10-K/A

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Non-accelerated filer

Smaller reporting company

Emerging growth company

ASPEN AEROGELS, INC.

Consolidated Balance Sheets


	December 31,
	2025			2024
	(In thousands, except share and per share data)
Assets
Current assets:
Cash and cash equivalents	$	156,857		$	220,882
Restricted cash		1,713			394
Accounts receivable, net of allowances of $4,172 and $1,265		35,270			109,104
Inventories		38,249			47,551
Prepaid expenses and other current assets		9,964			31,517
Total current assets		242,053			409,448
Property, plant and equipment, net		98,400			459,276
Assets held for sale		32,712			—
Operating lease right-of-use assets		18,014			20,854
Finance lease right-of-use assets		6,131			—
Other long-term assets		9,369			5,566
Total assets	$	406,679		$	895,144
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	13,243		$	44,361
Accrued expenses		12,952			36,495
Deferred revenue		1,259			2,199
Finance obligation for sale and leaseback transactions		4,443			4,028
Operating lease liabilities		3,245			3,279
Finance lease liabilities		1,768			—
Long term debt - current portion		25,115			19,750
Total current liabilities		62,025			110,112
Revolving line of credit		14,346			42,131
Long term debt		65,455			94,961
Finance obligation for sale and leaseback transactions long-term		4,953			10,087
Operating lease liabilities long-term		21,138			23,148
Finance lease liabilities long-term		3,244			—
Total liabilities		171,161			280,439
Commitments and contingencies (Note 12)
Stockholders' equity:
Preferred stock, $0.00001 par value; 5,000,000 shares authorized, no shares issued or outstanding at December 31, 2025 and 2024		—			—
Common stock, $0.00001 par value; 250,000,000 shares authorized, 82,711,351 and 82,040,468 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively		—			—
Additional paid-in capital		1,285,297			1,274,932
Accumulated deficit		(1,049,779	)		(660,227	)
Total stockholders' equity		235,518			614,705
Total liabilities and stockholders' equity	$	406,679		$	895,144

See accompanying notes to consolidated financial statements.

ASPEN AEROGELS, INC.

Consolidated Statements of Operations


	Year Ended December 31,
	2025			2024			2023
	(In thousands, except share and per share data)

Revenue	$	271,103		$	452,699		$	238,718
Cost of revenue		225,105			269,802			181,797
Gross profit		45,998			182,897			56,921
Operating expenses
Research and development		13,416			18,050			16,356
Sales and marketing		28,200			35,677			33,008
General and administrative		55,774			71,125			56,760
Restructuring and demobilization costs		17,510			—			—
Loss on disposal of property, plant and equipment		18,162			—			—
Impairment of property, plant and equipment		291,164			3,510			—
Total operating expenses		424,226			128,362			106,124
Income (loss) from operations		(378,228	)		54,535			(49,203	)
Other income (expense)
Interest expense, convertible note - related party		—			(7,550	)		(5,328	)
Interest income (expense), net		(10,716	)		(4,409	)		6,534
Income from Employee Retention Credits		—			—			2,186
Loss on extinguishment of debt		—			(27,487	)		—
Other income		1,786			—			—
Total other income (expense)		(8,930	)		(39,446	)		3,392
Income (loss) before income tax expense		(387,158	)		15,089			(45,811	)
Income tax expense		(2,394	)		(1,714	)		—
Net income (loss)	$	(389,552	)	$	13,375		$	(45,811	)
Net income (loss) per share:
Basic	$	(4.73	)	$	0.17		$	(0.66	)
Diluted	$	(4.73	)	$	0.17		$	(0.66	)
Weighted-average common shares outstanding:
Basic		82,328,484			77,535,121			69,439,034
Diluted		82,328,484			80,306,690			69,439,034

See accompanying notes to consolidated financial statements.

ASPEN AEROGELS, INC.

Consolidated Statements of Stockholders’ Equity

(In thousands, except share and per share data)


	Preferred Stock				Common Stock					Additional Paid-in Capital			Accumulated Deficit			Total Stockholders’ Equity
	Shares		Value		Shares			Value
Balance at December 31, 2022		—	$	—		69,994,963		$	—	$	1,075,226		$	(627,791	)	$	447,435
Net loss		—		—		—			—		—			(45,811	)		(45,811	)
Stock-based compensation expense		—		—		—			—		10,954			—			10,954
Issuance of restricted stock		—		—		44,928			—		—			—			—
Vesting of restricted stock units		—		—		79,151			—		(420	)		—			(420	)
Proceeds from employee stock option exercises		—		—		323,502			—		1,659			—			1,659
Proceeds from registered direct offering of common stock, net of fees and issuance costs of $623		—		—		6,060,607			—		74,377			—			74,377
Issuance costs from underwritten public offering		—		—		—			—		(139	)					(139	)
Balance at December 31, 2023		—	$	—		76,503,151		$	—	$	1,161,657		$	(673,602	)	$	488,055
Net income		—		—		—			—		—			13,375			13,375
Stock-based compensation expense		—		—		—			—		10,681			—			10,681
Issuance of restricted stock		—		—		13,264			—		—			—			—
Vesting of restricted stock units		—		—		137,240			—		(1,289	)		—			(1,289	)
Proceeds from employee stock option exercises		—		—		1,254,994			—		10,364			—			10,364
Proceeds from registered direct offering of common stock, net of fees and issuance costs of $686		—		—		4,887,500			—		93,154			—			93,154
Cancellation of restricted stock		—		—		(679,796	)		—		2,174			—			2,174
Employee restricted stock awards withheld for tax		—		—		(75,885	)		—		(1,809	)		—			(1,809	)
Balance at December 31, 2024		—	$	—		82,040,468		$	—	$	1,274,932		$	(660,227	)	$	614,705
Net loss		—		—		—			—		—			(389,552	)		(389,552	)
Stock-based compensation expense		—		—		—			—		8,628			—			8,628
Vesting of restricted stock units		—		—		199,297			—		(765	)		—			(765	)
Proceeds from employee stock option exercises		—		—		407,316			—		1,718			—			1,718
Issuance costs from offering of common stock		—		—		—			—		205			—			205
Acquisition of variable interest entity		—		—		—			—		403			—			403
Proceeds from employee stock purchase plan		—		—		64,270					176						176
Balance at December 31, 2025		—	$	—		82,711,351		$	—	$	1,285,297		$	(1,049,779	)	$	235,518

See accompanying notes to consolidated financial statements.

ASPEN AEROGELS, INC.

Consolidated Statements of Cash Flows


	Year Ended December 31,
	2025			2024			2023
	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	(389,552	)	$	13,375		$	(45,811	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		45,157			22,526			15,318
Accretion of interest on convertible note - related party		—			7,083			4,403
Amortization of convertible note issuance costs		—			24			37
Amortization of debt issuance costs		3,637			1,139			—
Amortization of debt discount due to modification of convertible note – related party		—			443			888
Loss on extinguishment of debt		—			27,487			—
Deferred financing costs written off		—			1,829			—
Provision for bad debt		3,538			247			(93	)
Stock-based compensation expense		8,628			12,855			10,954
Impairment of property, plant and equipment		291,626			7,613			—
Loss on disposal of property, plant and equipment		18,162			—			—
Deferred taxes		(416	)		—			—
Reduction in the carrying amount of operating lease right-of-use assets		3,534			1,886			2,859
Changes in operating assets and liabilities:
Accounts receivable		70,296			(39,356	)		(12,552	)
Inventories		9,302			(8,362	)		(16,651	)
Prepaid expenses and other assets		18,172			(19,835	)		(7,401	)
Accounts payable		(19,453	)		7,341			4,583
Accrued expenses		(23,310	)		11,855			6,808
Deferred revenue		(940	)		(117	)		(3,530	)
Operating lease and other liabilities		(5,509	)		(2,484	)		(2,424	)
Net cash provided by (used in) operating activities		32,872			45,549			(42,612	)
Cash flows from investing activities:
Capital expenditures		(37,449	)		(86,262	)		(175,455	)
Net cash used in investing activities		(37,449	)		(86,262	)		(175,455	)
Cash flows from financing activities:
Proceeds from employee stock option exercises		1,718			10,364			1,659
Payments made for employee restricted stock tax withholdings		(765	)		(1,289	)		(420	)
Proceeds from registered direct offering of common stock		—			93,840			75,000
Fees and issuance costs from registered direct offering of common stock		(28	)		(686	)		(623	)
Proceeds from employee stock purchase plan		176			—			—
Fees and issuance costs from private placement of common stock		—			—			(139	)
Repayment of convertible note		—			(150,029	)		—
Repayment of term loan		(26,000	)		(6,500	)		—
Proceeds from term loan		—			125,000			—
Issuance costs from term loan and revolving line of credit		—			(5,797	)		—
Proceeds from revolving line of credit		—			43,000			—
Repayment of revolving line of credit		(28,000	)		—			—
Proceeds from sale and leaseback transactions		—			14,983			—
Repayment of lease and other finance obligations		(5,230	)		(868	)		—
Net cash (used in) provided by financing activities		(58,129	)		122,018			75,477
Net (decrease) increase in cash, cash equivalents and restricted cash		(62,706	)		81,305			(142,590	)
Cash, cash equivalents and restricted cash at beginning of period		221,276			139,971			282,561
Cash, cash equivalents and restricted cash at end of period	$	158,570		$	221,276		$	139,971
Supplemental disclosures of cash flow information:
Interest paid	$	12,220		$	7,007		$	1
Income taxes paid	$	4,134		$	—		$	—
Supplemental disclosures of non-cash activities:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	24		$	5,131		$	10,380
Capitalized Interest	$	—		$	—		$	6,084
Changes in accrued capital expenditures	$	(11,665	)	$	(14,074	)	$	(8,217	)

See accompanying notes to consolidated financial statements.

ASPEN AEROGELS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Description of Business

Nature of Business

Aspen Aerogels, Inc. (the Company) is an aerogel technology company that designs, develops and manufactures innovative, high-performance aerogel materials used primarily in the energy industrial, sustainable insulation materials, and electric vehicle (EV) markets. The Company has provided high-performance aerogel insulation to the energy industrial and sustainable insulation markets for nearly two decades. The Company has developed and commercialized its proprietary line of PyroThin® aerogel thermal barriers for use in battery packs in EVs. The Company's core business is organized into two reportable segments: Thermal Barrier and Energy Industrial.

