ASTC 10-K & 10-Q changes, risk factors and insider trading
ASTROTECH Corp · Nasdaq · Laboratory Analytical Instruments · CIK 1001907 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Risks Related to our Strategic Initiatives”
New heading “We intend to explore expanding our business into the Lunar Initiatives and we may not be able to successfully transition our business and may not realize the anticipated synergies and benefits of such proposed transition.”
New heading “The development and maintenance of the technologies and infrastructure necessary to support our new Lunar Initiatives will require significant capital expenditures, and if we are unable to generate sufficient cash flow from operations or obtain additional financing on acceptable terms, our business, financial condition, results of operations, and future prospects could be materially and adversely affected.”
New heading “We are substantially dependent on the outcome of government solicitations and awards, including the Appendix A Program and the CLPS2 Program, and there can be no assurance that we will submit a proposal or be selected for any contract, award or funding.”
New heading “Many of our Lunar Initiatives involve significant technical complexity, unproven technologies, or technologies that do not exist or may require significant advancement, and such Lunar Initiatives may not achieve commercial viability.”
New heading “Our future revenue and operating results depend upon our ability to develop new technologies and respond to changes in customer demands and industry standards in highly competitive markets, and if we are unable to do so, our business, financial condition, results of operations, and future prospects may be materially and adversely affected.”
New heading “The commercial lunar market is undeveloped and uncertain, and there may be insufficient demand for the products and services we intend to develop”
New heading “We expect to face significant competition from well-capitalized commercial entities and government-sponsored programs in the markets we intend to enter, and if we are unable to compete effectively, our business, financial condition and results of operations could be harmed.”
New heading “Our activities to evaluate and pursue strategic alternatives may not be successful, including the announcement and pendency of the proposed sale of 1st Detect, and may present certain risks to our ongoing business and operations.”
New heading “Even if we obtain FDA clearance or approval for BreathTest-1000 or any other medical device product, our products will remain subject to regulatory scrutiny.”
Removed heading “Our financial performance may be adversely affected by medical device tax provisions in healthcare reform laws.”
Largest changes
“We will require additional financing as we continue to execute our business strategy, including the need for additional funds for the development of our products and our Lunar Initiatives. We may seek to raise additional capital through issuances of equity or debt securities, entrance into a credit facility or another form of third-party funding or seek other debt financing. …”see in full comparison
“We expect to face significant competition from well-capitalized commercial entities and government-sponsored programs in the markets we intend to enter, and if we are unable to compete effectively, our business, financial condition and results of operations could be harmed.”see in full comparison
“We expect to continue to evaluate the acquisition of strategic businesses and technologies with the potential to enhance our Lunar Initiatives. It may be difficult for us to complete transactions quickly and to integrate acquired operations efficiently into our current business operations. Acquisitions and investments may involve significant cash expenditures, debt incurrence, operating losses and expenses that could have a material adverse effect on our business, consolidated financial condition, results of operations and cash flows. …”see in full comparison
“Any government investigation of alleged violations of law would require us to expend significant time and resources in response and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our product candidates. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will be adversely affected.”see in full comparison
“The development and maintenance of the technologies and infrastructure necessary to support our new Lunar Initiatives will require significant capital expenditures, and if we are unable to generate sufficient cash flow from operations or obtain additional financing on acceptable terms, our business, financial condition, results of operations, and future prospects could be materially and adversely affected.”see in full comparison
“Our future revenue and operating results depend upon our ability to develop new technologies and respond to changes in customer demands and industry standards in highly competitive markets, and if we are unable to do so, our business, financial condition, results of operations, and future prospects may be materially and adversely affected.”see in full comparison
Full comparison: every changed paragraph (55)
As of June 30, 2025,2026, the Company had cash of approximately $8.4 million and short-term investments of approximately $2.9 million. If our available cash resources and anticipated cash flows from operations are insufficient to satisfy our liquidity requirements, we will need to raise additional capital to continue to fund our operations in the future. As of June 30, 2026, we had an accumulated deficit of approximately $251$265 million and reported a net loss of $13.8$14.4 million for the fiscal year 2025.2026. We are unable to predict the extent of any future losses or when we will become profitable, if at all. If we are unable to achieve and then maintain profitability,profitability or raise capital, the market value of our common stock will likely experience significant decline.
