MOBIX LABS, INC
For the period ended Mar 31, 2025. Filed May 15, 2025.
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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.
Mar 31, 2025 · Filed May 15, 2025
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 2024-12-31; filed 2025-02-12.
0001493152-25-006122
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001641172-25-010986
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 117 previous paragraphs and 131 current paragraphs.
78 unchanged; 35 reworded; 17 added; 4 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 5 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 (17)
Current report
April 2025 Offering
Current 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, are exercisable upon receipt of stockholder approval of the issuance of the shares of Class A Common Stock underlying the Common Warrants and will expire five years after such stockholder approval. The net proceeds to us from the April 2025 Offering were $3,645, after payment of the placement agent’s fees and expenses. We intend to use the net proceeds from the April 2025 Offering for working capital and other general corporate purposes.
Current report
In connection with the April 2025 Offering, we also amended the outstanding PIPE Common Warrants, as discussed below under July 2024 Private Placement.
Current report
We paid the placement agent fees and totaling $355 and 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, become exercisable upon receipt of stockholder approval, will expire on April 4, 2030 and are not transferable prior to October 1, 2025.
Current report
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 report
Nasdaq Delinquency Notice
Current 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. In addition, on April 28, 2025, we received a delinquency notification letter (the “Bid Price Notice”, together with the MVLS Notice, the “Notices”) 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 Notices stated that, as of their date, the stock price of our Class A Common Stock was below $1.00 and our MVLS was below $35 million, in each case for 30 consecutive business days. The Notices have 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, or if we are not in compliance with the MVLS Requirement by October 27, 2025, our shares will be subject to delisting from Nasdaq.
Current report
July 2024 Private Placement
Current report
For the six months ended March 31, 2025, our net revenue was $5,680 compared to $1,430 for the six months ended March 31, 2024, an increase of $4,250 or 297%. 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), partly offset by lower sales of AOCs.
Current report
Cost of revenue was $2,973 for the six months ended March 31, 2025 compared to $1,281 for the six months ended March 31, 2024, an increase of $1,692 or 132%. The change principally reflects the addition of sales of our wireless systems solutions and, to a lesser extent, lower sales of interconnect products and AOCs.
Current report
Research and development expenses were $1,330 for the six months ended March 31, 2025 compared to $2,959 for the six months ended March 31, 2024, a decrease of $1,629 or 55%. 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.
Current report
Selling, general and administrative expenses were $8,129 for the three months ended March 31, 2025 compared to $7,358 for the three months ended March 31, 2024, an increase of $771. The increase reflects higher stock-based compensation expense, a $573 charge for estimated amounts payable under the RaGE Earn-out, losses on the disposal of assets and the addition of selling, general and administrative expenses of the businesses we acquired during fiscal 2024. These amounts were partly offset by lower compensation and benefits and lower outside professional fees.
Current report
Interest expense was $274 for the three months ended March 31, 2025 compared to $248 for the three months ended March 31, 2024, an increase of $26 or 10%. The increase principally reflects higher interest rates on outstanding borrowings.
Current report
Other Non-Operating (Gains) Losses, Net
Current report
For the three months and six months ended March 31, 2024, other non-operating losses, net principally consist of commitment and other fees of $1,575 payable under the committed equity facility.
Current report
Income Tax Benefit
Current report
Net cash used in investing activities of $16 for the six months ended March 31, 2025 consisted of payments for the acquisition of property and equipment.
Removed paragraphs (4)
Previous report
Private Placement
Previous report
We also entered into a registration rights agreement and filed with the Securities and Exchange Commission a registration statements to register for resale the shares of Common Stock issuable upon exercise of the PIPE Common Warrants, the Pre-Funded Warrants and the Placement Agent Warrants, which became effective on August 28, 2024.
Previous report
Other Non-Operating Losses, Net
Previous report
Provision (Benefit) for Income Taxes
Reworded paragraphs (35)
Previous wording
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”). The PIPE Common Warrants have an exercise price of $1.39 per share and are exercisable beginning on the effective date of stockholder approval of the issuance of the shares of Class A Common Stock upon exercise of the PIPE Common Warrants, which was obtained on January 3, 2025. The Series A Warrants will expire on January 3, 2030 and the Series B warrants will expire on January 3, 2026.
