10-Q: Virtuix Holdings Q3 2026: Omni One Sales Drive Revenue Growth

Virtuix Holdings Inc. reports a 41% increase in net sales for the nine months ended December 31, 2025, driven by Omni One, despite continued net losses and a going concern warning.

Summary

• Net sales for the nine months ended December 31, 2025, increased by 41% to $2,980,765 from $2,110,889 in the prior year, primarily due to Omni One sales.
• Gross profit significantly improved, moving from a loss of $(355,603) in the nine months ended December 31, 2024, to a profit of $873,047 in the same period of 2025, with gross margin increasing from -17% to 29%.
• Net loss for the nine months ended December 31, 2025, decreased to $(6,892,302) from $(12,024,068) in the prior year, partly due to a one-time non-cash stock-based compensation expense in 2024.
• The company continues to operate at a net loss and has an accumulated deficit of $(69,384,892) as of December 31, 2025, raising substantial doubt about its ability to continue as a going concern.
• Subsequent to December 31, 2025, the company raised significant capital, including an initial $8,000,000 advance from Streeterville and $3,138,125 from warrant exercises, which is expected to mitigate the going concern risk for at least 9 months.
• Strategic focus is on scaling Omni One consumer sales and developing VTW for the defense market, with meaningful VTW sales not expected until fiscal year 2027 at the earliest.
• The Omni Arena business is in 'sustaining mode,' with no new systems or game development, focusing on recurring revenues from existing operators.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a challenging report, primarily due to the explicit "going concern" warning and continued net losses, despite some positive revenue growth and successful capital raises post-period end. The increased net loss in the most recent quarter and identified material weaknesses in internal controls add to the negative sentiment.

Positives

• Net sales for the nine months ended December 31, 2025, increased by 41% to $2,980,765, primarily driven by Omni One sales.
• Gross profit for the nine months ended December 31, 2025, improved significantly to $873,047 from a gross loss of $(355,603) in the prior year, with gross margin increasing from -17% to 29%.
• Net loss for the nine months ended December 31, 2025, decreased by $5,131,766 to $(6,892,302) compared to $(12,024,068) in the prior year.
• Operating expenses decreased significantly for the nine months ended December 31, 2025, to $6,292,648 from $11,357,777, largely due to a one-time non-cash stock-based compensation expense in the prior year.
• Successful capital raises post-December 31, 2025, including an $8,000,000 advance and $3,138,125 from warrant exercises, improved liquidity and are expected to support operations for at least 9 months.
• New orders for Omni One and Omni One Core systems increased 60% in December 2025 compared to December 2024.
• The company successfully completed its direct listing on Nasdaq, with trading commencing on January 27, 2026.
• Development of VTW for the defense market is underway, with test units already sold to the U.S. Air Force Academy, YokoWERX, and the U.S. Military Academy at West Point.
• The U.S. and Taiwan signed a new trade agreement lowering tariffs on Taiwan-made goods to 15%, which could benefit the company's alternative manufacturing strategy.

Negatives

• The company has not generated profits since inception and incurred a net loss of $(2,730,944) for the three months ended December 31, 2025, an increase of $760,331 from the prior year's $(1,970,613) net loss.
• Accumulated deficit reached $(69,384,892) as of December 31, 2025, up from $(62,492,590) at March 31, 2025.
• Substantial doubt exists about the company's ability to continue as a going concern within one year from the financial statement issuance date.
• Net sales for the three months ended December 31, 2025, decreased by 24% to $963,817 from $1,264,122 in the prior year, attributed to fulfilling a large backlog in the previous period.
• Selling expenses for the nine months ended December 31, 2025, increased significantly to $2,129,111 from $1,151,749, largely due to increased digital ad spend.
• Interest expense for the nine months ended December 31, 2025, increased substantially to $(1,308,982) from $(243,738) in the prior year, primarily due to new secured convertible promissory notes.
• The company estimates it will require an additional $2,000,000 in funding to execute its operating plan for the next 12 months, even after recent capital raises.
• The joint venture with Hero Entertainment is in the process of closing, expected to be completed by June 30, 2026.
• Identified material weaknesses in internal control over financial reporting, including insufficient written policies, lack of segregation of duties, and inadequate controls for related-party transactions.