We will require additional financing as we continue to execute our business strategy, including the need for additional funds for the development of our products and our Lunar Initiatives. We may seek to raise additional capital through issuances of equity or debt securities, entrance into a credit facility or another form of third-party funding or seek other debt financing. Such funding may not be available to us on acceptable terms, or at all, and such funding may become even more difficult to obtain due to macroeconomic conditions, including rising interest rates, tariffs and trade restrictions, global conflicts and other conditions that could result in volatility in the U.S. capital markets. We may be unable to raise capital through public offerings of our common stock and may need to turn to alternative financing arrangements. Such arrangements could involve issuances of one or more types of securities, including common stock, preferred stock, convertible debt, warrants to acquire common stock or other securities. Even if successful in raising new capital, we could be limited in the amount of capital we raise due to investor demand. There can be no assurance that funding will be available on acceptable terms, on a timely basis, or at all. The various ways that we could raise capital carry potential risks. Any additional financing will likely involve the issuance of our equity securities, which will have a dilutive effect on our stockholders. Any debt financing, if available, may involve restrictive covenants that may impact our ability to conduct our business. If we raise funds through partnering, such as collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or grant licenses on terms that are not favorable to us. If we do not succeed in raising additional funds on acceptable terms or at all, we may be unable to develop our products.
If we are unable to raise additional capital when required or on acceptable terms, we may be required to:
These business units can be expected to experience continued operating losses until they can generate sufficient revenues to cover their operating costs. Furthermore, these business units may not be able to develop, manufacture, or market additional products in the future, and there can be no guarantee that future revenues will be significant, that any sales will be profitable, or that the business units will have sufficient funds available to complete their commercialization efforts. Any products and technologies developed and manufactured by our business units may require regulatory approvals prior to being made, marketed, sold, and used. Regulatory approval of any products may not be obtained. In particular, TSA approval is required to begin selling the TRACER 1000 in the United States and FDA clearance or approval is required to market the BreathTest-1000 in the United States. Obtaining approval from both TSA andthe FDA is a complex and lengthy process, and approvals for the TRACER 1000 and BreathTest-1000 may not be granted on a timely basis or at all, which would have a material adverse effect on our results of operations and financial condition.
If our available cash resources and anticipated cash flows from operations are insufficient to satisfy our liquidity requirements, including because of lower demand for our products or the realization of other risks discussed in this Item1A.Item 1A. of this Form 10-K, we may be required to raise additional capital through issuances of equity or convertible debt securities, entrance into a credit facility or another form of third party funding or seek other debt financing. There is no assurance we will be able to obtain future financing on commercially reasonable terms, or at all. In any event, we may consider raising additional capital in the future to expand our business, to pursue strategic investments, to take advantage of financing opportunities or for other reasons, including to:
AroundFor example, around October 2024 we became aware of two third party companies advertising the TRACER 1000 for sale on their respective websites. Their websites used images of the TRACER 1000 that were copied from the 1st Detect website. The offering price was far below the price that we would quote to a potential customer, and these companies were not authorized distributors of our products. We are aware that these companies have confirmed to independent inquiries that they are authorized distributors or resellers of 1st Detect’s products. We have not granted licenses to these companies to distribute 1st Detect's products.
We engaged legal counsel to investigate the companies. One company subsequently responded to our investigation’s inquiries that they did not have the product in stock but would order it directly from the manufacturer. However, the second company confirmed to an anonymous inquiry that they have the product in stock, which we believe is misleading to customers.
Our business strategy outlines the use of the decades of experience we have accumulated to expand the services and products we offer to both U.S. government agencies and commercial industries. These services and products are in the development stage and involve new and untested technologies and business models. These technologies and business models may not be successful, which could result in the loss of any investment we make in developing them, including the development of the BreathTest-1000. We believe commercialization of this application with the AMS Technology would require many years and significant investment due to regulatory requirements. As such, we have determined to deploy capital instead to our other subsidiaries.
Risks Related to our Strategic Initiatives
We intend to explore expanding our business into the Lunar Initiatives and we may not be able to successfully transition our business and may not realize the anticipated synergies and benefits of such proposed transition.
Recently our Board approved the Lunar Initiatives. Such Lunar Initiatives are in the explorative planning and design stage and subject to all of the risks inherent in the establishment of a new business venture. We may formulate new business strategies, offer new products or services or enter into new markets, which may result in additional risks and uncertainties in our business. Accordingly, our intended business and operations may not prove to be successful in the future, if at all.
