MOBIX LABS, INC
For the period ended Dec 31, 2025. Filed Feb 12, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2025 · Filed Feb 12, 2026
MOBX$0.56+0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-13.
0001493152-25-011909
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-02-12.
0001493152-26-006406
Item 2. 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 136 previous paragraphs and 77 current paragraphs.
33 unchanged; 25 reworded; 18 added; 75 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 5 previous and 2 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 (18)
Current report
On January 6, 2026, we entered into certain securities purchase agreements with unrelated investors relating to a public offering of 30,000,000 shares of our Class A Common Stock at a price to the public of $0.20 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 $5,135, after deducting placement agent fees and commissions and other estimated offering expenses payable by us.
Current report
At the Market Offering Agreement
Current report
On October 21, 2025, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with Roth Capital Partners, LLC (“Manager”) under which we may offer and sell, from time to time at our sole discretion, up to $15,800 in shares of our Class A Common Stock through the Manager acting in its capacity as our sales agent.
Current report
Pursuant to the ATM Agreement, sales of the Common Stock, if any, will be made under our Registration Statement on Form S-3 (File No. 333-284351) by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, including privately negotiated and block transactions. The Manager will use commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal law, rules and regulations and the rules of The Nasdaq Capital Market to sell the Common Stock from time to time, based upon instructions from us (including any price, time or size limits or other customary parameters or conditions we may impose). We will pay the Manager a commission of three percent of the gross sales proceeds of any Common Stock sold through the Manager under the ATM Agreement, and we have also provided the Manager with customary indemnification rights. We intend to use the net proceeds from the sales of our Common Stock under the ATM Agreement for working capital purposes.
Current report
During the three months ended December 31, 2025, we sold 1,914,496 shares of our Class A Common Stock under the ATM agreement, for net proceeds (after commissions) of $1,254. The amount and timing of the proceeds we may receive from sales of our Class A Common Stock pursuant to the ATM Agreement, if any, will depend on a number of factors, including that we are eligible to use the Registration Statement on Form S-3 to sell the shares to the Manager, the numbers of shares we may elect to sell, the timing of such sales and the future market price of our Class A Common stock. As of the date of this Form 10-Q, we are unable to sell shares pursuant to the ATM Agreement due to restrictions on the use of the Registration Statement on Form S-3.
Current report
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.
Current report
Product revenue was $1,335 for the three months ended December 31, 2025 compared to $1,951 for the three months ended December 31, 2024, a decrease of $616 or 32%. The change is principally due to the timing of the shipment of wireless systems solutions products to meet customer requirement dates, partially offset by increased shipments of our interconnect products.
Current report
Services revenue was $540 for the three months ended December 31, 2025 compared to $1,218 for the three months ended December 31, 2024, a decrease of $678 or 56%. Our service revenues are subject to routine fluctuations based on the timing of our receipt of contracts from customers, and our performance thereunder. The change in service revenues principally reflects performance under a relatively large service contract in the fiscal 2025 first quarter.
Current report
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.
Current report
Cost of product revenue was $949 for the three months ended December 31, 2025 compared to $1,190 for the three months ended December 31, 2024, a decrease of $241 or 20%. The change principally reflects the lower shipments of our wireless systems solutions products noted above.
Current report
Cost of service revenue was $345 for the three months ended December 31, 2025 compared to $292 for the three months ended December 31, 2024, an increase of $53 or 18%. The change principally reflects increased compensation and benefits costs as well as the adverse impact of certain fixed costs.
Current report
Research and development expenses were $442 for the three months ended December 31, 2025 compared to $611 for the three months ended December 31, 2024, a decrease of $169 or 28%. The decrease reflects lower costs for employee compensation and benefits and other costs as part of the Company’s ongoing cost management efforts.
Current report
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).
Current report
On October 24, 2025, we entered into amendments to certain liability-classified warrants to purchase an aggregate of 13,375,490 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.
Current report
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 1,000,000 shares of our Class A Common Stock at a price of $1.08 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 three months ended December 31, 2025.
Current report
As a result of changes in the fair value of liability-classified warrants outstanding during the periods, for the three months ended December 31, 2025 and 2024, we recognized net non-cash losses of $323 and $2,658, respectively, which are included in “Change in fair value of warrants” in the condensed consolidated statements of operations and comprehensive loss. As of December 31, 2025 and September 30, 2025, the related liabilities of $270 and $6,859, respectively, are included in “Liability-classified warrants” in the condensed consolidated balance sheet.
Current report
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.
Current report
During the three months ended December 31, 2025, 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.
