have unanimously approved the Merger Agreement and the transactions contemplated thereby.

At the effective time of the First Merger, each share of the Company's common stock (other than certain excluded shares and any shares held by stockholders who properly exercise and do not lose their dissenter's rights under applicable Nevada law) will be converted into the right to receive a number of shares of common stock of the Surviving Pubco, as determined by the exchange ratio set forth in the Merger Agreement. Each share of the Company's preferred stock will be converted into the right to receive the applicable merger consideration as set forth in the Merger Agreement. Outstanding Company warrants and other convertible securities will be assumed by the Surviving Pubco and become exercisable for shares of Surviving Pubco common stock, subject to adjustment as provided in the Merger Agreement. The transaction is intended to qualify as a "reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a)of the Internal Revenue Code for U.S. federal income tax purposes. The aggregate merger consideration to be received by Company shareholders is equal to a combination of preferred and common shares of FGMC that equals a total of $3,500,000,000, each at a deemed value of $10 per share.

*Closing Conditions*

The closing of the Mergers is subject to customary closing conditions, including, among others, approval of the transaction by the stockholders of the Company and FGMC, effectiveness of a registration statement on Form S-4 to be filed by FGMC with the SEC in connection with the transaction, expiration or termination of any applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, accuracy of representations and warranties, approval for listing of the Surviving Pubco common shares on Nasdaq or NYSE, absence of any law or order prohibiting the consummation of the transaction, and other conditions as set forth in the Merger Agreement.

*Termination Provisions*

The Merger Agreement may be terminated and the transactions contemplated thereby abandoned at any time prior to the closing under certain specified circumstances. Either the Company or FGMC may terminate the agreement by written notice if the closing has not occurred on or before December 31, 2025 (the "<u>Agreement End Date</u>"), provided that the right to terminate on this basis is not available to any party whose breach of the agreement has proximately caused the failure of the closing to occur by such date. Termination is also permitted by mutual written consent of the parties, or by either party if a governmental authority enacts a law or order that makes consummation of the transactions illegal or otherwise prohibits the transaction, so long as the terminating party or its subsidiaries did not cause such prohibition by their own breach.

Additional termination rights include the ability for either party to terminate if the required stockholder approvals from either the Company or FGMC are not obtained at their respective stockholder meetings, unless the failure to obtain such approval is due to the action or inaction of the party seeking termination. The agreement may also be terminated by one party if the other party has committed a material breach of its representations, warranties, or covenants that would prevent the satisfaction of closing conditions, subject to a cure period of up to thirty (30) days (or any shorter period remaining before the Agreement End Date) after notice of such breach. Upon termination, the agreement becomes void and has no further effect, except for certain provisions that expressly survive, and subject to liability for any willful and material breach or actual fraud occurring prior to termination. Each party is responsible for its own fees and expenses incurred in connection with the agreement and the contemplated transactions, except as otherwise provided.

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is attached as Exhibit 2.1 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

***Related Agreements***

In connection with the execution of the Merger Agreement, FG Merger Investors II LLC, the sponsor of FGMC, entered into a support agreement pursuant to which it agreed to vote its shares of FGMC in favor of the transaction and take certain other actions in support of the Mergers (the "<u>Sponsor Support Agreement</u>"). Certain stockholders of the Company entered into a support agreement pursuant to which they agreed to vote their shares of the Company in favor of the transaction and take certain other actions in support of the Mergers (the "<u>Company Support Agreement</u>"). At closing, the Company and FGMC will enter into lock-up agreements with certain Company stockholders (the "<u>Company Lock-Up Agreements</u>") and with the sponsor (the "<u>Sponsor Lock-Up Agreement</u>"), restricting the transfer of certain shares for specified periods following the closing. The Company and FGMC previously entered into a confidentiality and non-disclosure agreement in connection with the transaction.

The foregoing description of the Sponsor Support Agreement, Company Support Agreement, Company Lock-Up Agreements, and Sponsor Lock-Up Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Sponsor Support Agreement, Company Support Agreement, Company Lock-Up Agreements, and Sponsor Lock-Up Agreement, respectively, copies of which are attached as Exhibits 10.23, 10.24, 10.25, and 10.26 to this Quarterly Report on Form 10-Q, respectively, and incorporated herein by reference

***Trend Information***

To date through August 19, 2025, we have manufactured 744 Casitas and have completed deliveries of 285 Casitas in 6 states, including Arizona, Nevada, California, Oklahoma, Utah, and Hawaii. The Company has remaining customer deposits of $3.3 million from 9,350 potential customers ranging from $100 to $5,000. The Company currently requires a $500 non-refundable order fee for Casitas to connect that customer to a BOXABL Preferred Dealer/Installer and survey the related location where the product is intended to be installed. The Company also started accepting $200 non-refundable pre-order fees in January 2025 to be added to the priority list for the Baby Box as discussed below.

The Company has been developing an expanded product line, which includes a variety of sizes and configurations that extend beyond our existing Casita model. The growing interest expressed by various external stakeholders including property developers and homebuilders have prompted us to explore additional sales channels. In January 2025, we announced the launch of prototypes of our Next Generation Products.

This includes the Baby Box, a 120 sq ft compact living space, towable trailer, built to RV Standard NFPA 1192 and our Phase 2 Modular Building System, comprising Boxes (modules) of varying dimensions that stack and/or connect allowing a system where homebuilder customers are able to customize the Boxes to build different building types and floorplans. We plan on beginning production of this product line manually with low capital investment to start.

For Phase 2 modular, we have been prototyping the production over the past few months and built two model homes in our Factory. This product will eventually need a new production line. We have developed various manufacturing concepts to manufacture this product in the future. We expect the design and development changes to be completed within 2025 and will focus design and manufacturing efforts based on the orders from developers for specific floorplans/models within the product offering. Manufacturing changes will be completed in parallel to the designs for initial manufacturing launch, which we expect to occur within the first half of 2026, subject to State approvals.

For Phase 2 Baby Box, we plan to start production of Baby Boxes in the fourth quarter of 2025.

In 2025, and following feedback from our customer base, we also introduced a 2-box configuration set up of our Casita including a 1 or 2 bedroom (for a total of 722 sq. ft.) set up for the California ADU market. This new floor plan can be produced with our existing production line.

Also, in 2025, the Company introduced a product currently in research and development, known as Sanctuary. This is a modular housing system designed for rapid deployment of versatile shelters that can be used for emergency response and are configured in single (55 sq ft) and double (85 sq ft) occupancy layouts. The Sanctuary models are developed with a new proprietary panelized construction for superior thermal performance and rapid deployment. We anticipate that the new panel designs will initially be produced on our current production line.

***Tariffs and Inflation***

The U.S. government recently implemented new tariff measures affecting a broad range of imported materials. We have evaluated the potential impact of these actions on our operations and supply chain and do not expect them to have a material impact on our financial position or results of operations in the near term. Our operations are currently supported by a substantial inventory of completed units manufactured prior to the effective dates of the tariff adjustments, which reduces our near-term exposure to increased costs associated with imported materials. Additionally, as we transition into the next phase of our product development, including Phase 2, our sourcing strategy reflects a greater emphasis on domestic procurement. This shift is expected to further mitigate exposure to international trade disruptions and tariff-related cost volatility.

