MOBX 10-Q
Mobix Labs, Inc (MOBX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
For the transition period from ______________ to ______________
Commission
File Number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
(Address of principal executive offices and zip code)
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Capital Market | ||||
| Capital Market |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was
required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller
reporting company | |
| Emerging
growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares of the registrant’s Class A Common Stock and Class B Common Stock outstanding as of August 13, 2026 was and , respectively.
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 | 24 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 36 |
| Item 4. | Controls and Procedures | 36 |
| PART II. OTHER INFORMATION | 38 | |
| Item 1. | Legal Proceedings | 38 |
| Item 1A. | Risk Factors | 38 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 39 |
| Item 3. | Defaults Upon Senior Securities | 40 |
| Item 4. | Mine Safety Disclosures | 40 |
| Item 5. | Other Information | 40 |
| Item 6. | Exhibits | 41 |
| Signatures | 42 | |
| 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; | |
| ● | our ability to consummate the pending acquisitions of Vision Aerial, Inc. and Special Project Delivery, Inc. in the expected time frames or at all, and to finance those acquisitions; | |
| ● | our beliefs regarding whether the assets and focus areas we have prioritized in furtherance of the National Security Matters (“NSM”) Initiative advance U.S. national security, reduce foreign dependency in critical supply chains, respond to announced federal supply-chain, stockpile and defense initiatives, and position us to help strengthen America’s defense industrial base and supply-chain resilience; | |
| ● | 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 dilutive effect of conversions of the Series A 10% Convertible Preferred Stock and the Additional Notes, the conversion price of which floats with the trading price of our Class A Common Stock; | |
| ● | 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, including Vision Aerial, Inc. and Special Project Delivery, Inc. on the expected time frames or at all, 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 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the Securities and Exchange Commission on January 13, 2026 and May 20, 2026, respectively.
| iii |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Mobix Labs, Inc.
Unaudited Condensed Consolidated Financial Statements
June 30, 2026 and 2025
| 1 |
MOBIX LABS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share amounts)
| June 30, 2026 | September 30, 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, PREFERRED STOCK 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 – measured at fair value, current | ||||||||
| Operating lease liabilities, current | ||||||||
| Total current liabilities | ||||||||
| Notes payable – related parties, noncurrent | ||||||||
| Earnout liability | ||||||||
| Deferred tax liability | ||||||||
| Operating lease liabilities, noncurrent | ||||||||
| Liability-classified warrants | ||||||||
| Other noncurrent liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 9) | ||||||||
| Preferred Stock, $ par value, of which shares have been designated as Series A 10% Convertible Preferred Stock; and shares issued and outstanding at June 30, 2026 and September 30, 2025, respectively | ||||||||
| Stockholders’ equity (deficit) | ||||||||
| Class A Common Stock, $ par value, shares authorized; and shares issued and outstanding at June 30, 2026 and September 30, 2025, respectively | ||||||||
| Class B Common Stock, $ par value, shares authorized; shares issued and outstanding at June 30, 2026 and September 30, 2025 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities, preferred stock 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)
Three months ended June 30, | Nine months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net revenue: | ||||||||||||||||
| Products | $ | $ | $ | $ | ||||||||||||
| Services | ||||||||||||||||
| Total net revenue | ||||||||||||||||
| Cost of revenue: | ||||||||||||||||
| Products | ||||||||||||||||
| Services | ||||||||||||||||
| Total cost of revenue | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Impairment of long-lived assets | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense | ||||||||||||||||
| Change in fair value of earnout liability | ( | ) | ( | ) | ( | ) | ||||||||||
| Change in fair value of warrants | ( | ) | ( | ) | ( | ) | ||||||||||
| Change in fair value of notes payable | ||||||||||||||||
| Loss on issuance of preferred shares and liability-classified warrants | ||||||||||||||||
| Financing costs expensed | ||||||||||||||||
| Loss on extinguishment of notes payable | ||||||||||||||||
| 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 PREFERRED STOCK AND
STOCKHOLDERS’ EQUITY (DEFICIT)
(unaudited, in thousands, except share and per share amounts)
| Additional | Total | |||||||||||||||||||||||||||||||||||
| Preferred Stock | Class A Common Stock | Class B Common Stock | Paid-in Capital | Accumulated | Stockholder’s Equity | |||||||||||||||||||||||||||||||
| Shares | Amount | 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 on vesting of RSUs | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock on exercise of stock options | - | - | ||||||||||||||||||||||||||||||||||
| Reclassification of warrants | - | - | - | |||||||||||||||||||||||||||||||||
| Issuance of warrants in consideration for modification | - | - | - | |||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at December 31, 2025 | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of common stock | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with debt | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock in settlement of liabilities | - | - | - | |||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with public offering | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock on vesting of RSUs | - | - | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at March 31, 2026 | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of common stock on vesting of RSUs | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for amendment of RaGE earnout | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of Common Stock for services | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock in settlement of liabilities | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of preferred stock | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Issuance of extension shares in consideration for modification | - | - | - | |||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Additional | Total | |||||||||||||||||||||||||||||||||||
| Preferred Stock | Class A Common Stock | Class B Common Stock | Paid-in Capital | Accumulated | Stockholder’s Equity | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | (Deficit) | ||||||||||||||||||||||||||||
| 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 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of common stock in settlement of liabilities | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for amendment of RaGE earnout | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock on vesting of RSUs | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of warrants | - | - | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at March 31, 2025 | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of Class A common stock and warrants in private placement | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of Class A common stock in settlement of liabilities | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of Class A common stock for RaGE earnout | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of restricted stock awards | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of RSUs | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of warrants | - | - | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
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)
Nine months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Amortization of intangible assets | ||||||||
| Impairment of long-lived assets | ||||||||
| Issuance of warrants to placement agent | ||||||||
| Issuance of common stock for amendment of RaGE earnout | ||||||||
| Change in fair value of earnout liability | ( | ) | ( | ) | ||||
| Change in fair value of warrants | ( | ) | ||||||
| Change in fair value of notes payable | ||||||||
| Loss on extinguishment of notes payable | ||||||||
| Loss on issuance of preferred shares and liability-classified warrants | ||||||||
| Noncash private placement costs expensed | ||||||||
| Noncash financing costs expensed | ||||||||
| 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 | ||||||||
| Proceeds from sale of property and equipment | ||||||||
| Acquisition of property and equipment | ( | ) | ( | ) | ||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Financing activities | ||||||||
| Proceeds from sale of common stock and warrants in private placement | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Proceeds from issuance of preferred shares and liability-classified warrants | ||||||||
| 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 | $ | $ | ||||||
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. In July 2026, our Board of Directors approved the launch of our NSM Initiative, broadening our strategic focus to businesses that advance U.S. national security priorities, including critical resources; defense, aerospace and autonomous systems; energy, water and critical infrastructure; and digital infrastructure and strategic 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 June 30, 2026 and its condensed consolidated results of operations and cash flows for the periods ended June 30, 2026 and 2025. The condensed consolidated results of operations for the three months and nine months ended June 30, 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, liability-classified warrants, bifurcated derivatives, and certain debt instruments; 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 nine months ended June 30, 2026, aside from those outlined below.
| 7 |
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815. The Company values its derivatives using the Black-Scholes option-pricing model or other acceptable valuation models, as applicable, with the assistance of valuation specialists. Derivative instruments accounted for as liabilities are valued at inception and subsequent valuation dates for each reporting period the derivative instrument remains outstanding. The classification of derivative instruments, including whether such instruments should be recorded as liabilities, is reassessed at each reporting period.
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 not recognize any impairment losses for the three and nine months ended June 30, 2026. The
Company recognized impairment losses of $
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 three and nine months ended June 30, 2026 and 2025. There were no changes in the carrying amount of goodwill during the three and nine months ended June 30, 2026 and 2025.
