zSpace, Inc. Announces Additional $4.3 Million Senior Secured Convertible Note Issuance

Rhea-AI Summary

zSpace (NASDAQ: ZSPC) issued an additional $4,301,075 senior secured convertible note on March 16, 2026, under its existing financing arrangement first entered on April 10, 2025. The note is convertible into common stock.

The company said it will use net proceeds to repay outstanding debt, strengthen working capital and support general corporate purposes to maintain financial flexibility for its AR/VR education platform.

Positive

• Additional financing of $4.3M raised
• Proceeds earmarked to repay outstanding debt
• Working capital boost for operations and flexibility

Negative

• Conversion risk could dilute existing shareholders if converted
• Senior secured note adds secured debt obligations

News Market Reaction – ZSPC

+0.26%

8 alerts

+0.26% News Effect

+3.5% Peak Tracked

-2.1% Trough Tracked

+$14K Valuation Impact

$5M Market Cap

0.7x Rel. Volume

On the day this news was published, ZSPC gained 0.26%, reflecting a mild positive market reaction. Argus tracked a peak move of +3.5% during that session. Argus tracked a trough of -2.1% from its starting point during tracking. Our momentum scanner triggered 8 alerts that day, indicating moderate trading interest and price volatility. This price movement added approximately $14K to the company's valuation, bringing the market cap to $5M at that time.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

New convertible note: $4,301,075 Original note size: $13,978,495 Debt repayment: $2,000,000 +5 more

8 metrics

New convertible note $4,301,075 Additional senior secured convertible note issued March 16, 2026

Original note size $13,978,495 Senior secured convertible note closed April 11, 2025

Debt repayment $2,000,000 Portion of existing debt to be repaid with new note proceeds

Conversion price $0.28 per share Initial conversion price of additional senior secured convertible note

Conversion floor $0.05 per share Conversion floor price on additional senior secured convertible note

Note maturity March 15, 2028 Maturity date of additional senior secured convertible note

Strategic investment $3,000,000 Series P preferred stock and warrants investment closed Jan 27, 2026

SPA maximum $10,000,000 Maximum purchases under Series P Securities Purchase Agreement

Market Reality Check

Price: $0.1422 Vol: Volume 5,484,925 is 2.67x...

high vol

$0.1422 Last Close

Volume Volume 5,484,925 is 2.67x the 20-day average of 2,056,393, signaling elevated trading interest ahead of and around this note issuance. high

Technical At $0.1558, ZSPC trades well below its 200-day MA of $1.49 and 98.69% below its 52-week high of $11.86, near the 52-week low of $0.1425.

Peers on Argus

ZSPC fell 31.34% while only one peer in the momentum set (BTCT) showed notable m...

1 Up

ZSPC fell 31.34% while only one peer in the momentum set (BTCT) showed notable movement, rising 4.09% without news. Other peers were flat to modestly mixed, indicating ZSPC’s drop was stock-specific rather than a broad hardware/software sector move.

Historical Context

5 past events · Latest: Feb 24 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Feb 24	Youth partnership	Positive	+8.1%	Partnership to deploy headset-free AR/VR learning for at-promise youth.
Feb 17	International expansion	Positive	+9.8%	Expansion of immersive learning footprint and research initiatives across Italy.
Feb 3	Product award	Positive	-2.0%	Career Explorer platform received a major education technology award.
Jan 29	Strategic investment	Positive	-11.7%	Planet One invested $3M via convertible preferred shares and warrants.
Jan 12	Case study promo	Positive	-6.0%	Showcased AR/VR learning benefits for neurodivergent students at FETC 2026.

Pattern Detected

Recent history shows mixed reactions: positive commercial or partnership news often led to gains, but capital-raising or strategic financing-related announcements sometimes coincided with sharp declines, suggesting sensitivity to dilution and balance sheet actions.