We expect to continue to evaluate the acquisition of strategic businesses and technologies with the potential to enhance our Lunar Initiatives. It may be difficult for us to complete transactions quickly and to integrate acquired operations efficiently into our current business operations. Acquisitions and investments may involve significant cash expenditures, debt incurrence, operating losses and expenses that could have a material adverse effect on our business, consolidated financial condition, results of operations and cash flows. Integration activities can be costly, complex and time-consuming. We may not be able to realize the expected benefits from our Lunar Initiatives because of integration difficulties or other challenges. Acquisitions involve numerous other risks, including: (i) diversion of management’s time and attention from daily operations; (ii) difficulties integrating acquired businesses, technologies and personnel into our business; (iii) inability to obtain required regulatory approvals; (iv) inability to obtain required financing on favorable terms or, if so obtained, risks associated with incurrence of substantial amounts of indebtedness to finance the acquisition; (v) potential loss of key employees, key contractual relationships, or key customers of acquired companies or from our existing businesses; (vi) assumption of the liabilities and exposure to unforeseen liabilities of acquired companies (including environmental, employee benefits, safety and health and third-party property and casualty liabilities); (vii) unanticipated changes in applicable laws and regulations; (viii) unanticipated expenses and liabilities and (ix) other difficulties in the assimilation of our Lunar Initiatives’ business operations, technologies, products and systems. Any acquisitions or investments may ultimately harm our business or consolidated financial condition, as such acquisitions may not be successful and may ultimately result in impairment charges. The success of our Lunar Initiatives will depend, in part, on our ability to realize all or some of the anticipated synergies and other benefits from integrating the new Lunar Initiatives with our existing business.
In addition, we may not accomplish the integration smoothly, successfully or within the anticipated costs or timeframe. If we experience difficulties with the integration process or if the business of our Lunar Initiatives deteriorates, growth opportunities and other synergies may not be realized fully or at all, or may take longer to realize than expected. If any of the above risks occur, our business, financial condition, results of operations and cash flows may be materially and adversely impacted, we may fail to meet the expectations of investors or analysts, and our stock price may decline as a result.
The development and maintenance of the technologies and infrastructure necessary to support our new Lunar Initiatives will require significant capital expenditures, and if we are unable to generate sufficient cash flow from operations or obtain additional financing on acceptable terms, our business, financial condition, results of operations, and future prospects could be materially and adversely affected.
Our Lunar Initiatives will require substantial capital expenditures to design, develop, expand, and maintain our technologies and infrastructure to support development of such potential operations. These expenditures include, but are not limited to, costs associated with research and development, construction and expansion of production capabilities, acquisition of property and equipment, and ongoing maintenance and upgrades to ensure reliability and competitiveness.
In particular, lunar resource development, autonomous industrial infrastructure, Moon-based semiconductor, quantum computing manufacturing and lunar power generation opportunities all require the investment of significant additional capital resources. We may choose to increase or accelerate the pace of any of these investments at any time, which could result in periods of reduced profitability or increased losses as we prioritize long-term growth over near-term financial performance. Many of the products and services that may be important for the growth of our Lunar Initiatives are novel and untested, and therefore our estimates of capital expenditures may prove to be inaccurate. In addition, if any adverse findings are discovered at any stage during the course of our Lunar Initiatives that would render the initiative unsuitable, then we may not be able to obtain the financing necessary to proceed with the Lunar Initiatives on favorable terms, or at all.
Our ability to obtain financing that may be needed to provide additional funding will depend, in part, on factors beyond our control, and there can be no assurance that funding will be available to us on commercially reasonable terms or at all. Even if we are able to obtain financing, we may have to accept terms that are disadvantageous to us or that may have an adverse impact on our business plan and the viability of the relevant Lunar Initiatives. Any additional debt financing secured by us in the future could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which could limit our operational flexibility and make it more difficult for us to obtain additional capital and to pursue business opportunities.
In addition, we may need to raise additional capital through further issuances of equity or convertible debt securities, and if we do, our shareholders would suffer significant dilution and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock. Our ability to access the capital markets or secure other sources of financing may be adversely affected by factors beyond our control, including fluctuations in market conditions, changes in investor sentiment, increases in interest rates, or adverse events affecting the broader industry or economy. The failure to obtain necessary additional funding could cause any or all of our Lunar Initiatives to be delayed or not completed.
We are substantially dependent on the outcome of government solicitations and awards, including the Appendix A Program and the CLPS2 Program, and there can be no assurance that we will submit a proposal or be selected for any contract, award or funding.
