zSpace (ZSPC) Registration Filing summary

Company overview and business model

• Provides AR/VR educational technology solutions for K-12 and Career & Technical Education (CTE) markets, with proprietary hardware and software enabling 3D learning without goggles or glasses.

• Platform is implemented in over 3,500 U.S. public school districts and more than 50 countries, with direct sales in the U.S. and reseller-based international distribution.

• Product suite includes Inspire laptops, tracked stylus, a broad software library, and professional development services.

• Focused on scaling in the U.S., expanding internationally, investing in R&D, and acquiring software assets to drive growth.

Financial performance and metrics

• Revenue for the year ended December 31, 2023 was $43.9M, up 23% from $35.8M in 2022; U.S. revenue comprised 88% in 2023.

• Net loss for 2023 was $13.0M, compared to $15.2M in 2022; net loss for the six months ended June 30, 2024 was $17.0M.

• Gross profit margin for the three months ended September 30, 2024 is expected to be 45%, up from 39% in the prior year period.

• Adjusted EBITDA for the six months ended June 30, 2024 was $(7.9)M; for 2023, $(6.9)M.

• As of June 30, 2024, cash and cash equivalents were $3.0M; working capital deficit was $(13.7)M.

• Accumulated deficit as of June 30, 2024 was $(286.6)M; going concern risk disclosed.

Use of proceeds and capital allocation

• Net proceeds of ~$7.0M (assuming $5.00/share IPO price) to be used for growth initiatives: funding product commitments, software development (including acquisitions), sales and marketing, and working capital.

• Majority of proceeds expected to be directed to product commitments and software development.