AIRG 10-K & 10-Q changes, risk factors and insider trading

The markets for our antennawireless systems solutions, embedded and wirelessexternal systemsantennas, and loT solutions are developing and may not develop as we expect;

If we are unable to manage our growth and expand our operations successfully, or navigate the transition to integrated system solutions, including increased business complexity and execution risk, our business and operating results will be harmed, and our reputation may be damaged;

We are developing a number of our new products and wireless connectivity solutions and new products in partnership with or under strategic alliances with other companies. If any of these companies were to fail to perform, or our partnerships or strategic alliances were to be unsuccessful, we may experience delays in new product development or may not be able to bring our solutions to market successfully or on a timely basis;

We are subject to governmental export and import controls and supply chain-related regulations that could impair our ability to compete in international markets due to licensing requirements, result in the disruption of our supply chains and/or subject us to liability and reputational harm if we are not in compliance with applicable laws; and Changes to United States tax, tariffs, Department of Defense’s Section 1260H List, and import/export regulations may have a negative effect on global economic conditions, financial markets and our business. China’s 2024 export ban on critical minerals such as gallium, germanium, and antimony has disrupted and may continue to disrupt global supply chains, driving up costs for semiconductors, sensors, and LEDs.

The wireless industry is characterized by rapidly evolving technologies, and the markets for our wireless connectivity solutions, embedded and external antennas, and IoT productssolutions may not develop as we expect. It is difficult to predict customer demand for our wireless system solutions and components, customer adoption rates, the size and growth rate of our target markets, the entry of competitive solutions and products, or the success of existing competitive solutions and products. We have historically driven revenue growth primarily through our embedded antennas, external antennas, embedded modems, and custom IoT products, largely in the consumer market. Moving forward, our goal is to drive growth in complex system solutions in the enterprise and automotive markets, including AC-Fleet, Lighthouse, Lantern,Lighthouse and asset tracking solutions.AC-Fleet. These markets may develop at varying growth rates, and our success in penetrating these markets will depend on various competitive factors across a number of developing industries.

Any expansion in our markets depends on several factors. For example, any growth in demand will depend on, among other things, the cost, performance, and perceived value associated with our components and the ability for our components to meet increased performance demands, refresh cycles, and device form factors. Further, as we continue to transition to a wireless systems solution provider, increased growth in the enterprise and automotive markets will depend on, among other things, acceptance of our solutions by our customers and performance of the networks on which our products operate. For example, AC-Fleet, Lighthouse, Lantern,AC-Fleet and asset trackingLighthouse solutions are dependent on the carriers’ networks that they operate on and require widespread commitments across multiple customer markets and budgets. The growth potential for these solutions may be limited, and we will need to introduce new products in the AirgainConnect, Lighthouse, Lantern,AirgainConnect and asset trackingLighthouse platforms in order to continue to grow.

If our wireless solutions do not achieve widespread adoption, if there is a slower rollout than we expect in certain markets, or if there is a reduction in demand for our wireless connectivity solutions or components including AC-Fleet, Lighthouse, Lantern,AC-Fleet and asset trackers,Lighthouse, caused by a lack of customer acceptance, technological challenges, competing technologies and products, decreases in corporate spending, weakening economic conditions, or otherwise, it could result in reduced customer orders and decreased sales, which would adversely affect our business, operating results, and financial condition.

Our quarterly and annual operating results have fluctuated in the past and may fluctuate significantly in the future, which makes it difficult for us to predict our future operating results. The timing and size of sales of our wireless system solutions and components are variable and difficult to predict and can result in fluctuations in our net sales from period to period. In addition, our budgeted expense levels depend in part on our expectations of future sales. Because any substantial adjustment to expenses to account for lower levels of sales is difficult and takes time, we may not be able to reduce our costs sufficiently to compensate for an unexpected shortfall in net sales, and even a small shortfall in net sales could disproportionately and adversely affect our operating margin and operating results for a given quarter. Our net loss decreasedwas from $12.4$6.4 million in the year ended December 31, 2023 to $8.7 million in the year ended December 31, 2024,2025, and the net loss or income will fluctuate in the future. Prior to 2024,2025, our net losses were $12.2$8.7 million, $8.7$12.4 million and $10.1$8.7 million for the years ended December 31, 2023,2024, 20222023 and 2021,2022, respectively.

Our operating results may also fluctuate due to a variety of other factors, many of which are outside of our control, including any change or volatility in U.S., European,Asian, AsianEuropean and global economic environments, and any of which may cause our stock price to fluctuate. Besides the other risks in this “Risk Factors” section, factors that may affect our operating results include:

global supply shortage including, but not limited to chipssemiconductors and modules, supply constraints relating to other materials and potential increasing shipping costs and related limitations on our ability to acquire mission critical components and our CM’s abilities to obtain sufficient human resources to meet our global demand;

changing market and economic conditions and,and financial institution instability.instability;

govenment approval delays terrorism, political instability or war, and the imposition of sanctions or countermeasures by the United States and other countries in relation to such conflicts;

Additionally, our transition into more system-based solutions may bring more competitors into our markets than we have traditionally faced. As our solutions begin to contain more system components and commensurate with higher average selling prices, the resulting product categories may attract additional competitors, or our customers may be more likely to begin to develop competing products. We face new competition from established telematics, networking, and IoT platform providers, which may create barriers to our market entry and limit our ability to grow in these sectors.