We believe that we are well positioned to react to potential increased costs from our suppliers in the future due to our cost-effective building components and manufacturing process in the factory setting compared to the cost of traditional construction of stick-built homes in the field, which would face similar cost increases. As a result, the Company believes that it would be able to pass on those costs to end customers while keeping the BOXABL solution competitive.

However, recent proposals to change the international trade framework have resulted in substantial regulatory uncertainty regarding international trade and trade policy, both in the United States and abroad. The U.S. government has also raised the possibility of other initiatives that may affect our business, including renegotiation of trade agreements with other countries and the introduction of new or increased import duties or tariffs with respect to products from a number of different countries. In light of this uncertainty and the unknown impact on the broader US and global economy in the future, we do not have clarity at this point over the potential medium to long term impacts our business may face. The availability of certain goods could be affected if foreign suppliers choose to limit their exposure to U.S. markets in response to unfavorable trade policies, which could negatively impact the ability of our suppliers to deliver materials or manufacturing equipment to us and, therefore, delay or impede our deliveries. Furthermore, rising inflation, slower economic growth and increases in unemployment that may result from global trade disruptions could further deflate consumer demand, which may impact the housing market more broadly, reducing demand for our products.

**Results of Operations**

***Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024***

***Revenues***

Our gross revenues for the three months ended June 30, 2025 and 2024 were $279,000 and $83,000, respectively. The BOXABL Casita received modular housing approval in New Mexico and California in 2024, and Nevada and South Carolina in 2025, as discussed above. Revenue was generated by the sale of 4 Casitas delivered to 4 customers during the three months ended June 30, 2025. This is in comparison to the sale of 1 Casitas delivered to 1 customer during the three months ended June 30, 2024. During the three months ended June 30, 2025, revenues from four customers made up 88% of the Company's revenues. Significant customers included American Home Source, NRE Custom Homes, KAS Construction, and Pinnacle Construction, representing 24%, 22%, 21% and 21% of revenues for the three months ended June 30, 2025, respectively.

We are continuing to close deals from our sales pipeline/waitlist and generating interest in our next generation of products. We have reinforced our go-to market sales strategy with a targeted salesforce. On July 17, 2024, the Company launched the BOXABL Directory which is a growing network of modular home Preferred Dealers/Installers across the States where the Company has approval to sell its Casita. Since most states require various dealer and installer licenses in order to sell and install modular homes, BOXABL had been utilizing a network of Preferred BOXABL Dealers/Installers to handle these transactions with its end customers. In addition to the network of Dealers/Installers, the Company has also launched an online dealer portal which allows the approved and trained Dealers/Installers to access a list of potential customers that have ordered a Casita in their area, are ready to proceed with their project, and need sitework and installation services. The launch of the Company's dealer portal, combined with the expansion of our Preferred Dealer/Installer network, provides a platform for the Company to expand its sales and installation operations throughout the States where our product can be sold. Since launching the BOXABL Directory, the Company trained over 80 Dealers/Installers in its network. As the Company's product obtains additional approvals throughout the country, the Company expects to utilize these systems to execute additional sales in these territories, with faster ramp up time.

***Cost of Goods Sold***

Cost of goods sold were $9.7 million and $2.9 million for the three months ended June 30, 2025 and 2024, respectively. Cost of goods sold consists primarily of the cost of products used in the production of the Company's finished products, inbound and outbound shipping costs, the related labor, and indirect manufacturing overhead costs associated with that production. Manufacturing overhead, consists primarily of the allocation of indirect labor, rent and lease expense, and depreciation expense. Other allocations to manufacturing overhead included indirect supplies, scrapped material, and maintenance costs.

Cost of goods sold for the three months ended June 30, 2025 and 2024, consist of the following:

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| | | |
|:---|:---|:---|
| | **June 30,** | **June 30,** |
| <br>(In Thousands) | **2025** | **2024** |
| Direct material/shipping | $136 | $29 |
| Direct labor | 116 | &nbsp;&nbsp;&nbsp;&nbsp;343 |
| Manufacturing overhead | (344) | 2549 |
| Inventory adjustments | 9815 | - |
| Cost of goods sold | $9723 | $2921 |

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Our costs of goods sold increased significantly due to inventory adjustments resulting primarily from the write down of 68 units that management determined were obsolete following the inventory slow movement analysis, for which the Company determined that it was not cost effective to rework, resulting in an inventory write down of $8.3 million in the three months ended June 30, 2025. In addition, during the three months ended June 30, 2025, the Company recognized $1.3 million in inventory valuation adjustments within cost of goods sold related to adjusting the carrying value of finished goods inventory to its net realizable value. See Note 5 to our unaudited condensed consolidated financial statements for more information regarding inventory valuation adjustments. During the three months ended June 30, 2025, our manufacturing overhead was negative $344,000 due to the recapture of stock-based compensation expense resulting from terminations recognized in the second quarter of 2025. We continue to work to align production activity with delivery schedules. Our costs of goods sold compared to revenues for each period presented remain significantly elevated due to our reduced production levels as we faced delays on revenues mainly from permitting and regulatory issues, customer readiness and financing. As a result, the factory overhead, including the costs of leasing and operating our factories and indirect labor costs, was allocated to the total units produced during the respective periods. While we estimate that we could produce and deliver 1,200 Casitas per year at full factory capacity, or 300 Casitas per quarter, we only produced 25 Casitas and 35 Casitas in the three month ended June 30, 2025 and 2024, respectively.

***Operating Expenses***

Operating expenses for the three months ended June 30, 2025 and 2024, consisted of the following:

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| | | |
|:---|:---|:---|
| | **June 30,** | **June 30,** |
| <br>(In Thousands) | **2025** | **2024** |
| General and administrative | $5938 | $3842 |
| Sales and marketing | 15142 | 2201 |
| Research and development | 676 | 1332 |
| Impairment loss | - | 12120 |
| Total Operating expenses | $21756 | $19495 |

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General and administrative expenses consist of compensation and benefits for various positions including company administration, rents, shop supplies, and utilities. The increase in general and administrative expenses was primarily related to compensation and benefits for additional staff in IT, Legal, and Accounting, offset by the Company's cost control initiatives. As we expand the Company's production capacity, we generally expect these expenses to decrease on a per unit basis, though they may increase somewhat upon the consummation of the transactions contemplated by the BCA.

We also incurred higher sales and marketing expenses in the three months ended June 30, 2025, offset by a slight decrease in research and development expenses. Sales and marketing expenses generally consist of advertising and promotions. Starting in 2024 and increasing in 2025, the Company undertook significant new advertising campaigns to refine the marketing of the Company's products focused on generating sales activity, as well as advertising to customers, leading to a significant increase in sales and marketing expenses in the three months ended June 30, 2025 compared to prior year period. Research and development activity is essential to testing and developing BOXABL products and involves significant costs to obtain permits and approvals. These costs included test raw material used in production and researching industry standards and regulations. Research and development costs declined as the Company succeeded in obtaining state approvals under modular housing programs in several states. Following BOXABL obtaining California statewide approval for the Casita in all climate zones in January 2025, we expect to focus future research and development efforts on our Phase 2 Modular Building System and the Baby Box.

