MOBX

Business Context and Reporting Period

Company: Mobix Labs, Inc. (MOBX)

Filing Type: Form 10-Q (Unaudited)

Reporting Period: Quarter and six months ended March 31, 2025

Business Overview: Mobix Labs designs and sells components for advanced wireless connectivity, RF, switching, and EMI filtering technologies. The company operates in commercial, industrial, automotive, medical, aerospace, and defense sectors. Recent strategic moves include the acquisitions of EMI Solutions (Dec 2023) and RaGE Systems (May 2024) to expand its product portfolio in 5G and mmWave imaging.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Net revenue increased 119% quarter-over-quarter (QoQ) and 297% year-over-year (YoY) for the six-month period. This growth is primarily driven by the inclusion of RaGE Systems (acquired May 2024) and EMI Solutions (acquired Dec 2023) sales.
• Operating Expenses: Selling, General, and Administrative (SG&A) expenses increased 10% QoQ and 4% YoY (six months). Increases were driven by stock-based compensation, RaGE earn-out charges ($2.22 million for six months), and asset disposal losses. R&D expenses decreased 49% QoQ due to workforce reductions and lower outside service costs.
• Non-Operating Items: The company recognized significant non-cash gains from changes in the fair value of earnout liabilities and warrants, which partially offset the operating losses. Specifically, a $2.22 million gain on earnout liability and a $3.28 million gain on warrant fair value were recorded in the quarter.
• Liquidity: Cash balance increased from $0.27 million (Sep 30, 2024) to $0.78 million (Mar 31, 2025), primarily due to financing activities including the issuance of notes payable and common stock.

Guidance, Outlook, Risks, and Unusual Items

• Going Concern Warning: Management has expressed substantial doubt about the company's ability to continue as a going concern. The company does not have adequate liquidity to meet obligations beyond the next 90 days and requires additional financing.
• Nasdaq Compliance: On April 28, 2025, the company received delinquency notices from Nasdaq for failing to maintain the $1.00 minimum bid price and the $35 million Market Value of Listed Securities (MVLS). The company has until October 27, 2025, to regain compliance or face delisting.
• Recent Financing (Subsequent Event): In April 2025, the company completed a registered direct offering raising net proceeds of $3.65 million. This included the issuance of common stock and pre-funded warrants.
• Material Weaknesses: The company identified material weaknesses in internal controls over financial reporting, including insufficient segregation of duties, lack of formal accounting policies, and ineffective IT general controls. These weaknesses led to prior period adjustments.
• Customer Concentration: For the six months ended March 31, 2025, one customer accounted for 64% of net revenue. As of March 31, 2025, one customer represented 61% of accounts receivable.

Investor Verification Checklist

• Liquidity Runway: Verify the sufficiency of the $3.65 million raised in April 2025 against the stated 90-day liquidity constraint and ongoing burn rate.
• Nasdaq Compliance Plan: Review the specific strategy to regain compliance with the $1.00 bid price and $35 million MVLS requirements by October 2025.
• Debt Maturity: Confirm the repayment schedule for the $4.60 million in total debt, noting that $1.62 million is currently due.
• Internal Controls Remediation: Assess the progress of the remediation plan for material weaknesses in financial reporting and IT controls.
• Customer Dependency: Evaluate the risk associated with 64% of revenue coming from a single customer and the stability of that relationship.