AIRO Group Q3 2026 net loss widens to $12M
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
AIRO Group Holdings, Inc. reported third-quarter 2026 revenue of $17.510 million, up 178.6% from $6.284 million a year earlier; Drones revenue was $15.338 million versus $3.145 million. Nine-month revenue was $69.591 million, up 63.2% from $42.629 million. Net loss was $11.997 million for the quarter, compared with $7.963 million, and $29.444 million for nine months, versus $4.065 million.
Cash and working capital at September 30, 2026 were $37.8 million and $50.7 million. Management believes available liquidity and its current operating plan provide sufficient resources to meet obligations and continue operations for at least the next 12 months from the statements’ issuance. Operating cash used in the nine months was $27.112 million, compared with $36.522 million a year earlier. AIRO disclosed material weaknesses in internal control over financial reporting. Separately, AIRO Drone and Nord Drone Group agreed to form a 50/50 joint venture, subject to closing conditions, including any required regulatory approval; unless revised, the agreement terminates if the venture is not closed by November 30, 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue rose 178.6% to $17.510 million year over year.
- Moderate pointNine-month operating cash used fell to $27.112 million from $36.522 million.
Negative
- Major pointAIRO disclosed material weaknesses in internal control over financial reporting.
- Moderate pointNine-month net loss was $29.444 million, compared with $4.065 million a year earlier.
Filing Explained
At September 30, 2026, debt was scheduled to mature within 12 months, while the $9.1 million revolving facility was undrawn.
The filing reports potential—not issued—shares from warrants, options and unsettled RSUs; if issued, additional shares would increase the share count and reduce existing holders’ percentage ownership. As of
At that date, AIRO had debt scheduled to mature within 12 months, while its
Key Figures
Key Terms
Adjusted EBITDA financial
contract liabilities financial
Indefinite Delivery Indefinite Quantity (IDIQ) Contract regulatory
GPS-denied environment technical
eVTOL technical
FAQ
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What was AIRO's third-quarter 2026 revenue?
What was AIRO's net loss for the first nine months of 2026?
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UNITED STATES
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(I.R.S. Employer Identification No.) |
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telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | Trading Symbol | Name of each exchange on which registered |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
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| Large accelerated filer ☐ | Accelerated filer ☐ | |
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As
of November 6, 2026, there were
AIRO GROUP HOLDINGS, INC
Table of Contents
| Item 1. | Financial Statements (Unaudited): | 3 |
| Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025 | 3 | |
| Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2026 and 2025 | 4 | |
| Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, 2026 and 2025 | 5 | |
| Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2026 and 2025 | 6 | |
| Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025 | 8 | |
| Notes to Condensed Consolidated Financial Statements | 9 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 31 |
| Item 4. | Controls and Procedures | 31 |
| PART II. OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 33 |
| Item 1A. | Risk Factors | 33 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 33 |
| Item 3. | Defaults Upon Senior Securities | 33 |
| Item 4. | Mine Safety Disclosures | 33 |
| Item 5. | Other Information | 33 |
| Item 6. | Exhibits | 34 |
| Signatures | 35 | |
| 2 |
Item 1. Financial Statements
AIRO Group Holdings, Inc.
Condensed Consolidated Balance Sheets
unaudited
| (Amounts in thousands, except par value amounts) | September 30, 2026 | December 31, 2025 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | - | |||||||
| Accounts receivable, net | ||||||||
| Related party receivables | - | |||||||
| Accounts receivable, net | - | |||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use operating lease assets | ||||||||
| Goodwill | ||||||||
| Intangible assets, net | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Related party payables | ||||||||
| Accounts payable | ||||||||
| Accrued expenses | ||||||||
| Operating lease liabilities, current | ||||||||
| Deferred revenue | ||||||||
| Related party borrowings | ||||||||
| Current maturities of debt | ||||||||
| Total current liabilities | ||||||||
| Long-term debt, net of current maturities | - | |||||||
| Deferred tax liability | ||||||||
| Long-term deferred revenue | ||||||||
| Operating lease liabilities, noncurrent | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 8) | - | |||||||
| Stockholders’ equity: | ||||||||
| Common stock, $ | - | - | ||||||
| Additional paid-in capital | ||||||||
| Treasury shares, | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 3 |
AIRO Group Holdings, Inc.
Condensed Consolidated Statements of Operations
unaudited
| (Amounts in thousands, except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| (Amounts in thousands, except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income, net: | ||||||||||||||||
| Interest income (expense), net | ( | ) | ||||||||||||||
| Gain on extinguishment of debt, net | - | - | - | |||||||||||||
| Other income, net | ||||||||||||||||
| Total other income, net | ||||||||||||||||
| Loss before income tax benefit (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax benefit (expense) | ( | ) | ( | ) | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share – basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted-average number of shares of common stock used in computing net loss per share, basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 4 |
AIRO Group Holdings, Inc.
Condensed Consolidated Statements of Comprehensive (Loss) Income
unaudited
| (Amounts in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| (Amounts in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive (loss) income: | ||||||||||||||||
| Foreign currency translation, net of tax | ( | ) | ( | ) | ( | ) | ||||||||||
| Total other comprehensive (loss) income | ( | ) | ( | ) | ( | ) | ||||||||||
| Comprehensive (loss) income | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 5 |
AIRO Group Holdings, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
unaudited
| (Amounts in thousands) | Shares | Amount | Capital | Shares | Amount | (Loss) | Deficit | Equity | ||||||||||||||||||||||||
| Common Stock | Additional Paid-In | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||
| (Amounts in thousands) | Shares | Amount | Capital | Shares | Amount | (Loss) | Deficit | Equity | ||||||||||||||||||||||||
| Balance as of July 1, 2026 | $ | - | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||
| RSU vesting | - | - | - | - | - | - | - | |||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | - | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||
| (Amounts in thousands) | Shares | Amount | Capital | Shares | Amount | (Loss) | Deficit | Equity | ||||||||||||||||||||||||
| Common Stock | Additional Paid-In | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||
| (Amounts in thousands) | Shares | Amount | Capital | Shares | Amount | (Loss) | Deficit | Equity | ||||||||||||||||||||||||
| Balance as of July 1, 2025 | $ | - | $ | - | $ | - | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Stock issued in connection with the Management Carveout Plan, net of shares withheld for taxes | - | - | ( | ) | - | - | ( | ) | ||||||||||||||||||||||||
| Conversion of Jaunt deferred compensation, net of shares withheld for taxes | - | ( | ) | - | - | |||||||||||||||||||||||||||
| Issuance and exercise of Libertas warrants | - | - | - | - | - | |||||||||||||||||||||||||||
| RSU vesting, net of shares withheld for taxes | - | - | - | - | - | - | - | |||||||||||||||||||||||||
| Sale of common stock in Follow-on Offering, including over-allotment, net of $ | - | - | - | - | - | |||||||||||||||||||||||||||
| Repurchase of common stock | ( | ) | - | - | ( | ) | - | - | ( | ) | ||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | - | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||
| 6 |
| Shares | Amount | Capital | Shares | Amount | (Loss) | Deficit | Equity | |||||||||||||||||||||||||
| Common Stock | Additional Paid-In | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||
| (Amounts in thousands) | Shares | Amount | Capital | Shares | Amount | (Loss) | Deficit | Equity | ||||||||||||||||||||||||
| Balance as of January 1, 2026 | $ | - | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||
| RSU vesting | - | - | - | - | - | - | - | |||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | - | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Shares | Amount | Capital | Shares | Amount | (Loss) | Deficit | Equity | |||||||||||||||||||||||||
| Common Stock | Additional Paid-In | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||
(Amounts in thousands) | Shares | Amount | Capital | Shares | Amount | (Loss) | Deficit | Equity | ||||||||||||||||||||||||
| Balance as of January 1, 2025 | $ | - | $ | - | $ | - | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Conversion of Coastal Defense promissory note | - | - | - | - | - | |||||||||||||||||||||||||||
| Conversion of Aspen Bridge notes | - | - | - | - | - | |||||||||||||||||||||||||||
| Conversion of Jaunt Carter debt | - | - | - | - | - | |||||||||||||||||||||||||||
| Issuance of investor note interest shares | - | - | - | - | - | |||||||||||||||||||||||||||
| Conversion of Airo Drone debt | - | - | - | - | - | |||||||||||||||||||||||||||
| Conversion of Agile Defense debt | - | - | - | - | - | |||||||||||||||||||||||||||
| Conversion of Aspen Contingent Debt | - | - | - | - | - | |||||||||||||||||||||||||||
| Conversion of Jaunt deferred compensation | - | - | - | - | - | |||||||||||||||||||||||||||
| Reclassification of Libertas Warrants | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Exercise of Libertas Warrants | - | - | - | - | - | |||||||||||||||||||||||||||
| Issuance of Underwriter Warrants | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Sale of common stock in initial public offering, including over-allotment, net of $ | - | - | - | - | - | |||||||||||||||||||||||||||
| Shares issued to NGA | - | - | - | - | - | |||||||||||||||||||||||||||
| Shares issued to Dangroup | - | - | - | - | - | |||||||||||||||||||||||||||
