What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-12 compared with 2025-08-13 · 231 added, 162 removed, 215 unchanged (65% of the section changed)

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events occur in the future.

strategy and primary business objective is to be a profitable, IP-rich fabless semiconductor company offering integrated circuits, or

ICs, antenna modules and related non-recurring engineering services.

We specialize in the development of mmWave semiconductors, primarily

in the unlicensed 60 GHz spectrum band for 802.11ad/ay-compliant devices and in the 28/39 GHz spectrum bands for 5G-compliant devices.

We derive our revenue from selling semiconductor devices, as well as antenna modules based on using those mmWave semiconductor devices.

We have pioneered a high-volume mmWave IC production test methodology using standard, low-cost production test equipment.

taken us several years to refine performance of this production test methodology, and we believe this places us in a leadership position

in addressing the operational challenges of delivering mmWave products into high-volume markets.

We also produce and sell complete mmWave

antenna modules.

The primary advantage provided by our antenna modules is that our proprietary mmWave ICs and the antenna are integrated

into a single device.

A differentiating characteristic of mmWave technology is that the RF amplifiers must be as close as possible to

the antenna to minimize loss.

With our module, we can guarantee the performance of the amplifier/antenna interface and simplify customers’

radio frequency, or RF, engineering, facilitating more opportunities for customer prospects that have not provided RF-type systems, as

well as shortening the time to market for new products.

Our strategy and primary business

objective is to be a profitable, IP-rich fabless semiconductor company offering integrated circuits, or ICs, antenna modules and related

non-recurring engineering services.

We specialize in the development of mmWave semiconductors, primarily in the unlicensed 60 GHz spectrum

band for 802.11ad/ay-compliant devices and in the 28/39 GHz spectrum bands for 5G-compliant devices.

We derive our revenue from selling

semiconductor devices, as well as antenna modules based on using those mmWave semiconductor devices.

We have pioneered a high-volume mmWave

IC production test methodology using standard, low-cost production test equipment.

It has taken us several years to refine performance

of this production test methodology, and we believe this places us in a leadership position in addressing the operational challenges of

delivering mmWave products into high-volume markets.

We also produce and sell complete mmWave antenna modules.

The primary advantage provided

by our antenna modules is that our proprietary mmWave ICs and the antenna are integrated into a single device.

A differentiating characteristic

of mmWave technology is that the RF amplifiers must be as close as possible to the antenna to minimize loss.

With our module, we can guarantee

the performance of the amplifier/antenna interface and simplify customers’ radio frequency, or RF, engineering, facilitating more

opportunities for customer prospects that have not provided RF-type systems, as well as shortening the time to market for new products.

We also had a memory product

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As a result, in May 2023,

we initiated an end-of-life, or EOL, of our memory IC products, and we fulfilled the backlog

and completed the final EOL shipments of our memory IC products in March 2025.

we initiated an end-of-life, or EOL, of our memory IC products, and, in March 2025, we fulfilled all then-outstanding EOL orders for our

memory IC products.

Since March 2025, we received additional purchase orders totaling approximately $452,800 from customers for remaining

We recorded approximately $72,000 of product revenue from these purchase orders during the three months ended September 30,

We incurred net losses of approximately

$2.3 million for the six months ended June 30, 2025 and $10.7 million for the year ended December 31, 2024, and we had an accumulated

deficit of approximately $179.4 million as of June 30, 2025.

$3.5 million for the nine months ended September 30, 2025 and $10.7 million for the year ended December 31, 2024, and we had an accumulated

deficit of approximately $180.6 million as of September 30, 2025.

These and prior year losses have resulted in significant negative

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Recent Developments

Compliance with Nasdaq Minimum Bid Price Requirement

On April 4, 2025, we received

a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing

bid price of our common stock for the 30 consecutive business days ending on April 3, 2025, we no longer met the requirement to maintain

a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5550(a)(2).

On June 18, 2025, we received a notification letter

from Nasdaq notifying us that we had regained compliance with the minimum bid price requirement.

Unsolicited, Non-binding Proposal from Mobix

Update on Strategic Review Process and Capital Strategy

Strategic Review Process

On June 27, 2025, we confirmed

in a public press release the receipt of an unsolicited, non-binding proposal from Mobix Labs, Inc.

(“Mobix”) to acquire all

of the Company’s issued and outstanding equity securities in exchange for newly issued shares of Mobix common stock, with a fixed

exchange ratio based on the average daily closing price of the Company’s common stock over the 30 calendar days ending on June 11,

2025, plus a 20% premium, or approximately $1.20 per share (the “Mobix Proposal”).

On July 11, 2025, we announced

that our board of directors (the “Board”) has authorized the exploration of strategic alternatives, including a merger, sale

of assets or other similar transaction, all intended to maximize stockholder value and further our business operations.

We retained Craig-Hallum

Capital Group LLC as our financial advisor to assist with the exploration process.

As part of this process, the Board is evaluating the

Mobix Proposal.

In addition, management is

pursuing a wide variety of potential funding arrangements to address our short-term cash needs and provide the capital necessary to support

our operations, while at the same time conserving cash by delaying or deferring certain expenditures.

There can be no assurance that the

exploration process will result in any strategic alternative, or as to its outcome or timing.

Additionally, there can be no assurance

that we will secure any financing arrangement or complete any capital transaction, that we will enter into negotiations with Mobix or

any third party, that the Mobix Proposal or any strategic alternative will result in a formal offer, or that any such offer or alternative

will ultimately lead to a completed transaction.

(“Mobix Labs”) to acquire

all of the Company’s issued and outstanding equity securities in exchange for newly issued shares of Mobix Labs common stock, with

a fixed exchange ratio based on the average daily closing price of our common stock over the 30 calendar days ending on June 11, 2025,

plus a 20% premium, or approximately $1.20 per share.

On July 11, 2025, we issued

a press release announcing the initiation of the strategic review process.

Following this, our financial advisor contacted potential counterparties

to invite them to participate in the process subject to such parties’ execution of our standard non-disclosure agreement, which

includes a standstill provision.

Our financial advisor also contacted Mobix Labs to request that Mobix Labs execute our non-disclosure

agreement in order to participate in the process, which Mobix Labs declined to execute.

On August 19, 2025, we issued

a public press release providing an update on our strategic review process, including our engagement with potential counterparties and

our continued openness to engaging with Mobix Labs and others, while noting that Mobix Labs declined to enter into our standard non-disclosure

agreement and indicated it would not agree to receive material non-public information (“MNPI”).

On September 8, 2025, we issued

a press release providing another update on our strategic review process, including regarding the two letters that we received from Mobix

Labs, dated as of September 4, 2025, and September 5, 2025, in connection with its unsolicited offer to acquire all outstanding shares

of the Company.

The September 4 letter included a revised acquisition proposal involving a combination of cash and stock consideration

in an undetermined amount, and a reiteration of Mobix Labs’ refusal to enter into a confidentiality agreement or receive MNPI from

The September 5 follow-up letter stated that while Mobix Labs continued to oppose any standstill restrictions, it would be willing

to consider a limited confidentiality arrangement to permit us to share MNPI deemed reasonably necessary, provided that such arrangement

did not include a standstill and did not indefinitely constrain Mobix Labs.

In response to such letters, we authorized a limited exploratory

call with Mobix Labs, and we requested that any such discussion take place without us sharing any MNPI and outside the bounds of a confidentiality

agreement, which exploratory call would serve to allow us to better understand Mobix Labs’ revised proposal and intentions.

On September 11, 2025, following

the limited exploratory call with Mobix Labs on September 10, 2025, Mobix Labs issued a public statement describing the discussions had

in such limited exploratory call and announcing an enhanced proposal of approximately 30% cash and 70% Mobix Labs common stock.

on September 12, 2025, we issued a press release to provide clarification to all stockholders relating to such public statements made

by Mobix Labs, including that we did not respond to Mobix Labs’ proposal and that we did not agree to continue discussions with

Mobix Labs during the call, and we sent a letter to Mobix Labs to clarify our position.

On September 13, 2025, Mobix

Labs filed a Form 425 with the SEC and issued a related press release announcing its intent to commence a hostile exchange offer to acquire

all outstanding shares of the Company.

In the press release, Mobix Labs stated that the proposed offer is expected to consist of a mix

of cash and Mobix Labs common stock, with an intended closing timeline of approximately 75 days.

On September 29, 2025, Mobix

Labs delivered another letter to our board of directors reiterating its interest in a business combination and submitting what it described

as a definitive proposal to acquire all outstanding shares of the Company for $1.30 per share, consisting of a mix of cash and Mobix Labs

common stock, and also separately requested our cooperation with respect to an anticipated registration statement on Form S-4.

On October 3, 2025, Mobix

Labs delivered an updated letter superseding its prior proposal and proposing to acquire all outstanding shares of the Company for $1.30

per share in cash, stating that the proposal was not subject to financing contingencies and was based on our publicly reported share count

as of June 30, 2025.

On October 6, 2025, we sent

a letter to Mobix Labs acknowledging receipt of its revised proposal and requesting clarification regarding share count assumptions, treatment

of the Company’s publicly disclosed warrants and equity-linked instruments, and financing sources.

Also on October 6, 2025, Mobix

Labs issued a press release publicly announcing its updated all-cash proposal and reiterating its preference for a cooperative process

with the Company.

On October 30, 2025, we entered

into a mutual confidentiality agreement with Mobix Labs in connection with our ongoing review of strategic alternatives.

The confidentiality

agreement contains customary terms, including mutual 12-month standstill and non-solicitation provisions.

On November 3, 2025, Mobix Labs

issued a press release publicly announcing its entry into a mutual confidentiality agreement with us.

Our board of directors is

evaluating the Company’s options to enhance stockholder value.

Our board of directors and management team are committed to acting

in the best interests of all stockholders.

Consistent with its fiduciary duties and in consultation with the Company’s financial

and legal advisors, our board of directors will carefully review Mobix Labs’ proposal to determine the course of action that it

believes is in the best interest of the Company and its stockholders.

We do not intend to make further comments regarding potential transactions

or provide any public updates regarding proposed or potential transactions, unless required by applicable law or a regulatory body.

can be no assurance that any transaction will be completed at this price or at any other price with such third party or any other third

2025 Warrant Inducement Offering

On September 11, 2025, we

entered into an inducement offer letter agreement (the “2025 Inducement Letter”) with a holder (the “Series C Holder”)

of Series C Warrants to purchase up to an aggregate of 952,380 shares of common stock, having an original exercise price of $1.61 per

share, issued to the Series C Holder on November 6, 2024.

Pursuant to the 2025 Inducement Letter, the Series C Holder agreed to exercise

for cash its Series C Warrants at a reduced exercise price of $1.18 per share in consideration for our agreement to issue in a private

placement new Series E common stock purchase warrants (the “Series E Warrants”) to purchase an aggregate of 952,380 shares

of common stock.

The Series E Warrants have an exercise price of $1.25 per share, will be exercisable upon the six-month anniversary of

the date of issuance and will have a term of exercise of 5.5 years from the initial exercise date.

The warrant inducement offering closed

on September 12, 2025, and resulted in net proceeds to us of approximately $0.9 million, after deducting placement agent fees and other

offering expenses payable by us.

Compliance with Nasdaq Minimum Bid Price Requirement

On September 5, 2025, we received

a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing

bid price of our common stock for the 30 consecutive business days ending on September 4, 2025, we no longer met the requirement to maintain

a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5550(a)(2).

On September 19, 2025, we received a notification

letter from Nasdaq notifying us that we had regained compliance with the minimum bid price requirement.

Risks and Uncertainties

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among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements,

rapidly changing customer requirements, limited operating history, pandemics, wars and acts of terrorism and the volatility of public

We may be unable to access the capital markets, and additional capital may only be available to us on terms that could be significantly

detrimental to our existing stockholders and to our business.

rapidly changing customer requirements, limited operating history, tariffs, pandemics, wars and acts of terrorism and the volatility of

public markets.

We may be unable to access the capital markets, and additional capital may only be available to us on terms that could

be significantly detrimental to our existing stockholders and to our business.

For additional information

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to Consolidated Financial Statements” in our Annual Report on Form 10-K for the year ended December 31, 2024.

As of September

30, 2025, there have been no material changes to our significant accounting policies and estimates.

Results of Operations

September 30,

(dollar amounts in thousands)

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Percentage of total net revenue

Product - six months ended

Product - nine months ended

Percentage of total net revenue

following table details revenue by product category for the three and six months ended June 30, 2025 and 2024:

The following table details revenue by product

category for the three and nine months ended September 30, 2025 and 2024:

(amounts in thousands)

For the Three Months Ended June 30,

For the Three Months Ended September 30,

Product category

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(amounts in thousands)

Six Months Ended June 30,

For the Nine Months Ended September 30,

Product category

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Product revenue decreased

for the three and six months ended June 30, 2025 compared with the same periods of 2024 primarily due to the decrease in our memory IC

product shipments attributable to the completion of final EOL shipments in March 2025.

The decrease was partially offset by an increase

in shipments of our mmWave ICs and antenna modules.

We expect sales of our mmWave

products to increase from a volume and revenue perspective during 2025, based on our current order backlog and the expected commencement

of production shipments to new customers.

for the three and nine months ended September 30, 2025 compared with the same periods of 2024 primarily due to the decrease in our memory

IC product shipments attributable to the significant reduction in EOL shipments subsequent to March 2025.

The decreases were partially

offset by an increase in shipments of our mmWave ICs and antenna modules.

September 30,

(dollar amounts in thousands)

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Percentage of total net revenue

Royalty and other - six months ended

Royalty and other - nine months ended

Percentage of total net revenue

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includes royalty, non-recurring engineering services and license revenues.

The decrease in royalty and other revenue for the three and

six months ended June 30, 2025 compared with the same periods of 2024 was primarily due to a decrease in royalty revenues from licensees

of our memory technology due to reduced shipments by these licensees, which we attribute to the discontinuation of the foundry process

by TSMC, and decreases in non-recurring engineering services revenue related to our mmWave technology.

The increase in royalty and other revenue for the three months

ended September 30, 2025 compared with the same period of 2024 was primarily due to an increase in non-recurring engineering services

revenue related to our mmWave technology attributable to a statement of work entered into in July 2025.

The decrease in royalty and other

revenue for the nine months ended September 30, 2025 compared with the same period of 2024 was primarily due to a decrease in royalty

revenues from licensees of our memory technology due to reduced shipments by these licensees, which we attribute to the discontinuation

of the foundry process by TSMC.

Cost of Net Revenue and Gross Profit

September 30,

(dollar amounts in thousands)

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Percentage of total net revenue

Cost of net revenue -six months ended

Cost of net revenue -nine months ended

Percentage of total net revenue

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Cost of net revenue decreased

for the three months ended June 30, 2025 when compared with the same period in 2024, primarily related to the decrease of amortization

of developed technology intangible assets of approximately $0.6 million, as these assets were fully amortized as of December 31, 2024.

The decrease was partially offset by an increase in cost of sales of our mmWave IC and module products attributable to increased shipments

during the three months ended June 30, 2025 as compared with the prior year period.

Cost of net revenue decreased for the six months ended

June 30, 2025 when compared with the same period in 2024, primarily related to the decrease of amortization of developed technology intangible

assets of approximately $1.1 million, as these assets were fully amortized as of December 31, 2024.

The decrease was partially offset

by an increase in cost of sales of our mmWave IC and module products attributable to increased shipments during the six months ended June

30, 2025 as compared with the prior year period.

for the three months ended September 30, 2025 when compared with the same period in 2024, primarily related to the decrease in product

revenue and amortization of developed technology intangible assets of approximately $0.6 million, as these assets were fully amortized

as of December 31, 2024.

Cost of net revenue decreased for the nine months ended September 30, 2025 when compared with the same period

in 2024, primarily related to the decrease in product revenue and amortization of developed technology intangible assets of approximately

$1.7 million, as these assets were fully amortized as of December 31, 2024.

September 30,

(dollar amounts in thousands)

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Percentage of total net revenue

Gross profit -six months ended

Gross profit -nine months ended

Percentage of total net revenue

Gross profit decreased for

the three months ended June 30, 2025 compared with the same period of 2024 primarily due to decreases in product and royalty revenues,

and product revenue mix, as we had no sales of our memory IC products during the three months ended June 30, 2025, which historically

had higher profit margins than our mmWave IC and module products.

During the three months ended June 30, 2025, we sold mmWave inventory

with a cost of approximately $0.2 million that had been written down in prior periods.

Gross profit increased for

the six months ended June 30, 2025 compared with the same period of 2024 primarily due to an increase in sales of our mmWave IC and module

products, partially offset by a decrease in sales of our memory IC products and a decrease in royalty revenue.

During the six months ended

June 30, 2025, we sold mmWave inventory with a cost of approximately $0.3 million that had been written down in prior periods.

Gross profit remained flat

for the three months ended September 30, 2025 compared with the same period of 2024, despite the decrease in total net revenue, primarily

due to product revenue mix, increased contribution from royalty and other revenues and sales of mmWave inventory with a cost of approximately

$0.3 million that had been written down in prior periods.

Gross profit remained relatively

flat for the nine months ended September 30, 2025 compared with the same period of 2024, despite the decrease in total net revenue, primarily

due to product revenue mix and sales of mmWave inventory with a cost of approximately $0.6 million that had been written down in prior

Research and Development

September 30,

(dollar amounts in thousands)

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Percentage of total net revenue

Research and development -six months ended

Research and development -nine months ended

Percentage of total net revenue

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The decrease for the three

and six months ended June 30, 2025 compared with the same periods of 2024 was primarily due to:

i) reduced salary and consulting costs,

as we implemented reductions in force in February and November 2023 and terminated consultant contracts, ii) reduced rent expense for

our San Jose office as we significantly reduced the space we rent effective January 2025, and iii) reduced software license expense, as

during the three and six months ended June 30, 2024, we accrued the value of certain of our software license obligations (see Note 4 to

the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q).

expect that total R&D expenses will decrease during 2025 compared with 2024, as a result of our cost reduction initiatives .

and nine months ended September 30, 2025 compared with the same periods of 2024 was primarily due to:

i) reduced salary and consulting

costs, as we implemented reductions in force during 2024 and terminated consultant contracts, ii) reduced rent expense, as our San Jose

office lease expired in January 2025, and iii) reduced software license expense, as during the three and nine months ended September 30,

2024, we accrued the value of certain of our software license obligations (see Note 4 to the condensed consolidated financial statements

in Part I, Item 1 of this Quarterly Report on Form 10-Q).

We expect that total R&D

expenses will decrease during the remainder of 2025 compared with the prior period of 2024, as a result of our cost reduction initiatives.

Selling, General and Administrative

September 30,

(dollar amounts in thousands)

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Percentage of total net revenue

SG&A months ended

SG&A -nine months ended

Percentage of total net revenue

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The decrease for the three

months ended June 30, 2025 compared with the same period of 2024 was primarily attributable to reductions in expenses for facilities,

months ended September 30, 2025 compared with the same period of 2024 was primarily attributable to reductions in expenses for facilities,

stock based compensation and amortization of purchased intangible assets for customer relationships of approximately $0.3 million, which

were fully amortized as of December 31, 2024.

The decrease for the six months ended June 30, 2025 compared with the same period of 2024

was primarily attributable to reductions in expenses for facilities, stock based compensation and amortization of purchased intangible

The decrease for the nine months ended September 30, 2025 compared with the same period

of 2024 was primarily attributable to reductions in expenses for facilities, stock based compensation and amortization of purchased intangible

assets for customer relationships of approximately $0.8 million, which were fully amortized as of December 31, 2024.

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partially offset by increases in consulting and professional services costs.

We expect that total

SG&A expense will remain flat or slightly decrease for the remainder of 2025 compared with 2024, as we continue to manage our SG&A

We expect that total SG&A expense will remain flat or

slightly decrease for the remainder of 2025 compared with 2024, as we continue to manage our SG&A costs.

Severance and Software License Obligations

September 30,

(dollar amounts in thousands)

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Percentage of total net revenue

Severance and software license obligations -six months ended

Severance and software license obligations -nine months ended

Percentage of total net revenue

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for each of the three and six months ended June 30, 2024.

The remaining severance liabilities of approximately $10,000 as of June 30,

2025 were paid in July 2025.

The severance liabilities were fully paid as of September 30, 2025.

As a result of the decision

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this licensor during the three months ended June 30, 2025.

As of June 30, 2025, the remaining contractual liabilities of approximately

$0.2 million and $0.2 million were included in accrued expenses and other (see Note 3 to the condensed consolidated financial statements)

and accounts payable, respectively, which are expected to be paid by September 30, 2025.

As of September 30, 2025, the remaining contractual liabilities of approximately

$0.2 million were recorded in accounts payable and are expected to be paid by December 31, 2025.

Liquidity and Capital Resources;

Changes in Financial Condition

As of June 30, 2025, we had

cash and cash equivalents of $1.8 million and working capital of $2.4 million.

As of September 30, 2025,

we had cash and cash equivalents of $1.9 million and working capital of $3.1 million.

Net cash used in operating

activities was $3.0 million for the first six months of 2025, which primarily resulted from our net loss of $2.3 million, as adjusted

for $1.1 million in net changes in assets and liabilities, as partially offset by non-cash charges of $0.1 million of depreciation and

activities was $4.6 million for the first nine months of 2025, which primarily resulted from our net loss of $3.5 million, as increased

by $1.7 million in net changes in assets and liabilities, and partially offset by non-cash charges of $0.2 million of depreciation and

amortization and $0.4 million of stock based compensation.

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Net cash used in operating

activities was $3.2 million for the first six months of 2024, which primarily resulted from our net loss of $6.5 million, as adjusted

for a $1.6 million non-cash gain on the change in fair value of warrant liability, as partially offset by non-cash charges of $2.0 million

activities was $3.9 million for the first nine months of 2024, which primarily resulted from our net loss of $9.2 million, as adjusted

for a $1.6 million non-cash gain on the change in fair value of warrant liability, and partially offset by non-cash charges of $3.0 million

of depreciation and amortization, $3.3 million of stock based compensation and $0.6 million in net changes in assets and liabilities.

The changes in assets and liabilities primarily related to the timing of accounts receivable collections, accruals for software license

obligations, accrued severance benefits and other vendor payables and prepayments.

The changes in assets and liabilities primarily related to the timing of accruals for software licenses, accrued severance benefits and

accounts receivable collections, and other vendor payables and prepayments.

Net cash used in investing

activities was approximately $45,000 for the first six months of 2025, which was attributable to the purchase of fixed assets.

For the six months ended June

30, 2024, no cash was provided by or used in investing activities.

activities was approximately $79,000 for the first nine months of 2025, which was attributable to the purchase of fixed assets.

For the nine months ended

September 30, 2024, no cash was provided by or used in investing activities.

Net cash provided by financing

activities for the six months ended June 30, 2025 comprised $1.5 million of net proceeds from sales under our at-the market offering program,

partially offset by repayment of financing lease liabilities.

activities of $3.2 million for the nine months ended September 30, 2025 primarily comprised $2.3 million of net proceeds from at-the-market

sales of stock and $0.9 million in net proceeds from a warrant inducement offering completed in September 2025.

Net cash provided by financing

activities of $3.5 million for the six months ended June 30, 2024 primarily comprised $3.4 million in net proceeds from a public offering

of our common stock and common stock purchase warrants completed in February 2024 and a $0.1 million sale of unregistered common stock

to a member of our board of directors.

activities of $3.6 million for the nine months ended September 30, 2024 primarily comprised $3.4 million in net proceeds from a public

offering of our common stock and common stock purchase warrants completed in February 2024 and a $0.1 million sale of unregistered stock

to a member of our board of directors, $0.2 million of net proceeds from at-the-market sales of stock, which was partially offset by $0.1

million for repayment of finance lease liabilities.

Our future liquidity and capital

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include non-cancelable purchase orders for inventory.

At June 30, 2025, we had outstanding non-cancelable purchase orders for inventory,

At September 30, 2025, we had outstanding non-cancelable purchase orders for inventory,

primarily wafers and substrates, and related expenditures of approximately $2.7 million.

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We incurred net losses of

approximately $2.3 million for the six months ended June 30, 2025 and $10.7 million for the year ended December 31, 2024, and we had an

accumulated deficit of approximately $179.4 million as of June 30, 2025.

These and prior year losses have resulted in significant negative

cash flows and have required us to raise substantial amounts of additional capital.

approximately $3.5 million for the nine months ended September 30, 2025 and $10.7 million for the year ended December 31, 2024, and we

had an accumulated deficit of approximately $180.6 million as of September 30, 2025.

These and prior year losses have resulted in significant

negative cash flows and have required us to raise substantial amounts of additional capital.

To date, we have primarily financed our operations

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We expect to continue to incur

operating losses during 2025, as we ceased shipments of our memory products in March 2025 and continue to secure new customers for and

continue to invest in the development of our products.

Further, we expect our cash expenditures to continue to exceed receipts for at

least the next 12 months, as our revenues will not be sufficient to offset our operating expenses.

In addition, we may incur substantial

costs related to the Mobix Proposal and our strategic alternative exploration process, which costs may include the fees of our financial

and legal advisors.

We believe that our existing cash and cash equivalents as of June 30, 2025 will enable us to meet our capital needs

into the fourth quarter of 2025.

operating losses during 2025, as we do not expect any further shipments or to generate any meaningful revenue from shipments of our memory

products after March 2025, with the exception of two purchase orders received in September 2025, and as we continue to secure new customers

for and continue to invest in the development of our mmWave products.

Further, we expect our cash expenditures to continue to exceed receipts

for at least the next 12 months, as our revenues will not be sufficient to offset our operating expenses.

In addition, we have incurred

and may continue to incur substantial costs related to our strategic alternative exploration process, including our evaluation of Mobix

Labs’ proposal, which costs include the fees of our financial and legal advisors.

We believe that our existing cash and cash equivalents

as of September 30, 2025 and expected receipts associated with forecasted product sales will enable us to meet our capital needs into

the first quarter of 2026.

We will need to increase revenues

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may include, but are not limited to, reducing headcount and curtailing business activities.

As further discussed in Note 9 to the condensed consolidated financial

statements, in November 2024, we entered into a warrant inducement offering for net proceeds of approximately $2.6 million.

Additionally,

as further discussed in Note 8 to the condensed consolidated financial statements, on August 30, 2024, we entered into the Sales Agreement

with Ladenburg, pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our common stock through

Ladenburg as agent and/or principal (subject to the limitations of General Instruction I.B.6 of Form S-3) through an at-the-market program.

During the six months ended June 30, 2025, we sold 1,270,158 shares of common stock for proceeds of approximately $1,512,000

(net of commissions of approximately $47,000 paid to Ladenburg) pursuant to the Sales Agreement.

Further, during 2023 and 2024, we implemented

reductions in our workforce and eliminated 19 full-time equivalent positions.

These cost reduction actions were intended to preserve cash,

as we kept capital expenditures to minimum levels in order to reduce operating costs and our short-term cash needs.

As further discussed

in Note 9 to the condensed consolidated financial statements, we completed warrant inducement offerings in September 2025 and November

2024 for net proceeds of approximately $0.9 million and $2.6 million, respectively.

Additionally, as further discussed in Note 8 to the

condensed consolidated financial statements, on August 30, 2024, we entered into the Sales Agreement with Ladenburg, pursuant to which

we may offer and sell, from time to time at our sole discretion, shares of our common stock through Ladenburg as agent and/or principal

(subject to the limitations of General Instruction I.B.6 of Form S-3) through an at-the-market program.

During the three and nine months

ended September 30, 2025, we sold 733,049 and 2,003,207 shares of common stock for proceeds of approximately $751,200 and $2,270,200

(net of commissions of approximately $23,000 and $70,000 paid to Ladenburg), respectively, pursuant to the Sales Agreement.

10, 2025, we increased the maximum aggregate offering amount of common stock issuable pursuant to the Sales Agreement to $1,750,000.

during 2023 and 2024, we implemented reductions in our workforce and eliminated 19 full-time equivalent positions.

These cost reduction

actions were intended to preserve cash, as we kept capital expenditures to minimum levels in order to reduce operating costs and our short-term

If we were to raise additional

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develop or enhance our products;

● continue to expand our product

development and sales and marketing organizations;

● acquire complementary technologies,

products or businesses;

● expand operations, in the United

States or internationally;

continue to expand our product development and sales and marketing organizations;

acquire complementary technologies, products or businesses;

expand operations, in the United States or internationally;

hire, train and retain employees;

● respond to competitive pressures

or unanticipated working capital requirements.

respond to competitive pressures or unanticipated working capital requirements.

Our failure to do any of these

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No material amounts related to these indemnifications are reflected in our condensed consolidated financial statements

for the three and six months ended June 30, 2025.

for the three and nine months ended September 30, 2025.

Recent Accounting Pronouncements

2 unchanged sentences

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 2. Management’s Discussion and Analysis