Removed paragraphs (75)
Previous report
On December 21, 2023, we consummated the merger pursuant to the business combination agreement, dated November 15, 2022 (as amended, supplemented or otherwise modified, the “Business Combination Agreement”), by and among Chavant, CLAY Merger Sub II, Inc., a Delaware corporation and newly formed, wholly-owned direct subsidiary of Chavant (“Merger Sub”), and Mobix Labs, Inc. (“Legacy Mobix”), a Delaware corporation, pursuant to which, among other things, Merger Sub merged with and into Legacy Mobix, with Legacy Mobix surviving the merger as a wholly-owned direct subsidiary of Chavant (together with the other transactions related thereto, the “Merger”). In connection with the consummation of the Merger (the “Closing”), Chavant changed its name from “Chavant Capital Acquisition Corp.” to “Mobix Labs, Inc.” (the “Company”) and Legacy Mobix changed its name from “Mobix Labs, Inc.” to “Mobix Labs Operations, Inc.”
Previous report
Throughout this discussion, unless otherwise noted or otherwise suggested by context, all references to “we,” “us” or “our” refer to Legacy Mobix prior to the consummation of the Merger, and to the Company and its subsidiaries after the consummation of the Merger.
Previous report
In 2021, we completed the acquisition of substantially all of the assets including IP of Cosemi Technologies, Inc. (“Cosemi”), an Irvine, California-based global supplier of high-speed connectivity solutions. The acquired products and IP included a broad range of AOCs and optical engines that deliver optimal connectivity to a wide range of applications—including home entertainment, gaming, augmented reality and virtual reality, video conferencing, medical, mobile devices and monitors—and built the foundation for our current connectivity business. We believe the patented cable technology and AOC optical chip solutions from Cosemi along with our innovative wireless semiconductor technologies provide more opportunities in the wireless C-Band and mmWave 5G market as the need for faster, more reliable data transmission becomes ever more apparent, whether it is for the data center, infrastructure, home entertainment or consumer electronics market.
Previous report
April 2025 Offering
Previous report
On April 4, 2025, we entered into a securities purchase agreement (the “2025 Securities Purchase Agreement”) with an institutional accredited investor. Pursuant to the 2025 Securities Purchase Agreement, on April 7, 2025 we issued 3,850,000 shares of Class A common stock and a pre-funded warrant to purchase up to 1,026,860 shares of our Class A Common Stock in a registered direct offering priced at-the-market under Nasdaq rules (the “Registered Direct Offering”). The public offering price for each share was $0.8202 and the public offering price for each pre-funded warrant was $0.8201. In addition, in a concurrent private placement (together with the Registered Direct Offering, the “April 2025 Offering”), we issued unregistered common stock warrants (the “Common Warrants”) to purchase up to 4,876,860 shares of our Class A Common Stock. The pre-funded warrant has an exercise price of $0.0001 per share, is exercisable immediately and may be exercised at any time. The Common Warrants have an exercise price of $0.8202 and became exercisable beginning on the effective date of stockholder approval, which was obtained on May 30, 2025 and will expire on May 30, 2030. The net proceeds to us from the April 2025 Offering were $3,645, after payment of the placement agent’s fees of $355.
Previous report
In connection with the April 2025 Offering, we also amended the outstanding PIPE Common Warrants, as discussed below under July 2024 Private Placement.
Previous report
We also issued the placement agent warrants to purchase an aggregate of 682,760 shares of Class A Common Stock. These warrants have an exercise price of $0.8202 per share, and became exercisable beginning on the effective date of stockholder approval, which was obtained on May 30, 2025, and will expire on April 4, 2030 and are not transferable prior to October 1, 2025.
Previous report
Nasdaq Delinquency Notice
Previous report
On April 28, 2025, we received a delinquency notification letter (the “MVLS Notice”) from Nasdaq’s Listing Qualifications Staff (the “Staff”) due to the non-compliance with Nasdaq Listing Rule 5550(b)(2) as a result of our failure to maintain a minimum Market Value of Listed Securities (“MVLS”) of $35 million (the “MVLS Requirement”). The MVLS Notice stated that, as of its date, the MVLS was below $35 million for 30 consecutive business days. On May 20, 2025, the Company received a letter from Nasdaq notifying the Company that they were in compliance with the MVLS Requirement.