We plan to submit a proposal to NASA’s Next Space Technologies for Exploration Partnerships-3 Appendix A: Lunar Enabling Infrastructure Accelerator program, and we submitted a proposal to NASA’s Commercial Lunar Payload Services 2 program in June 2026. Neither the CLPS2 submission nor the planned Appendix A proposal constitutes a NASA selection, award, contract, funding commitment, authorization or endorsement. Our business strategy and planned operations are substantially dependent on our ability to secure government contracts, awards and funding, including under programs such as the Appendix A Program and CLPS2 Program. We do not currently have committed funding sufficient to fully execute on any of the Company’s Lunar Initiatives, and we are reliant on government awards and contracts to provide the programmatic support, and potentially the capital necessary to advance our development activities, achieve key technical milestones and sustain our operations. If we are not selected for awards under these programs, or if any awards we receive are smaller in scope, delayed or subject to conditions that limit their utility, we may lack the financial resources to carry out any of the Lunar Initiatives on the timelines necessary for commercialization. There can be no assurance that NASA will not modify, delay or cancel the Appendix A Program or the CLPS2 Program, that we will submit a proposal to the Appendix A Program, or that NASA will select or fund us under the Appendix A Program or CLPS2 Program.
The award processes for government programs such as the Appendix A Program and CLPS2 Program are highly competitive, subject to extensive evaluation criteria, and influenced by factors beyond our control, including government budgetary constraints, shifting policy priorities, the number and quality of competing proposals, and the discretion of the awarding agency. Even if we submit technically sound proposals, there can be no assurance that we will be selected for any award, that any award will be made on terms favorable to us, or that funding under any award will be disbursed in a timely manner or in amounts sufficient to advance the Lunar Initiatives. Our failure to obtain government contracts, awards or funding could materially impair our ability to advance the Lunar Initiatives, force us to seek alternative sources of capital on potentially unfavorable terms, significantly curtail or delay our planned operations, or otherwise have a material adverse effect on our business, financial condition and results of operations.
Many of our Lunar Initiatives involve significant technical complexity, unproven technologies, or technologies that do not exist or may require significant advancement, and such Lunar Initiatives may not achieve commercial viability.
Our Lunar Initiatives are in the explorative planning and design stages and have not yet been proven at commercial scale, or at all, and may ultimately be unsuccessful. In particular, the timeline for these Lunar Initiatives, and the launch cadence required to achieve them may be difficult or impossible to determine. To date, no formal business plan or capital budget has been approved relating to our Lunar Initiatives. These efforts require substantial and ongoing investments of financial, technical, and human resources over extended time horizons, including, but not limited to, research and development, testing, infrastructure, regulatory approvals, and mission execution. The technologies, systems, and operational capabilities required for each of these Lunar Initiatives involve significant technical complexity and are subject to design, engineering, and performance risks, many of which may only become apparent as development and testing progress. Many of these technologies, systems and operational capabilities are novel and untested, and we expect to incur significant capital expenditures over a period of years before our products and services and other strategic Lunar Initiatives, including in-orbit, lunar, and interplanetary industrialization efforts, become profitable, which may never occur. We may not be able to develop, commercialize, scale, or successfully implement these or other strategic initiatives on the timelines we currently anticipate, or at all.
The Lunar Initiatives require the transportation of significant equipment, technology and materials to the lunar surface. The availability and cost of lunar transportation and launch services are determined by third-party providers and are subject to significant uncertainty. Launch failures, schedule delays, limited payload capacity and escalating costs could delay or prevent the deployment of our planned lunar infrastructure and could render our operations commercially impracticable. We have not announced any contracts with launch service providers, and there can be no assurance that we will be able to secure reliable and cost-effective transportation to the Moon.
Furthermore, to the extent that breakthrough developments in terrestrial energy access, such as advances in nuclear energy, significantly reduce energy costs or alleviate infrastructure constraints, the viability of our infrastructure may be materially diminished. Even if our Lunar Initiatives prove to be commercially viable, a material slowdown in the demand of lunar based products could result in existing infrastructure meeting such demand, thereby reducing the need for our lunar infrastructure. As a result, we may be required to devote financial, technical, human or other resources in excess of our current expectations, and there can be no assurance that these investments will generate adequate revenue, which could adversely affect our business, financial condition, results of operations, and future prospects. Our Lunar Initiatives are still emerging and evolving or do not currently exist, and such markets may not develop as we expect, or at all. Any estimate we make regarding the size or timing of our anticipated market opportunities is inherently uncertain and necessarily involves significant assumptions about future customer demand, adoption, technological development, regulatory conditions and the emergence of a broader commercial market that does not currently exist. While we believe these industries will develop over time, the manner in which they emerge, including the timing of commercialization, the scale and pace of adoption, and the applicable technical, regulatory, geopolitical and economic frameworks may differ materially from our current expectations. If these industries do not develop, develop on slower timelines, at smaller scales, or under different economic or regulatory conditions than we anticipate, this could require us to modify, delay, or abandon certain of our business plans, or cause such plans not to develop at all, which could materially and adversely affect our business, financial condition, results of operations, and future prospects.
