What changed in this filing

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Item 1. Financial Statements

2025-05-07 compared with 2024-11-07 · 205 added, 215 removed, 380 unchanged (53% of the section changed)

4 unchanged sentences

(in thousands, except share and per share amounts)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

ASSETS (unaudited)

1 unchanged sentence

Cash and cash equivalents $ 48,600 $ 50,572

Marketable securities 35,369 58,477

Accounts receivable, net of allowance for credit losses of $ 1,035 and $ 1,168 as of September 30, 2024 and December 31, 2023, respectively

Accounts receivable, net of allowance for credit losses of $ 1,018 and $ 1,006 as of March 31, 2025 and December 31, 2024, respectively

23,197 21,624

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Authorized 30,000,000 shares;

21,255,231 and 21,066,899 shares issued at September 30, 2024 and December 31, 2023, respectively;

and 19,799,122 and 19,610,790 shares outstanding at September 30, 2024 and December 31, 2023, respectively

21,220,157 and 21,240,525 shares issued at March 31, 2025 and December 31, 2024, respectively;

and 19,733,230 and 19,784,416 shares outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 167,624 167,287

2 unchanged sentences

150,064 150,715

treasury stock at cost, common stock, 1,456,109 shares as of September 30, 2024 and December 31, 2023

treasury stock at cost, common stock, 1,486,927 and 1,456,109 shares as of March 31, 2025 and December 31, 2024, respectively.

( 12,253 ) ( 12,090 )

6 unchanged sentences

(in thousands, except earnings per share amounts, unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Three Months Ended

Service $ 21,642 $ 25,038

7 unchanged sentences

General and administrative 3,535 5,291

Goodwill impairment charge — 5,333 — 5,333

Long-lived assets impairment charge 1,137 657 1,137 657

Total costs and expenses 27,657 33,065

1 unchanged sentence

Interest income 567 911

Interest expense 2 — 2 —

Other income (expense), net 216 ( 121 ) ( 348 ) ( 583 )

Other expense, net ( 9 ) ( 198 )

Loss before income tax expense ( 1,685 ) ( 3,085 )

12 unchanged sentences

(in thousands, unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Three Months Ended

Net loss $ ( 1,710 ) $ ( 3,163 )

Other comprehensive loss, net of tax:

Unrealized gain on available-for-sale securities — — — 12

Foreign currency translation adjustment 722 229

Other comprehensive income (loss), net of tax (1)

134 ( 267 ) 328 ( 112 )

Other comprehensive income, net of tax (1)

Total comprehensive loss $ ( 988 ) $ ( 2,934 )

10 unchanged sentences

Shares Amount Shares Amount

Balance at June 30, 2024 21,170 $ 212 $ 166,490 $ ( 7,243 ) $ ( 3,991 ) ( 1,456 ) $ ( 12,090 ) $ 143,378

Balance at December 31, 2024 21,241 $ 212 $ 167,287 $ ( 12,752 ) $ ( 4,032 ) ( 1,456 ) $ ( 12,090 ) $ 138,625

Net loss — — — ( 1,710 ) — — — ( 1,710 )

1 unchanged sentence

Stock-based compensation — — 337 — — — — 337

Acquisition of treasury stock — — — — — ( 31 ) ( 163 ) ( 163 )

Exercise of stock options and issuance of restricted stock awards, net of forfeitures ( 21 ) — — — — — — —

Balance at September 30, 2024 21,255 $ 213 $ 166,874 $ ( 8,442 ) $ ( 3,857 ) ( 1,456 ) $ ( 12,090 ) $ 142,698

Balance at March 31, 2025 21,220 $ 212 $ 167,624 $ ( 14,462 ) $ ( 3,310 ) ( 1,487 ) $ ( 12,253 ) $ 137,811

Common Stock Additional

9 unchanged sentences

Exercise of stock options and issuance of restricted stock awards, net of forfeitures 114 1 11 — — — — 12

Balance at September 30, 2024 21,255 $ 213 $ 166,874 $ ( 8,442 ) $ ( 3,857 ) ( 1,456 ) $ ( 12,090 ) $ 142,698

Common Stock Additional

Capital Retained Earnings Accumulated

Comprehensive Loss Treasury Stock Total

Stockholders’

Shares Amount Shares Amount

Balance at June 30, 2023 20,969 $ 210 $ 163,690 $ 14,858 $ ( 3,955 ) ( 1,456 ) $ ( 12,090 ) $ 162,713

Net loss — — — ( 4,369 ) — — — ( 4,369 )

Other comprehensive loss — — — — ( 267 ) — — ( 267 )

Stock-based compensation — — 559 — — — — 559

Issuance of common stock under employee stock purchase plan 17 — 123 — — — — 123

Exercise of stock options and issuance of restricted stock awards, net of forfeitures 81 1 133 — — — — 134

Balance at September 30, 2023 21,067 $ 211 $ 164,505 $ 10,489 $ ( 4,222 ) ( 1,456 ) $ ( 12,090 ) $ 158,893

Common Stock Additional

Capital Retained Earnings Accumulated

Comprehensive Loss Treasury Stock Total

Stockholders’

Shares Amount Shares Amount

Balance at December 31, 2022 20,631 $ 206 $ 160,475 $ 13,718 $ ( 4,110 ) ( 1,433 ) $ ( 11,851 ) $ 158,438

Net loss — — — ( 3,229 ) — — — ( 3,229 )

Other comprehensive loss — — — — ( 112 ) — — ( 112 )

Stock-based compensation — — 1,433 — — — — 1,433

Issuance of common stock under employee stock purchase plan 17 — 123 — — — — 123

Acquisition of treasury stock — — — — — ( 23 ) ( 239 ) ( 239 )

Exercise of stock options and issuance of restricted stock awards, net of forfeitures 419 5 2,474 — — — — 2,479

Balance at September 30, 2023 21,067 $ 211 $ 164,505 $ 10,489 $ ( 4,222 ) ( 1,456 ) $ ( 12,090 ) $ 158,893

Balance at March 31, 2024 21,205 $ 212 $ 165,768 $ ( 4,867 ) $ ( 3,956 ) ( 1,456 ) $ ( 12,090 ) $ 145,067

See accompanying Notes to Unaudited Consolidated Financial Statements.

