MultiSensor AI Holdings, Inc.

Previous wording

Revenue: Revenue for the three months ended March 31, 2026 was $1.6 million, compared to $1.2 million for the three months ended March 31, 2025. Revenue streams from each of our products and services are summarized below for the three months ended March 31, 2026 and 2025.

Current wording

Revenue: Revenue for the three months ended June 30, 2026 was $1.7 million, compared to $1.4 million for the three months ended June 30, 2025. Revenue streams from each of our products and services are summarized below for the three months ended June 30, 2026 and 2025.

Previous wording

The increase in revenue was primarily attributable to a $0.4 million or 169% increase in software revenue from sales of MSAI Connect, our condition intelligence platform, and a $0.2 million or 21% increase from sensor sales connected with new deployments of our platform and standalone hardware sales. These increases in revenue were offset by a decrease in services revenue of $0.1 million or 84%, primarily related to the discontinuation of inspection and training services in August 2025.

Current wording

The increase in revenue was primarily attributable to an increase in software revenues of $0.3 million, or 85%, in line with our strategic initiative of transitioning away from being a hardware provider to being a solutions provider by focusing on growing our SaaS business. This increase in revenue was partially offset by a decrease in services revenue of $0.1 million, or 82%, primarily related to the discontinuation of inspection and training services in August 2025.

Previous wording

*Cost of Goods Sold:*Cost of goods sold for the three months ended March 31, 2026 was $0.7 million, compared to $0.5 million for the three months ended March 31, 2025. The increase in cost of goods sold was attributable to an increase in the quantity of sensor hardware sold as well as a change in product mix.

Current wording

Cost of Goods Sold: Cost of goods sold for the three months ended June 30, 2026 was $0.9 million, compared to $1.1 million for the three months ended June 30, 2025. The decrease in cost of goods sold was attributable to a change in product mix.

Previous wording

Selling, General and Administrative Expense: Selling, general and administrative expense for the three months ended March 31, 2026 was $3.0 million, compared to $4.1 million for the three months ended March 31, 2025. The decrease in selling, general and administrative expense was primarily driven by a $0.7 million reduction in professional fees and $0.2 million reduction in payroll expenses compared to the prior year period.

Current wording

Selling, General and Administrative Expense: Selling, general and administrative expense for the three months ended June 30, 2026 was $2.8 million, compared to $2.9 million for the three months ended June 30, 2025. The decrease in selling, general and administrative expenses was primarily driven by a $0.3 million decrease in professional fees due to the Company’s continued strategic cost optimization initiatives, partially offset by a $0.1 million increase in payroll costs and other costs.

Previous wording

*Interest expense (income), net:*Interest income was $0.2 million for the three months ended March 31, 2026, compared to insignificant interest income for the three months ended March 31, 2025. The increase in interest income was primarily due to higher average cash balances invested in interest-bearing accounts.

Current wording

*Interest expense (income), net:*Interest income was $0.1 million for the three months ended June 30, 2026, compared to insignificant interest income for the three months ended June 30, 2025. The increase in interest income was primarily due to higher average cash balances invested in interest-bearing accounts.

Previous wording

*Share-Based Compensation Expense:*Share-based compensation expense for the three months ended March 31, 2026 was $0.2 million, compared to $0.9 million for the three months ended March 31, 2025. The decrease in share-based compensation expense was primarily attributable to restricted stock units granted during the first quarter of 2025, which included a provision for immediate vesting of 25% of the total award, resulting in higher expense recognized in the prior-year period.

Current wording

*Share-Based Compensation Expense:*Share-based compensation expense for the six months ended June 30, 2026 was $0.4 million, compared to $1.3 million for the six months ended June 30, 2025. The decrease in share-based compensation expense was primarily attributable to restricted stock units granted during the first quarter of 2025, which included a provision for immediate vesting of 25% of the total award, resulting in higher expense recognized in the prior-year period and forfeitures of unvested awards previously granted predominantly as a result of the reduction in our workforce which occurred in July 2025.