Current wording
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. 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. The PIPE Common Warrants are exercisable beginning on the effective date of stockholder approval of the issuance of the shares of Class A Common Stock upon exercise of the PIPE Common Warrants at the exercise price of $0.8202.
Previous wording
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 upon stockholder approval on January 3, 2025 and will expire on January 3, 2030. Moreover, upon any exercise for cash of the PIPE Common Warrants, we are obligated to pay the placement agent cash fees aggregating 8% of the gross exercise price and issue to the placement agent warrants to purchase a number of shares of our Common Stock equal to 7.0% of the aggregate number of such shares of our common stock underlying the PIPE Common Warrants.
Current wording
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 wording
During the three months ended December 31, 2024, we had additional financing activity, consisting of the issuance of a note payable, an agreement for the sale and purchase of future receipts and the sale of shares of our Class A Common Stock. See “Liquidity and Capital Resources,” below, and our unaudited condensed consolidated financial statements for further details.
Current wording
During the six months ended March 31, 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 wording
Comparison of the Three Months Ended December 31, 2024 and 2023
Current wording
Comparison of the Three Months and Six Months Ended March 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 three months ended December 31, 2024 and 2023). Sales and other taxes we collect, if any, are excluded from net revenue. We account for all shipping and handling as fulfillment activities and we recognize shipping revenue and any related costs concurrently with the related product revenues. 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 six months ended March 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 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.
Previous wording
Our net revenue was $3,169 for the three months ended December 31, 2024 compared to $285 for the three months ended December 31, 2023, an increase of $2,884 or 1,012%. The increase principally reflects the addition of sales of our interconnect products, which we acquired in our December 2023 acquisition of EMI Solutions, and wireless systems solutions, which we acquired in our May 2024 acquisition of RaGE Systems.
Current wording
Our net revenue was $2,511 for the three months ended March 31, 2025 compared to $1,145 for the three months ended March 31, 2024, an increase of $1,366 or 119%. The increase principally reflects 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 interconnect products and AOCs.
Previous wording
Cost of revenue was $1,482 for the three months ended December 31, 2024 compared to $329 for the three months ended December 31, 2023, an increase of $1,153 or 350%. The change principally reflects the addition of sales of our interconnect products and wireless systems solutions as discussed above.
Current wording
Cost of revenue was $1,491 for the three months ended March 31, 2025 compared to $952 for the three months ended March 31, 2024, an increase of $539 or 57%. The change principally reflects the addition of sales of our wireless systems solutions and interconnect products as discussed above.
Previous wording
Research and development expenses were $611 for the three months ended December 31, 2024 compared to $1,562 for the three months ended December 31, 2023, a decrease of $951 or 61%. The decrease principally reflects lower employee compensation and benefits, lower costs for outside services and lower stock-based compensation expense resulting from the cost reduction actions we initiated during the fourth quarter of our fiscal year ended September 30, 2023. These decreases were partly offset by the addition of research and development expenses of the businesses we acquired during fiscal year 2024.
Current wording
Research and development expenses were $719 for the three months ended March 31, 2025 compared to $1,397 for the three months ended March 31, 2024, a decrease of $678 or 49%. 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 wording
Selling, general and administrative expenses were $15,706 for the three months ended December 31, 2024 compared to $15,663 for the three months ended December 31, 2023, an increase of $43. The change reflects a $1,646 charge for estimated amounts payable under the RaGE Earn-out in connection with our acquisition of RaGE Systems, the addition of selling, general and administrative expenses of the businesses we acquired during fiscal 2024, higher insurance costs and higher amortization of intangible assets. These increases were largely offset by lower stock-based compensation expense. Stock based-compensation expense for the three months ended December 31, 2023 included the impact of certain awards whose vesting is contingent on both the completion of the Merger and the satisfaction of a service condition. Upon completion of the Merger, we recognized a “catch-up” of stock-based compensation expense of $10,858 for the portion of the service period that had elapsed from the date of the awards through December 31, 2023. During the three months ended December 31, 2024, we recognized additional stock-based compensation expense of $6,917 resulting from the acceleration of certain stock-based compensation awards.