3 unchanged sentences

(in thousands, unaudited)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

3 unchanged sentences

Depreciation and amortization 2,888 3,247

Impairment charge to goodwill and long-lived assets 1,137 5,990

Deferred income taxes 46 36

Loss on disposals of fixed assets 1,850 511

(Gain) loss on disposals of fixed assets ( 27 ) 683

Compensation expense related to stock-based awards and employee stock purchase plan

Unrealized currency translation loss (gain) 280 ( 150 )

Unrealized currency translation loss 726 241

Changes in operating assets and liabilities:

10 unchanged sentences

Cash paid for acquisition of intangible asset ( 43 ) ( 10 )

Proceeds from sale of fixed assets 635 —

Purchases of marketable securities — ( 720 )

Maturities and sales of marketable securities — 4,000

Net cash provided by (used in) investing activities $ 16,507 $ ( 9,224 )

Net cash (used in) provided by investing activities $ ( 557 ) $ 871

Cash flows from financing activities:

1 unchanged sentence

Purchase of treasury stock ( 163 ) —

Payment of finance lease — ( 22 )

Net cash provided by financing activities $ 96 $ 2,343

Net cash (used in) provided by financing activities $ ( 162 ) $ 96

Effect of exchange rate changes on cash and cash equivalents 24 ( 28 )

Net increase (decrease) in cash and cash equivalents 3,102 ( 9,572 )

Net (decrease) increase in cash and cash equivalents ( 1,972 ) 147

Cash and cash equivalents at beginning of period 50,572 11,294

1 unchanged sentence

Supplemental disclosure of non-cash investing and financing activities:

Changes in accrued other and accounts payable related to property and equipment additions $ 31 $ 3

Amounts in accrued other and accounts payable related to property and equipment additions $ 186 $ 5

See accompanying Notes to Unaudited Consolidated Financial Statements.

7 unchanged sentences

KVH’s service sales primarily represent revenue earned from satellite Internet airtime services.

KVH provides, for monthly fixed and per-usage fees, satellite connectivity encompassing broadband Internet and VoIP services, to its TracNet H-series and TracPhone V-HTS series customers via KVH’s global high-throughput satellite (HTS) network.

KVH provides, for monthly fixed and per-usage fees, satellite connectivity encompassing broadband Internet and Voice over Internet Protocol (VoIP) services, to its TracNet® H-series and TracPhone® V-HTS series customers via KVH’s global high-throughput satellite (HTS) network.

Revenue from our cellular airtime service supplements KVH’s satellite-only airtime revenue following the July 2022 launch of the KVH ONE® hybrid network and TracNet H-series terminals.

This service and product combination integrates global satellite service with KVH-provided cellular service in more than 150 countries, along with shore-based Wi-Fi access.

In March 2023, KVH began selling Starlink terminals and in September 2023 became a Starlink authorized hardware and airtime reseller.

In March 2023, KVH began selling terminals for the Starlink Low Earth Orbit (LEO) service and in September 2023 became a Starlink authorized hardware and airtime reseller.

The May 2023 introduction of the KVH ONE OpenNet Program expanded access to KVH’s global HTS network and airtime services to non-KVH terminals for the first time.

KVH further expanded its LEO service and hardware portfolio in January 2025 with the launch of OneWeb service for maritime applications.

AgilePlans, KVH’s connectivity as a service offering, is a monthly subscription model that provides global connectivity to commercial maritime customers.

The subscription can include KVH VSAT terminals and data service, Starlink terminals and data service, KVH’s CommBox™ Edge Communications Gateway and associated service licensing, VoIP, daily news, subsidized shipping and installation, and global support for a monthly fee with no minimum contract commitment.

The subscription can include KVH VSAT terminals and data service, Starlink and OneWeb terminals and data service, KVH’s CommBox™ Edge Communications Gateway and associated service licensing, VoIP, daily news, subsidized shipping and installation, and global support for a monthly fee with no minimum contract commitment.

KVH offers AgilePlans subscribers a variety of airtime data plans with varying data speeds and fixed data usage levels with per megabyte overage charges.

These airtime plans are similar to those the Company offers to customers who elect to purchase or lease a TracNet H-series or TracPhone V-HTS series terminal.

These airtime plans are similar to those that the Company offers to customers who elect to purchase or lease a TracNet H-series, TracPhone V-HTS series, Starlink, or OneWeb terminal.

The Company recognizes the monthly AgilePlans subscription fee as service revenue over the service delivery period.

3 unchanged sentences

Since the Company retains ownership of the hardware, it does not accrue any warranty costs for AgilePlans hardware;

however, any maintenance costs on the hardware are expensed in the period these costs are incurred.

Service sales also include the distribution of commercially licensed entertainment, including news, sports, and movies to commercial customers in the maritime market through the KVH Media Group, along with supplemental value-added cybersecurity, email, and crew internet services.

In addition, KVH earns monthly usage fees from third-party satellite connectivity services, including VoIP, data and Internet services, provided to its Inmarsat and Iridium customers who choose to activate their subscriptions with KVH.

however, any maintenance or refurbishment costs on the hardware are expensed in the period these costs are incurred.

Service sales also include the distribution of commercially licensed entertainment, including movies, television programming, news, and music, to commercial customers in the maritime market through the KVH Media Group, along with supplemental value-added cybersecurity, email, and crew Internet services.

In addition, KVH earns monthly usage fees from third-party satellite connectivity services, including VoIP, data and Internet services, provided to its Viasat/Inmarsat and Iridium customers who choose to activate their subscriptions with KVH.

Service sales also include sales from product repairs and extended warranty sales.

KVH’s satellite-only and hybrid products enable marine customers to receive data, Voice over Internet Protocol (VoIP), and value-added services via satellite, cellular, and shore-based Wi-Fi networks onboard commercial, leisure, and military/government vessels.

KVH’s satellite-only and hybrid products enable marine customers to receive data, VoIP, and value-added services via satellite, cellular, and shore-based Wi-Fi networks onboard commercial, leisure, and military/government vessels.

In addition, the Company’s in-motion television terminals permit customers to receive live digital television via regional satellite services in marine vessels, recreational vehicles, buses and automobiles.

6 unchanged sentences

In February 2024, the Company announced a staged wind-down of its product manufacturing operations at its Middletown, Rhode Island location.

The Company expects that it will continue its product manufacturing activities in order to generate a targeted amount of inventory of maritime satellite connectivity and satellite television terminals to meet anticipated demand and that it will cease substantially all manufacturing activity by the end of 2025.

demand and that it will cease substantially all manufacturing activity by the end of 2025.

The Company expects to continue to facilitate customer transition to third-party hardware products compatible with its mobile satellite communications services.

Please see Note 17 for additional details surrounding the wind-down of the Company's manufacturing activities.

(2) Summary of Significant Accounting Policies

2023 10-K - Revision for Correction of Immaterial Errors

As stated in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, which was filed on March 15, 2024, the Company corrected for errors that were immaterial to its previously reported consolidated financial statements.

These errors were identified in connection with the preparation of the Company's consolidated financial statements for the year ended December 31, 2023, and related primarily to the adoption and implementation of Accounting Standards Codification (“ASC”) No.

606, Revenue from Contracts with Customers (“ASC 606”) on January 1, 2018, specifically, the assessment of performance obligations associated with the sales of antennas and airtime-related equipment.

The Company evaluated the materiality of these errors both qualitatively and quantitatively in accordance with Staff Accounting Bulletin (“SAB”) No.

99, Materiality, and SAB No.

108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements, and determined that the effect of these corrections was not material to the previously issued financial statements.

Therefore, the amounts in the previous period have been revised to reflect the correction of these errors.

