AIRGAIN INC
For the period ended Dec 31, 2025. Filed Feb 26, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 26, 2026
AIRG$4.04+1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-27.
0000950170-25-029234
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-26.
0001193125-26-076752
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 105 previous paragraphs and 99 current paragraphs.
54 unchanged; 29 reworded; 16 added; 22 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report
Markets
Current report
The enterprise market demands reliable wireless access across diverse settings, including smart cities, campuses, stadiums, transportation hubs, utilities, buildings, and suburban developments.
Current report
Our Lighthouse platform is a carrier‑grade, high‑power 5G smart repeater designed to extend coverage and offload capacity for mobile network operators and system integrators. It can be deployed outdoors or as an in‑building solution, and it includes advanced features such as carrier aggregation, automatic gain control, echo cancellation, TDD synchronization, firmware‑over‑the‑air (FOTA) updates, and remote management capabilities. Lighthouse supports rapid deployment and does not require wired backhaul, offering a cost‑effective alternative to small cells and Distributed Antenna Systems (DAS) for coverage enhancement. Our NimbeLink embedded modems serve numerous enterprise IoT sectors that require cellular connectivity, including packaging, logistics, EV charging, smart buildings, agriculture, and self-service innovations. These NimbeLink cellular modems, which are both patented and end-device certified, minimize the need for additional OEM end-customer carrier certifications. Our asset tracking solutions are deployed across transportation, supply chain, and other specialized applications. 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 report
Net loss decreased by $2.3 million in 2025 compared to 2024. The decrease was due to lower operating expenses and an employee retention credit gain in 2025, offsetting the lower gross profit due to lower sales.
Current report
Employee retention credit refund. 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. We applied for ERC refunds in 2023, totaling $2.8 million. During the twelve months ended December 31, 2025, we received ERC refunds of $2.0 million.
Current report
Gross profit for 2025 decreased $2.3 million, or 9.1%, compared to 2024 primarily driven by lower sales, partially offset by gross margin improvements.
Current report
Operating expenses for 2025 decreased $2.7 million or (8.0)% compared to 2024. The decrease was primarily due to lower employee and engineering project development expenses.
Current report
Other income, net for 2025 increased $2.0 million compared to 2024. The increase was primarily due to the receipt of $2.0 million for employee retention credit refunds and $0.3 million for interest earnings under the CARES Act. We paid approximately $0.2 million in commissions to a third-party consulting firm that assisted in processing the refund request.
Current report
Income tax expense for 2025 was $73.0 thousand, compared with income tax benefit of $0.2 million in 2024, primarily due to release an income tax reserve associated with the China office which generated benefit in 2024 provision.
Current report
On May 7, 2025, we filed an registration statement on Form S-3, which was declared effective on May 15, 2025, including a prospectus for ATM offerings pursuant to the Sales Agreement for up to an aggregate of $5.0 million in shares of our common stock. During 2025, we issued 109,167 shares of common stock under the 2025 ATM offering for net proceeds of $0.2 million after deducting commissions and other costs associated with the offering. As of December 31, 2025, we had $4.6 million available under the offering program for future sales of our common stock.
Current report
Leases
Current report
The Company's facilities long term operating leases expired in China, Arizona and Minnesota. In 2025, the Company renewed the facilities leases in China and in Arizona. The lease amendments extend the term of the China lease to October 2027 and the term of the Arizona lease to October 2029. There are no rights to further extend the term of the leases.
Current report
In June 2025, the Company entered into lease agreements for the use of six vehicles to demonstrate our AC-Fleet vehicle gateway. The lease term ends in March 2028. Each lease vehicle includes an option to purchase and is subject to an assumed residual value of approximately $24,000 per vehicle. The Company is uncertain about exercising the purchase options.
Current report
The Company recognizes the excess of the purchase price over the fair value of identifiable net assets acquired as goodwill. The Company performs a qualitative assessment on goodwill at least annually on December 31 or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. If it is determined in the qualitative assessment that the fair value of a reporting unit is more likely than not below its carrying amount, then the Company will perform a quantitative impairment test. The quantitative goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. Any excess in the carrying value of a reporting unit's goodwill over its fair value is recognized as an impairment loss, limited to the total amount of goodwill allocated to that reporting unit. For purposes of goodwill impairment testing, the Company has one reporting unit. There were no goodwill impairments recorded during the years ended December 31, 2025 and 2024.