Our future revenue and operating results depend upon our ability to develop new technologies and respond to changes in customer demands and industry standards in highly competitive markets, and if we are unable to do so, our business, financial condition, results of operations, and future prospects may be materially and adversely affected.
Our future revenue growth and operating results relating to our Lunar Initiatives are dependent on our ability to design, develop and successfully commercialize new and innovative technologies, products, and services on a timely and cost-effective basis. The commercial lunar and space industries are characterized by rapid and disruptive technological change, evolving industry standards, the emergence of new and well-funded competitors, and frequent new product and service introductions. In addition, we may expand into new markets, which may lead to similar or additional challenges that we cannot foresee and may require novel innovations to navigate or overcome. As a result, we may from time to time rapidly adjust, modify or change our strategic priorities, capital allocation, product or service focus or operational Lunar Initiatives across our business in response to these other changes or new markets.
The markets in which we plan to operate are rapidly evolving and intensely competitive, and we face competition from a range of established and emerging companies, including large, well-capitalized technology companies and aerospace firms, including foreign competitors. Some competitors are investing significant capital to develop related infrastructure that compete directly with our offerings, and companies based in China and other jurisdictions may benefit from government support, favorable regulatory environments, or strategic national prioritization.
If we are unable to anticipate technological trends, respond to technological advancements or changing customer demands, or successfully develop and commercialize new or enhanced offerings, we may be unable to establish or maintain a meaningful market position and our business, financial condition, results of operations, and future prospects could be materially and adversely affected.
The commercial lunar market is undeveloped and uncertain, and there may be insufficient demand for the products and services we intend to develop
Our Lunar Initiatives contemplate the development of infrastructure and services including power generation and energy storage for commercial and government customers on the Moon. Currently, there is no commercial lunar market, and there can be no assurance that lunar commercialization will occur, or that sufficient customer demand will develop for such products and services. Uncertainty concerning the existence, concentration, accessibility, extractability, processing, ownership, regulation and commercial value of lunar resources further limits the predictability of this market. If the commercial lunar market does not develop as anticipated, or develops more slowly than expected, we may be unable to generate meaningful revenue from the Lunar Initiatives.
We expect to face significant competition from well-capitalized commercial entities and government-sponsored programs in the markets we intend to enter, and if we are unable to compete effectively, our business, financial condition and results of operations could be harmed.
The markets for which we are conducting explorative planning and design, including lunar power generation, energy storage and resource mining are expected to attract significant competition from commercial entities and government-sponsored programs, many of which have substantially greater financial, technical, manufacturing, marketing and personnel resources than we do. We believe that our ability to compete will depend upon many factors both within and beyond our control, including:
Many of our current and potential competitors have significantly greater resources and more advanced operational capabilities than we do. For example, SpaceX is substantially better capitalized than us and possesses substantial vertical integration across launch, spacecraft manufacturing and mission operations, which provides it with significant cost and schedule advantages that could enable it to offer competing lunar infrastructure services at lower prices or on faster timelines than we are able to achieve. Other competitors, including Blue Origin, Intuitive Machines and international space agencies, are also pursuing lunar surface operations and may establish infrastructure or secure customer commitments before we are able to deploy our planned systems. Because our Lunar Initiatives remain in the explorative planning and design stage, we have not yet demonstrated the technical feasibility of our planned offerings, potential customer base or generated any revenue from lunar-related activities, and we may be unable to compete effectively against entities that are further advanced in their lunar programs. Our failure to compete effectively could have a material adverse effect on our business, financial condition and results of operations.
Our activities to evaluate and pursue strategic alternatives may not be successful, including the announcement and pendency of the proposed sale of 1st Detect, and may present certain risks to our ongoing business and operations.
In November 2025, we initiated a review of strategic alternatives in order to explore ways to maximize shareholder value, including raising equity capital, reverse mergers, combination transactions, and the sale of all or part of our business, and other possible strategic or financial transactions. The review of such alternatives is ongoing and we have not set a deadline or definitive timetable for the completion of the strategic alternatives review process, and there can be no assurance that this process will result in any transaction or specific outcome. Additionally, on June 16, 2026, we announced that our Board authorized our management to pursue a potential sale process of our subsidiary, 1st Detect. We may not be able to accurately estimate the timing of any strategic alternative, including a potential sale of 1st Detect, or signing of a final agreement, valuation or purchase price, or whether economic or other market conditions will impact the timing, price or market interest. We cannot estimate whether economic conditions, capital markets, or other factors will allow us to successfully complete a strategic alternative, locate an adequate counterparty, negotiate terms of a strategic alternative acceptable to us or successfully complete such a strategic alternative.