Basis of Presentation

5 unchanged sentences

These consolidated interim financial statements do not include all disclosures associated with annual financial statements and accordingly should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2024 filed on March 10, 2025 with the Securities and Exchange Commission.

The results for the three and nine months ended September 30, 2024 are not necessarily indicative of operating results for the remainder of the year.

The results for the three months ended March 31, 2025 are not necessarily indicative of operating results for the remainder of the year.

Significant Estimates and Assumptions and Other Significant Non-Recurring Transactions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of sales and expenses during the reporting periods.

The estimates and assumptions used by management affect the Company’s revenue recognition, valuation of accounts receivable, valuation of inventory, expected future cash flows (including growth rates, discount rates, terminal values and other assumptions and estimates used to evaluate the recoverability of long-lived assets and goodwill), estimated fair values of long-lived assets (including goodwill, amortization methods and amortization periods), certain accrued expenses and other related charges, stock-based compensation, contingent liabilities, forfeitures and key valuation assumptions for its share-based awards, estimated fulfillment costs for warranty obligations, tax reserves and recoverability of the Company’s net deferred tax assets and related valuation allowance, and the valuation of right-of-use assets and lease liabilities.

The estimates and assumptions used by management affect the Company’s revenue recognition, valuation of accounts receivable, valuation of inventory, valuation of prepaid assets, expected future cash flows (including growth rates, discount rates, terminal values and other assumptions and estimates used to evaluate the recoverability of long-lived assets), estimated fair values of long-lived assets (including amortization methods and amortization periods), certain accrued expenses and other related charges, stock-based compensation, contingent liabilities, forfeitures and key valuation assumptions for its share-based awards, estimated fulfillment costs for warranty obligations, tax reserves and recoverability of the Company’s net deferred tax assets and related valuation allowance, and the valuation of right-of-use assets and lease liabilities.

Although the Company regularly assesses these estimates, actual results could differ materially from these estimates.

4 unchanged sentences

The Company also considers whether an active program to locate a buyer has been initiated, whether the asset is marketed actively for sale at a price that is reasonable in relation to its current fair value and whether actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

The Company initially measures an asset that is classified as held for sale at the lower of its carrying amount or fair value less

costs to sell.

The Company initially measures an asset that is classified as held for sale at the lower of its carrying amount or fair value less costs to sell.

Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met.

3 unchanged sentences

Foreign Currency Translation

The financial statements of the Company’s foreign subsidiaries located in Denmark, Singapore and Cyprus are maintained using the United States dollar as the functional currency.

The financial statements of the Company’s foreign subsidiaries located in Denmark, Singapore, Brazil and Cyprus are maintained using the United States dollar as the functional currency.

Exchange rates in effect on the date of the transaction are used to record monetary assets and liabilities.

1 unchanged sentence

Foreign currency exchange gains and losses are recognized within “other expense, net” in the accompanying consolidated statements of operations.

The Company recorded net foreign currency exchange gains and losses, which are comprised of both realized and unrealized foreign currency exchange gains and losses, in its accompanying consolidated statements of operations of $( 48 ) and $ 92 for the three months ended September 30, 2024 and 2023, respectively, and $( 317 ) and $( 18 ) for the nine months ended September 30, 2024 and 2023, respectively.

The financial statements of the Company’s foreign subsidiaries located in the United Kingdom, Brazil, Norway, India and Japan use the foreign subsidiaries’ respective local currencies as the functional currency.

The Company recorded net foreign currency exchange losses, which are comprised of both realized and unrealized foreign currency exchange gains and losses, in its accompanying consolidated statements of operations of $( 31 ) and $( 21 ) for the three months ended March 31, 2025 and 2024, respectively.

The financial statements of the Company’s foreign subsidiaries located in the United Kingdom, Norway, India and Japan use the foreign subsidiaries’ respective local currencies as the functional currency.

The Company translates the assets and liabilities of these foreign subsidiaries at the exchange rates in effect at the end of each reporting period.

2 unchanged sentences

(3) Recently Issued Accounting Standards and Accounting Standards Not yet Adopted

There are no recent accounting pronouncements that have been issued by the FASB, that are not yet effective and that the Company expects would have a material impact on the Company's financial statements.

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The amendments in this ASU apply to all entities that are subject to Topic 740, Income Taxes.

The amendments require public business entities to disclose specific categories in their tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

These amendments also require all entities to disclose income taxes paid, net of refunds received, disaggregated by federal, state, and foreign taxes and by individual jurisdictions in which income taxes paid, net of refunds received, are equal to or greater than five percent of total income taxes paid.

For public business entities, the amendments in this ASU are effective for annual periods beginning after December 15, 2024.

The amendments in this ASU should be applied on a prospective basis.

The adoption of ASU No.

2023-09 is not expected to have a material impact on the Company’s financial statements, including disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The standard requires public business entities to provide further disaggregated information of relevant expense captions within its consolidated statements of operations.

The standard is effective for annual periods beginning after December 15, 2026 and interim periods within annual periods beginning after December 15, 2027.

The standard may be applied prospectively or retrospectively.

The adoption will result in disclosure changes only.

There are no other recent accounting pronouncements that have been issued by the FASB that are not yet effective and that the Company expects would have a material impact on the Company’s financial statements, including disclosures.

(4) Marketable Securities

Marketable securities as of September 30, 2024 and December 31, 2023 consisted of the following:

September 30, 2024 Amortized

Money market mutual funds $ 35,369 $ — $ — $ 35,369

Total marketable securities designated as available-for-sale $ 35,369 $ — $ — $ 35,369

December 31, 2023 Amortized

Money market mutual funds $ 58,477 $ — $ — $ 58,477

Total marketable securities designated as available-for-sale $ 58,477 $ — $ — $ 58,477

Interest income from marketable securities was $ 466 and $ 744 during the three months ended September 30, 2024 and 2023, respectively, and $ 1,892 and $ 2,019 during the nine months ended September 30, 2024 and 2023, respectively.

In the fourth quarter of 2024, the balance of our marketable securities held by Wells Fargo was liquidated and transferred to an interest-bearing account held by Bank of America, N.A.

Interest income from marketable securities was $ 0 and $ 720 during the three months ended March 31, 2025 and 2024, respectively.

We held no marketable securities as of March 31, 2025 and December 31, 2024.

(5) Stockholder's Equity

1 unchanged sentence

The Company recognizes stock-based compensation in accordance with the provisions of ASC Topic 718, Compensation-Stock Compensation .

Stock-based compensation expense was $ 384 and $ 558 , excluding $ 1 and $ 1 of compensation charges related to our Amended and Restated 1996 Employee Stock Purchase Plan, or the ESPP, for the three months ended September 30, 2024 and 2023, respectively, and $ 1,622 and $ 1,408 , excluding $ 7 and $ 25 of compensation shares related to the ESPP, for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, there was $ 1,428 of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 2.61 years.