Current report
The Company amortizes the acquired finite-lived intangible assets on a straight-line basis over its estimated useful lives. Intangible assets are reviewed for impairment in conjunction with other long-lived assets. The Company's long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the future undiscounted cash flows expected to be generated by the asset or asset group. If such asset group is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. There were no long-lived asset impairments recorded during the years ended December 31, 2025 and 2024.
Removed paragraphs (22)
Previous report
LYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Previous report
Core Markets
Previous report
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 TM FWA 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.
Previous report
Loss from operations decreased by $3.5 million in 2024 compared to 2023. The decrease in the loss from operations was primarily due to an increase of $4.0 million in gross profit on higher sales.
Previous report
Gross profit for 2024 increased $4.0 million, or 19.5%, compared to 2023 primarily due to improved automotive and enterprise product margin rates.
Previous report
Operating expenses for 2024 increased $0.6 million or 1.7% compared to 2023. The increase was due to higher engineering expenses developing the company’s product roadmap, partially offset by lower general and administrative expenses driven by operational efficiencies.
Previous report
Other expenses for 2024 and 2023 consists primarily of unfavorable foreign currency transaction remeasurement adjustments.
Previous report
Income tax benefit for 2024 increased $0.3 million or 218.8%, compared to 2023 primarily due to a decrease in foreign income tax accrual.
Previous report
Lease Modification
Previous report
Since an implicit rate of the lease was not available and having limited comparative information, the Company engage a valuation specialist to develop a methodology to estimate the incremental borrowing rate (IBR) to calculate the present value of future lease payments. The IBR was developed using quantitative analysis that involved developing an unsecured credit rating, determining a collateral adjustment, and applying a debt yield curve.
Previous report
For more details of the headquarter lease modification, see exhibit 10.23 filed with the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2024.
Previous report
We have a significant amount of goodwill and finite-lived intangible assets. At December 31, 2024, the Company's goodwill and intangible assets totaled $16.6 million, or 34% of our total assets.
Previous report
Our intangible assets were obtained from business combinations, such as goodwill, customer relationships, developed technologies, market related intangibles and non-compete covenants. The intangible assets were initially recorded at estimated fair value. We amortize the non-goodwill intangibles over an estimated life of 2 to 11 years, using the straight-line method.
Previous report
These assets are carried at the estimated fair value at the time of acquisition and assets. However, if their estimated fair value is less than the carrying amount, we would recognize an impairment charge for the amount by which the carrying amount of these assets exceeds their estimated fair value.
Previous report
We perform a goodwill impairment assessment annually and during the interim when events or circumstances indicates that the fair value of a reporting unit might be below its carrying amount. The analysis may include both qualitative and quantitative factors to assess the likelihood of an impairment. Qualitative factors include industry and market considerations, overall financial performance, and other relevant events. Our quantitative impairment test may consider both the income approach and the market approach to estimate a reporting unit's fair value. Significant estimates include market segment growth rates, our assumed market segment share, estimated costs, and discount rates on the cost of capital.
Previous report
The Company evaluated qualitative factors for goodwill impairment as of December 31, 2024. The Company is expecting cash flows will be sufficient to meet its obligations in the next twelve months. Several factors indicates that macroeconomic and industry conditions have improved since December 31, 2023, including the Company's stock share value, annual sales total, working capital and gross margin. Raw material costs per unit slightly increased in 2024 and are expected to increase in the next twelve months, but we expect the favorable macroeconomic and industry factors to minimize effects of increasing raw material costs. After assessing the totality of events or circumstances, the Company determined that there were no events or circumstances as of December 31, 2024 that indicate that it is more likely than not that the fair value of a reporting unit may be less than its carrying amount.
Previous report
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 December 31, 2024. Based on the assessment performed, we concluded that an impairment charge to goodwill was not required as of December 31, 2024.
Previous report
No impairment losses were recorded against the goodwill during each of the twelve months ended December 31, 2024 and 2023.
Previous report
We perform an intangible assets impairment assessment annually and during the interim when facts and circumstances indicate that the carrying amount may not be recoverable. These reviews can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our forecasts for product lines.