A successful transaction could depend on various factors, including our ability to effectively transfer liabilities, contracts, and employees, revise our legal entity structure, negotiate equity ownership, identify and separate intellectual property, reduce fixed costs associated with the assets or a business, obtain financing, and collect or use the proceeds from any transaction. Any strategic alternative transaction may result in a dilutive impact to our future earnings, as well as significant write-offs, including those related to long-lived assets, including goodwill and other intangible assets, which could have a material adverse effect on our results of operations and financial condition. All of these efforts require varying levels of management resources, which may divert our attention from other business operations.
In addition, the announcement and ongoing conduct of a strategic alternative process may disrupt the Company’s business by creating uncertainty among employees, customers, and suppliers, which could result in the loss of key personnel, cancellation or non-renewal of customer contracts, or causing the deterioration of supplier relationships, which in turn could reduce all or a portion of our business’ value and adversely affect our results of operations.
Commercialization of the BreathTest-1000 may require FDA clearance of a 510(k) premarket notification submission and/orsubmission, authorization of a de novo submission.submission, or PMA approval. The process for submitting and obtaining FDA clearance of a 510(k) or, authorization of a de novo submission, or PMA approval can be expensive and lengthy. The FDA’s review process can take several months or longer, and we may not be able to obtain FDA clearance orclearance, de novo authorizationauthorization, or approval for the BreathTest-1000 on a timely basis, if at all. The FDA’s refusal of, or any significant delays in receiving, 510(k) clearance orclearance, de novo authorizationauthorization, or PMA approval of the BreathTest-1000, would have an adverse effect on our ability to expand our business. Thus far, we have not performed any clinical testing of the BreathTest-1000, which will likely be required before the device can be marketed. Even if a clinical trial is completed, there can be no assurance that the data generated during a clinical trial will meet the safety and effectiveness endpoints or otherwise produce results that will lead the FDA to grant marketing clearance, approval, or authorization. We believe commercialization of BreathTest-1000 would require many years and significant investment due to regulatory requirements. At this time, we have determined to deploy capital instead to our other subsidiaries. In addition, any other delays in the development of the BreathTest-1000, for example, unforeseen issues during product validation, would have an adverse effect on our ability to commercialize the BreathTest-1000.
As a prospective medical device manufacturer, if BreathTest-1000 or any other device(s) we may successfully develop in the future is approved or cleared for commercialization in the United States, we will need to register with the FDA and will be subject to periodic inspection by the FDA for compliance with the QSR,QMSR, including requirements pertaining to design controls, product validation and verification, in-process testing, quality control and documentation procedures, labeling, among numerous others. Compliance with applicable regulatory requirements is subject to continual review and is rigorously monitored through routine and unannounced inspections by the FDA. Any product and component suppliers we may engage in connection with the manufacture and/or distribution of any medical device(s) for which we obtain FDA clearance or approval, if any, will also be required to meet certain standards applicable to their manufacturing processes, and we may be held responsible for any failure to do so by any such suppliers or vendors.
Even if we obtain FDA clearance or approval for BreathTest-1000 or any other medical device product, our products will remain subject to regulatory scrutiny.
Even if we successfully develop our BreathTest-1000 and it is cleared or approved for commercialization by FDA, it will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, distributing, follow-up and data and adverse event reporting, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy, and other post-market information, including both federal and state requirements in the United States.
If FDA discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or disagrees with the promotion, marketing or labeling of BreathTest-1000, FDA may impose restrictions on that product or us, including requiring withdrawal of the product from the market. If we fail to comply with applicable regulatory requirements, FDA or another enforcement authority may, among other things:
Any government investigation of alleged violations of law would require us to expend significant time and resources in response and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our product candidates. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will be adversely affected.
Legislative or regulatory healthcare reforms may makeadversely itaffect moreour difficultbusiness and costlyour for usability to obtain reimbursement for our products or regulatory clearance or approval offor, and successfully commercialize, our future products, if any, and to produce, market and distribute those products after clearance or approval is obtained.products.