***Stock-based Compensation Expense***

The Company recognizes stock-based compensation expense based on fair value on the date of grant and recognized over the associated vesting periods. Vesting of RSU awards is generally subject to a 3-year service period and, as of October 18, 2024, also subject to a performance condition. Accordingly, stock-based compensation is recognized upon satisfaction of the service and performance condition. In the case of options, the Company uses the Black-Scholes pricing model to estimate the fair value of options on the date of grant that are then expensed on a straight-line basis over the vesting period. The Company accounts for forfeitures as they occur in the year of forfeiture and share-based compensation expense is adjusted accordingly.

For the three months ended June 30, 2025 and 2024, the Company recaptured $613,000 and recognized $1.9 million in stock-based compensation, respectively. The decrease is attributable to employee forfeitures upon terminations in 2025, offset by the vesting of stock options under the Company's Amended 2021 stock incentive plan. See "*Note 12. Stockholders' Equity – Stock-based Compensation" for further discussion.*

***Total Other Income***

For the three months ended June 30, 2025 and 2024, our total other income was $400,000 as compared to $502,000, respectively, primarily due to lower balances of interest-bearing deposits.

***Six Months Ended June 30, 2025 Compared with the Six Months Ended June 30, 2024***

***Revenues***

Our gross revenues for the six-months ended June 30, 2025 and 2024 were $402,000 and $708,000, respectively. Revenue was generated by the sale of 5 Casitas delivered to 5 customers during the six months ended June 30, 2025. This is in comparison to the sale of 7 Casitas delivered to 4 customers during the six months ended June 30, 2024. During the six months ended June 30, 2025, revenues from four customers was approximately 76% of the Company's revenues. Significant customers included Pinnacle Construction, KAS Construction, NRE Construction, and American Home Source, representing 30%, 15%, 15% and 16% of revenues for the six months ended June 30, 2025, respectively.

***Cost of Goods Sold***

Cost of goods sold were $11.8 million and $7.3 million for the six-months ended June 30, 2025 and 2024, respectively.

Cost of goods sold for the six months ended June 30, 2025 and 2024, consist of the following:

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| | | |
|:---|:---|:---|
| | **June 30,** | **June 30,** |
| <br>(In Thousands) | **2025** | **2024** |
| Direct material/shipping | $170 | $252 |
| Direct labor | 145 | 411 |
| Manufacturing overhead | (353) | 6669 |
| Inventory adjustments | 11879 | - |
| Cost of goods sold | $11841 | $7332 |

---

Our costs of goods sold increased significantly due to inventory adjustments related primarily to the write down of 68 units that management determined were obsolete following the inventory slow movement analysis, for which the Company determined that it was not cost effective to rework, resulting in an inventory write down of $8.4 million in the six months ended June 30, 2025. In addition, during the six months ended June 30, 2025, the Company recognized $3.4 million in inventory valuation adjustments within cost of goods sold related to adjusting the carrying value of finished goods inventory to its net realizable value. See Note 5 to our unaudited condensed consolidated financial statements for more information regarding inventory valuation adjustments. During the six months ended June 30, 2025, our manufacturing overhead was negative $353,000 due to the recapture of stock-based compensation expense resulting from terminations recognized in 2025. We continue to work to align production activity with delivery schedules. We produced 35 Casitas in the six months ended June 30, 2025 and 54 Casitas in the six months ended June 30, 2024, which bore the full manufacturing overhead costs in those periods, compared to an estimated full production rate of 300 Casitas per quarter.

***Operating Expenses***

Operating expenses for the six months ended June 30, 2025 and 2024, consisted of the following:

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| | | |
|:---|:---|:---|
| | **June 30,** | **June 30,** |
| <br>(In Thousands) | **2025** | **2024** |
| General and administrative | $7745 | $7571 |
| Sales and marketing | 21492 | 5060 |
| Research and development | 1259 | 3579 |
| Impairment loss | - | 12120 |
| Total Operating expenses | $30496 | $28330 |

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General and administrative expenses consist of compensation and benefits for various positions including company administration, rents, shop supplies, and utilities. The increase in general and administrative expenses was primarily related to compensation and benefits for additional staff in IT, Legal, and Accounting, offset by the Company's cost control initiatives.

We also incurred higher sales and marketing expenses in the six months ended June 30, 2025 compared to the prior period, reflecting increased advertising as discussed above. Research and development activity declined following our obtaining state approvals under modular housing programs in several states.

***Stock-based Compensation Expense***

For the six-months ended June 30, 2025 and 2024, the Company recaptured $3.6 million and recognized $4.9 million in stock-based compensation, respectively. The decrease is attributable to employee forfeitures upon terminations in 2025, offset by the vesting of Stock options under the Company's Amended 2021 stock incentive plan. See "*Note 12. Stockholders' Equity – Stock-based Compensation" for further discussion.*

***Total Other Income***

For the six months ended June 30, 2025 and 2024, our total other income was $872,000 as compared to $1.1 million, respectively, primarily due to lower balances of interest-bearing deposits.

**Liquidity and Capital Resources**

***Going Concern***

The Company's unaudited interim condensed consolidated financial statements have been prepared under the assumption that the Company will be able to continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company's ability to continue as a going concern is probable. Primarily due to slower sales associated with delays in obtaining US statewide modular approvals and customer readiness, the Company reported a net loss of $41.1 million and an operating cash outflow of $33.7 million for the six months ended June 30, 2025. At June 30, 2025, the Company had an accumulated deficit of $759.5 million. Absent any other action, the Company will require additional liquidity to continue its operations over the next 12 months.

The continuing viability of the Company and its ability to continue as a going concern is dependent on the Company being successful in its continued efforts in growing its revenue and/or accessing additional sources of capital. Management's plan to address this need includes (a) continued exercise of tight controls to conserve cash, (b) accelerating product sales, and (c) raising funds through equity financing. The Company anticipates current capital on hand, product revenue, and expected future funding will be sufficient to fund the Company's operations in excess of twelve months. Through June 2025, the Company conducted offerings of shares of its preferred stock through Regulation A and Regulation D in the United States and in a Canadian offering. Management believes that the actions being taken by the Company will provide sufficient liquidity for the Company to continue to execute its business plan over the next year. However, there can be no assurances that management's plans will be achieved.

***Sources of Liquidity***

To date, our operations have been financed by our exempt offerings of securities made in reliance on Regulation A, Regulation CF and both Rule 506(c) and Rule 506(b) of Regulation D in the United States and exempt offering regulations in Canada. For details regarding our securities offerings, see below *Sales of Securities*.

At June 30, 2025, our principal source of liquidity was our unrestricted cash and cash equivalents and short-term investments, which we achieved through our offerings of securities as discussed above. As of June 30, 2025, the Company held $14.8 million in unrestricted cash and cash equivalents, $1.1 million in digital assets, and $2.0 million in investments in short-term treasury notes, compared to $5.8 million in cash and cash equivalents, and $15.9 million held in short-term treasury notes as of December 31, 2024. Based on the Company's current burn rate of $5.6 million per month, we anticipate that the current liquidity together with cash generated from sales of our products will be sufficient to meet our immediate cash needs for 6 months.