Previous report
The Company performed an impairment test as of December 31, 2024 to determine the recoverability of the assets group by comparing the future undiscounted cash flows expected from the use of the asset group to the carrying value. The recoverability test indicated that the future expected cash flows will materially exceed the asset group carrying value. In addition, the Company determined that there were no other triggering events or circumstances to indicate that the carrying value of the finite-lived asset group may not be recoverable. Therefore, the Company did not proceed with the third step to determine the fair value of the intangible assets and compare fair value against the carrying value. Based on the assessment performed, we determined that the intangible asset carrying values are not impaired as of September 30, 2023 and the useful lives remain appropriate.
Previous report
No impairment losses were recorded against the other intangibles during each of the twelve months ended December 31, 2024 and 2023.
Previous report
Certain future events and circumstances, including adverse changes in the business and economic conditions and changes in customer behavior could result in changes to our assumptions and judgments used in the impairment tests. A downward revision of these assumptions could cause the total fair value of our goodwill and intangible assets to fall below carrying values and a non-cash impairment charge would be required. Such a charge may have a material effect on the consolidated financial statements.
Reworded paragraphs (29)
Previous wording
Headquartered in San Diego, California, Airgain, Inc. (NASDAQ: AIRG) 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
Headquartered in San Diego, California, Airgain, Inc. (NASDAQ: AIRG) is a leading provider of advanced wireless connectivity solutions. We are focused on 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. While historically recognized for high-performance radio frequency (RF) components, Airgain is increasingly delivering integrated, system-level connectivity solutions that combine hardware, software and cloud management.
Previous wording
Our enterprise products include Smart Network Controlled Cellular Repeaters (Smart NCRs), fixed wireless access (FWA) devices, asset tracking solutions, embedded cellular modems, and antennas for access points and Internet of Things (IoT) applications. Our automotive products include our second generation AirgainConnect® Fleet system solution – a low profile, roof-mounted, all-in-one 5G vehicle gateway – and aftermarket antennas. Our consumer products include embedded antennas for consumer access points, wireless gateways, smart home devices and FWA devices.
Current wording
Our enterprise products include Smart Network Controlled Cellular Repeaters (Smart NCRs), embedded cellular modems, asset tracking solutions, and antennas for access points and Internet of Things (IoT) applications. Our automotive products include our second-generation AirgainConnect® Fleet system solution, and our aftermarket antennas. Our consumer products include embedded antennas for consumer access points, wireless gateways, and FWA devices.
Previous wording
We have a rich history of providing radio frequency (RF) expertise, services, and solutions to mobile operators and major original equipment manufacturers (OEMs). We expanded our current portfolio of embedded cellular modems, asset tracking solutions and custom IoT systems with advanced 5G connectivity solutions, including our AirgainConnect Fleet vehicle gateway, Smart Network Controlled Cellular Repeaters, and FWA system solutions. We are leveraging our RF and systems experience, and our Mobile Network Operator (MNO) and Multiple Service Operator (MSO) relationships to deliver complex and differentiated system solutions.
Current wording
We have a rich history of providing radio frequency (RF) expertise, services, and solutions to telecommunications operators and major original equipment manufacturers (OEMs). We leverage our RF and systems experience, and our Mobile Network Operator (MNO) and Multiple Service Operator (MSO) relationships, to deliver complex and differentiated system solutions.
Previous wording
In the automotive market, our products are deployed in a wide range of vehicles in the fleet and aftermarket applications, supporting a variety of technologies that include 5G, LTE, Wi-Fi, LPWAN, GNSS, and Bluetooth. Fleet and aftermarket products in the automotive market typically consist of applications where vehicular wireless routers are paired with external antenna systems to provide connectivity to mobile assets. In the third quarter of 2024, we expanded our product offering with our second generation AirgainConnect® Fleet (AC-Fleet) system solution – a low profile, roof-mounted, all-in-one 5G vehicle gateway – that provides 4G/5G cellular connectivity with built-in multi-profile eSIM, GPS, Wi-Fi, and gigabit ethernet router functionalities. We also offer a full line of external fleet antennas that are designed to be rugged, reliable, and flexible to meet almost any need. These antennas include high-performance and low-profile versions that mount on the roof, trunk, windshield, or dashboard and are optimized for 5G, 4G, Wi-Fi, and GNSS.
