zSpace shares fall 11.46% after-hours as $3M Planet One investment highlights ongoing financial challenges.

zSpace Inc. (NASDAQ: ZSPC) fell 11.46% in after-hours trading following a $3 million strategic investment from Planet One Education, which raised concerns about the company’s financial distress. The investment, structured as convertible preferred stock and warrants, reflects zSpace’s urgent need for liquidity amid a 38% revenue decline in Q3 2025 and a current ratio of 0.68. The $2.00 per share price (far above its $0.47 trading price) signaled significant dilution and underscored weak investor confidence. Additionally, zSpace faces Nasdaq delisting risks due to a market cap below $35 million and has raised capital through convertible notes and equity sales, further eroding shareholder value. While the partnership aims to expand international STEM initiatives, the market interpreted the funding as a sign of operational strain, triggering a sharp sell-off.