The Company maintains its corporate offices in Northborough, Massachusetts. The Company has five wholly owned subsidiaries: Aspen Aerogels Rhode Island, LLC (Aspen RI), Aspen Aerogels Germany, GmbH, Aspen Aerogels Georgia, LLC (Aspen Georgia), Aspen Aerogels Mexico Holdings, LLC (Aspen Mexico), and OPE Manufacturer Mexico S de RL de CV (OPE), a maquiladora located in Mexico. OPE was established under an agreement between the Company and Prodensa Servicios de Consultora (Prodensa) during 2022 to assemble thermal barrier PyroThin products and operate an automated fabrication facility for PyroThin. Pursuant to the agreement, Prodensa owned OPE and charged a management fee, and the Company had an option to purchase OPE from Prodensa after a period of 18 months. The Company subsequently purchased OPE for a nominal value in accordance with the terms of the agreement. During the period between inception and the exercise of the option to purchase OPE, OPE operations were consolidated within the Company financial statements as OPE was a variable interest entity (VIE) with the Company as the primary beneficiary. The purchase of OPE was accounted for as an equity transaction.

Liquidity

During the year ended December 31, 2025, the Company incurred a net loss of $389.6 million, generated $32.9 million of cash from operations and used $37.4 million of cash for capital expenditures. The Company had unrestricted cash and cash equivalents of $156.9 million as of December 31, 2025.

In January 2024 and September 2024, the Company entered into sale and leaseback arrangements, pursuant to which the Company sold certain equipment to an equipment leasing company for one-time cash payments of $5.0 million and $10.0 million, respectively, and leased back such equipment from the leasing company. The associated monthly lease rents will be paid over the lease term of three years.

On August 19, 2024, the Company and Aspen RI (each, a Borrower and collectively, the Borrowers) entered into a Credit, Security and Guaranty Agreement (the Credit Agreement and the facilities provided thereunder, collectively, the MidCap Loan Facility) with MidCap Funding IV Trust, as agent (the Agent), MidCap Financial Trust, as term loan servicer (the Term Loan Servicer), and the financial institutions or other entities from time to time party thereto as lenders (the Lenders), with respect to the MidCap Loan Facility, which is comprised of (i) the Term Loan Facility in an aggregate principal amount of $125.0 million (the Term Loan Facility) and (ii) the Revolving Facility in an aggregate principal amount not to exceed the lesser of $100.0 million and the value of the borrowing base (defined as the sum of (x) 85% of certain eligible accounts of the Borrowers and (y) the lesser of 85% of the NOLV (as defined in the Credit Agreement) or 85% of the cost of certain eligible inventory of the Borrowers (the Borrowing Base) (the Revolving Facility). At closing of the transactions contemplated by the Credit Agreement, the Company drew $125.0 million from the Term Loan Facility and $43.0 million from the Revolving Facility. The proceeds of the borrowings at closing, net of fees and costs, were used to repurchase the 2022 Convertible Note (as defined below) for $150.0 million and for general corporate purposes. The amount available to the Company at December 31, 2025 under the Revolving Facility was $9.5 million.

On May 6, 2025, the Credit Agreement was amended to add Aspen Georgia as a Borrower and to amend the minimum Liquidity, the minimum EBITDA and the Liquidity amount trigger for a Cash Dominion Event (each as defined in the Amended MidCap Loan Facility (as defined in Note (7))).

On December 16, 2025, the Credit Agreement was further amended to change the applicable minimum Liquidity threshold and to entirely remove the minimum EBITDA financial maintenance covenant.

As of December 31, 2025, the Company is in compliance with the financial covenants set forth in the Amended MidCap Loan Facility. See Note (7) for further details.

In October 2024, the Company entered into an underwriting agreement with Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC (collectively, the Underwriters), pursuant to which the Company issued and sold an aggregate of 4,887,500 shares of the Company’s common stock, which included 637,500 shares pursuant to the Underwriters’ option to purchase additional shares of common stock of the Company, to the Underwriters in a registered underwritten offering (the Offering). The price to the public in the Offering was $20.00 per share. The net proceeds to the Company from the Offering were approximately $93.2 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

In November 2022, the Company entered into a loan agreement (the GM Loan Agreement) with General Motors Holdings LLC (GM), an entity affiliated with General Motors LLC, which provided for a multi-draw senior secured term loan (the GM Loan) in an aggregate principal amount of up to $100.0 million, available to the Company on a delayed draw basis beginning January 1, 2023 to September 30, 2023, subject to certain conditions precedent to funding. In September 2023, the Company amended the GM Loan Agreement to (i) extend the draw period for the GM Loan to a period beginning on the date that is 12 months prior to the date agreed upon by the Company and GM for the start of production at an aerogel manufacturing facility in Statesboro, Georgia (the Statesboro Plant), which construction has since been terminated, and ending on March 31, 2024 (or any later date approved in writing by GM at its sole discretion); (ii) extend the maturity date of the GM Loan from March 31, 2025 to September 30, 2025; and (iii) add financial covenants measured starting from the fiscal quarter ending December 31, 2024 and at the end of each fiscal quarter thereafter. The Company has not drawn, and no longer has the ability to draw on the GM Loan. The associated unamortized deferred financing costs of $1.7 million were written off to interest expense during the year ended December 31, 2024, upon the expiration of the draw period. On August 16, 2024, the Company and GM entered into the a termination letter to terminate and pay off in full all obligations outstanding under the GM Loan Agreement.

The Company expects its existing cash balance will be sufficient to support current operating requirements and capital expenditures required to support the Company’s existing business in the EV and energy industrial markets for at least 12 months from the date of this Annual Report on Form 10-K. However, the Company expects that it will need to supplement its cash balance with anticipated cash flow from operations, as well as potential equity financings, debt financings, equipment leasing, sale-leaseback transactions, customer prepayments, or government grant and loan programs to provide the additional capital necessary to support the Company’s long-term growth strategy.

(2) Summary of Basis of Presentation and Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements of the Company include the accounts of all its subsidiaries which are majority-owned, controlled by the Company or a VIE where the Company is the primary beneficiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

A VIE is an entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The Company consolidates a VIE in accordance with ASC 810, Consolidation when it is the primary beneficiary of such VIE. As primary beneficiary, the Company has both the power to direct the activities that most significantly impact the economic performance of the VIE and a right to receive benefits or absorb losses of the entity that could be potentially significant to the VIE. The Company is required to reconsider its evaluation of whether to consolidate a VIE each reporting period, based upon changes in the facts and circumstances pertaining to the VIE.

The Company evaluates the initial consolidation of each consolidated VIE, which includes a determination of whether the VIE constitutes the definition of a business in accordance with ASC 805, Business Combinations, by considering if substantially all of the fair value of the gross assets within the VIE are concentrated in either a single identifiable asset or group of single identifiable assets. Upon consolidation, the Company recognizes the assets acquired, the liabilities assumed, and any third-party ownership of membership interests as non-controlling interest as of the consolidation or acquisition date, measured at their relative fair values.

Use of Estimates

The preparation of the consolidated financial statements requires the Company to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include allowances for doubtful accounts, sales returns and allowances, assets held for sale, product warranty costs, inventory valuation, the carrying amount of property and equipment, right-of-use assets, lease liabilities, stock-based compensation, and deferred income taxes. The Company evaluates its estimates and assumptions on an on-going basis using historical experience and other factors, including current economic conditions, which are believed to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances warrant. Illiquid credit markets, volatile equity markets, and declines in business investment can increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Cash and Cash Equivalents

Cash equivalents include short-term, highly liquid instruments, which consist of money market accounts and high-quality debt securities issued by the U.S. government via cash sweep accounts. All cash and cash equivalents are maintained with major financial institutions in North America. Deposits with these financial institutions may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and, therefore, bear minimal risk.

Restricted Cash

As of December 31, 2025, the Company had $1.7 million of restricted cash to support its outstanding letters of credit.

Concentration of Credit Risk

Financial instruments, which potentially expose the Company to concentrations of credit risk, consist principally of accounts receivable. The Company’s customers are primarily insulation distributors, insulation contractors, insulation fabricators and select energy and automotive end-users located throughout the world. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral to secure accounts receivable. The Company maintains an allowance for doubtful accounts based on its assessment of the collectability of accounts receivable. The Company reviews the allowance for doubtful accounts quarterly. During the years ended December 31, 2025, 2024, and 2023, the Company recorded a charge for estimated customer uncollectible accounts receivable of $3.5 million, $0.2 million, and $0.1 million, respectively. Allowance for doubtful accounts was $4.2 million and $1.3 million at December 31, 2025 and 2024, respectively. The Company does not have any off-balance-sheet credit exposure related to its customers.

For the year ended December 31, 2025, two customers represented 59% and 9% of total revenue, respectively. For the year ended December 31, 2024, two customers represented 64% and 6% of total revenue, respectively. For the year ended December 31, 2023, two customers represented 41% and 14% of total revenue, respectively.

At December 31, 2025, the Company had two customers which accounted for 41% and 13% of accounts receivable, respectively. At December 31, 2024, the Company had two customers which accounted for 80% and 5% of accounts receivable, respectively.

Inventories

Inventory consists of finished products, work-in-process, and raw materials. Inventories are carried at lower of cost and net realizable value. The Company utilizes a standard costing system including materials, labor, and manufacturing overhead, capitalizing variances between estimated and actual production costs during periods of normal production. Manufacturing overhead is allocated to the costs of conversion based on normal capacity of the Company’s production facility. Abnormal freight, handling costs and material waste are expensed in the period it occurs.

The Company periodically reviews its inventories and makes provisions as necessary for estimated excess, obsolete or damaged goods to ensure values approximate the lower of cost and net realizable value. The amount of any such provision is equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand, selling prices and market conditions.

Prepaid expenses and other current assets

Prepaid expenses and other current assets primarily include value added tax and income tax receivables, prepayments of future services, and payments for pre-billed inventories.

Property, Plant and Equipment, Net

Property, plant and equipment are stated at cost. Expenditures for maintenance and repairs are charged to expense as incurred. Expenditures for major betterments are capitalized as additions to property, plant and equipment.

Depreciation on plant and equipment is calculated on the straight-line method over the estimated useful lives of the assets. Assets related to leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset.

Assets utilized in the Company’s operations that are taken out of service with no future use are charged to cost of revenue or operating expenses, depending on the department in which the asset was utilized. Impairments of construction in progress are charged to operating expenses upon the determination of no future use.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recognition and measurement of a potential impairment is performed on assets grouped with other assets and liabilities at the lowest level where identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to future undiscounted net cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Assets held for sale

A disposal group is reported as held for sale when management has approved or received approval to sell and is committed to a formal plan, the disposal group is available for immediate sale, the disposal group is being actively marketed, the sale is anticipated to occur during the next 12 months and certain other specified criteria are met. A disposal group classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell.

Other Assets

Other assets primarily include long-term deposits and cloud computing costs.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers (ASC 606). See Note (3) for further details.

Warranty

The Company provides warranties for its products and records the estimated cost within cost of revenue in the period that the related revenue is recorded. The Company’s standard warranty period extends to one year from the date of shipment. This standard warranty provides that the Company’s products will be free from defects in material and workmanship, and will, under normal use, conform to the specifications for the product.