Current wording
Selling, general and administrative expenses were $23,835 for the six months ended March 31, 2025 compared to $23,021 for the six months ended March 31, 2024, an increase of $814. The increase reflects a $2,219 charge for estimated amounts payable under the RaGE Earn-out, the addition of selling, general and administrative expenses of the businesses we acquired during fiscal 2024 and increased stock-based compensation expense. These amounts were partly offset by lower compensation and benefits and decreases in outside professional fees and insurance costs. Stock based-compensation expense for the six months ended March 31, 2024 included the impact of certain awards whose vesting is contingent on both the completion of the Merger and the satisfaction of a service condition. Upon Closing, we recognized additional stock-based compensation expense of $10,858 relating to these awards, representing a “catch up” for the portion of the service period that had elapsed from the date of the awards through the Closing. During the six months ended March 31, 2025, we recognized additional stock-based compensation expense of $6,917 resulting from the acceleration of certain stock-based compensation awards.
Previous wording
Interest expense was $211 for the three months ended December 31, 2024 compared to $857 for the three months ended December 31, 2023, a decrease of $646 or 75%. The decrease principally reflects higher costs in the three months ended December 31, 2023 for the value of warrants to purchase shares of our common stock that we issued in connection with borrowings.
Current wording
Interest expense was $485 for the six months ended March 31, 2025 compared to $1,105 for the six months ended March 31, 2024, a decrease of $620 or 56%. The decrease principally reflects higher costs in the six months ended March 31, 2024 for the value of warrants to purchase shares of our common stock that we issued in connection with borrowings.
Previous wording
We estimated the fair value of the earnout liability as of the Closing of the Merger at $33,559. As of December 31, 2024, 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 $3,620. As a result of changes in the estimated fair value of the liability, we recognized non-cash gains (losses) of $(1,940) and $24,764, respectively, for the three months ended December 31, 2024 and 2023. 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
We estimated the fair value of the earnout liability as of the Closing of the Merger at $33,559. As of March 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 $1,400. As a result of changes in the estimated fair value of the liability, we recognized non-cash gains of $2,220 and $5,174, respectively, for the three months ended March 31, 2025 and 2024 and non-cash gains of $280 and $29,938, respectively, for the six months ended March 31, 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.
Previous wording
The fair value of the earnout liability is based on a number of factors, including changes in the market price of our Class A Common Stock. We have experienced significant fluctuations in the market price of our Class A Common Stock, and may experience significant fluctuations in the future. Such price fluctuations will increase or decrease the value of the earnout liability, and we may be required to recognize additional losses or gains in our statements of operations and comprehensive income (loss), the amounts of which may be substantial.
Current wording
The fair value of the earnout liability is based on a number of factors, including changes in the market price of our Class A Common Stock. We have experienced significant fluctuations in the market price of our Class A Common Stock, and may experience significant fluctuations in the future. Such price fluctuations will increase or decrease the value of the earnout liability, and we may be required to recognize additional losses or gains in our statements of operations and comprehensive loss, the amounts of which may be substantial.
Previous wording
We account for the PIPE 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 using the Black-Scholes option-pricing model. As of December 31, 2024, we adjusted the carrying amount of the liability for the PIPE Common Warrants to its estimated fair value of $4,429. As a result of the change in the fair value of the PIPE Common Warrants, for the three months ended December 31, 2024 we recorded a non-cash loss of $2,620.
Current wording
We account for the PIPE 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 using the Black-Scholes option-pricing model. As of March 31, 2025, we adjusted the carrying amount of the liability for the PIPE Common Warrants to its estimated fair value of $1,202. As a result of changes in the fair value of the PIPE Common Warrants, for the three months and six months ended March 31, 2025 we recognized non-cash gains of $3,227 and $607, respectively.
Previous wording
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 December 31, 2024, all of the Private Warrants remained outstanding and we adjusted the carrying amount of the liability to its estimated fair value of $368. As a result of changes in the fair value of the Private Warrants, we recorded non-cash losses of $38 and $60 for the three months ended December 31, 2024 and 2023, respectively. The gains and losses are included in “Change in fair value of warrants” in the unaudited condensed consolidated statements of operations and comprehensive income (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.
Current wording
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 March 31, 2025, all of the Private Warrants remained outstanding and we adjusted the carrying amount of the liability to its estimated fair value of $312. As a result of changes in the estimated fair value of the liability, we recognized non-cash gains (losses) of $56 and $(420), respectively, for the three months ended March 31, 2025 and 2024 and non-cash gains (losses) of $18 and $(480), respectively, for the six months ended March 31, 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 wording
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 income (loss), the amounts of which may be substantial.