| Stock issued in connection with the Management Carveout Plan, net of shares withheld for taxes | - | - | ( | ) | - | - | ( | ) | ||||||||||||||||||||||||
| Conversion of Jaunt deferred compensation, net of shares withheld for taxes | - | ( | ) | - | - | |||||||||||||||||||||||||||
| Issuance and exercise of Libertas warrants | - | - | - | - | - | |||||||||||||||||||||||||||
| RSU vesting | - | - | - | - | - | - | - | |||||||||||||||||||||||||
| Sale of common stock in Follow-on Offering, including over-allotment, net of $ | - | - | - | - | - | |||||||||||||||||||||||||||
| Sale of common stock in Follow-on Offering, including over-allotment, net of offering costs | - | - | - | - | - | |||||||||||||||||||||||||||
| Repurchase of common stock | ( | ) | - | - | ( | ) | - | - | ( | ) | ||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | - | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 7 |
AIRO Group Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
unaudited
| (Amounts in thousands) | 2026 | 2025 | ||||||
| Nine months ended September 30, | ||||||||
| (Amounts in thousands) | 2026 | 2025 | ||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Non-cash gain on IPO transactions | - | ( | ) | |||||
| Note issuance for legal settlement | - | |||||||
| Provision for credit losses | ||||||||
| Non-cash interest | - | |||||||
| Non-cash charge for Libertas warrants | - | |||||||
| Non-cash investor note interest | - | |||||||
| Non-cash gain on debt extinguishment | - | ( | ) | |||||
| Change in investor notes at fair value | - | |||||||
| Depreciation and amortization | ||||||||
| Amortization of right-of-use lease assets | ||||||||
| Change in fair value of contingent consideration | - | ( | ) | |||||
| Change in fair value of warrant liability | - | ( | ) | |||||
| Change in deferred taxes | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Related party receivables | ||||||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Inventory | ( | ) | ( | ) | ||||
| Accounts payable, accrued expenses and other long-term liabilities | ( | ) | ||||||
| Related party payables | ( | ) | ( | ) | ||||
| Lease liabilities | ( | ) | ( | ) | ||||
| Deferred revenue | ( | ) | ||||||
| Deferred compensation | - | ( | ) | |||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment and investment in intangible assets | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from the sale of common stock, net | - | |||||||
| Repurchase of common stock | - | ( | ) | |||||
| Change in lines of credit | - | ( | ) | |||||
| Proceeds from borrowings | - | |||||||
| Repayments on borrowings | ( | ) | ( | ) | ||||
| Proceeds from related party borrowings | - | |||||||
| Repayments on related party borrowings | ( | ) | ( | ) | ||||
| Debt issuance costs paid | - | ( | ) | |||||
| Proceeds from the exercise of warrants | - | |||||||
| Payment of contingent consideration | - | ( | ) | |||||
| Cash paid to seller | - | ( | ) | |||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| Effect of exchange rate changes | ( | ) | ||||||
| Net (decrease) increase in cash and restricted cash | ( | ) | ||||||
| Cash and restricted cash as of beginning of period | ||||||||
| Cash and restricted cash as of end of period | $ | $ | ||||||
| Supplemental disclosures of non-cash information: | ||||||||
| Financing of insurance premiums | $ | $ | ||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | ||||||
| Purchases of property and equipment included in accounts payable | $ | $ | - | |||||
| Deferred consideration for licensing arrangement | $ | $ | - | |||||
| Deferred compensation settled in common stock | $ | - | $ | |||||
| Reclass between accrued expenses and notes payable | $ | - | $ | |||||
| Reclass between accrued expenses and contingent consideration | $ | - | $ | |||||
| Reclass between related party payables and related party borrowings | $ | $ | - | |||||
| Initial recognition of warrant liability | $ | - | $ | |||||
| Reclass of warrants to equity | $ | - | $ | |||||
| Debt settled in common stock | $ | - | $ | |||||
| Contingent consideration settled in common stock | $ | - | $ | |||||
| Deferred offering cost in accrued expenses | $ | - | $ | |||||
| Issuance of Underwriter Warrants | $ | - | $ | |||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 8 |
AIRO Group Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
| 1. | The Company and Summary of Significant Accounting Policies |
Nature of Operations
AIRO Group Holdings, Inc., a Delaware corporation (“Holdings” or the “Company”), is a technologically differentiated aerospace, autonomy, and air mobility platform targeting 21st century aerospace and defense opportunities. The Company is organized into four operating segments: (i) Avionics, (ii) Drones, (iii) Electric Air Mobility, and (iv) Training. The Avionics segment develops, manufactures, and sells avionics for military and general aviation aircraft, drones, and electric vertical takeoff and landing (“eVTOL”) aircraft. The Drones segment develops, manufactures, and sells drones and expects to provide drone services, such as Drone as a Service (“DaaS”), for military and commercial end users. The Electric Air Mobility segment is developing autonomous eVTOL platforms for defense, government, cargo logistics, and remote operations applications. The Training segment currently provides military pilot training.
Consolidation and Basis of Presentation
The accompanying condensed consolidated financial statements include the accounts of Holdings and its wholly owned subsidiaries, including Old AGI, Inc. f/k/a AIRO Group, Inc., AIRO Drone, LLC (“AIRO Drone”), Agile Defense, LLC (“Agile Defense”), Coastal Defense, Inc. (“Coastal Defense”), Jaunt Air Mobility, LLC (“Jaunt”), Sky-Watch A/S (“Sky-Watch”) and Aspen Avionics, Inc. (“Aspen Avionics”). All intercompany accounts and transactions have been eliminated in consolidation.
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of such interim results. Certain information and disclosures normally included in unaudited condensed consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, the unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“Form 10-K”) as filed with the Securities and Exchange Commission (“SEC”). The condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited consolidated financial statements as of that date.
The results for the unaudited interim condensed consolidated statements of operations are not necessarily indicative of results to be expected for the year ending December 31, 2026 or for any future interim period.
Liquidity
As of September 30, 2026, we had total cash of $
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These judgments, estimates, and assumptions are used to determine litigation and claims and other asset and liability amounts. The Company bases its estimates and judgments on historical experience along with other pertinent information available at the time the estimate is made. However, future events are subject to change and the estimates and judgments may require adjustments. Actual results could differ from these estimates, and these differences may be material.
Significant Accounting Policies
No material changes have been made to the Company’s significant accounting policies disclosed in Note 1. The Company and Summary of Significant Accounting Policies, of its audited consolidated financial statements included in the Form 10-K.
Recently Adopted Accounting Standards
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient to simplify the estimation of expected credit losses on current accounts receivable and current contract assets arising from revenue transactions under Accounting Standards Codification (“ASC”) 606. The Company adopted this guidance effective January 1, 2026. The adoption did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures.
| 9 |
Recent Accounting Pronouncements Not Yet Adopted
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 disclosure of certain costs and expenses on an interim and annual basis in the notes to the consolidated financial statements. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The guidance is to be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which establishes authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants received by business entities. The ASU requires entities to recognize a government grant when it is probable that both (1) the entity will comply with the conditions attached to the grant and (2) the grant will be received. For grants related to assets, an entity may apply either a deferred income approach or a cost accumulation approach, and for grants related to income, an entity should recognize income on a systematic basis as related expenses are incurred. The ASU also includes expanded disclosure requirements regarding the nature of government grants received, the accounting policies adopted, and significant terms and conditions of the grants. The guidance is effective for annual reporting periods beginning after December 15, 2029. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which amends the guidance in ASC 270, Interim Reporting. The objective of this new guidance is to improve the clarity and navigability of the interim reporting guidance without changing the fundamental nature of interim reporting or expanding or reducing the interim disclosure requirements currently in U.S. GAAP. The amendments clarify the scope and applicability of ASC 270, specify the form and content of interim financial statements and accompanying notes, and consolidate the interim disclosures required under U.S. GAAP into a single comprehensive list. The ASU also introduces a disclosure principle that an entity must disclose events and changes occurring after the end of the last annual reporting period that have a material impact on the entity, consistent with the principle that previously existed under certain SEC interim reporting rules. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2028. Early adoption is permitted, and the amendments may be applied either prospectively or retrospectively to prior interim periods presented. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements, which provides technical corrections, clarifications, and improvements to the FASB ASC across multiple Topics. The amendments are generally not expected to change current accounting practices materially but may affect application of certain guidance such as diluted earnings per share in loss periods and other technical areas. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual periods, with early adoption permitted. An entity may elect the transition method on an issue-by-issue basis. The Company is evaluating the impact of ASU 2025-12 on its consolidated financial statements and related disclosures.