Previous report
In addition, on April 28, 2025, we received a delinquency notification letter (the “Bid Price Notice”) from the Staff due to the non-compliance with Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”). The Bid Price Notice stated that, as of its date, the stock price of our Class A Common Stock was below $1.00 for 30 consecutive business days. The Bid Price Notice has no immediate effect on the listing or trading of the shares of Class A Common Stock on Nasdaq. We have until October 27, 2025 to regain compliance. If we are not in compliance with the Minimum Bid Price Requirement by October 27, 2025, we may qualify for a second 180 calendar day compliance period. However, if we fail to timely regain compliance with the Minimum Bid Price Requirement during the second 180 calendar day period our shares will be subject to delisting from Nasdaq.
Previous report
July 2024 Private Placement
Previous report
On July 22, 2024, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an institutional accredited investor in connection with a private placement (the “Private Placement”). Pursuant to the Securities Purchase Agreement, on July 24, 2024, we issued an unregistered pre-funded warrant (the “Pre-Funded Warrant”) to purchase up to 2,877,698 unregistered shares of our Class A Common Stock. We also issued unregistered warrants to purchase an aggregate of 5,755,396 shares of our Class A Common Stock (“PIPE Common Warrants”). We received gross proceeds from the Private Placement of $4,000, before payment of fees and expenses to the placement agent of $415. In August 2024, the investor exercised the Pre-Funded Warrant in full, for net cash proceeds to us of $3.
Previous report
The PIPE Common Warrants are comprised of Series A Warrants to purchase up to 2,877,698 shares of Class A Common Stock (the “Series A Warrants”) and Series B Warrants to purchase up to 2,877,698 shares of Class A Common Stock (the “Series B Warrants”). As part of the April 2025 Offering, we amended the outstanding Series A Warrants and Series B Warrants to reduce the exercise price from $1.39 per share to $0.8202 per share, which became exercisable beginning on the effective date of stockholder approval, which was obtained on May 30, 2025. We also extended the term of the Series B Warrants from January 3, 2026 to April 3, 2026. The term of the Series A Warrants remains unchanged and will expire on January 3, 2030.
Previous report
In connection with the Private Placement, we paid the placement agent fees and expenses of $415 and issued the placement agent warrants to purchase an aggregate of 201,439 shares of our Class A Common Stock (the “Placement Agent Warrants”). The Placement Agent Warrants have an exercise price of $1.7375 per share, became exercisable beginning on the effective date of stockholder approval, which was obtained on January 3, 2025, and will expire on January 3, 2030. Moreover, upon any exercise for cash of the PIPE Common Warrants, we will pay the placement agent cash fees aggregating 8% of the gross proceeds received from the exercise of the PIPE Common Warrants and will also issue to the placement agent additional Placement Agent Warrants to purchase a number of shares of our Class A Common Stock equal to 7.0% of the aggregate number of shares of our Class A Common Stock issued upon such exercise of the PIPE Common Warrants.
Previous report
Acquisition of RaGE Systems Inc.
Previous report
On May 21, 2024, we completed the previously announced acquisition of RaGE Systems. RaGE Systems designs, develops and manufactures wireless systems solutions, including products for 5G communications, mmWave imaging, and software defined radio targeting the commercial, industrial, and defense and aerospace sectors. We believe the acquisition of RaGE Systems expands our expertise in wireless communications and will allow us to deliver solutions that address a wider variety of applications and markets.
Previous report
Aggregate consideration for the acquisition of RaGE Systems consisted of 3,214,045 shares of our Class A Common Stock, having a fair value of $7,682 at the closing date, and $2,000 in cash. We also entered into employment agreements with each of the RaGE Systems stockholders. The RaGE Systems stockholders will also be entitled to receive possible earnout payments of up to $8,000 over eight fiscal quarters, payable in a combination of cash and shares of our Class A Common Stock, based upon the satisfaction of certain financial metrics and continued employment with us. The RaGE Systems business combination agreement also provides the RaGE Systems stockholders with “piggy-back” registration rights, subject to certain requirements and customary conditions.
Previous report
Acquisition of EMI Solutions, Inc.
Previous report
On December 18, 2023, we completed the acquisition of EMI Solutions when we acquired all of the issued and outstanding common shares of EMI Solutions. EMI Solutions is a manufacturer of interconnect products, including electromagnetic interference filtering products for aerospace, military, defense and medical applications. We believe the acquisition of EMI Solutions complements our existing product offerings, expanded our customer base and allows us to deliver solutions that address a wider variety of applications and markets. Consideration for the acquisition of EMI Solutions consisted of 964,912 shares of Legacy Mobix common stock and $2,200 in cash. We valued the common stock at $8,856, based on the fair value of the Legacy Mobix common stock at the time of the acquisition.