The Company’s products may be utilized in systems that involve new technical demands and new configurations. Accordingly, the Company regularly reviews and assesses whether warranty reserves should be recorded in the period the related revenue is recorded. For an initial shipment of product for use in a system with new technical demands or new configurations and where the

Company is unsure of meeting the customer’s specifications, the Company will defer the recognition of product revenue and related costs until written customer acceptance is obtained.

Shipping and Handling Costs

Shipping and handling costs are classified as a component of cost of revenue. Customer payments of shipping and handling costs are recorded as product revenue.

Stock-based Compensation

The Company grants share-based awards to its employees and non-employee directors. All share-based awards granted, including grants of stock options, restricted stock and restricted stock units (RSUs), are recognized in the statement of operations based on their fair value as of the date of grant. Expense is recognized on a straight-line basis over the requisite service period for all awards with service conditions. For performance-based awards, the grant date fair value is recognized as expense when the condition is probable of being achieved, and then on a graded basis over the requisite service period.

The Company uses the Black-Scholes option-pricing model to determine the fair value of service-based option awards. The Black-Scholes model requires the use of a number of complex and subjective assumptions including fair value of the underlying security, the expected volatility of the underlying security, a risk-free interest rate and the expected term of the option.

The fair value of restricted stock and RSUs is determined using the closing price of the Company’s common stock on the date of grant. All shares of restricted stock are not transferable until vested. Restricted stock, or RSUs, issued to non-employee directors typically vests over a one-year period from the date of issuance. RSUs are issued to employees and typically vest over a three-year period from the date of issuance. The fair value of restricted stock and RSUs upon which vesting is solely service-based is expensed ratably over the vesting period. If the service condition for shares of restricted stock is not met for any reason, the shares of unvested restricted stock will be forfeited and returned to the Company.

For stock awards that contain a market condition, the Company uses the Monte-Carlo simulation model to determine the fair value of the awards. In addition to the input assumptions used in the Black-Scholes model, the Monte-Carlo simulation model factors the probability that the specific market condition may or may not be satisfied into the valuation. Stock-based compensation expense for awards with a market condition is recognized on a straight-line basis over the requisite service period for each such award.

Research and Development

Costs incurred in the Company’s research and development activities include compensation and related costs, services provided by third-party contractors, materials and supplies and are classified as research and development expenses as incurred.

Earnings per Share

The Company calculates net income (loss) per common share based on the weighted-average number of common shares outstanding during each period. Potential common stock equivalents are determined using the treasury stock method. The weighted-average number of common shares included in the computation of diluted net income (loss) gives effect to all potentially dilutive common equivalent shares, including outstanding stock options and RSUs. Common equivalent shares are excluded from the computation of diluted net loss per share if their effect is antidilutive.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. The Company accounts for uncertain tax positions using a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Differences between tax positions taken in

a tax return and amounts recognized in the financial statements are recorded as adjustments to income taxes payable or receivable, or adjustments to deferred taxes, or both. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes penalties and interest related to uncertain tax positions, if any, as a component of income tax expense.

Segments

Operating segments are identified as components of an enterprise about which separate, discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company’s chief operating decision maker reviews consolidated operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company presently views its operations and manages its business as two operating segments.

Leases

The Company accounts for leases in accordance with FASB ASC Topic 842, Leases. The Company determines whether an arrangement is a lease at inception. For leases where the Company is the lessee, a lease liability and a right-of-use (ROU) asset is recognized for all leases, with the exception of short-term leases with terms of 12 months or less. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s payment obligations under the lease.

Operating lease ROU assets and liabilities are recognized based on the present value of lease payments over the lease term. For finance leases, the lease liability is initially measured in the same manner and date as for operating leases and is subsequently presented at amortized cost using the effective interest method. To measure its lease liabilities, the Company uses its incremental borrowing rate or the rate implicit in the lease, if available. The Company calculates its incremental borrowing rate using a synthetic credit rating analysis based on Moody’s Building Materials Industry Rating Methodology. ROU assets also include any direct costs and prepaid lease payments but exclude any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Finance lease ROU assets are generally amortized on a straight-line basis over the lease term with the interest expense on the lease liability recorded using the interest method. The amortization and interest expense are recorded separately in the Consolidated Statement of Operations. For operating leases, the amortization of the ROU asset and the interest expense on the lease liability are not separately recorded; rather, the lease cost is recognized on a straight-line basis over the lease term as a single-line item in the Consolidated Statement of Operations.

The Company elected the short-term lease recognition exemption for all leases that qualify. For leases that qualify for this exemption, the Company does not recognize ROU assets or lease liabilities. For lease agreements with lease and non-lease components, the Company accounts for each component separately. However, in the case of equipment leases, the Company accounts for lease and non-lease components as a single component. See Note (11) for further details.

Sale and Leaseback Accounting

The Company has entered into sale and leaseback transactions for certain equipment within its plants. Due to the Company not meeting criteria to account for the transfer of the assets as a sale, sale accounting is precluded. Accordingly, the Company uses the financing method to account for these transactions.

Under the financing method of accounting for a sale and leaseback, the Company does not derecognize the assets and does not recognize as revenue any of the sale proceeds received from the lessor that contractually constitutes payment to acquire the assets subject to these arrangements. Instead, the sale proceeds received are accounted for as finance obligations and leaseback payments made by the Company are allocated between interest expense and a reduction to the finance obligation. Interest on the finance obligation is calculated using the Company’s incremental borrowing rate at the inception of the arrangement on the outstanding finance obligation.

Foreign Currency Transactions

The Company converts foreign currency transactions recognized in the Consolidated Statements of Operations to U.S. dollars by applying the exchange rate prevailing on the date of the transaction. Gains and losses arising from foreign currency transactions and the effects of remeasuring monetary assets and liabilities are recorded in general and administrative expenses, net in the Consolidated Statements of Operations. The Company had foreign exchange losses of $0.5 million and $2.8 million for the fiscal years ended December 31, 2025 and 2024, respectively. For the fiscal year ended December 31, 2023, the Company had foreign exchange gains of $0.5 million.

Recently Issued Accounting Standards

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies. Recently issued standards typically do not require adoption until a future effective date. Prior to their effective date, the Company evaluates the pronouncements to determine the potential effects of adoption to its consolidated financial statements.

Standards Implemented Since December 31, 2024

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures (ASU 2023-09) that requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures including additional information about income taxes paid. Effective January 1, 2025, the Company adopted ASU 2023-09 on a prospective basis. See Note (17) for more information.

Standards to be Implemented After December 31, 2025

Although there are several other new accounting pronouncements issued by the FASB, the Company does not believe any of these accounting pronouncements had or will have a material impact on its Consolidated Financial Statements.

The Company believes that the impact of recently issued accounting standards that are not yet effective will not have a material impact on its consolidated financial statements.

(3) Revenue from Contracts with Customers

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (i) identification of the contract with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the separate performance obligations in the contract; and (v) recognition of the revenue associated with performance obligations as they are satisfied. The Company applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone-selling prices of the promised products or services underlying each performance obligation. The Company determines standalone-selling prices based on the price at which the performance obligation is sold separately. If the standalone-selling price is not observable through past transactions, the Company estimates the standalone-selling price considering available information such as market conditions and internally approved pricing guidelines related to the performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph ASC 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. The Company did not have any contracts outstanding at either December 31, 2025 or December 31, 2024 and did not enter into any contracts during each of the years ended December 31, 2025 and 2024 that contained a significant financing component.

The Company records deferred revenue for product sales when (i) the Company has delivered products, but other revenue recognition criteria have not been satisfied, or (ii) payments have been received in advance of the completion of required performance obligations.

Thermal Barriers

The Company supplies fabricated, multi-part thermal barriers for use in battery packs in the EV market. These thermal barriers are customized to meet customer specifications. Although thermal barrier products are customized with no alternative use to the Company, the Company does not always have an enforceable right to payment. Under the provisions of ASC 606, the Company recognizes revenue at a point in time when transfer of the control of the products is passed to the customer according to the terms of the contract, including under bill and hold arrangements. The timing of revenue recognition is assessed on a contract-by-contract basis.

Energy Industrial

The Company generally enters into contracts containing one type of performance obligation. For a majority of the contracts, the Company recognizes revenue at a point in time when transfer of control of the products is passed to the customer, which is generally upon delivery according to contractual shipping terms within customer purchase orders. For a limited number of customer arrangements for customized products with no alternative use to the Company and an enforceable right to payment for progress completed to date, the Company recognizes revenue over time using units of production to measure progress toward satisfying the performance obligations. Units of production represent work performed as we do not generate significant work in process and thereby best depicts the transfer of control to the customer. Customer invoicing terms for contracts for which revenue is recognized under the over time methodology are typically based on certain milestones within the production and delivery schedule. The timing of revenue recognition is assessed on a contract-by-contract basis.

The Company also enters into rebate agreements with certain customers. These agreements may be considered an additional performance obligation of the Company or variable consideration within a contract. Rebates are recorded as a reduction of revenue in the period the related revenue is recognized. A corresponding liability is recorded as a component of deferred revenue on the consolidated balance sheets. These arrangements are primarily based on the customer attaining contractually specified sales volumes.

The Company estimates the amount of its sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related revenue is recognized. The Company currently estimates return liabilities using historical rates of return, current quarter credit sales, and specific items of exposure on a contract-by-contract basis. Sales return reserves were approximately $0.3 million at both December 31, 2025 and December 31, 2024.

Shipping and Handling Costs

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in the cost of product revenue. The associated amount of revenue recognized includes the consideration to which the Company expects to be entitled to receive in exchange for incurring these shipping and handling costs.

Disaggregation of Revenue

In the following tables, revenue is disaggregated by primary geographical region and source of revenue:


	December 31, 2025
	U.S.		International		Total
	(In thousands)
Geographical region
Asia	$	—	$	31,129	$	31,129
Canada		—		2,466		2,466
Europe		—		17,870		17,870
Latin America		—		47,556		47,556
United States		172,082		—		172,082
Total revenue	$	172,082	$	99,021	$	271,103

Source of revenue
Energy industrial	$	54,637	$	47,561	$	102,198
Thermal barrier		117,445		51,460		168,905
Total revenue	$	172,082	$	99,021	$	271,103


	December 31, 2024
	U.S.		International		Total
	(In thousands)
Geographical region
Asia	$	—	$	29,321	$	29,321
Canada		—		19,265		19,265
Europe		—		45,027		45,027
Latin America		—		100,568		100,568
United States		258,518		—		258,518
Total revenue	$	258,518	$	194,181	$	452,699

Source of revenue
Energy industrial	$	63,761	$	82,106	$	145,867
Thermal barrier		194,757		112,075		306,832
Total revenue	$	258,518	$	194,181	$	452,699


	December 31, 2023
	U.S.		International		Total
	(In thousands)
Geographical region
Asia	$	—	$	35,698	$	35,698
Canada		—		2,033		2,033
Europe		—		42,731		42,731
Latin America		—		7,219		7,219
United States		151,037		—		151,037
Total revenue	$	151,037	$	87,681	$	238,718

Source of revenue
Energy industrial	$	52,838	$	75,801	$	128,639
Thermal barrier		98,199		11,880		110,079
Total revenue	$	151,037	$	87,681	$	238,718

Contract Balances

The following table presents changes in the Company’s contract liabilities during the year ended December 31, 2025:


	Balance at December 31, 2024		Additions		Deductions			Balance at December 31, 2025
	(In thousands)
Contract liabilities
Deferred revenue
Energy industrial	$	2,199	$	1,942	$	(2,882	)	$	1,259
Total contract liabilities	$	2,199	$	1,942	$	(2,882	)	$	1,259

During the year ended December 31, 2025, the Company recognized $2.2 million of revenue that was included in deferred revenue at December 31, 2024.