Current wording
In the automotive market, our products are deployed in a wide range of vehicles in the fleet and aftermarket applications, supporting a variety of technologies that include 5G, LTE, Wi-Fi, LPWAN, GNSS, and Bluetooth. Fleet and aftermarket products in the automotive market typically consist of applications where vehicular wireless routers are paired with external antenna systems to provide connectivity to mobile assets. In the third quarter of 2024, we completed the first commercial deployment of our second generation AirgainConnect® Fleet (AC-Fleet) system solution – a low profile, roof-mounted, all-in-one 5G vehicle gateway that provides 4G/5G cellular connectivity with built-in multi-profile eSIM, GNSS, Wi-Fi, and gigabit Ethernet router functionalities. We also offer a full line of external fleet antennas that are designed to be rugged, reliable, and flexible to meet almost any need. We design our products for performance, quality, and long product life, and our antennas connect to almost any vehicular router or modem. These antennas include high-performance and low-profile versions that mount on the roof, trunk, windshield, or dashboard and are optimized for 5G, 4G, Wi-Fi, and GNSS.
Previous wording
The consumer market represents a vast audience utilizing wireless-enabled devices. Our embedded antennas are deployed in various consumer applications including access points, wireless gateways, FWA devices, Wi-Fi routers and extenders, smart TVs, smart home devices, and set-top boxes. These consumer products support a variety of technologies, products and services, including 4G/LTE, 5G, Wi-Fi, Bluetooth, LPWAN and GNSS (Global Navigation Satellite System).
Current wording
The consumer market represents a vast audience utilizing wireless-enabled devices. Our embedded antennas are deployed in various consumer applications including access points, wireless gateways, FWA devices, Wi-Fi routers and extenders, and smart home devices. These consumer products support a variety of technologies, products and services, including 4G/LTE, 5G, Wi-Fi, Bluetooth, LPWAN and Global Navigation Satellite System (GNSS).
Previous wording
Macroeconomic conditions have continued to create demand softness in certain markets. While our sales grew by 8% year-over-year, we experienced a demand softness combined with excess inventories in our channels and our direct customers, in our existing markets. While we are experiencing a market recovery with our consumer customers, we anticipate the inventory surplus some of our enterprise and automotive customers have may extend into the first half of 2025. We believe the previously broad demand softness that we experienced in 2023 has become more product and customer specific, as the industry re-calibrates to optimal inventory levels. We remain focused on the execution of our strategic product initiatives and operational efficiencies, which lay the foundation of our revenue and profitability growth when market conditions improve.
Current wording
Macroeconomic conditions have continued to create demand softness in certain markets. Our sales declined by 14.6% year-over-year, as we experienced a demand softness, combined with excess inventories in our channels and direct customers, in our existing automotive and enterprise markets. While we are experiencing a growth driven by the Wi-Fi 7 transition with our consumer customers, we anticipate the inventory surplus some of our enterprise and automotive customers have may extend into the second half of 2026. We remain focused on the execution of our strategic product initiatives, specifically design and revenue ramps of our AirgainConnect and Lighthouse platforms, which lay the foundation for our pursuit of revenue and profitability growth.
Previous wording
the ability to successfully integrate past and any future acquisitions
Current wording
the ability to successfully integrate any future acquisitions
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, pandemics and epidemics, global trade disputes 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 2024.
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, public health crises, global trade disputes, 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 2025.
Previous wording
Sales increased by 8.1% in 2024 compared to 2023. The increase in sales was primarily driven by the enterprise and consumer markets.
Current wording
Sales decreased by 14.6% in 2025 compared to 2024. The decrease in sales was primarily driven by lower sales in the enterprise and automotive markets, offsetting a 20.2% sales growth in our consumer markets.
Previous wording
Gross profit as a percentage of sales increased to 40.9% in 2024 compared to 37.1% in 2023. The increase was primarily due to improved automotive and enterprise product margins rate.
Current wording
Gross profit as a percentage of sales increased to 43.5% in 2025 compared to 40.9% in 2024. The increase was primarily due to improved enterprise and consumer product margins and operational efficiencies.
Previous wording
Our effective tax rate for each year was 2% and -1% in 2024 and in 2023, respectively.
Current wording
Our effective tax rate for each year was -1% and 2% in 2025 and in 2024, respectively.
Previous wording
We ended 2024 with cash and cash equivalents and restricted cash totaling $8.6 million, which is a $0.6 million increase from the prior year.
Current wording
We ended 2025 with cash and cash equivalents and restricted cash totaling $7.4 million.
Previous wording
Interest Income, net. Interest income consists of interest from our cash and cash equivalents offset by interest expense which consists of interest charges on credit card charges and certain vendor bills.
