AIRGAIN INC

Previous wording

Airgain is a leading provider of advanced wireless connectivity solutions that drive cutting-edge innovation in 5G technology. We are committed to delivering high-performance, cost-effective, and energy-efficient wireless solutions that enable rapid market deployment. Our mission is to connect the world through integrated, innovative, and optimized wireless solutions. Our diverse product portfolio serves three primary markets: enterprise, automotive, and consumer.

Current wording

Airgain is a leading provider of advanced wireless connectivity solutions. We are committed to delivering high-performance, cost-effective, and energy-efficient wireless solutions that enable rapid market deployment. Our mission is to connect the world through integrated, innovative, and optimized wireless solutions. Our diverse product portfolio serves three primary markets: enterprise, automotive, and consumer.

Previous wording

The enterprise market requires reliable wireless access across various use cases, including smart cities, utilities, factories, buildings, campuses, transportation hubs, stadiums, and suburban developments. Our Lighthouse smart repeater platform consists of a high-power large area indoor and outdoor network repeater for MNOs and systems integrators. Our outdoor 5G Lantern TMFWA device is designed to address 5G connectivity challenges, reduce deployment costs and enhance customer experiences. Our asset tracking solutions are deployed across transportation, supply chain, and other specialized applications. In addition to hardware, our asset tracking solution includes a recurring revenue component, our subscription-based NLink cloud-based device enablement platform, which allows for deployment and integration with enterprise systems via open application programming interfaces (API). Our NimbeLink embedded modems serve numerous enterprise IoT sectors requiring cellular connectivity such as packaging, logistics, EV charging, smart cities, smart buildings, agriculture, asset tracking, and self-service innovations. Our custom products feature joint engineering collaboration with strategic customers to develop industrial IoT products (IIoT) for specific applications while helping them reduce their time to market. Our enterprise IoT and machine-to-machine (M2M) antennas are extensively deployed in diverse systems, products, and applications, including access points, gateways, FWA devices and utility meters.

Current wording

The enterprise market requires reliable wireless access across various use cases, including smart cities, utilities, factories, buildings, campuses, transportation hubs, stadiums, and suburban developments. Our Lighthouse 5G Smart NCR platform provides coverage enhancements both indoors and outdoors to improve 5G connectivity for MNOs and systems integrators. Our asset tracking solutions are deployed across transportation, supply chain, and other specialized applications. Our NimbeLink embedded modems serve numerous enterprise IoT sectors requiring cellular connectivity such as packaging, logistics, EV charging, smart cities, smart buildings, agriculture, asset tracking, and self-service innovations. Our custom products feature joint engineering collaboration with strategic customers to develop industrial IoT products (IIoT) for specific applications while helping them reduce their time to market. Our enterprise IoT and machine-to-machine (M2M) antennas are extensively deployed in diverse systems, products, and applications, including access points, gateways, FWA devices and utility meters.

Previous wording

Macroeconomic factors, such as elevated interest rates, market volatility, persistent inflation, ongoing trade policy shifts and recessionary concerns have caused uncertainty in end customer demand and supply chain constraints. We are closely monitoring the impact of these factors on our existing product lines and growth initiatives. Our consumer business is experiencing a market recovery, and the enterprise customer excess inventory concern has dissipated. We are, however, expecting the surplus inventory for our automotive customers to extend through the second half of the year. We remain focused on the execution of our strategic product initiatives and operational efficiencies, which lay the foundation of our revenue growth, and profitability, when market conditions improve.

Current wording

Macroeconomic factors, such as market volatility, inflation, ongoing trade policy shifts and recessionary concerns have caused uncertainty in end customer demand and supply chain constraints. We are closely monitoring the impact of these factors on our existing product lines and growth initiatives. Our consumer business is experiencing a market recovery, and the enterprise customer excess inventory concern has dissipated. We are, however, expecting the surplus inventory for our automotive customers to extend through the second half of the year. We remain focused on the execution of our strategic product initiatives and operational efficiencies, which lay the foundation of our revenue growth, and profitability, when market conditions improve.

Previous wording

the impact of global supply shortages on our business and that of our end customers;

Current wording

the impact of global supply shortages on our business and that of our end customers; and

Previous wording

international expansion in light of continuing global tensions; and

Current wording

international expansion in light of continuing global tensions

Previous wording

In addition, inflation generally affects us by increasing our raw material and employee-related costs and other expenses. Our financial condition and results of operations may also be impacted by other factors we may not be able to control, such as uncertain global economic conditions, tariffs and trade policies, pandemics and epidemics, or political instability, as well as conflicts around the world. We do not believe that such factors had a material adverse impact on our results of operations during the three months ended March 31, 2025.