***Historical Cash Flows***

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| | | |
|:---|:---|:---|
| | **Six Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** |
| <br>**(In Thousands)** | **2025** | **2024** |
| Net cash used in operating activities | $(33670) | $(19246) |
| Net cash provided by investing activities | $12548 | $6085 |
| Net cash provided by financing activities | $30192 | $296 |

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*Operating Activities*

Cash used in operating activities included net loss adjusted for several non-cash items such as depreciation & amortization, stock-based compensation, and other non-cash expenses, in addition to the change in working capital as inventory balances increased.

*Investing Activities*

Primary investing activities included purchase of property, equipment, leasehold improvement, payment of security deposit for our factory and other facility, and acquisition and sales of short-term and long-term investments. The increase in cash flows provided by investing activities was due to a sales and maturities of investments (U.S. Treasuries) during the first quarter of 2025 being slightly higher than the prior comparable quarter as well as purchases of investments in the 2024 period that did not recur in the 2025 period.

*Financing Activities*

Primary sources of our financing activities included net proceeds from issuance and sales of A-2 and A-3 Preferred Stock. This also includes proceeds received in advance of security issuance, which is included within the Company's subscription liability.

*Inventory*

Our physical assets decreased with inventory of $16.5 million as of June 30, 2025, related to 348 inventory units, which is comprised of $6.5 million related to 126 Casitas in finished goods and $7.2 million related to 222 work-in-process units. This compares to $24.3 million in inventory as of December 31, 2024, primarily comprised of 397 Casitas classified as finished goods. During the six months ended June 30, 2025, the Company decided to rework certain of its existing units to meet California modular specifications so that these units are able to be sold in California, as discussed in Note 5 of our unaudited condensed consolidated financial statements. As a result, in the second quarter of 2025, approximately $7.1 million of inventory was reclassified from finished goods to work-in-process on the consolidated balance sheet.

The decline in the Company's June 30, 2025 total inventory balance mainly relates to the write down of 68 units that had been held in inventory for an extended time period and for which the Company determined that it was not cost effective to rework. Subsequent to June 30, 2025 and through August 19, 2025, we delivered 1 additional Casita.

*Property, Plant and Equipment*

Property, Plant and Equipment decreased to $8.1 million as of June 30, 2025 compared to $8.9 million as of December 31, 2024 primarily resulting from depreciation of machinery and equipment at our manufacturing facility.

*Sales of Securities*

During the six months ended June 30, 2025 and 2024, the Company conducted offerings under Regulation A, Regulation Crowdfunding, Regulation D, and in a Canadian offering. These offerings terminated in June 2025. The progress of these offerings during those periods was as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| **(In Thousands)** | **Six Months Ended**<br> **June 30, 2025** | **Six Months Ended**<br> **June 30, 2025** | **Six Months Ended**<br> **June 30, 2024** | **Six Months Ended**<br> **June 30, 2024** |
| **Offering** | **Shares Sold** | **Gross Proceeds** | **Shares Sold** | **Gross Proceeds** |
| Regulation A (Series A-3) | 63304 | $49507 |  | $- |
| Regulation D (Series A-3) | 6779 | 5101 | 5338 | 3145 |
| Canada (Series A-2) | 162 | 129 | - | - |
| **Total** | **70245** | $**54737** | $**5338** | $**3145** |

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***Material Commitments and Obligations***

***Expense Commitments***

As of June 30, 2025, we reported current lease liabilities of $3.7 million compared to $3.5 million as of December 31, 2024. Our long-term lease liability decreased to $5.3 million as of June 30, 2025, from $7.2 million as of December 31, 2024, due to the passage of time.

***Customer Deposits***

Our main non-lease liability is the Company's obligation to customers who have placed deposits on the purchase of our products. As of June 30, 2025, the Company held customer deposits in the amount of $3.4 million, which represented a decrease from $3.6 million as of December 31, 2024. This decrease is due to refunds and/or application of customer deposits to customer orders that were fulfilled during 2025.

***Deferred Revenue***

As of June 30, 2025, our balance sheet carried $2.7 million of deferred revenue related primarily to advanced deposits on unfulfilled purchase orders, including $1.5 million to Pronghorn Services LLC, $108,000 deposit on a contract with Hideaway Inn, LLC, and $340,000 deposit for purchase orders from Punnet Construction in Oklahoma. This compares to $2.3 million of deferred revenue as of December 31, 2024. Deferred revenue generally occurs when the Company receives payments from the customer in advance of the Company shipping units to that customer. Pursuant to ASC 606, Revenue Recognition, the Company records deferred revenue for paid, unfulfilled performance obligations which are represented by the Casitas or installer training sessions that had not yet been delivered as of the date of the consolidated financial statements.

**Off-Balance Sheet Arrangements**

The Company did not have any off-balance sheet arrangements as of June 30, 2025 or December 31, 2024.

**Critical Accounting Policies and Estimates**

*Inventory Valuation*

Inventories consist of raw materials, in-bound freight and duties, work in progress, and finished goods. Inventories available for sale are valued at the lower of cost or net realized value. Cost is determined using the weighted average method. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, bulk sales, and the expected recoverable values for each disposition category. On a periodic basis, the Company performs a physical count of its inventory and records an inventory valuation allowance for inventory that has become obsolete or inventory that has a cost basis in excess of the expected net realizable value. Damaged and obsolete inventory are valued based on specific identification and management's estimate of net realizable value, including consideration of whether the items are usable in current or future production. Any difference between cost and estimated realizable value is recognized as an expense.

*Intangible Assets*

The Company has intangible assets that are amortized over the respective estimated lives on a straight-line basis unless the lives are determined to be indefinite and reviewed for impairment whenever events or other changes in circumstances indicate that the carrying amount may not be recoverable. The Company's intangible assets include intellectual property associated with patents and trademarks that are amortized over their estimated useful life of 14 years, or the stated expiration date, whichever is more determinable. The Company also has implementation costs for cloud computing and hosting arrangements for software-as-a-service arrangements that are recorded as an intangible asset on the balance sheet, and subsequently amortized over their economic or legal life, whichever is shorter. The Company applies the following useful lives to its intangible assets:

Intellectual property 14 years <br> Software 1-3 years <br> Domain 5 years

The Company has also incurred costs to develop software that are being developed for sale and/or external-use. These software development costs are recognized in research and development expenses on the Company's statement of comprehensive loss, as these costs do not qualify for capitalization until the software has reached the point of technological feasibility, which is determined after the planning, designing, coding, and testing phases have been completed.

*Stock-Based Compensation*

The Company applies ASC 718, *Stock-Based Compensation* for all stock-based awards, including stock options and restricted stock units, that are measured at fair value on the date of grant and recognized over the associated vesting periods. The fair value of stock options is estimated on the date of grant using a Black-Scholes model. The fair value of restricted stock awards is estimated on the date of the grant based on the fair value of the Company's underlying common stock. The Company recognizes compensation expense for stock options on a straight-line basis over the associated service or vesting periods. Effective October 18, 2024, restricted stock awards became subject to a performance condition, which defers vesting of restricted stock awards until a monetization event. Accordingly, the Company shall not recognize stock-based compensation from restricted stock awards until a monetization event becomes probable.