| 2. | Net Loss Per Share |
The following table presents the computation of basic and diluted net loss per share:
Schedule of Basic and Diluted Net Income (Loss) Per Share
| (Amounts in thousands, except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Three Months ended September 30, | Nine Months ended September 30, | |||||||||||||||
| (Amounts in thousands, except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Numerator: Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator: Basis and diluted weighted average shares outstanding | ||||||||||||||||
| Net loss per share – basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share – diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The
potentially dilutive shares of common stock that have been excluded from the calculation of net loss per share because of the anti-dilutive
effect are as follows as of September 30, 2026:
| 10 |
| 3. | Equity |
The
Company’s authorized capital stock consists of
Common Stock
The
Company has reserved the following shares of authorized but unissued common stock as of September 30, 2026:
Warrants
In
connection with the Company’s acquisition of Jaunt, the Company assumed equity-classified warrants to purchase
In
connection with the Company’s initial public offering (“IPO”), the Company also issued warrants to the
underwriters to purchase
Equity Incentive Plan
In
March 2025, the Company’s board of directors adopted, and the stockholders approved, the AIRO Group Holdings, Inc. 2025 Equity Incentive Plan (the
“2025 Plan”). The initial share reserve of the Company’s common stock authorized for issuance under the 2025 Plan was
The
share reserve will continue to increase annually on January 1 of each fiscal year through January 1, 2035 by 3% of the outstanding shares
of common stock as of December 31st of the preceding fiscal year or a lesser amount approved by the Company’s board of directors. The
maximum number of shares issuable upon exercise of incentive stock options under the 2025 Plan is
During
the three and nine months ended September 30, 2026, the Company granted
| 4. | Goodwill |
The following table presents the changes in the carrying value of goodwill for the periods indicated:
Schedule of Goodwill
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Balance as of January 1, 2026 | $ | - | $ | $ | $ | $ | ||||||||||||||
| Effect of exchange rate | - | ( | ) | - | - | ( | ) | |||||||||||||
| Balance as of September 30, 2026 | $ | - | $ | $ | $ | $ | ||||||||||||||
| Balance as of January 1, 2025 | $ | - | $ | $ | $ | $ | ||||||||||||||
| Effect of exchange rate | - | - | - | |||||||||||||||||
| Balance as of September 30, 2025 | $ | - | $ | $ | $ | $ | ||||||||||||||
The Company evaluates goodwill for impairment as of October 1 each year, and more frequently if events or circumstances indicate that there may be impairment. The Company completed its most recent annual goodwill impairment test as of October 1, 2025 and determined that no goodwill impairment existed. No triggering events were identified during the nine months ended September 30, 2026 that would require an interim impairment assessment.
| 11 |
| 5. | Intangible Assets, Net |
Intangible
assets, net, consist primarily of intangible assets acquired through business combinations. During the nine months ended September 30,
2026, the Company also capitalized $
The following table presents the details of intangible assets, net, as of the dates indicated:
Schedule of Intangible Assets, Net
| (In thousands) | Weighted Average Remaining Life (Years) | Gross | Accumulated
Amortization | Carrying Value | ||||||||||||
| As of September 30, 2026 | ||||||||||||||||
| (In thousands) | Weighted Average Remaining Life (Years) | Gross | Accumulated Amortization | Carrying Value | ||||||||||||
| Developed technology - definite lived | $ | $ | $ | |||||||||||||
| Developed technology - indefinite lived | N/A | - | ||||||||||||||
| Tradenames - definite lived | ||||||||||||||||
| Tradenames - indefinite lived | N/A | - | ||||||||||||||
| Customer relationships | ||||||||||||||||
| Patents | ||||||||||||||||
| Manufacturing license agreement | ||||||||||||||||
| Intangible assets net | $ | $ | $ | |||||||||||||
| As of December 31, 2025 | ||||||||||||||||
| (In thousands) | Weighted Average Remaining Life (Years) | Gross | Accumulated Amortization | Carrying Value | ||||||||||||
| Developed technology – definite lived | $ | $ | $ | |||||||||||||
| Developed technology – indefinite lived | N/A | - | ||||||||||||||
| Tradenames - definite lived | ||||||||||||||||
| Tradenames - indefinite lived | N/A | - | ||||||||||||||
| Customer relationships | ||||||||||||||||
| Patents | ||||||||||||||||
| Intangible assets net | $ | $ | $ | |||||||||||||
Amortization expense is reported within the following line items in the condensed consolidated statements of operations line items for the periods indicated:
Schedule of Amortization Expense
| (In thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| (In thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Cost of revenue | $ | $ | $ | $ | ||||||||||||
| Research and development | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Amortization expense | $ | $ | $ | $ | ||||||||||||
| 12 |
The following table presents the total estimated future amortization expense as of the date indicated:
Schedule of Estimated Future Amortization Expense
| (In thousands) | September 30, 2026 | |||
| 2026 (remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Amortization expense | $ | |||
The
estimated future amortization expense presented above excludes $
| 6. | Inventory |
The following table presents inventory as of the dates indicated:
Schedule of Inventory
| (In thousands) | September 30, 2026 | December 31, 2025 | ||||||
| Raw materials | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| Total | $ | $ | ||||||
| 7. | Debt |
Revolving Lines of Credit
On
May 26, 2026, the Company entered into a revolving overdraft credit facility with Danske Bank providing borrowing capacity of up to
DKK
Current Maturities of Debt and Long-Term Debt
Current maturities of debt and long-term debt consist of the following as of the dates indicated:
Schedule of Current Maturities of Debt and Long Term Debt
| (In thousands) | September 30, 2026 | December 31, 2025 | ||||||
| Bridge Loans | $ | - | $ | |||||
| SBA COVID-19 Economic Injury Disaster Loan | - | |||||||
| Code 1 | ||||||||
| Perrin Legal Settlement | ||||||||
| Financed Insurance Premiums | ||||||||
| Total debt | ||||||||
| Less: current maturities of long-term debt | ( | ) | ( | ) | ||||
| Long-term debt, net of current maturities | $ | - | $ | |||||
| 13 |
As of September 30, 2026, the Company has repaid in full its outstanding balance under the U.S. Small Business Administration COVID-19 Economic Injury Disaster Loan.
As of September 30, 2026, all outstanding debt is scheduled to mature within the next twelve months and are therefore classified as current liabilities in the accompanying unaudited condensed consolidated balance sheets.
| 8. | Commitments and Contingencies |
Joint Venture Agreement
On
November 13, 2025, AIRO Drone entered into a Joint Venture and Operating Agreement (the “JV Agreement”) with Nord Drone
Group, LLC (“NDG”), a Ukrainian limited liability company, pursuant to which AIRO Drone and NDG will form AIRO
Nord-Drone, LLC, a Delaware limited liability company (the “JV”). Pursuant to the terms of the JV Agreement, the JV will
develop, manufacture, and commercialize unmanned aerial systems primarily designed for delivering munitions, targeting U.S., North
Atlantic Treaty Organization (“NATO”), and Ukrainian defense markets. Each of the parties will contribute operational
resources and capabilities to the JV. The Company will contribute business development, sales, manufacturing, engineering, and
government certification resources, as well as manufacturing facilities in the United States, while NDG will contribute intellectual
property, engineering data, operational resources, and manufacturing facilities in Ukraine. In addition, the Company will reimburse
NDG for reasonable out-of-pocket costs incurred by NDG in obtaining NATO certification required by the JV Agreement, up to a maximum
amount of $
Each party to the JV will receive 50% of the limited liability company interests of the JV. The JV will be governed by a five-member board of managers, with each party appointing two directors and the acting chairman of the Company’s board of directors serving as the fifth director and chairman of the JV.
The consummation of the JV is subject to various closing conditions, including executing certain ancillary agreements between the parties and the JV, including intellectual property license, manufacturing, and services agreements, and obtaining any regulatory approval required under applicable law or by any governmental authority. Unless revised, the JV Agreement (as amended) will terminate, and the JV will not be consummated if closing does not occur on or before November 30, 2026.
There can be no assurance that closing conditions under the JV Agreement will be satisfied or when or that the JV will be consummated on the terms described herein or at all. The JV involves material risks including operational challenges related to NDG’s location in Ukraine during ongoing military conflict, complex export control and sanctions compliance requirements, and potential regulatory scrutiny regarding foreign defense partnerships.
Litigation
The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims. From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. Legal contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss or the measurement of a loss can be complex. The Company will accrue losses that are both probable and reasonably estimable.