Current wording
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 wording
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 a non-cash loss of $2,904 for the three months ended December 31, 2023, which is included in “Change in fair value of PIPE make-whole liability” in the unaudited condensed consolidated statements of operations and comprehensive income (loss).
Current wording
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 of $3,336 and $432, respectively, for the three months and six months ended March 31, 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.
Previous wording
For the three months ended December 31, 2024, other non-operating losses, net of $402 principally consist of a loss we recognized upon the conversion of the outstanding principal balance of a note payable and accrued interest thereon into shares of our Class A Common Stock.
Current wording
For the three months ended March 31, 2025, other non-operating gains, net of $(303) principally consist of a gain from the decrease in the fair value of a derivative liability and gains on the conversion of certain accounts payable into shares of our Class A Common Stock. For the six months ended March 31, 2025, other non-operating losses, net of $99 principally consist of a loss recognized upon the conversion of the outstanding principal balance of a note payable and accrued interest thereon into shares of our Class A Common Stock.
Previous wording
For the three months ended December 31, 2024, our provision (benefit) for income taxes differs from an amount calculated based on statutory tax rates principally due to our recording a valuation allowance against the net operating losses we generated during the period because we did not expect that the deferred tax asset arising from our pretax book loss of $19,841 would be realized in the future.
Current wording
For the three months and six months ended March 31, 2025, and for the three months ended March 31, 2024, our provision (benefit) for income taxes differs from an amount calculated based on statutory tax rates principally due to our recording a valuation allowance against the net operating losses we generated during the period because we did not expect that the deferred tax asset arising from our pretax book losses would be realized in the future.
Previous wording
For the three months ended December 31, 2023, we recognized an income tax benefit of $1,280. In connection with our acquisitions of EMI Solutions, we recognized additional deferred tax liabilities of $1,084 associated with acquired intangible assets. Based on the availability of these tax attributes, we determined that we expect to realize a greater portion of our existing deferred tax assets and for the three months ended December 31, 2023 we recognized an income tax benefit of $1,280, principally resulting from reductions of the valuation allowance previously recorded against our deferred tax assets.
Current wording
For the six months ended March 31, 2024, we recognized an income tax benefit of $1,296. In connection with our acquisition of EMI Solutions, we recognized additional deferred tax liabilities of $1,084 associated with acquired intangible assets. Based on the availability of these tax attributes, we determined that we expect to realize a greater portion of our existing deferred tax assets and for the six months ended March 31, 2024 we recognized an income tax benefit of $1,296, principally resulting from reductions of the valuation allowance previously recorded against our deferred tax assets.
Previous wording
The following table summarizes our unaudited condensed consolidated cash flows for the three months ended December 31, 2024 and 2023:
Current wording
The following table summarizes our unaudited condensed consolidated cash flows for the six months ended March 31, 2025 and 2024:
Previous 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.
Current wording
For the six months ended March 31, 2025, net cash used in operating activities was $1,516, which included the impact of our net loss of $22,130, offset by net non-cash charges of $14,028 and net decreases in working capital items of $6,586. The net non-cash charges principally consisted of stock-based compensation expense of $13,154 for stock options and restricted stock units and $1,124 of depreciation and amortization expense. The net working capital decrease principally consisted of increases in accounts payable and accrued expenses together with decreases in accounts receivable and inventory.
Previous wording
For the three months ended December 31, 2023, net cash used in operating activities was $3,596, which included the impact of our net income of $935, net non-cash credits of $5,298 and net decreases in working capital items of $767. The net non-cash credits principally consisted of the $24,764 gain on the change in fair value of the earn-out liability and a deferred income tax benefit of $1,280, partially offset by stock-based compensation expense of $12,705 for stock options and restricted stock units, $4,009 of Merger related transaction costs expensed, a $2,904 loss on the change in the fair value of the PIPE make-whole liability, $729 of expense for the issuance of warrants in connection with borrowings and $350 of depreciation and amortization expense.
Current wording
For the six months ended March 31, 2024, net cash used in operating activities was $11,689, which included the impact of our net loss of $818 and net non-cash credits of $11,807, partly offset by net decreases in working capital items of $936. The net non-cash credits principally consisted of the $29,938 gain on the change in fair value of the earnout liability, a $432 gain on the change in the fair value of the PIPE make-whole liability and a deferred income tax benefit of $1,296, partially offset by stock-based compensation expense of $14,146 for stock options and restricted stock units, $4,009 of Merger related transaction costs expensed, $884 of expense for the issuance of warrants in connection with borrowings and $866 of depreciation and amortization expense. The net working capital decrease principally consists of an increase in accounts payable.