As of September 30, 2024, there was $ 2,002 of total unrecognized compensation expense related to restricted stock awards, which is expected to be recognized over a weighted-average period of 2.22 years.

Stock-based compensation expense was $ 335 and $ 517 , excluding $ 2 and $ 5 of compensation shares related to the employee stock purchase plan (ESPP), for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, there was $ 2,005 of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 3.20 years.

As of March 31, 2025, there was $ 1,227 of total unrecognized compensation expense related to restricted stock awards, which is expected to be recognized over a weighted-average period of 1.83 years.

Stock Options

During the three months ended September 30, 2024, the company issued no shares of common stock upon the exercise of stock options.

No shares were surrendered to the Company to satisfy minimum tax withholding obligations.

Additionally, during the three months ended September 30, 2024, no stock options were granted and 230 stock options expired, were canceled or were forfeited.

During the nine months ended September 30, 2024, the Company issued no shares of common stock upon the exercise of stock options.

No shares were surrendered to the Company to satisfy minimum tax withholding obligations.

Additionally, during the nine months ended September 30, 2024, 266 stock options were granted and 501 stock options expired, were canceled or were forfeited.

During the nine months ended September 30, 2023, 317 stock options were granted and 564 stock options expired, were canceled or were forfeited.

During the three months ended March 31, 2025, the Company issued less than 1 shares of common stock upon the exercise of stock options.

Additionally, during the three months ended March 31, 2025, 525 stock options were granted and 63 stock options expired, were canceled or were forfeited.

During the three months ended March 31, 2024, no shares of common stock were issued upon the exercise of stock options.

Additionally, during the three months ended March 31, 2024, 266 stock options were granted and 14 stock options expired, were canceled or were forfeited.

The Company has historically estimated the fair value of each option grant on the date of grant using the Black-Scholes option-pricing model.

The weighted average assumptions utilized to determine the fair value of options granted during the nine months ended September 30, 2024 and 2023 are as follows:

Nine Months Ended September 30,

The weighted average assumptions utilized to determine the fair value of options granted during the three months ended March 31, 2025 and 2024 are as follows:

Three Months Ended March 31,

Risk-free interest rate 3.95 % 4.36 %

2 unchanged sentences

Dividend yield 0 % 0 %

As of September 30, 2024, there were 995 options outstanding with a weighted average exercise price of $ 8.23 per share and 410 options exercisable with a weighted average exercise price of $ 9.32 per share.

As of March 31, 2025, there were 1,415 options outstanding with a weighted average exercise price of $ 7.33 per share and 531 options exercisable with a weighted average exercise price of $ 9.02 per share.

As of March 31, 2024, there were 1,482 options outstanding with a weighted average exercise price of $ 8.75 per share and 641 options exercisable with a weighted average exercise price of $ 9.86 per share.

Restricted Stock

During the three months ended September 30, 2024, 85 shares of restricted stock were granted with a weighted average grant date fair value of $ 4.51 per share, and no shares of restricted stock were forfeited.

Additionally, during the three months ended September 30, 2024, 16 shares of restricted stock vested.

During the nine months ended September 30, 2024, 207 shares of restricted stock were granted with a weighted average grant date fair value of $ 4.82 per share, and 43 shares of restricted stock were forfeited.

Additionally, during the nine months ended September 30, 2024, 158 shares of restricted stock vested.

As of September 30, 2024, the Company had no unvested outstanding options and no outstanding shares of restricted stock that were subject to performance-based or market-based vesting conditions.

During the three months ended March 31, 2025, no shares of restricted stock were granted and 21 shares of restricted stock were forfeited.

Additionally, during the three months ended March 31, 2025, 83 shares of restricted stock vested.

During the three months ended March 31, 2024, 122 shares of restricted stock were granted with a weighted average grant date fair value of $ 5.03 per share and 8 shares of restricted stock were forfeited.

Additionally, during the three months ended March 31, 2024, 66 shares of restricted stock vested.

As of March 31, 2025 and 2024, the Company had no unvested outstanding options and no outstanding shares of restricted stock that were subject to performance-based or market-based vesting conditions.

(b) Employee Stock Purchase Plan

The Company's ESPP affords eligible employees the right to purchase common stock, via payroll deductions, through various offering periods at a purchase price equal to 85 % of the fair market value of the common stock on the first or last day of the offering period, whichever is lower.

During the three months ended September 30, 2024 and 2023, 0 and 17 shares were issued under the ESPP plan, respectively.

During the nine months ended September 30, 2024 and 2023, 24 and 17 shares were issued under the ESPP plan, respectively.

The Company recorded compensation charges related to the ESPP of $ 1 for both the three months ended September 30, 2024 and 2023, and $ 7 and $ 25 for the nine months ended September 30, 2024 and 2023, respectively.

During the three months ended March 31, 2025 and 2024, 0 and 24 shares were issued under the ESPP plan, respectively.

The Company recorded compensation charges related to the ESPP of $ 2 and $ 5 for the three months ended March 31, 2025 and 2024, respectively.

The following table presents stock-based compensation expense, including expense for the ESPP, in the Company's consolidated statements of operations for the nine months ended September 30, 2024 and 2023, respectively:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

The following table presents stock-based compensation expense, including expense for the ESPP, in the Company's consolidated statements of operations for the three months ended March 31, 2025 and 2024, respectively:

Three Months Ended March 31,

Cost of service sales $ 7 $ 7

3 unchanged sentences

General and administrative 297 346

$ 385 $ 559 $ 1,629 $ 1,433

(d) Accumulated Other Comprehensive Loss (AOCL)

Comprehensive loss includes net loss, unrealized gains and losses from foreign currency translation, and unrealized gains and losses on available for sale marketable securities.

The components of the Company’s comprehensive loss and the effect on earnings for the periods presented are detailed in the accompanying consolidated statements of comprehensive loss.

The balances for the three months ended September 30, 2024 and 2023 are as follows:

Comprehensive income (loss) includes net income (loss), unrealized gains and losses from foreign currency translation, and unrealized gains and losses on available for sale marketable securities.

The components of the Company’s comprehensive income (loss) and the effect on earnings for the periods presented are detailed in the accompanying consolidated statements of comprehensive income (loss).