Current wording

In addition, inflation generally affects us by increasing our raw material and employee-related costs and other expenses. Our financial condition and results of operations may also be impacted by other factors we may not be able to control, such as uncertain global economic conditions, tariffs and trade policies, pandemics or political instability, as well as conflicts around the world. We do not believe that such factors had a material adverse impact on our results of operations during the six months ended June 30, 2025.

Previous wording

Other Income and Expense. Other income and expense includes employee retention credit refunds, realized foreign exchange gains or losses, state franchise tax expense, and other income.

Current wording

Other Income and Expense. Other income and expense includes employee retention credit refunds and associated commissions, realized foreign exchange gains or losses, state franchise tax expense, and other income.

Previous wording

Comparison of the Three Months Ended March 31, 2025(dollars in thousands)

Current wording

Comparison of the Three and Six Months Ended June 30, 2025 and 2024(dollars in thousands)

Previous wording

Sales for the three months ended March 31, 2025 decreased $2.2 million or 15.6% compared to the same period in the prior year. Enterprise market sales decreased $4.6 million to $4.3 million for the three months ended March 31, 2025 from $8.9 million during the same period in the prior year, primarily due to lower embedded modems and custom IoT product sales. Automotive market sales decreased $0.5 million to $1.3 million for the three months ended March 31, 2025 from $1.8 million during the same period in the prior year, driven by lower shipments of aftermarket antenna sales. Consumer market sales increased $2.9 million to $6.4 million for the three months ended March 31, 2025 from $3.5 million during the same period in the prior year, primarily due to higher shipments to cable and mobile network operators.

Current wording

Sales for the three months ended June 30, 2025 decreased $1.6 million or 10.3% compared to the same period in the prior year. Enterprise market sales decreased $1.5 million to $7.2 million for the three months ended June 30, 2025 from $8.6 million during the same period in the prior year, primarily due to lower custom IoT product and asset tracker sales. Automotive market sales decreased $0.9 million to $0.8 million for the three months ended June 30, 2025 from $1.7 million during the same period in the prior year, on lower demand for antennas. Consumer market sales increased $0.8 million to $5.6 million for the three months ended June 30, 2025 from $4.8 million during the same period in the prior year, primarily due to higher shipments to cable and mobile network operators.

Previous wording

Cost of goods sold for the three months ended March 31, 2025 decreased $1.8 million or 20.8% compared to the same period in the prior year, primarily due to lower sales, partially offset by gross margin improvements.

Current wording

Cost of goods sold for the three months ended June 30, 2025 decreased $1.3 million or 13.9% compared to the same period in the prior year. Cost of goods sold for the six months ended June 30, 2025 decreased $3.1 million or 17.3% compared to the same period in the prior year. The declines for both periods were primarily due to lower sales, partially offset by gross margin improvements.

Previous wording

Gross profit for the three months ended March 31, 2025 decreased $0.4 million or 7.5%, compared to the same period in the prior year, driven by lower sales, partially offset by gross margin improvements. Gross profit as a percentage of sales for the three months ended March 31, 2025 increased by 380 basis points compared to the same period in the prior year. The increase was primarily driven by improved enterprise product margins, and a favorable market sales mix.

Current wording

Gross profit for the three months ended June 30, 2025 decreased $0.3 million or 5.0%, compared to the same period in the prior year, driven by lower sales, partially offset by gross margin improvements. Gross profit as a percentage of sales for the three months ended June 30, 2025 increased by 240 basis points compared to the same period in the prior year. The increase was primarily driven by improved enterprise product margins.

Previous wording

Operating expenses for the three months ended March 31, 2025 increased $0.1 million or 0.6% compared to the same period in the prior year. The increase was primarily due to higher personnel expenses, offset by lower project development expenses.

Current wording

Operating expenses for the six months ended June 30, 2025 decreased $0.8 million or 4.5% compared to the same period in the prior year. The decrease was primarily due to lower personnel expenses and project development expenses, partially offset by higher outsourced services.

Previous wording

In January 2025, the Company received $1.5 million for employee retention credit refunds and $0.2 million for interest earnings, under the CARES Act that wasenacted on March 27, 2020. The Company paid $0.1 million commission in January 2025 to a third-party consulting firm that assisted in processing the refund request.