Determining the grant date fair value of stock options using the Black-Scholes option-pricing model requires management to make assumptions and judgments. These estimates involve inherent uncertainties and, if different assumptions had been used, stock-based compensation expense could have been materially different from the amounts recorded.

***Planned Timeline***

With the success of our fundraising through our offerings under Regulation A, Regulation D, and Regulation CF, we have continued to advance our planned timeline. As of June 30, 2025, we see our next 12-month timeline as follows:

● Release to market Casita 2 boxes set up with one- or two-bedroom floorplans and get it approved in California.

● Continue to expand our dealer & installer network.

● Develop a commission-only sales team and hire additional sales resources to ramp up the Company's B2B and B2C Casita sales.

● Establish our RV Dealer in Nevada to facilitate sales of Baby Boxes.

● Begin delivery of Casita orders to New York subject to customary project approval.

● Expand horizontally by obtaining large-scale orders for projects in which the Company will provide development services alongside products.

● Obtain plant and Casita certification in South Carolina\*, Texas, and Colorado. Costs are estimated to be $50,000 per State.

● Obtain state approval for sale of the Casita in Arizona, based on revised plan sets.

● Continue research and development on Sanctuary, a product suitable for emergency response and rapid deployment.

● Obtain orders for Phase 2 products to justify development costs for product & manufacturing.

● Begin work on contracted B2B development projects from the orders obtained in previous months.

● Obtain certification in California for our Phase 2 Modular Building System Boxes. Costs are estimated to be $50,000.

● Obtain state approval for the Casita in Iowa, Florida, Indiana, and New Jersey.

● Obtain State approval for the Casita in Maryland and Hawaii.

● Begin Production of Phase 2 Modular Building System Boxes, depending on receipt of sufficient orders for Phase 2 products.

● Explore vertical expansion, including the development of an AI-enabled smart home solution to enhance our customer experience.

● Develop a mobile product compliant with RV Codes that does not fold and is compact.

\*Plan sets for the Casita in South Carolina have been approved; factory certification is pending and the Company expects this within the next 6 months.

The Company believes the above referenced activities are achievable with its current cash and cash equivalents. However, there is no assurance that we will be able to meet this timeline. It is provided to identify our intentions for moving forward during the next 12 months of operation.

**Item 3. Quantitative and Qualitative Disclosures About Market Risk.**

As a smaller reporting company as defined by §229.10(f)(1), BOXABL is not required to provide the information under this Item.

**Item 4. Controls and Procedures.**

**Limitations on Effectiveness of Disclosure Controls and Procedures**

The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact there are resource constraints and management are required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

**Evaluation of Disclosure Controls and Procedures**

Management, with the participation of our Co-Chief Executive Officers and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Based on the evaluation of our disclosure controls and procedures as of June 30, 2025, our Co-Chief Executive Officers and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses in the design and operation of ineffective Information Technology General Controls ("ITGC") over certain key financial IT systems and ineffective design and operation of certain business process controls over the preparation and timely review of financial statements and disclosures described below. This will require remediation in order to be effective at the reasonable assurance level.

***Evaluation of Information Technology General Controls (ITGCs)***

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

The Company identified a material weakness related to the ineffective design and operation of effective ITGC's over certain systems that are critical to the Company's financial reporting process. Specifically, the Company had ineffective design and operation of controls over certain information technology general controls (ITGCs), including user segregation of incompatible duties, program change management, and user access controls to ensure: (i) that access to applications and data, and the ability to perform program changes, were adequately restricted to appropriate personnel and (ii) that the activities of individuals with access to modify data and make program changes were appropriately monitored and restricted. Automated process-level and manual controls that are dependent upon the information derived from such financially relevant systems were also determined to be ineffective as a result of such deficiency for the year ended December 31, 2024 and the six months ended June 30, 2025.

The Company identified a material weakness related to the ineffective design and operation of certain business process controls over the preparation and timely review of financial statements and disclosures, journal entries, reconciliations, schedules, and roll-forwards supporting financial statement account balances. Several material adjustments were identified. Management reviewed these errors identifying the root cause was due to the control environment component of internal control as the Company experienced continued personnel turnover and did not maintain a sufficient complement of personnel with the appropriate level of knowledge, experience, and training in certain areas important to financial reporting.

During 2024 and the six months ended June 30, 2025, significant turnover in the Company's personnel across the Finance, IT, Legal, and Investor Relations departments contributed to these deficiencies.

Notwithstanding the material weakness in our internal control over financial reporting, Management has concluded that our consolidated financial statements and related notes included in this Report are prepared in accordance with generally accepted accounting principles. Our Co-Chief Executive Officers and Chief Financial Officer have certified that, based on each such officer's knowledge, the financial statements, as well as the other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Report.

***Management's Plan for Remediation of the Material Weakness***

Management, with the oversight of the audit committee of the board of directors, is committed to maintaining a strong internal control environment. In response to the material weakness identified above, we have identified and begun to implement remediation efforts which include: (i) implementing user access rights to formally require segregation of duties over systems that are critical to the Company's financial reporting; (ii) engaging third-party consultants to assist with the remediation efforts, including enhancing our risk assessment; (iii) hiring of additional and more experienced Accounting, IT, Legal, and Investor Relations personnel and; (iv) reporting remediation measures to the Audit Committee of the Board of Directors.

The Company believes that these actions, when fully implemented, will remediate the material weakness. However, the material weakness will not be considered fully remediated until management designs and implements effective controls that operate for a sufficient period of time and management has concluded, through testing, that these controls are effective. As the Company continues to evaluate operating effectiveness and monitor improvements to our internal control over financial reporting, we may take additional measures to address control deficiencies or modify the remediation plan described above.

**Changes in Internal Control Over Financial Reporting**

There were no changes in our internal control over financial reporting that occurred during the six months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except for significant turnover in the Company's personnel across the Finance, IT, Legal, Investor Relations, Business Development, Sales, and Human Resources departments.

**Part II Other Information**

**Item 1 Legal Proceedings.**

The Company is party to various legal proceedings and claims from time-to-time. A liability will be accrued when a loss is both probable and can be reasonably estimated. Management believes that the probability of a material loss is remote. However, litigation is inherently uncertain, and it is not possible to predict the ultimate disposition of these proceedings.

***Employment Matters***

The Company initiated legal action against former employees who violated their employment agreements post-termination. Specifically, on or about June 13, 2023, the Company filed two (2) lawsuits against former employees alleging claims including Breach of Contract, violations of the Computer Fraud & Abuse Act, violations of the Defend Trade Secrets Act, Conversion, Unjust Enrichment, Breach of a Covenant of Good Faith and Fair Dealing, and demanded for temporary and permanent injunctive relief. These litigation matters are currently pending. Management does not anticipate these matters will have a material impact on the Company's results of operations or financial condition. Quantifying the resulting harm is complex and ongoing. The Company anticipates that judgment will be entered in its favor for a sum less than $250,000.