Previous wording

Depreciation: Depreciation expense was $0.4 million for the three months ended March 31, 2026, compared to $0.3 million for the three months ended March 31, 2025. The increase in depreciation expense was primarily driven by additions to property, plant, and equipment, predominately software associated with our development of MSAI Connect, partially offset by lower depreciation expense related to machinery, equipment, and demo assets due to disposals and sales completed during fiscal year 2025.

Current wording

Depreciation: Depreciation expense was $0.7 million for the six months ended June 30, 2026, compared to $0.6 million for the six months ended June 30, 2025. The increase in depreciation expense was primarily driven by additions, predominantly in the internal-use software category, associated with our development of MSAI Connect, partially offset by lower depreciation expense related to machinery, equipment, and demo assets due to disposals and sales completed during fiscal year 2025.

Previous wording

Other expense (income), net: Other income, net was insignificant for the three months ended March 31, 2026, compared to $0.2 million for the three months ended March 31,2025. The decrease in other income was primarily due to the resolution of the ELOC make-whole obligation, as notified by B. Riley on January 8, 2025 (as discussed below), which resulted in a one-time benefit recorded in the prior-year period.

Current wording

Other expense (income), net: Other expense (income), net for the six months ended June 30, 2026 was insignificant compared to $0.2 million of income for the six months ended June 30, 2025 primarily due to the resolution of the ELOC make-whole obligation, as notified by B. Riley on January 8, 2025, which resulted in a one-time benefit recorded in the prior-year period.

Previous wording

EBITDA and Adjusted EBITDA, when viewed in a reconciliation to respective GAAP measures, provide an additional way of viewing the Company’s results of operations and factors and trends affecting the Company’s business. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the respective financial results presented in accordance with GAAP. The following tables present a reconciliation of EBITDA and Adjusted EBITDA to the GAAP financial measure of net income (loss) (unaudited) for each of the periods indicated, in thousands:

Current wording

We believe EBITDA and Adjusted EBITDA, when viewed in a reconciliation to respective GAAP measures, provide an additional way of viewing the Company’s results of operations and factors and trends affecting the Company’s business. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the respective financial results presented in accordance with GAAP. The following tables present a reconciliation of EBITDA and Adjusted EBITDA to the GAAP financial measure of net income (loss) (unaudited) for each of the periods indicated, in thousands:

Previous wording

We incurred losses for the three months ended March 31, 2026 and 2025. We have historically funded our operations with internally generated cash flows, equity financings, debt, convertible notes, and promissory notes with shareholders and related parties. As of March 31, 2026, we had $22.6 million of cash and cash equivalents. We expect that our current sources of liquidity, together with our projection of cash flows from operating activities, will provide us with adequate liquidity for at least the next 12 months.

Current wording

We incurred losses for the three and six months ended June 30, 2026. We have historically funded our operations with internally generated cash flows, equity financings, debt, convertible notes, and promissory notes with shareholders and related parties. As of June 30, 2026, we had $21.0 million of cash and cash equivalents. We expect that our current sources of liquidity, together with our projection of cash flows from operating activities, will provide us with adequate liquidity for at least the next 12 months.

Previous wording

We may require additional capital in order to execute on our business plan and may require capital to fund our operations or to respond to technological advancements, competitive dynamics, technologies, customer demands, business opportunities, challenges, acquisitions, or unforeseen circumstances, and we may determine to raise capital through equity or debt financings or enter into credit facilities for other reasons. In order to maintain our anticipated growth trajectory and to further business relationships with current or potential customers or partners, or for other reasons, we may issue equity or equity-linked securities to such current or potential customers or partners. We may not be able to timely secure additional debt or equity financing on favorable terms, or at all, as these plans are subject to market conditions and are not within our control. There is no assurance that we will be successful in implementing our plans. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, or if we issue equity or equity-linked securities to current or potential customers to further business relationships, our existing stockholders could experience significant dilution. Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited and our business could be materially and adversely affected.