Recent political, economic and regulatory influences are subjecting the healthcare industry to fundamental changes. Both the federal and state governments in the United States and foreign governments continue to propose and pass new legislation and regulations designed to contain or reduce the cost of healthcare. Such legislation and regulations may result in decreasedincreased reimbursementcost pressures on healthcare providers and other potential customers, which could reduce spending, delay purchasing decisions, increase price sensitivity, or otherwise negatively affect demand for our product,products, if approved and commercialized, which may further exacerbate industry‑wide pressure to reduce the prices charged for our product. This could harm our ability to market our products and generate sales. In addition, FDA regulations and guidance are often revised or reinterpreted by the FDA in ways that may significantly affect our business and our current products and future products. Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of our products. Delays in receipt of or failure to receive regulatory clearances or approvals for any future products would negatively impact our long‑term business strategy.
The ability of FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect FDA’s ability to perform routine functions. Average review times at the agency have fluctuated in recent years as a result. Disruptions at FDA and other agencies may also increase the time necessary to meet with and provide feedback to entities developing drug products, review and/or approve our submissions, conduct inspections, issue regulatory guidance, or otherwise authorize our actions requiring regulatory approval, which would adversely affect our business. In addition, government funding of FDA and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable. For example, the executive branch recently established the Department of Government Efficiency (“DOGE”),in 2025, which implemented a federal government hiring freeze and large scalelarge-scale layoffs of current federal employees and also announced additional efforts to reduce federal government employee headcount and the size of the federal government. ItSimilar isbudgetary unclearpressures, howif these executive actions or other potential actionsimplemented by the executivefederal branch will impact the regulatory authorities that oversee our business. These budgetary pressuresgovernment, may reduce FDA’s ability to perform its responsibilities. If a significant reduction in FDA’s workforce occurs, FDA’s budget is significantly reduced, or there are other disruptions at FDA and other agencies, more time may be necessary for biologicaldevice products, or biologics, or modifications to approved biologicsproducts to be reviewed and/or approved by necessary government agencies, which could increase our costs and would adversely affect our business.
Our financial performance may be adversely affected by medical device tax provisions in healthcare reform laws.
The Patient Protection and Affordable Care Act (the “PPACA”) imposed, among other things, an excise tax of 2.3% on any entity that manufactures or imports medical devices offered for sale in the United States. Under these provisions, the Congressional Research Service predicted that the total cost to the medical device industry may be up to $20 billion over a decade. The Internal Revenue Service issued final regulations implementing the tax in December 2012, which required, among other things, bi-monthly payments and quarterly reporting. The Consolidated Appropriations Act, 2016 (Pub. L. 114-113), signed into law in December 2015, included a two-year moratorium on the medical device excise tax. A second two-year moratorium on the medical device excise tax was signed into law in January 2018 as part of the Extension of Continuing Appropriations Act, 2018 (Pub. L. 115-120), extending the moratorium through December 31, 2019. On December 20, 2019, as part of the Further Consolidated Appropriations Act, 2020 H.R. 1865 (Pub. L. 116-94), President Trump signed into law a permanent repeal of the medical device tax under the PPACA such that sales of taxable medical devices after December 31, 2015 are not subject to the tax; however, there is no guarantee that Congress or the President will not reverse course in the future. If such an excise tax on sales of our products in the United States is enacted, it could have a material adverse effect on our business, results of operations and financial condition.
Legislation and regulations pertaining to the use and cultivation of hemp and cannabis are enacted on both the state and federal government level within the United States. As a result, the laws governing the cultivation and use of hemp and cannabis may be subject to change. Any new laws and regulations limiting the use or cultivation of hemp and cannabis and any enforcement actions by state and federal governments could indirectly reduce demand for our products and may impact our current and planned future operations. Most recently, the Continuing Appropriations and Extensions Act of 2026 (H.R. 5371) (the “2026 Appropriations Act”), enacted on November 12, 2025, includes a provision to amend the definition of hemp in the 2018 Farm Bill to effectively eliminate the currently commercialized hemp-derived THC products although the change does not become effective for 365 days from the date of enactment. Efforts are underway to repeal, replace, or delay this amendment, but whether any change will occur is uncertain. The amended definition was set to go into effect on November 12, 2026, but Congress delayed implementation until December 11, 2026. There can be no assurance that changes in regulation of the industry and/or more rigorous enforcement by federal authorities will not have a detrimental effect on us.