A contract asset is recorded when the Company satisfies a performance obligation by transferring a promised good or service and has earned the right to consideration from its customer. When there is a conditional right to consideration, these items are included within other assets on the consolidated balance sheets. When there is an unconditional right to consideration, these items are included within accounts receivable on the consolidated balance sheets.

A contract liability is recorded when consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services under the terms of the contract. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met.

(4) Inventories

Inventories consist of the following:


	December 31,
	2025		2024
	(In thousands)
Raw material	$	8,179	$	13,671
Work in process		5,522		9,664
Finished goods		24,548		24,216
Total	$	38,249	$	47,551

(5) Property, Plant and Equipment, Net

Property, plant and equipment consist of the following:


	December 31,
	2025			2024			Useful life
	(In thousands)
Construction in progress	$	9,258		$	352,567		—
Buildings		27,045			27,032		30 years
Machinery and equipment		224,619			201,789		3 — 10 years
Computer equipment and software		7,760			9,794		3 years
Leasehold improvements		25,561			24,843		Shorter of useful life or lease term
Total		294,243			616,025
Accumulated depreciation and amortization		(195,843	)		(156,749	)
Property, plant and equipment, net	$	98,400		$	459,276

Depreciation expense was $45.2 million, $22.5 million and $15.3 million for the years ended December 31, 2025, 2024 and 2023, respectively.

In February 2025, as part of a restructuring plan, the Company decided to cease construction at its previously planned Statesboro Plant and demobilize the site. In connection with the same, the Company adjusted the construction in progress balance to its fair value and recorded impairment charges of $286.6 million during the three months ended March 31, 2025. The Company plans to divest the assets of the Statesboro Plant through broker-assisted sales. At June 30, 2025, certain of the assets of the Statesboro Plant met the criteria to be classified as held for sale and are separately classified on the balance sheet. At December 31, 2025, the remaining assets of the Statesboro Plant met the criteria to be classified as held for sale. At December 31, 2025, the carrying value of assets classified as held for sale is $32.7 million and a loss of $18.2 million was recorded to reflect the remeasured fair value and cost to sell, which is included in loss on disposal of property, plant and equipment in the consolidated statement of operations. The construction in progress balance at December 31, 2025 and December 31, 2024 included $0.0 million and $323.6 million, respectively, for the Statesboro Plant.

During the second quarter of fiscal year 2025, the Company implemented additional actions under the restructuring plan, which included headcount reduction and rationalizing research and development programs. As a result of the restructuring plan, the Company recorded impairment charges of $1.0 million during the year ended December 31, 2025, which are included in impairment of property, plant and equipment in the consolidated statement of operations.

During the fourth quarter of fiscal year 2025, a large Thermal Barrier customer notified the Company of its lower forecasted long-term demand requirements and requested the Company submit a claim for certain losses incurred. Further, EV adoption rates are expected to be lower following the termination in the United States of certain consumer tax incentives for EV purchases. These developments have caused the Company to reassess its capacity requirements. In connection with the same, the Company revised the useful lives of certain assets to align utilization with the revised expected demand and recognized accelerated depreciation of $22.2 million. Additionally, the Company recognized $3.6 million of impairment related to construction in progress assets that are no longer needed due to the lower forecasted demand. The Company submitted the claim with the Thermal Barrier customer in November 2025. See Note (20) for further details.

The Company recorded impairment charges of approximately $7.6 million during the year ended December 31, 2024, for equipment that will no longer be needed in manufacturing following customer directed engineering changes to a part it manufactures and for other property, plant and equipment that have become obsolete following development of new and more efficient equipment. The impairment charges of $7.6 million during the year ended December 31, 2024 consist of $4.1 million impairment included in cost of revenue and $3.5 million included in impairment of equipment under development on the Company's consolidated statement of operations. The Company received reimbursement for the losses incurred in connection with the customer-directed engineering changes which was recorded as an offset to the impairment loss recognized in cost of revenue.

Fair value of long-lived assets is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved and a review of appraisals or other market indicators and management estimates. As such, the Company has determined that the fair value measurements of long-lived assets principally fall in Level 3 of the fair value hierarchy.

(6) Accrued Expenses

Accrued expenses consist of the following:


	December 31,
	2025		2024
	(In thousands)
Employee compensation	$	2,929	$	19,371
Other accrued expenses		10,023		17,124
Total	$	12,952	$	36,495

(7) Debt

On August 19, 2024, the Borrowers entered into the Credit Agreement, by and among the Borrowers, the Agent, the Lenders and the other parties party thereto as additional guarantors and/or borrowers from time to time. Loans borrowed under the MidCap Loan Facility mature on August 19, 2029.

The MidCap Loan Facility is comprised of (i) the Term Loan Facility in an aggregate principal amount of $125 million and (ii)

the Revolving Facility in an aggregate principal amount not to exceed the lesser of (A) $100 million and (B) the value of the Borrowing Base.

Loans borrowed under the Term Loan Facility bear interest rate equal to Term SOFR (as defined in the Credit Agreement) for a one-month interest period plus 4.50% per year, subject to a Term SOFR floor of 4.50% and a Term SOFR cap of 7.50%. The Term Loan Facility is subject to amortization of principal, payable quarterly on the last day of each quarter, commencing September 30, 2024, in an amount as set forth in the Credit Agreement with the remaining aggregate principal amount payable on the maturity date. The Borrowers are required to pay the Lenders an exit fee of $2.5 million on the maturity date. Additionally, the Borrowers are required to pay an origination fee of $1.3 million annually on the anniversary of the closing date.

Loans borrowed under the Revolving Facility bear an interest rate equal to Term SOFR plus 4.60% per year, subject to a Term SOFR floor of 2.50%. The Revolving Facility has a required minimum balance set at 30% of the average Borrowing Base during the immediate preceding month. The Borrowers are required to pay the Lenders under the Revolving Facility an unused line fee of 0.30% of the average unused availability under the Revolving Facility, subject to the aforementioned minimum balance.

The MidCap Loan Facility is guaranteed by Aspen Mexico and is secured by a lien on substantially all existing and after-acquired assets of the Loan Parties, including the equity interest in Aspen RI, Aspen Mexico and Aspen Georgia owned by the Company, in each case, subject to customary exceptions. At the entrance into the Credit Agreement in August 2024, Aspen Georgia was not a guarantor (and thus not a Loan Party) and its assets were excluded from the collateral under the MidCap Loan Facility. However, as further described below, on May 6, 2025, Aspen Georgia became a Loan Party under the MidCap Loan Facility.

The Credit Agreement includes representations and warranties, affirmative covenants (including reporting obligations), negative covenants and events of default that are usual and customary for facilities of this type, in each case, subject to certain permitted exceptions as set forth therein. The Credit Agreement includes financial covenants for the benefit of the Lenders, including (i) a covenant to maintain Liquidity (as defined therein) equal to or greater than $75.0 million at all times and (ii) a covenant to maintain EBITDA (as defined therein) equal to or greater than the specified applicable amount set forth in the Credit Agreement, tested quarterly with the first test set at $45.0 million commencing with the fiscal quarter ended September 30, 2024.

The Borrowers have the right to prepay the loans outstanding under the MidCap Loan Facility (or, with respect to the Revolving Facility, terminate the commitments thereunder), subject to a premium equal to 3.0% of the amount prepaid or terminated, as applicable, during the first year after the closing date, which premium will be decreased to 2.0% during the second year after the closing date and to 1.0% thereafter. The Borrowers are required to mandatorily prepay the loans outstanding under the Term Loan Facility with, among other things, certain casualty insurance proceeds or proceeds from non-ordinary course assets sales (which will also be subject to the aforementioned premium). The Borrowers are required to mandatorily prepay the balance outstanding under the Revolving Facility (i) if the outstandings exceed the Borrowing Base in an aggregate amount equal to that excess or (ii) upon a cash dominion event of all the funds deposited in the lockbox account during the cash dominion period. A cash dominion event is triggered (x) upon the occurrence of any Specified Event of Default (as defined in the Credit Agreement to include payment default, failure to deliver monthly or annual financials, financial covenant breach or bankruptcy) or any event of default arising from the failure to comply with the requirement to deliver a monthly Borrowing Base certificate, in each case, after any applicable grace period set forth in the Credit Agreement and/or cure rights applicable thereto or (y) if the Liquidity is less than $100 million.

First Amendment to MidCap Loan Facility

On May 6, 2025, the Company, Aspen RI, Aspen Mexico and Aspen Georgia entered into that certain Amendment No. 1 and Joinder to Credit, Security and Guaranty Agreement (Amendment No. 1), by and among the Company, Aspen RI, Aspen Mexico, Aspen Georgia, the Agent, the Term Loan Servicer, and the Lenders party thereto, amending the MidCap Loan Facility.

Under Amendment No. 1, Aspen Georgia became a borrower under the Amended MidCap Loan Facility and has (a) guaranteed the obligations of the Credit Parties (as defined in the Amended MidCap Loan Facility (defined below)) and (b) granted Agent for the benefits of the Lenders a lien on substantially all of its existing and after-acquired assets, in each case, subject to customary exceptions.