Risks

• Substantial doubt about the company's ability to continue as a going concern due to recurring losses and accumulated deficit.
• No assurance that efforts to ramp up Omni One sales and raise capital will be successful.
• Anticipated continued operating losses as the company pursues market penetration and revenue growth.
• Meaningful sales of VTW in the defense sector may not materialize until fiscal year 2027 at the earliest, despite initial test unit sales.
• Long sales cycles and compliance requirements (FAR, DFARS, Export Administration Regulations, cybersecurity, Buy American Act, Berry Amendment) for penetrating the defense market.
• Potential for unfavorable global economic and political conditions, including tariffs and trade barriers, to adversely affect business.
• Reliance on a single operating segment (design, development, marketing, and sale of omni-directional treadmills and related services).
• Exposure to foreign currency fluctuations or exchange rate changes due to non-U.S. subsidiaries.
• Material weaknesses in internal control over financial reporting, including insufficient written policies, lack of segregation of duties, and inadequate controls for related-party transactions.
• No assurance that measures taken to remediate material weaknesses will be sufficient or avoid future weaknesses.
• The ability to access the full $50,000,000 under the Equity Purchase Agreement with Streeterville is subject to conditions (market capitalization, trading volume, Nasdaq listing standards) and not solely at the company's discretion.
• Any future financing transactions could result in dilution to existing stockholders.
• Unrefunded Omni Pro preorders totaling $449,635 will be reclassified to an escheatment liability, indicating past operational issues with customer refunds.

Future Outlook

The company anticipates continued operating losses in 2026 as it pursues market penetration and revenue growth. Key milestones for sustainable profitability include scaling Omni One consumer sales through increased marketing and supplementing with high-value defense contracts for VTW, though meaningful VTW sales are not expected until fiscal year 2027 at the earliest. The Omni Arena business is in 'sustaining mode,' with no new systems or game development. Expenses are expected to increase with scaling sales, marketing, and production of Omni One, and due to public company operations. The company believes its public listing will provide access to additional funding to accelerate revenue growth.

Management Comments

• "We anticipate continued operating losses as we pursue market penetration and revenue growth in 2026."
• "We believe a dual-use strategy of building consumer sales plus defense contracts can position us for achieving revenue growth and sustainable profitability."
• "We expect that meaningful sales of VTW in the defense sector may not materialize until fiscal year 2027 at the earliest."
• "We believe Virtuix is well placed at the intersection of immersive gaming, fitness, and enterprise VR, and at the leading edge of the development of hyper-realistic digital twins of the real world through Gaussian splatting and other AI-driven 3D reconstruction technologies."
• "We pioneer the technology and products for physically moving around in these virtual environments."
• "We believe we are positioned to help define the next decade of VR advancements and be a leader in immersive gaming and simulation."
• "Our path to profitability relies on scaling Omni One sales at an acceptable CAC and on gaining adoption of VTW for immersive mission planning in the defense sector."
• "Although we believe that our plans are realistic, there is no guarantee that we will be able to scale Omni One sales or find product-market fit in the defense sector."
• "We estimate we'll have the resources to conduct our planned operations for at least 9 months."
• "To continue as a going concern and execute our operating plan for the next 12 months, we estimate we'll require additional funding of approximately $2,000,000."

Industry Context

StockSavvy.ai notes that Virtuix operates in the rapidly evolving virtual reality (VR) market, specifically targeting immersive gaming, fitness, enterprise VR, and the emerging defense sector with its omni-directional treadmills. The company's focus on "full-body movement with immersive VR gaming and fitness" for the home consumer (Omni One) aligns with broader trends of VR adoption beyond niche commercial applications. The strategic pivot to defense (VTW) for "multi-user mission planning" indicates an attempt to diversify revenue streams and leverage its core technology in a high-value, albeit long sales cycle, market, potentially differentiating itself from competitors focused solely on consumer or commercial entertainment. The mention of AI-driven 3D reconstruction technologies like Gaussian splatting highlights the company's awareness of cutting-edge developments in virtual environment creation, positioning itself as a key enabler for physical interaction within these advanced digital worlds.

Comparison to Industry Standards

• The filing does not provide specific comparisons to industry benchmarks or named competitors' projects/results.
• Internal target gross margins are 40% on Omni One hardware sales and 70% on Omni One Enterprise, but these are not benchmarked against industry averages.
• The company highlights its "expansive omni-directional treadmill patent portfolio" as a competitive moat, but without direct comparison to other VR hardware providers like Meta (Quest), HTC (Vive), or Pimax, its relative strength is not quantified.
• The defense market entry with VTW is presented as a unique opportunity due to "inherent barriers to entry," but no specific defense contractors or VR simulation providers are mentioned for comparison.