| 9. | Segment Information |
The
Company’s chief operating decision maker has been identified as the chief executive officer. The Company periodically
reevaluates its reportable and operating segments. The Company manages its business primarily based upon
| 14 |
The Company evaluates the performance of its reportable segments based on the net income (loss) for each reporting segment. The following table presents the reconciliations of the reportable segment total revenues to the condensed consolidated revenues and the reportable segment total net income (loss) to the condensed consolidated net loss for the periods indicated:
Schedule of Segment Information
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Three months ended September 30, 2026 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Revenue | $ | $ | $ | - | $ | $ | ||||||||||||||
| Cost of revenue | - | |||||||||||||||||||
| Gross profit | - | |||||||||||||||||||
| Research and development | - | |||||||||||||||||||
| Sales and marketing | - | |||||||||||||||||||
| General and administrative | ||||||||||||||||||||
| Interest expense | - | - | ||||||||||||||||||
| Interest income | - | ( | ) | - | - | ( | ) | |||||||||||||
| Gain on extinguishment of debt, net | ||||||||||||||||||||
| Other expense (income), net | - | ( | ) | ( | ) | |||||||||||||||
| Income tax benefit | - | ( | ) | - | - | ( | ) | |||||||||||||
| Segment loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ( | ) | ||||||
| Unallocated amounts: | ||||||||||||||||||||
| Corporate expenses | ||||||||||||||||||||
| - | ||||||||||||||||||||
| - | ||||||||||||||||||||
| Interest income, net | ( | ) | ||||||||||||||||||
| Other income, net | ( | ) | ||||||||||||||||||
| Net loss | $ | ( | ) | |||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Three months ended September 30, 2025 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Revenue | $ | $ | $ | - | $ | $ | ||||||||||||||
| Cost of revenue | - | |||||||||||||||||||
| Gross profit | - | |||||||||||||||||||
| Research and development | - | |||||||||||||||||||
| Sales and marketing | - | |||||||||||||||||||
| General and administrative | ||||||||||||||||||||
| Interest expense | - | - | ||||||||||||||||||
| Interest income | - | ( | ) | - | - | ( | ) | |||||||||||||
| Other expense (income), net | ( | ) | ( | ) | ||||||||||||||||
| Income tax benefit | - | ( | ) | - | - | ( | ) | |||||||||||||
| Segment (loss) income | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ( | ) | ||||||||
| Unallocated amounts: | ||||||||||||||||||||
| Corporate expenses | ||||||||||||||||||||
| - | ||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||
| Other expense, net | ||||||||||||||||||||
| Net loss | $ | ( | ) | |||||||||||||||||
| 15 |
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Nine months ended September 30, 2026 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Revenue | $ | $ | $ | - | $ | $ | ||||||||||||||
| Cost of revenue | - | |||||||||||||||||||
| Gross profit | - | |||||||||||||||||||
| Research and development | - | |||||||||||||||||||
| Sales and marketing | - | |||||||||||||||||||
| General and administrative | ||||||||||||||||||||
| Interest expense | - | - | ||||||||||||||||||
| Interest income | - | ( | ) | - | - | ( | ) | |||||||||||||
| Other expense (income), net | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Income tax expense | - | - | - | |||||||||||||||||
| Segment (loss) income | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ( | ) | ||||||||
| Unallocated amounts: | ||||||||||||||||||||
| Corporate expenses | ||||||||||||||||||||
| Interest income, net | ( | ) | ||||||||||||||||||
| Other income, net | ( | ) | ||||||||||||||||||
| Net loss | $ | ( | ) | |||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Nine months ended September 30, 2025 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Revenue | $ | $ | $ | - | $ | $ | ||||||||||||||
| Cost of revenue | - | |||||||||||||||||||
| Gross profit | - | |||||||||||||||||||
| Research and development | - | |||||||||||||||||||
| Sales and marketing | - | |||||||||||||||||||
| General and administrative | ||||||||||||||||||||
| Interest expense | - | |||||||||||||||||||
| Interest income | - | ( | ) | - | - | ( | ) | |||||||||||||
| Gain on debt extinguishment, net | ( | ) | - | - | - | ( | ) | |||||||||||||
| Other expense (income), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Income tax expense | - | - | - | |||||||||||||||||
| Income tax expense (benefit) | - | - | - | |||||||||||||||||
| Segment income (loss) | $ | $ | $ | $ | ( | ) | ||||||||||||||
| Unallocated amounts: | ||||||||||||||||||||
| Corporate expenses | ||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||
| Gain on debt extinguishment, net | ( | ) | ||||||||||||||||||
| Other income, net | ( | ) | ||||||||||||||||||
| Net loss | $ | ( | ) | |||||||||||||||||
The following table presents revenue by geographic area for the periods indicated:
Schedule of Revenue by Geographic Area
| (In thousands) | Avionics | Drones | Electric
Air Mobility | Training | Total | |||||||||||||||
| Three months ended September 30, 2026 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| United States | $ | $ | $ | - | $ | $ | ||||||||||||||
| Europe | - | - | ||||||||||||||||||
| Other | - | - | - | |||||||||||||||||
| Revenue | $ | $ | $ | - | $ | $ | ||||||||||||||
| 16 |
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Three months ended September 30, 2025 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| United States | $ | $ | $ | - | $ | $ | ||||||||||||||
| Europe | - | - | ||||||||||||||||||
| Other | - | - | ||||||||||||||||||
| Revenue | $ | $ | $ | - | $ | $ | ||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Nine months ended September 30, 2026 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| United States | $ | $ | $ | - | $ | $ | ||||||||||||||
| Europe | - | - | ||||||||||||||||||
| Other | - | - | ||||||||||||||||||
| Revenue | $ | $ | $ | - | $ | $ | ||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Nine months ended September 30, 2025 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| United States | $ | $ | $ | - | $ | $ | ||||||||||||||
| Europe | - | - | ||||||||||||||||||
| Other | - | - | ||||||||||||||||||
| Revenue | $ | $ | $ | - | $ | $ | ||||||||||||||
The following table presents revenue by products and services for the periods indicated:
Schedule of Revenue by Products and Services
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Three months ended September 30, 2026 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Products | $ | $ | $ | - | $ | - | $ | |||||||||||||
| Services | - | - | ||||||||||||||||||
| Revenue | $ | $ | $ | - | $ | $ | ||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Three months ended September 30, 2025 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Products | $ | $ | $ | - | $ | $ | ||||||||||||||
| Services | - | - | ||||||||||||||||||
| Revenue | $ | $ | $ | - | $ | $ | ||||||||||||||
| 17 |
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Nine months ended September 30, 2026 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Products | $ | $ | $ | - | $ | - | $ | |||||||||||||
| Services | - | |||||||||||||||||||
| Revenue | $ | $ | $ | - | $ | $ | ||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Nine months ended September 30, 2025 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total | |||||||||||||||
| Products | $ | $ | $ | - | $ | $ | ||||||||||||||
| Services | - | |||||||||||||||||||
| Revenue | $ | $ | $ | - | $ | $ | ||||||||||||||
The following table presents capital expenditures, depreciation and amortization, stock-based compensation and contingent consideration fair value adjustments for the periods indicated:
Schedule of Capital Expenditures, Depreciation and Amortization
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total (1) | |||||||||||||||
| Three months ended September 30, 2026 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total (1) | |||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | $ | |||||||||||||||
| Stock-based compensation | ||||||||||||||||||||
| Capital expenditures | ||||||||||||||||||||
| (1) |
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total(1) | |||||||||||||||
| Three months ended September 30, 2025 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total (1) | |||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | $ | |||||||||||||||
| Stock-based compensation | - | - | - | |||||||||||||||||
| Capital expenditures | - | |||||||||||||||||||
| (1) |
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total (1) | |||||||||||||||
| Nine months ended September 30, 2026 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total (1) | |||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | $ | |||||||||||||||
| Stock-based compensation | ||||||||||||||||||||
| Capital expenditures | ||||||||||||||||||||
| (1) |
| 18 |
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total(1) | |||||||||||||||
| Nine months ended September 30, 2025 | ||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Total (1) | |||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | $ | |||||||||||||||
| Stock-based compensation | ||||||||||||||||||||
| Contingent consideration fair value adjustments | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
| Capital expenditures | - | |||||||||||||||||||
| (1) |
The following table presents tangible long-lived assets by geographic area as of the dates indicated:
Schedule of Tangible Long Lived Assets by Geographic Area
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Corporate | Total | ||||||||||||||||||
| September 30, 2026 | ||||||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Corporate | Total | ||||||||||||||||||
| United States | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Europe | - | - | - | - | ||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Corporate | Total | ||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Corporate | Total | ||||||||||||||||||
| United States | $ | $ | - | $ | $ | $ | - | $ | ||||||||||||||||
| Europe | - | - | - | - | ||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | - | $ | |||||||||||||||||
The following table presents the reconciliation of total segment assets to the condensed consolidated amounts as of the dates indicated:
Schedule of Segment Assets
| Total segment assets | ||||||||||||||||||||||||
| (In thousands) | Avionics | Drones | Electric Air Mobility | Training | Corporate | Total | ||||||||||||||||||
| September 30, 2026 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| December 31, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| 10. | Revenue |
The Company generates revenue from (i) product sales, including avionics, Global Navigation Satellite System (“GNSS”) technologies, and mini unmanned aircraft systems (“mUAS”)/commercial drones; (ii) services, including training, support, and drone services; (iii) research and development (“R&D”) contracts; and (iv) sales-based royalties.
Product revenue is recognized at a point in time upon shipment or delivery when control transfers to the customer. Service revenue is generally recognized over time as services are performed, typically on a straight-line basis over the service period, except for revenue from the Training segment, which is recognized at a point in time. Extended warranties are service-type warranties and are recognized over the contractual term, typically two to three years. Revenue from R&D contracts is recognized over time using an input method based on costs incurred relative to total estimated costs. Sales-based royalties are recognized at a point in time as underlying sales occur.
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The following table summarizes revenue recognized at a point in time and over time for the periods indicated:
Schedule of Revenue Recognition based on Time Periods
| (In thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Three Months ended September 30, | Nine Months ended September 30, | |||||||||||||||
| (In thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Point in time | $ | $ | $ | $ | ||||||||||||
| Over time | ||||||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
Contract
liabilities as of September 30, 2026 and December 31, 2025 were $
Revenue is also disaggregated by segment and geography. See Note 9. Segment Information.