Our sales depend on our ability to anticipate our existing and prospective customers’ needs and develop products and systems solutions that address those needs. Our future success will be contingent on our ability to introduce new solutions for wireless applications, anticipate improvements and enhancements in wireless technology and wireless standards, and to develop solutions that are competitive in the rapidly evolving wireless industry. In furtherance of these efforts, we will continue to invest significantly in ongoing research and development. However, such investments may not translate into material enhancements to our wireless solutions, which are important for us to compete effectively. As we complete our transition into a wireless systems solutions provider, our investment in research and development will be required to grow to stay on the leading edge of next generation development and to align ourselves with the rapidly evolving technology needs of the industry. Moreover, the introduction of newly integrated wireless platforms and product and system enhancements will require coordination of our engineering efforts with those of our customers, carriers, suppliers, and manufacturers to efficiently achieve our growth objectives. As our business transitions to more complex system-based solutions, we must provide enhanced post-sales support, ongoing firmware/software updates, and higher levels of technical assistance. If we are unable to effectively support our customers in deploying and maintaining these solutions, we may experience reputational harm, reduced customer adoption, or an increase in warranty and service costs. If we fail to coordinate these efforts, develop product enhancements or introduce new solutions that meet the needs of our customers as scheduled, our operating results will be materially and adversely impacted, and our business and prospects will be harmed. We cannot assure you that our new wireless solutions will meet customer expectations or that our wireless solutions will be competitive in the market.

The introduction of the next generation AirgainConnect, Lighthouse, LanternAirgainConnect and asset trackingLighthouse platforms, and the transition to a more expansive level of advanced solutions, requiresrequire coordination of efforts and increased time and resources. If we fail to develop competitive solutions for customers with outstanding quality within the identified market window, our operating results may be materially and adversely impacted. As we rollout follow-on products and accessories for the AC-Fleet, Lighthouse, LanternAC-Fleet and asset trackerLighthouse solutions, we may not be able to successfully develop to conform to carrier approvals, PTCRB certifications, and specific country and regulatory certifications and approvals of such products. Furthermore, our transition to full wireless system solutions introduces additional regulatory compliance challenges for new classes of devices such as Lighthouse. Our products must meet stringent equipment authorization and carrier certification requirements (such as carrier, PTCRB, FCC, and industry-specific and regional standards). Failure to secure timely authorizations or certifications or unexpected changes in regulatory requirements could delay product launches, increase costs, or impact on our ability to sell our solutions in key markets.

The successful deployment of our wireless system solutions depends on the reliability and security of our embedded software and firmware. Software bugs, cybersecurity vulnerabilities, or delays in providing necessary updates could result in product malfunctions, compromise the confidentiality, integrity, and availability of our customers’ own IT systems and/or our customers’ proprietary or other sensitive information, customer dissatisfaction, or reputational harm. Any failure to maintain robust software and cybersecurity protocols may negatively impact our business and financial performance. Furthermore, the stringent customer demands for these advanced solutions requiresrequire substantial ongoing effort and investment for solution maintenance, support, and evolution. If we are unable to continually provide such effort and investment to customers, our customers’ business could be adversely impacted, or customers could switch to competitor solutions, which would have an adverse impact on our operating results.

Sales cycles for some of our products can be lengthy, oftengenerally lastingranging severalbetween three and twelve months for our components, and six to twenty-four months and sometimes longer for our wireless systems solutions due to a yearlengthy orcustomer longer.evaluation, trial and approval process. In addition, it can take additional time before a customer commences volume production of equipment that incorporates our products. Sales cycles can be lengthy for several reasons, including:

the development and commercial introduction of products incorporating new technologies frequently are delayed; and certain customers of advanced antenna systems and integrated wireless solutions require successful field trials before committing to purchase our solutions, which could delay the customer decision making process.

The length of this process can be affected by factors over which we have little or no control, including the customer’s budgetary constraints and procurement cycles. As a result, sales cycles for customer orders vary substantially among different customers. A significant portion of our operating expenseexpenses is relatively fixed and is based in large part on our forecasts of volume and timing of orders. The lengthy sales cycles make forecasting the volume and timing of product orders difficult. In addition, the delays inherent in lengthy sales cycles raise additional risks of customer decisions to cancel or change product phases. In addition, we may incur substantial expenses and devote significant effort to develop potential relationships that do not result in agreements or revenues. If customer cancellations or product changes were to occur, this could result in the loss of anticipated sales without sufficient time for us to reduce our operating expenses. We currently maintain significant inventories to meet forecasted future demand due to the supply chain shortages. If the forecasted demand does not materialize into purchase orders for these products, we may be required to write off our inventory balances or reduce the value of our inventory, based on a reduced sales price. A write offwrite-off of the inventory, or a reduction in the inventory value due to a sales price reduction, could have an adverse effect on our financial condition and operating results.

Customers that accounted for 10% or more of our total revenue provided approximately 54% of sales in the aggregate for the year ended December 31, 2024.2025. Although our top customers that pay for our products have historically been ODMs and distributors, it is primarily the OEMs, carrier customers and retail-focused end-customers that drove the use of our antenna solutions and the purchase by the ODMs and distributors of our antenna solutions. In addition, a few end-customer devices which incorporate our antenna products comprise a significant amount of our sales, and the discontinuation or modification of such devices may materially and adversely affect our sales and results of operations. Moving forward, as we transition to a wireless systems solutions provider, we expect a shift toward external wireless solutions and antenna technologies in the automotive and enterprise markets that may result in a corresponding shift in the customer mix. Any significant loss of, or a significant reduction in purchases by, these other significant customers or customers that drive the use of our antenna solutions or a modification or discontinuation of a device which constitutes a significant portion of sales could have an adverse effect on our financial condition and operating results.

We outsource the manufacturing, assemblyassembly, and some of the testing of our products to CMs, and we also engage with ODMs to substantially contribute to the development of certain of our products in addition to production and shipping. We have over the past two years engaged additional CMs and ODMs outside of China, including Vietnam, Taiwan and Mexico, to expand our capacity, and to diversify the global regions in which our products are manufactured. These CMs and ODMs are relied upon to develop, manufacture, control quality of, and ship our products. We do not have long-term contracts that commit CMs to manufacture products for us. Furthermore, political unrest or political instability, military conflict in any country in which our CMs and ODMs are located could experience political unrest, tensions and uncertainty. Global and regional, terrorism or other geopolitical events may have an adverse effect on our contract manufacturer’s ability to deliver quality products on time. Any significant change in our relationship with these manufacturers could have a material adverse effect on our business, operating results, and financial condition. We make substantially all of our purchases from our CMs and ODMs on a purchase order basis. Our CMs and ODMs are not required to manufacture our products for any specific period or in any specific quantity. We expect that it would take approximately six to nine months to transition manufacturing, quality assurance, and shipping services to new providers. Relying on CMs for manufacturing, quality assurance, and shipping also presents significant risks to us, including the inability of our CMs to:

We may experience delays in obtaining productproducts from manufacturers and may not be a high priority for our manufacturers.