The balances for the three months ended March 31, 2025 and 2024 are as follows:

Foreign Currency Translation Total Accumulated Other Comprehensive Loss

Balance, June 30, 2024 $ ( 3,991 ) $ ( 3,991 )

Balance, December 31, 2024 $ ( 4,032 ) $ ( 4,032 )

Other comprehensive income 722 722

Net other comprehensive income 722 722

Balance, September 30, 2024 $ ( 3,857 ) $ ( 3,857 )

Balance, March 31, 2025 $ ( 3,310 ) $ ( 3,310 )

Foreign Currency Translation Total Accumulated Other Comprehensive Loss

Balance, June 30, 2023 $ ( 3,955 ) $ ( 3,955 )

Other comprehensive loss ( 267 ) ( 267 )

Net other comprehensive loss ( 267 ) ( 267 )

Balance, September 30, 2023 $ ( 4,222 ) $ ( 4,222 )

The balances for the nine months ended September 30, 2024 and 2023 are as follows:

Foreign Currency Translation Unrealized Gain (Loss) on Available for Sale Marketable Securities Total Accumulated Other Comprehensive Loss

Balance, December 31, 2023 $ ( 4,185 ) $ ( 4,185 )

1 unchanged sentence

Net other comprehensive income 229 229

Balance, September 30, 2024 $ ( 3,857 ) $ — $ ( 3,857 )

Foreign Currency Translation Unrealized (Loss) Gain on Available for Sale Marketable Securities Total Accumulated Other Comprehensive Loss

Balance, December 31, 2022 $ ( 4,098 ) $ ( 12 ) $ ( 4,110 )

Other comprehensive (loss) income ( 124 ) 12 ( 112 )

Net other comprehensive (loss) income ( 124 ) 12 ( 112 )

Balance, September 30, 2023 $ ( 4,222 ) $ — $ ( 4,222 )

Balance, March 31, 2024 $ ( 3,956 ) $ ( 3,956 )

(6) Net Loss per Common Share

1 unchanged sentence

Diluted net income per share incorporates the dilutive effect of common stock equivalent options, warrants and other convertible securities, if any, as determined with the treasury stock accounting method.

For the three and nine months ended September 30, 2024, since there was a net loss, the company excluded all 1,165 and 1,088 , respectively, in outstanding stock options and non-vested restricted shares from its diluted loss per share calculation, as inclusion of these convertible securities would have reduced the net loss per share.

For the three and nine months ended September 30, 2023, since there was a net loss, the company excluded all 1,572 and 1,053 , respectively, in outstanding stock options and non-vested restricted shares from its diluted loss per share calculation, as inclusion of these convertible securities would have reduced the net loss per share.

For the three months ended March 31, 2025 and 2024 since there was a net loss, the company excluded 1,141 and 1,584 shares, respectively, in outstanding stock options and non-vested restricted shares from its diluted loss per share calculation, as inclusion of these convertible securities would have reduced the net loss per share.

A reconciliation of the basic and diluted weighted average common shares outstanding is as follows:

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Three Months Ended

Weighted average common shares outstanding—basic 19,492 19,286

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Inventories are stated at the lower of cost or net realizable value using the first-in first-out costing method.

Inventories as of September 30, 2024 and December 31, 2023 include the costs of material, labor, and factory overhead.

Inventories as of March 31, 2025 and December 31, 2024 include the costs of material, labor, and factory overhead.

Components of inventories consist of the following:

September 30,

2025 December 31,

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(8) Prepaid Expenses and Other Current Assets

September 30,

2025 December 31,

3 unchanged sentences

During the second quarter of 2024, KVH expanded its relationship with Starlink through a bulk data distribution agreement.

Under the agreement, KVH prepaid for access to a large block of Starlink Mobile Priority data at favorable rates.

The new agreement offers KVH increased flexibility in the development and sales of custom, cost-effective airtime plans using Starlink’s Mobile Priority service.

Under the agreement, KVH prepaid for access to a large block of Starlink Global Priority data at favorable rates.

The new agreement offers KVH increased flexibility in the development and sales of custom, cost-effective airtime plans using Starlink’s Global Priority service.

KVH began drawing from this prepaid pooled data in the third quarter of 2024.

(9) Property and Equipment

Property and equipment, net, as of September 30, 2024 and December 31, 2023 consist of the following:

September 30,

Property and equipment, net, as of March 31, 2025 and December 31, 2024 consist of the following:

2025 December 31,

Land $ — $ 2,833

Building and improvements — 18,839

Leasehold improvements 338 336

6 unchanged sentences

$ 24,818 $ 27,014

Depreciation expense was $ 3,163 and $ 3,180 for the three months ended September 30, 2024 and 2023, respectively, and $ 9,947 and $ 9,952 for the nine months ended September 30, 2024 and 2023, respectively.

Depreciation expense was $ 2,784 and $ 3,147 for the three months ended March 31, 2025 and 2024, respectively.

Certain revenue-generating hardware assets are utilized by the Company in the delivery of the Company's airtime services, media and other content.

As of September 30, 2024 and December 31, 2023, the long-lived tangible assets related to the Company’s international subsidiaries were less than 10% of the Company’s long-lived tangible assets.

In the third quarter of 2024, the Company commenced its plan to sell the warehouse building and surface parking lot located at 75 Enterprise Center in Middletown, RI (“75 Enterprise Center”).

As of March 31, 2025 and December 31, 2024, the long-lived tangible assets related to the Company’s international subsidiaries were less than 10% of the Company’s long-lived tangible assets.

In the third quarter of 2024, the Company commenced its plan to sell the warehouse building and surface parking lot located at 75 Enterprise Center in Middletown, Rhode Island (“75 Enterprise Center”).

As of September 30, 2024, 75 Enterprise Center had a carrying value of approximately $ 7.8 million.

1 unchanged sentence

The estimated fair value was determined based upon the anticipated sales price of these assets based on current market conditions and assumptions made by management, less selling costs.

The Company recorded an impairment charge of $ 1.1 million during the three and nine months ended September 30, 2024, as the carrying value of 75 Enterprise Center at the time the asset for sale criteria were met exceeded the fair value less costs to sell.

Additionally, in the third quarter of 2024, the Company commenced its plan to sell the property, building, improvements, and land located at 50 Enterprise Center in Middletown, RI (“50 Enterprise Center”).

The Company recorded an impairment charge of $ 1.1 million during the year ended December 31, 2024, as the carrying value of 75 Enterprise Center at the time the asset for sale criteria were met exceeded the fair value less costs to sell.

As of September 30, 2024, 50 Enterprise Center had a carrying value of approximately $ 3.6 million.

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The estimated fair value of 50 Enterprise Center exceeds its carrying value.

In December 2024, the Company entered into an agreement to sell 50 Enterprise Center, subject to the buyer's right to terminate the agreement during an inspection period.

In January 2025, before the end of the inspection period, the Company received notice of termination from the buyer.

In March 2025, the Company entered into an agreement with another buyer to sell 50 Enterprise Center for $ 5.3 million.

Consummation of the transaction is subject to customary closing conditions.

Under the purchase agreement, the buyer has a 60-day inspection period and may terminate the agreement at any time before the end of the inspection period.

(10) Product Warranty

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The warranty period begins on the date of retail purchase or lease by the original purchaser.

The Company accrues estimated product warranty costs at the time of sale and any additional amounts are recorded when such costs are probable and can be reasonably estimated.

The Company also offers extended warranties on its products for up to five years, The Company accrues estimated product warranty costs at the time of sale and any additional amounts are recorded when such costs are probable and can be reasonably estimated.

Factors that affect the Company’s warranty liability include the number of units sold or leased, historical and anticipated rates of warranty repairs and the cost per repair.

Warranty and related costs are reflected within sales, marketing and support in the accompanying consolidated statements of operations.

