10-K: Mobix Labs' 2025 Annual Report: Losses Persist Amid Growth Strategy

Mobix Labs reports continued operating losses and substantial doubt about its going concern ability, despite revenue growth driven by strategic acquisitions.

Summary

• Mobix Labs designs, develops, and sells components and systems for advanced wireless and wired connectivity, RF, switching, and EMI filtering technologies for defense, aerospace, commercial, industrial, and medical markets.
• The company completed a merger with Chavant Capital Acquisition Corp. on December 21, 2023, becoming Mobix Labs, Inc.
• Strategic acquisitions included EMI Solutions, Inc. (December 18, 2023) and RaGE Systems, Inc. (May 21, 2024), expanding product offerings and customer base.
• Net revenue increased by 54% to $9,912 thousand in fiscal year 2025 from $6,442 thousand in 2024, driven by a 609% surge in services revenue.
• Gross profit increased by 96% to $5,007 thousand in 2025 from $2,552 thousand in 2024.
• Operating losses improved by 19% to $37,693 thousand in 2025 from $46,395 thousand in 2024, but net loss worsened by 130% to $46,131 thousand from $20,034 thousand.
• The accumulated deficit reached $150,588 thousand as of September 30, 2025.
• Management has expressed substantial doubt about the company's ability to continue as a going concern due to inadequate liquidity.
• Sales to Leidos Holdings, Inc. accounted for approximately 50% of net revenues in fiscal year 2025.
• The company is addressing material weaknesses in its internal control over financial reporting.
• Mobix Labs faces Nasdaq listing compliance issues related to minimum bid price and market value of listed securities.
• Subsequent to the fiscal year end, the company entered into an At The Market Offering Agreement to sell up to $15,800 thousand in Class A Common Stock and completed a public offering of 30,000,000 shares at $0.20 per share, raising approximately $5,135 thousand net proceeds on January 6, 2026.

Sentiment

Score: 3

Explanation: While the company shows revenue growth and strategic acquisitions, the significant and increasing net losses, accumulated deficit, explicit 'going concern' doubt, and ongoing Nasdaq compliance issues indicate a highly precarious financial position. The capital raises are necessary for survival rather than growth from a position of strength.

Positives

• Net revenue increased significantly by 54% year-over-year to $9,912 thousand, with services revenue growing by 609%.
• Gross profit increased by 96% year-over-year to $5,007 thousand.
• Operating losses decreased by 19% to $37,693 thousand in 2025, indicating some operational efficiency improvements.
• Strategic acquisitions of EMI Solutions and RaGE Systems expanded the product portfolio, customer base, and market expertise in defense, aerospace, commercial, industrial, and medical sectors.
• The company possesses an extensive intellectual property portfolio, including patents and trade secrets, providing a competitive advantage.
• A diversified business model serves both commercial and government markets, aiming to reduce dependence on a single sector.
• Positioned as a U.S.-based supplier of interconnect products, which is preferred by certain defense customers due to quality and pricing considerations.

Negatives

• The company incurred a net loss of $46,131 thousand for fiscal year 2025, a 130% increase from $20,034 thousand in 2024.
• An accumulated deficit of $150,588 thousand as of September 30, 2025, highlights persistent unprofitability.
• Management has stated "substantial doubt concerning our ability to continue as a going concern" due to inadequate liquidity to meet operating needs for at least the next twelve months.
• Working capital deficit increased to $21,071 thousand as of September 30, 2025, from $20,836 thousand in 2024.
• High reliance on a single customer, Leidos Holdings, Inc., which accounted for approximately 50% of net revenues in fiscal year 2025, poses a significant concentration risk.
• Identified material weaknesses in internal control over financial reporting, including insufficient accounting personnel, ineffective risk assessment, and lack of formal accounting policies and IT general controls.
• The company is non-compliant with Nasdaq listing rules regarding minimum bid price and minimum market value of listed securities, facing potential delisting.
• Financing costs expensed increased by 151% to $7,266 thousand in 2025, reflecting costs associated with warrant exercise inducements and offerings.
• Significant debt obligations, with $5,086 thousand due within one year as of September 30, 2025.