| 11. | Related Party Transactions |
Related party transactions include the following:
| ● | Aspen
Avionics has a Commercialization Agreement with Centro Italiano Richerche Aerospaziali S.c.p.A (“CIRA”), a former
stockholder of Aspen Avionics, whereby CIRA licensed certain technology to Aspen Avionics. As consideration for the license, CIRA
will receive a royalty based on each unit sold by Aspen Avionics. In March 2020, Aspen Avionics entered into an agreement with CIRA
to settle unpaid royalty amounts due under a development agreement. The Company owed $ |
| ● | Coastal
Defense entered into unsecured due on demand notes with two stockholders (the “Stockholder Notes”). Interest is charged
at | |
| During
2025, the Company engaged in settlement discussions with one counterparty, Jeffrey F. Parker as executor of the estate of Kenneth
Parker and received a proposed settlement pursuant to which the Company is expected to pay the counterparty $ | ||
| In
January 2026, the Company made a payment of $ | ||
| ● | Edvard
Per Erik Svehag, a member of the Company’s board of directors, is a director of Dangroup ApS (“Dangroup”) and indirectly
beneficially owns approximately | |
| On
June 28, 2024, the Company signed an Incentive Agreement whereby the Company will pay Dangroup | ||
| On
June 28, 2024, the Company signed a Consulting Agreement whereby the Company will pay Mr. Svehag | ||
| The
Company recorded $ |
| 20 |
Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements are subject to substantial risks and uncertainties and are based on estimates and assumptions. All statements other than statements of historical facts, including statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, financing needs, plans or intentions relating to markets, and business trends and other information contained in this Quarterly Report on Form 10-Q, are forward-looking statements, including statements about:
| ● | our ability to grow and manage growth profitably; | |
| ● | our financial and business performance and business metrics; | |
| ● | our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; | |
| ● | the implementation, market acceptance and success of our business model; | |
| ● | our market opportunity and the potential growth of that market; | |
| ● | our ability to compete effectively in a competitive industry; | |
| ● | our ability to protect and enhance our corporate reputation and brand; | |
| ● | the impact from future regulatory, judicial, and legislative changes in our industry; | |
| ● | our ability to effect our growth strategies, acquisitions or investments successfully; and | |
| ● | our future capital requirements and sources and uses of cash. |
These statements are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to differ materially from those projected or otherwise implied by the forward-looking statements. The following factors, among others, may cause actual results to differ materially from those expressed or implied in our forward-looking statements:
| ● | our dependence on a limited number of customers for most of our revenue; | |
| ● | our lack of long-term commitments from our customers; |
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| ● | our ability to successfully integrate the businesses and personnel of acquired companies, including AIRO Drone, LLC, Agile Defense, LLC, Coastal Defense, Inc. (“Coastal Defense”) Jaunt Air Mobility, LLC (“Jaunt”), Sky-Watch A/S (“Sky-Watch”) and Aspen Avionics, Inc. (“Aspen Avionics”) and our ability to realize the anticipated synergies and benefits of such acquisitions; | |
| ● | our ability to keep pace with technological advances and our dependence on advances in technology by other companies, many of which have substantially greater resources than we do; | |
| ● | our ability to acquire additional aircraft to support our Training segment on acceptable terms or at all; | |
| ● | the impact that our customers may experience from service failures or interruptions due to defects in the software, infrastructure, components or engineering system that comprise our products and services, or due to errors in product installation; | |
| ● | our dependence on the continuing efforts of our key personnel and on our ability to attract and retain highly skilled personnel and senior management; | |
| ● | we have identified material weaknesses in our internal control over financial reporting which, if not corrected, could affect the reliability of our condensed consolidated financial statements; | |
| ● | our failure to comply with applicable government regulations; | |
| ● | any disruptions or threatened disruptions to our relationships with our distributors, suppliers, customers and employees, including shortages in components for our products; | |
| ● | our sales to the U.S. government, particularly to agencies of the U.S. Department of War (“DoW”), and a decline in government budgets, funding, changes in spending or budgetary priorities, or delays in contract awards; | |
| ● | budget uncertainty, the risk of future budget cuts, the impact of continuing resolution funding mechanisms, the debt ceiling and government shutdowns, and changing funding and acquisition priorities; | |
| ● | changes in the supply, demand and/or prices for our products and services and our ability to perform under existing contracts and obtain new contracts; | |
| ● | the complexities and uncertainty of obtaining and conducting international business, including export compliance and other reporting and compliance requirements; | |
| ● | the impact of potential security and cyber threats or the risk of unauthorized access to our, our customers’ and/or our suppliers’ information and systems; | |
| ● | our ability to respond and adapt to changes in economic, capital market, and political conditions in the U.S. and globally, such as from the global sanctions and export controls with respect to Russia, and any changes therein, and including changes related to financial market conditions, banking industry disruptions, fluctuations in commodity prices or supply (including energy supply), inflation, interest rates and foreign currency exchange rates, disruptions in global supply chain and labor markets, and geopolitical risks, including in the Middle East and Ukraine; |
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| ● | our failure to develop new products or integrate new technology into current products; | |
| ● | unfavorable results in legal proceedings; | |
| ● | the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing; and | |
| ● | our expectations regarding the period during which we will qualify as an emerging growth company and smaller reporting company. |
In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target” or “will” or the negative of these terms or other similar expressions intended to identify statements about the future. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
You should read the section titled “Risk Factors” included in our Annual Report on Form 10-K for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
You should read this Quarterly Report on Form 10-Q and the documents that we reference in this report and have filed as exhibits to the report, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all our forward-looking statements in this Quarterly Report on Form 10-Q by these cautionary statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following is management’s discussion and analysis of the major factors that influenced our financial condition and results of operations as of and for the three and nine months ended September 30, 2026 and 2025. This analysis should be read in conjunction with the audited consolidated financial statements as of December 31, 2025 and 2024 and for each of the two years then ended, together with the related notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”) and with the unaudited condensed consolidated financial statements and notes thereto set forth in this Quarterly Report on Form 10-Q, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Some of the information contained in this discussion and analysis includes forward-looking statements that involve risks and uncertainties. You should review the sections titled “Note Regarding Forward-Looking Statements” and “Risk Factors” in this Quarterly Report on Form 10-Q for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. All references to “we”, “us”, “our”, and the “Company” refer to AIRO Group Holdings, Inc.
Overview
We are a technologically differentiated aerospace, autonomy, and air mobility platform targeting 21st century aerospace and defense opportunities. We leverage decades of industry expertise and connections across the drone, aviation, and avionics markets to provide leading solutions to the aerospace and defense market. We offer connected and diversified solutions providing operational synergies across our segments and are powered by an international footprint as well as supplier and public sector relationships. Supported by complementary and innovative technologies, we believe we bring a unique value proposition to the market and are well-positioned to become a differentiated leader in the industry.
Our business is organized into four operating segments, each of which represents a critical growth vector in the aerospace and defense market: Avionics, Drones, Electric Air Mobility, and Training. These four segments collectively target an estimated total addressable market of over $315 billion by 2030.
Avionics. The Avionics segment develops, manufactures, and sells avionics for military and general aviation aircraft, drones, and eVTOLs. Our avionics products include flight displays, Connected Panels, and GPS/GNSS sensors, all of which have been installed on legacy military aircraft and general aviation platforms. We sell our avionics products through our Aspen Avionics brand, which is well-recognized in the general aviation aftermarket sector with over 20 years of operating history building long-term customer loyalty through our value proposition. We also serve as an avionics supplier for original equipment manufacturers (“OEMs”), including Robinson Helicopters, Pilatus, Honeywell, and Joby Aviation. We believe our avionics solutions have a considerable market opportunity as general aviation fleets continue to age, with owners and operators seeking to upgrade the avionics technology on their aircraft. During the second quarter of 2026, our consolidated Phoenix manufacturing facility achieved AS9100D certification, reinforcing our manufacturing quality and supporting future growth across general aviation and advanced aerospace markets.
Drones. The Drones segment develops, manufactures, and sells drones and will provide drone services, such as DaaS, for military and commercial end users. Our military drones are sold through our Sky-Watch brand, which is a key supplier to European NATO countries. A critical point of differentiation lies in our drones’ ability to perform in a GPS-denied environment, which is a technology application relevant for both military and commercial end markets. The segment’s portfolio includes the battle-proven RQ-35 platform and the recently introduced next-generation RQ-70 platform, which is designed to support expanded operational capabilities, including longer flight range, greater endurance, higher payload capacity, upgraded sensor options, and enhanced autonomous mission operations. During the second quarter of 2026, we completed significant customer deliveries of our RQ-35 platform, including the first operational deployment featuring our proprietary Zentra camera suite, and announced that the RQ-35 had been added to the DoW Blue UAS list, expanding its eligibility for U.S. government procurement. Additionally, in September 2026, we were invited to participate in Phase 2.5 of the DoW’s Drone Dominance Program as one of 17 companies selected for drone evaluations, further expanding our engagement with U.S. defense initiatives.
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Electric Air Mobility. The Electric Air Mobility segment, operated through our Jaunt brand, is developing dual-use electric and hybrid-electric compound rotorcraft aircraft. Our near-term focus is on cargo-configured and multi-role autonomous aircraft platforms, including the JC250 and JX250 variants, designed to support middle-mile logistics, tactical resupply, emergency medical delivery, law enforcement, intelligence, surveillance and reconnaissance (“ISR”), and other commercial and government missions. The JC250 is designed as an autonomous cargo drone platform for logistics missions, while the JX250 is designed as a variant platform for ISR and logistics applications. These platforms are being designed to support extended operational range, payload flexibility, and autonomous mission capabilities for commercial and government use cases. We plan to pursue certification of our aircraft under existing CAR 529 Transport Category Rotorcraft standards. Our aircraft integrate characteristics of both rotary- and fixed-wing platforms through our patented compound rotorcraft configuration, which has accumulated over 300 piloted flight hours across multiple Jaunt demonstrator aircraft. We are evaluating both fully electric and hybrid-electric propulsion architectures to support varying mission requirements, including extended range and increased operational flexibility. We believe this compound rotorcraft architecture, combined with electric and hybrid-electric propulsion strategies, provides favorable range, payload capacity, and mission adaptability relative to conventional rotorcraft and certain eVTOL configurations. Upon certification, we expect our cargo-configured aircraft to serve as the initial foundation of our commercialization efforts. In October 2026, Jaunt Air Mobility Canada was selected as a qualified supplier within Canada’s Defense Drone Initiative Marketplace, providing an opportunity to participate in Canadian defense procurement initiatives focused on advanced drone and autonomous aviation technologies.