As a result of Amendment No. 1, the applicable margin under the MidCap Loan Facility was amended such that upon the effectiveness of Amendment No. 1, (a) (i) Loans borrowed under the Term Loan Facility will bear an interest rate equal to Term SOFR for one-month interest period plus 5.00% per year, subject to a Term SOFR floor of 4.50% and a Term SOFR cap of 7.50% and (ii) Loans borrowed under the Revolving Facility will bear an interest rate equal to Term SOFR for one-month interest period plus 5.10% per year, subject to a Term SOFR floor of 2.50%, in each case of (i) and (ii), until the first Pricing Date (as defined in the

Amended MidCap Loan Facility as the date five business days after the delivery of a compliance certificate to the Agent for the most recently ended fiscal quarter) after December 31, 2025 and (b) on such first Pricing Date and as thereafter adjusted on each Pricing Date (i) Loans borrowed under the Term Loan Facility will bear interest equal to Term SOFR for one-month interest period plus a margin equal to (x) if the recently reported EBITDA (as defined in the Amended MidCap Loan Facility) is equal to or above $50 million, 4.50% or (y) if the recently reported EBITDA is below $50 million, 5.00%, in each case of (x) and (y), subject to a Term SOFR floor of 4.50% and a Term SOFR cap of 7.50%, and (ii) Loans borrowed under the Revolving Facility will bear an interest rate equal to Term SOFR for one-month interest period plus a margin equal to (x) if the recently reported EBITDA is equal to or above $50 million, 4.60% or (y) if the recently reported EBITDA is below $50 million, 5.10%, in each case of (x) and (y), subject to a Term SOFR floor of 2.50%. The schedule for amortization of principal of the Term Loan Facility (which remains payable on the last day of each fiscal quarter with remaining principal amount payable on the maturity date) was also updated with new amounts as set forth in the Amended MidCap Loan Facility.

Pursuant to Amendment No. 1, the financial covenants under the MidCap Loan Facility were amended such that (a) the minimum Liquidity which must be maintained at all times has changed from $75 million to an amount equal to the greater of (i) $50 million and (ii) 85% of the then aggregate outstanding principal amount of the Term Loan Facility and (b) the minimum EBITDA level to be tested quarterly was changed to reflect a new range from $15 million to $50 million, with the next test set at $15 million with respect to the fiscal quarter ended March 31, 2026 and a $50 million level applicable commencing with the fiscal quarter ended December 31, 2027 and thereafter. The Liquidity amount trigger of a cash dominion event was also reduced from $100 million to an amount equal to the greater of (i) $50 million and (ii) 85% of the then aggregate outstanding principal amount of the Term Loan Facility.

Second Amendment to MidCap Loan Facility

On December 16, 2025, the Company, Aspen RI, Aspen Mexico and Aspen Georgia (together with the Company, Aspen RI and Aspen Mexico, collectively, the Credit Parties) entered into that certain Amendment No. 2 to Credit, Security and Guaranty Agreement (Amendment No. 2), by and among the Credit Parties, the Agent, the Term Loan Servicer, and the Lenders party thereto, which amends the Credit Agreement and the facilities provided thereunder, (the MidCap Loan Facility, as amended by Amendment No. 1 and Amendment No. 2, the Amended MidCap Loan Facility), by and among the Credit Parties, the Agent, the Term Loan Servicer, the Lenders, and the other parties party thereto as additional guarantors and/or borrowers from time to time.

Pursuant to Amendment No. 2, the financial covenants under the MidCap Loan Facility have been amended such that (a) the applicable minimum liquidity threshold (both for (i) the minimum liquidity financial covenant, which must be maintained by the Company at all times and (ii) the “Cash Dominion Event” definition for purposes of triggering cash dominion) has changed from (i) an amount equal to the greater of (x) $50 million and (y) 85% of the then aggregate outstanding principal amount of the Term Loan (as defined in the Amended MidCap Loan Facility) to (ii) an amount equal to the greater of (x) $50 million and (y) 100% of the then aggregate outstanding principal amount of the Term Loan and (b) the minimum EBITDA (as defined in the Amended MidCap Loan Facility) financial maintenance covenant has been removed entirely.

In addition, the mandatory prepayment provisions were revised to make clear that any mandatory prepayment of the loans under the Amended MidCap Loan Facility made with proceeds of an asset sale will be used to reduce the Company’s required amortization payments in direct order of maturity, and the basket for making permitted acquisitions under the Amended MidCap Loan Facility was reduced.

MidCap term loan consists of the following:


	December 31,			December 31,
	2025			2024
	(In thousands)
Term loan		92,500			118,500
Exit fee		1,152			264
Term loan issuance costs		(3,082	)		(4,053	)
Total debt		90,570			114,711
Current portion		25,115			19,750
Long term portion		65,455			94,961

MidCap revolving line of credit consists of the following:


	December 31,			December 31,
	2025			2024
	(In thousands)
Revolving line of credit		15,000			43,000
Exit fee		45			-
Revolving line of credit issuance costs		(699	)		(869	)
Total debt		14,346			42,131

During the year ended December 31, 2025, the Company repaid $28.0 million of the revolving line of credit. The amount available to the Company at December 31, 2025 under the Revolving Facility was $9.5 million.

(8) Convertible Note - Related Party

2022 Convertible Note

On February 15, 2022, the Company entered into a note purchase agreement (the Note Purchase Agreement) with Wood River Capital LLC (Wood River), an entity affiliated with Koch Strategic Platforms, LLC (Koch), relating to the issuance and sale to Wood River of convertible note (the 2022 Convertible Note) in the aggregate principal amount of $100.0 million. The transactions contemplated by the Note Purchase Agreement closed on February 18, 2022. The maturity date of the 2022 Convertible Note was February 18, 2027, subject to earlier conversion, redemption, or repurchase.

The 2022 Convertible Note was a senior unsecured obligation of the Company and ranked equal in right of payment to all senior unsecured indebtedness of the Company and would rank senior in right of payment to any indebtedness that was contractually subordinated to the 2022 Convertible Note.

On August 19, 2024, the Company entered into a note purchase and sale agreement with Wood River (the Note Repurchase Agreement), pursuant to which the Company repurchased from Wood River $123.9 million in aggregate capitalized principal amount (inclusive of PIK interest paid through June 30, 2024) of the 2022 Convertible Note, such aggregate amount being the entire outstanding amount of the 2022 Convertible Note, for a total purchase price of $150.0 million in cash, which amount equals to the Redemption Price (as defined in the 2022 Convertible Note). Pursuant to the Note Repurchase Agreement, all rights and obligations, covenants and agreements under the 2022 Convertible Note and the Note Purchase Agreement were satisfied and discharged. The Redemption Price less capitalized principal amount and accrued interest to redemption date, of $24.6 million along with unamortized deferred issuance costs was classified in the income statement as Loss on Extinguishment of Debt.

(9) Related Party Transactions

2022 Convertible Note

During the year ended December 31, 2022, the Company issued the 2022 Convertible Note to Wood River, an entity affiliated with Koch. The Company repurchased the 2022 Convertible Note on August 19, 2024. See Note (8) for additional details. For the years ended December 31, 2024 and 2023 interest expense on the related party convertible note was $7.5 million and $5.3 million, respectively.

Other

The Company had $2.8 million in accounts payable as of December 31, 2023, due to Wood River for project management service. On March 27, 2024, the Company entered into a Settlement and Release Agreement with Wood River to settle the accounts payable for $1.2 million, which was paid during the three months ended June 30, 2024.

(10) Other Income (Expense)

Interest income (expense), net

For the years ended December 31, 2025, 2024, and 2023 interest income (expense), net, included interest income of $7.5 million, $5.7 million, and $8.7 million, respectively, primarily related to interest earned on unrestricted cash and cash equivalents.

For the years ended December 31, 2025 and 2024, interest income (expense), net included interest expense related to the Amended MidCap Loan Facility of $15.9 million and $6.9 million, respectively.

Employee Retention Credits

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was signed into law, providing numerous tax provisions and other stimulus measures, including the Employee Retention Credit: a refundable tax credit against certain employment taxes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021 extended and expanded the availability of the Employee Retention Credits. The CARES Act provides an employee retention credit (CARES Employee Retention Credit), which is a refundable tax credit against certain employment taxes of up to $5,000 per employee for eligible employers. The tax credit is equal to 50% of qualified wages paid to employees during a quarter, capped at $10,000 of qualified wages per employee through December 31, 2020. Additional relief provisions were passed by the United States government, which extend and slightly expand the qualified wage caps on these credits through December 31, 2021. Based on these additional provisions, the tax credit is now equal to 70% of qualified wages paid to employees during a quarter, and the limit on qualified wages per employee has been increased to $10,000 of qualified wages per quarter. The Company qualified for the tax credit under the CARES Act for qualified wages for the years ended December 31, 2020 and 2021. In September 2023, the Company submitted filings for CARES Employee Retention Credits totaling $2.2 million that are reported in the accompanying condensed consolidated balance sheet within prepaid expenses and other current assets as of December 31, 2023 and 2024, and in the accompanying statement of operations for the year ended December 31, 2023, which amounts were collected during the year ended December 31, 2025.

(11) Leases & Sale and Leaseback

The Company leases office, laboratory, warehouse and fabrication space in Massachusetts, Rhode Island and Monterrey, Mexico under operating leases. Under these agreements, the Company is obligated to pay annual rent, real estate taxes, and certain other operating expenses. The Company also leases equipment under operating and finance leases. The Company’s leases expire at various dates through 2034.

Maturities of operating lease liabilities at December 31, 2025 are as follows:


Year	Operating Leases			Finance Leases
	(In thousands)
2026		5,912			2,177
2027		5,071			2,881
2028		4,984			370
2029		4,540			152
2030		4,486			105
Thereafter		11,108			-
Total lease payments		36,101			5,685
Less imputed interest		(11,718	)		(673	)
Total lease liabilities	$	24,383		$	5,012

The Company incurred operating lease costs of $6.4 million and $5.9 million during the years ended December 31, 2025 and 2024, respectively. Cash payments related to operating lease liabilities were $6.2 million and $5.6 million during the years ended December 31, 2025 and 2024, respectively. At December 31, 2025, the weighted average remaining lease term for operating leases was 6.9 years. At December 31, 2025, the weighted average discount rate for operating leases was 12.1%.

The Company incurred finance lease costs of $1.1 million during the year ended December 31, 2025. Cash payments related to finance lease liabilities were $2.0 million during the year ended December 31, 2025. The Company did not incur any finance lease costs or make any cash payments during the comparable 2024 period. As of December 31, 2025, the weighted average remaining lease term for finance leases was 2.5 years and the weighted average discount rate for finance leases was 10.1%.

Sale and leaseback transaction

In January and September 2024, the Company entered into sale and leaseback arrangements, pursuant to which the Company sold certain equipment to an equipment leasing company for one-time cash payments of $5.0 million and $10.0 million, respectively, leased back such equipment from the leasing company. The transactions were considered as failed sale and leaseback transactions and

accordingly, were accounted as financing transactions. The sale proceeds received were accounted for as finance obligations. The monthly lease rents will be paid over the term of three years and will be allocated between interest expense and principal repayment of the financial liability.