As of September 30, 2024 and December 31, 2023, the Company had accrued product warranty costs of $ 584 and $ 828 , respectively.

As of March 31, 2025 and December 31, 2024, the Company had accrued product warranty costs of $ 707 and $ 607 , respectively.

The following table summarizes product warranty activity during 2025 and 2024:

Nine Months Ended

September 30,

Three Months Ended

Beginning balance $ 607 $ 828

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Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

The Company’s Level 1 assets are investments in money market mutual funds.

Quoted prices for similar assets or liabilities in active markets;

or observable prices that are based on observable market data, based on directly or indirectly market-corroborated inputs.

The Company has no Level 2 assets or liabilities.

Unobservable inputs that are supported by little or no market activity and are developed based on the best information available given the circumstances.

The Company has no Level 3 assets.

Assets and liabilities measured at fair value are based on the valuation techniques identified in the table below.

The following tables present financial assets and liabilities at September 30, 2024 and December 31, 2023 for which the Company measures fair value on a recurring basis, by level, within the fair value hierarchy:

September 30, 2024 Total Level 1 Level 2 Level 3 Valuation

Money market mutual funds $ 35,369 $ 35,369 $ — $ — (a)

December 31, 2023 Total Level 1 Level 2 Level 3 Valuation

Money market mutual funds $ 58,477 $ 58,477 $ — $ — (a)

(a) Market approach—prices and other relevant information generated by market transactions involving identical or comparable assets.

No financial assets or liabilities were measured at fair value based upon the ASC 820 fair value hierarchy as of March 31, 2025 or December 31, 2024.

The carrying amount of certain financial instruments approximates fair value due to their short-term, highly liquid nature.

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The Company's non-financial assets, such as intangible assets, and other long-lived assets resulting from business combinations, are measured at fair value using income approach valuation methodologies at the date of acquisition and subsequently re-measured if indications of impairment exist.

There was a $ 1.1 million impairment of the Company's long-lived assets during the nine months ended September 30, 2024 and none during the nine months ended September 30, 2023.

See note 9 for further discussion.

There was no impairment of the Company's non-financial assets noted during the three months ended March 31, 2025 or 2024.

The Company does not have any liabilities that are recorded at fair value on a non-recurring basis.

(13) Intangible Assets

Intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.

Recoverability of intangible assets is measured by a comparison of the carrying amount of an asset group to its future undiscounted cash flows.

If these comparisons indicate that an asset group is not recoverable, the Company will recognize an impairment loss for the amount by which the carrying value of the asset group exceeds its related estimated fair value.

Intangible assets with finite lives and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of intangible assets with finite lives and other long-lived assets is measured by a comparison of the carrying amount of an asset or asset group to future undiscounted cash flows expected to be generated by the asset or asset group.

Asset groups are determined at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

If these comparisons indicate that an asset is not recoverable, the Company will recognize an impairment loss for the amount by which the carrying value of the asset or asset group exceeds its related estimated fair value.

The Company has determined that the assets within each of the Company's reporting units (Mobile Broadband (MBB) and KVH Media Group (Media)) are highly interrelated and interdependent on each other to generate revenues, and thus independent cash flows are not identifiable at a level lower than that of these reporting units.

Accordingly, the Company's asset groups were determined to be its reporting units (MBB and Media).

The changes in the carrying amount of intangible assets during the nine months ended September 30, 2024 are as follows:

The changes in the carrying amount of intangible assets during the three months ended March 31, 2025 are as follows:

Balance at December 31, 2024

1 unchanged sentence

Intangible assets acquired in asset acquisition 9

Balance at September 30, 2024

Balance at March 31, 2025

Intangible assets arose from the purchase of distribution rights from Kognitive Networks Inc.

and the purchase of KVH Industries Norway AS.

The assets related to the distribution rights with Kognitive Networks are being amortized on a straight-line basis over the estimated useful life of 3 years.

in October 2023 and the purchase of KVH Industries Norway AS in September 2010.

The assets that are related to the distribution rights from Kognitive Networks are being amortized on a straight-line basis over the estimated useful life of 3 years.

The assets related to the purchase of KVH Industries Norway AS for acquired intellectual property are fully amortized.

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Acquired intangible assets are subject to amortization.

The following table summarizes acquired intangible assets at September 30, 2024 and December 31, 2023, respectively:

The following table summarizes acquired intangible assets at March 31, 2025 and December 31, 2024, respectively:

Gross Carrying Amount Accumulated Amortization Net Carrying Value

September 30, 2024

March 31, 2025

Subscriber relationships $ 60 $ 18 $ 42

7 unchanged sentences

$ 3,585 $ 2,757 $ 828

Amortization expense related to intangible assets was $ 102 and $ 19 for the three months ended September 30, 2024 and 2023, respectively, and $ 303 and $ 167 for the nine months ended September 30, 2024 and 2023, respectively.

Amortization expense related to intangible assets was $ 104 and $ 100 for the three months ended March 31, 2025 and 2024, respectively.

Amortization expense was categorized as general and administrative expense.

As of September 30, 2024, the total weighted average remaining useful lives of the definite-lived intangible assets was 2.3 years.

Estimated future amortization expense for intangible assets recorded by the Company at September 30, 2024 is as follows:

As of March 31, 2025, the total weighted average remaining useful lives of the definite-lived intangible assets was 1.8 years.

Estimated future amortization expense for intangible assets recorded by the Company at March 31, 2025 is as follows:

Years ending December 31, Amortization

4 unchanged sentences

Disaggregation of Revenue

The following table summarizes net sales from contracts with customers for the nine months ended September 30, 2024 and 2023:

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

The following table summarizes net sales from contracts with customers for the three months ended March 31, 2025 and 2024:

Three Months Ended

Service - over time $ 21,642 $ 25,038

7 unchanged sentences

The Company offers a comprehensive family of mobile satellite antenna services and products that provide access to the Internet, television, and VoIP services while on the move.

Product sales accounted for 16 % and 11 % of the Company's consolidated net sales for the three months ended September 30, 2024 and 2023, respectively, and 15 % and 14 % of the Company's consolidated net sales for the nine months ended September 30, 2024 and 2023, respectively.

Service sales of VSAT Broadband airtime service accounted for 69 % and 83 % of the Company's consolidated net sales for the three months ended September 30, 2024 and 2023, respectively, and 74 % and 81 % of the Company's consolidated net sales for the nine months ended September 30, 2024 and 2023, respectively.

The balance of service sales is comprised of distribution of commercially licensed entertainment and news, product repairs, and extended warranty sales.

Service sales of airtime service accounted for approximately 79 % and 81 % of the Company's consolidated net sales for the three months ended March 31, 2025 and 2024, respectively.

The balance of service sales are comprised of distribution of commercially licensed entertainment and news, product repairs, and extended warranty sales.

Product sales accounted for 15 % and 14 % of the Company's consolidated net sales for the three months ended March 31, 2025 and 2024, respectively.