Current wording
Interest Income, net. Interest income generally consists of interest from our cash and cash equivalents and interest income related to employee retention credit, offset by interest expense which consists of interest charges on credit card charges and certain vendor bills.
Previous wording
Other Expense (Income), net. Other expense and income consists of realized foreign exchange gains or losses, state franchise tax benefit, and other income.
Current wording
Other Income (Expense), net. Other expense and income includes commissions associated with ERC refund, realized foreign exchange gains or losses, state franchise tax expense, and other income.
Previous wording
Sales for 2024 increased $4.6 million, or 8.1% compared to 2023. Consumer market sales increased $2.8 million to $21.7 million for 2024 from $18.9 million for 2023, driven by higher sales to cable and mobile network operators. Enterprise market sales increased $2.3 million, to $29.5 million for 2024 from $27.2 million for 2023, primarily driven by higher embedded modems sales. Automotive market sales decreased $0.5 million to $9.4 million for 2024, from $9.9 million for 2023, due to lower Aftermarket sales, partially offset by shipments of AirgainConnect Fleet.
Current wording
Sales for 2025 decreased $8.8 million, or 14.6% compared to 2024. Enterprise market sales decreased $6.9 million, to $22.6 million for 2025 from $29.5 million for 2024, primarily driven by lower IoT custom products and enterprise antennas sales. Automotive market sales decreased $6.3 million to $3.1 million for 2025 from $9.4 million for 2024, due to lower aftermarket sales. Consumer market sales increased $4.4 million to $26.1 million for 2025 from $21.7 million for 2024, driven primarily by higher antenna sales to cable and mobile network operators.
Previous wording
Cost of goods sold for 2024 increased $0.5 million or 1.5% compared to 2023. The increase was due to higher sales, partially offset by improved automotive and enterprise product margin rates.
Current wording
Cost of goods sold for 2025 decreased $6.6 million or 18.3% compared to 2024. The decrease was due to lower sales, partially offset by gross margin improvements.
Previous wording
Gross profit as a percentage of sales for 2024 increased by 380 basis points compared to 2023.
Current wording
Gross profit as a percentage of sales for 2025 increased by 260 basis points compared to 2024. The increase was primarily driven by improved enterprise and consumer margins, due to favorable product sales mix change and market introduction of premium solutions, along with operational efficiencies.
Previous wording
We had cash and cash equivalents of $8.5 million at December 31, 2024. Each year from 2013 through 2024, we have incurred net losses. As a result, we have an accumulated deficit of $87.2 million at December 31, 2024.
Current wording
We had cash and cash equivalents of $7.4 million at December 31, 2025. Each year from 2013 through 2025, we have incurred net losses. As a result, we have an accumulated deficit of $93.6 million at December 31, 2025.
Previous wording
Net cash used in operating activities was $3.5 million for the year ended December 31, 2024. The cash decrease was primarily driven by the net loss of $8.7 million, and by a $3.2 million net increase of operating assets and liabilities, offset by $8.4 million in non-cash expenses.
Current wording
Net cash used in operating activities was $1.1 million for the year ended December 31, 2025. The cash decrease was primarily driven by a net loss of $6.4 million, $1.4 million decrease of operating assets and liabilities, offset by $6.7 million in non-cash expenses.
Previous wording
Net cash used in investing activities of $0.2 million for the year ended December 31, 2024 was primarily for purchases of property and equipment.
Current wording
Net cash used in investing activities of $0.4 million for the year ended December 31, 2025 was primarily for purchases of intellectual property and purchase of property and equipment.
Previous wording
Net cash used in financing activities of $4.3 million for the year ended December 31, 2024 was primarily from $4.1 million of net proceeds after fees and expenses from the issuance of approximately 760,000 shares of common stock via our ATM offering program. Additionally, we received $0.3 million from the proceeds of common stock issuances under the ESPP and equity option exercises. These proceeds were partially offset by $0.1 million tax payments for net share settlement of restricted stock units.
Current wording
Net cash provided by financing activities of $0.4 million for the year ended December 31, 2025 was primarily from $0.4 million of proceeds of common stock issuances under the ESPP and equity option exercises, and $0.2 million of net proceeds from issuance of 109,167 shares of common stock via our ATM offering program. These proceeds were partially offset by $0.2 million tax payments for net share settlement of restricted stock units.
Previous wording
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law providing an employee retention credit (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, 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.