The outstanding finance obligation balance as of December 31, 2025 was $9.4 million. Maturities of finance obligations for sale and leaseback at December 31, 2025 are as follows:


Year	Finance Obligation
	(In thousands)
2026		5,601
2027		5,279
Total lease payments		10,880
Less imputed interest		(1,484	)
Total lease liabilities	$	9,396

(12) Commitments and Contingencies

Cloud Computing Agreement

The Company is party to multiple cloud computing agreements that are service contracts for enterprise resource planning (ERP) software programs and payroll services. The amortization period of the cloud computing agreement for the existing ERP software program was adjusted during the year ended December 31, 2024, to align with implementation of a new ERP software and is now fully amortized. During the year ended December 31, 2025, the Company updated the implementation date of the new ERP software to January 2026, which will begin to amortize thereafter.

The amortization associated with the payroll services agreement began during the year ended December 31, 2024 and is being amortized over a period of five years.

The capitalized implementation costs are classified on the consolidated balance sheets as follows:


	December 31,			December 31,
	2025			2024
	(In thousands)
Cloud computing costs included in other current assets	$	37		$	637
Cloud computing costs included in other assets		8,709			4,299
Amortization of cloud computing costs		(1,621	)		(1,053	)
Total capitalized cloud computing costs	$	7,125		$	3,883

Thermal Barrier Contract

The Company is party to production contracts with GM to supply fabricated, multi-part thermal barriers (Barriers) for use in the battery system of its current and next-generation EVs (Contracts). Pursuant to the Contracts, the Company is obligated to supply Barriers at fixed periodic prices and at volumes to be specified by the OEM up to a daily maximum quantity through the respective terms of the agreements, which expire at various times from 2030 through 2034 and, in certain cases, may be extended by GM. While the OEM has agreed to purchase its requirement for Barriers from the Company for locations to be designated from time to time by the OEM, it has no obligation to purchase any minimum quantity of Barriers under the Contracts. In addition, the OEM may terminate the Contracts any time and for any or no reason. All other terms of the Contracts are generally consistent with the OEM’s standard purchase terms, including quality and warranty provisions that are customary in the automotive industry.

Charges for Engineering Change

In January 2024, the Company was notified by a customer of an engineering change to one of the parts the Company manufactures for that customer to enable incremental productivity and support a set of broader system level changes that could drive higher demand for its parts. The Company submitted claims to the customer for reimbursement for estimated inventory and equipment losses incurred by the Company and its vendors due to potential obsolescence. In connection with the same, during the three months

ended March 31, 2024, the Company recognized a charge of $6.8 million, net of contractual recoverable of $1.9 million, in cost of revenues for inventory obsolescence and impairment of equipment. The claims were fully approved and recovered by December 31, 2024, and the reimbursements were recognized as an offset to the charge the Company recognized in cost of revenues.

Letters of Credit

The Company has provided certain customers with letters of credit securing obligations under commercial contracts. As of December 31, 2025, the Company had $1.7 million of restricted cash to support our outstanding letters of credit. The Company had letters of credit outstanding of $0.4 million at December 31, 2024 and these letters of credit were secured by the Company’s restricted cash.

Federal, State and Local Environmental Regulations

The Company is subject to federal, state and local environmental laws and regulations. These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation. Penalties may be imposed for noncompliance.

Litigation

The Company is, from time to time, a party to litigation that arises in the normal course of its business operations. See Part I, Item 3 (“Legal Proceedings”) of this Annual Report on Form 10-K for a description of certain of the Company’s current legal proceedings. The Company is not presently a party to any litigation for which it believes a loss is probable requiring an amount to be accrued or a possible loss contingency requiring disclosure.

Purchase Commitments

As of December 31, 2025, the Company had purchase commitments of approximately $36.2 million, which included capital commitments of $12.3 million. Purchase commitments related to capital expenditures are anticipated to be spent over the next three years, while the Company's remaining purchase commitments are anticipated to be spent throughout 2026.

Purchase obligations relate primarily to open purchase orders for capital expenditures, inventories, and goods and services. Purchase obligations are entered into with various vendors in the normal course of business and are consistent with the Company's expected requirements.

Warranty

The Company offers warranties to its customers depending upon the specific product.

The Company’s standard warranty period for energy industrial products extends to one year from the date of shipment. This standard warranty provides that the Company’s products will be free from defects in material and workmanship, and will, under normal use, conform to the specifications for the product.

The Company’s thermal barrier products provide quality and warranty provisions customary in the automotive industry.

The Company recorded warranty expense of $0.8 million, $1.4 million, and $0.5 million during the years ended December 31, 2025, 2024, and 2023, respectively.

(13) Stockholders’ Equity

At December 31, 2025 and 2024, the Company was authorized to issue 255,000,000 shares of stock, of which 250,000,000 shares were designated as common stock and 5,000,000 shares were designated as preferred stock.

(14) Employee Benefit Plan

The Company sponsors the Aspen Aerogels, Inc. 401(k) Plan. Under the terms of the plan, the Company’s employees may contribute a percentage of their pretax earnings. During the years ended December 31, 2025, 2024, and 2023, the Company provided matching contributions of $1.4 million, $1.6 million, and $1.5 million, respectively.

(15) Stock Based Compensation

Effective June 12, 2014, the Company adopted the 2014 Employee, Director and Consultant Equity Incentive Plan (the 2014 Equity Plan). Under the 2014 Equity Plan, the Company was authorized to grant incentive stock options (ISOs), non-qualified stock options (NSOs), restricted stock, RSUs and other stock-based awards. Stock options under the 2014 Equity Plan were granted with an exercise price not less than the fair market value of the Company’s common stock at the date of grant.

The Aspen Aerogels 2023 Equity Incentive Plan (the 2023 Equity Plan) was approved by stockholders at the Company’s annual meeting of stockholders held on June 1, 2023 as the successor to the 2014 Equity Plan, and no further awards may be made under the 2014 Equity Plan after that date. Under the 2023 Equity Plan, the Company may grant ISOs, NSOs, restricted stock, RSUs and other stock-based awards. Stock options under the 2023 Equity Plan are to be granted with an exercise price not less than the fair market value of the Company’s common stock at the date of grant. Equity awards granted to employees generally vest over a service period of three to four years. Restricted stock, RSUs and stock options granted to nonemployee directors generally vest over a one-year service period.

The Company’s stockholders approved the Aspen Aerogels Amended and Restated 2023 Equity Incentive Plan (the Restated 2023 Equity Plan) at the Company’s annual meeting of stockholders held on April 30, 2025 (the 2025 Annual Meeting). The Restated 2023 Equity Plan was previously approved by the Company’s Board of Directors (the Board). As amended and restated, the number of shares of the Company’s common stock reserved for issuance under the Restated 2023 Equity Plan has been increased by 3,850,000 shares to 16,971,994 shares and the term of the 2023 Restated Equity Plan has been extended until April 29, 2035. As of December 31, 2025, 4,356,250 shares of common stock were reserved for issuance upon the exercise or vesting of outstanding stock-based awards granted under the Company’s equity incentive plans. Any cancellations or forfeitures of awards outstanding under the Restated 2023 Equity Plan, the 2014 Equity Plan or the 2001 Equity Incentive Plan, as amended, will result in the shares reserved for issuance pursuant to such awards becoming available for grant under the Restated 2023 Equity Plan. As of December 31, 2025, the Company has either reserved in connection with statutory tax withholdings or issued a total of 6,689,149 shares under the Company’s equity incentive plans. As of December 31, 2025, there were 5,926,595 shares of common stock available for future grant under the Restated 2023 Equity Plan.

At the 2025 Annual Meeting, the Company’s stockholders also approved the Aspen Aerogels Employee Stock Purchase Plan (the ESPP). The ESPP was previously approved by the Board. The objective of the ESPP is to offer eligible employees of the Company and its designated subsidiaries the ability to purchase shares of the Company’s common stock at a 15% discount from the fair market value of the stock as determined on specific dates at six-month intervals, subject to various limitations under the ESPP. 4,000,000 shares of the Company’s common stock are authorized for issuance under the ESPP. The offering periods for the ESPP generally start on the first trading day on or after June 1st and December 1st of each year. The first offering period for the ESPP commenced on the first trading day after June 1, 2025 and ended on November 30, 2025, with the second offering period commencing on the first trading day after December 1, 2025 and ending on May 31, 2026. During the year ended December 31, 2025, $0.1 million of stock-based compensation was recognized for the ESPP.

Stock-based compensation is included in cost of sales or operating expenses, as applicable, and consists of the following:


	Year Ended December 31,
	2025		2024		2023
	(In thousands)
Cost of product revenue	$	451	$	773	$	583
Research and development expenses		269		1,140		799
Sales and marketing expenses		1,545		1,692		1,484
General and administrative expenses		6,908		9,250		8,088
Total stock-based compensation	$	9,173	$	12,855	$	10,954

The Company recognizes forfeitures on stock-based payments as they occur. During the years ended December 31, 2025, 2024 and 2023, stock-based compensation includes $(3.8) million, $(0.1) million and $(0.2) million, respectively, for forfeitures recorded during the period.

Stock Options Valuation and Amortization Method

During the year ended December 31, 2025, the Company granted NSOs to purchase 461,154 shares of common stock with a grant date fair value of $2.5 million to its employees and granted NSOs to purchase 45,525 shares of common stock with a grant date

fair value of $0.2 million to its non-employee directors under the Restated 2023 Equity Plan. The NSOs granted to employees will vest over a three-year period from the applicable vesting commencement date and is amortized on a straight-line basis over the requisite service period of the options. The NSOs granted to non-employee directors vest upon the earlier of the date that is the one-year anniversary of the grant date or the day prior to the Company’s annual meeting of stockholders to be held in 2026.

The fair value of each stock option is estimated as of the date of grant using the Black-Scholes option-pricing model. Key inputs into this formula included expected term, expected volatility, expected dividend yield and the risk-free rate. Each assumption is set forth and discussed below.

Expected Term

The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. The Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. Accordingly, the Company uses the simplified method to calculate the expected term for options granted.

Expected Volatility

In 2025, 2024 and 2023, the Company used its historical volatility as a basis to estimate expected volatility in the valuation of stock options.

Expected Dividend

The Company uses an expected dividend yield of zero. The Company does not intend to pay cash dividends on its common stock in the foreseeable future, nor has it paid dividends on its common stock in the past.

Risk-free Interest Rate

The Company uses a risk-free interest rate based on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant.

Estimated Forfeitures

Estimated forfeitures are excluded from the calculation of fair value of stock options as the Company records the impact of forfeitures of service-based awards under the provisions of ASU 2016-09 at the time an award is forfeited.