On or about March 2023, the Company uncovered potential misconduct by a former employee related to a stock scheme, the impact of which is challenging to measure. The Company filed a lawsuit against this former employee for breach of contract, violations of the Computer Fraud and Abuse Act, violations of the Defend Trade Secrets Act, Conversion, Unjust Enrichment, Breach of the Covenant of Good Faith and Fair Dealing and for a temporary and permanent injunction. The Company anticipates that judgment will be entered in its favor for a sum less than $1 million, but the investigation and extent of damages is ongoing.

On September 2, 2022, the Company received notice that a charge of employment discrimination had been filed with the Equal Employment Opportunity Commission ("EEOC") against the Company under Title VII of the Civil Rights Act of 1964 ("Title VII"). The circumstances of the alleged discrimination occurred on or about May 1, 2022. On October 3, 2022, the Company (through counsel) filed a Position Statement refuting the allegations and provided supporting documentation of the Company's position. The matter is pending before the EEOC. Management does not anticipate this matter will have a material impact on the Company's results of operations or financial condition.

On or about September 25, 2023, the Company received notice that a charge of unfair labor practices was filed with the National Labor Relations Board against the Company under Section 7 of the National Labor Relations Act ("NLRA"). The circumstances of the refuted charge are alleged to have occurred between March 2023 and September 2023. On or about October 12, 2023, BOXABL (through counsel) filed a position statement refuting the allegations and providing supporting documentation of BOXABL's position. The matter is pending before the NLRB. Management does not anticipate this matter will have a material impact on the Company's results of operations or financial condition.

On May 7, 2024, the Company received notification that a former employee filed a charge of employment discrimination against the Company with the EEOC under Title VII of the Civil Rights Act of 1964 (Title VII). The alleged discrimination involves claims of race-based discrimination, retaliation, and harassment. On the same day, the Company engaged external legal counsel to submit a Position Statement, contest the allegations and provided supporting documentation. The matter is currently under review by the EEOC and has not progressed to a formal court case. Management does not anticipate this matter will have a material impact on the Company's results of operations or financial condition.

The Company's former Chief Operating Officer, who was terminated after seven (7) months of employment, filed a civil complaint in Nevada alleging various claims against the Company and its Directors. The Company settled this matter in March 2025 without a material impact to its financial position. On March 25, 2025, the Company settled claims asserted against a former employee as well as claims that the former employee asserted against the Company. The Company paid $105,000 to this former employee in exchange for the surrender of 5,882,353 shares of the Company's Preferred A Stock.

***Other Litigation***

The Company has received claims from various parties alleging that it violated certain California laws, including the Trap and Trace Law and California Privacy Laws relating to its Facebook postings. The Company does not expect a material impact to its financial position.

On January 23, 2023, the Office of Administration of the Arizona Department of Housing brought an administrative complaint against the Company alleging that the Company did not comply with certain administrative requirements prior to shipping housing units into Arizona, and sought penalties up to suspension or revocation of its license, an administrative penalty, or probation. On February 9, 2023, the Company filed its Answer, explaining, *inter alia,* that the Company acted in good faith and in accordance with its reasonable interpretation of the Department's instructions regarding the shipments into Arizona, and that shipments were only made after it had requested and obtained the Department's written consent and authorization November 2022. This administrative matter was resolved by settlement agreement on April 21, 2023. The Company paid an administrative penalty in the amount of $48,000 to the Arizona Department of Housing on April 26, 2023. The Company has satisfied all of its obligations to the Arizona Department of Housing under the settlement agreement.

In a settlement dated May 30, 2023, the Company has assumed responsibility to pay reconstruction costs regarding its Casitas in Freeport, Arizona, and the purchaser in the Pronghorn transaction, but the Company will only be responsible for 10% of any costs in excess of $1 million. The Company will incur 50% of shipping costs in the event the contract is canceled and the Casitas removed. The Company accrued a $570,000 warranty expense for such costs and any additional costs related to the 10-year limited warranty offered to Pronghorn, which is recorded as a component of accrued expenses and other current liabilities.

On June 13, 2023, the Company filed a lawsuit against an internet blogger, not affiliated with the Company, alleging claims based on business disparagement and defamation towards the Company. On August 5, 2024, the court entered a default judgment against the internet blogger and in favor of the Company, awarding $50,000 in damages. A judgment lien was placed on real property owned by the defendant. The Company is in the process of enforcing its rights against the property.

On or about October 5, 2023, Leader Capital High Quality Income Fund, a series of Leader Funds Trust, a Delaware Statutory Trust, commenced an action against the Company and other defendants in the District Court for Nevada, asserting claims for breach of duty to register a transfer of a security (NRS 104.8401), Conversion, and Intentional Interference with a Prospective Economic Advantage. Plaintiff claims that it requested the removal of a restrictive legend to shares held by Plaintiff and that the Company refused and/or delayed approval of the removal and caused Plaintiff to suffer damages. The Company agreed to provide a defense to Transfer Online Inc., its former transfer agent, and the Company has since been engaged in defending the lawsuit. Discovery has commenced and the Company intends to file a dispositive motion at the appropriate time. The Company denies the merit of the underlying allegations, the damages sought and the Company will continue to defend against them. Management estimates a loss range of $1 to $3.7 million from this matter and believes that the Company has a reasonably good probability of success on summary judgment, and if necessary, a reasonably good probability of success at trial.

On February 2, 2024, Pronghorn Homes, LLC, a party to the Arizona mining project, filed a lawsuit against the Company in the State of Arizona, which has a potential loss exposure of up to $295,000. The Company denies liability and intends to defend against this claim. Management does not anticipate the matter will have a material impact on the Company's results of operations or its financial condition.

On April 30, 2024, the Company filed a lawsuit against Brave Control Solutions, Inc. ("Brave"), and its CEO, Brent McPhail. The lawsuit was filed in the United States District Court for the Eastern District of Michigan. The lawsuit related to the Company's claim of breach of contract by Brave related to the design, manufacture, and programming of specialized equipment to be used by the Company. The Company seeks damages equal to all amounts paid under the contracts, among other relief sought. The Company anticipates a judgment in its favor, but recovery of these assets is uncertain.

On July 3, 2024, Ro-Matt International Inc. and Electra-Tech Manufacturing Inc. ("Applicants") filed a lawsuit against Brave Control Solutions, Inc., the Company , and the Royal Bank of Canada in Ontario, Canada, in the Superior Court of Justice. This matter was dismissed without any damages being assessed against the Company.

On November 19, 2024, the Company entered into an agreement with an RV Park for the sale of certain PMRV units. It appears that the RV Park did not obtain required zoning and land use permits to install and use the units at their site in Arizona. The State of Arizona 'red tagged' the units and the RV Park asserted claims against the Company, and demanded that the Company immediately remove the units. The Company has denied all liability and is negotiating a resolution of this dispute with the RV Park. Management does not anticipate the matter will have a material impact on the Company's results of operations or financial condition.