Recent Company History

Over the last few months, zSpace has highlighted product traction, partnerships, and strategic financing. Positive operating updates on Jan 12, Feb 3, Feb 17, and the Feb 24 partnership generally showcased growing use of its AR/VR learning platform, with two of those events seeing price gains and three drawing negative reactions. The Jan 29 $3 million strategic investment introduced new convertible preferred equity, and today’s additional senior secured convertible note continues that pattern of balance sheet-focused activity.

Market Pulse Summary

This announcement expands zSpace’s senior secured convertible note financing by $4,301,075, intended...

Analysis

This announcement expands zSpace’s senior secured convertible note financing by $4,301,075, intended partly to repay about $2,000,000 of existing debt and bolster working capital. It builds on a prior $13,978,495 note and recent preferred stock and warrant funding, indicating continued reliance on structured capital. Investors may track how conversion pricing, the reverse stock split authorization, and future use of equity-linked facilities interact with the company’s AR/VR growth initiatives and loss profile.

Key Terms

senior secured convertible note, securities purchase agreement, working capital, reverse stock split, +4 more

8 terms

senior secured convertible note financial

"announced that it has issued an additional $4,301,075 senior secured convertible note"

A senior secured convertible note is a loan a company takes that is backed by specific assets and has first claim on repayment ahead of other creditors, but can also be exchanged for company shares under agreed conditions. For investors it signals higher priority if the company struggles (like a mortgage holder vs a general creditor) while also creating potential stock dilution if the loan is converted into equity, affecting value and recovery prospects.

securities purchase agreement financial

"to an institutional investor pursuant to the terms of its previously announced securities purchase agreement"

A securities purchase agreement is a written contract between a buyer and a seller outlining the terms for buying or selling financial assets such as stocks or bonds. It specifies details like the price, quantity, and conditions of the transaction, similar to a shopping list with agreed-upon terms. For investors, it provides clarity and legal protection when transferring ownership of these financial instruments.

working capital financial

"use the net proceeds from the additional note to repay outstanding debt, enhance the company’s working capital position"

Working capital is the money a business has available to cover its daily expenses, like paying bills and buying supplies. It’s like the cash in your wallet that helps you handle everyday costs; having enough ensures the business can operate smoothly without running into money shortages.

reverse stock split financial

"approved, by written consent, an authorization for the board to implement a reverse stock split of its common stock"

A reverse stock split is when a company reduces the number of its shares outstanding, making each share more valuable. For example, if you own 100 shares worth $1 each, a 1-for-10 reverse split would turn your 100 shares into 10 shares worth $10 each. Companies often do this to boost their stock price and appear more stable to investors.

prospectus regulatory

"zSpace, Inc. Prospectus Filed Pursuant to Rule 424(b)(4)"

A prospectus is a detailed document that explains a company's plans for offering new shares or investments to the public. It’s important because it provides potential investors with key information about the company’s business, risks, and how they might make money, helping them decide whether to invest. Think of it as a guidebook for understanding what you're buying into.

equity line financial

"may raise up to an additional $24.4 million from future sales of equity line shares to Tumim"

An equity line is a financing arrangement that lets a company raise cash over time by issuing new shares up to an agreed limit to an investor or through a placement program. It acts like a tapable credit line paid with stock rather than cash, giving the company flexible funding for operations or growth while reducing each existing share's ownership proportion; investors watch these deals because they affect share supply and shareholder value.

going concern financial

"faces going‑concern uncertainty, relies heavily on government‑funded school budgets"

A going concern is a business that is expected to continue its operations and meet its obligations for the foreseeable future, rather than shutting down or selling off assets. This assumption matters to investors because it indicates stability and ongoing profitability, making the business a more reliable investment. Think of it as believing a restaurant will stay open and serve customers, rather than closing down suddenly.

controlled company regulatory

"making zSpace a “controlled company” under Nasdaq rules"

A controlled company is a publicly traded firm where one shareholder or a small group holds enough voting power to determine board members and major strategic choices. For investors this matters because control can speed decision-making and protect long-term plans, but it also raises the risk that majority owners will favor their own interests over minority shareholders, reducing outside oversight—like a family-owned restaurant that sold shares but the family still calls the shots.