Previous report
During the nine months ended June 30, 2025, we had additional financing activity, consisting of the issuance of notes payable, agreements for the sale and purchase of future receipts and sales of shares of our Class A Common Stock. See “Liquidity and Capital Resources,” below, and our unaudited condensed consolidated financial statements for further details.
Previous report
The Merger
Previous report
We accounted for the Merger as a reverse recapitalization. Under this method of accounting, Chavant is treated as the “acquired” company for financial reporting purposes. This determination was primarily based on holders of Legacy Mobix capital stock comprising a majority of the voting power of our common stock upon consummation of the Merger and having the ability to nominate the majority of our board of directors, Legacy Mobix’ senior management comprising our senior management, and Legacy Mobix’ operations comprising our ongoing operations. Accordingly, for accounting purposes, our financial statements represent a continuation of the financial statements of Legacy Mobix with the Merger being treated as the equivalent of Legacy Mobix issuing shares for the net assets of Chavant, accompanied by a recapitalization. We recognized the net assets of Chavant as of the Closing at historical cost, with no goodwill or other intangible assets recorded. Our operations prior to the Merger are presented as those of Legacy Mobix and the accumulated deficit of Legacy Mobix has been carried forward after Closing. All issued and outstanding securities of Chavant at the time of the Closing were treated as issuances of securities by us upon the consummation of the Merger.
Previous report
As a result of the Merger, we raised gross proceeds of $21,014, including the contribution of $1,264 of cash held in Chavant’s trust account and the $19,750 private investment in public equity (“PIPE”) at $10.00 per share of Chavant’s Class A Common Stock. Our Class A Common Stock and Public Warrants (“Public Warrants”) began trading on Nasdaq under the symbols “MOBX” and “MOBXW,” respectively, on December 22, 2023.
Previous report
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Previous report
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Previous report
Our net revenue was $2,350 for the three months ended June 30, 2025 compared to $2,058 for the three months ended June 30, 2024, an increase of $292 or 14%. The increase principally reflects increased sales of our interconnect products and the addition of sales of our wireless systems solutions, which we acquired in our May 2024 acquisition of RaGE Systems, partly offset by lower sales of AOCs.
Previous report
For the nine months ended June 30, 2025, our net revenue was $8,030 compared to $3,488 for the nine months ended June 30, 2024, an increase of $4,542 or 130%. The increase principally reflects the addition of sales of our wireless systems solutions (acquired in our May 2024 acquisition of RaGE Systems) and increased sales of our interconnect products (acquired in our December 2023 acquisition of EMI Solutions).
Previous report
Cost of revenue was $1,001 for the three months ended June 30, 2025 compared to $1,327 for the three months ended June 30, 2024, a decrease of $326 or 25%. The change principally reflects lower sales of our AOCs, as discussed above, including lower amortization expense for AOC-related intangible assets which the Company impaired subsequent to June 30, 2024.
Previous report
Cost of revenue was $3,974 for the nine months ended June 30, 2025 compared to $2,608 for the nine months ended June 30, 2024, an increase of $1,366 or 52%. The increase principally reflects the addition of sales of our wireless systems solutions and increased sales of interconnect products. These increases were partly offset by the impact of lower sales of AOCs, including lower amortization expense for AOC-related intangible assets which the Company impaired subsequent to June 30, 2024.
Previous report
Research and development expenses were $486 for the three months ended June 30, 2025 compared to $1,369 for the three months ended June 30, 2024, a decrease of $883 or 64%. The decrease principally reflects lower costs for outside services, lower employee compensation and benefits and lower stock-based compensation expense resulting from the workforce and cost reduction actions taken during the fiscal year ended September 30, 2024.
Previous report
Research and development expenses were $1,816 for the nine months ended June 30, 2025 compared to $4,328 for the nine months ended June 30, 2024, a decrease of $2,512 or 58%. The decrease principally reflects lower costs for outside services, lower stock-based compensation expense and lower employee compensation and benefits resulting from the workforce and cost reduction actions taken during the fiscal year ended September 30, 2024. These decreases were partly offset by the addition of research and development expenses of the businesses we acquired during fiscal year 2024.
Previous report
Selling, general and administrative expenses were $32,043 for the nine months ended June 30, 2025 compared to $31,731 for the nine months ended June 30, 2024, an increase of $312 or 1%. The increase principally reflects increased stock-based compensation expense, the addition of selling, general and administrative expenses of the businesses we acquired during fiscal 2024 and losses on the disposal of assets. These amounts were partly offset by lower costs for outside professional fees and lower compensation and benefits.