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, 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
We applied for ERC refunds in 2023, totaling $2.5 million, net of professional fees. In January 2025, we received refunds of $1.4 million, net of professional fees, plus an additional $0.2 million for interest. 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. As of December 31, 2024, we have not recognized the ERC in our financial statements.
Current wording
During the twelve months ended December 31, 2025, we received ERC refunds of $2.0 million, which was recorded in other income section of our 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 (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” 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
In May 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 in March 2024. Pursuant to the Sales Agreement, we may sell at our option, shares of our 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 or to Craig-Hallum, as sales agent or principal. 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. As of December 31, 2024, $0.5 million remains 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
On December 31, 2024, the Company entered into a Third Amendment (Lease Amendment) to the Office Lease, relating to the Company’s corporate headquarters in San Diego, California. The Lease Amendment extends the term for the Lease from the prior expiration on November 30, 2025 to its new expiration on September 30, 2031. There is no right to further extend the term of the Lease. The Lease Amendment provides that the annual base rent for the leased space shall be $699,051, or $58,254 on a monthly basis for the 12-month period beginning January 1, 2025, which amount shall increase 3% annually beginning on January 1, 2026. The Company is entitled to base rent abatement beginning on January 1, 2025 through October 31, 2025.
Current wording
On December 31, 2024, the Company entered into a Third Amendment to the office lease, relating to the Company’s corporate headquarters in San Diego, California. The lease amendment extends the term for the lease from the prior expiration on November 30, 2025 to its new expiration on September 30, 2031. There is no right to further extend the term of the lease. The lease amendment provides that the annual base rent for the leased space shall be $699,051, or $58,254 on a monthly basis for the 12-month period beginning January 1, 2025, which amount shall increase 3% annually beginning on January 1, 2026. The Company was entitled to base rent abatement from January 1, 2025 through October 31, 2025.
Previous wording
As of December 31, 2024, management performed the annual assessment of the Company's ability to meet its obligations as they become due within one year based on relevant conditions and events that are known and reasonably knowable. Following ASC 205-40 guidance, management considered quantitative and qualitative information to evaluate the Company's ability to meet obligations. Based on the analysis of the relevant conditions and events that are known and reasonably known as of December 31, 2024, the Company concluded that it is probable that it will be able to meet all of its financial obligations as they become due in the next twelve months.
Current wording
As of December 31, 2025, management performed the annual assessment of the Company's ability to meet its obligations as they become due within one year, based on relevant conditions and events that are known and reasonably knowable. Following ASC 205-40 guidance, management considered quantitative and qualitative information to evaluate the Company's ability to meet obligations. Based on the analysis of the relevant conditions and events that are known and reasonably knowable as of December 31, 2025, management concluded that it is probable that it will be able to meet all of its financial obligations as they become due in the next twelve months.
Previous wording
The relevant conditions and events that are known and reasonably known as of February 27, 2025 related to the Company have not significantly changed since December 31, 2024. Therefore, the resulting cash inflows along with the existing funds are expected to be sufficient for the Company’s financial obligations as they become due in the next twelve months.
Current wording
The relevant conditions and events that are known and reasonably knowable as of February 26, 2026 related to the Company have not significantly changed since December 31, 2025. Therefore, the resulting cash inflows along with the existing funds are expected to be sufficient for the Company’s financial obligations as they become due in the next twelve months.
Previous wording
Inventory is stated at the lower of cost or net realizable value (first-in, first-out method). For items manufactured by third parties, cost is determined using the first-in, first-out method (FIFO). For items that are manufactured by the Company's CMs, cost is determined using the weighted average cost method. We write-down inventory when it has been determined that conditions exist that may not allow the inventory to be sold for at the intended price or the inventory is determined to be obsolete based on assumption about future demand and market conditions. The charge related to inventory write-downs is recorded as cost of goods sold. We evaluate inventory at least annually and at other times during the year. Charges to cost of goods sold for excess, obsolete, and lower of cost or net realizable inventories totaled $0.8 million and $1.2 million in 2024 and 2023, respectively.
Current wording
Inventory is stated at the lower of cost or net realizable value (first-in, first-out method). For items that are manufactured by the Company's CMs, cost is determined using the weighted average cost method. We write-down inventory when it has been determined that conditions exist that may not allow the inventory to be sold for at the intended price or the inventory is determined to be obsolete based on assumption about future demand and market conditions. The charge related to inventory write-downs is recorded as cost of goods sold. We evaluate inventory at least annually and at other times during the year.