In May 2025, the Company received a claim from a plaintiff that purchased fraudulent shares of the Company's stock from a former employee of the Company, at a discounted price, incurred a loss of approximately $144,000. Plaintiff claims that he purchased the shares by writing a check to an entity that was controlled by the former employee and alleges negligence and violations of Nevada Revised Statute (NRS) 90.9570. The Company denies liability and intends to defend against this claim. Management does not anticipate the matter will have a material impact on the Company's results of operations or financial condition. Separate from the above claim filed against the Company, the Company has also entered into settlement agreements with various parties who may have been impacted by a stock scheme perpetrated by the former employee of the Company. This resulted in the recognition of $2.4 million of legal settlement expenses recorded in General and administrative expenses, settled with 3,043,788 shares of the Company's Preferred A-1 Stock, during the three months ended June 30, 2025.

We know of no other existing or pending legal proceedings against the Company , nor are we involved as a plaintiff in any other proceeding or pending litigation. There are no proceedings in which any of our directors, officers any of their respective affiliates, or any beneficial stockholder, is an adverse party or has a material interest adverse to the Company

**Item 1A. Risk Factors.**

Rule 421(d) of the Securities Act of 1933 (§230.421(d) of this chapter). Smaller reporting companies are not required to provide the information required by this item.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.**

**Unregistered Sales of Equity Securities**

During the six months ended June 30, 2025, the Company has engaged in the following unregistered issuances of securities. The proceeds raised were generally used to fund the development of the Company's manufacturing facilities, working capital and compensation of executive officers and employees.

● Beginning
 February 17, 2023, the Company commenced a Canadian offering, through FrontFundr and DealMaker, of its Non-Voting Series A-2 Preferred
 Stock and the underlying shares of Common Stock into which they convert. This offering is subject to applicable exemptions under
 Canadian securities laws and is strictly limited to investors from specific Canadian provinces, which was verified by FrontFundr.
 As of June 30, 2025, the Company had sold 756,946 shares of A-2 Preferred Stock for gross proceeds of $605,400.

● Beginning
 May 14, 2024, the Company commenced an exempt offering of Non-Voting Series A-3 Preferred Stock and the underlying shares of Common
 Stock into which they convert pursuant to Rule 506(c) of Regulation D. As of June 30, 2025, the Company had sold 20,658,363 shares
 of Series A-3 Preferred Stock for gross proceeds of $14,082,651 million under the Regulation D offering.

● The
 Company's offering of Non-Voting Series A-3 Preferred Stock in reliance on Regulation A was qualified on June 24, 2024. As
 of June 30, 2025, the Company had sold 76,856,889 shares of Series A-3 Preferred Stock for gross proceeds of $59,521,138 million
 under Regulation A.

NOTE: All classes of Preferred Stock convert into Common Stock upon the Company undertaking a firm underwriting registered offering (an "IPO") or an offering of the Company's Common Stock under Regulation A.

*Please see Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources* for a discussion of funds raised during the quarter.

**Purchases of equity securities by the issuer and affiliated purchasers.**

There were no purchases by the Company of its securities during the quarter ended June 30, 2025.

**Use of Proceeds**

Not applicable.

**Item 3. Defaults Upon Senior Securities.**

Not applicable.

**Item 4. Mine Safety Disclosures.**

Not applicable.

**Item 5. Other Information**

None.

**Item 6. Exhibits.**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Exhibit**<br> **Number** | **Exhibit**<br> **Description** | **Form** | **File No.** | **Exhibit** | **Filing Date** | **Filed<br> Herewith** |
| 2.1 | [Agreement and Plan of Merger, dated as of August 4, 2025](https://www.sec.gov/Archives/edgar/data/1816937/000110465925073950/tm2522586d1_ex2-1.htm) | 8-K | 000-56579 | 2.1 | August 5, 2025 |  |
| 3.1 | [Sixth Amended and Restated Articles of Incorporation](https://www.sec.gov/Archives/edgar/data/1816937/000149315224041596/ex3-1.htm) | 8-K | 000-56579 | 3.1 | October 18, 2024 |  |
| 3.2 | [Bylaws](https://www.sec.gov/Archives/edgar/data/1816937/000109690620000484/filename5.htm) | 1-A POS | 024-11419 | 2.2 | September 19, 2022 |  |
| 9.1 | [Voting Trust Agreement\*\*](https://www.sec.gov/Archives/edgar/data/1816937/000149315224033168/ex9-1.htm) | 10-Q | 000-56579 | 9.1 | August 19, 2024 |  |
| 10.1 | [Facilities Lease Agreement](https://www.sec.gov/Archives/edgar/data/1816937/000109690621000126/box_ex6z2.htm) | 1-A POS | 024-11419 | 6.2 | September 19, 2022 |  |
| 10.2 | [Initial Purchase Orders and Related Agreements](https://www.sec.gov/Archives/edgar/data/1816937/000109690621000494/box_ex6z4.htm) | 1-A POS | 024-11419 | 6.4 | September 19, 2022 |  |
| 10.3 | [Form of Room Module Order Agreement](https://www.sec.gov/Archives/edgar/data/1816937/000109690621001283/box_ex6z5.htm) | 1-A POS | 024-11419 | 6.5 | September 19, 2022 |  |
| 10.4 | [Amended 2021 BOXABL Inc. Stock Incentive Plan](https://www.sec.gov/Archives/edgar/data/1816937/000149315224041596/ex10-4.htm) | 8-K | 000-56579 | 10.4 | October 18, 2024 |  |
| 10.5 | [Employment Agreement of Paolo Tiramani+](https://www.sec.gov/Archives/edgar/data/1816937/000109690623001547/box_ex10z6.htm) | 10-12G | 000-56579 | 10.6 | August 10, 2023 |  |
| 10.6 | [Employment Agreement of Galiano Tiramani+](https://www.sec.gov/Archives/edgar/data/1816937/000109690623001547/box_ex10z7.htm) | 10-12G | 000-56579 | 10.7 | August 10, 2023 |  |
| 10.7 | [Merger Agreement](https://www.sec.gov/Archives/edgar/data/1816937/000109690623001547/box_ex10z8.htm) | 10-12G | 000-56579 | 10.8 | August 10, 2023 |  |
| 10.8 | [Purchase Agreement with Pronghorn Services LLC](https://www.sec.gov/Archives/edgar/data/1816937/000109690623001547/box_ex10z9.htm) | 10-12G | 000-56579 | 10.9 | August 10, 2023 |  |

---

10.9 [Amendment No. 1 to Facilities Lease Agreement](https://www.sec.gov/Archives/edgar/data/1816937/000109690623001547/box_ex10z10.htm) 10-12G 000-56579 10.10 August
 10, 2023

10.10 [Amendment No. 2 to Facilities Lease Agreement](https://www.sec.gov/Archives/edgar/data/1816937/000109690623001547/box_ex10z11.htm) 10-12G 000-56579 10.11 August
 10, 2023

10.11 [Amendment No. 3 to Facilities Lease Agreement](https://www.sec.gov/Archives/edgar/data/1816937/000109690623001547/box_ex10z12.htm) 10-12G 000-56579 10.12 August
 10, 2023

10.12 [Amendment No.4 to Facilities Lease Agreement](https://www.sec.gov/Archives/edgar/data/1816937/000149315224044835/ex10-12.htm) 10-Q 000-56579 10.12 November
 12, 2024