Previous report
Impairment of Long-Lived Assets
Previous report
In March 2025, the Company vacated a leased 19,436 square foot office in Irvine, California and in April 2025 the lease was terminated. As a result, during the three months ended June 30, 2025, the Company recognized an impairment loss of $725 to reduce the carrying value of this asset group to its estimated fair value. See Note 12—Leases, of the notes to our unaudited condensed consolidated financial statements included herein.
Previous report
Interest expense was $1,032 for the nine months ended June 30, 2025 compared to $1,232 for the nine months ended June 30, 2024, a decrease of $200 or 16%. The decrease principally reflects higher costs in the nine months ended June 30, 2024 for the value of warrants to purchase shares of our common stock that we issued in connection with borrowings, which were largely offset by higher outstanding borrowings and higher interest rates on borrowings during the three months ended June 30, 2025.
Previous report
We account for the PIPE Common Warrants, the Common Warrants and the Private Warrants as liabilities because they do not meet the derivative scope exception for contracts in our own stock. We estimate the aggregate fair value of the 5,755,396 PIPE Common Warrants and the 4,876,860 Common Warrants using the Black-Scholes option-pricing model. As of June 30, 2025, we adjusted the carrying amount of the liability for the PIPE Common Warrants and the Common Warrants to its estimated fair value of $3,456. As a result of changes in the fair value of the PIPE Common Warrants and the Common Warrants, for the three months and nine months ended June 30, 2025 we recognized non-cash gains of $600 and $1,207, respectively.
Previous report
At the time of Closing, we estimated the aggregate fair value of the 3,000,000 Private Warrants using the Black-Scholes option-pricing model and recognized a liability of $150. As of June 30, 2025, all of the Private Warrants remained outstanding and we adjusted the carrying amount of the liability to its estimated fair value of $300. As a result of changes in the estimated fair value of the liability, we recognized non-cash gains (losses) of $12 and $68, respectively, for the three months ended June 30, 2025 and 2024 and non-cash gains (losses) of $30 and $(412), respectively, for the nine months ended June 30, 2025 and 2024. The gains and losses are included in “Change in fair value of warrants” in the unaudited condensed consolidated statements of operations and comprehensive loss. Additional information relating to the PIPE Common Warrants and the Private Warrants can be found in the notes to our unaudited condensed consolidated financial statements included herein.
Previous report
Change in Fair Value of PIPE Make-Whole Liability
Previous report
In connection with the Merger, we agreed to issue additional shares of our Class A Common Stock to the holders of 2,454,737 shares of our Class A Common Stock in the event that the volume-weighted average price per share of our Class A Common Stock in the event that the VWAP per share of the Class A Common Stock during a specified adjustment period is less than $10.00 per share. The specified adjustment period ended on August 30, 2024 and the Company issued 1,052,029 shares of its Class A Common Stock in settlement of the liability for the Make-Whole Shares.
Previous report
We accounted for the Make-Whole Shares as liability-classified instruments because the events that determined the number of Make-Whole Shares issuable included events that were not solely indexed to our common stock. At the time of Closing, we estimated the aggregate fair value of the liability for the Make-Whole Shares using a Monte Carlo simulation model and recorded a liability of $2,071. As a result of subsequent changes in the fair value of the liability, we recorded non-cash gains (losses) of $(310) and $122, respectively, for the three months and nine months ended June 30, 2024, which are included in “Change in fair value of PIPE make-whole liability” in the unaudited condensed consolidated statements of operations and comprehensive loss.
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Reworded paragraphs (25)
Previous wording
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements included the 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, including those set forth under “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. You should carefully read the “Risk Factors” section, the Cautionary Note Regarding Forward-Looking Statements as well as the risks and uncertainties set forth in 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.
Current wording
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements included the 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.
Previous wording
Based in Irvine, California, Mobix Labs designs, develops and sells 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 consumer commercial, industrial, automotive, medical, aerospace, defense and other markets. To enhance our product portfolio, we also intend to pursue acquisitions of companies with existing revenue which can be scaled, and which possess technologies that accelerate the speed, accessibility, and efficiency of disruptive or more efficient communications solutions, and which will also allow us to expand into strategically aligned industries. Our wireless systems solutions include products for advanced RF and millimeter wave (“mmWave”) 5G communications, mmWave imaging, software defined radio and custom RF integrated circuits (“ICs”) targeting the commercial, industrial, and defense and aerospace 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. Our True Xero active optical cables (“AOCs”) are designed to meet customer needs for high-quality active optical cable solutions at an affordable price. 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.
