Mobix Labs (NASDAQ: MOBX) flags going concern risk amid losses and dilutive financings
Mobix Labs, Inc. reported sharply lower revenue and continued losses for the quarter ended March 31, 2026 while warning of substantial doubt about its ability to continue as a going concern. Quarterly net revenue was $970, down from $2,511 a year earlier, with a net loss of $5,853 compared with $2,291 in the prior-year period.
For the first six months of fiscal 2026, net revenue totaled $2,845 and the net loss was $15,978. Cash stood at $2,563 against total debt of $6,438, and net cash used in operations reached $9,017. The company improved its capital structure from a small equity deficit to positive stockholders’ equity of $8,845 through public equity offerings, ATM sales and exchanges of debt and payables into shares, but these transactions were dilutive to existing holders.
Management states that ongoing operating losses, negative operating cash flows and limited liquidity mean additional debt or equity financing is required to meet obligations over the next twelve months. Subsequent events include a 1‑for‑10 reverse stock split, full conversion of a $4,000 senior secured convertible note into 2,500,000 shares, and a new $2,400 Series A 10% Convertible Preferred Stock financing with attached purchase warrant, further emphasizing reliance on capital markets.
Positive
- None.
Negative
- Going concern uncertainty: Management discloses substantial doubt about Mobix Labs’ ability to continue as a going concern, citing recurring losses, negative operating cash flows of $9,017 for the first half of 2026, and insufficient liquidity to meet obligations over the next twelve months.
- High losses relative to revenue: Six‑month net revenue of $2,845 compares with a net loss of $15,978, indicating the current cost structure and financing costs are far outpacing the scale of the business.
- Dilutive, expensive financing mix: The company relied on a $4,000 senior secured convertible note, public and ATM offerings, debt-for-equity exchanges and new 10% convertible preferred stock, all of which dilute common shareholders while adding structured, senior claims on the enterprise.
Insights
Mobix shows deep losses, tight liquidity and heavy reliance on dilutive financings.
Mobix Labs generated six‑month net revenue of only $2,845 against a net loss of $15,978 and operating cash outflow of $9,017. Cash at March 31, 2026 was $2,563 versus total debt of $6,438, indicating a strained balance sheet.
Management explicitly states there is “substantial doubt” about the company’s ability to continue as a going concern because current liquidity is insufficient to fund operations and obligations for at least twelve months. To bridge this, Mobix undertook multiple transactions: a $3,000–$4,000 senior secured convertible note with Leviston, several high‑cost future‑receipts financings, and exchanges of $3,000 of obligations into equity.
The company also executed a 1‑for‑10 reverse stock split and an underwritten offering of 3,000,000 Class A shares at $2.00 per share, plus ATM sales and preferred stock issuance to Kips Bay. These steps raised capital and turned a small deficit into $8,845 of equity as of March 31, 2026, but materially diluted common shareholders and added complex convertible and preferred instruments. Overall, the filing reflects elevated financial risk and dependence on continued access to equity-linked financing.
Key Figures
Key Terms
going concern financial
earnout liability financial
liability-classified warrants financial
reverse stock split financial
at the market offering financial
senior secured convertible note financial
Earnings Snapshot
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MOBIX LABS, INC.
TABLE OF CONTENTS
| Page | ||
| PART I. FINANCIAL INFORMATION | 1 | |
| Item 1. | Financial Statements (unaudited) | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 32 |
| Item 4. | Controls and Procedures | 32 |
| PART II. OTHER INFORMATION | 34 | |
| Item 1. | Legal Proceedings | 34 |
| Item 1A. | Risk Factors | 34 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 35 |
| Item 5. | Other Information | 36 |
| Item 6. | Exhibits | 37 |
| Signatures | 38 | |
| i |
Cautionary Note Regarding Forward-Looking Statements
This quarterly report on Form 10-Q for Mobix Labs, Inc. (the “Company”, “we”, “us” or “our”) contains “forward-looking statements,” as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are statements other than historical information or statements of current condition and relate to future events or our future financial performance. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. In this Quarterly Report on Form 10-Q, forward-looking statements include, but are not limited to, any statements regarding:
| ● | our financial and business performance; | |
| ● | our intent to pursue acquisitions of companies and technologies and the impact of such acquisitions on our business and results of operations; | |
| ● | changes in our strategy, future operations, financial position, estimated revenues and losses, forecasts, projected costs, prospects and plans; | |
| ● | our expectation regarding our ability to continue as a going concern and ability to obtain sufficient liquidity to meet our operating needs and satisfy our obligations; | |
| ● | the implementation, market acceptance and success of our products and technology in the wireless and connectivity markets and in potential new categories for expansion; | |
| ● | the demand for our products and the drivers of that demand; | |
| ● | our opportunities and strategies for growth; | |
| ● | our ability to scale in a cost-effective manner and maintain and expand our manufacturing and supply chain relationships; | |
| ● | our expectation that we will incur substantial expenses and continuing losses for the foreseeable future; | |
| ● | our expectations regarding our ability to obtain and maintain intellectual property protection and not infringe on the rights of others; | |
| ● | our assumptions underlying our critical accounting estimates; | |
| ● | future capital requirements and sources and uses of cash; and | |
| ● | the outcome of any known and unknown litigation and regulatory proceedings. |
These forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q, and current expectations, forecasts, and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we undertake no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
| ii |
As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:
| ● | our ability to remain in compliance with Nasdaq listing requirements, including the $1.00 minimum bid price requirement and the minimum $35 million market value of listed securities; | |
| ● | the inability to meet future capital requirements and the risk that we will be unable to raise additional capital in the future on attractive terms or at all, as well as the dilutive impact that may have on our stockholders; | |
| ● | the risk that we are unable to successfully commercialize our products and solutions, or experience significant delays in doing so; | |
| ● | the risk that we may not be able to generate sufficient income from operations to sustain ourselves; | |
| ● | the risks concerning our ability to continue as a going concern; | |
| ● | the risk that we experience difficulties in managing our growth and expanding operations; | |
| ● | the risk that we may not be able to consummate planned strategic acquisitions, or fully realize anticipated benefits from past or future acquisitions or investments; | |
| ● | the risk that litigation may be commenced against us; | |
| ● | the risk that our patent applications may not be approved or may take longer than expected, and we may incur substantial costs in enforcing and protecting our intellectual property; | |
| ● | our ability to attract new customers and grow our customer base; and | |
| ● | the risk that the price of our securities may be volatile due to a variety of factors, including changes caused by ongoing conflict in the Middle East and the implementation of tariffs in the United States as well as any impact that either may have on laws and regulations, changes in the competitive industries in which we operate, variations in performance across competitors, the global supply chain, and macro-economic and social environments affecting our business and changes in our capital structure. |
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some of these risks and uncertainties may in the future be amplified by geopolitical tensions, including the further escalation of war between Russia and Ukraine or the conflict pertaining to the Middle East, and there may be additional risks that we consider immaterial or which are unknown. It is not possible to predict or identify all such risks. However, we encourage you to review our risk factors as set forth herein and in our annual report on Form 10-K for our fiscal year ended September 30, 2025, filed with the Securities and Exchange Commission on January 13, 2026.
| iii |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Mobix Labs, Inc.
Unaudited Condensed Consolidated Financial Statements
March 31, 2026 and 2025
| Condensed Consolidated Balance Sheets as of March 31, 2026 and September 30, 2025 (unaudited) | 2 | |
| Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months and six months ended March 31, 2026 and 2025 (unaudited) | 3 | |
| Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three months and six months ended March 31, 2026 and 2025 (unaudited) | 4 | |
| Condensed Consolidated Statements of Cash Flows for the six months ended March 31, 2026 and 2025 (unaudited) | 5 | |
| Notes to Condensed Consolidated Financial Statements (unaudited) | 6 |
| 1 |
MOBIX LABS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share amounts)
| March 31, | September 30, | |||||||
| 2026 | 2025 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Operating lease right-of-use assets | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Deferred purchase consideration | ||||||||
| Notes payable, current | ||||||||
| Notes payable – related parties, current | ||||||||
| Notes payable, current | ||||||||
| Operating lease liabilities, current | ||||||||
| Total current liabilities | ||||||||
| Notes payable, noncurrent | — | |||||||
| Notes payable – related parties, noncurrent | ||||||||
| Notes payable, noncurrent | ||||||||
| Earnout liability | ||||||||
| Deferred tax liability | ||||||||
| Operating lease liabilities, noncurrent | ||||||||
| Liability-classified warrants | ||||||||
| Other noncurrent liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 9) | - | - | ||||||
| Stockholders’ equity (deficit) | ||||||||
| Class A Common Stock, $ | — | — | ||||||
| Class B Common Stock, $ | — | — | ||||||
| Common stock, value | — | — | ||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and stockholders’ equity (deficit) | $ | $ | ||||||
See accompanying notes to condensed consolidated financial statements.
| 2 |
MOBIX LABS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(unaudited, in thousands, except share and per share amounts)
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
Three months ended March 31, | Six months ended March 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net revenue: | ||||||||||||||||
| Products | $ | $ | $ | $ | ||||||||||||
| Services | ||||||||||||||||
| Total net revenue | ||||||||||||||||
| Net revenue | ||||||||||||||||
| Cost of revenue: | ||||||||||||||||
| Products | ||||||||||||||||
| Services | ||||||||||||||||
| Total cost of revenue | ||||||||||||||||
| Cost of revenue | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense | ||||||||||||||||
| Change in fair value of earnout liability | — | ( | ) | ( | ) | ( | ) | |||||||||
| Change in fair value of warrants | ( | ) | ( | ) | ||||||||||||
| Other non-operating (gains) losses, net | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax provision (benefit) | ( | ) | ( | ) | ( | ) | ||||||||||
| Net loss and comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share of Class A and Class B Common Stock: | ||||||||||||||||
| Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted-average common shares outstanding: | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
| 3 |
MOBIX LABS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ EQUITY (DEFICIT)
(unaudited, in thousands, except share and per share amounts)
| Shares | Amount | Shares | Amount | Capital | Deficit | (Deficit) | ||||||||||||||||||||||
Class A Common Stock | Class B Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ Equity | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | (Deficit) | ||||||||||||||||||||||
| Balance at September 30, 2025 | $ | — | $ | — | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||
| Issuance of common stock | — | — | — | — | ||||||||||||||||||||||||
| Issuance of common stock in settlement of liabilities | — | — | — | — | ||||||||||||||||||||||||
| Issuance of common stock upon vesting of RSUs | — | — | — | — | — | — | ||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | — | ||||||||||||||||||||||||
| Reclassification of warrants | — | — | — | — | — | |||||||||||||||||||||||
| Issuance of warrants | — | — | — | — | — | |||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance at December 31, 2025 | — | — | ( | ) | ||||||||||||||||||||||||
| Issuance of common stock | — | — | — | — | — | — | ||||||||||||||||||||||
| Issuance of common stock in settlement of liabilities | — | — | — | — | ||||||||||||||||||||||||
| Issuance of common stock in connection with public offering | — | — | — | — | ||||||||||||||||||||||||
| Issuance of common stock upon vesting of RSUs | — | — | — | — | — | — | ||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2026 | $ | — | $ | — | $ | $ | ( | ) | $ | |||||||||||||||||||
| Balance at September 30, 2024 | $ | — | $ | — | $ | $ | ( | ) | $ | |||||||||||||||||||
| Issuance of common stock | — | — | — | — | ||||||||||||||||||||||||
| Conversion of Class B Common Stock to Class A Common Stock | — | ( | ) | — | — | — | — | |||||||||||||||||||||
| Conversion of notes payable to Class A Common Stock | — | — | — | — | ||||||||||||||||||||||||
| Issuance of common stock upon vesting of RSUs | — | — | — | — | — | — | ||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance at December 31, 2024 | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Issuance of common stock in settlement of liabilities | — | — | — | — | ||||||||||||||||||||||||
| Issuance of common stock for RaGE earnout | — | — | — | — | ||||||||||||||||||||||||
| Issuance of common stock upon vesting of RSUs | — | — | — | — | — | — | ||||||||||||||||||||||
| Issuance of common stock upon exercise of warrants | — | — | — | — | ||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2025 | $ | — | $ | — | $ | $ | ( | ) | $ | |||||||||||||||||||
| Balance | $ | — | $ | — | $ | $ | ( | ) | $ | |||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
| 4 |
MOBIX LABS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands, except share and per share amounts)
| 2026 | 2025 | |||||||
Six months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Amortization of intangible assets | ||||||||
| Change in fair value of earnout liability | ( | ) | ( | ) | ||||
| Change in fair value of warrants | ( | ) | ||||||
| Non-cash expense for warrants issued | — | |||||||
| Stock-based compensation | ||||||||
| Deferred income taxes | ( | ) | ( | ) | ||||
| Loss on disposal of assets | — | |||||||
| Other non-cash items | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other assets | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Investing activities | ||||||||
| Acquisition of property and equipment | — | ( | ) | |||||
| Net cash used in investing activities | — | ( | ) | |||||
| Financing activities | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Proceeds from exercise of stock options | — | |||||||
| Proceeds from issuance of common stock in public offering | — | |||||||
| Proceeds from exercise of warrants | — | |||||||
| Proceeds from issuance of notes payable | ||||||||
| Principal payments on notes payable | ( | ) | ( | ) | ||||
| Principal payments on notes payable - related parties | ( | ) | — | |||||
| Deferred consideration paid for acquisition of business | — | ( | ) | |||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | — | — | ||||||
| Non-cash investing and financing activities: | ||||||||
| Settlement of notes payable and other liabilities in common stock | $ | $ | ||||||
| Issuance of Class A Common Stock for RaGE earnout | — | |||||||
See accompanying notes to condensed consolidated financial statements.