Training. The Training segment currently provides military pilot training. We offer professional training and consulting services to the U.S. military, select NATO countries, and other U.S. allies under our Coastal Defense brand. These offerings include adversary air, close air support, ISR, aircraft leasing, pilot training, ground liaison services, and Joint Terminal Attack Controller training, as well as full joint theatre ISR and simulated ground strike training. We work closely with special military forces such as the U.S. Navy Sea, Air, and Land (“SEAL”) teams, the U.S. Naval Air Warfare Center, and United States Air Force Air Combat Command, and are a mandated recipient on a $5.7 billion DoW Indefinite Delivery Indefinite Quantity (“IDIQ”) Contract and a $1.9 million IDIQ Contract. Our personnel’s top security clearances and established relationships at the Pentagon provide us with a differentiated ability to bid on mandates. The Company is evaluating the strategic fit and long-term role of its Training segment.
Key Factors Affecting Our Performance
Our financial condition and results of operations have been, and will continue to be, affected by a number of factors, including the following.
Customer Concentration and Drone Segment Revenue Concentration
We believe that our operating results for the foreseeable future will continue to depend to a significant extent on sales attributable to certain end customers with such concentration primarily attributable to our Drones segment.
Development of the Electric Air Mobility Market
Our future revenue for our Electric Air Mobility segment will depend on the continued development of autonomous cargo and logistics operations and short-distance aerial transportation. While we believe the global market for electric air mobility will be large, it remains undeveloped and future demand is uncertain. Our current focus is on the development and commercialization of autonomous cargo and multi-role eVTOL platforms for logistics, ISR, defense, government, and related commercial applications. We anticipate receiving certification of our 33% downscaled cargo eVTOL under drone rules as early as 2027. Launching these services is subject to available funding and will require significant, upfront investment, including, but not limited to, final engineering designs, prototyping and testing, manufacturing, software development, certification, operator training, infrastructure, and commercialization. We benefit from supplier cost sharing, whereby our suppliers have agreed to defer their non-recurring engineering costs until commercialization, which has reduced our initial funding requirements prior to commercialization.
Training Segment Contract Opportunities
The Training segment has experienced delays in the timing of expected contract awards under the IDIQ contracts as well as loss of awards under the IDIQ contracts due to insufficient aircraft, resulting in lower near-term revenue visibility. During 2026, the Company invested in operational capabilities to support its ability to compete for future contract opportunities. Future operating results will depend on the timing and successful conversion of contract awards.
Lack of Long-Term Customer Commitments
Our sales are generally made on a purchase order basis, and we typically do not have long-term purchase commitments from our customers. As a result, customers may cancel, reduce, reschedule, or otherwise modify their purchase orders, which may affect anticipated sales. In addition, the timing and size of purchase orders, as well as modifications to existing orders, may vary from period to period and could cause fluctuations in our operating results.
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements prepared and presented in accordance with GAAP, we use EBITDA, Adjusted EBITDA and Adjusted EBITDA margin, as described below, to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes.
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We define (1) EBITDA as net loss before depreciation and amortization, income tax (benefit) expense, and interest (income) expense, net, (2) Adjusted EBITDA as net loss before depreciation and amortization, income tax (benefit) expense, interest (income) expense, net, gain on extinguishment of debt, stock-based compensation, strategic workforce transition costs, contingent consideration fair value adjustments, warrant fair value adjustment, and IPO contingencies, and (3) Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. The above items are excluded from our Adjusted EBITDA measure because these items are either non-cash in nature, or because the amount and timing of these items is unpredictable, or because they are not driven by core results of operations, thereby rendering comparisons with prior periods and competitors less meaningful. We believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance. Moreover, we have included Adjusted EBITDA in this Quarterly Report on Form 10-Q because it is a key measurement used by our management internally to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting.
These non-GAAP financial measures should not be considered as alternatives to performance measures derived in accordance with GAAP. Our presentation of these non-GAAP financial measures should not be construed to imply that our future results will be unaffected by items that are excluded from these metrics. In addition, our definitions of these non-GAAP financial measures may be different from similarly titled non-GAAP measures used by other companies. These non-GAAP financial measures have limitations as an analytical tool, and you should not consider any of these non-GAAP financial measures in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that our non-GAAP financial measures:
| ● | do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; | |
| ● | exclude depreciation and amortization expense, and although these are non-cash expenses, the assets being depreciated may have to be replaced in the future, increasing our cash requirements; and | |
| ● | do not reflect provision for or benefit from income taxes that reduces cash available to us. |
Because of these limitations, we consider, and you should consider, the non-GAAP financial measures alongside other financial performance measures, including net loss and our other GAAP results. A reconciliation of EBITDA and Adjusted EBITDA to net loss, and Adjusted EBITDA Margin to net loss margin, the most directly comparable financial measures stated in accordance with GAAP, is provided below. Investors are encouraged to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measure to their most directly comparable GAAP financial measure.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net loss | $ | (11,997 | ) | $ | (7,963 | ) | $ | (29,444 | ) | $ | (4,065 | ) | ||||
| Depreciation and amortization | 3,316 | 2,909 | 9,651 | 9,035 | ||||||||||||
| Income tax (benefit) expense | (21 | ) | (613 | ) | 2,396 | 1,731 | ||||||||||
| Interest (income) expense, net | (128 | ) | (79 | ) | (712 | ) | 9,198 | |||||||||
| EBITDA | (8,830 | ) | (5,746 | ) | (18,109 | ) | 15,899 | |||||||||
| Gain on extinguishment of debt | - | - | - | (15,559 | ) | |||||||||||
| Stock-based compensation | 1,312 | 1,092 | 3,918 | 19,855 | ||||||||||||
| Strategic workforce transition costs1 | - | - | 635 | - | ||||||||||||
| Contingent consideration fair value adjustments | - | - | - | (20,272 | ) | |||||||||||
| Warrant fair value adjustment | - | - | - | (1,843 | ) | |||||||||||
| IPO contingencies2 | - | (3,391 | ) | - | (1,322 | ) | ||||||||||
| Adjusted EBITDA | $ | (7,518 | ) | $ | (8,045 | ) | $ | (13,556 | ) | $ | (3,242 | ) | ||||
| Net loss margin | (68.5 | )% | (126.7 | )% | (42.3 | )% | (9.5 | )% | ||||||||
| Adjusted EBITDA Margin | (42.9 | )% | (128.0 | )% | (19.5 | )% | (7.6 | )% | ||||||||
1 Strategic workforce transition costs consist of severance and other direct employee-related costs incurred in connection with the Company’s strategic workforce realignment and organization optimization initiatives. These costs are included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.
2 IPO contingencies for the three months ended September 30, 2025 are made up of a $1.2 million charge related to the Libertas warrants, net of a $4.5 million gain on deferred compensation. IPO contingencies for the nine months ended September 30, 2025 are made up of $1.0 million related to services with KippsDeSanto & Co. regarding the acquisition of Aspen Avionics, $0.8 million related to the Perrin legal settlement, $0.5 million in legal services accrual, $0.2 million for the NGA contingent fee agreement, $0.3 million in bonus payments, the $0.6 million Aspen contingent debt, a $1.2 million charge related to the Libertas warrants, the $0.1 million cash portion of the Aspen carve-out plan, net of a $5.9 million gain on deferred compensation.
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Results of Operations
Three and Nine Months Ended September 30, 2026 and 2025
The following table shows our consolidated financial results for the three and nine months ended September 30, 2026 and 2025:
Three Months Ended September 30, | Period over period change | |||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | ($) | (%) | ||||||||||||
| Revenue | $ | 17,510 | $ | 6,284 | $ | 11,226 | 178.6 | % | ||||||||
| Cost of revenue | 7,616 | 3,494 | 4,122 | 118.0 | % | |||||||||||
| Gross profit | 9,894 | 2,790 | 7,104 | 254.6 | % | |||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 7,925 | 4,124 | 3,801 | 92.2 | % | |||||||||||
| Sales and marketing | 3,687 | 1,603 | 2,084 | 130.0 | % | |||||||||||
| General and administrative | 11,415 | 9,043 | 2,372 | 26.2 | % | |||||||||||
| Total operating expenses | 23,027 | 14,770 | 8,257 | 55.9 | % | |||||||||||
| Loss from operations | (13,133 | ) | (11,980 | ) | (1,153 | ) | (9.6 | )% | ||||||||
| Other income, net: | ||||||||||||||||
| Interest income, net | 128 | 79 | 49 | 62.0 | % | |||||||||||
| Other income, net | 987 | 3,325 | (2,338 | ) | (70.3 | )% | ||||||||||
| Total other income, net | 1,115 | 3,404 | (2,289 | ) | (67.2 | )% | ||||||||||
| Income before income tax benefit | (12,018 | ) | (8,576 | ) | (3,442 | ) | (40.1 | )% | ||||||||
| Income tax benefit | 21 | 613 | (592 | ) | (96.6 | )% | ||||||||||
| Net loss | $ | (11,997 | ) | $ | (7,963 | ) | $ | (4,034 | ) | (50.7 | )% | |||||
Nine Months Ended September 30, | Period over period change | |||||||||||||||
| (In thousands, except percentages) | 2026 | 2025 | ($) | (%) | ||||||||||||
| Revenue | $ | 69,591 | $ | 42,629 | $ | 26,962 | 63.2 | % | ||||||||
| Cost of revenue | 29,645 | 17,872 | 11,773 | 65.9 | % | |||||||||||
| Gross profit | 39,946 | 24,757 | 15,189 | 61.4 | % | |||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 22,205 | 11,891 | 10,314 | 86.7 | % | |||||||||||
| Sales and marketing | 8,019 | 4,794 | 3,225 | 67.3 | % | |||||||||||
| General and administrative | 38,359 | 42,822 | (4,463 | ) | (10.4 | )% | ||||||||||
| Total operating expenses | 68,583 | 59,507 | 9,076 | 15.3 | % | |||||||||||
| Loss from operations | (28,637 | ) | (34,750 | ) | 6,113 | 17.6 | % | |||||||||
| Other income, net: | ||||||||||||||||
| Interest income (expense), net | 712 | (9,198 | ) | 9,910 | 107.7 | % | ||||||||||
| Gain on extinguishment of debt, net | - | 15,559 | (15,559 | ) | (100.0 | )% | ||||||||||
| Other income, net | 877 | 26,055 | (25,178 | ) | (96.6 | )% | ||||||||||
| Total other income, net | 1,589 | 32,416 | (30,827 | ) | (95.1 | )% | ||||||||||
| Loss before income tax expense | (27,048 | ) | (2,334 | ) | (24,714 | ) | (1,058.9 | )% | ||||||||
| Income tax expense | (2,396 | ) | (1,731 | ) | (665 | ) | (38.4 | )% | ||||||||
| Net loss | $ | (29,444 | ) | $ | (4,065 | ) | $ | (25,379 | ) | (624.3 | )% | |||||
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Revenue
For the three months ended September 30, 2026, revenue increased by $11.2 million compared to the same period in 2025, primarily driven by a $12.2 million increase in the Drones segment, partially offset by decreases of $0.6 million in the Training segment and $0.4 million in the Avionics segment. The increase in Drones revenue reflected higher drone sales and the impact of delayed shipments in the prior-year period following a key customer’s request for a configuration change to dual-band antennas, which the incumbent supplier was unable to fulfill in time for scheduled deliveries. The decreases in Training and Avionics revenue were primarily attributable to fewer task orders and lower demand, respectively.