Current wording
We design, develop and sell components and systems for advanced wireless and wired connectivity, radio frequency (“RF”), switching and electromagnetic interference (“EMI”) filtering technologies. Our solutions are used in the defense, aerospace, commercial, industrial and other markets. To enhance our product portfolio, we also intend to pursue acquisitions of companies with existing revenue which can be scaled, and which possess technologies that accelerate the speed, accessibility, and efficiency of disruptive or more efficient communications solutions, and which will also allow us to expand into strategically aligned industries. Our wireless systems solutions include products for advanced RF and millimeter wave (“mmWave”) 5G communications, mmWave imaging, software defined radio and custom RF integrated circuits (“ICs”) targeting the defense, aerospace, commercial and industrial sectors. Our interconnect products, including EMI filter inserts and filtered and non-filtered connectors, are designed for and are currently used in aerospace, military, defense and medical applications. These innovative technologies are designed for large and rapidly growing markets where there is increasing demand for higher performance communication and filtering systems which utilize an expanding mix of both wireless and connectivity technologies. Our Class A Common Stock and our public warrants are traded on the Nasdaq Capital Market under the symbols “MOBX” and “MOBXW,” respectively.
Previous wording
We were founded with the goal of simplifying the development and maximizing the performance of wireless mmWave 5G products by designing and developing high performance, cost-effective and ultra-compact semiconductor components and solutions used for signal processing applications in wireless products. Since our inception, our corporate strategy has evolved to encompass the pursuit of acquisitions in 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 (“IP”) 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.
Current wording
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.
Previous wording
In the 2025 Securities Purchase Agreement, we agreed, subject to certain exceptions, not to issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Class A Common Stock or any securities convertible into or exercisable or exchangeable for shares of Class A Common Stock or file any registration statement or prospectus, or any amendment or supplement thereto until sixty days after the stockholder approval date, subject to certain exceptions. In addition, we agreed not to effect or enter into an agreement to effect any issuance of Class A Common Stock or any securities convertible into or exercisable or exchangeable for shares of Class A Common Stock involving a variable rate transaction (as defined in the 2025 Securities Purchase Agreement) until August 29, 2025, subject to certain exceptions.
Current wording
Issuance of Class A Common Stock
Previous wording
Comparison of the Three Months and Nine Months Ended June 30, 2025 and 2024
Current wording
Comparison of the Three Months Ended December 31, 2025 and 2024
Previous wording
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, 2025 and 2024). 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 revenue. Our net revenue fluctuates based on a variety of factors, including the timing of the receipt of orders from our customers, product mix, competition, global economic conditions, and other factors.
Current wording
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 three months ended December 31, 2025 and 2024). 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.
Previous wording
Cost of revenue includes costs of materials, contract manufacturing services for the assembly, testing and shipping products, inbound freight, amortization of acquired developed technology, inventory obsolescence charges and other product-related costs. Cost of revenue also includes employee compensation and benefits (including stock-based compensation) of employees engaged in engineering services or the manufacture or sourcing of products, facility costs and depreciation.
Current wording
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.
Previous wording
Selling, general and administrative expenses were $8,208 for the three months ended June 30, 2025 compared to $8,710 for the three months ended June 30, 2024, a decrease of $502 or 6%. The decrease principally reflects lower costs under the RaGE Earnout, lower costs for outside legal and accounting services and lower insurance cost. These amounts were largely offset by higher stock-based compensation expense.
Current wording
Selling, general and administrative expenses were $8,972 for the three months ended December 31, 2025 compared to $15,706 for the three months ended December 31, 2024, a decrease of $6,734 or 43%. The change principally reflects a $4,713 decrease in stock-based compensation expense as well as lower costs under the RaGE Earnout, lower costs for outside legal and accounting services and lower insurance cost. The decrease in stock-based compensation expense reflects that during the three months ended December 31, 2024, we recognized additional expense of $6,917 from the acceleration of certain awards; there were no similar charges for the three months ended December 31, 2025.
Previous wording
Interest expense was $547 for the three months ended June 30, 2025 compared to $127 for the three months ended June 30, 2024, an increase of $420 or 331%. The increase principally reflects higher outstanding borrowings and higher interest rates on borrowings during the three months ended June 30, 2025.
Current wording
Interest expense was $1,380 for the three months ended December 31, 2025 compared to $211 for the three months ended December 31, 2024, an increase of $1,169 or 554%. The increase reflects higher outstanding borrowings and higher interest rates on borrowings during the three months ended December 31, 2025.