| 5 |
Note 1 — Company Information
Mobix Labs, Inc. (“Mobix Labs” or the “Company”), a Delaware corporation based in Irvine, California, designs, develops and sells components and systems for advanced wireless and wired connectivity, radio frequency (“RF”), switching and electromagnetic interference (“EMI”) filtering technologies used in the defense, aerospace, commercial, industrial and other markets. The Company’s wireless systems solutions include products for advanced RF and millimeter wave (“mmWave”) communications, mmWave imaging, software defined radio and custom RF integrated circuits (“ICs”) targeting the defense, aerospace, commercial and industrial sectors. The Company’s interconnect products, including EMI filter inserts and filtered and non-filtered connectors, are designed for and are currently used in aerospace, military, defense and medical applications. These technologies are designed for large and rapidly growing markets where there is increasing demand for higher performance communication and filtering systems which utilize an expanding mix of both wireless and connectivity technologies. The Company’s Class A Common Stock and its Public Warrants are traded on the Nasdaq Capital Market under the symbols “MOBX” and “MOBXW,” respectively.
Going Concern
The
condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. Since inception,
the Company has incurred operating losses and negative cash flows from operations, as a result of its ongoing investment in product development
and other operating expenses. The Company incurred a loss from operations of $
While the Company will seek to raise additional capital, there can be no assurance the necessary financing will be available on terms acceptable to the Company, or at all. If the Company raises funds by issuing equity securities, dilution to existing stockholders may result. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of common stock. If the Company raises funds by issuing debt securities, such debt securities would have rights, preferences and privileges senior to those of preferred and common stockholders. The terms of debt securities or borrowings may impose significant restrictions on the Company’s operations. The capital markets have in the past, and may in the future, experience periods of volatility that could impact the availability and cost of equity and debt financing. In addition, potential future increases in federal fund rates set by the Federal Reserve, which serve as a benchmark for rates on borrowing, could adversely impact the cost or availability of debt financing.
If the Company is unable to obtain additional financing, or if such transactions are successfully completed but do not provide adequate financing, the Company may be required to reduce its operating expenditures, which could adversely affect its business prospects, or the Company may be unable to continue operations. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. Accordingly, the condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business.
| 6 |
Note 2 — Basis of Presentation and Significant Accounting Policies
Basis of Presentation
The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and include the accounts of Mobix Labs, Inc. and its subsidiaries. The Company’s fiscal year ends on September 30. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements as of and for the year ended September 30, 2025 and the related notes which provide a more complete discussion of the Company’s accounting policies and certain other information. The September 30, 2025 consolidated balance sheet was derived from the Company’s audited financial statements. These unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the Company’s condensed consolidated financial position as of March 31, 2026 and its condensed consolidated results of operations and cash flows for the periods ended March 31, 2026 and 2025. The condensed consolidated results of operations for the three months and six months ended March 31, 2026 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2026 or for any other future annual or interim period.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified for consistency with the current year presentation.
Use of Estimates
The preparation of the Company’s condensed consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of certain assets and liabilities; the reported amounts of net revenue and expenses for the periods covered and certain amounts disclosed in the notes to the condensed consolidated financial statements. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. As future events and their effects cannot be determined with precision, actual results could differ materially from those estimates and assumptions. Areas requiring significant estimates and assumptions by the Company include, but are not limited to:
| ● | valuation of stock-based compensation awards; | |
| ● | impairment assessments of goodwill and long-lived assets; | |
| ● | measurement of liabilities carried at fair value, including the earnout liability and liability-classified warrants; and, | |
| ● | provisions for income taxes and related valuation allowances and tax uncertainties. |
Significant Accounting Policies
A summary of the Company’s significant accounting policies is included in its Annual Report on Form 10-K for the year ended September 30, 2025, filed with the Securities and Exchange Commission on January 13, 2026. There have been no significant changes to these policies during the six months ended March 31, 2026, aside from those outlined below.
| 7 |
Impairment of Long-Lived Assets
The
Company reviews its long-lived assets, consisting of property and equipment and intangible assets, for impairment whenever events or
changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company regularly reviews its operating
performance for indicators of impairment. Factors considered important that could trigger an impairment review include a significant
underperformance relative to expected historical or projected future operating results, or a significant change in the manner of the
use of the assets. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable
cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is determined by
comparing the forecasted undiscounted cash flows attributable to such assets including any cash flows upon their eventual disposition
to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written
down to their fair value. The Company did
Goodwill
Goodwill represents the excess of the fair value of purchase consideration of an acquired business over the fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at a reporting unit level on an annual basis on July 31, or more frequently if circumstances change or an event occurs that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company did not recognize any goodwill impairment losses for the six months ended March 31, 2026 and 2025. There were no changes in the carrying amount of goodwill during the six months ended March 31, 2026 and 2025.
Classification of Warrants
The Company accounts for warrants to purchase its common stock as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the liability classification requirements pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted when warrants are issued or modified and as of the end of each subsequent reporting period while the warrants are outstanding.
Note 3 — Inventory
Inventory consists of the following:
Schedule of Inventory
| March 31, | September 30, | |||||||
| 2026 | 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Finished goods | ||||||||
| Total inventory | $ | $ | ||||||
| 8 |
Note 4 — Property and Equipment, net
Property and equipment, net consists of the following:
Schedule of Property and Equipment, Net
| Estimated Useful | March 31, | September 30, | ||||||||
| Life (years) | 2026 | 2025 | ||||||||
| Equipment and furniture | $ | $ | ||||||||
| Laboratory equipment | ||||||||||
| Leasehold improvements | Shorter of estimated useful life or remaining lease term | |||||||||
| Property and equipment, gross | ||||||||||
| Less: Accumulated depreciation | ( |
) | ( |
) | ||||||
| Property and equipment, net | $ | $ | ||||||||
Depreciation
expense for the three months ended March 31, 2026 and 2025 was $
Note 5 — Intangible Assets, net
Intangible assets, net consist of the following:
Schedule of Intangible Assets, Net
| Estimated | March 31, 2026 | September 30, 2025 | ||||||||||||||||||||||||||
| Useful Life | Accumulated | Accumulated | ||||||||||||||||||||||||||
| (years) | Gross | Amortization | Net | Gross | Amortization | Net | ||||||||||||||||||||||
| Developed technology | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
| Customer relationships | ( | ) | ( | ) | ||||||||||||||||||||||||
| Trade names | ( | ) | ( | ) | ||||||||||||||||||||||||
| $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||||
Amortization
expense related to intangible assets for the three months ended March 31, 2026 and 2025 was $
Estimated future amortization expense for intangible assets by fiscal year as of March 31, 2026 is as follows:
Schedule of Estimated Future Amortization Expense for Intangible Assets
| Years ending September 30, | ||||
| 2026 (remaining six months) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
| 9 |
Note 6 — Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
Schedule of Accrued Expenses and Other Current Liabilities
| March 31, | September 30, | |||||||
| 2026 | 2025 | |||||||
| Accrued compensation and benefits | $ | |
$ | |||||
| Accrued professional fees | |
|||||||
| Accrued interest | |
|||||||
| Deferred revenue | |
|||||||
| Committed equity facility fees | ||||||||
| Unpaid Merger-related transaction costs | ||||||||
| RaGE Earnout | |
|||||||
| Other | |
|||||||
| Total accrued expenses and other current liabilities | $ | $ | ||||||
Note 7 — Debt
Debt consists of the following:
Schedule of Debt
| March 31, | September 30, | |||||||
| 2026 | 2025 | |||||||
| Notes payable | $ | $ | ||||||
| 7% promissory notes – related parties | ||||||||
| Notes payable | ||||||||
| Total debt | ||||||||
| Less: Amounts classified as current | ( | ) | ( | ) | ||||
| Noncurrent portion | $ | $ | ||||||
2026 Financings
On
March 13, 2026, the Company entered into three exchange agreements pursuant to which certain outstanding indebtedness and other amounts
owed were exchanged for shares of the Company’s Class A Common Stock. Under these agreements,
Between
February 23, 2026 and March 31, 2026, the Company entered into three securities purchase agreements providing for the issuance of
convertible notes. The first two agreements, entered into on February 23, 2026 and March 16, 2026, provided for bridge promissory
notes with an aggregate principal amount of $
On May 13, 2026, the Company
entered into a First Amendment to the Securities Purchase Agreement and Senior Secured Convertible Note (the “First Amendment”)
with Leviston Resources, LLC (“Leviston”), amending the Senior Secured Convertible Note originally issued on March 31, 2026
(the “Original Note”). Pursuant to the First Amendment, Leviston advanced an additional $
On May 18, 2026, the Company
satisfied in full the entire $
| 10 |
On
January 15, 2026, the Company amended an existing loan and security agreement, dated August 13, 2025, pursuant to which the Company was
provided with a closed-end commercial loan in the original principal amount of $
Notes Payable
During
the six months ended March 31, 2026, the Company also amended two existing agreements for the purchase and sale of future receipts, pursuant
to which the Company agreed to sell to the buyers additional future trade receipts totaling $
During
the six months ended March 31, 2025, the Company entered into a $
During
the six months ended March 31, 2025, the Company entered into two agreements for the purchase and sale of future receipts with unrelated
buyers, pursuant to which the Company agreed to sell to the buyer certain future trade receipts in the aggregate amount of $
During
the six months ended March 31, 2025, the Company and the holders of two notes agreed to settle the outstanding principal and accrued
interest, totaling $
During
the six months ended March 31, 2026 and 2025, the Company made principal payments on notes payable of $
7% Promissory Notes — Related Parties
The
Company has two outstanding promissory notes with related parties which bear interest at
| 11 |
Note 8 — Leases
The
Company has entered into operating leases for office space. The leases have remaining terms ranging from eight months to
Schedule of Lease Costs
| 2026 | 2025 | |||||||
Six months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Operating lease cost | $ | $ | ||||||
| Short-term lease cost | ||||||||
| Total lease cost | $ | $ | ||||||
Cash
paid for amounts included in the measurement of operating lease liabilities for the six months ended March 31, 2026 and 2025 was $
Schedule of Operating Lease Liability Maturity
| Years ending September 30, | ||||
| 2026 (remaining six months) | $ | |||
| 2027 | ||||
| Total minimum lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of future minimum lease payments | ||||
| Less: current obligations under leases | ( | ) | ||
| Long-term lease obligations | $ | |||
Note 9 — Commitments and Contingencies
The Company previously engaged a financial advisor to provide services and the financial advisor has asserted that the Company owes additional funds in excess of amounts previously recognized. The Company disputes the financial advisor’s claim. As of the date of these condensed consolidated financial statements, no legal proceeding has been initiated in respect of this matter. The ultimate resolution of this matter may differ from the amount recognized and any such difference could be material to the Company’s consolidated results of operations and cash flows. At this time, the Company is unable to reasonably estimate the possible amount or range of additional loss, if any, that it may incur.