Previous wording
Net cash used in investing activities for the three months ended December 31, 2023 of $115 consisted of payments for the acquisition EMI, net of acquired cash.
Current wording
Net cash used in investing activities of $1,150 for the six months ended March 31, 2024 principally consisted of payments for the acquisition EMI, net of acquired cash.
Previous 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.
Current wording
Net cash provided by financing activities for the six months ended March 31, 2025 of $2,047 consisted of $600 in proceeds from the issuance of common stock, and $1,725 in proceeds under agreements for the purchase and sale of future receipts and the issuance of a note payable and proceeds of $15 from the exercise of warrants to purchase shares of the Company’s Class A Common Stock. These amounts were partially offset by principal payments on notes payable of $119 and the payment of deferred consideration of $174 for the acquisition of a business.
Previous wording
Net cash provided by financing activities for the three months ended December 31, 2023 of $18,418 consisted of the $21,014 proceeds from the merger and PIPE, $3,286 in proceeds from the issuance of common stock, and $446 in proceeds from issuance of notes payable and convertible notes. These amounts were partially offset by the payment of merger-related transaction costs of $5,966 and $362 of principal payments on notes payable (including payments of $344 on notes payable—related parties).
Current wording
Net cash provided by financing activities for the six months ended March 31, 2024 of $15,743 consisted of the $21,014 proceeds from the Merger and PIPE, $3,286 in proceeds from the issuance of common stock, and $446 in proceeds from issuance of notes payable and convertible notes. These amounts were partially offset by the payment of merger-related transaction costs of $6,796 and $2,207 of principal payments on notes payable (including payments of $1,030 on notes payable—related parties).
Previous wording
As of December 31, 2024, our cash balance was $405 compared to $266 at September 30, 2024. We had a working capital deficit of $24,615 as of December 31, 2024 compared to a working capital deficit of $20,836 at September 30, 2024.
Current wording
As of March 31, 2025, our cash balance was $781 compared to $266 at September 30, 2024. We had a working capital deficit of $27,515 as of March 31, 2025 compared to a working capital deficit of $20,836 at September 30, 2024.
Previous wording
Our debt consists of notes payable with an aggregate amount of $794 and 7% promissory notes—related parties with an aggregate principal amount of $2,825. Of these amounts, notes having an aggregate principal amount of $1,624 have reached their maturity date and are currently due. The remainder require weekly or monthly payments in varying amounts through September 2026.
Current wording
As of March 31, 2025, our debt consists of notes payable with an aggregate amount of $2,103 and 7% promissory notes—related parties with an aggregate principal amount of $2,495. Of these amounts, notes having an aggregate principal amount of $1,624 have reached their maturity date and are currently due. The remainder require weekly or monthly payments in varying amounts through September 2026.
Previous wording
Our total liabilities as of December 31, 2024 were $40,310 compared to $33,558 as of September 30, 2024. The increase in our total liabilities is principally due to a $1,940 increase in the earnout liability, a $2,658 increase in the fair value of liability-classified warrants and a $1,646 increase in the liability for the RaGE Earn-out. The Business Combination Agreement provides that settlement of the earnout liability is through the issuance of shares of our Class A Common Stock; we do not expect to make any cash payments in settlement of the earnout liability.
Current wording
Our total liabilities as of March 31, 2025 were $36,192 compared to $33,558 as of September 30, 2024. The increase in our total liabilities is principally due to a $1,593 increase in accounts payable, a $1,175 increase notes payable and a $467 increase in the liability for the RaGE Earn-out.
Previous wording
Other commitments include (i) non-cancelable operating leases for equipment, office facilities and other property containing future minimum lease payments totaling $1,776 payable over the next three years, (ii) unpaid commitment and other fees of $1,553 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, payable at various dates through June 2025, and (iv) potential payments of up to $8,000 under the RaGE Earn-out, payable at various dates through 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 $1,755 payable over the next three 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, payable at various dates through June 2025, and (iv) potential payments of up to $5,752 under the RaGE Earn-out, payable at various dates through March 2026.