Note 3 — Inventory
Inventory consists of the following:
| June 30, 2026 | September 30, 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Finished goods | ||||||||
| Total inventory | $ | $ | ||||||
| 8 |
Note 4 — Property and Equipment, net
Property and equipment, net consists of the following:
Estimated Useful Life (years) | June 30, 2026 | September 30, 2025 | ||||||||
| Equipment and furniture | $ | $ | ||||||||
| Laboratory equipment | ||||||||||
| Leasehold improvements | ||||||||||
| Property and equipment, gross | ||||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||||
| Property and equipment, net | $ | $ | ||||||||
Depreciation
expense for the three months ended June 30, 2026 and 2025 was $
During
the nine months ended June 30, 2025, the Company recognized losses of $
During
the nine months ended June 30, 2025, the Company recognized an impairment loss of $
Note 5 — Intangible Assets, net
Intangible assets, net consist of the following:
| Estimated | June 30, 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 June 30, 2026 and 2025 was $
Estimated future amortization expense for intangible assets by fiscal year as of June 30, 2026 is as follows:
| Years ending September 30, | ||||
| 2026 (remaining three 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:
| June 30, 2026 | September 30, 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:
| June 30, 2026 | September 30, 2025 | |||||||
| Notes payable | $ | $ | ||||||
| 7% promissory notes – related parties | ||||||||
| Total debt | ||||||||
| Less: Amounts classified as current | ( | ) | ( | ) | ||||
| Noncurrent portion | $ | $ | ||||||
Debt measured at fair value consists of the following:
| June 30, 2026 | September 30, 2025 | |||||||
| Notes payable – measured at fair value | $ | $ | ||||||
| Total debt measured at fair value | ||||||||
| Less: Amounts classified as current | ( | ) | ||||||
| Noncurrent portion | $ | $ | ||||||
Exchange Agreements
On
March 13, 2026, the Company entered into an exchange agreement pursuant to which certain outstanding indebtedness and other amounts owed
were exchanged for shares of the Company’s Class A Common Stock. Under this agreement, outstanding obligations of $
On
June 5, 2026, the Company entered into a final exchange agreement pursuant to which certain outstanding indebtedness and other amounts
owed were exchanged for shares of the Company’s Class A Common Stock. Under the agreement, the remaining balance of $
| 10 |
During the nine months ended
June 30, 2026, the Company and the holders of four notes agreed to settle the outstanding principal and accrued interest, totaling $
During
the nine months ended June 30, 2025, the Company and the holders of three notes agreed to settle the outstanding principal and accrued
interest, totaling $
Convertible Notes
Between February 23, 2026 and March 31, 2026, the Company entered into three securities purchase agreements providing for the issuance of convertible notes.
Bridge Promissory 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 $
Leviston Senior Convertible Notes
The
third agreement, entered into on March 31, 2026, with Leviston Resources, LLC (“Leviston”), provided for a senior secured
convertible note with a 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 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 $
| 11 |
On
May 18, 2026, the Company satisfied in full the entire $
Based
on the fair value of the shares issued at the time of settlement of $,
or $
Leviston Senior Convertible Notes Measured at Fair Value
On
May 18, 2026, the Company issued to Leviston an Additional Note pursuant to the IRA with a principal amount of $
On
June 22, 2026, the Company issued to Leviston a senior secured convertible note with a principal amount of $
Maximcash Loan and Security Agreement
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 $
Based
on the fair value of the shares issued or delivered at the time of settlement of $,
or $ per
share, the Company recognized a loss on extinguishment of debt of $
| 12 |
Purchase and Sale of Future Receipts
During
the nine months ended June 30, 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 nine months ended June 30, 2025, the Company entered into three 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 $
Notes Payable with Financial Institutions
During
the nine months ended June 30, 2025, the Company entered into two notes payable with financial institutions for net proceeds of $
Total Principal Payments and Remaining Principal Balances on Non-Related Party Debt
During
the nine months ended June 30, 2026 and 2025, the Company made principal payments on notes payable of $
and $,
respectively. As of June 30, 2026, notes payable having an aggregate remaining principal balance of $
were outstanding and are included in “Notes payable” in the condensed consolidated balance sheet. As of June 30, 2026, notes payable measured
at a fair value of $
7% Promissory Notes — Related Parties
The
Company has two outstanding promissory notes with related parties which bear interest at
| 13 |
Note 8 — Leases
The
Company has entered into operating leases for office space. The leases have remaining terms ranging from five months to
Nine months ended June 30, | ||||||||
| 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 nine months ended June 30, 2026 and 2025 was $
| Years ending September 30, | ||||
| 2026 (remaining three 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 moved to compel arbitration. The parties thereafter stipulated to arbitrate the claims and the claims will now proceed in arbitration. The Company is unable to predict the final outcome of this matter, but it does not currently believe that it will have a material adverse effect on its results of operations or financial position. Additionally, on March 10, 2026, Robert Ydens (“Ydens”) filed a lawsuit against EMI Solutions, LLC, the Company, Phil Sansone, and Keyvan Samini in Orange County Superior Court, asserting claims for violation of the California Labor Code for failure to pay an alleged retention bonus, failure to pay alleged accrued vacation, breach of his at-will employment agreement, failure to pay final wages, and waiting time penalties. Defendants have filed a Petition to Compel Arbitration, seeking to enforce the mandatory arbitration provision contained in Ydens’ employment agreement, which requires all disputes arising out of or relating to his employment to be resolved through final and binding arbitration before JAMS. The Company is unable to predict the final outcome of this matter, but it does not currently believe that it will have a material adverse effect on its results of operations 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 June 30, 2026 or September 30, 2025.
| 14 |
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.
The Company assesses its preferred stock instruments at issuance and each reporting period for classification and derivative features requiring bifurcation.
The preferred stock is classified as mezzanine equity due to redemption features not solely within the Company’s control. For preferred stock presented as mezzanine equity that is not currently redeemable, the Company assesses the probability of the event that would lead to redemption. If it is probable that the equity instrument will become redeemable, the Company accretes changes in the redemption value over the period from the date of issuance, or from the date that it becomes probable that the instrument will become redeemable, if later, to the earliest redemption date of the instrument using an appropriate methodology. If an equity instrument classified as mezzanine equity is not probable of redemption, subsequent adjustment of the amounts presented in mezzanine equity is unnecessary.
Issuance of Preferred Stock and Preferred Warrants
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)
shares of Series A 10% Convertible Preferred Stock (the “Preferred
Shares”) for an aggregate purchase price of $
The Company has classified the preferred stock as mezzanine equity on the condensed consolidated balance sheet, as the shares have certain redemption features contingent upon the occurrence or non-occurrence of certain events that are not solely in the control of the Company. The carrying value of the Series A convertible preferred stock, which includes the proceeds received upon issuance, has not been adjusted to liquidation value since the securities are not currently redeemable or probable to become redeemable.
Liquidation Preference
Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, holders of preferred stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the Stated Value of $ per share, plus any accrued and unpaid dividends thereon and any other fees or liquidated damages then due and owing thereon under the Certificate of Designation (the “Certificate of Designation”), for each share of Preferred Stock before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of preferred stock shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
Dividend Rights
Dividends are cumulative and
accrue at a stated rate of
Conversion Rights
The
Preferred Shares and any shares issued upon exercise of the Preferred Warrant are convertible into shares of our Class A Common
Stock. The Conversion Price is 82% of the lowest 8-day VWAP of the Class A Common Stock immediately prior to and including the date
of the conversion notice, subject to adjustments. The number of shares of Class A Common Stock issuable upon conversion is equal to
the aggregate stated value plus accrued and unpaid dividends divided by the Conversion Price. The Company determined that the
conversion feature embedded within its preferred stock requires bifurcation under the guidance of ASC 815, Derivatives and Hedging
Activities. As shares of Series A
Voting Rights
Holders of the redeemable convertible preferred stock generally have no voting rights. However, as long as any shares of redeemable convertible preferred stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of redeemable convertible preferred stock, take certain specified actions such as amending the terms of the preferred shares that would have a material adverse affect on the economics of the preferred stock.
| 15 |
Registration Rights Agreement
In connection with the transaction, on May 19, 2026, the Company also entered into a Registration Rights Agreement with Kips (the “Registration Rights Agreement”) pursuant to which the Company agreed to register the resale of shares of Class A Common Stock issuable upon conversion of the Preferred Shares and upon exercise of the Preferred Warrant.