The ability and willingness of our CMs to perform is largely outside of our control. We believe that our orders may not represent a material portion of our CMs’ total orders and, as a result, fulfilling our orders may not be a priority if our CMs are constrained in their abilities or resources to fulfill all of their customer obligations in a timely manner. If any of our CMs suffers an interruption in its business, experiences delays, disruptions, or quality control problems in its manufacturing operations or we have to change or add additional CMs, our ability to ship products to our customers would be delayed and our sales could become volatile, and our cost of sales may increase. For example, throughout 2021 and 2022, we experienced a disruption in our supply chain for certain components located in Asia and made several purchases of available inventory in order to secure supply for our customers, sometimes at higher than our traditional prices. Although supply chain conditions have improved since 2022, they have not fully normalized, and structural risks related to capacity constraints, supplier prioritization, and external disruptions continue to expose us to potential delays and cost increases. Increased component and manufacturing costs may not be recoverable through pricing adjustments, particularly when customer contracts limit repricing or where customers resist price increases, which could result in margin compression and adversely affect our operating results. Additionally, any or all of the following could either limit supply or increase costs, directly or indirectly, to us or our CMs:

industry consolidation occurring within one or more component supplier markets, such as the semiconductor market; and labor strikes or shortages, or restrictions imposed to limit pandemic or epidemics.

We cannot predict with certainty in the future whether a pandemicpandemic, epidemic, or epidemicAI demand surge impacting the supply of certain components, will cause delays or disrupt our product shipments or impact manufacturing. If such disruption were to extend over a prolonged period, it could have a material impact on our sales and business and those of our customers.

We rely on third-party components and technology companies to provide contents of our bills of material to that ultimately configure the devices that are deployed in our integrate solutions. Thus, we rely on our CMs to obtain the components and subassemblies necessary for the manufacture of our devices. In 2024 we experienced continued relief from the shortages in supply of components that we experienced from 2021 to 2022, but we expect that we will experience shortages, constraints, hoarding, and higher prices due to export controls on critical minerals for semiconductors and tariffs in 2025. In 2023 we saw relief on supply disruptions due to over correction. A return to such shortages or other supply disruptions are possible, as well as inflation of prices of certain components, and our ability to predict the availability and pricing of such components is limited. Over the past four years, there have been and continue to exist fluctuations between shortages of certain electronic components used in our industry and a surplus that have led to ongoing uncertainty regarding lead times for the manufacture of certain components in some of our products. If shortages return or occur in the future, as, our business, operating results and financial condition would be materially adversely affected. Unpredictable price increases of such components due to market demand may occur as well. While components and supplies are generally available from a variety of sources, our CMs depend on a single or limited number of suppliers for several components for our products. Further, certain products may utilize custom components available from only one or a limited number of sources. When a component or product uses new technologies, capacity constraints may exist until the suppliers’ manufacturing capacity has increased. Many factors may affect the continued availability of these components at acceptable prices, including if those suppliers decide to concentrate on the production of common components instead of components customized to meet our requirements. There is no assurance that the supply of such components will not be delayed or constrained. If our suppliers of these components or technology were to enter into exclusive relationships with other providers of wireless networking equipment or were to discontinue providing such components and technology to us and we were unable to replace them cost effectively, or at all, our ability to provide our products would be impaired. Additionally, poor quality in any of the single or limited sourced components in our products could result in lost sales or lost sales opportunities. Our CMs generally rely on purchase orders rather than long-term contracts with these suppliers. As a result, even if available, our CMs may not be able to secure sufficient components at reasonable prices or of acceptable quality to build our products in a timely manner. Therefore, we may be unable to meet customer demand for our products, which would have a material adverse effect on our business, operating results, and financial condition.

Our success depends upon the continued service and performance of our senior management team and key technical, marketingmarketing, and production personnel. We have experienced management turnover in the past. The replacement of any member of our senior management team or other key employees or consultants involves significant time and costs and may significantly delay or prevent the achievement of our business objectives.

Our future success also depends, in part, on our ability to continue to attract, integrateintegrate, and retain highly skilled personnel. Competition for highly skilled personnel, especially our design and technical personnel is frequently intense. As the source of our technological and product innovations, our design and technical personnel represent a significant asset. Any inability to retain, attract or motivate such personnel could have a material adverse effect on our business and results of operations. Further, competition for highly skilled personnel is frequently intense. Any difficulties in obtaining or retaining human resource competencies we need to achieve our business objectives may have an adverse effect on our performance.

If our available cash balances and anticipated cash flow from operations are insufficient to satisfy our liquidity requirements, including because of lower demand for our products as a result of other risks described in this “Risk Factors” section and elsewhere in this annual report on Form 10-K, we may seek to raise additional capital through equity offerings, debt financings, collaborations or licensing arrangements. We may also consider raising additional capital in the future due to liquidity considerations or to expand our business, pursue strategic investments, take advantage of financing opportunities, or other reasons. For example, in MarchMay 2024,2025, we enteredamended intoand anrestated at-the-marketthe issuanceAt-the-Market salesIssuance agreementSales Agreement (as amended, the Sales Agreement) with Craig-Hallum Capital Group LLC (the Agent), originally entered into in March 2024, pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $5an millionamount inregistered under an effective registration statement and for which we have filed a prospectus “at the market” (ATM) offerings through or to the Agent, as sales agent or principal. In May 2025, we filed a registration statement on Form S-3, which was declared effective, including a prospectus for ATM offerings pursuant to the Sales Agreement for up to an aggregate of $5.0 million in shares of our common stock. As of December 31, 2025, $4.6 million remained available for future sales under the Sales Agreement. However, there can be no assurance that the Agent will be successful in consummating future sales based on prevailing market conditions or in the quantities or at the prices that we deem appropriate. In addition, the Sales Agreement may be terminated by us or the Agent at any time upon specified notice to the other party, or by the Agent at any time in certain circumstances, including the occurrence of a material adverse change.

Additional funding may not be available to us on acceptable terms, or at all. If we raise funds by issuing equity securities, dilution to our stockholders could result. Any equity securities issued also may provide for rights, preferences or privileges of senior to those of holders of our common stock. The terms of debt securities issued, or borrowingsborrowings, could impose significant restrictions on our operations. The incurrence of indebtedness or the issuance of certain equity securities could result in increased fixed payment obligations and could also result in restrictive covenants, such as limitations on our ability to incur additional debt or issue additional equity, limitations on our ability to acquire or license intellectual property rights, and other operating restrictions that could adversely affect our ability to conduct our business. In addition, the issuance of additional equity securities by us, or the possibility of such issuance, may cause the market price of our common stock to decline. The global credit and financial markets have in the past experienced extreme volatility and disruptions (including as a result of pandemic,public health crises, war and conflict and liquidity concerns regarding financial institutions and others in the financial services industry). If the equity and credit markets are volatile or deteriorate, or if adverse developments are experienced by financial institutions, it may make any necessary debt or equity financing more difficult to obtain, more costly, more onerous with respect to financial and operating covenants, and more dilutive. If we do not have, or are not able to obtain, sufficient funds, we may have to delay development or commercialization of our products or license to third parties the rights to commercialize products or technologies that we would otherwise seek to commercialize. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish some rights to our technologies or our products, or to grant licenses on terms that are not favorable to us. If we are unable to raise adequate funds, we may have to liquidate some or all of our assets, or delay, reduce the scope of or eliminate some or all of our development programs. We also may have to reduce marketing; customer support or other resources devoted to our products or cease operations. Any of these actions could harm our business, operating resultsresults, and financial condition.

We have in the past relied on third parties, such as sales consultants and engineering contractors, for a portion of the design and sales and marketing of our products. In the future, we may rely on third-party consultants in addition to our own employees to perform the daily tasks necessary to operate our business in certain areas, including sales and engineering, and cannot ensure that third-party consultants will be able to complete their work for us in a timely manner. The failure of any third-party consultants to perform as anticipated could result in substantial costs, divert management’s attention from other strategic activities, or create other operational or financial problems for us. Terminating or transitioning arrangements with key consultants could result in additional costs and a risk of operational delays, potential errorserrors, and possible control issues as a result of the termination or during the transition. Accordingly, our reliance on third parties exposes us to the risk that our business will be unsuccessful if they do not design and sell our product as expected.

As part of our strategy to develop and identify new products, services and technologies, we have made, and may continue to make, acquisitions of select assets and businesses. Integrating any newly acquired business could be expensive and time-consuming. Integration efforts often take a significant amount of time, place a significant strain on managerial, operational and financial resourcesresources, and could prove to be more difficult or expensive than predicted. The diversion of management’s attention and any delay or difficulties encountered in connection with any future acquisitions we may consummate could result in the disruption of on-going business or inconsistencies in standards and controls that could negatively affect our ability to maintain third-party relationships.

When pursuing acquisitions, we may not be able to find suitable acquisition candidates, and we may not be able to complete such acquisitions on favorable terms, if at all. Moreover, we may need to raise additional funds through public or private debt or equity financing, or issue additional shares, to acquire any businesses or products, which may result in dilution for stockholders or the incurrence of indebtedness. Any acquisitions we complete,complete may not ultimately strengthen our competitive position or achieve our goals,goals and could be viewed negatively by our end-customers, investors and financial analysts. Acquisitions involve many risks. An acquisition may negatively affect our operating results, financial condition or cash flows because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition.

As of December 31, 2024,2025, the Company had net operating loss (NOL) carryforwards of approximately $19.6$26.4 million for federal income tax purposes and $11.9$14.0 million for state income tax purposes,purposes that, subject to limitationslimitations, may be available to offset our future taxable income, if any. Our federal and state NOL carryforwardsgenerally begin to expire in 2029,2029 and 2026,2028, respectively. Federal NOLs generated in taxable years beginning after December 31, 20182017 can be carried forward indefinitely; however, willsuch carryforward indefinitely andNOLs may generally only be used to offset up to 80% of future taxable income in taxable years.income. As of December 31, 2024,2025, we also had federal and state research and development and other tax credit carryforwards of approximately $2.4$3.5 million and $2.0$2.8 million, respectively, available to reduce future income tax liabilities, subject to limitations. Our federal tax credit carryforwards begin to expire in 2026, and our state tax credit carryforwards will begin to expire in 2032. These NOL and tax credit carryforwards could expire unused, to the extent subject to expiration, and be unavailable to offset future taxable income or income tax liabilities.

Furthermore, inthe Company’s use of federal and state NOL and tax credit carryforwards could be limited by certain ownership changes. In general, under Sections 382 and 383 of the U.S. Internal Revenue Code of 1986, as amended (the Code), a corporation that undergoes an “ownership change” is subject to limitations on its ability to use pre-change NOL and tax credit carryforwards to offset future taxable income and income taxes, respectively. For these purposes, an ownership change generally occurs where the aggregate change in stock ownership of one or more stockholders or groups of stockholders owning at least 5% of a corporation’s stock exceeds 50 percentage points over a rolling three-year period. The Company’s use of U.S. federal and state NOL and tax credit carryforwards could be limited further by ownership changes. We have recorded a $16.7$18.5 million valuation allowance related to our NOL carryforwards and other deferred tax assets due to the uncertainty of the ultimate realization of the future tax benefits of such assets.

Some of our operations use substances regulated under various federal, state, local and international laws governing the environment and worker health and safety, including those governing the discharge of pollutants into the ground, air and water, the management and disposal of hazardous substances and wastes, and the cleanup of contaminated sites. Some of our products are subject to various federal, state, locallocal, and international laws governing chemical substances in electronic products. We could be subject to increased costs, fines, civil or criminal sanctions, third-party property damage or personal injury claims if we violate or become liable under environmental and/or worker health and safety laws.

Future pandemics or other public health epidemics may have a material adverse effect on our business, financial condition and results of operations, and may also have the effect of heightening many of the other risks described in this “Risk Factors” section.

Our ability to compete effectively is dependent in part upon our ability to protect our proprietary technology. We rely on patents, trademarks, trade secret laws, confidentiality proceduresprocedures, and licensing arrangements to protect our intellectual property rights. There can be no assurance that these protections will be available in all cases or will be adequate to prevent our competitors from copying, reverse engineering or otherwise obtaining and using our technology, proprietary rights or products. For example, the laws of certain countries in which our products are manufactured or licensed do not protect our proprietary rights to the same extent as the laws of the United States. In addition, third parties may seek to challenge, invalidate or circumvent our patents, trademarks, copyrights and trade secrets, or applications for any of the foregoing. ThereMoreover, cangeo-political beactions noin assurancethe thatUnited ourStates competitorsand willin notforeign independentlycountries developcould technologiesincrease thatthe areuncertainties substantiallyand equivalentcosts surrounding the prosecution or superior to our technology or design around our proprietary rights. In each case, our ability to compete could be significantly impaired. To prevent substantial unauthorized usemaintenance of our intellectualpatent propertyapplications rights,or itthose mayof beany necessarycurrent toor prosecutefuture actionspartners, for infringementcollaborators and/ licensors and the maintenance, enforcement or misappropriationdefense of our proprietaryissued rightspatents againstor thirdthose parties.of Anyany suchcurrent actionor couldfuture resultpartners, in significant costscollaborators and diversion of our resources and management’s attention, and there can be no assurance we will be successful in such action. Furthermore, many of our current and potential competitors have the ability to dedicate substantially greater resources to enforce their intellectual property rights than we do. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property.licensors.

Headquartered in San Diego, California, Airgain, Inc. (NASDAQ: AIRG) is a leading provider of advanced wireless connectivity solutions that drive cutting-edge innovation in 5G technology.solutions. We are committedfocused toon delivering high-performance, cost-effective, and energy-efficient wireless solutions that enable rapid market deployment. Our mission is to connect the world through integrated, innovative, and optimized wireless solutions. Our diverse product portfolio serves three primary markets: enterprise, automotive, and consumer. While historically recognized for high-performance radio frequency (RF) components, Airgain is increasingly delivering integrated, system-level connectivity solutions that combine hardware, software and cloud management.

Our enterprise products include Smart Network Controlled Cellular Repeaters (Smart NCRs), fixedembedded wirelesscellular access (FWA) devices,modems, asset tracking solutions, embedded cellular modems, and antennas for access points and Internet of Things (IoT) applications. Our automotive products include our second generationsecond-generation AirgainConnect® Fleet system solution – a low profile, roof-mounted, all-in-one 5G vehicle gateway –solution, and our aftermarket antennas. Our consumer products include embedded antennas for consumer access points, wireless gateways, smart home devices and FWA devices.

We have a rich history of providing radio frequency (RF) expertise, services, and solutions to mobiletelecommunications operators and major original equipment manufacturers (OEMs). We expanded our current portfolio of embedded cellular modems, asset tracking solutions and custom IoT systems with advanced 5G connectivity solutions, including our AirgainConnect Fleet vehicle gateway, Smart Network Controlled Cellular Repeaters, and FWA system solutions. We are leveragingleverage our RF and systems experience, and our Mobile Network Operator (MNO) and Multiple Service Operator (MSO) relationshipsrelationships, to deliver complex and differentiated system solutions.

Core Markets

In the automotive market, our products are deployed in a wide range of vehicles in the fleet and aftermarket applications, supporting a variety of technologies that include 5G, LTE, Wi-Fi, LPWAN, GNSS, and Bluetooth. Fleet and aftermarket products in the automotive market typically consist of applications where vehicular wireless routers are paired with external antenna systems to provide connectivity to mobile assets. In the third quarter of 2024, we expandedcompleted ourthe productfirst offeringcommercial withdeployment of our second generation AirgainConnect® Fleet (AC-Fleet) system solution – a low profile, roof-mounted, all-in-one 5G vehicle gateway – that provides 4G/5G cellular connectivity with built-in multi-profile eSIM, GPS,GNSS, Wi-Fi, and gigabit ethernetEthernet router functionalities. We also offer a full line of external fleet antennas that are designed to be rugged, reliable, and flexible to meet almost any need. We design our products for performance, quality, and long product life, and our antennas connect to almost any vehicular router or modem. These antennas include high-performance and low-profile versions that mount on the roof, trunk, windshield, or dashboard and are optimized for 5G, 4G, Wi-Fi, and GNSS.

The consumer market represents a vast audience utilizing wireless-enabled devices. Our embedded antennas are deployed in various consumer applications including access points, wireless gateways, FWA devices, Wi-Fi routers and extenders, smart TVs,and smart home devices, and set-top boxes.devices. These consumer products support a variety of technologies, products and services, including 4G/LTE, 5G, Wi-Fi, Bluetooth, LPWAN and GNSS (Global Navigation Satellite System (GNSS).

Macroeconomic conditions have continued to create demand softness in certain markets. While ourOur sales grewdeclined by 8%14.6% year-over-year, as we experienced a demand softnesssoftness, combined with excess inventories in our channels and our direct customers, in our existing automotive and enterprise markets. While we are experiencing a marketgrowth recoverydriven by the Wi-Fi 7 transition with our consumer customers, we anticipate the inventory surplus some of our enterprise and automotive customers have may extend into the firstsecond half of 2025. We believe the previously broad demand softness that we experienced in 2023 has become more product and customer specific, as the industry re-calibrates to optimal inventory levels.2026. We remain focused on the execution of our strategic product initiativesinitiatives, specifically design and operationalrevenue efficiencies,ramps of our AirgainConnect and Lighthouse platforms, which lay the foundation offor our pursuit of revenue and profitability growth when market conditions improve.growth.

international expansion in light of continuing global tensions; and the ability to successfully integrate past and any future acquisitions In addition, inflation generally affects us by increasing our raw material and employee-related costs and other expenses. Our financial condition and results of operations may also be impacted by other factors we may not be able to control, such as uncertain global economic conditions, pandemicspublic andhealth epidemics,crises, global trade disputes or political instability,disputes, as well as conflicts around the world. We do not believe that such factors had a material adverse impact on our results of operations during 2024.2025.

Sales increaseddecreased by 8.1%14.6% in 20242025 compared to 2023.2024. The increasedecrease in sales was primarily driven by lower sales in the enterprise and automotive markets, offsetting a 20.2% sales growth in our consumer markets.

Gross profit as a percentage of sales increased to 40.9%43.5% in 20242025 compared to 37.1%40.9% in 2023.2024. The increase was primarily due to improved automotiveenterprise and enterpriseconsumer product margins rate.and operational efficiencies.

LossNet from operationsloss decreased by $3.5$2.3 million in 20242025 compared to 2023.2024. The decrease in the loss from operations was primarily due to lower operating expenses and an increaseemployee ofretention $4.0credit milliongain in 2025, offsetting the lower gross profit ondue higherto lower sales.

Our effective tax rate for each year was 2%-1% and -1%2% in 20242025 and in 2023,2024, respectively.

We ended 20242025 with cash and cash equivalents and restricted cash totaling $8.6$7.4 million, which is a $0.6 million increase from the prior year.million.

Other Income (IncomeExpense) Expense

Interest Income, net. Interest income generally consists of interest from our cash and cash equivalents and interest income related to employee retention credit, offset by interest expense which consists of interest charges on credit card charges and certain vendor bills.

Other ExpenseIncome (IncomeExpense), net. Other expense and income consistsincludes ofcommissions associated with ERC refund, realized foreign exchange gains or losses, state franchise tax benefit,expense, and other income.

Cost of goods sold for 20242025 increaseddecreased $0.5$6.6 million or 1.5%18.3% compared to 2023.2024. The increasedecrease was due to higherlower sales, partially offset by improved automotive and enterprise productgross margin rates.improvements.

Gross profit for 20242025 increaseddecreased $4.0$2.3 million, or 19.5%,9.1%, compared to 20232024 primarily duedriven toby improvedlower automotivesales, andpartially enterpriseoffset productby gross margin rates.improvements.

Operating expenses for 20242025 increaseddecreased $0.6$2.7 million or 1.7%(8.0)% compared to 2023.2024. The increasedecrease was primarily due to higherlower employee and engineering expensesproject developingdevelopment the company’s product roadmap, partially offset by lower general and administrative expenses driven by operational efficiencies.expenses.

Net cash used in operating activities was $3.5$1.1 million for the year ended December 31, 2024.2025. The cash decrease was primarily driven by thea net loss of $8.7$6.4 million, and by a $3.2$1.4 million net increasedecrease of operating assets and liabilities, offset by $8.4$6.7 million in non-cash expenses.

Net cash used in investing activities of $0.2$0.4 million for the year ended December 31, 20242025 was primarily for purchases of intellectual property and purchase of property and equipment.

Net cash usedprovided inby financing activities of $4.3$0.4 million for the year ended December 31, 20242025 was primarily from $4.1$0.4 million of net proceeds after fees and expenses from the issuance of approximately 760,000 shares of common stock via our ATM offering program. Additionally, we received $0.3 million from the proceeds of common stock issuances under the ESPP and equity option exercises.exercises, and $0.2 million of net proceeds from issuance of 109,167 shares of common stock via our ATM offering program. These proceeds were partially offset by $0.1$0.2 million tax payments for net share settlement of restricted stock units.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law providing an employee retention credit (ERC),ERC, which is a refundable tax credit against certain employment taxes on qualified wages. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, the American Rescue Plan Act of 2021 and the Infrastructure Investment and Jobs Act amended the qualifications for eligible employers who could apply and extended the availability of the ERC employment taxes on qualified wages paid after December 31, 2020 through September 30, 2021. We believe that we qualify for application of the ERC on qualified wages from the second quarter of 2020 through the third quarter of 2021. We applied for ERC refunds in 2023, totaling $2.8 million.

WeDuring appliedthe fortwelve ERCmonths refundsended inDecember 2023, totaling $2.5 million, net of professional fees. In January31, 2025, we received ERC refunds of $1.4$2.0 million, netwhich was recorded in other income section of professionalour fees,consolidated plusstatements anof additionaloperations. In addition to the refunds, we received $0.3 million for interest earned. We paid $0.2 million forcommission interest.to a third party professional firm that assisted us with processing the ERC refund application. There is no assurance that we will ultimately receive the remaining refund balance, or the timeframe of any such receipt, based on IRS review or otherwise. As of December 31, 2024, we have not recognized the ERC in our financial statements.

OnIn MarchMay 7,2025, 2024,we amended and restated the Company entered into an At-the-Market Issuance Sales Agreement (as amended, the Sales Agreement) with Craig-Hallum Capital Group LLC (Craig-Hallum). originally entered into in March 2024. Pursuant to the Sales Agreement, the Companywe may sell at itsour option, shares of our common stock having an aggregate offering price of up to an aggregateamount ofregistered $5.0under millionan ineffective sharesregistration ofstatement itsand commonfor stockwhich we have filed a prospectus, through or to Craig-Hallum, as sales agent.agent or principal. Subject to the terms and conditions of the Sales Agreement, Craig-Hallum may sell the shares, if any, only by methods deemed to be an “at the market” (ATM) offering as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. TheWe Company hashave agreed to pay Craig-Hallum a sales commission of 3.0%2.5% of the gross proceeds for sales under the Sales Agreement.

TheWe Company isare not obligated to sell, and Craig-Hallum is not obligated to buy or sell, any shares of common stock under the Sales Agreement. No assurance can be given that the Companywe will sell any additional shares of common stock under the Sales Agreement, or, if itwe does,do, as to the price or amount of shares of common stock that the Companywe may sell or the dates when such sales will take place. During the year ended December 31, 2024, 760,000 shares of common stock were issued pursuant to the Sales Agreement for net proceeds of $4.1 million, after deducting commissions. As of December 31, 2024, $0.5 million remains available under the Sales Agreement for future sales of the Company’s common stock.

On December 31, 2024, the Company entered into a Third Amendment (Lease Amendment) to the Officeoffice Lease,lease, relating to the Company’s corporate headquarters in San Diego, California. The Leaselease Amendmentamendment extends the term for the Leaselease from the prior expiration on November 30, 2025 to its new expiration on September 30, 2031. There is no right to further extend the term of the Lease.lease. The Leaselease Amendmentamendment provides that the annual base rent for the leased space shall be $699,051, or $58,254 on a monthly basis for the 12-month period beginning January 1, 2025, which amount shall increase 3% annually beginning on January 1, 2026. The Company iswas entitled to base rent abatement beginning onfrom January 1, 2025 through October 31, 2025.

As of December 31, 2024,2025, management performed the annual assessment of the Company's ability to meet its obligations as they become due within one yearyear, based on relevant conditions and events that are known and reasonably knowable. Following ASC 205-40 guidance, management considered quantitative and qualitative information to evaluate the Company's ability to meet obligations. Based on the analysis of the relevant conditions and events that are known and reasonably knownknowable as of December 31, 2024,2025, the Companymanagement concluded that it is probable that it will be able to meet all of its financial obligations as they become due in the next twelve months.

The relevant conditions and events that are known and reasonably knownknowable as of February 27,26, 20252026 related to the Company have not significantly changed since December 31, 2024.2025. Therefore, the resulting cash inflows along with the existing funds are expected to be sufficient for the Company’s financial obligations as they become due in the next twelve months.

Inventory is stated at the lower of cost or net realizable value (first-in, first-out method). For items manufactured by third parties, cost is determined using the first-in, first-out method (FIFO). For items that are manufactured by the Company's CMs, cost is determined using the weighted average cost method. We write-down inventory when it has been determined that conditions exist that may not allow the inventory to be sold for at the intended price or the inventory is determined to be obsolete based on assumption about future demand and market conditions. The charge related to inventory write-downs is recorded as cost of goods sold. We evaluate inventory at least annually and at other times during the year. Charges to cost of goods sold for excess, obsolete, and lower of cost or net realizable inventories totaled $0.8 million and $1.2 million in 2024 and 2023, respectively.

Macroeconomic conditions have continued to create demand softness and supply chain constraints in certain markets. Our sales declinedincreased by 4.2%0.7% compared with same period last year, as we experienced a stronger demand softness infor our existingenterprise automotiveIoT modems and enterprisevehicle markets,gateways, combineddue withto excessthe inventoriesacquisition inof ourthe channelsHPUE andproduct directline customers.from Nextivity. While we are experiencing demand growthgrowth, withwe anticipate memory-driven supply shortages to constrain our consumer customers and enterprise IoT, we anticipate that the inventory surplus some of our automotive customers have may extend into the second half of 2026.market. We remain focused on the execution and commercialization of our strategic product initiatives, specifically design wins and revenue ramps of our AirgainConnect and Lighthouse platforms, which lay the foundation for our pursuit of revenue and profitability growth.

In addition, inflation generally affects us by increasing our raw material and employee-related costs and other expenses. Our financial condition and results of operations may also be impacted by other factors we may not be able to control, such as uncertain global economic conditions, public health crises, global trade disputes, tariffs and trade policies, as well as conflicts around the world. We do not believe that such factors had a material adverse impact on our results of operations during the threesix months ended MarchJune 31,30, 2026.

Our operating expenses are classified into three categories: research and development, sales and marketing, general and administrative. The largest component of expense is personnel costs, which includesinclude salaries, employee benefit costs, bonuses, and stock-based compensation. Operating expenses also include allocated overhead costs for depreciation of equipment, facilities and information technology. Allocated costs for facilities consist of amortization of leasehold improvements as well as rent and utility expenses and taxes. Operating expenses are generally recognized as incurred.

Research and Development. Research and development expenses primarily consist of personnel and project development costs. These expenses include work related to the design, development and testing of system solutions and components. These expenses include salaries, stock-based compensation, benefits, bonuses, project development and testing, prototype material, consulting, travel, and similar costs, and depreciation and allocated costs for certain facilities. We expect research and development expenses to increase in absolute dollars in future periods as we continue to invest in the development of advanced system solutions, although our research and development expenseexpenses may fluctuate as a percentage of total sales.

Sales and Marketing. Sales and marketing expenses primarily consist of personnel and facility-related costs for our sales, marketing, and business development personnel, stock-based compensation and bonuses earned by our sales personnel, and commissions earned by our third-party sales representative firms. Sales and marketing expenses also include the costs of trade shows, advertising, marketing programs, promotional materials, demonstration equipment, travel, and allocated costs for certain facilities. We expect sales and marketing expenses to increase in absolute dollars in future periods as we continue to market and sell our advanced system solutions globally, although our sales and marketing expenseexpenses may fluctuate as a percentage of total sales.

General and Administrative. General and administrative expenses primarily consist of personnel and facility related costs for our executive,executives, legal, human resource,resources, finance, and administrative personnel, including stock-based compensation, as well as legal, accounting, other professional services fees, depreciation and intangible amortization, and other corporate expenses. We expect general and administrative expenses to fluctuate as we grow our operations.

Employee retention credit refund. On March 27, 2020, the CARES Act was signed into lawlaw, providing an ERC,employee whichretention iscredit ("ERC"), a refundable tax credit against certain employment taxes on qualified wages. WeIn 2023, we applied for ERC refunds in 2023, totaling $2.8 million. DuringAs theof three months ended MarchDecember 31, 2025, we had received ERC refunds of $1.5 million and an additional $0.5 million thereafter, for an aggregate of $2.0 million duringin theERC twelverefunds. months ended December 31, 2025. During the three months ended March 31, 2026, weWe did not receive any additional ERC refunds.refunds during the three and six months ended June 30, 2026.

Interest Income, net. Interest income generally consists of interest earned on cash and cash equivalents and ERC-related interest, offset by interest expense which consistsconsisting of interest charges on credit card chargesbalances and certain vendor bills.

Other Income and Expense. Other income and expense includes gaingains or losslosses on disposal of property and equipment, realized foreign exchange gains or losses, state franchise tax,taxes and penalties.

Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and 2025 (dollars in thousands)

Cost of goods sold for the three months ended MarchJune 31,30, 2026 decreasedincreased $0.3$0.1 million or 4.6%1.6% compared to the same period in the prior year. The declineincrease was primarily due to lowerhigher sales.

Gross profit for the three months ended MarchJune 31,30, 2026 decreased $0.2$0.1 million or 3.6%,0.9%, compared to the same period in the prior year, driven by lower sales. Gross profit as a percentage of sales for the three months ended MarchJune 31,30, 2026 increaseddecreased by 2060 basis points compared to the same period in the prior year. The increase wasyear, primarily drivendue by improved consumer product margins, partially offset byto lower enterprise product margins.

Operating expenses for the three months ended MarchJune 31,30, 2026 decreased $1.2$0.4 million or 14.2%4.7% compared to the same period in the prior year. The decrease was primarily due to lower amortization of intangible assetsassets, andpartially loweroffset by higher personnel expenses.

Total other income,income (expense), net for the three months ended MarchJune 31,30, 2026 was $0.3$49 millionthousand expense, compared with $1.6$0.5 million income for the threesame monthsperiod endedin Marchprior 31, 2025.year. The decrease was primarily due to the receipt of $1.5$0.5 million employee retention creditERC refunds in the first quarter of 2025 that was not repeated in the current period, partially offset by a bargain purchase gain of $0.3 million associated with the HPUE business acquisition.period.

Income Tax (Benefit) Expense

Income tax expense for the threesix months ended MarchJune 31,30, 2026 increased $48$6 thousand or 200.0%15.8% compared to the same period in the prior yearyear, primarily due to higherpre-tax income tax expense accrualsloss in 2026 as compared to 2025.

We had cash and cash equivalents of $7.1$7.6 million at MarchJune 31,30, 2026. During the period from 2013 through 2025, we incurred several years of net losses. As a result, we have an accumulated deficit of $95.5$97.2 million as of MarchJune 31,30, 2026.

Net cash used in operating activities. Net cash used byin operating activities was $0.8$2.6 million for the threesix months ended MarchJune 31,30, 2026. This was primarily driven by thea net loss of $1.9 million, offset by $0.8$3.6 million non-cash expenses and $0.3a $1.1 million net change in operating assets and liabilities.liabilities, partially offset by $2.1 million in non-cash adjustments.

Net cash used in investing activities. Net cash used in investing activities ofwas $0.1 million for the threesix months ended MarchJune 31,30, 2026 was2026, primarily for purchases of property and equipment and intellectual property.equipment.

Net cash provided by financing activities. Net cash provided by financing activities ofwas $0.7$2.9 million for the threesix months ended MarchJune 31,30, 2026 was2026, primarily from $0.6$1.6 million of net proceeds from the issuance of 171,488313,139 shares of common stock viaunder our at-the-market offering program (2025 ATM Program), and $0.1$1.3 million of proceeds from option exercises.

In May 2025, we established the 2025 ATM Program, to sell at our option up to $5.0 million of our common stock, pursuant to an amended and restated sales agreement (the Sales Agreement) with Craig-Hallum Capital Group LLC (Craig-Hallum) as sales agent or principal. During the three months ended June 30, 2026, we issued 141,651 shares of common stock under the 2025 ATM Program for net proceeds of $1.0 million after deducting commissions and other costs associated with the offering. As of DecemberJune 31,30, 2025,2026, we had $4.6$2.9 million available under the 2025 ATM Program for future sales of our common stock. During the three months ended March 31, 2026, we issued 171,488 shares of common stock under the 2025 ATM Program for net proceeds of $0.6 million after deducting commissions and other costs associated with the offering. As of March 31, 2026, we had $3.9 million available under the 2025 ATM Program for future sales of our common stock.

As of MarchJune 31,30, 2026, management performed the annual assessment of the Company's ability to meet its obligations as they become due within one year based on relevant conditions and events that are known and reasonably knowable. Following ASC 205-40 guidance, management considered quantitative and qualitative information to evaluate the Company's ability to meet obligations. Based on the analysis of the relevant conditions and events that are known and reasonably known as of MarchJune 31,30, 2026, the Company concluded that it is probable that it will be able to meet all of its financial obligations as they become due in the next twelve months.

The relevant conditions and events that are known and reasonably known as of MayAugust 6,5, 2026 related to the Company have not significantly changed since MarchJune 31,30, 2026. Therefore, the expected cash inflows along with the existing funds are expected to be sufficient for the Company’s financial obligations as they become due in the next twelve months.