Assumptions Utilized

The following information relates to the fair value of the option awards estimated by use of the Black-Scholes option-pricing model:


	Year Ended December 31,
	2025			2024			2023
Weighted average assumptions:
Expected term (in years)		5.95			5.99			6.12
Expected volatility		79.77	%		75.04	%		70.04	%
Risk free interest rate		4.03	%		4.11	%		4.08	%
Expected dividend yield		0.00	%		0.00	%		0.00	%
Weighted average fair value:
Grant-date fair value of options granted	$	5.36		$	11.36		$	4.91
Grant-date fair value of options vested	$	7.75		$	7.59		$	9.63
Aggregate intrinsic value of options exercised	$	1,270,187		$	22,805,464		$	1,652,567

Outstanding Options

The following table summarizes information about stock options outstanding:


	Number of Shares			Weighted Average Grant Date Fair Value Per Share		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
	($ in thousands, except share and per share data)
Options outstanding at December 31, 2024		4,394,619		$	6.00	$	9.88		6.56	$	18,259,582
Granted		506,679		$	5.36	$	7.58
Forfeited		(672,414	)	$	6.28	$	9.23
Expired		(228,202	)	$	6.92	$	11.94
Exercised		(407,316	)	$	2.15	$	4.22			$	1,270,187
Options outstanding at December 31, 2025		3,593,366		$	6.22	$	10.17		4.96	$	—
Exercisable at December 31, 2025		2,543,973		$	6.24	$	10.63		3.62	$	—
Expected to vest after December 31, 2025		1,049,393		$	6.17	$	9.06		8.17	$	—

As of December 31, 2025, total unrecognized compensation cost related to non-vested service-based options granted under the Company’s equity incentive plans was $3.2 million. The unrecognized compensation cost for the service-based options is expected to be recognized over a weighted average period of 1.07 years.

Restricted Stock Awards and Restricted Stock Units

During the year ended December 31, 2025, the Company granted 327,104 RSUs with a grant date fair value of $2.5 million to its employees and granted 51,850 shares of restricted common stock with a grant date fair value of $0.3 million to its non-employee directors under the Restated 2023 Equity Plan. The RSUs granted to employees will vest over a three-year period from the applicable vesting commencement date. The restricted common stock granted to non-employee directors vest upon the earlier of the date that is the one-year anniversary of the grant date or the day prior to the Company’s annual meeting of stockholders to be held in 2026.

The Company values restricted stock awards and RSUs based on the closing price of its common stock on the date of grant.

The following table provides detail of grants, vesting, and forfeitures of RSUs during 2025:


	Restricted Stock Units			Weighted Average Grant Date Fair Value
Balance at December 31, 2024		560,630		$	12.95
Granted		378,954			7.46
Vested		(299,918	)		12.23
Forfeited		(228,070	)		10.62
Balance at December 31, 2025		411,596		$	9.72

Restricted stock awards granted during 2025 are considered issued and outstanding common stock and are excluded from the table above.

The total intrinsic value of restricted stock and RSUs that vested in 2025 and 2024 was $2.3 million and $3.7 million, respectively. As of December 31, 2025, 411,596 of the total shares of RSUs outstanding will vest upon the fulfillment of service conditions.

As of December 31, 2025, total unrecognized compensation cost related to RSUs of $2.3 million is expected to be recognized over a weighted average period of 1.72 years.

Performance Stock Units

During the year ended December 31, 2025, the Company issued an aggregate of 654,217 performance share units (the PSU Awards) to certain employees. Each PSU Award provides the grantee with the opportunity to earn between 0% and 200% of the target number of performance share units, based on the Company’s total stockholder return for a three-year performance period (January 1, 2025 through December 31, 2027) relative to the total stockholder return of the components of the Russell 2000 Index. Vesting of any performance share units so earned generally is also contingent upon the grantee’s continued employment (or other service) with the Company through the third anniversary of the date of grant, and any vested performance share units will be settled in shares of the Company’s common stock at (or shortly after) vesting. The PSU Awards had a total aggregate fair value of $7.4 million at the time of grant.

The Company uses the Monte-Carlo simulation model to determine the grant date fair value of the PSU Awards. In addition to the input assumptions used in the Black-Scholes model, the Monte-Carlo simulation model factors into the valuation the probability that the specific market condition may or may not be satisfied. Stock-based compensation expense for awards with a market condition is recognized on a straight-line basis over the requisite service period for each such award.

The following table provides detail of grants, vesting, and forfeitures of PSUs during 2025:


	Performance Stock Units			Weighted Average Grant Date Fair Value
Balance at December 31, 2024		—		$	—
Granted		654,217			11.31
Vested		—			—
Forfeited		(302,929	)		11.49
Balance at December 31, 2025		351,288		$	11.15

As of December 31, 2025, total unrecognized compensation cost related to PSUs of $2.9 million is expected to be recognized over a weighted average period of 2.18 years.

On March 5, 2024, the Compensation and Leadership Development Committee of the Board (the Committee) approved the cancellation of the outstanding, unearned portion of the performance-based restricted shares granted to certain employees pursuant to the 2014 Equity Plan on June 29, 2021 (to Chief Executive Officer) and June 2, 2022 (to certain other employees). The Committee determined that based on current market conditions, the likelihood of achievement of any of the remaining performance hurdles applicable to the unearned restricted shares is remote, and that the unearned restricted shares therefore had ceased to have incentive value for the grantees. On March 6, 2024, the Company entered into cancellation agreements, pursuant to which the applicable employees agreed to such cancellation.

The cancelled unearned restricted shares were added to the number of shares available for awards under the Restated 2023 Equity Plan. For financial accounting purposes, the cancellation of the unearned restricted shares resulted in the immediate charge of approximately $2.2 million of unamortized stock compensation costs of which $2.0 million is included in the general and administrative expenses and $0.2 million is included in research and development expenses in the accompanying consolidated statement of operations.

Cash-settled Awards

During the year ended December 31, 2025, the Company granted RSUs that vest over a period of three years which are settled in cash. The Company has accounted for these as liability-classified awards and accordingly changes in the market value of the instruments will be recorded to costs of revenue or operating expense, as applicable, over the vesting period of the award. The fair value of a liability-classified award is determined on a quarterly basis beginning at the grant date until final vesting. These awards will be settled on the vesting dates and the maximum liability is capped at 200% of the fair value of the award at the grant date. At December 31, 2025, the fair value of these awards were $0.5 million.

(16) Net Income (Loss) Per Share

The computation of basic and diluted net income (loss) per share consists of the following:


	Year ended December 31,
	2025			2024		2023
	(In thousands, except share and per share data)
Numerator:
Net income (loss)	$	(389,552	)	$	13,375	$	(45,811	)
Denominator:
Weighted average shares outstanding, basic		82,328,484			77,535,121		69,439,034
Weighted average shares outstanding, diluted		82,328,484			80,306,690		69,439,034
Net income (loss) per share, basic	$	(4.73	)	$	0.17	$	(0.66	)
Net income (loss) per share, diluted	$	(4.73	)	$	0.17	$	(0.66	)

Potentially dilutive common shares that were excluded from the computation of diluted net income (loss) per share because they were anti-dilutive consist of the following:


	Year ended December 31,
	2025		2024		2023
Common stock options		3,593,366		141,134		5,234,194
Restricted common stock units		411,596		2,979		574,247
Restricted common stock awards		—		218		881,674
Convertible note, if converted		—		—		3,951,833
Total		4,004,962		144,331		10,641,948

The potential dilutive shares from common stock options, restricted common stock units, restricted common stock awards, and the 2022 Convertible Note were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented. The Company excludes the shares issued in connection with restricted stock awards from the calculation of basic weighted average common shares outstanding until the restrictions lapse.

For each of the years ended December 31, 2025 and 2023, there was no dilutive impact of the common stock options, RSUs, or restricted stock awards.

(17) Income Taxes

The Company incurred net operating losses for the years ended December 31, 2025 and 2023, and net operating income for the year ended December 31, 2024. The Company incurred net operating losses and recorded a full valuation allowance against net deferred tax assets for all prior periods. Accordingly, the Company has not recorded a provision for federal income taxes for the years ended December 31, 2025 or 2024.

The following table summarizes the (loss) income before the (benefit) provision:


	Year Ended December 31,
	2025
U.S.	$	(389,309	)
Foreign		2,151
Loss before income tax expense	$	(387,158	)

The Company has recorded a provision for state income taxes of $0.3 million during the year ended December 31, 2025. The Company has incurred $2.1 million and $1.7 million of income tax expense related to its foreign operations, primarily its Mexican maquiladora operations for the years ended December 31, 2025 and 2024, respectively. There was no respective income tax for the year ended December 31, 2023.

Income taxes included in the Consolidated Statement of Operations are as follows:


	Year ended December 31,
	2025
	(In thousands)
Current income tax expense
Federal	$	—
State		323
Foreign		2,487
Deferred income tax (benefit)
Federal		—
State		—
Foreign		(416	)
Total income tax (benefit)	$	2,394

The table below represents cash paid (refunds received) for income taxes.


	For the Year Ended December 31,
	2025
	(In thousands)

Federal	$	—
Aggregated state and local jurisdictions		391
Foreign
Other		139
Mexico		3,604
Net cash paid (refunds received) for income taxes	$	4,134

The tables below represent a reconciliation of the U.S. federal statutory income tax rate to effective tax rate. The Company has adopted the guidance in ASU 2023-09 on a prospective basis. The following table reflects the reconciliation rate for 2025 under the new guidance.


	December 31,
	2025			2025
	Tax Expense			Effective Rate
	(In thousands)

U.S. federal income tax at statutory rate	$	(81,303	)		21.00	%
State and local income taxes, net of federal income tax effect		251			(0.06	)%
Foreign tax effects
Other		58			(0.01	)%
Mexico
Other		(31	)		0.01	%
Safe Harbor		1,874			(0.48	)%
Tax credits		935			(0.24	)%
Changes in valuation allowances		78,726			(20.33	)%
Nontaxable or nondeductible items
Other		73			(0.02	)%
Stock-based compensation		2,672			(0.69	)%
Other reconciling items		(861	)		0.22	%
Effective income tax rate	$	2,394			(0.62	)%

The table below represents a reconciliation of the U.S. federal statutory tax rate to effective tax rate for the years ended December 31, 2024 and 2023 under the disclosure requirements prior to the adoption of ASU 2023-09.