Litigation
On March 13, 2026, Ydens Holdings, LLC and related individual plaintiffs filed a lawsuit in Orange County Superior Court against the Company and its subsidiary EMI Solutions, asserting breach of contract and related claims arising from the September 2022 Agreement and Plan of Merger under which the Company acquired EMI Solutions. The plaintiffs seek damages. The Merger Agreement contains a mandatory arbitration provision, and the Company intends to move to compel arbitration and to defend the matter vigorously. The Company is unable to predict final outcome of this matter, but it does not currently believe that it will have a material adverse effect on its results of operation or financial position.
From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. The Company does not believe it is currently a party to any legal proceedings—nor is the Company aware of any other pending or threatened litigation—that the Company believes would have a material adverse effect on its business, operating results, cash flows or financial condition should such litigation be resolved unfavorably.
Indemnifications
In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with customers, suppliers and vendors. Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred in connection with its service, breach of representations or covenants, intellectual property infringement or other claims made against such parties. These provisions may limit the time within which an indemnification claim can be made. The Company has not in the past incurred significant expense defending against third party claims, nor has it incurred significant expense under its standard service warranties or arrangements with its customers, suppliers and vendors. Accordingly, the Company has not recognized any liabilities for these indemnification provisions as of March 31, 2026 or September 30, 2025.
| 12 |
Note 10 — Income Taxes
The
Company recorded an income tax provision of $
Note 11 — Equity
The Company’s amended and restated certificate of incorporation authorizes the issuance of preferred stock, Class A Common Stock and Class B Common Stock. As of March 31, 2026, the board of directors had not designated any series of preferred stock, and no shares of preferred stock were issued or outstanding.
During
the six months ended March 31, 2026, the Company entered into three exchange agreements pursuant to which certain outstanding indebtedness
and other amounts owed were exchanged for shares of the Company’s Class A Common Stock. Under these agreements, (i) indebtedness
of $
During
the six months ended March 31, 2025, the Company sold
All references to shares, options to purchase common stock, share amounts, per share amounts, and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.
Issuance of Class A Common Stock
On
January 6, 2026, the Company entered into certain securities purchase agreements with unrelated investors relating to a public offering
of
| 13 |
At the Market Offering Agreement
On
October 21, 2025, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with Roth Capital Partners,
LLC (“Manager”) under which the Company may offer and sell, from time to time at its sole discretion, up to $
Pursuant to the ATM Agreement, sales of the Common Stock, if any, will be made under the Company’s Registration Statement on Form S-3 (File No. 333-284351) by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, including privately negotiated and block transactions. The Manager will use commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal law, rules and regulations and the rules of The Nasdaq Capital Market to sell the Common Stock from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company will pay the Manager a commission of three percent of the gross sales proceeds of any Common Stock sold through the Manager under the ATM Agreement and also has provided the Manager with customary indemnification rights. The Company also reimbursed the Manager for certain expenses in connection with entering into the ATM Agreement.
During
the six months ended March 31, 2026, the Company sold
As of March 31, 2026, the number of shares of Class A Common Stock available for issuance under the Company’s amended and restated articles of incorporation were as follows:
Schedule of Common Stock Available for Issuance
| Authorized number of shares of Class A Common Stock | ||||
| Less: | ||||
| Class A Common Stock outstanding | ||||
| Reserve for conversion of Class B Common Stock | ||||
| Reserve for exercise of common stock warrants | ||||
| Reserve for Earnout shares | ||||
| Stock options and RSUs | ||||
| Awards available for grant under 2023 Equity Incentive Plan | ||||
| Awards available for grant under 2023 Employee Stock Purchase Plan | ||||
| Shares of Class A Common Stock available for issuance |
The Company has never declared or paid any dividends on any class of its equity securities and does not expect to do so in the near future.
Note 12 — Warrants
Outstanding warrants consist of the following:
Schedule of Outstanding Warrants
| Range of Exercise Prices Per Share: | March 31, 2026 | September 30, 2025 | ||||||
| Public Warrants and Private Warrants
- $ | ||||||||
| Other Warrants: | ||||||||
| $ | ||||||||
| $ | ||||||||
| $ | ||||||||
| $ | ||||||||
| Total | ||||||||
| 14 |
Liability-Classified Warrants
The Company evaluated all common stock warrants at the time of issuance and concluded that certain warrants did not meet the derivative scope exception. Specifically, these warrants contained provisions that affected their settlement amounts which are not inputs into the pricing of a fixed-for-fixed option on equity shares. Therefore, these warrants were not considered indexed to the Company’s stock and were classified as liabilities. At their respective dates of issuance, the Company recognized a liability for each of the liability-classified warrants in the amount of its estimated fair value using the Black-Scholes option-pricing model. The Company subsequently adjusts the carrying amount of the liability for each warrant to its estimated fair value as of the end of each reporting period (or through the warrants’ respective dates of exercise or modification, if earlier).
On
October 24, 2025, the Company entered into amendments to certain liability-classified warrants to purchase an aggregate of
As
a result of the amendments to the warrants, the Company remeasured the related liabilities to their estimated fair value of $
As
a result of changes in the fair value of liability-classified warrants outstanding during the periods, for the six months ended March
31, 2026 and 2025, the Company recognized net non-cash losses of $
Note 13 — Stock-Based Compensation
The
Company’s 2023 Equity Incentive Plan provides for the issuance of stock options, restricted stock awards, RSUs and other stock-based
compensation awards to employees, directors, officers, consultants or others who provide services to the Company. The specific terms
of such awards are to be established by the board of directors or a committee thereof. As of March 31, 2026,
Restricted Stock Units
During
the six months ended March 31, 2025, the Company and a former employee entered into certain agreements wherein the Company agreed to
accelerate the vesting of
A summary of activity in the Company’s RSUs for the six months ended March 31, 2026 is as follows:
Schedule of Activity in the Company's RSUs
Number of units | Weighted- Average Grant Date Fair Value per Unit | |||||||
| Outstanding at September 30, 2025 | $ | |||||||
| Granted | ||||||||
| Forfeited | ( | ) | ||||||
| Vested | ( | ) | ||||||
| Outstanding at March 31, 2026 | ||||||||
| 15 |
Unrecognized
compensation expense related to RSUs was $
Restricted Stock Awards
A summary of activity in the Company’s RSAs for the six months ended March 31, 2026 is as follows:
Schedule of Activity in the Company's RSAs
Number of shares | Weighted- Average Grant Date Fair Value per Share | |||||||
| Outstanding at September 30, 2025 | $ | |||||||
| Vested | ( | ) | ||||||
| Outstanding at March 31, 2026 | ||||||||
Unrecognized
compensation expense related to RSAs was $
Stock Options
Stock option activity for the six months ended March 31, 2026 is as follows:
Schedule of Stock Option Activity
Number of Options | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Term (years) | ||||||||||
| Outstanding at September 30, 2025 | $ | |||||||||||
| Exercised | ( | ) | ||||||||||
| Forfeited | ( | ) | ||||||||||
| Expired | ( | ) | ||||||||||
| Outstanding at March 31, 2026 | ||||||||||||
| Exercisable at March 31, 2026 | ||||||||||||
Unrecognized
stock-based compensation expense related to stock options, totaling $
The condensed consolidated statements of operations and comprehensive loss include stock-based compensation expense as follows:
Schedule of Consolidated Statements of Operations and Comprehensive Loss
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
Three months ended March 31, | Six months ended March 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Cost of revenue – product | $ | $ | $ | $ | ||||||||||||
| Cost of revenue – services | — | — | ||||||||||||||
| Research and development | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | ||||||||||||
| 16 |
Note 14 — Fair Value Measurements
The
carrying amounts of the Company’s cash, accounts receivable and accounts payable approximate their fair value due to the short-term
nature of these instruments. The Company believes the aggregate carrying value of debt approximates its fair value as of March 31, 2026
and September 30, 2025 because the notes payable, the
Fair Value Hierarchy
Liabilities measured at fair value on a recurring basis as of March 31, 2026 are as follows:
Schedule of Fair Value Assets And Liabilities Measured On Recurring Basis
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Earnout liability | $ | — | $ | — | $ | $ | ||||||||||
| Liability-classified warrants | — | — | ||||||||||||||
| Total | $ | — | $ | — | $ | $ | ||||||||||
The Company classifies the earnout liability and the liability-classified warrants as Level 3 financial instruments due to the judgment required to develop the assumptions used and the significance of those assumptions to the fair value measurement. No financial instruments were transferred between levels of the fair value hierarchy during the six months ended March 31, 2026 or 2025. The following table provides a reconciliation of the balance of financial instruments measured at fair value on a recurring basis using Level 3 inputs:
Schedule of Fair Value Measured On Recurring Basis Unobservable Input Reconciliation
| Six months ended March 31, 2026: | Earnout Liability | Liability Classified Warrants | ||||||
| Balance, September 30, 2025 | $ | $ | ||||||
| Reclassification of warrant liabilities to equity | — | ( | ) | |||||
| Change in fair value included in net loss | ( | ) | ||||||
| Balance, March 31, 2026 | $ | $ | ||||||
| Six months ended March 31, 2025: | Earnout Liability | Liability Classified Warrants | ||||||
| Balance, September 30, 2024 | $ | $ | ||||||
| Beginning balance | $ | $ | ||||||
| Change in fair value included in net loss | ( | ) | ( | ) | ||||
| Balance, March 31, 2025 | $ | $ | ||||||
| Ending balance | $ | $ | ||||||
Liability-Classified Warrants
As of March 31, 2026, liability-classified warrants consist of the Private Warrants. The Company estimates the fair value of the Private Warrants based on quoted market prices for the Public Warrants, which have substantially the same economic characteristics. As of September 30, 2025, the Company estimated the fair value of liability-classified warrants (other than the Private Warrants)—including those amended during the six months ended March 31, 2026—using the Black-Scholes option pricing model. The following table summarizes the significant assumptions used in estimating the fair value of liability-classified warrants under the Black-Scholes option pricing model:
Schedule of Fair Value of Liability-Classified Warrants
September 30, 2025 | ||||
| Stock price | $ | |||
| Expected volatility | % | |||
| Risk-free rate | % | |||
| Contractual term | ||||
| 17 |
Earnout Liability
The Company estimates the fair value of the earnout liability using a Monte Carlo simulation model that utilizes significant assumptions, including volatility, expected term and risk-free rate that determine the probability of achieving the earnout conditions. The following table summarizes the assumptions used in estimating the fair value of the earnout liability at the respective dates:
March 31, 2026 | September 30, 2025 | |||||||
| Stock price | $ | $ | ||||||
| Expected volatility | % | % | ||||||
| Risk-free rate | % | % | ||||||
| Contractual term | ||||||||
Note 15 — Net Loss Per Share
The Company computes net loss per share of Class A and Class B Common Stock using the two-class method. Basic net loss per share is computed using the weighted-average number of shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of stock options, warrants, RSAs, RSUs and other contingently issuable shares. The dilutive effect of outstanding stock options, warrants, RSAs, RSUs and other contingently issuable shares is reflected in diluted earnings per share by application of the more dilutive of (a) the two-class method or (b) the if-converted method and treasury stock method, as applicable. The computation of the diluted net loss per share of Class A Common Stock assumes the conversion of Class B Common Stock, while the diluted net loss per share of Class B Common Stock does not assume the conversion of those shares.