Previous wording
In connection with the Merger, certain Legacy Mobix stockholders and certain holders of Legacy Mobix stock options will be entitled to receive an additional aggregate 3,500,000 shares of our Class A Common Stock based on the achievement of trading price targets following the Closing over a seven-year earnout period. 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. Additional information relating to the earnout liability can be found in the notes to our unaudited condensed consolidated financial statements included herein.
Current wording
Certain Mobix stockholders and certain holders of Mobix stock options will be entitled to receive an additional aggregate 3,500,000 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.
Previous wording
We estimated the fair value of the earnout liability as of the Closing of the Merger at $33,559. As of June 30, 2025, 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 $1,190. As a result of changes in the estimated fair value of the liability, we recognized non-cash gains of $210 and $661, respectively, for the three months ended June 30, 2025 and 2024 and non-cash gains of $490 and $30,599, respectively, for the nine months ended June 30, 2025 and 2024. The changes in the estimated fair value of the earnout liability are principally due to changes in price of our Class A Common Stock during the respective periods.
Current wording
As of December 31, 2025, 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 (losses) of $960 and $(1,940) for the three months ended December 31, 2025 and 2024, respectively.
Previous wording
For the three months ended June 30, 2025, other non-operating losses, net of $36 consist of a loss from the increase in the fair value of a derivative liability and a loss on the settlement of a note payable in shares of our Class A Common Stock. For the nine months ended June 30, 2025, other non-operating losses, net of $135 principally consist of net losses recognized upon the settlement of liabilities in shares of our Class A Common Stock.
Current wording
For the three months ended December 31, 2025, other non-operating losses, net of $573 principally consist of the $514 fair value of the additional warrants issued in connection with amendments to certain warrants and losses on the settlement of a note payable and certain other liabilities in shares of our Class A Common Stock. For the three months ended December 31, 2024, other non-operating losses, net principally consist of a loss recognized on the settlement of a note payable in shares of our Class A Common Stock.
Previous wording
For the three months and nine months ended June 30, 2025, our income tax benefit 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.
Current wording
For the three months ended December 31, 2025 and 2024, our income tax benefit 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. We did not recognize any tax benefit related to our pretax book losses of $10,149 and $19,841, respectively, for the three months ended December 31, 2025 and 2024 because we did not expect that the deferred tax asset arising from our net operating losses would be realized in the future.
Previous wording
The following table summarizes our unaudited condensed consolidated cash flows for the nine months ended June 30, 2025 and 2024:
Current wording
The following table summarizes our unaudited condensed consolidated cash flows for the three months ended December 31, 2025 and 2024:
Previous wording
For the nine months ended June 30, 2024, net cash used in operating activities was $14,767, which included the impact of our net loss of $8,497 and net non-cash credits of $9,347, partly offset by net decreases in working capital items of $3,077. The net non-cash credits principally consisted of the $30,599 gain on the change in fair value of the earnout liability and a deferred income tax benefit of $2,803, partially offset by stock-based compensation expense of $17,768, $4,009 of Merger related transaction costs expensed, $1,474 of depreciation and amortization expense and $891 of expense for the issuance of warrants in connection with borrowings. The net working capital decrease principally consists of an increase in accounts payable.
Current wording
For the three months ended December 31, 2025, net cash used in operating activities was $4,765, which included the impact of our net loss of $10,125 and a net increase in working capital items of $634, offset by net non-cash charges of $5,994. The net non-cash charges principally consisted of stock-based compensation expense of $5,139 for restricted stock units and stock options and $455 of depreciation and amortization expense and charges of $837 for the issuance or change in fair value of warrants, partly offset by a $960 non-cash gain from the decrease in the fair value of the earnout liability. The net working capital increase principally consisted of decreases in accounts payable and accrued expenses, partly offset by decreases in accounts receivable and inventory.
Previous wording
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 accounts payable and accrued expenses together with decreases in accounts receivable and inventory.
Current wording
For the three months ended December 31, 2024, net cash used in operating activities was $930, which included the impact of our net loss of $19,839, offset by net non-cash charges of $15,520 and net decreases in working capital items of $3,389. The net non-cash charges principally consisted of stock-based compensation expense of $9,802 for stock options and restricted stock units, losses of $2,658 from the change in fair value of warrants, a $1,940 loss on the change in fair value of the earnout liability and $594 of depreciation and amortization expense. The net working capital decrease principally consisted of an increase in accrued expenses together with decreases in accounts receivable and inventory.
Previous wording
Net cash provided by financing activities for the nine months ended June 30, 2024 of $15,991 consisted of the $21,014 proceeds from the Merger and PIPE, $3,334 in proceeds from the issuance of common stock, $971 in proceeds from issuance of notes payable and convertible notes and proceeds from the exercise of stock options of $225. These amounts were partially offset by the payment of merger-related transaction costs of $6,946 and $2,608 of principal payments on notes payable (including payments of $1,298 on notes payable—related parties).