No other single product class accounts for 10% or more of the Company's consolidated net sales.

1 unchanged sentence

Revenues from international locations primarily include Singapore, Canada, South American countries, European Union countries and other European countries, and countries in Africa, the Middle East and Asia/Pacific, including India.

Revenues are based upon customer location, and revenues from international locations represented 71 % and 70 % of consolidated net sales for the three months ended September 30, 2024 and 2023, respectively, and 72 % and 67 % of consolidated net sales for the nine months ended September 30, 2024 and 2023, respectively.

Sales to Singapore customers represented 20 % and 18 % of the Company's consolidated net sales for the three months ended September 30, 2024 and 2023, respectively.

No other individual foreign country represented 10% or more of the Company's consolidated net sales for the three months ended September 30, 2024 or 2023.

Sales to Singapore customers represented 21 % and 18 % of the Company's consolidated net sales for the nine months ended September 30, 2024 and 2023, respectively.

No other individual foreign country represented 10% or more of the Company's consolidated net sales for the nine months ended September 30, 2024 or 2023.

Revenues are based upon customer location, and revenues from international locations represented 80 % and 72 % of consolidated net sales for the three months ended March 31, 2025 and 2024, respectively.

Sales to Singapore customers represented 23 % and 22 % of the Company's consolidated net sales for the three months ended March 31, 2025 and 2024, respectively.

No other individual foreign country represented 10% or more of the Company's consolidated net sales for the three months ended March 31, 2025 or 2024.

Business and Credit Concentrations

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The Company establishes allowances for credit losses and evaluates, on a monthly basis, the adequacy of those reserves based upon expected losses, historical experience and its expectation for future collectability concerns.

No single customer accounted for 10% or more of consolidated net sales for the nine months ended September 30, 2024 or 2023.

One customer accounted for approximately 24 % and 23 % of accounts receivable at September 30, 2024 and December 31, 2023, respectively.

One customer accounted for 52 % and 62 % of long-term accounts receivable included in other non-current assets on the consolidated balance sheets related to sales-type leases at September 30, 2024 and December 31, 2023, respectively.

One customer accounted for 13 % and 11 % of consolidated net sales for the three months ended March 31, 2025 and 2024, respectively.

No other customers accounted for 10% or more of consolidated net sales for the three months ended March 31, 2025 and 2024.

One customer accounted for approximately 21 % and 19 % of accounts receivable at March 31, 2025 and December 31, 2024, respectively.

One customer accounted for 39 % and 45 % of long-term accounts receivable included in other non-current assets on the consolidated balance sheets related to sales-type leases at March 31, 2025 and December 31, 2024, respectively.

Certain components from third parties used in the Company’s products are procured from single sources of supply.

1 unchanged sentence

(15) Income Taxes

The Company’s effective tax rate for the three and nine months ended September 30, 2024 was ( 4.4 )% and ( 1.9 )%, respectively, compared with ( 2.2 )% and ( 5.2 )%, for the corresponding periods in the prior year.

The Company’s effective tax rate for the three months ended March 31, 2025 was ( 1.5 )%, compared with ( 2.5 )%, for the corresponding period in the prior year.

The effective income tax rate is based on estimated income for the year, the estimated composition of the income in different jurisdictions and discrete adjustments, if any, in the applicable periods, including retroactive changes in tax legislation, settlements of tax audits or assessments, and the resolution or identification of tax position uncertainties.

For the three and nine months ended September 30, 2024 and 2023, the effective tax rates differed from the statutory tax rate primarily due to the Company maintaining a valuation allowance reserve on its U.S.

For the three months ended March 31, 2025 and 2024, the effective tax rates differed from the statutory tax rate primarily due to the Company maintaining a valuation allowance reserve on its U.S.

deferred tax assets, discrete tax adjustments and the composition of income from foreign jurisdictions taxed at lower rates.

As of September 30, 2024 and December 31, 2023, the Company had reserves for uncertain tax positions of $ 733 and $ 673 , respectively.

There were no material changes during the nine months ended September 30, 2024 to the Company’s reserve for uncertain tax positions.

The Company estimates that it is reasonably possible that the balance of unrecognized tax benefits as of September 30, 2024 may decrease $ 28 in the next twelve months as a result of a lapse of statutes of limitations and settlements with taxing authorities.

As of March 31, 2025 and December 31, 2024, the Company had reserves for uncertain tax positions of $ 745 and $ 724 , respectively.

There were no material changes during the three months ended March 31, 2025 to the Company’s reserve for uncertain tax positions.

The Company estimates that it is reasonably possible that the balance of unrecognized tax benefits as of March 31, 2025 may decrease $ 15 in the next twelve months as a result of a lapse of statutes of limitations and settlements with taxing authorities.

The Company’s tax jurisdictions include the United States, the United Kingdom, Denmark, Cyprus, Norway, Brazil, Singapore, Japan and India.

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The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment.

Lease expense was $ 376 and $ 417 for the three months ended September 30, 2024 and 2023, respectively, and $ 1,095 and $ 1,291 for the nine months ended September 30, 2024 and 2023, respectively.

Short-term operating lease costs were $ 20 and $ 15 for the three months ended September 30, 2024 and 2023, respectively, and $ 59 and $ 55 for the nine months ended September 30, 2024 and 2023, respectively.

Maturities of lease liabilities as of September 30, 2024 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:

Lease expense was $ 271 and $ 353 for the three months ended March 31, 2025 and 2024, respectively.

Short-term operating lease costs were $ 22 and $ 19 for the three months ended March 31, 2025 and 2024, respectively.

Maturities of lease liabilities as of March 31, 2025 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:

Remainder of 2025 $ 460

7 unchanged sentences

Weighted-average discount rate - operating leases 5.50 %

The Company enters into leases with certain customers primarily for the TracPhone VSAT systems.

The Company enters into leases with certain customers primarily for the TracPhone and TracNet VSAT systems.

These leases are classified as sales-type leases because title to the equipment transfers to the customer at the end of the lease term.

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The practical expedient also allows a lessor to account for the combined lease and non-lease components under ASC 606, Revenue from Contracts with Customers, when the non-lease component is the predominant element of the combined component.

The current portion of the net investment in these leases was $ 3,011 as of September 30, 2024 and the non-current portion of the net investment in these leases was $ 2,913 as of September 30, 2024.

The current portion of the net investment in these leases was $ 3,067 as of March 31, 2025 and the non-current portion of the net investment in these leases was $ 3,036 as of March 31, 2025.

The current portion of the net investment in the leases is included in accounts receivable, net of allowance for doubtful accounts on the accompanying consolidated balance sheets, and the non-current portion of the net investment in these leases is included in other non-current assets on the accompanying consolidated balance sheets.

Interest income from sales-type leases was $ 108 and $ 159 during the three months ended September 30, 2024 and 2023, respectively, and $ 354 and $ 501 during the nine months ended September 30, 2024 and 2023, respectively.