Current wording

We may require additional capital in order to execute on our business plan and may require capital to fund our operations or to respond to technological advancements, competitive dynamics, technologies, customer demands, business opportunities, challenges, acquisitions, or unforeseen circumstances, and we may determine to raise capital through equity or debt financings or enter into credit facilities for other reasons. In order to maintain our anticipated growth trajectory and to further business relationships with current or potential customers or partners, or for other reasons, we may issue equity or equity-linked securities to such current or potential customers or partners. We may not be able to timely secure additional debt or equity financing on favorable terms, or at all, as these plans are subject to market conditions and are not within our control. There is no assurance that we will be successful in implementing our plans. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, or if we issue equity or equity-linked securities to current or potential customers to further business relationships, our existing shareholders could experience significant dilution. Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited and our business could be materially and adversely affected.

Previous wording

During the three months ended March 31, 2026, the Company did not utilize the B. Riley ELOC and terminated the Purchase Agreement effective February 2, 2026. During the three months ended March 31, 2025, the Company utilized the ELOC to sell 44,793 shares of common stock for cash proceeds totaling $4.7 million.

Current wording

During the three months ended June 30, 2025, the Company did not utilize the ELOC to sell shares. During the six months ended June 30, 2025, the Company utilized the ELOC to sell a total of 44,793 shares of Common Stock for cash proceeds totaling $4.7 million, all of which occurred during the first quarter.

Previous wording

On March 13, 2026, we entered into an at market issuance sales agreement (the “2026 Sales Agreement”) with Roth Capital Partners, LLC and H.C. Wainwright & Co., LLC as sales agents or principals (the “Agents”), under which we may offer and sell shares

Current wording

On March 13, 2026, the Company entered into an at market sales agreement (the “2026 Sales Agreement”) with Roth Capital Partners, LLC and H.C. Wainwright & Co., LLC, as sales agents or principals, under which the Company may offer and sell shares of its Common Stock having an aggregate market value of up to $60.0 million from time to time. During the three and six months ended

Previous wording

of our common stock having an aggregate market value of up to $60 million from time to time through the Agents. We intend to use the net proceeds from sales of common stock under the 2026 Sales Agreement, if any, for working capital and general corporate purposes.

Current wording

June 30, 2026, the Company did not sell any shares under the 2026 Sales Agreement. We intend to use the net proceeds from sales of Common Stock under the 2026 Sales Agreement, if any, for working capital and general corporate purposes.

Previous wording

On March 28, 2025, the Company entered into an at market issuance sales agreement (the “2025 Sales Agreement”) with B. Riley Securities, Inc. (“B. Riley Securities”) as sales agent or principal, pursuant to which the Company could offer and sell shares of its common stock, having an aggregate offering price of up to $8.6 million from time to time through B. Riley Securities. B. Riley Securities was entitled to compensation at a fixed commission rate based on the gross sales price of shares sold pursuant to the 2025 Sales Agreement. During the three months ended March 31, 2026 and 2025, the Company did not sell any shares under the 2025 Sales Agreement. The Company terminated the 2025 Sales Agreement effective February 2, 2026.

Current wording

On March 28, 2025, the Company entered into an at market issuance sales agreement (the “2025 Sales Agreement”) with B. Riley Securities, Inc., as sales agent or principal, having an aggregate market value of up to $8.6 million. The Company terminated the 2025 Sales Agreement effective February 2, 2026, and did not sell any shares under the 2025 Sales Agreement during the three or six months ended June 30, 2026. During the three and six months ended June 30, 2025, the Company sold 2,735 shares of Common Stock under the 2025 Sales Agreement for cash proceeds totaling $0.1 million.

Previous wording

As previously discussed, on October 24, 2025, the Company entered into the 2025 Purchase Agreement with the Investors, pursuant to which it agreed to sell to the Investors (i) 855,745 shares of common stock at a purchase price of $16.36 per share and (ii) the 2025 Warrants (collectively, the “2025 Private Placement”), with an exercise price of $5.98 per share, for an aggregate purchase price of $14 million before deducting placement agent fees and offering expenses. 325 Capital and its affiliates beneficially own more than 5.0% of the outstanding common stock. In addition, Daniel M. Friedberg, who is a Managing Member of 325 Capital, serves on the Company’s board of directors.

