BASIS OF PRESENTATION AND ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2025

BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements included have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial reporting and as required by Form 10-Q. These condensed consolidated financial statements are unaudited and, in the opinion of management, reflect all normal recurring adjustments necessary to fairly present the financial position, results of operations, cash flows, and change in equity for the periods presented. Results for the periods presented are not necessarily indicative of the results that may be expected for any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes as of and for the year ended December 31, 2024 included in the Prospectus. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (the “ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (the “FASB”).

The Company’s condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The Company expects to use the extended transition period for any other new or revised accounting standards during the period in which it remains an emerging growth company.

Summary of Significant Accounting Policies

There have been no other changes to the Company’s significant accounting policies described in Note 2 “Summary of Significant Accounting Policies” to the consolidated financial statements and notes as of and for the year ended December 31, 2024 included in the Prospectus that have had a material impact on the condensed consolidated financial statements and related notes, other than those described below. Certain items in the prior year’s audited consolidated financial statements have been reclassified to conform to the current presentation.

Concentration of Credit Risk

Specific revenue from customers exceeding 10% of total revenues for the three and nine months ended September 30, 2025 and 2024 were as follows:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2025	2024	2025	2024
Customer A	*	21%	21%	43%
Customer B	16%	41%	18%	35%
Customer C	*	17%	*	11%
Customer D	*	*	15%	*
Customer E	26%	*	*	*
Customer F	15%	*	*	*
Customer G	23%	*	*	*

______________

*Less than 10%

Specific customer receivable balances in excess of 10% of total accounts receivable as of September 30, 2025 and December 31, 2024 were as follows:


	As of September 30, 2025	As of December 31, 2024
Customer A	28%	25%
Customer B	28%	56%
Customer C	*	13%
Customer E	34%	*

______________

*Less than 10%

Deferred Offering Costs

The Company capitalizes certain legal, professional accounting, and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds from the offering, either as a reduction of the carrying value of the Preferred Stock or in stockholders’ equity as a reduction of additional paid-in-capital generated as a result of the offering. The Company recorded $6,724 of deferred offering costs as of September 30, 2025 and there were no deferred offering costs as of December 31, 2024. As a result of the IPO, the Company recorded a reduction of the carrying value of the Class A common stock of $10,723 in November 2025.

Loss on Issuance of Convertible Preferred Stock

As of the closings of Series C and Series C-1 Preferred Stock issued during the three months ended September 2025, the estimated fair value of the Preferred Stock ranged between $114.47 and $196.73 per share compared with the purchase price per share of $114.47. As a result, the Company recorded a non-cash loss of $355,551 to other expense to account for the difference between the amount of aggregate purchase price and the fair value of the shares issued as of the date of issuance. The estimated fair value of the Preferred Stock was prepared using the hybrid method, with one or more scenarios using the option pricing model (the “OPM”) to allocate the equity value to respective share classes. The valuation was based on numerous valuation factors, including, but not limited to economic factors, industry trends, and likelihood of achieving a liquidity event. These are level 3 inputs within the fair value hierarchy and require significant judgment or estimation.

Collaboration Agreements

The Company assesses joint development arrangements to determine whether they are in the scope of ASC 808 – Collaborative Arrangements (“ASC 808”). The Company evaluates whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on commercial success of the activities. This assessment is performed throughout the life of such arrangement with consideration given to the changes in the roles and responsibilities between the parties.

On September 3, 2025, the Company entered into a Strategic Collaboration Agreement and Joint Technology Development Agreement (together, the “GE Collaboration Agreements”) with General Electric Company, operating as GE Aerospace (“GE Aerospace”) within the scope of ASC 808 to research, develop, manufacture, test, market, sell, field, and support propulsion technologies for hybrid-electric applications, including turbogenerators for future sales to the commercial civilian aircraft market and government customers. Both parties provide engineering personnel, technical expertise, commercial resources, and support to carry out commitments under the GE Collaboration Agreements and are exposed to significant risks as both parties are responsible for its own costs during the development period. Furthermore, both parties participate on a joint development committee that directs the parties’ collaboration across aspects of development. Costs BETA incurs in connection with the GE Collaboration Agreements are recorded within research and development expense.

In connection with the GE Collaboration Agreements, on September 26, 2025, the Company issued warrants to purchase 2,552,467 shares of Class A common stock to GE Aerospace at a pre-split exercise price of $0.01 per share (the “GE Warrants”). The GE Warrants are exercisable upon vesting, and vest subject to the satisfaction of certain milestones, with any shares that remain unvested on the third anniversary of September 3, 2025 vesting on such date if the Company and GE Aerospace are continuing to work together under the GE Collaboration Agreements (or similar arrangements) as of such date. The aggregate grant date fair value of the warrants was $67,236. The estimated fair value of the common stock was prepared using the hybrid method, with one or more scenarios using the OPM to allocate the equity value to the GE Warrants. The valuation was based on numerous valuation factors, including, but not limited to economic factors, industry trends, and likelihood of achieving a liquidity event. These are level 3 inputs within the fair value hierarchy and require significant judgment or estimation. The Company recorded research and development expense of $308 related to the GE Warrants as of September 30, 2025.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The new standard is effective for annual periods beginning after December 15, 2025, with early adoption permitted. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is still evaluating the effects of adopting this accounting standard on the condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income -Expense Disaggregation Disclosures (subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public entities to disclose in the notes to the consolidated financial statements, of specified information about certain costs and expenses. In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (subtopic 220-40): Disaggregation of Income Statement Expenses, Clarifying the Effective Date. ASU 2025-01 clarifies that the guidance in ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is still evaluating the effects of adopting this accounting standard on the condensed consolidated financial statements.