	Year Ended December 31,
	2024			2023
U.S. federal income tax statutory rate		21	%		21	%
Permanent differences		12	%		—
State tax, net of federal benefit		3	%		7	%
Changes in valuation allowance for deferred tax assets		9	%		(17	)%
Stock-based compensation		(29	)%		(7	)%
Research credits		(8	)%		—	%
Other		(5	)%		2	%
State rate change		(3	)%		(6	)%
Foreign		11	%		—	%
Effective tax rate		11	%		—

The tax effects of temporary differences between financial statement and tax accounting that gave rise to significant portions of the Company’s deferred tax assets and deferred tax liabilities at December 31, 2025 and 2024 are presented below:


	December 31,
	2025			2024
	(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	81,875		$	71,026
Stock-based compensation		3,072			4,197
Operating lease liabilities		5,696			6,732
Capitalized research and development		9,152			12,250
Tax credit carryforwards		4,717			6,358
Depreciation		76,569			—
Reserves and accruals		4,273			7,491
Interest expense limitation		8,311			6,354
Total gross deferred tax assets		193,665			114,408
Deferred tax liabilities:
Depreciation		—			(2,715	)
Operating lease right-of-use assets		(4,209	)		(5,061	)
Total deferred tax liabilities		(4,209	)		(7,776	)
Total deferred tax assets and liabilities		189,456			106,632
Valuation allowance		(188,637	)		(106,632	)
Net deferred tax asset	$	819		$	—

The net change in the valuation allowance for the year ended December 31, 2025, was an increase of $82.0 million. The Company has recorded a full valuation allowance against its federal and state net deferred tax assets due to the uncertainty associated with the utilization of the net operating loss carryforwards and other future deductible items. In assessing the realizability of deferred tax assets, the Company considers all available evidence, historical and prospective, with greater weight given to historical evidence, in determining whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the Company’s deferred tax assets generally is dependent upon generation of future taxable income.

At December 31, 2025, the Company had $372.3 million of net operating losses available to offset future federal income, if any, of which $145.0 million expire on various dates through December 31, 2037. Net operating losses of $227.3 million generated from 2018 through 2025 have an unlimited carryforward.

At December 31, 2025, the Company had $258.0 million of apportioned net operating losses available to offset future state taxable income, if any, and which begin to expire at various dates between 2026 and 2044.

For each of the years ended December 31, 2025, 2024 and 2023, the Company did not have any material unrecognized tax benefits and thus no interest and penalties related to unrecognized tax benefits were recorded.

The Company files a federal income tax return in the United States and income tax returns in various state and foreign jurisdictions. All tax years are open for examination by the taxing authorities for both federal and state purposes.

The Tax Cuts and Jobs Act requires taxpayers to capitalize and amortize research and development (R&D) expenditures under Section 174 of the Internal Revenue Code for tax years beginning after December 31, 2021. R&D costs performed in the United States are amortized over 5 years and over 15 years for R&D performed outside the United States. This rule became effective for the Company during 2022 and resulted in the net capitalization of R&D expenses of $51.4 million as of December 31, 2024. All costs were incurred in the United States.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, which allows for immediate deduction of R&D costs performed in the United States. Expenses related to R&D performed outside the United States will continue to be capitalized and amortized over 15 years. This is applicable for tax years beginning after December 31, 2024. OBBBA also provides certain eligible taxpayers with the option to accelerate the deduction of the remaining unamortized domestic R&D costs incurred during taxable years ending after December 31, 2021 and before January 1, 2025 over one or two years or continue to amortize the remaining unamortized cost over the remaining 5 year lives. The Company intends to continue amortizing the domestic R&D costs over the remaining 5 year lives. Previously unamortized Capitalized R&D costs is $37.4 million as of December 31, 2025.

(18) Segment Information

Operating segments are identified as components of an enterprise about which separate, discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company’s chief operating decision maker reviews consolidated operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company reports two segments: Thermal Barrier and Energy Industrial. The Company evaluates segment performance based on the segment profit (loss) before corporate expenses.

Summarized below are the Revenue, Cost of Goods Sold, and Segment Operating Profit for each reporting segment:


	Year Ended						Year Ended
	Revenue						Cost of Goods Sold
	December 31						December 31
	2025		2024		2023		2025		2024		2023
	(In thousands)
Energy industrial	$	102,198	$	145,867	$	128,639	$	64,992	$	87,425	$	94,477
Thermal barrier		168,905		306,832		110,079		160,113		182,377		87,320
Total	$	271,103	$	452,699	$	238,718	$	225,105	$	269,802	$	181,797


	Year Ended
	Segment Operating Profit (Loss)
	December 31
	2025			2024			2023
	(In thousands)
Energy industrial	$	37,206		$	58,442		$	34,162
Thermal barrier		8,792			124,455			22,759
Total gross profit	$	45,998		$	182,897		$	56,921
Corporate expenses		97,390			128,362			106,124
Restructuring and demobilization costs		17,510			—			—
Loss on disposal of property, plant and equipment		18,162			—			—
Impairment of property, plant and equipment		291,164			—			—
Operating profit (loss)		(378,228	)		54,535			(49,203	)
Other (expense) income, net		(8,930	)		(39,446	)		3,392
Income tax expense		(2,394	)		(1,714	)		—
Net income (loss)	$	(389,552	)	$	13,375		$	(45,811	)


	Year Ended
	Depreciation Expense
	December 31,
	2025		2024		2023
	(In thousands)
Energy industrial	$	10,633	$	11,685	$	10,720
Thermal barrier		34,524		10,841		4,598
Consolidated depreciation expense	$	45,157	$	22,526	$	15,318


	Total Assets
	December 31,
	2025		2024
	(In thousands)
Energy industrial	$	93,111	$	103,453
Thermal barrier		69,550		159,934
Total assets of reportable segments		162,661		263,387
Construction in progress and held for sale		41,970		352,567
All other corporate assets		202,048		279,190
	$	406,679	$	895,144

Information about the Company’s total revenues, based on shipment destination or services location, is presented in the following table:


	Year Ended
	December 31,
	2025		2024		2023
	($ in thousands)
Revenue:
U.S.	$	172,082	$	258,518	$	151,037
International		99,021		194,181		87,681
Total	$	271,103	$	452,699	$	238,718

(19) Restructuring and Demobilization Costs

In February 2025, the Company announced and began implementing a restructuring plan to realign the Company’s operational focus to improve costs and align capital expenditure to anticipated long-term demand. The plan included reducing the Company’s

headcount and ceasing construction of the Company's previously planned Statesboro Plant. In connection with the demobilization, the Company is no longer pursuing its application for a loan from the Department of Energy’s Loan Programs Office and has withdrawn from the loan application process.

During each of the three months ended June 30, 2025, September 30, 2025 and December 31, 2025, the Company announced further headcount reductions to realign the Company’s operation and to improve costs.

As a result of the restructurings and the demobilization, the Company incurred the charges shown in the following table. Property, plant and equipment write-downs are included within impairment expenses in the consolidated statements of operations.


	Year Ended
	December 31, 2025
	(In thousands)
Severance and other personnel costs	$	8,270
Demobilization costs		3,067
Deferred financing costs write-off		6,173
Total	$	17,510

(20) Subsequent Events

The Company has evaluated subsequent events through March 13, 2026, the date of issuance of the consolidated financial statements for the year ended December 31, 2025.

As discussed in Note (5), during the fourth quarter of 2025, a large Thermal Barrier customer notified the Company of its lower forecasted long-term demand requirements and requested the Company submit a claim for certain losses incurred. The Company submitted the claim with the customer in November 2025. On January 27, 2026, the Company accepted a settlement of $37.6 million to cover the Company's claims and expects to receive the funds later in the first quarter of 2026.

Schedule II

VALUATION AND QUALIFYING ACCOUNTS

(in thousands)


Description	Balance at Beginning of Year		Charges to Costs and Expenses (a)			Recoveries of Costs and Expenses (b)		Deductions to Allowances for Uncollectible Accounts (c)		Charges to (Deductions from) Other Accounts (d)			Balance at End of Year
Year Ended December 31, 2025:
Allowances for uncollectible accounts and sales returns and allowances	$	1,265		3,538.00			—		—		(631	)	$	4,172
Year Ended December 31, 2024:
Allowances for uncollectible accounts and sales returns and allowances	$	230		247			—		—		788		$	1,265
Year Ended December 31, 2023:
Allowances for uncollectible accounts and sales returns and allowances	$	255		(93	)		—		—		68		$	230

(a)

Represents allowances for uncollectible accounts established through general and administrative expenses.

(b)

Represents recoveries of allowances for uncollectible accounts established through general and administrative expenses.

(c)

Represents actual write-offs of uncollectible accounts.

(d)

Represents net change in allowances for sales returns, recorded as contra-revenue.

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Item 15(a). The following documents are filed as part of this Annual Report on Form 10-K:

Item 15(a)(1). The following consolidated financial statements of the Company are included in Part II, Item 8 of this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2025 and 2024

Consolidated Statements of Operations for the Years Ended December 31, 2025, 2024, and 2023

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024 and 2023

Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023

Notes to Consolidated Financial Statements

Item 15(a)(2). The following financial statements schedule is included in Part II, Item 8:

Schedule II – Valuation and Qualifying Accounts

All other financial statement schedules have not been included because they are not applicable or the information is included in the financial statements or notes thereto.

Item 15(a)(3). Exhibits:

The following is a list of exhibits filed as part of this Annual Report on Form 10-K.


Exhibit Number	Exhibit Description	Filed with this Report	Incorporated by Reference herein from Form or Schedule	Filing Date	SEC File/Reg. Number

3.1	Restated Certificate of Incorporation of the Registrant, as filed with the Secretary of State of the State of Delaware on June 18, 2014.		Form 8-K (Exhibit 3.2)	6/19/14	001-36481

3.1.1	Certificate of Amendment to Restated Certificate of Incorporation of Aspen Aerogels, Inc., dated June 1, 2023.		Form 8-K (Exhibit 3.1)	6/1/23	001-36481

3.2	Amended and Restated Bylaws of Aspen Aerogels, Inc.		Form 10-K (Exhibit 3.2)	3/7/24	001-36481

4.1	Form of Common Stock Certificate.		Amendment No. 1 to Form S-1 (Exhibit 4.1)	5/14/14	333-195523

4.2	Description of Securities.		Form 10-K (Exhibit 4.3)	3/6/20	001-36481

10.1+	2014 Employee, Director and Consultant Equity Incentive Plan.		Form S-8 (Exhibit 99.10)	8/13/14	333-198124

10.1.1+	Form of Stock Option Agreement Granted under 2014 Employee, Director and Consultant Equity Incentive Plan.		Amendment No. 1 to Form S-1 (Exhibit 10.2.2)	5/14/14	333-195523

10.1.2+	Form of Restricted Stock Unit Agreement for Executive Officers under 2014 Employee, Director and Consultant Equity Incentive Plan.		Form 10-Q (Exhibit 10.3)	11/7/14	001-36481


Delaware		04-3559972
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

30 Forbes Road, Building B Northborough, Massachusetts		01532
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock, par value $0.00001 per share	ASPN	New York Stock Exchange


Auditor Firm Id:	185	Auditor Name:	KPMG LLP	Auditor Location:	Boston, MA, United States of America


ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	4
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	39
	SIGNATURES	44


	ASPEN AEROGELS, INC.

Date: March 23, 2026	By:	/s/ Donald R. Young
		Donald R. Young
		President and Chief Executive Officer
		(principal executive officer)