In periods where the Company has a net loss, most potentially dilutive securities are not included in the computation as their impact is anti-dilutive; those potentially dilutive securities whose impact is dilutive are included in the computation. In periods where their effect is dilutive, liability-classified warrants are included in the computation of diluted loss per share as if the underlying shares had been issued as of the later of the beginning of the fiscal period or the date of issuance of those securities. Inclusion of those securities increases both the net loss for the period and the number of shares used in the per share computation and is dilutive to the Company’s net loss per share.
Schedule of Earnings Per Share Basic and Diluted
| Class A | Class B | Class A | Class B | |||||||||||||
| Three months ended March 31, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||
| Basic net loss per share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| Basic net loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted net loss per share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Reallocation of net loss as a result of conversion of Class B to Class A Common Stock | ( | ) | — | ( | ) | — | ||||||||||
| Allocation of net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator: | ||||||||||||||||
| Number of shares used in basic earnings per share calculation | ||||||||||||||||
| Conversion of Class B to Class A Common Stock | — | — | ||||||||||||||
| Number of shares used in per share computation | ||||||||||||||||
| Diluted net loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 18 |
| Class A | Class B | Class A | Class B | |||||||||||||
| Six months ended March 31, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||
| Basic net loss per share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| Basic net loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted net loss per share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Reallocation of net loss as a result of conversion of Class B to Class A Common Stock | ( | ) | — | ( | ) | — | ||||||||||
| Allocation of net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator: | ||||||||||||||||
| Number of shares used in basic earnings per share calculation | ||||||||||||||||
| Conversion of Class B to Class A Common Stock | — | — | ||||||||||||||
| Number of shares used in per share computation | ||||||||||||||||
| Diluted net loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
For the purposes of applying the if converted method or treasury stock method for calculating diluted earnings per share, Warrants, RSAs, RSUs and stock options result in anti-dilution. Therefore, these securities are not included in the computation of diluted net loss per share. Shares potentially issuable under earnout arrangements were not included for purposes of calculating the number of diluted shares outstanding because the number of dilutive shares is, in each case, based on a contingency which had not been met during the periods presented herein.
The potential shares of Class A Common Stock that were excluded from the computation of diluted net loss per share for the periods presented because including them would have an antidilutive effect were as follows:
Schedule of Antidilutive Shares
| 2026 | 2025 | |||||||
Six months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Warrants | ||||||||
| Shares potentially issuable under earnout arrangements | ||||||||
| RSAs | — | |||||||
| RSUs | ||||||||
| Stock options | ||||||||
| Total | ||||||||
Note 16 — Concentrations
Significant Customers
For
the three months ended March 31, 2026, three customers accounted for
As
of March 31, 2026, two customers had balances due that represented
| 19 |
Note 17 — Segment Information
The Company operates as a single operating segment. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer. All significant operating decisions are based upon analysis of the Company as one operating segment to allocate resources, make operating decisions, and evaluate financial performance.
The CODM considers consolidated net income (loss) to be the measure of segment profit and loss for monitoring budget versus actual results, performing variance analysis, and forecasting future performance. The CODM considers the impact of significant segment expenses on net income, which are the same expenses presented on the condensed consolidated statements of operations and comprehensive loss when making operating decisions.
The measure of segment assets is reported on the condensed consolidated balance sheets as total assets. The CODM does not review segment assets at a level other than that presented in the Company’s condensed consolidated balance sheets.
Revenues by Geographic Region
The Company’s net revenue by geographic region, based on ship-to location, is summarized as follows:
Schedule of Company’s Net Revenue by Geographic Region
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
Three months ended March 31, | Six months ended March 31, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| United States | $ | $ | $ | $ | ||||||||||||
| Other | ||||||||||||||||
| Total net revenue | $ | $ | $ | $ | ||||||||||||
Long-Lived Assets
Substantially all of the Company’s long-lived assets are located in the United States.
Note 18 — Subsequent Events
On
April 2, 2026, the Company’s board of directors approved a reverse stock split of its Class A common stock and Class B common stock
at a ratio of
On
May 13, 2026, the Company entered into a First Amendment to the Securities Purchase Agreement and Senior Secured Convertible Note
(the “First Amendment”) with Leviston Resources, LLC (“Leviston”), amending the Senior Secured Convertible
Note originally issued on March 31, 2026 (the “Original Note”). Pursuant to the First Amendment, Leviston advanced an
additional $
On
May 13, 2026, the Company entered into an Investor Rights Agreement (the “IRA”) with Leviston, in connection with the Senior
Secured Convertible Note originally entered into on March 31, 2026 and amended pursuant to the First Amendment described above. Pursuant
to the IRA, the Company granted Leviston the right, but not the obligation, to purchase one or more additional senior secured convertible
notes (each, an “Additional Note”) from the Company during the seven-month period commencing May 13, 2026 and ending December
13, 2026, in an aggregate principal amount not to exceed $
On May 18,
2026, the Company satisfied in full the entire $
On May 19,
2026, the Company entered into a Securities Purchase Agreement (the “Kips Purchase Agreement”) with Kips Bay Select, LP
(“Kips”), pursuant to which the Company agreed to sell to Kips (i)
| 20 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. The following discussion contains forward-looking statements based upon current beliefs that involve risks, uncertainties, and assumptions, such as statements regarding our plans, objectives, expectations, intentions, and projections. Our actual results and the timing of selected events could differ materially from those described in or implied by these forward-looking statements as a result of several factors. You should carefully read the Cautionary Note Regarding Forward-Looking Statements as well as the risk factors set forth in our annual report on Form 10-K for the year ended September 30, 2025 and our other SEC filings to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.
All amounts in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are in thousands, except numbers of shares and per share amounts.
Overview
We design, develop and sell components and systems for advanced wireless and wired connectivity, radio frequency (“RF”), switching and electromagnetic interference (“EMI”) filtering technologies. Our solutions are used in the defense, aerospace, commercial, industrial and other markets. To enhance our product portfolio, we also intend to pursue acquisitions of companies with existing revenue which can be scaled, and which possess technologies that accelerate the speed, accessibility, and efficiency of disruptive or more efficient communications solutions, and which will also allow us to expand into strategically aligned industries. Our wireless systems solutions include products for advanced RF and millimeter wave (“mmWave”) 5G communications, mmWave imaging, software defined radio and custom RF integrated circuits (“ICs”) targeting the defense, aerospace, commercial and industrial sectors. Our interconnect products, including EMI filter inserts and filtered and non-filtered connectors, are designed for and are currently used in aerospace, military, defense and medical applications. These innovative technologies are designed for large and rapidly growing markets where there is increasing demand for higher performance communication and filtering systems which utilize an expanding mix of both wireless and connectivity technologies. Our Class A Common Stock and our public warrants are traded on the Nasdaq Capital Market under the symbols “MOBX” and “MOBXW,” respectively.
We were founded with the goal of simplifying the development and maximizing the performance of mmWave wireless products by designing and developing high performance system-level solutions used for signal processing applications in wireless products. Since our inception, our corporate strategy has evolved to encompass the pursuit of acquisitions serving diverse industry sectors, including aerospace, military, defense, medical and high reliability (“HiRel”) technology, as part of our commitment to enhancing communication services. We have developed and/or acquired an extensive intellectual property portfolio comprised of patents and trade secrets that are critical to commercializing our communication products and communications technologies. In leveraging our proprietary technology, we aim to scale the growth of revenue for our products by serving large and rapidly growing markets where we believe there are increasing demands for higher performance communication technologies, including both wireless and wired connectivity systems. We are actively pursuing customer engagements with manufacturers of wireless communications, aerospace, military, defense, medical and HiRel products.
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Recent Developments
April 2026 Reverse Stock Split
On April 2, 2026, our board of directors approved a reverse stock split of our Class A common stock and Class B common stock at a ratio of 1-for-10 (the “Reverse Stock Split”). The Reverse Stock Split became effective at 4:00 p.m. Eastern Time on April 6, 2026, and our Class A common stock began trading on a post-split adjusted basis on April 7, 2026. The number of authorized shares and par value per share were not adjusted as a result of the Reverse Stock Split. All references to shares, options to purchase common stock, share amounts, per share amounts, and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. The shares of common stock underlying outstanding stock options and other equity instruments, other than outstanding warrants, were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities. The number of warrants outstanding was not reduced as a result of the Reverse Stock Split. Rather, in accordance with the terms of the applicable warrant agreements, the number of shares of common stock issuable upon exercise of each outstanding warrant was proportionately reduced such that each warrant is exercisable for 1/10th of one share of common stock following the Reverse Stock Split, and the applicable exercise prices were proportionately increased, as applicable. Accordingly, the number of warrants outstanding has not been retrospectively adjusted or recast in the condensed consolidated financial statements. No fractional shares were issued in connection with the Reverse Stock Split, and cash was paid in lieu of fractional shares.
Second Quarter Financings
On March 13, 2026, we issued an aggregate of 206,876 shares of Class A Common Stock to three of our creditors in exchange for satisfaction of the Company’s debt owed to such creditors in the aggregate amount of $3,000.
Between February 23, 2026 and March 16, 2026, we issued convertible bridge promissory notes with an aggregate principal amount of $554. These bridge notes mature on December 30, 2026 and January 15, 2027 and require aggregate scheduled payments of $621.
March 2026 Convertible Promissory Note
On March 31, 2026, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with Leviston Resources, LLC (“Leviston”), pursuant to which we agreed to issue a convertible promissory note (the “Promissory Note”). The $3,000 principal amount of the Promissory Note will be payable with interest on July 31, 2026. We intend to use the net proceeds from the sale of the Promissory Note for working capital and general corporate purposes. The Promissory Note bears an interest rate of 10% per annum.
The Promissory Note is convertible into shares of our Class A Common Stock at the election of Leviston at a conversion price that is the lesser of (i) the closing price on March 31, 2026, which was $3.34, and (ii) 85% of the lowest 8-day VWAP immediately prior to and including the date of the notice of conversion (the “Conversion Price”). If at any time the market price is lower than the Conversion Price, the principal of the Promissory Note is subject to adjustment in accordance with the terms of the Promissory Note.
First Amendment to Senior Secured Convertible Note
On May 13, 2026, we entered into a First Amendment to the Securities Purchase Agreement and Promissory Note (the “First Amendment”) with Leviston, amending the Promissory Note originally issued on March 31, 2026 (the “Original Note”). Pursuant to the First Amendment, Leviston advanced an additional $833 to us, increasing the total funded amount under the Original Note to $3,333. The First Amendment increased the aggregate principal amount of the Original Note, inclusive of a 16.667% original issue discount, from $3,000 to $4,000. Interest on the incremental $1,000 of principal created by the First Amendment commenced accruing on May 13, 2026; interest on the original $3,000 principal continues to accrue in accordance with the terms of the Original Note as in effect immediately prior to May 13, 2026.