Risks

• The company is an early-stage entity, making future prospects and challenges difficult to evaluate, including the ability to develop and commercialize new products and sustain sales.
• Inability to achieve or maintain profitability, leading to continued losses and substantial doubt about the company's ability to continue as a going concern.
• The need to raise additional capital in the future, which may not be available on acceptable terms or at all, potentially leading to significant dilution for existing stockholders.
• Risk of failing to successfully acquire or integrate new businesses, products, and technology, or to realize expected benefits from acquisitions.
• Dependence on customers achieving widespread market acceptance of their products that incorporate Mobix Labs' solutions.
• Products generally require a lengthy qualification process with customers, which does not guarantee sales.
• Markets for mmWave wireless semiconductor products are still developing and may not grow at the anticipated speed and scale.
• Inability to effectively execute growth strategies could adversely affect the business.
• Highly competitive markets for semiconductor products and solutions, with some competitors possessing substantially greater resources.
• Intense competition in the interconnect products market.
• Future success is dependent on the ability to successfully introduce new products and solutions that meet evolving customer needs.
• Consolidation or vertical integration among customers could adversely affect financial results.
• Reliance on a limited number of customers, with the loss of any key customer having a material adverse effect.
• Absence of long-term purchase commitments and the risk of unilateral order cancellations by customers.
• Defects in products or poor design and engineering solutions could result in lost sales and substantial liability.
• Dependence on third-party offshore suppliers for components and materials, exposing the company to supply chain disruptions, political/economic instability, and currency risks.
• Inflation and unfavorable global economic conditions could adversely affect the business, financial condition, or results of operations.
• Inability to manage the expected growth in the scale and complexity of operations could lead to underperformance.
• Failure to comply with applicable laws and regulations, including export control and import laws, could result in investigations, sanctions, and penalties.
• Changes to trade policy, tariffs, and import/export regulations may have a material adverse effect on the business.
• Future success depends on the ability to retain key employees and attract qualified personnel.
• Identified material weaknesses in internal control over financial reporting could impair accurate and timely financial reporting.
• Risk of security breaches involving IT systems, intellectual property, or other confidential information.
• Intellectual property or other types of litigation and administrative proceedings could consume substantial resources and distract personnel.
• Compliance with additional regulatory requirements for military and aerospace customers may increase costs.
• Potential adverse effects from violations of applicable anti-corruption laws or internal policies.
• Intellectual property applications may not be issued or granted, or may take longer than expected, affecting the ability to enforce rights.
• Failure to protect intellectual property could adversely affect the business.
• Subject to state, federal, and international privacy and data protection laws and regulations.
• The market price of the company's securities is volatile.
• Risk of delisting from Nasdaq due to non-compliance with minimum bid price and market value of listed securities requirements.
• The dual class structure of Common Stock concentrates voting control with holders of Class B Common Stock (management/directors).
• Management has limited experience in operating a public company.
• Anticipated future dilution for stockholders from equity issuances for acquisitions, capital market transactions, or other purposes.
• No anticipated cash dividends on Class A Common Stock in the foreseeable future, making capital appreciation the sole source of gain.
• Future sales of Class A Common Stock may cause the market price to drop significantly.
• Unexpired Public Warrants may be redeemed prior to their exercise at a time disadvantageous to holders, potentially rendering them worthless.
• The terms of the Public Warrants may be amended in a manner adverse to warrant holders with the approval of a majority of outstanding Public Warrants.
• Exclusive forum provisions in the Charter and Bylaws may limit a stockholder's ability to bring claims in a preferred judicial forum.
• Delaware law and provisions in the Charter and Bylaws could make a takeover proposal more difficult.

Future Outlook

The company expects to continue incurring operating losses and negative cash flows for the foreseeable future due to ongoing investments in product development and expansion. It aims to raise additional debt or equity financing to fund operations, product development plans, capital expenditure requirements, and strategic investments, with the ultimate goal of achieving profitability. The company also intends to continue exploring accretive acquisition opportunities and accelerating technology development and innovation to expand into new end markets and geographies.

Management Comments

• We expect these demands create opportunities to develop new communication solutions for both domestic and international markets.
• We believe this presents an opportunity for us and our capabilities in the design, testing and manufacturing of multi-band, multi-spectral systems integrated with data processing and AI with machine leaning.
• We believe our design capabilities, IP, and products position us to be a strong supplier at both ends of the communications infrastructure market.
• We believe our technology, products, and acquisition strategy will serve as strong bases for growth in the markets we currently serve as well as enable us to penetrate new markets globally.
• We believe our ability to develop and produce market-leading products and services coupled with our deep knowledge of our customers and end markets will enable us to expand our domestic and international market share and continue to offer our customers high-value solutions.
• Our leadership team has significant experience and insight into growing advanced technology companies and executing strategic acquisitions to accelerate growth.
• We expect to continue to devote substantial resources to the development and acquisition of technology to be incorporated within our products and to product innovation and development.
• Management believes that there is substantial doubt concerning the Company’s ability to continue as a going concern as the Company currently does not have adequate liquidity to meet its operating needs and satisfy its obligations for at least the next twelve months.
• Notwithstanding the above, our management believes that the financial statements included in this Annual Report on Form 10-K present fairly in all material respects our financial position, results of operations and cash flows for the periods presented.