Current wording

On October 24, 2025, the Company entered into the 2025 Purchase Agreement with the Investors, pursuant to which it agreed to sell to the Investors (i) 855,745 shares of Common Stock at a purchase price of $16.36 per share and (ii) the 2025 Warrants (collectively, the “2025 Private Placement”), with an exercise price of $5.98 per share, for an aggregate purchase price of $14 million before deducting placement agent fees and offering expenses. 325 Capital and its affiliates beneficially own more than 5.0% of the outstanding Common Stock. In addition, Daniel M. Friedberg, who is a Managing Member of 325 Capital, serves on the Company’s board of directors.

Previous wording

The 2025 Purchase Agreement and the 2025 Warrants provide that each Investor’s beneficial ownership of common stock, including after taking into account the full exercise of such Investor’s 2025 Warrant, shall in no event exceed 49.5% of the issued and outstanding common stock (the “Maximum Ownership Limitation”). In the event that an Investor’s 2025 Warrant is not exercisable for shares of common stock due to the beneficial ownership of such Investor exceeding the Maximum Ownership Limitation, the applicable 2025 Warrant will be exercisable for shares of the Company’s Series A Convertible Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), that are convertible into an equivalent number of shares of common stock for which the 2025 Warrant is exercisable. The 2025 Warrants will expire seven years from the date of issuance.

Current wording

The 2025 Purchase Agreement and the 2025 Warrants provide that each Investor’s beneficial ownership of Common Stock, including after taking into account the full exercise of such Investor’s 2025 Warrant, shall in no event exceed 49.5% of the issued and outstanding Common Stock (the “Maximum Ownership Limitation”). In the event that an Investor’s 2025 Warrant is not exercisable for shares of Common Stock due to the beneficial ownership of such Investor exceeding the Maximum Ownership Limitation, the applicable 2025 Warrant will be exercisable for shares of the Company’s Series A Convertible Preferred Stock, par value $0.0001 per share, that are convertible into an equivalent number of shares of Common Stock for which the 2025 Warrant is exercisable. The 2025 Warrants will expire seven years from the date of issuance.

Previous wording

At the initial closing of the Private Placement on October 30, 2025, the Company issued to the Investors 174,272 shares of common stock and 2025 Warrants to purchase up to 953,543.13 shares of common stock (as adjusted for the Reverse Stock Split), for gross proceeds of $2.85 million before deducting placement agent fees and offering expenses.

Current wording

At the initial closing of the 2025 Private Placement on October 30, 2025, the Company issued to the Investors 174,272 shares of Common Stock, and 2025 Warrants to purchase up to 953,543.13 shares of Common Stock (as adjusted for the Reverse Stock Split), for gross proceeds of $2.85 million before deducting placement agent fees and offering expenses.

Previous wording

On November 4, 2025, the Company entered into a common stock purchase agreement with a single institutional investor, pursuant to which the Company agreed to issue and sell (i) 114,875 shares (the “2025 Registered Direct Shares”) of the Company’s common stock and (ii) pre-funded warrants (the “2025 Pre-Funded Warrants”) to purchase up to 152,500 shares of common stock (the “2025 Pre-Funded Warrant Shares”) in a registered direct offering (the “2025 Registered Direct Offering”). The 2025 Registered Direct Shares, 2025 Pre-Funded Warrants and 2025 Pre-Funded Warrant Shares are registered pursuant to an effective shelf registration statement on Form S-3 (File No. 333-284437), and a base prospectus and prospectus supplement relating to the 2025 Registered Direct Offering, in each case filed with the SEC. The offering price was $54.00 per share of common stock and $53.9999 per Pre-Funded Warrant, which is the price of each share of common stock sold in the 2025 Registered Direct Offering, minus the $0.0001 exercise price per 2025 Pre-Funded Warrant.

Current wording

On November 4, 2025, the Company entered into a common stock purchase agreement with a single institutional investor, pursuant to which the Company agreed to issue and sell (i) 114,875 shares (the “2025 Registered Direct Shares”) of the Company’s Common Stock and (ii) pre-funded warrants (the “2025 Pre-Funded Warrants”) to purchase up to 152,500 shares of Common Stock (the “2025 Pre-Funded Warrant Shares”) in a registered direct offering (the “2025 Registered Direct Offering”). The 2025 Registered Direct Shares, 2025 Pre-Funded Warrants and 2025 Pre-Funded Warrant Shares are registered pursuant to an effective shelf registration statement on Form S-3 (File No. 333-284437), and a base prospectus and prospectus supplement relating to the 2025 Registered Direct Offering, in each case filed with the SEC. The offering price was $54.00 per share of Common Stock and $53.9999 per 2025 Pre-Funded Warrant, which is the price of each share of Common Stock sold in the 2025 Registered Direct Offering, minus the $0.0001 exercise price per 2025 Pre-Funded Warrant.

Previous wording

Net cash used in operating activities was $1.7 million for the three months ended March 31, 2026, a decrease of $1.5 million compared to $3.2 million for the three months ended March 31, 2025. The decrease in net cash used in operating activities was primarily driven by a lower net loss during the current period, as well as changes in working capital, including the timing of customer receipts.

Current wording

Net cash used in operating activities was $4.1 million for the six months ended June 30, 2026, an increase of $0.1 million as compared to $4.0 million of net cash used in operating activities for the six months ended June 30, 2025. The increase in net cash used in operating activities was primarily driven by changes in working capital, including the timing of customer receipts.

Previous wording

Net cash used in investing activities was $0.1 million for the three months ended March 31, 2026, a decrease of $0.3 million as compared to $0.4 million of net cash used in investing activities for the three months ended March 31, 2025. The decrease is primarily related to a decrease in cash paid for capital expenditures.

Current wording

Net cash used in investing activities was $0.4 million for the six months ended June 30, 2026, a decrease of $0.5 million as compared to $0.9 million of net cash used in investing activities for the six months ended June 30, 2025. The decrease was primarily related to a decrease in cash paid for capital expenditures.

Previous wording

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company included in our 2025 Annual Report. There have been no significant and material changes in our Critical Accounting Policies and Estimates since the 2025 Annual Report.

Current wording

Our condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company included in our 2025 Annual Report. There have been no significant and material changes in our Critical Accounting Policies and Estimates since the 2025 Annual Report.

Previous wording

We are an emerging growth company under the Jumpstart Our Business Act of 2012 (the “JOBS Act”). The JOBS Act provides that an emerging growth company can delay adopting new or revised accounting standards until such a time as those standards apply to private companies.

Current wording

We are an emerging growth company under the Jumpstart Our Business Startups Act (the “JOBS Act”). The JOBS Act provides that an emerging growth company can delay adopting new or revised accounting standards until such a time as those standards apply to private companies.

Previous wording

Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation or (v) comply with any new or revised financial accounting standards that have different effective dates for public and private companies until those standards would otherwise apply to private companies. However, we have elected to opt out of this extended exemption period discussed (v) and will therefore comply with new or revised accounting standards on the applicable dates on which the adoption of such standards are required for non-emerging growth companies. We may take advantage of these exemptions until December 31, 2026, or until we are no longer an emerging growth company, whichever is earlier. We will cease to be an emerging growth company prior to the end of such five-year period if certain earlier events occur, including if we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period.

Current wording

Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation or (v) comply with any new or revised financial accounting standards that have different effective dates for public and private companies until those standards would otherwise apply to private companies. However, we have elected to opt out of this extended exemption period discussed in (v) and will therefore comply with new or revised accounting standards on the applicable dates on which the adoption of such standards is required for non-emerging growth companies. We may take advantage of these other exemptions until we cease to be an emerging growth company which will occur no later than December 31, 2026, which marks the last day of the fiscal year following the fifth anniversary of the date of our initial public offering of common equity securities. We will cease to be an emerging growth company prior to the end of such five-year period if we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or we issue more than $1.0 billion of non-convertible debt in any three-year period.