On
June 18, 2026, the Company and Kips entered into Amendment No. 1 to the Registration Rights Agreement, pursuant to which the filing
and effectiveness deadlines were extended and prior remedies were waived. In addition, The Company and Kips agreed to revise the
Original Issue Date of the Preferred Shares to be June 18, 2026. As a non-refundable registration-extension fee, fully earned upon
execution of the amendment, the Company issued shares
of Class A Common Stock (the “Extension Shares”) on July 17, 2026, valued at $
In addition to the
exchange agreements discussed in Note 7, Debt, during the nine months ended June 30, 2025, the Company and the holders of certain
of the Company’s accounts payable and accrued expenses and other current liabilities agreed to settle the outstanding balances,
totaling $
During the nine months ended June 30, 2026, in connection with a modification
of the RaGE earnout agreement, the Company issued shares of the Company’s Class A Common Stock. The Company recognized an additional expense
on the issuance of $
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
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
shares of its Class A Common Stock at a price to the public
of $
per share (the “Offering”). In connection with
the Offering, the Company entered into a placement agency agreement, pursuant to which the Company agreed to pay the placement agent
a cash placement fee equal to
During
the nine months ended June 30, 2025, the Company sold
shares of its Class A Common Stock to an unaffiliated investor
for net proceeds of $
| 16 |
Termination of 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 $
During
the nine months ended June 30, 2026, the Company sold
shares of its Class A Common Stock under the ATM Agreement,
for net proceeds (after commissions) of $
As of June 30, 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:
| 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 | ||||
| Reserve for Extension shares | ||||
| Reserve for conversion of Series A 10% Convertible Preferred Stock and exercise of Preferred Warrant 1 | ||||
| Reserve for conversion of convertible notes payable measured at fair value2 | ||||
| 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 |
| 1 | ||
| 2 |
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 for the Company’s Class A Common Stock consist of the following:
| Range of Exercise Prices Per Share: | June 30, 2026 | September 30, 2025 | ||||||
| Public Warrants and Private Warrants - $ | ||||||||
| Other Warrants: | ||||||||
| $ Extension Shares | ||||||||
| $ | ||||||||
| $ to $ | ||||||||
| $ to $ | ||||||||
| $ to $ | ||||||||
| Total | ||||||||
Outstanding warrants for the Company’s Series A 10% Convertible Preferred Stock consist of the following:
| Range of Exercise Prices Per Share: | June 30, 2026 | September 30, 2025 | ||||||
| Preferred Warrant - $ | ||||||||
| Total | ||||||||
| 17 |
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 or other methodology as appropriate. See Note 14, Fair Value Measurements. 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 nine months ended June
30, 2026 and 2025, the Company recognized net non-cash losses of $
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 June 30, 2026, shares of the Company’s Class A Common Stock are available for the grant of awards under the 2023 Equity Incentive Plan.
Restricted Stock Units
During
the nine months ended June 30, 2025, the Company and a former employee entered into certain agreements wherein the Company agreed to
accelerate the vesting of
common stock warrants and grant the holder an additional
warrants to purchase shares of its Class A Common Stock. The
warrants are immediately exercisable and have an exercise price of $
Number of units | Weighted-Average Grant Date Fair Value per Unit | |||||||
| Outstanding at September 30, 2025 | $ | | ||||||
| Granted | ||||||||
| Forfeited | ( | ) | ||||||
| Vested | ( | ) | ||||||
| Outstanding at June 30, 2026 | ||||||||
| 18 |
Unrecognized compensation expense related to RSUs was $ as of June 30, 2026 and is expected to be recognized over a weighted-average period of years.
Restricted Stock Awards
Number of shares | Weighted-Average Grant Date Fair Value per Share | |||||||
| Outstanding at September 30, 2025 | $ | |||||||
| Vested | ( | ) | ||||||
| Outstanding at June 30, 2026 | ||||||||
Unrecognized compensation expense related to RSAs was $ as of June 30, 2026 and is expected to be recognized over a weighted-average period of years.
Stock Options
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 June 30, 2026 | ||||||||||||
| Exercisable at June 30, 2026 | ||||||||||||
Unrecognized stock-based compensation expense related to stock options, totaling $ as of June 30, 2026, is expected to be recognized over a weighted-average period of years. The aggregate intrinsic value of stock options outstanding and stock options exercisable as of June 30, 2026 was $ and $, respectively. The total intrinsic value of options exercised during the nine months ended June 30, 2026 and 2025 was $ and $, respectively. The total fair value of options that vested during the nine months ended June 30, 2026 and 2025 was $ and $, respectively. No stock options were granted during the nine months ended June 30, 2026 and 2025.
Three months ended June 30, | Nine months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Cost of revenue – product | $ | $ | $ | $ | ||||||||||||
| Cost of revenue – services | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | ||||||||||||
| 19 |
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 not accounted for using the fair value option
approximates its fair value as of June 30, 2026 and September 30, 2025 because the notes payable, the
Fair Value Hierarchy
Liabilities measured at fair value on a recurring basis as of June 30, 2026 are as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Earnout liability | $ | $ | $ | $ | ||||||||||||
| Bifurcated conversion feature derivative | ||||||||||||||||
| Notes payable measured at fair value | ||||||||||||||||
| Liability-classified warrants | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The Company classifies the earnout liability, liability-classified warrants, bifurcated conversion feature derivative, and notes payable measured at fair value 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 nine months ended June 30, 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:
| Nine months ended June 30, 2026: | Earnout Liability | Liability Classified Warrants | Notes Payable Measured at Fair Value | Bifurcated Conversion Feature Derivative | ||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | ||||||||||||
| Reclassification of warrant liabilities to equity | ( | ) | ||||||||||||||
| Issuance of notes payable measured at fair value | ||||||||||||||||
| Issuance of Preferred Stock | ||||||||||||||||
| Issuance of Preferred Stock warrants | ||||||||||||||||
| Change in fair value included in net loss | ( | ) | ||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ||||||||||||
| Nine months ended June 30, 2025: | Earnout Liability | Liability Classified Warrants | ||||||
| Balance, September 30, 2024 | $ | $ | ||||||
| Sale of warrants in private placement | ||||||||
| Modification of warrants in connection with private placement | ||||||||
| Exercise of warrants | ( | ) | ||||||
| Change in fair value included in net loss | ( | ) | ( | ) | ||||
| Balance, June 30, 2025 | $ | $ | ||||||
Liability-Classified Warrants
As of June 30, 2026, liability-classified warrants consist of the Private Warrants and the Preferred 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 nine months ended June 30, 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:
September 30, 2025 | ||||
| Stock price | $ | |||
| Expected volatility | % | |||
| Risk-free rate | % | |||
| Contractual term | – years | |||
Liability-Classified Preferred Warrants and Bifurcated Conversion Feature
The Preferred Shares and the shares of Series A 10% Convertible Preferred Stock underlying the Preferred Warrants are immediately convertible or exercisable into a variable number of common shares based on a fixed dollar amount. The Company estimated the fair value of these warrants and the bifurcated conversion feature associated with the Preferred Shares as equal to the fixed dollar amount associated with each warrant or share of convertible Series A 10% Convertible Preferred Stock. See Note 11, Equity.
| 20 |
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 changes in the assumptions used to estimate the earnout liability were inconsequential for the three months ended June 30, 2026. The following table summarizes the assumptions used in estimating the fair value of the earnout liability at the respective dates:
June 30, 2026 | September 30, 2025 | |||||||
| Stock price | $ | $ | ||||||
| Expected volatility | % | % | ||||||
| Risk-free rate | % | % | ||||||
| Contractual term | years | years | ||||||
Notes Payable Measured at Fair Value
The Company estimates the fair value of the notes payable measured at fair value using the Black-Scholes option pricing model. The following table summarizes the significant assumptions used in estimating the fair value of notes payable measured at fair value under the Black-Scholes option pricing model:
June 30, 2026 | ||||
| Stock price | $ | |||
| Expected volatility | – | % | ||
| Risk-free rate | – | % | ||
| Contractual term | – years | |||
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, preferred stock, 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.
| Three months ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||
| Basic net loss per share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Preferred stock dividends | ( | ) | ||||||||||||||
| Net loss available to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| Basic net loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted net loss per share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Net loss available to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 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 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 21 |
| Nine months ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||
| Basic net loss per share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Preferred stock dividends | ( | ) | ||||||||||||||
| Net loss available to common stockholders | $ | ( | ) | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| 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, stock options and preferred stock 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.
Nine months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Warrants | ||||||||
| Shares potentially issuable upon conversion of preferred stock or exercise of warrants on preferred stock3 | ||||||||
| Shares potentially issuable upon conversion of convertible notes payable measured at fair value4 | ||||||||
| Shares potentially issuable under earnout arrangements | ||||||||
| RSAs | ||||||||
| RSUs | ||||||||
| Stock options | ||||||||
| Total | ||||||||
| 3 | |
| 4 |
Note 16 — Concentrations
Significant Customers
For
the three months ended June 30, 2026, two customers accounted for
As
of June 30, 2026, two customers had balances due that represented
| 22 |
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:
Three months ended June 30, | Nine months ended June 30, | |||||||||||||||
| 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
Agreement and Plan of Merger — Vision Aerial
On
July 24, 2026, the Company entered into an Agreement and Plan of Merger (the “Vision Aerial Merger Agreement”) with Vision
Aerial, Inc. (“Vision Aerial”), a U.S.-based designer and manufacturer of unmanned aerial systems, providing for the acquisition
of Vision Aerial through a two-step merger, following which Vision Aerial will be a wholly owned subsidiary of the Company. The consideration
for the transaction consists of (i) a number of shares of the Company’s Class A Common Stock equal to
$
Agreement and Plan of Merger — Special Project Delivery
On August 13, 2026, the Company entered into an Agreement and Plan of Merger with Special Project Delivery, Inc. (“SPD”), two wholly owned merger subsidiaries of the Company, and the stockholder representative named therein, providing for the acquisition of SPD through a two-step merger. The merger consideration consists solely of shares of the Company’s Class A Common Stock, with no cash consideration, escrow or holdback. No shares will be issued unless and until the Company’s stockholders have approved the issuance in accordance with Nasdaq Listing Rule 5635, and the closing is subject to that approval and other customary conditions. Because the transaction has not been consummated, no shares have been issued and the Company is unable to estimate the financial effect of the acquisition on its condensed consolidated financial statements at this time.
Kips Warrant Exercise and Preferred Stock Conversion
On
August 5, 2026, Kips exercised the Preferred Warrant in part, purchasing
On August 13, 2026, Kips
converted shares of Series A 10% Convertible Preferred Stock into shares of Class A Common Stock at a conversion price of
$
Partial Conversion of Notes Payable
On August 13, 2026, an unrelated
investor converted $
| 23 |
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. In July 2026, our Board of Directors approved the launch of our National Security Matters (“NSM”) Initiative, broadening our strategic focus to businesses that advance U.S. national security priorities, including critical resources; defense, aerospace and autonomous systems; energy, water and critical infrastructure; and digital infrastructure and strategic technologies. Consistent with this strategy, in July 2026 we entered into a definitive agreement to acquire Vision Aerial, Inc., a U.S.-based drone manufacturer, and announced our intention to change our corporate name to NSM Labs, Inc. In furtherance of the NSM Initiative, we have also entered into a definitive agreement to acquire Special Project Delivery, Inc., a company focused on U.S. supply chains for rare earth elements and critical minerals – an opportunity we have prioritized around assets that we believe advance U.S. national security, reduce single points of foreign dependency in critical supply chains, and are responsive to the priorities reflected in announced federal supply-chain, stockpile and defense initiatives, including the U.S. Strategic Critical Minerals Reserve (“Project Vault”), financed in part by the Export-Import Bank of the United States, the “Golden Dome” missile defense initiative, and the executive order on “Unleashing American Drone Dominance.” We believe these focus areas position us to help strengthen America’s defense industrial base and supply-chain resilience. We are not a party to, and have not been awarded any contract or funding under, any of these programs or initiatives, and there can be no assurance that we or any business we acquire will participate in or benefit from them. See “Recent Developments” below.
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. Our NSM Initiative extends this strategy to the broader national security priorities described above.
| 24 |
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 pursuant to exchange agreements under which (i) indebtedness of $785 was exchanged in full, (ii) outstanding obligations of $1,425 were partially settled through the issuance of shares having an aggregate value of $615, with the remaining balance to be resolved under a separate agreement, and (iii) outstanding amounts owed under a service agreement were exchanged in full.
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 Additional Notes
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.
On May 18, 2026, we issued to Leviston a senior secured convertible promissory note in the original principal amount of $1,200, for gross proceeds to us of approximately $1,000. On June 22, 2026, we issued to Leviston a senior secured convertible promissory note in the original principal amount of $2,800, for gross proceeds to us of approximately $2,300. The notes mature on September 18, 2026 and October 22, 2026, respectively. Each note was issued as an Additional Note under the IRA. We also amended the registration rights agreement with Leviston relating to the resale registration of shares issuable upon conversion of the notes.
| 25 |
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 sold to Kips (i) 2,000 shares of Series A 10% Convertible Preferred Stock (the “Preferred Shares”) for an aggregate purchase price of $2,000, reflecting an aggregate stated value of $2,400, and (ii) a Preferred Stock Purchase Warrant (the “Preferred Warrant”) to purchase up to an additional 6,000 shares of Series A 10% Convertible Preferred Stock at an exercise price of $1,000.00 per share, for net proceeds to us of $1,975. Dividends are payable in cash, or at our option, shares of Series A 10% Convertible Preferred Stock. The Preferred Shares and any shares issued upon exercise of the Preferred 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 “Certificate of Designation”). 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 Preferred Warrant.
The Preferred Shares and the Preferred Warrant were issued on June 18, 2026 upon the filing of the corrected Certificate of Designation. Under Amendment No. 1 to the Registration Rights Agreement, dated June 18, 2026, we agreed to issue 294,117 Extension Shares valued at $600 as a non-refundable registration-extension fee. We issued the Extension Shares on July 17, 2026. Our registration statement on Form S-1 (File No. 333-296928) was filed June 22, 2026 and declared effective July 16, 2026.
On August 5, 2026, Kips exercised the Preferred Warrant in part, purchasing 1,000 Preferred Shares for aggregate gross proceeds to the Company of $1,000, and converted those Preferred Shares into 585,365 shares of Class A Common Stock at a conversion price of $2.05 per share in accordance with the terms of the Certificate of Designation. The conversion price is equal to the Nasdaq Minimum Price of the Class A Common Stock on May 19, 2026, the date of the Kips Purchase Agreement. Following the partial exercise, 5,000 Preferred Shares remain issuable under the Preferred Warrant.
On August 13, 2026, Kips converted 1,000 shares of Series A 10% Convertible Preferred Stock into 585,365 shares of Class A Common Stock at a conversion price of $2.05 per share in accordance with the terms of the Certificate of Designation.
Partial Conversion of Notes Payable
On August 13, 2026, an unrelated investor converted $150 of outstanding principal and accrued interest into 126,957 shares of Class A Common Stock at a conversion price of $1.18 per share.
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 nine months ended June 30, 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 loss on extinguishment of notes payable on the condensed consolidated statements of operations and comprehensive loss.
| 26 |
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.
Termination of At The Market Offering Agreement
On June 26, 2026, we terminated our At The Market Offering Agreement and filed a post-effective amendment to deregister approximately 950,000 shares of Class A Common Stock previously registered for potential sale under the facility.
Vision Aerial Merger Agreement
On July 24, 2026, we entered into the Vision Aerial Merger Agreement providing for our acquisition of Vision Aerial, Inc., a U.S.-based designer and manufacturer of unmanned aerial systems, for consideration consisting of (i) shares of our Class A Common Stock valued at $12,000, based on a 20-trading-day volume-weighted average price subject to a $2.00 floor and $3.00 cap per share, and (ii) $3,000 in cash, subject to customary adjustments and holdbacks. The closing is subject to customary closing conditions, and there can be no assurance a transaction will be consummated. See Note 18 to our condensed consolidated financial statements.
Special Project Delivery Merger Agreement
On August 13, 2026, we entered into a definitive merger agreement to acquire Special Project Delivery, Inc. for 4,800,000 shares of our Class A Common Stock. No shares will be issued unless and until our stockholders approve the issuance under Nasdaq Listing Rule 5635, and the closing is subject to that approval and other customary conditions. See Note 18 to our condensed consolidated financial statements.
National Security Matters Initiative
On July 21, 2026, our Board of Directors approved the launch of the NSM Initiative described under “Overview” above, broadening our strategic focus to businesses that advance U.S. national security priorities. The NSM Initiative builds on the proposed acquisitions of Vision Aerial and SPD described above.
Corporate Name Change
On July 27, 2026, we announced our intention to change our corporate name to NSM Labs, Inc., reflecting the expansion of our platform across national security markets. The name change is subject to stockholder approval. Until the change becomes effective, we will continue to operate as Mobix Labs, Inc., and our Class A Common Stock will continue to trade on Nasdaq under the symbol “MOBX.”
| 27 |
Results of Operations
Comparison of the Three Months Ended June 30, 2026 and 2025
| (dollars in thousands) | Three months ended June 30, | Change | ||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Net revenue: | ||||||||||||||||
| Products | $ | 529 | $ | 1,503 | $ | (974 | ) | (65 | )% | |||||||
| Services | 260 | 847 | (587 | ) | (69 | )% | ||||||||||
| Total net revenue | 789 | 2,350 | (1,561 | ) | (66 | )% | ||||||||||
| Cost of revenue: | ||||||||||||||||
| Products | 528 | 655 | (127 | ) | (19 | )% | ||||||||||
| Services | 159 | 346 | (187 | ) | (54 | )% | ||||||||||
| Total cost of revenue | 687 | 1,001 | (314 | ) | (31 | )% | ||||||||||
| Gross profit | 102 | 1,349 | (1,247 | ) | (92 | )% | ||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 411 | 486 | (75 | ) | (15 | )% | ||||||||||
| Selling, general and administrative | 7,045 | 8,208 | (1,163 | ) | (14 | )% | ||||||||||
| Impairment of long-lived assets | — | 725 | (725 | ) | (100 | )% | ||||||||||
| Loss from operations | (7,354 | ) | (8,070 | ) | 716 | (9 | )% | |||||||||
| Interest expense | 868 | 547 | 321 | 59 | % | |||||||||||
| Change in fair value of earnout liability | — | (210 | ) | 210 | (100 | )% | ||||||||||
| Change in fair value of warrants | (108 | ) | (612 | ) | 504 | (82 | )% | |||||||||
| Financing costs expensed | 600 | 443 | 157 | 35 | % | |||||||||||
| Change in fair value of notes payable | 27 | — | 27 | 100 | % | |||||||||||
| Loss on extinguishment of notes payable | 3,791 | 17 | 3,774 | 22,201 | % | |||||||||||
| Loss on issuance of preferred shares and liability-classified warrants | 3,707 | — | 3,707 | 100 | % | |||||||||||
| Other non-operating losses, net | 553 | 19 | 534 | 2,810 | % | |||||||||||
| Loss before income taxes | (16,792 | ) | (8,274 | ) | (8,518 | ) | 103 | % | ||||||||
| Income tax provision (benefit) | 3 | (2 | ) | 5 | (250 | )% | ||||||||||
| Net loss and comprehensive loss | $ | (16,795 | ) | $ | (8,272 | ) | $ | (8,523 | ) | 103 | % | |||||
| 28 |
Comparison of the Nine Months Ended June 30, 2026 and 2025
| (dollars in thousands) | Nine months ended June 30, | Change | ||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Net revenue: | ||||||||||||||||
| Products | $ | 2,533 | $ | 4,911 | $ | (2,378 | ) | (48 | )% | |||||||
| Services | 1,101 | 3,119 | (2,018 | ) | (65 | )% | ||||||||||
| Total net revenue | 3,634 | 8,030 | (4,396 | ) | (55 | )% | ||||||||||
| Cost of revenue: | ||||||||||||||||
| Products | 1,933 | 2,912 | (979 | ) | (34 | )% | ||||||||||
| Services | 834 | 1,062 | (228 | ) | (21 | )% | ||||||||||
| Total cost of revenue | 2,767 | 3,974 | (1,207 | ) | (30 | )% | ||||||||||
| Gross profit | 867 | 4,056 | (3,189 | ) | (79 | )% | ||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 1,281 | 1,816 | (535 | ) | (29 | )% | ||||||||||
| Selling, general and administrative | 21,864 | 32,043 | (10,179 | ) | (32 | )% | ||||||||||
| Impairment of long-lived assets | — | 725 | (725 | ) | (100 | )% | ||||||||||
| Loss from operations | (22,278 | ) | (30,528 | ) | 8,250 | (27 | )% | |||||||||
| Interest expense | 3,637 | 1,032 | 2,605 | 252 | % | |||||||||||
| Change in fair value of earnout liability | (960 | ) | (490 | ) | (470 | ) | 96 | % | ||||||||
| Change in fair value of warrants | 320 | (1,237 | ) | 1,557 | (126 | )% | ||||||||||
| Financing costs expensed | 600 | 443 | 157 | 35 | % | |||||||||||
| Change in fair value of notes payable | 27 | — | 27 | 100 | % | |||||||||||
| Loss on extinguishment of notes payable | 4,218 | 300 | 3,918 | 1,306 | % | |||||||||||
| Loss on issuance of preferred shares and liability-classified warrants | 3,707 | — | 3,707 | 100 | % | |||||||||||
| Other non-operating gains (losses), net | (1,036 | ) | (165 | ) | (871 | ) | 528 | % | ||||||||
| Loss before income taxes | (32,791 | ) | (30,411 | ) | (2,380 | ) | 8 | % | ||||||||
| Income tax benefit | (18 | ) | (9 | ) | (9 | ) | 100 | % | ||||||||
| Net loss and comprehensive loss | $ | (32,773 | ) | $ | (30,402 | ) | $ | (2,371 | ) | 8 | % | |||||
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 nine months ended June 30, 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.
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Product revenue was $529 for the three months ended June 30, 2026 compared to $1,503 for the three months ended June 30, 2025, a decrease of $974 or 65%. The change is principally driven by a drop in sales of our filtered connectors products.
For the nine months ended June 30, 2026, product revenue was $2,533 compared to $4,911 for the nine months ended June 30, 2025, a decrease of $2,378 or 48%. The change reflects a delay in shipments of our radar and imaging sensor products, which began to resume near the end of the three months ended June 30, 2026.
Services revenue was $260 for the three months ended June 30, 2026 compared to $847 for the three months ended June 30, 2025, a decrease of $587 or 69%. The decrease is primarily attributable to reduced project activity with a customer that began to slow in advance of the customer’s April 2026 announcement that it intends to contribute the division with which we principally engage to a newly formed joint venture expected to close in the third quarter of calendar year 2026; we anticipate project activity will begin to recover within approximately three to six months following the closing, although there can be no assurance regarding the timing or completion of the transaction or that activity with the successor entity will resume at historical levels.
For the nine months ended June 30, 2026, services revenue was $1,101 compared to $3,119 for the nine months ended June 30, 2025, a decrease of $2,018 or 65%. The decrease is primarily attributable to the same reduction in project activity with the customer described above, which affected a larger portion of the current nine-month period as project activity began to slow in advance of the customer’s April 2026 announcement. The decrease also reflects performance under a relatively large service contract with this customer during the nine months ended June 30, 2025, which elevated services revenue in the prior-year period and did not recur in the current-year period.
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 $528 for the three months ended June 30, 2026 compared to $655 for the three months ended June 30, 2025, a decrease of $127 or 19%. The change principally reflects the lower shipments of our wireless systems solutions products noted above.
Cost of services revenue was $159 for the three months ended June 30, 2026 compared to $346 for the three months ended June 30, 2025, a decrease of $187, or 54%. The decrease is primarily attributable to lower direct labor and related compensation and benefits costs resulting from the reduced project activity with the customer described under “Services Revenue” above. Cost of services revenue decreased at a lower rate than the related revenue due to certain fixed costs within our services operations that do not vary with project activity, which adversely affected our services gross margin for the period.
Cost of product revenue was $1,933 for the nine months ended June 30, 2026 compared to $2,912 for the nine months ended June 30, 2025, a decrease of $979 or 34%. The change principally reflects the lower shipments of our wireless systems solutions products noted above.
Cost of service revenue was $834 for the nine months ended June 30, 2026 compared to $1,062 for the nine months ended June 30, 2025, a decrease of $228 or 21%.
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 $411 for the three months ended June 30, 2026 compared to $486 for the three months ended June 30, 2025, a decrease of $75 or 15%. The decrease primarily relates to lower stock-based compensation expense.
Research and development expenses were $1,281 for the nine months ended June 30, 2026 compared to $1,816 for the nine months ended June 30, 2025, a decrease of $535 or 29%. 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 $7,045 for the three months ended June 30, 2026 compared to $8,208 for the three months ended June 30, 2025, a decrease of $1,163 or 14%. The change principally reflects a decrease in stock-based compensation expense.
Selling, general and administrative expenses were $21,864 for the nine months ended June 30, 2026 compared to $32,043 for the nine months ended June 30, 2025, a decrease of $10,179 or 32%. The decrease was primarily attributable to lower stock-based compensation expense, which included $6,917 recognized in the nine months ended June 30, 2025 in connection with the acceleration of vesting of certain awards, with no comparable expense in the current-year period. The decrease also reflects lower professional services costs and lower employee compensation and benefits as a result of the Company’s ongoing cost reduction initiatives.
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 $868 for the three months ended June 30, 2026 compared to $547 for the three months ended June 30, 2025, an increase of $321 or 59%. The increase reflects higher outstanding borrowings and higher interest rates on borrowings during the three months ended June 30, 2026.
Interest expense was $3,637 for the nine months ended June 30, 2026 compared to $1,032 for the nine months ended June 30, 2025, an increase of $2,605 or 252%. The increase reflects higher outstanding borrowings and higher interest rates on borrowings during the nine months ended June 30, 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 June 30, 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 $210 for the three months ended June 30, 2026 and 2025, respectively, and non-cash gains of $960 and $490 for the nine months ended June 30, 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 nine months ended June 30, 2026.
As a result of changes in the fair value of liability-classified warrants outstanding during the periods, for the three months ended June 30, 2026 and 2025, we recognized net non-cash gains of $108 and net non-cash gains of $612, respectively. For the nine months ended June 30, 2026 and 2025, we recognized net non-cash losses of $320 and net non-cash gains of $1,237, respectively, which are included in “Change in fair value of warrants” in the condensed consolidated statements of operations and comprehensive loss.
As of June 30, 2026 and September 30, 2025, the related liabilities of $3,047 and $6,859, respectively, are included in “Liability-classified warrants” in the condensed consolidated balance sheet.
Financing Costs Expensed
In April 2025, we entered into a securities purchase agreement with an institutional accredited investor, pursuant to which it issued 385,000 shares of Class A Common Stock, a pre-funded warrant to purchase up to 102,686 shares of Class A Common Stock and common stock warrants to purchase up to 487,686 shares of our Class A Common Stock (together, the “April 2025 Offering”). Private placement costs of $443 for the three months and nine months ended June 30, 2025 represent costs incurred in connection with the April 2025 Offering. The costs consist of outside professional fees and the value of warrants to purchase shares of our Class A Common Stock issued to the placement agent. We allocated the total costs among the liability-classified and equity-classified securities we issued in the April 2025 Offering. The portion of such costs allocated to liability-classified securities is included in “Private Placement Costs Expensed” in the unaudited condensed consolidated statements of operations and comprehensive loss. Additional information relating to the April 2025 Offering can be found in the notes to our unaudited condensed consolidated financial statements included herein.
On June 18, 2026, we entered into Amendment No. 1 to the Registration Rights Agreement with Kips, pursuant to which the filing and effectiveness deadlines were extended and prior remedies were waived. As a non-refundable registration-extension fee, fully earned upon execution, we issued 294,117 shares of Class A Common Stock (the “Extension Shares”) on July 17, 2026, valued at $600 based on a price of $2.04 per share, which exceeded the Nasdaq Listing Rule 5635(d) Minimum Price of $2.036. Our registration statement on Form S-1 (File No. 333-296928) was filed June 22, 2026 and declared effective July 16, 2026. We recorded a charge of $600 in the three months ended June 30, 2026 with respect to the Extension Shares, which was recorded in financing costs expensed in the condensed consolidated statements of operations and comprehensive loss
Other Non-Operating (Gains) Losses, Net
For the three months ended June 30, 2026, other non-operating losses, net of $553 principally consist of losses on the settlements of certain other liabilities in shares of our Class A Common Stock. For the nine months ended June 30, 2026, other non-operating gains, net of $1,036 principally consist of gains on the settlements of certain other liabilities in shares of our Class A Common Stock.
For the three months ended June 30, 2025, other non-operating losses, net of $19 consist of a loss from the increase in the fair value of a derivative liability. For the nine months ended June 30, 2025, other non-operating gains, net of $165 principally consist of net gains recognized upon the settlement of liabilities in 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 nine months ended June 30, 2026, and for the three and nine months ended June 30, 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 nine months ended June 30, 2026 and 2025:
Nine months ended June 30, | Change | |||||||||||
| 2026 | 2025 | $ | ||||||||||
| Net cash used in operating activities | $ | (14,719 | ) | $ | (5,600 | ) | $ | (9,119 | ) | |||
| Net cash provided by (used in) investing activities | (9 | ) | 11 | (20 | ) | |||||||
| Net cash provided by financing activities | 13,597 | 5,563 | 8,034 | |||||||||
| Net increase (decrease) in cash | (1,131 | ) | (26 | ) | $ | (1,105 | ) | |||||
| Cash, beginning of period | 3,273 | 266 | ||||||||||
| Cash, end of period | $ | 2,142 | $ | 240 | ||||||||
Operating Activities
For the nine months ended June 30, 2026, net cash used in operating activities was $14,719, which included the impact of our net loss of $32,773 and a net decrease in working capital items of $2,347, offset by net non-cash charges of $20,401. The net non-cash charges principally consisted of stock-based compensation expense of $9,941 for restricted stock units and stock options, $1,324 of depreciation and amortization expense, charges of $4,027 for the issuance or change in fair value of warrants and the issuance of preferred stock, charges of $4,218 for the extinguishment of notes payable, and charges of $1,121 for the issuance of common stock in consideration for a modification, partially 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 nine months ended June 30, 2025, net cash used in operating activities was $5,600, which included the impact of our net loss of $30,402, offset by net non-cash charges of $21,817 and net decreases in working capital items of $2,985. The net non-cash charges principally consisted of stock-based compensation expense of $20,256 for stock options and restricted stock units and $1,591 of depreciation and amortization expense and a $725 loss on the impairment of long-lived assets. The net working capital decrease principally consisted of increases in accrued expenses and inventory together with decreases in accounts receivable and accounts payable.
Investing Activities
Net cash used in investing activities for the nine months ended June 30, 2026 was $9.
Net cash provided by investing activities of $11 for the nine months ended June 30, 2025 consisted of proceeds from the sale of property and equipment, partially offset by payments for the acquisition of property and equipment.
Financing Activities
Net cash provided by financing activities for the nine months ended June 30, 2026 of $13,597 principally consisted of $5,360 in proceeds from our public offering, $1,254 in proceeds from the sale of common stock, $1,975 in proceeds from the sale of preferred stock and warrants on preferred stock, $8,649 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 $3,696 (including payments of $854 on notes payable—related parties).
Net cash provided by financing activities for the nine months ended June 30, 2025 of $5,563 consisted of $3,645 in proceeds from the sale of common stock and warrants in the April 2025 Offering, $600 from the issuance of common stock, $2,575 in proceeds under agreements for the purchase and sale of future receipts and the issuance of notes payable and proceeds of $17 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 $1,100 (including payments of $445 on notes payable—related parties) and the payment of deferred consideration of $174 for the acquisition of a business.
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Liquidity
As of June 30, 2026, our cash balance was $2,142 compared to $3,273 at September 30, 2025. We had a working capital deficit of $16,117 as of June 30, 2026 compared to a working capital deficit of $21,071 at September 30, 2025.
As of June 30, 2026, our debt consists of notes payable with an aggregate amount of $4,355 and 7% promissory notes—related parties with an aggregate principal amount of $1,397. 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. Holders of 10% Convertible Preferred Shares have accrued $8 of dividends. In addition, our near-term liquidity requirements include the September and October 2026 maturities of the convertible notes with principal amounts of $1,200 and $2,800, respectively, each described in Note 7 and in “Recent Developments” and, if the Vision Aerial acquisition is consummated, the $3,000 cash component of the merger consideration. In August 2026, we received gross proceeds of $1,000 from Kips’ partial exercise of the Preferred Warrant. See Note 18 to our condensed consolidated financial statements.
Our total liabilities as of June 30, 2026 were $26,711 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 nine months ended June 30, 2026, a decrease in accounts payable of $3,949, and a decrease in accrued expenses and other current liabilities of $2,008, partially offset by the issuance of $2,780 of liability-classified warrants.
Other commitments include (i) non-cancelable operating leases for equipment, office facilities and other property containing future minimum lease payments totaling $167 payable over the next 0.7 years, (ii) unpaid commitment and other fees of $1,478 payable in connection with the committed equity facility (terminated effective June 26, 2026), (iii) deferred purchase consideration of $2,093 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 $22,278 for the nine months ended June 30, 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 $14,719 for the nine months ended June 30, 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 June 30, 2026, we had cash on hand of $2,142 and an accumulated deficit of $183,361. 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 nine months ended June 30, 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 and (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 June 30, 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 June 30, 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, other non-operating gains and losses, 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, June 30, 2024, and June 30, 2026, 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
See Part I, Notes to Condensed Consolidated Financial Statements, Note 9, Commitments and Contingencies.
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 the Company’s Form 10-K for the year ended September 30, 2025 and the Company’s Form 10-Q for the quarterly period ended March 31, 2026. 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 and those additional risk factors in our Form 10-Q for the period ended March 31, 2026.
The terms of our Series A Preferred Stock and outstanding convertible notes impose significant restrictions on our operations and our ability to raise capital.
The terms of our Series A 10% Convertible Preferred Stock and our convertible notes contain a number of restrictive covenants and protective provisions that may impose significant operating and financial restrictions on us while those securities remain outstanding. These restrictions generally cannot be waived without the prior written consent of the applicable holders. Among other things, these instruments restrict our ability to incur senior or other indebtedness, to issue or create securities senior to or on parity with the applicable security, to pay dividends on or repurchase our common stock and other junior securities, to enter into certain affiliate transactions, to change the nature of our business, to amend our charter documents in a manner adverse to the holders, and to consummate mergers, asset sales, and other fundamental transactions. Certain of our convertible notes are further secured by a lien on our assets and rank senior in right of payment to our existing and future indebtedness, which would subordinate other creditors and equity holders and could limit our ability to obtain additional secured financing. As a result of these restrictions, we may be limited in how we conduct our business, unable to finance our operations through additional debt or equity financings, and/or unable to compete effectively or to take advantage of new business opportunities.
In addition, both securities require us to apply proceeds from certain future financings and asset sales to repay or redeem the applicable security, in some cases before we may use those proceeds for any other purpose. These mandatory repayment and proceeds-application requirements could further constrain our liquidity and our ability to fund our operations. These protective provisions may also restrict our ability to raise additional capital, restructure our capital stock, pursue strategic transactions, or otherwise respond to changing market conditions in a timely manner. The interests of the holders of the Series A 10% Convertible Preferred Stock and the convertible notes may differ from those of holders of our Class A Common Stock, and the exercise of these rights could result in outcomes that are less favorable to Class A Common Stockholders.
The combination of a floating, discounted conversion price, anti-dilution protection, and a potentially increasing stated value or principal amount could result in the issuance of a significantly greater number of shares of our common stock than currently anticipated, causing substantial and potentially continuing dilution to our stockholders and further depressing the market price of our Class A Common Stock.
The conversion price applicable to each of the Series A 10% Convertible Preferred Stock and the convertible notes is not fixed but instead floats at a discount to the recent trading price of our Class A Common Stock and is subject to anti-dilution and other adjustments. Because the conversion price is tied to a discount to the market price of our Class A Common Stock, the lower the market price of our Class A Common Stock at the time of conversion, the more shares of common stock a holder will receive upon conversion. The conversion of some or all of the Series A 10% Convertible Preferred Stock or the convertible notes into shares of our common stock will dilute the ownership interests of our existing stockholders. In addition, any sales in the public market of the shares of our Class A Common Stock issuable upon such conversion, and/or any anticipated conversion of these securities into shares of our Class A Common Stock, could adversely affect prevailing market prices of our common stock. Any such conversion may significantly dilute our common stockholders and adversely affect both our net income per share and the market price of our common stock. Although conversion of each of these securities is subject to a beneficial ownership limitation, and conversion of the convertible notes is also subject to an exchange cap and a stockholder approval limitation under applicable listing rules, these limitations restrict the size or timing of conversions but do not limit the aggregate number of shares that may ultimately be issued upon conversion over time.
In addition, each of the Series A 10% Convertible Preferred Stock and the convertible notes provides that its stated value or outstanding principal amount, as applicable, may automatically increase if the market price of our common stock is below the applicable conversion price, meaning that the amount owed to these holders may grow as our stock price declines. The combination of a floating, discounted conversion price, anti-dilution protection, and a potentially increasing stated value or principal amount could result in the issuance of a significantly greater number of shares of our common stock than currently anticipated, causing substantial and potentially continuing dilution to our stockholders and further depressing the market price of our common stock.
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We may be required, under certain circumstances, to redeem or repay the outstanding Series A 10% Convertible Preferred Stock and our outstanding convertible notes for cash, at a premium, and to pay additional penalties and default interest, and such obligations could adversely affect our liquidity and financial condition.
Upon the occurrence of specified triggering events or events of default, each holder of our Series A 10% Convertible Preferred Stock and our convertible notes has the right to require us to redeem or repay all or any portion of the applicable security for cash. These events include, among others, a failure to timely deliver shares of common stock upon conversion, a breach of the applicable covenants, a delisting of our common stock, and certain bankruptcy, judgment, and cessation-of-operations events, as well as a change of control or other fundamental transaction in the case of the Series A 10% Convertible Preferred Stock. Upon such an event and a holder’s election, we may be required to redeem or repay the affected security at a redemption or repayment price that represents a premium to its stated value or outstanding balance or, in the case of the Series A 10% Convertible Preferred Stock, if greater, its value on an as-converted basis, together with accrued and unpaid dividends or interest and other amounts then due. In the case of the convertible notes, following an event of default the amounts we owe increase to a specified premium over the outstanding obligations, and default interest accrues on those amounts.
We are generally required to pay amounts due upon such an event within a short period after demand, and a failure to make timely payment would result in additional penalties and default interest. These penalty, dividend, interest, and redemption or repayment obligations could significantly impact our liquidity and reduce the amount of our cash flows that are available for working capital, capital expenditures, growth opportunities, acquisitions, and other general corporate purposes. Our obligations to these holders could also limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition. The preferential and security rights described above could also result in divergent interests between these holders and the holders of our common stock.
We do not currently have sufficient cash on hand to fund a redemption or repayment of the Series A 10% Convertible Preferred Stock and the convertible notes if we are required to do so. If we are required to redeem or repay these securities and are unable to do so, or if we otherwise fail to satisfy our payment obligations, we would incur additional penalties and default interest, the holder of the note could exercise remedies against the assets securing the note, and our liquidity, financial condition, and ability to continue our operations would be materially and adversely affected.
Our expansion into new lines of business under our NSM Initiative, including through acquisitions, may not be successful and could strain our financial and management resources.
In furtherance of our NSM Initiative, we have entered into a definitive agreement to acquire Vision Aerial and a definite agreement to acquire Special Project Delivery, Inc. (“SPD”), and we expect to pursue additional acquisitions in markets that are new to us, such as unmanned aerial systems and critical minerals. We may fail to complete announced transactions, and any transaction we do complete may not achieve the anticipated benefits. Acquisitions will place substantial demands on our management, may require additional capital that may not be available on acceptable terms or at all, may result in substantial dilution to existing stockholders, and expose us to integration, regulatory and, in certain cases, related-party transaction risks. If we are unable to manage this expansion effectively, our business, financial condition and results of operations could be materially and adversely affected.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On June 5, 2026, we entered into a settlement agreement and mutual release pursuant to which we issued 49,702 shares to Green Flash Media LLC and 21,565 shares to Wolff Moscaro LLP in connection with the settlement of litigation. The issuance of such shares 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.
In connection with the Kips transaction, on May 19, 2026, we also entered into a registration rights agreement, as amended on June 18, 2026, with Kips (the “May 2026 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. We agreed to issue $600,000 of shares of Class A Common Stock (or 294,117 shares) to Kips as consideration for extending the filing deadlines in the May 2026 Registration Rights Agreement. The issuance of such shares 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 August 5, 2026, we issued 585,365 shares to Kips upon conversion of 1,000 shares of Series A 10% Convertible Preferred Stock at a conversion price of $2.05. On August 13, 2026, Kips converted 1,000 shares of Series A 10% Convertible Preferred Stock into 585,365 shares of Class A Common Stock at a conversion price of $2.05. The issuance of the shares of Class A Common Stock was exempt from registration under Section 3(a)(9) of the Securities Act.
On August 13, 2026, an unrelated investor converted $150 of outstanding principal and accrued interest into 126,957 shares of Class A Common Stock at a conversion price of $1.18 per share. The issuance of the shares of Class A Common Stock was exempt from registration under Section 3(a)(9) of the Securities Act.
On August 13, 2026, we entered into a definitive merger agreement to acquire SPD for 4,800,000 shares of our Class A Common Stock. No shares will be issued unless and until our stockholders approve the issuance under Nasdaq Listing Rule 5635, and the closing is subject to that approval and other customary conditions. The issuance of such shares will be 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 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Entry into a Material Definitive Agreement with Special Project Delivery, Inc.
On August 13, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Mobix Merger Sub XIV, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub XIV”), Mobix Merger Sub XV, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“Merger Sub XV”), SPD, and the stockholder representative named therein.
The Merger Agreement provides for the acquisition of SPD by the Company through a series of mergers, pursuant to which Merger Sub XIV will merge with and into SPD, with SPD surviving as a wholly owned subsidiary of the Company, followed immediately by the merger of the surviving corporation with and into Merger Sub XV, with Merger Sub XV surviving the second merger. The parties intend that the mergers (the “Mergers”), taken together, will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.
Under the terms of the Merger Agreement, the consideration payable to the stockholders of SPD will consist solely of shares of 4,800,000 shares of the Company’s Class A common stock, and no cash consideration will be payable. The consideration is fixed as of the closing, and is not subject to any post-closing purchase price adjustment or indemnification holdback. The issuance of the shares is subject to approval by the Company’s stockholders in accordance with the applicable listing rules of The Nasdaq Stock Market LLC, and the issuance of such shares will be 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.
The Merger Agreement contains representations, warranties, covenants, and indemnification provisions customary for a transaction of this type, and the closing of the transaction is subject to customary closing conditions, including the satisfaction of the Company’s due diligence investigation, approval by the stockholders of the Company and of SPD, delivery of a tax opinion regarding the intended tax treatment of the Mergers, and the execution of employment agreements by specified individuals. The Merger Agreement may be terminated under specified circumstances, including by mutual consent, if the closing has not occurred by the outside date, upon an uncured breach by either party, or in connection with the exercise of the specified termination rights of the parties. No termination fee, break-up fee, or expense reimbursement is payable by any party in connection with a termination of the Merger Agreement.
The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibits 10.7 to this Quarterly Report on Form 10-Q.
Kips Financing
On August 5, 2026, Kips exercised the Preferred Warrant in part, purchasing 1,000 Preferred Shares for aggregate gross proceeds to the Company of $1,000, and converted those Preferred Shares into 585,365 shares of Class A Common Stock at a conversion price of $2.05 per share in accordance with the terms of the Certificate of Designation. The conversion price is equal to the Nasdaq Minimum Price of the Class A Common Stock on May 19, 2026, the date of the Kips Purchase Agreement. Following the partial exercise, 5,000 Preferred Shares remain issuable under the Preferred Warrant. On August 13, 2026, Kips converted 1,000 shares of Series A 10% Convertible Preferred Stock into 585,365 shares of Class A Common Stock at a conversion price of $2.05 per share in accordance with the terms of the Certificate of Designation. The issuances of the shares of Class A Common Stock were exempt from registration under Section 3(a)(9) of the Securities Act.
Partial Conversion of Notes Payable
On August 13, 2026, an unrelated investor converted $150 of outstanding principal and accrued interest into 126,957 shares of Class A Common Stock at a conversion price of $1.18 per share. The issuance of the shares of Class A Common Stock was exempt from registration under Section 3(a)(9) of the Securities Act.
10b5-1 Trading Plans
Insider Trading Arrangements
During the quarter ended June 30, 2026, the following directors of the Company adopted a “Rule 10b5-1 trading arrangement,” as that term is defined in Item 408(c) of Regulation S-K, each of which the applicable director represented was designed to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended:
| Name | Title | Action | Date Adopted | Character of Trading Arrangement(1) | Aggregate Number of Shares of Common Stock to be Purchased or Sold Pursuant to a Trading Arrangement | Expiration Date(2) | ||||||||
| James J. Peterson(3) | Chairman of the Board, Director | Adoption | 6/10/2026 | Rule 10b5-1 Trading Arrangement | 100,000 | 12/31/2027 | ||||||||
| Frederick C. Goerner(4) | Director | Adoption | 6/12/2026 | Rule 10b5-1 Trading Arrangement | 30,000 | 12/31/2027 | ||||||||
(1) Except as indicated by footnote, each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” is intended to satisfy the affirmative defense of Rule 10b5-1(c) of the Exchange Act, as amended (the Rule).
(2) Except as indicated by footnote, each trading arrangement permitted or permits transactions through and including the earlier to occur of (a) the date on which all trades under the arrangement have been executed or (b) the date listed in the table. Each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” only permits transactions upon expiration of the applicable mandatory cooling-off period under the Rule and is scheduled to terminate on the earlier of the expiration date or when all shares are sold under such plan, subject to early termination for certain specified events set forth therein.
(3) The shares covered by this trading arrangement include certain shares that are held by trusts and may be deemed to be indirectly beneficially owned by James J. Peterson.
(4) The shares covered by this trading arrangement include certain shares that are held by trusts and may be deemed to be indirectly beneficially owned by Frederick C. Goerner.
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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.
* Filed herewith
** Furnished herewith
# Certain confidential portions (indicated by brackets and asterisks) of this exhibit have been omitted from this exhibit
^ Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the U.S. Securities and Exchange Commission upon request.
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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: August 17, 2026 | By: | /s/ Keyvan Samini |
| Keyvan Samini | ||
President and Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer) | ||
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