Industry Context

Mobix Labs operates in rapidly growing markets for wireless and wired connectivity, RF, switching, and EMI filtering technologies, driven by increasing demand for higher performance communication systems. Key industry trends include the evolution of 5G and beyond, the deployment of applications for artificial intelligence (AI), alternative reality (AR), virtual reality (VR), autonomous vehicles, and industrial Internet of Things (IoT), all necessitating higher bandwidth and more efficient communication networks. There is also increasing interest in energy-efficient, standards-based infrastructure. The sensing and detection market is expanding across security and medical applications, utilizing multi-spectral sensors, high-performance microelectronics, machine learning, and AI. The global EMI filter market is experiencing significant growth due to the increasing complexity of electronic systems and the proliferation of communication technologies, particularly in aerospace and defense. The satellite communications industry is seeing a push to converge broadband low earth orbit (LEO) SATCOM with terrestrial 5G and other technologies. The semiconductor industry, in which Mobix Labs competes, is highly competitive, characterized by high development and production costs, and is experiencing consolidation among market participants.

Comparison to Industry Standards

• The company expects its mmWave ICs, based on a complementary metal-oxide-semiconductor (CMOS) process, to allow for higher levels of integration, leading to more compact and cost-effective products, simplifying manufacturer designs and accelerating time to market, positioning it against competitors like Qualcomm Incorporated, NXP Semiconductors, N.V., Qorvo, Inc., Skyworks Solutions, Inc., and Analog Devices Inc.
• Mobix Labs' high-reliability EMI filters are designed to consistently meet or exceed performance requirements crucial for industries with a high cost of failure (e.g., military, aerospace, healthcare), distinguishing it from competitors such as Amphenol Corporation, Glenair, Inc., ITT Inc., and TE Connectivity Corporation, where only a limited number of companies are approved vendors for certain mission-critical solutions.
• Being a U.S.-based supplier of interconnect products provides a competitive advantage, particularly with defense industry customers who prefer domestic sourcing due to overall quality and pricing concerns related to global economic tensions and tariffs.

Corporate Governance

Legal Proceedings

• The company is subject to various claims, lawsuits, and other legal and administrative proceedings arising in the ordinary course of business, but does not believe any currently pending would have a material adverse effect on its business, operating results, cash flows, or financial condition.
• A financial advisor has asserted that the company owes additional funds in excess of amounts previously recognized, which the company disputes. No legal proceeding has been initiated in respect of this matter, and the ultimate resolution and potential loss are currently unable to be reasonably estimated.

Related Party Transactions

• The company has two outstanding 7% promissory notes with related parties, assumed in 2020 as part of an asset acquisition. During the year ended September 30, 2025, payment terms were extended through March 2027, with a remaining principal balance of $979 thousand payable on May 15, 2027.
• During the year ended September 30, 2024, the company entered into two promissory notes with an aggregate principal amount of $495 thousand with a related party. One note for $165 thousand was repaid in 2024, and the remaining $330 thousand note was repaid in 2025.

Stakeholder Impact

• Shareholders face significant dilution risk from ongoing and future equity issuances and capital raises, as well as potential delisting from Nasdaq due to non-compliance with listing standards. The dual-class stock structure concentrates voting power, limiting influence for Class A holders. No cash dividends are anticipated, making capital appreciation the sole source of potential gain.
• Employees are subject to the company's ability to attract and retain key personnel, with headcount reductions having occurred in fiscal year 2024. Stock-based compensation is a notable component of remuneration.
• Customers may experience lengthy product qualification processes and face risks related to the company's high reliance on a limited number of customers. Potential product defects or poor design could lead to lost sales or liability.
• Suppliers are exposed to the company's dependence on third-party offshore suppliers, which introduces risks of supply chain disruptions and price volatility.
• Creditors face elevated risk due to the company's significant debt obligations, a substantial portion of which is current, and the explicit 'going concern' doubt, raising concerns about the company's ability to satisfy its liabilities.

Next Steps

• Remediate identified material weaknesses in internal control over financial reporting.
• Regain compliance with Nasdaq listing requirements (minimum bid price and market value of listed securities).
• Continue to raise additional capital through sales of securities, issuance of debt, and/or related party advances to fund operations and strategic investments.
• Hold a special meeting of stockholders to obtain approval for Inducement Warrants.
• Continue to explore acquisition opportunities that can be accretive or fill technology gaps.
• Accelerate technology development and innovation for next-generation products.
• Expand into new end markets and geographies.

Key Dates

Recommendation

Mobix Labs is in a highly precarious financial position, explicitly stating "substantial doubt about its ability to continue as a going concern" due to inadequate liquidity. Despite revenue growth, net losses significantly increased, and the company carries a large accumulated deficit and working capital deficit. It is actively raising capital through dilutive offerings and debt, which are necessary for immediate survival rather than growth from a position of strength. The company also has identified material weaknesses in internal controls and is non-compliant with Nasdaq listing rules, facing potential delisting. These factors indicate a highly speculative and high-risk investment with significant downside potential, making it unsuitable for most investors.

Keywords

Mobix Labs, semiconductor, wireless connectivity, mmWave, RF technology, EMI filtering, defense industry, aerospace, medical applications, 5G communications, integrated circuits, corporate governance, financial reporting, Nasdaq compliance, capital raise, going concern, intellectual property, acquisitions, RaGE Systems, EMI Solutions, stock warrants, Class A Common Stock, Class B Common Stock, SEC filing, 10-K