Current wording
Net cash provided by financing activities for the three months ended December 31, 2025 of $1,760 principally consisted of $1,254 in proceeds from the sale of common stock, $1,717 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 $1,266 (including payments of $186 on notes payable—related parties).
Previous wording
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.
Current wording
Net cash provided by financing activities for the three months ended December 31, 2024 of $1,069 consisted of $600 in proceeds from the issuance of common stock and $675 in proceeds under an agreement for the purchase and sale of future receipts and the issuance of a note payable. These amounts were partially offset by principal payments on notes payable of $32 and the payment of deferred consideration of $174 for the acquisition of a business.
Previous wording
As of June 30, 2025, our cash balance was $240 compared to $266 at September 30, 2024. We had a working capital deficit of $23,020 as of June 30, 2025 compared to a working capital deficit of $20,836 at September 30, 2024.
Current wording
As of December 31, 2025, our cash balance was $268 compared to $3,273 at September 30, 2025. We had a working capital deficit of $22,370 as of December 31, 2025 compared to a working capital deficit of $21,071 at September 30, 2025.
Previous wording
As of June 30, 2025, our debt consists of notes payable with an aggregate amount of $1,980 and 7% promissory notes—related parties with an aggregate principal amount of $2,380. 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 September 2026.
Current wording
As of December 31, 2025, our debt consists of notes payable with an aggregate amount of $4,200 and 7% promissory notes—related parties with an aggregate principal amount of $2,065. 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.
Previous wording
Our total liabilities as of June 30, 2025 were $34,130 compared to $33,558 as of September 30, 2024. The increase in our total liabilities is principally due to a $1,382 increase in notes payable.
Current wording
Our total liabilities as of December 31, 2025 were $28,057 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 three months ended December 31, 2025.
Previous wording
Other commitments include (i) non-cancelable operating leases for equipment, office facilities and other property containing future minimum lease payments totaling $1,519 payable over the next two years, (ii) unpaid commitment and other fees of $1,575 payable in connection with the committed equity facility, (iii) deferred purchase consideration of $2,323 related to our acquisitions of EMI Solutions and RaGE Systems which is currently due, and (iv) potential payments of up to $4,000 under the RaGE Earnout, payable by March 2026.
Current wording
Other commitments include (i) non-cancelable operating leases for equipment, office facilities and other property containing future minimum lease payments totaling $303 payable over the next two years, (ii) unpaid commitment and other fees of $1,478 payable in connection with the committed equity facility, (iii) deferred purchase consideration of $2,323 related to acquisitions which is currently due, and (iv) $2,000 currently payable under an earnout arrangement related to the acquisition of a business.
Previous wording
We incurred a loss from operations of $30,528 for the nine months ended June 30, 2025, and we incurred losses from operations of $46,395 and $35,544 for the years ended September 30, 2024 and 2023, respectively. As of June 30, 2025, we had an accumulated deficit of $134,859. 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 will need to raise additional debt or equity financing to fund our continuing operations, product development plans and capital expenditure requirements, to service our debt obligations and to make strategic investments. 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 beyond the next approximately ninety days.
Current wording
We incurred a loss from operations of $8,833 for the three months ended December 31, 2025, and we incurred losses from operations of $37,693 and $46,395 for the years ended September 30, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $160,713. 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.
Previous wording
While we will seek to raise additional capital, we cannot assure you that we will be able to obtain financing on acceptable terms, or at all, to provide the necessary interim funding to continue our operations and satisfy our obligations. If we raise funds by issuing equity securities, dilution to our existing stockholders may result. Any equity securities we issue may also provide for rights, preferences or privileges senior to those of holders of our 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.
Current wording
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.
Previous wording
If we are unable to obtain additional financing, or if such transactions are successfully completed but do not provide adequate financing, we will not be able to continue operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. Accordingly, the 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.
Current wording
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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
The fair value of the PIPE Common Warrants and the Private Warrants 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 PIPE Common Warrants and the Private Warrants, 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.
Previous report — wording carried elsewhere
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. We remeasure the earnout liability to its estimated fair value at the end of each reporting period.
Previous report — wording carried elsewhere
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. We recognize the effect of a change in tax laws on deferred tax assets and liabilities in our results of operations in the period the new laws are enacted. We record a valuation allowance to reduce the carrying amounts of deferred tax assets unless it is more likely than not that such assets will be realized.