Previous wording
We incurred a loss from operations of $14,630 for the three months ended December 31, 2024, and we incurred losses from operations of $46,395 and $35,544 for the years ended September 30, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $124,296. 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 $22,458 for the six months ended March 31, 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 March 31, 2025, we had an accumulated deficit of $126,587. 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.
Previous wording
Our most critical accounting estimates include the assumptions we use in the determination of the fair value of the earnout liability, the fair value of the PIPE make-whole liability, the fair value of common stock, stock-based compensation, the fair value of liability-classified warrants, the provision for income taxes, the accounting for business combinations and the measurement of definite-lived intangible assets and goodwill.
Current wording
Our most critical accounting estimates include the assumptions we use in the determination of the fair value of the earnout liability, the fair value of common stock, stock-based compensation, the fair value of liability-classified warrants, the provision for income taxes, the accounting for business combinations and the measurement of definite-lived intangible assets and goodwill.
Previous wording
We have also issued warrants to purchase common stock to employees and service providers in exchange for services to us and we determined that those warrants should be accounted for as equity-classified awards. We determined the fair value of these warrants at the date of issuance using the Black- Scholes option pricing model, based on the variables and assumptions discussed above, and recognized the fair value as stock-based compensation expense in our consolidated statements of operations and comprehensive income (loss).
Current wording
We have also issued warrants to purchase common stock to employees and service providers in exchange for services to us and we determined that those warrants should be accounted for as equity-classified awards. We determined the fair value of these warrants at the date of issuance using the Black-Scholes option pricing model, based on the variables and assumptions discussed above, and recognized the fair value as stock-based compensation expense in our consolidated statements of operations and comprehensive loss.
Previous wording
We classify stock-based compensation expense in our consolidated statements of operations and comprehensive income (loss) in the same manner in which the award recipient’s salary and related costs are classified or in which the award recipient’s service payments are classified. In future periods, we expect stock-based compensation expense to increase, due in part to our existing unrecognized stock-based compensation expense and as we grant additional stock-based awards to continue to attract and retain employees.
Current wording
We classify stock-based compensation expense in our consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s salary and related costs are classified or in which the award recipient’s service payments are classified. In future periods, we expect stock-based compensation expense to increase, due in part to our existing unrecognized stock-based compensation expense and as we grant additional stock-based awards to continue to attract and retain employees.
Previous wording
We recognize liabilities for uncertain tax positions based on a two-step process regarding recognition and measurement. We recognize a tax benefit only if it is more likely than not the tax position will be sustained on examination by the local taxing authorities based on the technical merits of the position. We measure the amount of tax benefits recognized in the financial statements from such positions based on the largest benefit greater than 50% likely to be realized upon ultimate settlement with the related tax authority. Changes in recognition or measurement of an uncertain tax position are reflected in our statements of operations and comprehensive income (loss) in the period in which the change in estimate occurs, based on new information not previously available.
Current wording
We recognize liabilities for uncertain tax positions based on a two-step process regarding recognition and measurement. We recognize a tax benefit only if it is more likely than not the tax position will be sustained on examination by the local taxing authorities based on the technical merits of the position. We measure the amount of tax benefits recognized in the financial statements from such positions based on the largest benefit greater than 50% likely to be realized upon ultimate settlement with the related tax authority. Changes in recognition or measurement of an uncertain tax position are reflected in our statements of operations and comprehensive loss in the period in which the change in estimate occurs, based on new information not previously available.
Previous wording
We did not recognize any impairment charges during the three months ended December 31, 2024 and 2023. However, future cash flows may vary from what was expected, or assumptions and estimates we use in the fair value calculations may change. Any such changes in assumptions or estimates could change the estimates of future cash flows we use to estimate fair values and could result in a decline in the estimated fair value of related assets. Such a decline in our estimates of the fair values of assets may result in future impairment charges.
Current wording
We did not recognize any impairment charges during the six months ended March 31, 2025 and 2024. However, future cash flows may vary from what was expected, or assumptions and estimates we use in the fair value calculations may change. Any such changes in assumptions or estimates could change the estimates of future cash flows we use to estimate fair values and could result in a decline in the estimated fair value of related assets. Such a decline in our estimates of the fair values of assets may result in future impairment charges.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
“nm” indicates amount is not meaningful.