On May 18, 2026, we satisfied in full the entire $4,000 of outstanding principal under the Original Note, together with all accrued interest thereon, through the conversion of such amounts into 2,500,000 shares of Class A Common Stock. Upon such full satisfaction, the Original Note, the Securities Purchase Agreement (as amended by the First Amendment), and the Registration Rights Agreement, dated March 31, 2026, between the Company and Leviston, terminated in accordance with their terms.
Leviston Investor Rights Agreement
On May 13, 2026, we entered into an Investor Rights Agreement (the “IRA”) with Leviston, in connection with the Promissory note originally entered into on March 31, 2026 and amended pursuant to the First Amendment described above. Pursuant to the IRA, we granted Leviston the right, but not the obligation, to purchase one or more additional senior secured convertible notes (each, an “Additional Note”) from us during the seven-month period commencing May 13, 2026 and ending December 13, 2026, in an aggregate principal amount not to exceed $4,000, with a corresponding maximum aggregate cash subscription amount of approximately $3,333, reflecting the same 16.667% original issue discount as the Original Note. Each Additional Note will be issued in minimum tranches of $300 of principal, will bear interest at 10% per annum (18% upon an event of default), will mature four months from its respective issuance date, and will be convertible into shares of our Class A Common Stock at a price equal to the lesser of (i) the closing price of the Common Stock on the applicable issuance date and (ii) 85% of the lowest 8-day volume-weighted average price immediately prior to and including the date of the applicable conversion notice. Any Additional Notes issued under the IRA will constitute senior secured indebtedness of us ranking pari passu with, and secured by the same collateral as, the Original Note. We intend to use any proceeds from exercises of the Investment Right for working capital and general corporate purposes.
Kips Financing
On May 19, 2026, we entered into a Securities Purchase Agreement (the “Kips Purchase Agreement”) with Kips Bay Select, LP (“Kips”), pursuant to which we agreed to sell to Kips (i) 2,000 shares of Series A 10% Convertible Preferred Stock (the “Preferred Shares”) for aggregate gross proceeds of $2,400, and (ii) a Preferred Stock Purchase Warrant (the “Warrant”) to purchase up to an additional 6,000 shares of Series A 10% Convertible Preferred Stock at an exercise price of $1,000 per share. Dividends are payable in cash, or at our option, Preferred Shares. The Preferred Shares and any shares issued upon exercise of the Warrant are convertible into shares of our Class A Common Stock in accordance with the terms of the Certificate of Designation of Preferences, Rights and Limitations of Series A 10% Convertible Preferred Stock (the “COD”). In connection with the transaction, on May 19, 2026, we also entered into a Registration Rights Agreement with Kips (the “Registration Rights Agreement”) pursuant to which we agreed to register the resale of shares of Class A Common Stock issuable upon conversion of the Preferred Shares and upon exercise of the Warrant.
Loan and Security Agreement Settlement
On January 15, 2026, we amended an existing loan and security agreement, dated August 13, 2025, pursuant to which we were provided with a closed-end commercial loan in the original principal amount of $600. Under the amendment, we agreed to cure a prior payment default, make an additional interim payment of $33, and make a principal reduction payment of $233. The amendment also provided for an equity-based settlement of the remaining obligations under the loan, subject to the effectiveness of a registration statement covering shares of the Company’s common stock held by or for the benefit of Maximcash Solutions LLC and our timely payment of the required cash amounts.
During the six months ended March 31, 2026, we settled the remaining outstanding indebtedness under the arrangement. In connection with the settlement, indebtedness of $232, consisting of principal of $140 and accrued interest of $92, was settled through the issuance or delivery of 169,375 shares of the Company’s Class A Common Stock. Based on the fair value of the shares issued or delivered at the time of settlement of $376, or $2.22 per share, we recognized a loss on extinguishment of debt of $144, which was recorded in other non-operating (gains) losses, net in the condensed consolidated statements of operations and comprehensive loss.
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Issuance of Class A Common Stock
On January 6, 2026, we entered into certain securities purchase agreements with unrelated investors relating to a public offering of 3,000,000 shares of our Class A Common Stock at a price to the public of $2.00 per share (the “Offering”). In connection with the Offering, we entered into a placement agency agreement, pursuant to which we agreed to pay the placement agent a cash placement fee equal to 8.0% of the aggregate gross proceeds raised in the Offering. Subject to certain conditions, we also agreed to reimburse the placement agent up to 1.0% of the gross proceeds raised in the Offering for non-accountable expenses and up to $100 for fees and expenses of legal counsel and other out-of-pocket expenses. We also agreed to indemnify the placement agent against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments that the placement agent may be required to make in respect of those liabilities. The net proceeds to us from the Offering were approximately $5,360, after deducting placement agent fees and commissions and other estimated offering expenses payable by us.
At the Market Offering Agreement
On October 21, 2025, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with Roth Capital Partners, LLC (“Manager”) under which we may offer and sell, from time to time at our sole discretion, up to $15,800 in shares of our Class A Common Stock through the Manager acting in its capacity as our sales agent.
Pursuant to the ATM Agreement, sales of the Common Stock, if any, will be made under our Registration Statement on Form S-3 (File No. 333-284351) by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, including privately negotiated and block transactions. The Manager will use commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal law, rules and regulations and the rules of The Nasdaq Capital Market to sell the Common Stock from time to time, based upon instructions from us (including any price, time or size limits or other customary parameters or conditions we may impose). We will pay the Manager a commission of three percent of the gross sales proceeds of any Common Stock sold through the Manager under the ATM Agreement, and we have also provided the Manager with customary indemnification rights. We intend to use the net proceeds from the sales of our Common Stock under the ATM Agreement for working capital purposes.
During the six months ended March 31, 2026, we sold 191,449 shares of our Class A Common Stock under the ATM Agreement, for net proceeds (after commissions) of $1,254. The amount and timing of the proceeds we may receive from sales of our Class A Common Stock pursuant to the ATM Agreement, if any, will depend on a number of factors, including that we are eligible to use the Registration Statement on Form S-3 to sell the shares to the Manager, the numbers of shares we may elect to sell, the timing of such sales and the future market price of our Class A Common stock. As of the date of this Form 10-Q, we are unable to sell shares pursuant to the ATM Agreement due to restrictions on the use of the Registration Statement on Form S-3.
Letter of Intent
We have submitted a non-binding letter of intent to acquire a drone technology and manufacturing company. The letter of intent has not been counter-signed, and discussions are ongoing. There can be no assurance the letter of intent will be counter-signed or that any acquisition will be consummated.
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Results of Operations
Comparison of the Three Months Ended March 31, 2026 and 2025
| (dollars in thousands) | Three months ended March 31, | Change | ||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Net revenue: | ||||||||||||||||
| Products | $ | 669 | $ | 1,457 | $ | (788 | ) | (54 | )% | |||||||
| Services | 301 | 1,054 | (753 | ) | (71 | )% | ||||||||||
| Total net revenue | 970 | 2,511 | (1,541 | ) | (61 | )% | ||||||||||
| Cost of revenue: | ||||||||||||||||
| Products | 456 | 1,067 | (611 | ) | (57 | )% | ||||||||||
| Services | 330 | 424 | (94 | ) | (22 | )% | ||||||||||
| Total cost of revenue | 786 | 1,491 | (705 | ) | (47 | )% | ||||||||||
| Gross profit | 184 | 1,020 | (836 | ) | (82 | )% | ||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 428 | 719 | (291 | ) | (40 | )% | ||||||||||
| Selling, general and administrative | 5,847 | 8,129 | (2,282 | ) | (28 | )% | ||||||||||
| Loss from operations | (6,091 | ) | (7,828 | ) | 1,737 | (22 | )% | |||||||||
| Interest expense | 1,389 | 274 | 1,115 | 407 | % | |||||||||||
| Change in fair value of earnout liability | — | (2,220 | ) | 2,220 | (100 | )% | ||||||||||
| Change in fair value of warrants | 105 | (3,283 | ) | 3,388 | (103 | )% | ||||||||||
| Other non-operating losses, net | (1,735 | ) | (303 | ) | (1,432 | ) | 473 | % | ||||||||
| Loss before income taxes | (5,850 | ) | (2,296 | ) | (3,554 | ) | (155 | )% | ||||||||
| Income tax provision (benefit) | 3 | (5 | ) | 8 | (160 | )% | ||||||||||
| Net loss and comprehensive loss | $ | (5,853 | ) | $ | (2,291 | ) | $ | (3,562 | ) | (155 | )% | |||||
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Comparison of the Six Months Ended March 31, 2026 and 2025
| (dollars in thousands) | Six months ended March 31, | Change | ||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Net revenue: | ||||||||||||||||
| Products | $ | 2,004 | $ | 3,408 | $ | (1,404 | ) | (41 | )% | |||||||
| Services | 841 | 2,272 | (1,431 | ) | (63 | )% | ||||||||||
| Total net revenue | 2,845 | 5,680 | (2,835 | ) | (50 | )% | ||||||||||
| Cost of revenue: | ||||||||||||||||
| Products | 1,405 | 2,257 | (852 | ) | (38 | )% | ||||||||||
| Services | 675 | 716 | (41 | ) | (6 | )% | ||||||||||
| Total cost of revenue | 2,080 | 2,973 | (893 | ) | (30 | )% | ||||||||||
| Gross profit | 765 | 2,707 | (1,942 | ) | (72 | )% | ||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 870 | 1,330 | (460 | ) | (35 | )% | ||||||||||
| Selling, general and administrative | 14,819 | 23,835 | (9,016 | ) | (38 | )% | ||||||||||
| Loss from operations | (14,924 | ) | (22,458 | ) | 7,534 | (34 | )% | |||||||||
| Interest expense | 2,769 | 485 | 2,284 | 471 | % | |||||||||||
| Change in fair value of earnout liability | (960 | ) | (280 | ) | (680 | ) | (243 | )% | ||||||||
| Change in fair value of warrants | 428 | (625 | ) | 1,053 | (168 | )% | ||||||||||
| Other non-operating gains (losses), net | (1,162 | ) | 99 | (1,261 | ) | (1,274 | )% | |||||||||
| Loss before income taxes | (15,999 | ) | (22,137 | ) | 6,138 | (28 | )% | |||||||||
| Income tax benefit | (21 | ) | (7 | ) | (14 | ) | 200 | % | ||||||||
| Net loss and comprehensive loss | $ | (15,978 | ) | $ | (22,130 | ) | $ | 6,152 | (28 | )% | ||||||
Net Revenue
We derive our net revenue primarily from product sales to equipment manufacturers. We recognize product revenue when we satisfy performance obligations under the terms of our contracts and upon transfer of control when title transfers (either upon shipment to or receipt by the customer, as determined by the contractual shipping terms of the contract), net of accruals for estimated sales returns and allowances (which were not material for the six months ended March 31, 2026 and 2025). Sales and other taxes we collect, if any, are excluded from net revenue. We include shipping and handling fees we bill to customers as part of net revenue. We include shipping and handling costs associated with outbound freight in cost of product revenue.
We derive services revenue from engineering services, principally for the research, development or design of wireless systems solutions. Our contracts with our customers generally contain a single distinct performance obligation, to provide research or design services for products based on the customer’s specifications. We recognize revenue for engineering services over time as we deliver the services on an input basis, using costs incurred as the measure of progress. Costs incurred represent the most reliable measure of transfer of control to the customer. We defer the recognition of revenue for any amounts billed or received prior to delivery of the services.
Our net revenue fluctuates based on a variety of factors, including the timing of the receipt of product orders or contracts from our customers, product mix, competition, global economic conditions, and other factors.
Product revenue was $669 for the three months ended March 31, 2026 compared to $1,457 for the three months ended March 31, 2025, a decrease of $788 or 54%. The change is principally driven by a temporary delay in shipments of our radar and imaging sensor products within our wireless systems solutions segment, which we expect to resume in the second half of calendar year 2026, as well as lower shipments of our interconnect products.