Current wording

Total other Income (Expense) for the three months ended June 30, 2025 increased $0.5 million compared to the same period in the prior year. The increase was primarily due to our receipt of $0.5 million for employee retention credit refunds and $0.1 million for interest earnings, under the CARES Act that wasenacted on March 27, 2020. We paid approximately $45,000 in commissions to a third-party consulting firm that assisted in processing the refund request.

Previous wording

Income tax expense for the three months ended March 31, 2025 increased $0.2 million or 117.1% compared to the same period in the prior year primarily due to a reversal of in foreign income tax accrual in the prior year.

Current wording

Income tax expense for the six months ended June 30, 2025 increased $0.1 million or 135.8% compared to the same period in the prior year primarily due to a reversal of in foreign income tax accrual in the prior year.

Previous wording

We had cash and cash equivalents of $7.4 million at March 31, 2025. During the period from 2013 through 2024, we incurred several years of net losses. As a result, we have an accumulated deficit of ($88.8) million as of March 31, 2025.

Current wording

We had cash and cash equivalents of $7.7 million at June 30, 2025. During the period from 2013 through 2024, we incurred several years of net losses. As a result, we have an accumulated deficit of ($90.2) million as of June 30, 2025.

Previous wording

Net cash used in operating activities. Net cash used by operating activities was $1.0 million for the three months ended March 31, 2025. This was primarily driven by the net loss of $1.5 million and a $1.3 million net change in operating assets and liabilities, offset by $1.8 million in non-cash expenses.

Current wording

Net cash used in operating activities. Net cash used by operating activities was $0.9 million for the six months ended June 30, 2025. This was primarily driven by the net loss of $3.0 million and a $1.2 million net change in operating assets and liabilities, offset by $3.3 million in non-cash expenses.

Previous wording

Net cash used in investing activities. Net cash used in investing activities of $42,000 for the three months ended March 31, 2025 was for purchases of property and equipment.

Current wording

Net cash used in investing activities. Net cash used in investing activities of $58,000 for the six months ended June 30, 2025 was for purchases of property and equipment.

Previous wording

Net cash used in financing activities. Net cash used in financing activities of $43,000 for the three months ended March 31, 2025 was primarily for $0.2 million tax payments for net share settlement of restricted stock units. These payments were partially offset from $0.1 million received for proceeds from common stock issuances under the ESPP.

Current wording

Net cash provided by financing activities. Net cash provided by financing activities of $0.1 million for the six months ended June 30, 2025 were primarily from exercised options for $0.2 million and common stock issuances under the ESPP for $0.1 million. These proceeds were partially offset by the $0.2 million in tax payments for net share settlement of restricted stock units.

Previous wording

On March 27, 2020, the CARES Act was signed into law providing an ERC, which is a refundable tax credit against certain employment taxes on qualified wages. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, the American

Current wording

On March 27, 2020, the CARES Act was signed into law providing an ERC, which is a refundable tax credit against certain employment taxes on qualified wages. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, the American Rescue Plan Act of 2021 and the Infrastructure Investment and Jobs Act amended the qualifications for eligible employers who could apply and extended the availability of the ERC employment taxes on qualified wages paid after December 31,

Previous wording

Rescue Plan Act of 2021 and the Infrastructure Investment and Jobs Act amended the qualifications for eligible employers who could apply and extended the availability of the ERC employment taxes on qualified wages paid after December 31, 2020 through September 30, 2021. We believe that we qualify for application of the ERC on qualified wages from the second quarter of 2020 through the third quarter of 2021.We applied for ERC refunds in 2023, totaling $2.8 million.

Current wording

2020 through September 30, 2021. We believe that we qualify for application of the ERC on qualified wages from the second quarter of 2020 through the third quarter of 2021.We applied for ERC refunds in 2023, totaling $2.8 million.

Previous wording

In January 2025, we received ERC refunds of $1.5 million, which was recorded in other income section of our condensed consolidated statements of operations. In addition to the refunds, we received $0.2 million for interest earned. We paid a $0.1 million commission in January 2025 to a third party professional firm that assisted us with processing the ERC refund application. There is no assurance that we will ultimately receive the remaining refund balance, or the timeframe of any such receipt, based on IRS review or otherwise.

Current wording

During the six months ended June 30, 2025, we received ERC refunds of $2.0 million, which was recorded in other income section of our condensed consolidated statements of operations. In addition to the refunds, we received $0.3 million for interest earned. We paid $0.2 million commission to a third party professional firm that assisted us with processing the ERC refund application. There is no assurance that we will ultimately receive the remaining refund balance, or the timeframe of any such receipt, based on IRS review or otherwise.