The future undiscounted cash flows from these leases as of September 30, 2024 are:

Interest income from sales-type leases was $ 102 and $ 129 during the three months ended March 31, 2025 and 2024, respectively.

The future undiscounted cash flows from these leases as of March 31, 2025 are:

Remainder of 2025 $ 2,776

4 unchanged sentences

As a result, and in light of other factors indicated in ASC 842, these leases are classified as operating leases.

As of September 30, 2024, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $ 1,824 and $ 1,174 , respectively.

As of March 31, 2025, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $ 1,767 and $ 1,352 , respectively.

They are depreciated on a straight-line basis over a five-year estimated useful life.

Depreciation expense for these assets was $ 95 and $ 282 for the three and nine months ended September 30, 2024, respectively.

Lease revenue recognized was $ 79 and $ 295 for the three and nine months ended September 30, 2024, respectively, in service sales in the consolidated statements of operations.

As of September 30, 2024, minimum future lease payments to be recognized on the operating leases are as follows:

Depreciation expense for these operating leases was $ 89 for the three months ended March 31, 2025.

Lease revenue recognized was $ 19 for the three months ended March 31, 2025, respectively, in service sales in the consolidated statements of operations.

As of March 31, 2025, minimum future lease payments to be recognized on the operating leases are as follows:

Remainder of 2025 $ 6

3 unchanged sentences

The Board concluded that the Company should discontinue its capital-intensive manufacturing activities and concentrate its efforts on growing sales of its multi-orbit, multi-channel, integrated communications solutions, which in recent years have constituted the largest portion of the Company’s overall revenues.

The Company expects that it will continue its product manufacturing activities for a period of time in order to generate a targeted amount of inventory of maritime satellite connectivity and satellite television terminals to meet anticipated demand and that it will cease substantially all manufacturing activity at the Middletown facility by the end of 2025.

The Company expects to continue to facilitate customer transition to third-party hardware products compatible with the Company’s mobile satellite communications services.

The Company also plans to continue to conduct maintenance, service, warehousing, shipping and receiving activities at the Middletown location.

The Company also plans to continue to conduct maintenance, refurbishment service, warehousing, shipping and receiving activities at the Middletown, Rhode Island location until the Company's anticipated relocation by early next year.

As part of this restructuring, the Company reduced its headcount by approximately 75 employees, or approximately 20 % of its total workforce as of the time the Company announced the restructuring.

As of June 30, 2024, all employee terminations were completed.

During the nine months ended September 30, 2024, the Company incurred $ 2.9 million of severance charges for this restructuring, which amount reflects a favorable $ 0.4 million correction in the three months ended September 30, 2024.

The $ 2.9 million of severance charges incurred during the nine months ended September 30, 2024 consisted of approximately $ 2.6 million of cash charges and approximately $ 0.3 million of non-cash charges arising from pre-existing contractual obligations to accelerate vesting of certain outstanding equity compensation awards.

In 2024, the Company incurred aggregate severance charges of approximately $ 3.9 million, consisting of approximately $ 3.6 million of cash charges and approximately $ 0.3 million of non-cash charges arising from pre-existing contractual obligations to accelerate vesting of certain outstanding equity compensation awards.

For the aggregate severance charges of approximately $ 3.9 million, the Company recorded in its consolidated statement of operations $ 0.9 million in cost of product sales, $ 1.4 million in research and development, $ 0.7 million in sales, marketing and support, and $ 0.8 million in general and administrative.

(18) Segment Information

The Company manages its operations as a single operating segment for the purpose of assessing performance and making operating decisions, resulting in a single reportable segment.

The Company has determined that its Chief Operating Decision Maker (CODM) is its Chief Executive Officer.

The CODM reviews the Company’s financial information on a consolidated basis for the purpose of allocating resources and assessing financial performance.

The key measure of segment profit or loss that the CODM uses to allocate resources and assess performance is the Company’s consolidated net income (loss).

This is reviewed against budgeted expectations to assess segment performance and allocate resources.

The Company’s segment net income for the three months ended March 31, 2025 and 2024 consisted of the following:

Three Months Ended

Service $ 21,642 $ 25,038

Product 3,772 4,229

Net Sales 25,414 29,267

Cost of service sales

VSAT airtime 11,196 13,207

LEO airtime 2,545 507

Other (1) 494 330

14,235 14,044

Cost of product sales

LEO 1,455 1,272

TracVision & land mobile

Other (2) 1,070 2,349

Research and development

Personnel costs 951 2,606

Professional fees 38 88

Other (3) 198 344

Sales, marketing and support

Personnel costs 3,231 3,583

Professional fees 220 167

Other (4) 1,509 1,634

General and administrative

Personnel costs 1,878 3,460

Professional fees 636 590

Other (5) 1,021 1,241

Other segment items (6) ( 533 ) ( 635 )

Net loss $ ( 1,710 ) $ ( 3,163 )

(1) Includes costs related to Inmarsat, service activations, content service, CommBox Edge and other miscellaneous

(2) Includes costs related to CommBox Edge, TracNet Coastal, obsolete inventory write-off and other miscellaneous

(3) Includes facilities and other less significant expenses

(4) Includes marketing expenses, external commissions, travel and entertainment, facilities expense, warranty expense and other less significant expenses

(5) Includes the financing fees, facilities expense, computer expenses, depreciation and amortization and other less significant expenses

(6) Other segment items includes interest income;

other expense, net;

and income tax expense line items on the face of the income statement

Regarding the Company's long-lived assets of $ 25,948 , $ 4,719 of these assets are located inside of the United States, while the remaining $ 21,229 are located outside of the United States.

Regarding the assets located outside of the United States, $ 7,128 are located in Singapore.

The geographic location of the Company's AgilePlans revenue-generating assets has been determined based upon the customer shipping address.

(19) Share Buyback Program

On December 9, 2024, the Board of Directors of the Company authorized a share repurchase program pursuant to which the Company may purchase outstanding shares of the Company’s common stock for an aggregate purchase price of up to $ 10 million.

Under the program, the Company, at management’s discretion, may repurchase shares from time to time through various means, including on the open market, in privately negotiated transactions or block transactions, or through an accelerated repurchase agreement.

The Company may elect to make purchases under Rule 10b-18 under the Securities Exchange Act of 1934, as amended, which imposes certain volume limitations, and/or under Rule 10b5-1 under that act, which would permit repurchases to occur during periods when the Company might otherwise be precluded from making purchases under insider trading laws or Company policy.

The volume and timing of any such repurchases will depend on a variety of factors, including the availability of shares, price, market conditions, alternative uses of capital, liquidity, general business conditions, satisfaction of debt covenants, and applicable regulatory requirements.

The program does not obligate the Company to repurchase any minimum number or dollar amount of shares, and the program may be modified, suspended or terminated at any time without prior notice.

During the three months ended March 31, 2025, the Company repurchased 31 shares of common stock in open market transactions at a cost of approximately $ 163 .

Except as noted above, there were no other repurchase programs outstanding.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements