Airship AI Holdings, Inc.
For the period ended Sep 30, 2025. Filed Nov 14, 2025.
View on SEC.govAbout this filing
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.
Sep 30, 2025 · Filed Nov 14, 2025
AISP$1.79+2.9%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 2025-08-05.
0001654954-25-009056
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001654954-25-013084
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 63 previous paragraphs and 70 current paragraphs.
38 unchanged; 21 reworded; 11 added; 3 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 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 (11)
Current report
Backlog and Pipeline
Current report
Backlog as of October 6, 2025 was approximately $11 million, representing firm fixed price contracts awarded in the third quarter of 2025 that will be shipped and invoiced through the remainder of calendar year 2025 and early 2026.
Current report
Our total validated pipeline as of September 30, 2025 was $166 million, consisting of single and multi-year opportunities for AI- driven edge, video, and sensor and data management platform across our customer verticals. Our pipeline includes opportunities at varying stages of progression with expected award timeframes over the next 18-24 months.
Current report
Warrant Exercise
Current report
On October 8, 2025, we entered into warrant exercise inducement offer letter with the holder of its existing common stock warrants exercisable for an aggregate of 2,162,162 shares of its common stock to exercise its existing warrants at the existing exercise price of $4.50 per share, in exchange for our agreement to issue new common stock warrants to purchase 2,702,702 shares of common stock at an exercise price per share of $6.20. The aggregate gross proceeds from the exercise of the existing warrants were approximately $9,729,729, before deducting financial advisory fees. We intend to use the net proceeds from the exercise of the existing warrants for working capital and general corporate purposes.
Current report
The shares of common stock issuable upon exercise of the existing warrants are registered for issuance pursuant to a registration statement on Form S-3 (File No. 333-284462), which was declared effective by the SEC on January 31, 2025.
Current report
In consideration for the immediate exercise of the existing warrants for cash, the holder received the inducement warrants in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The inducement warrants have an exercise price of $6.20 per share, are immediately exercisable and will be exercisable for five and one-half years from the date of issuance.
Current report
The inducement warrants and the shares of common stock underlying the inducement warrants offered in the private placement have not been registered under the Securities Act or applicable state securities laws. Accordingly, the securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. As part of the transaction, we have filed a resale registration statement on Form S-3 with the SEC to register the resale of the shares of common stock underlying the inducement warrants.
Current report
Other Income *(Expense) *— Other income for the three months ended September 30, 2025 was $9,277,000 as compared to $7,801,000 for the three months ended September 30, 2024. Other income for the three months ended September 30, 2025 consisted of (i) gain from change in fair value of earnout liability of $3,893,000; (ii) gain from change in fair value of warrant liability of $5,331,000; and (iii) other income of $53,000. The income from change in fair value of various financial instruments was primarily the result of a decrease in our stock price.
Current report
Other income for the three months ended September 30, 2024 consisted of (i) gain from change in fair value of earnout liability of $5,512,000; (ii) gain from change in fair value of warrant liability of $2,471,000; (iii) gain from change in fair value of convertible debt of $371,000; (iv) other income of $16,000; offset by (v) loss on note conversion of $435,000; and (vi) interest expense of $134,000. The gain from change in fair value of various financial instruments was primarily the result of a lower stock price.
Current report
*Net Income *— Net income for the three months ended September 30, 2025 was $6,410,000 as compared to net income of $6,214,000 for the three months ended September 30, 2024. The net income primarily related to noncash income of $8,770,000. Noncash items included (i) gain from change in warrant liability of $5,331,000; (ii) gain from change in earnout liability of $3,893,000; (iii) stock based compensation of $356,000; and (iv) net amortization of operating lease right of use asset of $98,000.
Removed paragraphs (3)
Previous report
Other income for the three months ended June 30, 2024 consisted of (i) gain from change in fair value of warrant liability of $1,542,000; (ii) gain from change in fair value of earnout liability of $14,877,000; (iii) gain from change in fair value of convertible debt of $1,527,000; and offset by (iv) interest expense $421,000; and (v) other expense of $39,000.
Previous report
*Net (Loss) Income *— Net loss for the three months ended June 30, 2025 was $23,757,000 as compared to a net income of $18,462,000 for the three months ended June 30, 2024. The net loss primarily related to noncash expenses of $22,264,000. Noncash items included (i) loss from change in warrant liability of $14,494,000; (ii) loss from change in earnout liability of $7,301,000; (iii) stock based compensation of $372,000; and (iv) net amortization of operating lease right of use asset of $97,000.
Previous report
Other expense for the six months ended June 30, 2024 consisted of (i) loss from change in fair value of warrant liability of $5,305,000; (ii) loss from change in fair value of earnout liability of $6,608,000; (iii) loss from change in fair value of convertible debt of $512,000; (iv) loss on note conversion of $159,000; (v) interest expense of $453,000; and (vi) other interest of $39,000.
Reworded paragraphs (21)
Previous wording
At the merger closing, we assumed 515,000 private placement warrants and 16,184,612 public warrants. On June 3, 2024, we permanently reduced the exercise price of such warrants from $11.50 per share to an exercise price of $7.80 per share. On November 20, 2024, the Company further reduced the exercise price of the outstanding public warrants and private warrants to an exercise price of $4.50 per share. The purpose of this reduced exercise price was to potentially raise proceeds received from the exercise of such warrants, if any, for working capital and general corporate purposes. As of June 30, 2025, there were 515,000 private placement warrants and 16,145,110 public warrants outstanding.
Current wording
At the merger closing, we assumed 515,000 private placement warrants and 16,184,612 public warrants. On June 3, 2024, we permanently reduced the exercise price of such warrants from $11.50 per share to an exercise price of $7.80 per share. On November 20, 2024, we further reduced the exercise price of the outstanding public warrants and private warrants to an exercise price of $4.50 per share. The purpose of this reduced exercise price was to potentially raise proceeds received from the exercise of such warrants, if any, for working capital and general corporate purposes. As of September 30, 2025, there were 515,000 private placement warrants and 16,145,108 public warrants outstanding.
Previous wording
On January 20, 2025, President Trump signed an executive order creating an advisory commission, the Department of Government Efficiency to reform federal government processes and reduce expenditures. Pressures on and uncertainty surrounding the U.S. federal government’s budget, and potential changes in budgetary priorities and spending levels, could adversely affect staffing levels and the funding for government projects. Disruptions in how the government agencies operate due to these policies are materially affecting our business.
Current wording
Net Revenues — Net revenues for the three months ended September 30, 2025 decreased $1,691,000 to $1,177,000 as compared to $2,868,000 for the three months ended September 30, 2024. On January 20, 2025, President Trump signed an executive order creating an advisory commission, the Department of Government Efficiency to reform federal government processes and reduce expenditures. Pressures on and uncertainty surrounding the U.S. federal government’s budget, and potential changes in budgetary priorities and spending levels, could adversely affect staffing levels and the funding for government projects. Disruptions in how the government agencies operate due to these policies are materially affecting our business.
Previous wording
Cost of Net Revenues — Cost of net revenues primarily consists of product costs and post customer support. For the three months ended June 30, 2025, cost of sales decreased $1,281,000 to $614,000 as compared to $1,895,000 for the three months ended June 30, 2024. The decrease was due to lower sales, offset by product mix with decreased equipment purchases during the three months ended June 30, 2025.
Current wording
Cost of Net Revenues — Cost of net revenues primarily consists of product costs and post customer support. For the three months ended September 30, 2025, cost of sales decreased $140,000 to $574,000 as compared to $714,000 for the three months ended September 30, 2024. The decrease was due to lower sales, offset by product mix with decreased equipment purchases during the three months ended September 30, 2025.
Previous wording
Research and Development Expenses — Research and development expenses for the three months ended June 30, 2025 increased $38,000 to $741,000 as compared to $703,000 for the three months ended June 30, 2024. The increase was due to increased expenses for product development in the United States and Taiwan.
Current wording
Research and Development Expenses — Research and development expenses for the three months ended September 30, 2025 decreased $321,000 to $753,000 as compared to $1,074,000 for the three months ended September 30, 2024. The decrease was due to decreased expenses for product development in the United States and Taiwan.
Previous wording
Selling, General and Administrative Expenses — Selling, general and administrative expenses for the three months ended June 30, 2025 decreased $13,000 to $2,814,000.
Current wording
Selling, General and Administrative Expenses — Selling, general and administrative expenses for the three months ended September 30, 2025 increased $50,000 to $2,667,000.
Previous wording
The net income for the three months ended June 30, 2024 primarily related to noncash items of $16,894,000. Noncash items included (i) stock based compensation of $262,000; (ii) net amortization of operating lease right of use asset of $71,000; (iii) issuance of common stock for services of $198,000; (iv) noncash interest expense of $521,000; (v) gain from change in warrant liability of $1,542,000; (vi) gain from change in earnout liability of $14,877,000; and (vii) gain from change in fair value of convertible note of $1,527,000.
Current wording
Net income for the three months ended September 30, 2024 was $6,214,000. The net income is reduced by noncash items of $7,338,000, primarily the gain from the change in fair value of various financial instruments. Noncash items included (i) stock based compensation of $557,000; (ii) net amortization of operating lease right of use asset of $24,000; (iii) loss on note conversions of $434,000; offset by (iv) gain from change in fair value of warrant liability of $2,471,000; (v) gain from change in fair value of earnout liability of $5,571,000; and (vi) gain from change in fair value of convertible note of $370,000.
Previous wording
The following table sets forth key components of our results of operations during the six months ended June 30, 2025 and 2024.
Current wording
The following table sets forth key components of our results of operations during the nine months ended September 30, 2025 and 2024.
Previous wording
Net Revenues — Net revenues for the three months ended June 30, 2025 decreased $4,254,000 to $2,147,000 as compared to $6,401,000 for the three months ended June 30, 2024, as a result of purchase orders from various federal government agency customers totaling over $13 million which we primarily shipped in the three months ended June 30, 2024.
Current wording
*Net Revenues *— Net revenues for the nine months ended September 30, 2025 decreased $11,017,000 to $8,827,000 as compared to $19,844,000 for the nine months ended September 30, 2024, as a result of purchase orders from various federal government agency customers totaling over $13 million which we primarily shipped in the nine months ended September 30, 2024.
Previous wording
Cost of Net Revenues — Cost of net revenues primarily consists of product costs and post customer support. For the six months ended June 30, 2025, cost of sales decreased $5,960,000 to $3,882,000 as compared to $9,842,000 for the six months ended June 30, 2024. The decrease was due to lower sales, offset by product mix with decreased equipment purchases during the six months ended June 30, 2025.
Current wording
Cost of Net Revenues — Cost of net revenues primarily consists of product costs and post customer support. For the nine months ended September 30, 2025, cost of sales decreased $6,100,000 to $4,456,000 as compared to $10,556,000 for the nine months ended September 30, 2024. The decrease was due to lower sales, offset by product mix with decreased equipment purchases during the nine months ended September 30, 2025.
Previous wording
Research and Development Expenses — Research and development expenses for the six months ended June 30, 2025 increased $62,000 to $1,460,000 as compared to $1,398,000 for the six months ended June 30, 2024. The increase was due to increased expenses for product development in the United States and Taiwan.
Current wording
Research and Development Expenses — Research and development expenses for the nine months ended September 30, 2025 decreased $259,000 to $2,213,000 as compared to $2,472,000 for the nine months ended September 30, 2024. The decrease was due to decreased expenses for product development in the United States and Taiwan.
Previous wording
Selling, General and Administrative Expenses — Selling, general and administrative expenses for the six months ended June 30, 2025 decreased $118,000 to $6,044,000 as compared to $6,162,000 for the six months ended June 30, 2024.
Current wording
Selling, General and Administrative Expenses — Selling, general and administrative expenses for the nine months ended September 30, 2025 increased $69,000 to $8,761,000 as compared to $8,830,000 for the nine months ended September 30, 2024.
Previous wording
Other Income (Expense) — Other income for the six months ended June 30, 2025 was $3,687,000 as compared to other expense of $13,076,000 for the six months ended June 30, 2024. Other income for the six months ended June 30, 2025 consisted of (i) gain from change in fair value of earnout liability of $2,522,000; (ii) gain from change in fair value of warrant liability of $1,027,000; and (iii) other income of $138,000. The gain from change in fair value of various financial instruments was primarily the result of an increase in our stock price.
Current wording
Other Income (Expense) — Other income for the nine months ended September 30, 2025 was $12,964,000 as compared to other expense of $5,275,000 for the nine months ended September 30, 2024. Other income for the nine months ended September 30, 2025 consisted of (i) gain from change in fair value of earnout liability of $6,415,000; (ii) gain from change in fair value of warrant liability of $6,358,000; and (iii) other income of $191,000. The income from change in fair value of various financial instruments was primarily the result of a decrease in our stock price.
Previous wording
Other (Expense) Income — Other expense for the three months ended June 30, 2025 was $21,735,000 as compared to other income of $17,486,000 for the three months ended June 30, 2024. Other expense for the three months ended June 30, 2025 consisted of (i) loss from change in fair value of earnout liability of $7,302,000; (ii) loss from change in fair value of warrant liability of $14,494,000; and (iii) other income of $61,000. The loss from change in fair value of various financial instruments was primarily the result of an increase in our stock price.
Current wording
Other expense for the nine months ended September 30, 2024 was $5,275,000 as compared to other expense of $466,000 for the nine months ended September 30, 2023. Other expense for the nine months ended September 30, 2024 consisted of (i) loss from change in fair value of earnout liability of $1,096,000; (ii) loss from change in fair value of warrant liability of $2,834,000; (iii) loss from change in fair value of convertible debt of $142,000; (iv) loss on note conversion of $593,000; (v) interest expense of $587,000: and (vi) other expense of $23,000. The loss from change in fair value of various financial instruments was primarily the result of an increase in the stock price.
Previous wording
Net (Loss) Income — Net loss for the six months ended June 30, 2025 was $49,000 as compared to a net loss of $13,502,000 for the six months ended June 30, 2024. The net income primarily related to noncash items of $2,569,000. Noncash items included (i) gain from change in warrant liability of $1,027,000; (ii) gain from change in earnout liability of 2,522,000; and offset by (iii) stock based compensation of $800,000; and (ix) net amortization of operating lease right of use asset of $180,000.
Current wording
Net Income (Loss) — Net income (loss) for the nine months ended September 30, 2025 was 6,361,000 as compared to a net loss of $7,289,000 for the nine months ended September 30, 2024. The net income primarily related to noncash items of $11,339,000. Noncash items included (i) gain from change in warrant liability of $6,359,000; (ii) gain from change in earnout liability of $6,415,000; and offset by (iii) stock based compensation of $1,156,000 and (iv) net amortization of operating lease right of use asset of $278,000.
Previous wording
The net loss for the six months ended June 30, 2024 primarily related to noncash items of $13,987,000. Noncash items included (i) depreciation of $2,000; (ii) stock based compensation of $531,000; (iii) net amortization of operating lease right of use asset of $151,000; (iv) issuance of common stock for services of $198,000; (v) noncash interest expense of $521,000; (vi) loss from change in warrant liability of $5,305,000; (vii) loss from change in earnout liability of $6,608,000; (viii) loss from change in fair value of convertible note of $512,000; and (ix) loss on note conversions of $159,000.
Current wording
Net loss for the nine months ended September 30, 2024 was $7,289,000 The net loss primarily related to noncash items of $6,649,000. Noncash items included (i) depreciation of $2,000; (ii) stock based compensation of $1,088,000; (iii) net amortization of operating lease right of use asset of $175,000; (iv) issuance of common stock for services of $198,000; (v) noncash interest expense of $521,000; (vi) loss from change in fair value of warrant liability of $2,834,000; (vii) loss from change in fair value of earnout liability of $1,096,000; (viii) loss from change in fair value of convertible note of $142,000; and (ix) loss on note conversions of $593,000.
Previous wording
Liquidity is our ability to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures. We have incurred losses from operations in the past few years and had an accumulated deficit of $75.0 million as of June 30, 2025. In September 2024, we closed an $8.0 million public offering with approximately $7.3 million in net proceeds. In December 2024, we received net proceeds of approximately $7.4 million from the exercise of warrants related to an inducement offer agreement. We formally evaluated our liquidity and cash position in August 2025 when preparing the June 30, 2025 Form 10-Q consolidated financial statements. During this process, we analyzed our cash requirements and operations at least through August 2026 and determined that, based upon our current available cash and operations, we have no substantial doubt about our ability to continue as a going concern. Our assessment of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties. Our actual results could vary as a result of our near and long-term future capital requirements that will depend on many factors.
Current wording
Liquidity is our ability to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures. We have incurred losses from operations in the past few years and had an accumulated deficit of $68.6 million as of September 30, 2025. In September 2024, we closed an $8.0 million public offering with approximately $7.3 million in net proceeds. In December 2024, we received net proceeds of approximately $7.4 million from the exercise of warrants related to an inducement offer agreement. In October 2025, we received net proceeds of approximately $9.7 million from the exercise of warrants related to an inducement offer agreement. We formally evaluated our liquidity and cash position in November 2025 when preparing the September 30, 2025 Form 10-Q consolidated financial statements. During this process, we analyzed our cash requirements and operations at least through November 2026 and determined that, based upon our current available cash and operations, we have no substantial doubt about our ability to continue as a going concern. Our assessment of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties. Our actual results could vary as a result of our near and long-term future capital requirements that will depend on many factors.