Previous wording

On March 7, 2024, the Company entered into an At-the-Market Issuance Sales Agreement (as amended and restated as described below, the Sales Agreement) with Craig-Hallum Capital Group LLC (Craig-Hallum). Pursuant to the Sales Agreement, the Company may sell at its option, up to an aggregate of $5.0 million in shares of its common stock through Craig-Hallum, as sales agent. Subject to the terms and conditions of the Sales Agreement, Craig-Hallum may sell the shares, if any, only by methods deemed to be an “at the market” (ATM) offering as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. The Company has agreed to pay Craig-Hallum a sales commission of 3.0% of the gross proceeds for sales under the Sales Agreement.

Current wording

On May 7, 2025, we amended and restated the At-the-Market Issuance Sales Agreement (as amended, the Sales Agreement) with Craig-Hallum Capital Group LLC (Craig-Hallum) originally entered into on March 7, 2024. Pursuant to the Sales Agreement, the Company may sell at its option, shares of its common stock having an aggregate offering price of up to an amount registered under an effective registration statement and for which we have filed a prospectus, through Craig-Hallum, as sales agent. Subject to the terms and conditions of the Sales Agreement, Craig-Hallum may sell the shares, if any, only by methods deemed to be an “at the market” (ATM) offering as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. We have agreed to pay Craig-Hallum a sales commission of 2.5% of the gross proceeds for sales under the Sales Agreement.

Previous wording

The Company is not obligated to sell, and Craig-Hallum is not obligated to buy or sell, any shares of common stock under the Sales Agreement. No assurance can be given that the Company will sell any additional shares of common stock under the Sales Agreement, or, if it does, as to the price or amount of shares of common stock that the Company may sell or the dates when such sales will take place. During the year ended December 31, 2024, 760,000 shares of common stock were issued pursuant to the Sales Agreement for net proceeds of $4.1 million, after deducting commissions. During the first quarter of 2025, the Company did not offer any common stock for sale through the ATM program. As of March 31, 2025, $0.5 million remained available under the Sales Agreement for future sales of the Company’s common stock.

Current wording

We are not obligated to sell, and Craig-Hallum is not obligated to buy or sell, any shares of common stock under the Sales Agreement. No assurance can be given that we will sell any additional shares of common stock under the Sales Agreement, or, if we do, as to the price or amount of shares of common stock that we may sell or the dates when such sales will take place.

Previous wording

The Company evaluated the goodwill impairment considerations as of March 31, 2025. The first and second quarter 2025 tariff increases by the United States and other countries have increased the uncertainty in our business environment. The impact of the tariff increases on our Company have been mitigated by a few factors. Most of our products are in specific categories that are exempt from the increased tariffs. Many of our products are sold to the ODM customers who are not subject to the increased tariffs. We source our supplies in tariff favorable regions. During the three months ended March 31, 2025, the Company's current and forecasted sales, cash flows, and excess market capitalization over net assets are reasonable when compared to quarters in the past two years. After assessing the totality of events and circumstances, the Company determined that there were no events or circumstances as of March 31, 2025 that indicate that it is more likely than not that the fair value of a reporting unit may be less than its carrying amount. Since there was no indication that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company determined that a quantitative goodwill impairment test was not necessary as of March 31, 2025. Based on the assessment performed, we concluded that an impairment charge to goodwill was not required.

Current wording

The Company evaluated the goodwill impairment considerations as of June 30, 2025. The first half 2025 tariff increases by the United States and other countries have increased the uncertainty in our business environment. The impact of the tariff increases on our Company have been mitigated by a few factors. Most of our products are in specific categories that are exempt from the increased tariffs. Many of our products are sold to the ODM customers who are not subject to the increased tariffs. We source our supplies in tariff favorable regions. During the six months ended June 30, 2025, the Company's current and forecasted sales, cash flows, and excess market capitalization over net assets are reasonable when compared to quarters in the past two years. After assessing the totality of events and circumstances, the Company determined that there were no events or circumstances as of June 30, 2025 that indicate that it is more likely than not that the fair value of a reporting unit may be less than its carrying amount. Since there was no indication that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company determined that a quantitative goodwill impairment test was not necessary as of June 30, 2025. Based on the assessment performed, we concluded that an impairment charge to goodwill was not required.

Previous wording

There have been no material changes outside the ordinary course of our business during the three months ended March 31, 2025, to the information regarding our contractual obligations that was disclosed in 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 December 31, 2024.

Current wording

There have been no material changes outside the ordinary course of our business during the three month ended June 30, 2025, to the information regarding our contractual obligations that was disclosed in 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 December 31, 2024.