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For the six months ended March 31, 2026, product revenue was $2,004 compared to $3,408 for the six months ended March 31, 2025, a decrease of $1,404 or 41%. The change reflects a temporary delay in shipments of our radar and imaging sensor products, which we expect to resume in the second half of calendar year 2026, partially offset by an increase in shipments of our interconnect products.
Services revenue was $301 for the three months ended March 31, 2026 compared to $1,054 for the three months ended March 31, 2025, a decrease of $753 or 71%. Our services revenues are subject to routine fluctuations based on the timing of our receipt of contracts from customers, and our performance thereunder. The change in service revenues is the result of the timing of customer contracts.
For the six months ended March 31, 2026, services revenue was $841 compared to $2,272 for the six months ended March 31, 2025, a decrease of $1,431 or 63%. Our services revenues are subject to routine fluctuations based on the timing of our receipt of contracts from customers, and our performance thereunder. The change in service revenues is the result of the timing of customer contracts.
Cost of Revenue
Cost of product revenue consists of materials, direct labor, contract manufacturing services, inbound freight, amortization of acquired developed technology, inventory obsolescence charges and other product-related costs. Cost of product revenue also includes overhead costs for the manufacture or sourcing of products, including facility costs and depreciation.
Cost of services revenue principally consists of employee compensation and benefits of employees engaged in the delivery of engineering services, along with any related materials, equipment, supplies or other costs to perform a contract.
Cost of product revenue was $456 for the three months ended March 31, 2026 compared to $1,067 for the three months ended March 31, 2025, a decrease of $611 or 57%. The change principally reflects the lower shipments of our wireless systems solutions products noted above.
Cost of service revenue was $330 for the three months ended March 31, 2026 compared to $424 for the three months ended March 31, 2025, a decrease of $94 or 22%.
Cost of product revenue was $1,405 for the six months ended March 31, 2026 compared to $2,257 for the six months ended March 31, 2025, a decrease of $852 or 38%. The change principally reflects the lower shipments of our wireless systems solutions products noted above.
Cost of service revenue was $675 for the six months ended March 31, 2026 compared to $716 for the six months ended March 31, 2025, a decrease of $41 or 6%.
Research and Development Expenses
Research and development expenses represent costs of our product design and development activities, including employee compensation and benefits (including stock-based compensation), outside services, design tools, supplies, facility costs, depreciation and amortization of acquired developed technology. We expense all research and development costs as incurred.
Research and development expenses were $428 for the three months ended March 31, 2026 compared to $719 for the three months ended March 31, 2025, a decrease of $291 or 40%. The decrease reflects lower costs for employee compensation and benefits and other costs as part of the Company’s ongoing cost management efforts.
Research and development expenses were $870 for the six months ended March 31, 2026 compared to $1,330 for the six months ended March 31, 2025, a decrease of $460 or 35%. The decrease reflects lower costs for employee compensation and benefits and other costs as part of the Company’s ongoing cost management efforts.
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Selling, General and Administrative Expenses
Selling, general and administrative expenses primarily include employee compensation and benefits (including stock-based compensation) of executive and administrative staff including human resources, accounting, information technology, sales and marketing, outside professional and legal fees, insurance, advertising and promotional programs, travel and entertainment, and facility costs.
Selling, general and administrative expenses were $5,847 for the three months ended March 31, 2026 compared to $8,129 for the three months ended March 31, 2025, a decrease of $2,282 or 28%. The change principally reflects a decrease in stock-based compensation expense as well as lower costs under the RaGE Earnout, lower costs for outside legal and accounting services and lower insurance cost.
Selling, general and administrative expenses were $14,819 for the six months ended March 31, 2026 compared to $23,835 for the six months ended March 31, 2025, a decrease of $9,016 or 38%. The change principally reflects a decrease in stock-based compensation expense as well as lower costs under the RaGE Earnout, lower costs for outside legal and accounting services and lower insurance cost.
Interest Expense
Interest expense consists of cash and non-cash interest related to our related and unrelated party promissory notes, notes payable and convertible notes.
Interest expense was $1,389 for the three months ended March 31, 2026 compared to $274 for the three months ended March 31, 2025, an increase of $1,115 or 407%. The increase reflects higher outstanding borrowings and higher interest rates on borrowings during the three months ended March 31, 2026.
Interest expense was $2,769 for the six months ended March 31, 2026 compared to $485 for the six months ended March 31, 2025, an increase of $2,284 or 471%. The increase reflects higher outstanding borrowings and higher interest rates on borrowings during the six months ended March 31, 2026.
Change in Fair Value of Earnout Liability
Certain Mobix stockholders and certain holders of Mobix stock options will be entitled to receive an additional aggregate 350,000 shares of our Class A Common Stock (“Earnout Shares”) based on the achievement of trading price targets over a period extending to December 2030. We account for the Earnout Shares as liability-classified instruments because the events that determine the number of Earnout Shares to which the earnout recipients will be entitled include events that are not solely indexed to our common stock, and we remeasure the earnout liability to its estimated fair value at the end of each reporting period.
As of March 31, 2026, none of the conditions for the issuance of any earnout shares had been achieved and we adjusted the carrying amount of the earnout liability to its estimated fair value of $280. As a result of changes in the estimated fair value of the liability, we recognized non-cash gains of $0 and $2,220 for the three months ended March 31, 2026 and 2025, respectively, and non-cash gains of $960 and $280 for the six months ended March 31, 2026 and 2025, respectively.
The fair value of the earnout liability is based on a number of factors, including changes in the market price of our Class A Common Stock. We have experienced significant fluctuations in the market price of our Class A Common Stock, and may experience significant fluctuations in the future. Such price fluctuations will increase or decrease the value of the earnout liability, and we may be required to recognize additional losses or gains in our statements of operations and comprehensive loss, the amounts of which may be substantial.
Change in Fair Value of Warrants
We evaluated all common stock warrants at the time of issuance and concluded that certain warrants did not meet the derivative scope exception. Specifically, these warrants contained provisions that affected their settlement amounts which are not inputs into the pricing of a fixed-for-fixed option on equity shares. Therefore, these warrants were not considered indexed to our common stock and were classified as liabilities. At their respective dates of issuance, we recognized a liability for each of the liability-classified warrants in the amount of its estimated fair value using the Black-Scholes option-pricing model. We subsequently adjust the carrying amount of the liability for each warrant to its estimated fair value as of the end of each reporting period (or through the warrants’ respective dates of exercise or modification, if earlier).
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On October 24, 2025, we entered into amendments to certain liability-classified warrants to purchase an aggregate of 1,337,549 shares of our Class A Common Stock. The amendments revised certain terms of the warrants, including terms that could potentially require cash settlement, such that under the guidance in ASC Topic 480, Distinguishing Liabilities from Equity and ASC Topic 815, Derivatives and Hedging, the warrants are equity-classified financial instruments. The amendments did not affect any terms of the warrants that are inputs into the estimation of the fair value of warrants under the Black-Scholes option pricing model, which we use to estimate the fair value of warrants.
As a result of the amendments to the warrants, we remeasured the related liabilities to their estimated fair value of $6,912 as of the date of the amendments and we reclassified this amount from “Liability-classified warrants” to “Additional paid-in capital” in the condensed consolidated balance sheet. As consideration for these amendments, we issued the warrant holder an additional warrant to purchase 100,000 shares of our Class A Common Stock at a price of $10.80 per share. We recognized the $514 fair value of the additional warrant as an expense, included in “Other non-operating losses, net” in the condensed consolidated statements of operations and comprehensive loss for the six months ended March 31, 2026.
As a result of changes in the fair value of liability-classified warrants outstanding during the periods, for the three months ended March 31, 2026 and 2025, we recognized net non-cash losses of $105 and net non-cash gains of $3,283, respectively. For the six months ended March 31, 2026 and 2025, we recognized net non-cash losses of $428 and net non-cash gains of $625, respectively, which are included in “Change in fair value of warrants” in the condensed consolidated statements of operations and comprehensive loss.
As of March 31, 2026 and September 30, 2025, the related liabilities of $375 and $6,859, respectively, are included in “Liability-classified warrants” in the condensed consolidated balance sheet.
Other Non-Operating (Gains) Losses, Net
For the three months ended March 31, 2026, other non-operating gains, net of $1,735 principally consist of gains on the settlements of certain notes payable and certain other liabilities in shares of our Class A Common Stock. For the six months ended March 31, 2026, other non-operating gains, net of $1,162 principally consist of the $514 fair value of the additional warrants issued in connection with amendments to certain warrants and gains on the settlements of certain notes payable and certain other liabilities in shares of our Class A Common Stock.
For the three months ended March 31, 2025, other non-operating gains, net of $303 principally consist of a gain from the decrease in the fair value of a derivative liability and gains on the conversion of certain accounts payable into shares of our Class A Common Stock. For the six months ended March 31, 2025, other non-operating losses, net of $99 principally consist of a loss recognized upon the conversion of the outstanding principal balance of a note payable and accrued interest thereon into shares of our Class A Common Stock.
Income Tax Provision / Benefit
We account for income taxes using the asset and liability method whereby deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The effect on deferred tax assets and liabilities of a change in tax laws is recognized in the results of operations in the period the new laws are enacted. We record a valuation allowance to reduce the carrying amounts of our deferred tax assets unless it is more likely than not that such assets will be realized.
For the three months and six months ended March 31, 2026, and for the three months ended March 31, 2025, our provision (benefit) for income taxes differs from an amount calculated based on statutory tax rates principally due to our recording a valuation allowance against the net operating losses we generated during the period because we did not expect that the deferred tax asset arising from our pretax book losses would be realized in the future.
Liquidity and Capital Resources
Our primary use of cash is to fund operating expenses, working capital requirements, debt service obligations, capital expenditures and other investments.
We have incurred operating losses and negative cash flows as a result of our ongoing investment in product development and other operating expenses we incur. We expect to continue to incur operating losses and negative cash flows from operations associated with research and development expenses, selling, general, and administrative expenses and capital expenditures necessary to expand our operations, product offerings, and customer base with the ultimate goals of growing our business and achieving profitability in the future.
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Cash Flows
The following table summarizes our unaudited condensed consolidated cash flows for the six months ended March 31, 2026 and 2025:
Six months ended March 31, | Change | |||||||||||
| 2026 | 2025 | $ | ||||||||||
| Net cash used in operating activities | $ | (9,017 | ) | $ | (1,516 | ) | $ | (7,501 | ) | |||
| Net cash used in investing activities | — | (16 | ) | 16 | ||||||||
| Net cash provided by financing activities | 8,307 | 2,047 | 6,260 | |||||||||
| Net increase (decrease) in cash | (710 | ) | 515 | $ | (1,225 | ) | ||||||
| Cash, beginning of period | 3,273 | 266 | ||||||||||
| Cash, end of period | $ | 2,563 | $ | 781 | ||||||||
Operating Activities
For the six months ended March 31, 2026, net cash used in operating activities was $9,017, which included the impact of our net loss of $15,978 and a net increase in working capital items of $1,094, offset by net non-cash charges of $8,055. The net non-cash charges principally consisted of stock-based compensation expense of $7,592 for restricted stock units and stock options, $879 of depreciation and amortization expense and charges of $428 for the issuance or change in fair value of warrants, partly offset by a $960 non-cash gain from the decrease in the fair value of the earnout liability. The net working capital increase principally consisted of decreases in accounts payable and accrued expenses, partly offset by decreases in accounts receivable and inventory.
For the six months ended March 31, 2025, net cash used in operating activities was $1,516, which included the impact of our net loss of $22,130, offset by net non-cash charges of $14,028 and net decreases in working capital items of $6,586. The net non-cash charges principally consisted of stock-based compensation expense of $13,154 for stock options and restricted stock units and $1,124 of depreciation and amortization expense. The net working capital decrease principally consisted of increases in accounts payable and accrued expenses together with decreases in accounts receivable and inventory.