For the nine months ended September 30, 2026, revenue increased by $27.0 million compared to the same period in 2025, primarily driven by a $29.3 million increase in the Drones segment, partially offset by decreases of $1.3 million in the Training segment and $1.0 million in the Avionics segment. The increase in Drones revenue reflected higher drone sales and the aforementioned prior-year shipment delays. The decrease in Training revenue was primarily attributable to fewer task orders, while the decrease in Avionics revenue reflected lower demand and temporary disruptions associated with a facility relocation during the first quarter of 2026.
Cost of Revenue
For the three months ended September 30, 2026, cost of revenue increased by $4.1 million compared to the same period in 2025, primarily driven by a $4.9 million increase in the Drones segment due to higher drone sales during the current year period, partially offset by decreases of $0.7 million and $0.1 million in the Training and Avionics segments, respectively.
Gross margin increased to 56.5% during the three months ended September 30, 2026 compared to 44.4% during the same period in 2025, primarily reflecting a higher proportion of revenue generated by the Drones segment, which carries higher margins relative to the other segments. Gross margin in the Drones segment decreased to 61.0% from 66.1%, reflecting changes in product sales mix that more than offset the impact of higher drone sales volume in the current year period. Gross margin in the Training segment increased to 31.7% from 13.0%, primarily reflecting reductions in subcontractor costs, cost of service and travel expenses associated with lower contract activity which more than offset the impact of lower revenue. Gross margin in the Avionics segment decreased to 18.1% from 32.7%, primarily due to lower sales volume and pricing concessions to support customer demand.
For the nine months ended September 30, 2026, cost of revenue increased by $11.8 million compared to the same period in 2025, primarily driven by a $12.9 million increase in the Drones segment due to higher drone sales during the current year period, partially offset by a $1.1 million decrease in the Training segment. Cost of revenue in the Avionics segment remained relatively flat year over year.
Gross margin was 57.4% during the nine months ended September 30, 2026 compared to 58.1% during the same period in 2025. Gross margin in the Drones segment decreased to 61.1% from 65.4%, primarily reflecting a less favorable sales mix during the first quarter of 2026, partially offset by improved margins in the second and third quarters as drone product deliveries increased. Gross margin in the Training segment increased to 19.3% from 17.5%, primarily reflecting reductions in subcontractor costs, cost of service and travel expenses associated with lower contract activity which more than offset the impact of lower revenue. Gross margin in the Avionics segment decreased to 25.0% from 40.1%, primarily due to lower sales volume and pricing concessions to support customer demand.
Operating Expenses
Research and Development (“R&D”)
For the three months ended September 30, 2026, R&D expenses increased by $3.8 million compared to the same period in 2025, reflecting higher expenses in the Drones segment of $2.1 million, Electric Air Mobility segment of $1.2 million, and Avionics segment of $0.6 million.
For the nine months ended September 30, 2026, R&D expenses increased by $10.3 million compared to the same period in 2025, reflecting higher expenses in the Drones segment of $6.7 million, Electric Air Mobility segment of $2.2 million, and Avionics segment of $1.4 million.
The increases for both periods were primarily driven by higher personnel and consulting costs associated with ongoing development initiatives in the Drones segment, increased personnel costs supporting development programs in the Electric Air Mobility segment, and targeted investments in the Avionics segment.
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Sales and Marketing
For the three months ended September 30, 2026, sales and marketing expenses increased by $2.1 million compared to the same period in 2025, primarily driven by a $0.7 million increase in consulting fees associated with defense-related sales activities, a $0.6 million increase in personnel costs, a $0.2 million increase in facility costs, a $0.2 million increase in marketing and trade show expenses, and a $0.1 million increase in professional services, with the remaining net increase attributable to other operating expenses.
For the nine months ended September 30, 2026, sales and marketing expenses increased $3.2 million compared to the same period in 2025, primarily driven by a $0.9 million increase in personnel costs, a $0.7 million increase in consulting fees associated with defense-related sales activities, a $0.6 million increase in marketing and tradeshow expenses, and a $0.5 million increase in facility costs, and a $0.2 million increase in professional services, with the remaining net increase attributable to other operating expenses.
General and Administrative
For the three months ended September 30, 2026, general and administrative expenses increased by $2.4 million compared to the same period in 2025. The increase was primarily driven by a $1.1 million increase in the Drones segment, reflecting higher personnel costs to support production expansion, increased professional fees, and higher depreciation and amortization expenses associated with investments in property and equipment. Corporate expenses increased by a $1.4 million, while expenses also increased in the Training and Electric Air Mobility segments increased by $0.2 million and $0.1 million, respectively. These increases were partially offset by a $0.4 million decrease in the Avionics segment.
Corporate expenses increased by $1.4 million compared to the same period in 2025. The increase was primarily driven by higher professional fees of $0.9 million, personnel costs of $0.5 million, and facility-related costs of $0.3 million, primarily reflecting increased operating activities to support business growth. These increases were partially offset by decreases of $0.2 million in other operating expenses.
For the nine months ended September 30, 2026, general and administrative expenses decreased by $4.5 million compared to the same period in 2025. The decrease was primarily attributable to lower stock-based compensation expenses associated with awards that vested in connection with the IPO, resulting in decreases of $9.0 million in the Training segment and $1.8 million in the Avionics segment. These decreases were partially offset by a $5.5 million increase in the Drones segment, driven by increased personnel costs to support production expansion, higher stock-based compensation related to RSU grants, and increased depreciation and amortization associated with investments in property and equipment. Expenses also increased by $0.6 million in the Electric Air Mobility segment, primarily due to higher personnel and other operating costs, and by $0.3 million in Corporate expenses.
Corporate expenses increased by $0.3 million compared to the same period in 2025. The increase was primarily driven by higher personnel costs of $1.4 million, facility-related costs of $1.1 million, and insurance costs of $0.6 million, primarily reflecting increased operating activities to support business growth. These increases were partially offset by a $2.7 million decrease in IPO-related expenses incurred in the prior-year period and a $0.4 million decrease in professional fees, with the remaining net increase of $0.4 million attributable to other operating expenses.
Other Income
Interest Income (Expense), Net
Interest income, net remained relatively flat at $0.1 million for both the three months ended September 30, 2026 and 2025. For the nine months ended September 30, 2026 and 2025, interest income, net was $0.7 million, compared to interest expense, net of $9.2 million for the nine months ended September 30, 2025. Interest expense for the nine months ended September 30, 2025 was primarily attributable to $6.7 million of non-cash interest on investor notes settled in shares, as well as additional interest incurred on borrowings from Libertas Funding, LLC (“Libertas”) and WebBank.
Gain on extinguishment of debt, net
For the nine months ended September 30, 2025, gain on debt extinguishment, net, was $15.6 million, primarily consisting of a $13.1 million gain from the partial settlement of Aspen bridge notes through the issuance of equity and a $5.7 million gain from the settlement of certain investor notes at fair value, partially offset by $3.2 million in losses on the extinguishment of Libertas and WebBank loans. No gain or loss on debt extinguishment was recognized during the three months ended September 30, 2025 and the three and nine months ended September 30, 2026.
Other Income, Net
For the three months ended September 30, 2026, other income, net was $1.0 million, compared to $3.3 million for the same period in 2025. Other income in 2026 primarily reflected a one-time benefit from the release of certain liabilities. Other income in 2025 was primarily attributable to a $4.5 million gain from the settlement of deferred compensation, partially offset by a $1.2 million charge related to Libertas warrants.
For the nine months ended September 30, 2026, other income, net was $0.9 million, compared to $26.1 million for the same period in 2025. Other income in 2026 primarily reflected a one-time benefit from the release of certain liabilities. Other income in 2025 primarily consisted of a $20.3 million gain from fair value adjustments to contingent consideration, a $5.9 million gain from the settlement of deferred compensation, and a $1.8 million gain from fair value adjustments to Libertas warrants, partially offset by a $1.2 million charge related to Libertas warrants and a $0.6 million contingency related to Aspen contingent debt.