10.13 [Lease Agreement for Second Manufacturing Facility](https://www.sec.gov/Archives/edgar/data/1816937/000109690623001547/box_ex10z13.htm) 10-12G 000-56579 10.13 August
 10, 2023

10.14 [Supercar System, Inc. Services Agreement](https://www.sec.gov/Archives/edgar/data/1816937/000109690623001547/box_ex10z15.htm) 10-12G 000-56579 10.15 August
 10, 2023

10.15 [Supercar System, Inc. Lease Agreement](https://www.sec.gov/Archives/edgar/data/1816937/000109690623001547/box_ex10z16.htm) 10-12G 000-56579 10.16 August
 10, 2023

10.16 [Form of Award for Employees](https://www.sec.gov/Archives/edgar/data/1816937/000164117225004605/ex10-16.htm) 10-K 000-56579 10.16 April
 14, 2025

10.17 [Form of Award for Directors](https://www.sec.gov/Archives/edgar/data/1816937/000164117225004605/ex10-17.htm) 10-K 000-56579 10.17 April
 14, 2025

10.18 [Martin Noe Costas Offer Letter+](https://www.sec.gov/Archives/edgar/data/1816937/000109690623001983/box_ex10z1.htm) 8-K 000-56579 10.1 October
 13, 2023

10.19 [Restricted Stock Unit Agreement between the Company and Martin Noe Costas \*\*](https://www.sec.gov/Archives/edgar/data/1816937/000109690623001983/box_ex10z2.htm) 8-K 000-56579 10.2 October
 13, 2023

10.20 [Punnet Construction Purchase Contract](https://www.sec.gov/Archives/edgar/data/1816937/000164117225004605/ex10-20.htm) 10-K 000-56579 10.20 April
 14, 2025

10.21 [Restricted Stock Unit Agreement between the Company and Martin Noe Costas \*\*](https://www.sec.gov/Archives/edgar/data/1816937/000164117225004605/ex10-21.htm) 10-K 000-56579 10.21 April
 14, 2025

10.22 [Form of Award for Consultants](https://www.sec.gov/Archives/edgar/data/1816937/000164117225004605/ex10-22.htm) 10-K 000-56579 10.22 April
 14, 2025

10.23 [Sponsor Support Agreement, dated as of August 4, 2025](https://www.sec.gov/Archives/edgar/data/1816937/000110465925073950/tm2522586d1_ex10-1.htm) 8-K 000-56579 10.1 August 5, 2025

10.24 [Company Support Agreement, dated as of August 4, 2025](https://www.sec.gov/Archives/edgar/data/1816937/000110465925073950/tm2522586d1_ex10-2.htm) 8-K 000-56579 10.2 August 5, 2025

10.25 [Form of Company Lock-Up Agreement](https://www.sec.gov/Archives/edgar/data/1816937/000110465925073950/tm2522586d1_ex10-3.htm) 8-K 000-56579 10.3 August 5, 2025

10.26 [Form of Sponsor Lock-Up Agreement](https://www.sec.gov/Archives/edgar/data/1816937/000110465925073950/tm2522586d1_ex10-4.htm) 8-K 000-56579 10.4 August 5, 2025

14.1 [Code of Ethics](https://www.sec.gov/Archives/edgar/data/1816937/000149315224012367/ex14-1.htm) 10-K 000-56579 14.1 April
 1, 2024

31.1 [Certification of Paolo Tiramani, Co-Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex31-1.htm) X

31.2 [Certification of Galiano Tiramani, Co-Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex31-2.htm) X

31.3 [Certification of Martin Noe Costas, Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex31-3.htm) X

32.1 [Certification of Paolo Tiramani, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex32-1.htm) X

32.2 [Certification of Galiano Tiramani, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex32-2.htm) X

32.3 [Certification of Martin Noe Costas, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex32-3.htm) X

\* Certain of the schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

\*\* Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

+ Management contract or compensatory plan or arrangement.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| (Registrant) BOXABL Inc. | (Registrant) BOXABL Inc. | |
| | | |
| By: | */s/ Paolo Tiramani* | |
| | Paolo Tiramani |  |
|  | Co-Chief Executive Officer |  |
| Date: | August 19, 2025 |  |
| By: | */s/ Galiano Tiramani* |  |
|  | Galiano Tiramani |  |
| | Co-Chief Executive Officer |  |
| Date: | August 19, 2025 |  |
| By: | */s/ Martin Noe Costas* | |
|  | Martin Noe Costas |  |
|  | Chief Financial Officer and Principal Accounting Officer |  |
| Date: | August 19, 2025 |  |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PERIODIC REPORT UNDER**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Paolo Tiramani, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this Quarterly Report on Form 10-Q of BOXABL Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by the report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

b. Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

c. Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

b. Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| |
|:---|
| Date: August 19, 2025 |
| */s/ Paolo Tiramani* |
| Paolo Tiramani, Co-Chief Executive Officer |
| BOXABL Inc. |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PERIODIC REPORT UNDER**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Galiano Tiramani, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this Quarterly Report on Form 10-Q of BOXABL Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by the report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

b. Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

c. Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

b. Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| |
|:---|
| Date: August 19, 2025 |
| */s/ Galiano Tiramani* |
| Galiano Tiramani, Co-Chief Executive Officer |
| BOXABL Inc. |

---

## Exhibit 31.3

**Exhibit 31.3**

**CERTIFICATION OF PERIODIC REPORT UNDER**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Martin Noe Costas, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this Quarterly Report on Form 10-Q of BOXABL Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by the report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

b. Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

c. Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

b. Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| |
|:---|
| Date: August 19, 2025 |
| */s/ Martin Noe Costas* |
| Martin Noe Costas, Chief Financial Officer |
| BOXABL Inc. |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION**

**PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

I, Paolo Tiramani, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge the Quarterly Report on Form 10-Q of BOXABL Inc. for the quarterly period ended June 30, 2025, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that the information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of BOXABL Inc. for the periods presented therein.

---

| | | |
|:---|:---|:---|
| Date: August 19, 2025 | By: | */s/ Paolo Tiramani* |
|  | Name: | Paolo Tiramani |
|  | Title: | Co-Chief Executive Officer |
|  |  | BOXABL Inc. |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION**

**PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

I, Galiano Tiramani, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge the Quarterly Report on Form 10-Q of BOXABL Inc. for the quarterly period ended June 30, 2025, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that the information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of BOXABL Inc. for the periods presented therein.

---

| | | |
|:---|:---|:---|
| Date: August 19, 2025 | By: | */s/ Galiano Tiramani* |
|  | Name: | Galiano Tiramani |
|  | Title: | Co-Chief Executive Officer |
|  |  | BOXABL Inc. |

---

## Exhibit 32.3

**Exhibit 32.3**

**CERTIFICATION**

**PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

I, Martin Noe Costas, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge the Quarterly Report on Form 10-Q of BOXABL Inc. for the quarterly period ended June 30, 2025, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that the information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of BOXABL Inc. for the periods presented therein.

---

| | | |
|:---|:---|:---|
| Date: August 19, 2025 | By: | */s/ Martin Noe Costas* |
|  | Name: | Martin Noe Costas |
|  | Title: | Chief Financial Officer |
|  |  | BOXABL Inc. |

---