Investing Activities
Net cash used in investing activities for the six months ended March 31, 2026 was $0.
Net cash used in investing activities of $16 for the six months ended March 31, 2025 consisted of payments for the acquisition of property and equipment.
Financing Activities
Net cash provided by financing activities for the six months ended March 31, 2026 of $8,307 principally consisted of $5,360 in proceeds from our public offering, $1,254 in proceeds from the sale of common stock, $4,736 in borrowings under notes payable and agreements for the purchase and sale of future receipts and proceeds of $55 from the exercise of stock options. These amounts were partially offset by principal payments on notes payable of $3,098 (including payments of $565 on notes payable—related parties).
Net cash provided by financing activities for the six months ended March 31, 2025 of $2,047 consisted of $600 in proceeds from the issuance of common stock, and $1,725 in proceeds under agreements for the purchase and sale of future receipts and the issuance of a note payable and proceeds of $15 from the exercise of warrants to purchase shares of the Company’s Class A Common Stock. These amounts were partially offset by principal payments on notes payable of $119 and the payment of deferred consideration of $174 for the acquisition of a business.
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Liquidity
As of March 31, 2026, our cash balance was $2,563 compared to $3,273 at September 30, 2025. We had a working capital deficit of $18,540 as of March 31, 2026 compared to a working capital deficit of $21,071 at September 30, 2025.
As of March 31, 2026, our debt consists of notes payable with an aggregate amount of $4,752 and 7% promissory notes—related parties with an aggregate principal amount of $1,686. Of these amounts, one note having a principal amount of $125 has reached its maturity date and is currently due. The remainder require weekly or monthly payments in varying amounts through July 2027.
Our total liabilities as of March 31, 2026 were $26,009 compared to $37,449 as of September 30, 2025. The decrease in our total liabilities is principally due to the amendment of certain liability-classified warrants and the resulting reclassification of $6,912 of liabilities to stockholders’ equity (deficit) on the condensed consolidated balance sheet during the six months ended March 31, 2026, a decrease in accounts payable of $2,747, and a decrease in accrued expenses and other current liabilities of $1,289.
Other commitments include (i) non-cancelable operating leases for equipment, office facilities and other property containing future minimum lease payments totaling $235 payable over the next 1.2 years, (ii) unpaid commitment and other fees of $1,478 payable in connection with the committed equity facility, (iii) deferred purchase consideration of $2,323 related to acquisitions which is currently due, and (iv) $2,000 currently payable under an earnout arrangement related to the acquisition of a business.
Going Concern
We incurred a loss from operations of $14,924 for the six months ended March 31, 2026 and we incurred losses from operations of $37,693 and $46,395 for the years ended September 30, 2025 and 2024, respectively. Additionally, we had negative cash flows from operations of $9,017 for the six months ended March 31, 2026 and negative cash flows from operations of $10,113 and $18,388 for the years ended September 30, 2025 and 2024, respectively. As of March 31, 2026, we had cash on hand of $2,563 and an accumulated deficit of $166,566. We have historically financed our operations through the issuance and sale of equity securities and the issuance of debt. We expect to continue to incur operating losses and negative cash flows from operations for the foreseeable future and we will need to raise additional debt or equity financing to fund our operations and satisfy our obligations. We believe that there is substantial doubt concerning our ability to continue as a going concern as we currently do not have adequate liquidity to meet our operating needs and satisfy our obligations for at least the next twelve months.
While we will seek to raise additional capital, there can be no assurance the necessary financing will be available on terms acceptable to us, or at all. If we raise funds by issuing equity securities, dilution to existing stockholders may result. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of common stock. If we raise funds by issuing debt securities, such debt securities would have rights, preferences and privileges senior to those of preferred and common stockholders. The terms of debt securities or borrowings may impose significant restrictions on our operations. The capital markets have in the past, and may in the future, experience periods of volatility that could impact the availability and cost of equity and debt financing. In addition, potential future increases in federal fund rates set by the Federal Reserve, which serve as a benchmark for rates on borrowing, could adversely impact the cost or availability of debt financing.
If we are unable to obtain additional financing, or if such transactions are successfully completed but do not provide adequate financing, we may be required to reduce our operating expenditures, which could adversely affect our business prospects, or we may be unable to continue operations. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. Accordingly, the condensed consolidated financial statements have been prepared on a basis that assumes we will continue as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business.
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Critical Accounting Policies and Estimates
Our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with U.S. GAAP. The preparation of condensed consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. To the extent that there are differences between our estimates and actual results, our future financial position, results of operations, and cash flows may be affected.
During the six months ended March 31, 2026, there were no significant changes to our critical accounting policies and estimates compared to those previously disclosed in “Critical Accounting Policies and Estimates” included in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended September 30, 2025, filed with the SEC on January 13, 2026.
Emerging Growth Company
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and we will take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
We expect to no longer be an “emerging growth company” effective September 30, 2026.
Smaller Reporting Company
Additionally, we are a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the last business day of our second fiscal quarter, or (ii) our annual revenue exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the last business day of our second fiscal quarter. If we continue to be a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from these certain reduced disclosure requirements that are available to smaller reporting companies.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
Item 4. Controls and Procedures.
Limitations on Effectiveness of Disclosure Controls and Procedures
In designing and evaluating our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures, pursuant to Rule 13a-15(b) of the Exchange Act, as of March 31, 2026. We identified material weaknesses in our internal control over financial reporting as described below, and, as a result, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of March 31, 2026.
Material Weaknesses in Internal Control over Financial Reporting
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses are as follows:
| ● | We did not design and maintain an effective control environment commensurate with our financial reporting requirements. Specifically, we 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. Additionally, our insufficient complement of personnel resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in our finance and accounting functions. | |
| ● | We did not design and maintain an effective risk assessment process at a precise enough level to identify new and evolving risks of material misstatement in our financial statements. Specifically, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to our risks of material misstatement to financial reporting. |
These material weaknesses contributed to the following additional material weaknesses:
| ● | We did not design and maintain formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over (i) the preparation and review of account reconciliations and journal entries, (ii) maintaining appropriate segregation of duties, (iii) determining the appropriate grant date for stock options and evaluating the assumptions used within our Black-Scholes model to determine the fair value of option grants, and (iv) the review of the completeness and accuracy of the income tax provision and related disclosures. Additionally, we did not design and maintain controls over the classification and presentation of accounts and disclosures in our financial statements and to ensure revenue transactions are recorded in the correct period. | |
| ● | We did not design and maintain effective controls to identify and account for certain non-routine, unusual or complex transactions, including the proper application of U.S. GAAP of such transactions. Specifically, we did not design and maintain effective controls to (i) timely identify, account for and value business combinations and asset acquisitions, including the associated tax implications and (ii) timely identify, account for and value our financing arrangements. | |
| ● | We did not design and maintain effective controls to verify transactions are properly authorized, executed, and accounted for, including transactions related to incentive compensation arrangements. |
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These material weaknesses resulted in adjustments to revenue, accrued expenses, general and administrative expenses, inventory, costs of products sold, the accounting for and classification of redeemable convertible preferred stock, founders preferred and common stock, stock-based compensation expense, other current assets, income tax expense and deferred tax liabilities, as well as the purchase price allocation for our business combination, as of and for the years ended September 30, 2022 and 2021; adjustments to stock-based compensation expense, accrued expenses, other current liabilities and the PIPE make-whole liability, as well as the purchase price allocations for our business combinations as of and for the interim periods ended December 31, 2023 and June 30, 2024, and as of and for the year ended September 30, 2024; and, an adjustment to the number of shares of our Class B Common Stock reported as issued and outstanding as of June 30, 2025.
| ● | We did not design and maintain effective information technology (“IT”) general controls for information systems that are relevant to the preparation of our financial statements. Specifically, we did not design and maintain (i) program change management controls to ensure that program and data changes are identified, tested, authorized and implemented appropriately, (ii) user access controls to ensure appropriate segregation of duties and to adequately restrict user and privileged access to appropriate personnel, (iii) computer operations controls to ensure that processing and transfer of data, and data backups and recovery are monitored, and (iv) program development controls to ensure that new software development is tested, authorized and implemented appropriately. These deficiencies did not result in a misstatement to our financial statements. |
Additionally, these material weaknesses could result in a misstatement of substantially all of our accounts or disclosures that would result in a material misstatement to our annual or interim financial statements that would not be prevented or detected.
Remediation Plan
We have begun an implementation plan to remediate these material weaknesses, which we expect will result in significant future costs for us.
Those remediation measures will include (i) hiring additional accounting and IT personnel to enhance our financial reporting, accounting and IT capabilities; (ii) designing and implementing controls to formalize roles and review responsibilities and designing and implementing controls over segregation of duties; (iii) designing and implementing controls to identify and evaluate changes in our business and the impact on our internal control over financial reporting; (iv) designing and implementing controls over the proper authorization of transactions; (v) designing and implementing controls to identify, account for, and value non-routine, unusual or complex transactions; (vi) designing and implementing formal accounting policies, procedures and controls supporting our financial close process, including controls over account reconciliations and journal entries; (vii) designing and implementing controls over determining the appropriate grant date for stock options and evaluating the assumptions used within the Black-Scholes model; (viii) designing and implementing controls over the completeness and accuracy of the income tax provision and related disclosure; (ix) designing and implementing controls over the classification and presentation of accounts and disclosures in our financial statements and to ensure revenue transactions are recorded in the correct period; (x) implementing a more sophisticated IT system; and (xi) designing and implementing IT general controls.
The material weaknesses will not be considered remediated until our remediation plan as described above has been fully implemented and we determine no further changes to the remediation plan are necessary, the applicable controls operate for a sufficient period of time, and we have concluded, through testing, that the newly implemented and enhanced controls are operating effectively.
Notwithstanding the above, our management believes that the financial statements included in this Quarterly Report on Form 10-Q present fairly in all material respects our financial position, results of operations and cash flows for the periods presented.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On March 13, 2026, Ydens Holdings, LLC and related individual plaintiffs filed a lawsuit in Orange County Superior Court against us and our subsidiary EMI Solutions, asserting breach of contract and related claims arising from the September 2022 Agreement and Plan of Merger under which we acquired EMI Solutions. The plaintiffs seek damages. The Merger Agreement contains a mandatory arbitration provision, and we intend to move to compel arbitration and to defend the matter vigorously. We are unable to predict final outcome of this matter, but we do not currently believe that it will have a material adverse effect on our results of operation or financial position.
From time to time, we have been, and may continue to be, subject to various claims, lawsuits and other legal and administrative proceedings that arise in the ordinary course of business. Some of these claims, lawsuits and other proceedings may range in complexity and result in substantial uncertainty, damages, fines, penalties, non-monetary sanctions or other relief. However, we do not believe any such claims, lawsuits, or proceedings currently pending, individually or in the aggregate, would be material to our business or likely to result in a material adverse effect on our future operating results, financial condition or cash flows.
Item 1A. Risk Factors
In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025. The information presented below updates, and should be read in conjunction with, the risk factors and information disclosed in our Annual Report on Form 10-K. Except as set forth below, there have been no material changes to the risk factors disclosed in the Form 10-K.