Management Changes

Corporate Governance

Legal Proceedings

• In February 2024, the company was named a co-defendant in a lawsuit by a customer related to alleged injuries obtained when attempting to use the Omni Arena attraction. The case is in the discovery phase, and no settlement range has been determined. The company believes this matter will not have a material adverse effect, with legal costs and potential settlement largely covered by insurance (except for a $2,500 deductible).

Related Party Transactions

• In May 2025, the company raised $217,678 through subordinated promissory notes (2025 Notes) from two related party investors, which were subsequently repaid on September 15, 2025.
• Of the Second 2025 Notes issued between October and December 2025, a total of $225,000 was borrowed from Jan Goetgeluk (CEO and Chairman) and Mieke Criel (mother of Jan Goetgeluk).
• Jan Goetgeluk (CEO, Chairman, founder) exchanged 5,500,000 shares of Class A common stock for Class B common stock on August 8, 2025.
• Jan Goetgeluk transferred 1,000,000 shares of Class B common stock to a family member in November 2025, which automatically converted to Class A common stock.
• Material weaknesses in internal control over financial reporting include inadequate controls to ensure all material related-party transactions are properly identified, approved, and reported.

Stakeholder Impact

• Shareholders face potential for significant dilution from ongoing capital raises and warrant exercises. The dual-class stock structure concentrates voting power with Class B holders, including the CEO, impacting Class A shareholders' influence. The 'going concern' warning poses a direct risk to investment value.
• Employees may see new hiring as the company scales sales and marketing, but past personnel reductions indicate a dynamic workforce. Stock-based compensation is a significant component of the compensation strategy.
• Omni One customers are the primary focus for growth. Omni Arena customers will continue to receive support but no new game development. Unrefunded Omni Pro preorders will be reclassified as escheatment liability, indicating past issues for some customers.
• Suppliers/Creditors may face risks related to timely payments due to the company's liquidity challenges and reliance on continuous capital raises, though recent funding has improved the short-term outlook. Secured debt to Streeterville Capital gives them priority.
• Regulatory Bodies are monitoring the company's remediation of identified material weaknesses in internal controls over financial reporting, which is crucial for compliance and investor confidence.

Next Steps

• Continue to ramp up marketing and sales of Omni One.
• Seek to gain adoption of VTW for immersive mission planning in the defense sector.
• Complete the closure process for the Heroix VR joint venture by June 30, 2026.
• Evaluate financing alternatives for the 2024 Notes, potentially including exchanges for equity or equity-linked securities.
• Continue to implement measures to improve internal controls over financial reporting, including formalizing policies, enhancing segregation of duties, and improving related-party transaction controls.
• The company will issue 4,000 shares of Class A Common Stock monthly to FMW Media Works LLC for 11 months starting after February 9, 2026.
• Streeterville's warrant exercise price will revert to the reference price after March 11, 2026.
• The Streeterville Notes will automatically be exchanged for a pre-paid purchase under an Equity Purchase Agreement ten days after the resale registration statement is declared effective.

Key Dates

Recommendation

While Virtuix Holdings Inc. shows promising revenue growth in its core Omni One product and has successfully completed a Nasdaq direct listing and secured significant post-period-end financing, the explicit "going concern" warning and continued net losses present substantial risks. The company's strategic pivot to defense (VTW) offers long-term potential but is years away from meaningful revenue. The identified material weaknesses in internal controls also warrant caution. The recent capital raises provide a temporary reprieve, but the need for additional funding within 12 months indicates ongoing financial fragility. A "Hold" recommendation is appropriate for investors who are already exposed and believe in the long-term vision, but new investors should exercise extreme caution given the high risk profile and the company's reliance on future capital and successful market penetration.

Keywords

Virtual Reality, VR, Omni One, Omni Arena, Omni Pro, Omni-directional treadmill, immersive gaming, VR fitness, enterprise VR, defense technology, VTW, SEC filing, 10-Q, financial results, capital raise, going concern, Nasdaq listing, Streeterville Capital, stock compensation, tariffs, internal controls