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Income Tax Benefit (Expense)
For the three months ended September 30, 2026 and 2025, income tax benefit was approximately $21,000 and $0.6 million, respectively. For the nine months ended September 30, 2026 and 2025, income tax expense was $2.4 million and $1.7 million, respectively. Tax expense for the nine months ended September 30, 2026 and 2025 was primarily attributable to Sky-Watch generating positive pre-tax income.
Liquidity and Capital Resources
As of September 30, 2026, we had total cash of $37.8 million and working capital of $50.7 million. Based on its current operating plan and available liquidity, management believes that the Company has sufficient cash and resources to meet its obligations and continue its operations for at least the next 12 months from the date of issuance of the financial statements included in this Quarterly Report on Form 10-Q.
Cash Flows
The following summarizes our cash flows for the periods indicated:
Nine Months Ended September 30, | ||||||||
| (In thousands) | 2026 | 2025 | ||||||
| Net cash used in operating activities | $ | (27,112 | ) | $ | (36,522 | ) | ||
| Net cash used in investing activities | (7,080 | ) | (2,007 | ) | ||||
| Net cash (used in) provided by financing activities | (1,898 | ) | 97,463 | |||||
Net Cash Used in Operating Activities
Net cash used in operating activities for the nine months ended September 30, 2026 was $27.1 million, primarily reflecting a net loss of $29.4 million, adjusted for non-cash expenses, including $9.7 million of depreciation and amortization and $3.9 million of stock-based compensation, and net cash outflows of $12.1 million from changes in operating assets and liabilities. Changes in operating assets and liabilities primarily consisted of increases of $7.3 million in inventory and $4.7 million in accounts receivable, and a decrease of $6.4 million in related party payables, partially offset by an increase of $3.6 million in accounts payable, accrued expenses and other long-term liabilities, an increase of $1.8 million in deferred revenue, and a decrease of $1.2 million in prepaid expenses and other assets.
Net cash used in operating activities for the nine months ended September 30, 2025 was $36.5 million, primarily reflecting a net loss of $4.1 million, net non-cash adjustments of $4.3 million and net cash outflows of $28.2 million from changes in operating assets and liabilities. Non-cash adjustments primarily included a $20.3 million gain from changes in the fair value of contingent consideration, a $15.6 million gain on debt extinguishment, a $5.5 million gain from IPO transactions and a $1.8 million gain from changes in the fair value of warrant liabilities, partially offset by $19.9 million of stock-based compensation, $9.0 million of depreciation and amortization, $6.7 million of non-cash investor note interest, a $1.2 million non-cash charge related to Libertas warrants and $1.1 million of non-cash interest. Changes in operating assets and liabilities primarily consisted of a $19.8 million decrease in accounts payable, accrued expenses and other long-term liabilities, an $8.9 million decrease in deferred revenue, a $6.3 million increase in inventory and a $1.5 million increase in prepaid expenses and other assets, partially offset by an $8.7 million decrease in accounts receivable.
Net Cash Used in Investing Activities
Cash of $7.1 million and $2.0 million was used in investing activities during the nine months ended September 30, 2026 and 2025, respectively, to purchase property and equipment and intangible assets.
Net Cash (Used In) Provided by Financing Activities
Net cash used in financing activities during the nine months ended September 30, 2026 was $1.9 million, primarily due to $1.7 million of repayments on borrowings and $0.2 million of repayments on related party borrowings.
Net cash provided by financing activities during the nine months ended September 30, 2025 was $97.5 million primarily due to $58.3 million of proceeds from the IPO net of issuance costs, $83.3 million of proceeds from our September 2025 follow-on offering net of issuance costs, and $8.5 million of proceeds from the Libertas warrants and WebBank loans, partially offset by $20.0 million of common stock repurchases, $20.9 million of repayments on borrowings and related party borrowings, $8.5 million of contingent consideration payments, and $3.2 million in payments to seller.
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Critical Accounting Policies and Estimates
Our condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires management to establish accounting policies that contain estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These policies relate to revenue recognition, goodwill impairment, inventory, income taxes, impairment of indefinite-lived and long-lived assets, and stock-based compensation. We have other important accounting policies and practices; however, once adopted, these other policies either generally do not require us to make significant estimates or assumptions or otherwise only require implementation of the adopted policy and not a judgment as to the policy itself. Management bases its estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Despite our intention to establish accurate estimates and assumptions, actual results may differ from these estimates under different assumptions or conditions. During the nine months ended September 30, 2026, management believes there have been no significant changes to the items that we disclosed within our critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Recent Accounting Pronouncements
A summary of recent accounting pronouncements that may have an impact on our consolidated financial statements is included in Note 1 to condensed consolidated financial statements accompanying this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”) and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding required disclosure.
Our Chief Executive Officer and Chief Financial Officer, with assistance from other members of management, have evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2026, and based on their evaluation, have concluded that our disclosure controls and procedures were not effective as of such date due to material weaknesses in internal control over financial reporting, described below.
Background and Remediation of Material Weaknesses
In connection with the preparation of our consolidated financial statements for the years ended December 31, 2025 and 2024, material weaknesses were identified in the design and operating effectiveness of our internal control over financial reporting. In 2024, we identified material weaknesses due to ineffective information and communication controls, resulting in lack of timely identification and accounting for certain key debt and other agreements. Since fiscal year 2023, there have been misstatements that, individually and in the aggregate, were material to the consolidated financial statements that were identified due to deficiencies related to technical accounting. More specifically, the review controls over the transactions that gave rise to these misstatements lacked sufficient precision and the Company lacked a sufficient complement of personnel with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately. Due to the delays in securing funding during 2024 and 2025, we were not able to hire and train sufficient staff to remediate the previously identified material weaknesses in our internal control over financial reporting. As such, these material weaknesses were not remediated and continued to be present as of September 30, 2026.
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We have initiated, and continue to implement, measures intended to remediate the material weaknesses described above and to strengthen our internal control over financial reporting. These measures include:
(i) hiring additional experienced accounting and SEC reporting personnel at the corporate and subsidiary levels and enhancing segregation of duties; (ii) engaging an independent internal auditor and establishing an internal audit plan focused on improving the overall financial reporting control environment, including revenue recognition, complex financing arrangements, and acquisition accounting, with periodic reporting to the Audit Committee; (iii) implementing formal contract-review controls including documented technical accounting reviews for new or amended agreements; (iv) standardizing and documenting our monthly and quarterly close processes, including review and approval controls, checklists, and enhanced management review controls over significant estimates and judgments; and (v) deploying certain technology solutions, including a cloud-based planning and reporting system to reduce manual processes and improve data integrity and transparency.
While we believe these actions represent important steps toward remediation, the material weaknesses will not be considered remediated until the applicable controls are designed, implemented, and operate effectively for a sufficient period of time and management has concluded, through testing, that they are operating effectively. We can provide no assurance that the measures described above will fully remediate the identified material weaknesses. We also may incur significant costs to execute various aspects of our remediation plan.
Changes in Internal Control over Financial Reporting
Except for the material weakness remediation efforts described above, there were no other changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on the Effectiveness of Disclosure Controls and Procedures
Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some people, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any material legal proceedings and are not aware of any pending or threatened claims. From time to time, we may be subject to various legal proceedings and claims that arise in the ordinary course of our business activities. Regardless of outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.
Item 1A. Risk Factors
Our business, financial condition and operating results are affected by a number of factors, whether currently known or unknown, including risks specific to us or the aerospace and defense industry as well as risks that affect businesses in general. In addition to the information set forth in this Quarterly Report on Form 10-Q, you should consider carefully the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 31, 2026. The risks and uncertainties disclosed in such Annual Report could materially adversely affect our business, financial condition, cash flows or results of operations and thus our stock price. During the third quarter of 2026, there were no material changes to our previously disclosed risk factors.
These risk factors may be important to understanding other statements in this Quarterly Report and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report. Because of such risk factors, as well as other factors affecting our financial condition and operating results, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Adoption, Modification and Termination of Rule 10b5-1 Plans and Certain Other Trading Arrangements
During
the quarter ended September 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act)
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ITEM 6. EXHIBITS
| Incorporated by Reference | ||||||||||
Exhibit Number |
Description | Form | File No. | Exhibit | Filing Date | |||||
| 3.1 | Amended and Restated Certificate of Incorporation of the Company | 8-K | 001-38529 | 3.1 | June 16, 2025 | |||||
| 3.2 | Amended and Restated Bylaws of the Company | S-1/A | 333-285149 | 3.4 | April 10, 2025 | |||||
| 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. | |||||||||
| 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. | |||||||||
| 32.1* | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||
| 101.INS | XBRL Instance Document – The instance document does not appear in the Interactive Data Files because its XBRL tags are embedded within the Inline XBRL document. | |||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||||
| 104 | Cover Page Interactive Data File formatted as Inline XBRL and contained in Exhibit 101 | |||||||||
* The information in Exhibit 32.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act (including this report), unless the Company specifically incorporates the foregoing information into those documents by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AIRO GROUP HOLDINGS, INC. | ||
| By: | /s/ Captain Joseph D. Burns | |
| Captain Joseph D. Burns | ||
| Chief Executive Officer | ||
| By: | /s/ Dr. Mariya Pylypiv | |
| Dr. Mariya Pylypiv | ||
| Chief Financial Officer | ||
Dated: November 12, 2026
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