AI-generated analysis. Not financial advice.

Company to use proceeds to repay a portion of existing debt and support working capital

SAN JOSE, Calif., March 17, 2026 (GLOBE NEWSWIRE) -- zSpace, Inc. (NASDAQ: ZSPC), a leading provider of augmented and virtual reality (AR/VR) solutions for education, today announced that it has issued an additional $4,301,075 senior secured convertible note to an institutional investor pursuant to the terms of its previously announced securities purchase agreement.

The additional note was issued on March 16, 2026 under the company’s previously announced senior secured convertible note financing, originally entered into on April 10, 2025. Under that agreement, the company initially issued a senior secured convertible note in the original principal amount of $13,978,495, which closed on April 11, 2025.

The newly issued note is convertible into shares of the company’s common stock.

zSpace intends to use the net proceeds from the additional note to repay outstanding debt, enhance the company’s working capital position and support general corporate purposes.

This financing is part of the company’s ongoing efforts to strengthen its capital structure and maintain financial flexibility while continuing to invest in its immersive learning platform.

About zSpace, Inc.

zSpace, Inc. (NASDAQ: ZSPC) delivers innovative augmented and virtual reality (AR/VR) experiences that drive achievement in STEM, CTE, and career readiness programs. Trusted by over 3,500 school districts, technical centers, community colleges, and universities, zSpace enables hands-on "learning by doing" experiences proven to improve engagement and student outcomes. Headquartered in San Jose, California, zSpace holds more than 80 patents, with research published in the Journal of Computer Assisted Learning (2021) validating the impact of 3D virtual reality technologies on student knowledge gains.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the intended use of proceeds from the issuance of the additional note and the company’s financial and operational plans. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, among others, market conditions, the company’s ability to manage its capital structure, and other risks detailed in the company’s filings with the U.S. Securities and Exchange Commission. zSpace undertakes no obligation to update any forward-looking statements except as required by law.

Press Contact:
Amanda Austin
Senior Marketing Director,zSpace, Inc.
press@zspace.com

Investor Relations Contact:
Gateway Group, Inc. Cody Slach, Greg Robles
949.574.3860
ZSPC@gateway-grp.com

FAQ

How much additional financing did zSpace (ZSPC) announce on March 16, 2026?

zSpace announced an additional $4,301,075 senior secured convertible note on March 16, 2026. According to the company, this issuance supplements the original senior secured convertible note financing that began on April 10, 2025.

What will zSpace (ZSPC) use the proceeds from the $4.3M note for?

zSpace will use net proceeds to repay outstanding debt and strengthen working capital. According to the company, remaining funds will support general corporate purposes and maintain financial flexibility for its AR/VR education platform.

Is the newly issued zSpace (ZSPC) note convertible into common stock?

Yes, the additional senior secured note is convertible into the company’s common stock. According to the company, conversion terms follow the previously announced securities purchase agreement tied to the April 2025 financing.

How does the $4.3M note relate to zSpace’s prior financing from April 2025?

The March 16, 2026 note supplements a prior senior secured convertible note originally issued April 11, 2025 with a principal of $13,978,495. According to the company, the new note is issued under the same securities purchase agreement.

What shareholder impact could zSpace’s (ZSPC) convertible note have?

Conversion of the note into common stock could dilute existing shareholders if conversion occurs. According to the company, the note’s convertible feature means potential share issuance depending on conversion terms and timing.

Does the $4.3M financing affect zSpace’s debt structure immediately?

The financing increases secured convertible debt on the balance sheet immediately. According to the company, proceeds will repay some outstanding debt while adding a senior secured convertible obligation under the existing financing agreement.