In the event that we are unable to maintain compliance with Nasdaq’s continued listing standards, Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Currently, our Class A Common Stock and the Public Warrants are traded on Nasdaq. However, we cannot assure you that our securities will continue to be listed on Nasdaq in the future. In order to continue listing our securities on Nasdaq, we are required to maintain certain financial, distribution, and stock price levels. We are required to maintain a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”). On April 28, 2025, we received a delinquency notification letter (the “Notice”) from Nasdaq’s Listing Qualifications Staff (the “Staff”) due to the non-compliance with Nasdaq Listing Rule 5550(a)(2) as a result of our failure to maintain the Minimum Bid Price Requirement. The Notice stated that, as of its date, the stock price of the Class A Common Stock was below $1.00 for 30 consecutive business days and gave us 180 calendar days, or until October 27, 2025, to regain compliance by maintaining a closing bid price of at least $1.00 per share for a minimum of ten consecutive business days (the “Initial Compliance Period”).
On October 24, 2025, we submitted a request to Nasdaq for an additional 180-day period (the “Second Compliance Period”) to provide additional time for us to demonstrate compliance with the Minimum Bid Price Requirement. On October 29, 2025 we received written notice from Nasdaq (the “Extension Letter”) granting us an extension through April 27, 2026 (the “Extension Deadline”), to regain compliance with the Minimum Bid Price Requirement. On March 23, 2026, our stockholders approved a proposal to effect the Reverse Stock Split. The Reverse Stock Split went effective after market close on April 6, 2026. The effects of the Reverse Stock Split allowed us to regain compliance with the Minimum Bid Price Requirement as of April 21, 2026; however, the Reverse Stock Split is subject to certain risks, which are outlined below. We may in the future fail to meet the Minimum Bid Price Requirement and in such event, if we fail to timely regain compliance with the Minimum Bid Price Requirement, Nasdaq will provide written notification to us that our common stock is subject to delisting. Nasdaq rules provide that any listed company that fails to meet the Minimum Bid Price Requirement and has effected a reverse stock split over the prior one-year period, or has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, will not be eligible for an automatic 180-day grace compliance period and Staff is obligated to immediately issue a delisting determination. Therefore, if we were to fall out of compliance with the Minimum Bid Price Requirement prior to April 6, 2027, we would not be able to effect a reverse stock split and would immediately be issued a delisting determination.
We are also required to maintain a minimum market capitalization (generally $35 million) and a minimum number of holders of our listed securities (generally 400 public holders). On January 15, 2026, we received a delinquency notification letter (the “MVLS Notice”) from the Staff that we are not compliant with Nasdaq Listing Rule 5550(b)(2) as a result of our failure to maintain a minimum Market Value of Listed Securities (“MVLS Requirement”) of $35 million. We have subsequently regained compliance with the MVLS Requirement. However, we may in the future fail to meet the MVLS Requirement and in such event, if we fail to timely regain compliance with the MVLS Requirement, Nasdaq will provide written notification to us that our common stock is subject to delisting.
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If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
| ● | a limited availability of market quotations for our securities; | |
| ● | reduced liquidity for our securities; | |
| ● | a determination that our Class A Common Stock is a “penny stock,” which will require brokers trading in our Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; | |
| ● | a limited amount of news and analyst coverage; and | |
| ● | a decreased ability to issue additional securities or obtain additional financing in the future. |
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Since our Class A Common Stock and our Public Warrants are listed on Nasdaq, they are covered securities. If we are no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.
The Reverse Stock Split Has Led to a Decrease in the Overall Market Capitalization of the Company.
The Reverse Stock Split may be viewed negatively by the market. Following the Reverse Stock Split, our per share market price has declined, which has resulted in a decrease in our overall market capitalization. If there are further decreases in the per share market price of our Common Stock, then our value, as measured by our market capitalization, will be reduced.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On March 13, 2026, we issued an aggregate of 206,876 shares of Class A Common Stock to three of our creditors in exchange for satisfaction of the Company’s debt owed to such creditors in the aggregate amount of $3,000.
Between February 23, 2026 and March 16, 2026, we entered into two securities purchase agreements providing for the issuance of convertible notes. The agreements were entered into on February 23, 2026 and March 16, 2026, respectively, and provided for bridge promissory notes with an aggregate principal amount of $554, aggregate original issue discount of $72, aggregate purchase price of $482, and one-time interest charges of 12%. These bridge notes mature on December 30, 2026 and January 15, 2027, respectively, and require aggregate scheduled payments of $621. The promissory notes are convertible into shares of our Class A Common Stock at the election of the holder at a conversion price equal to 75% multiplied by the lowest trading price of the Class A Common Stock during the 10 trading days prior to the conversion date.
No underwriting discounts and commissions were paid with respect to the foregoing transactions. We believe the sales and issuances of the above securities were exempt from registration under the Securities Act by virtue of Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder because the issuance of securities to the recipients did not involve a public offering.
On March 31, 2026, we entered into the Securities Purchase Agreement with Leviston, pursuant to which we issued the Promissory Note. The $3,000 principal amount of the Promissory Note will be payable with interest on July 31, 2026. We intend to use the net proceeds from the sale of the Promissory Note for working capital and general corporate purposes. The Promissory Note bears an interest rate of 10% per annum. The Promissory Note is convertible into shares of our Class A Common Stock at the election of Leviston at a Conversion Price that is the lesser of (i) the closing price on March 31, 2026, which was $3.34 and (ii) 85% of the lowest 8-day VWAP immediately prior to and including the date of the notice of conversion. On May 13, 2026, we entered into the Amendment to increase the principal amount under the Promissory Note from $3,000 to $4,000 in exchange for an additional cash advance of $833. The issuance of the Promissory Note was effected in reliance upon exemptions from registration under the Securities Act, including Section 4(a)(2) thereof and Rule 506(b) of Regulation D thereunder.
On May 13, 2026, we entered into the Investor Rights Agreement that grants Leviston the right, but not the obligation, to acquire, over a seven-month period, additional secured convertible notes of up to $4,000 in aggregate principal amount on terms substantially similar to the Promissory Note and secured on a pari passu basis.
Between May 12, 2026 and May 18, 2026, Leviston converted the entire $4,000 of outstanding principal under the Promissory Note, as amended, together with all accrued interest thereon, into an aggregate of 2,500,000 shares of Class A Common Stock, satisfying the Promissory Note in full. The issuance of the shares of Class A Common Stock was exempt from registration under Section 3(a)(9) of the Securities Act. Any shares issuable pursuant to the Investor Rights Agreement upon conversion of additional secured convertible notes will be effected in reliance upon Section 3(a)(9) of the Securities Act.
On May 19, 2026, we entered into the Kips Purchase Agreement, pursuant to which we agreed to sell to Kips (i) 2,000 Preferred Shares for aggregate gross proceeds of $2,400 and (ii) a Warrant to purchase up to an additional 6,000 Preferred Shares at an exercise price of $1,000 per share. The Preferred Shares are convertible into shares of Class A Common Stock at a conversion price equal to 82% of the lowest 8-day VWAP of the Class A Common Stock, immediately prior to and including the conversion date, subject to adjustments provided in the COD, including for stock dividends, stock splits, subsequent equity sales and similar events. The Warrant is exercisable beginning May 19, 2026 and expires no later than twelve months thereafter.
The issuance of the Preferred Shares and the Warrant was effected in reliance upon exemptions from registration under the Securities Act, including Section 4(a)(2) thereof and Rule 506(b) of Regulation D thereunder.
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Item 5. Other Information
On May 19, 2026, we entered into the Kips Purchase Agreement, pursuant to which we agreed to sell to Kips (i) 2,000 Preferred Shares for aggregate gross proceeds of $2,400, and (ii) a Warrant to purchase up to an additional 6,000 Preferred Shares at an exercise price of $1,000 per share. The COD provides that 10,000,000 shares have been designated as Preferred Shares with a stated value equal to $1,200, subject to increase as set forth in the COD.
The Preferred Shares accrue dividends at a rate of ten percent per annum, payable in cash or, at our option, in Preferred Shares. The COD includes affirmative and negative covenants. The Preferred Shares are convertible into shares of Class A Common Stock at a conversion price equal to 82% of the lowest 8-day VWAP of the Class A Common Stock, immediately prior to and including the conversion date, subject to adjustments provided in the COD, including for stock dividends, stock splits, subsequent equity sales and similar events. At any time commencing 30 days after the issuance date, and subject to the satisfaction of certain Equity Conditions, as defined in the COD, we may redeem some or all of the outstanding Preferred Shares for an amount equal to the Optional Redemption Amount, as defined in the COD and we are required to redeem the Preferred Stock upon a Triggering Event, as defined in the COD.
Pursuant to the Registration Rights Agreement, we have agreed to register the resale of the shares of Class A Common Stock issuable upon conversion of the Preferred Shares, including the Preferred Shares issuable upon exercise of the Warrant.
The Warrant is exercisable beginning May 19, 2026 and expires no later than twelve months thereafter.
Pursuant to the terms of the Kips Purchase Agreement, we may not issue shares of Class A Common Stock pursuant upon conversion of the Preferred Shares to the extent such issuance would require prior stockholder approval under Nasdaq rules.
The securities described above are being offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder.
The COD was filed with the Secretary of State of the State of Delaware on May 19, 2026, which became effective upon filing. The COD was adopted by our Board of Directors without a vote of our stockholders pursuant to the authority granted to the Board of Directors under our certificate of incorporation, which authorizes us to issue up to 10,000,000 shares of preferred stock, and Section 151 of the Delaware General Corporation Law.
The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Warrant, the COD, the Kips Purchase Agreement, and the Registration Rights Agreement, copies of which are filed as Exhibits 4.3, 4.4, 10.4, and 10.5, respectively, to this Quarterly Report on Form 10-Q.
We have determined not to pursue a potential acquisition of Peraso Inc.
10b5-1 Trading Plans
During the three months ended March 31, 2026, none of our officers (as defined in Rule 16a-1(f) of the Exchange Act) or directors
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| Exhibit No. | Description | |
| 4.1 | Senior Secured Convertible Promissory Note in favor of Leviston Resources, LLC dated as of March 31, 2026 (incorporated by reference to Exhibit 4.17 to the Registrant’s Registration Statement on Form S-1 (File No. 333-295357), filed with the SEC on April 27, 2026). | |
| 4.2* | First Amendment to Securities Purchase Agreement and Senior Secured Convertible Promissory Note in favor of Leviston Resources, LLC dated as of May 13, 2026. | |
4.3* |
Preferred Stock Purchase Warrant, dated May 19, 2026, in favor of Kips Bay Select, LP. | |
4.4* |
Certificate of Designation of Series A 10% Convertible Preferred Stock. | |
| 10.1 | Securities Purchase Agreement, by and between Mobix Labs, Inc and Leviston Resources, LLC, dated as of March 31, 2026 (incorporated by reference to Exhibit 10.57 to the Registrant’s Registration Statement on Form S-1 (File No. 333-295357), filed with the SEC on April 27, 2026). | |
| 10.2 | Registration Rights Agreement by and between Mobix Labs, Inc and Leviston Resources, LLC, dated as of March 31, 2026 (incorporated by reference to Exhibit 10.58 to the Registrant’s Registration Statement on Form S-1 (File No. 333-295357), filed with the SEC on April 27, 2026). | |
| 10.3* | Investor Rights Agreement by and between Mobix Labs, Inc. and Leviston Resources, LLC, dated as of May 13, 2026. | |
10.4* |
Securities Purchase Agreement, dated May 19, 2026, by and between Mobix Labs, Inc. and Kips Bay Select, LP. | |
10.5* |
Registration Rights Agreement, dated May 19, 2026 by and between Mobix Labs and Kips Bay Select, LP. | |
| 31.1* | Certification of Principal Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934. | |
| 31.2* | Certification of Principal Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934. | |
| 32.1** | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2** | Certification of Principal 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* | Inline XBRL Instance 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). |
* Filed herewith
** Furnished herewith
| 37 |
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| MOBIX LABS, INC. | ||
| Date: May 20, 2026 | By: | /s/ Keyvan Samini |
| Keyvan Samini | ||
President and Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer) | ||
| 38 |