Previous wording
Net cash used in operating activities for the six months ended June 30, 2025 was $3,919,000. This amount was primarily related to (i) net loss of $49,000; (ii) net working capital reductions of $1,301,000 (including a $606,000 reduction in deferred revenues); and offset by (iii) noncash items of $2,569,000. Noncash items included (iv) gain from change in warrant liability of $1,027,000; (v) gain from change in earnout liability of 2,522,000; and offset by (vi) stock based compensation of $800,000; and (vii) net amortization of operating lease right of use asset of $180,000.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2025 was $4,502,000. This amount was primarily related to (i) net income of $6,361,000; (ii) net working capital changes of $476,000 (including a $1,211,000 reduction in deferred revenues); and offset by (iii) noncash items of $11,339,000. Noncash items included (iv) gain from change in warrant liability of $6,359,000; (v) gain from change in earnout liability of $6,415,000; and offset by (vi) stock based compensation of $1,156,000 and (vii) net amortization of operating lease right of use asset of $278,000.
Previous wording
Net cash used in operating activities for the six months ended June 30, 2024 was $4,147,000. This amount was primarily related to (i) net loss of $13,502,000; and (ii) net working capital reductions of $4,632,000; offset by (iii) noncash items of $13,987,000. Noncash items included (iv) depreciation of $2,000; (v) stock based compensation of $531,000; (vi) net amortization of operating lease right of use asset of $151,000; (vii) issuance of common stock for services of $198,000; (viii) noncash interest expense of $521,000; (ix) loss from change in warrant liability of $5,305,000; (x) loss from change in earnout liability of $6,608,000; (xi) loss from change in fair value of convertible note of $512,000; and (xii) loss on note conversions of $159,000.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2024 was $4,398,000. This amount was primarily related to (i) net loss of $7,289,000; and (ii) net working capital reductions of $3,758,000 (including a $2,059,000 reduction in deferred revenues); offset by (iii) noncash items of $6,649,000. Noncash items included (iv) depreciation of $2,000; (v) stock based compensation of $1,088,000; (vi) net amortization of operating lease right of use asset of $175,000; (vii) issuance of common stock for services of $198,000; (viii) noncash interest expense of $521,000; (ix) loss from change in warrant liability of $2,834,000; (x) loss from change in earnout liability of $1,096,000; (xi) loss from change in fair value of convertible note of $142,000; and (xii) loss on note conversions of $593,000.
Previous wording
Net cash used in financing activities for the six months ended June 30, 2025 was $1,182,000 and consisted of (i) repayment of advances by founders of $1,300,000; and offset by (ii) net proceeds from exercise of warrants of $60,000; and (iii) proceeds from stock option exercises of $58,000.
Current wording
Net cash used in financing activities for the nine months ended September 30, 2025 was $1,149,000 and consisted of (i) repayment of advances by founders of $1,300,000; and offset by (ii) net proceeds from exercise of warrants of $60,000; and (iii) proceeds from stock option exercises of $91,000.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2024 was $1,240,000 and consisted of (i) proceeds from warrant exercise of $293,000; (ii) advances from founders of $800,000; and (iii) proceeds from stock option exercises of $147,000.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2024 was $7,780,000 and consisted of (i) proceeds from offering of $7,290,000; (ii) proceeds from exercise of warrants of $294,000; and (iii) proceeds from stock option exercises of $196,000.
Previous wording
We believe that the significant accounting policies described in “Note 2, Summary of Significant Accounting Policies” to our audited consolidated financial statements are accurate and complete. The critical accounting estimates and policies during the six months ended June 30, 2025 have not materially changed to those discussed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Current wording
We believe that the significant accounting policies described in “Note 2, Summary of Significant Accounting Policies” to our audited consolidated financial statements are accurate and complete. The critical accounting estimates and policies during the nine months ended September 30, 2025 have not materially changed to those discussed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Net Revenues — Net revenues for the six months ended June 30, 2025 decreased $9,326,000 to $7,650,000 as compared to $16,976,000 for the six months ended June 30, 2024, as a result of purchase orders from various federal government agency customers totaling over $13 million which we primarily shipped in the six months ended June 30, 2024.