The recent changes in the U.S.’s approach to international trade may impact existing bilateral or multi-lateral trade agreements and treaties with foreign countries. The U.S. has imposed tariffs on certain foreign goods and may increase tariffs or impose new ones, and certain foreign governments have retaliated and may continue to do so. For example, the President of the United States signed executive orders directing the U.S. to impose tariffs on goods originating from Canada, Mexico and China. In response, some of these countries threatened or announced tariffs on imports from the U.S. To date, Canada and the U.S. agreed to delay the imposition of certain tariffs on imported goods but the situation remains temporary and uncertain. Furthermore, on July 28, 2025, the U.S. announced that they have reached a preliminary trade deal with the European Union,EU, which among other things, sets a 15% percent tariff on most European UnionEU goods. These developments are ongoing and are subject to change, including the imposition of additional tariffs and retaliatory measures by these and other countries. We derive a significant portion of our revenues from international sales, which makes us especially vulnerable to increased tariffs. Additionally, the implementation of these or other tariffs may lead to increased costs for our product components, which could impact our ability to maintain competitive pricing in the market. Changes in U.S. trade policy have created ongoing turmoil in international trade relations, and it is unclear what future actions the U.S. government or foreign governments will or will not take with respect to tariffs or other international trade agreements and policies. Current trade negotiations may fail, which may exacerbate these risks. Ongoing or new trade wars or other governmental action related to tariffs or international trade agreements or policies could reduce demand for our products and services, increase our costs, reduce our profitability, adversely impact our supply chain or otherwise have a material adverse effect on our business and results of operations.
Since early February 2025, The Bureau of Industry and Security (BIS), a part of the U.S. Commerce Department, has paused the processing of new export license applications, citing a "hold without action" order for applications filed after February 5, 2025. This pause, reportedly due to an internal policy review and ongoing turmoil at the agency, has left exporters with no clear guidance and is expected to significantly lengthen already long application review times. No formal statement or explanation has been issued by BIS or the Commerce Department to the public or industry stakeholders. Such policies and actions could effectaffect our ability to export our products and could reduce demand for our products and services, increase our costs, reduce our profitability, adversely impact our supply chain or otherwise have a material adverse effect on our business and results of operations.
Our stock price has fluctuated in the past, has recently been volatile and may be volatile in the future. OnThe Septemberclosing 9, 2024, the intra-day salesmarket price of our common stock fluctuated between a reported low sale price of $8.01 and a reported high sales price of $10.69. Throughout the fiscal year 2025, the closing sales price offor our common stock has fluctuatedvaried between a reported low sales pricehigh of $5.50$49.80 on May 29, 2026, and a reported high sales pricelow of $11.51.$2.17 on March 26, 2026, in the twelve-month period ended June 30, 2026. We may incur rapid and substantial decreases in our stock price in the foreseeable future that are unrelated to our operating performance or prospects. The stock market in general and the market for companies such as ours in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may experience losses on their investment in our common stock. The market price for our common stock may be influenced by many factors, including the following:
Our Certificate of Incorporation provides that unless we consent in writing to the selection of an alternative forum, the Court of Chancery for the State of Delaware is the sole and exclusive forum for claims brought by a stockholder, including claims in the right of the corporation, (i) that are based upon a violation of a duty by a current or former director or officer or stockholder in such capacity or (ii) as to which the Delaware General Corporation Law (the “DGCL”) confers jurisdiction upon the Court of Chancery of the State of Delaware. The provision indicates that if the Court of Chancery does not have jurisdiction, then the Superior Court of the State of Delaware, or, if such other court does not have jurisdiction, the United States District Court for the District of Delaware, shall be the exclusive forum for such action.
Our common stock is currently listed for trading on the Nasdaq Capital Market.Nasdaq. We must satisfy the Nasdaq Capital Market’sNasdaq’s continued listing requirements or risk delisting, which would have a material adverse effect on our business. A delisting of our common stock from the Nasdaq Capital Market could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities.
Management's Discussion & Analysis (MD&A)
New heading “The terms “Astrotech”, “the Company”, “we”, “us”, or “our” refer to Astrotech Corporation (Nasdaq: ASTC), a Delaware corporation organized in 1984. Our use of “products” and “devices” refer to the TRACER 1000™, BreathTest-1000™, AGLAB 1000™, and Pro-Control 1000™ along with related accessories and consumables.”
New heading “Recent Developments”
Removed heading “Fiscal Year 2025 Business Highlights”
Largest changes
“As of June 30, 2026, we had cash and cash equivalents of $8.4 million as compared to cash and cash equivalents of $3.1 million at June 30, 2025. We have incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of approximately $265 million at June 30, 2026, and reported a net loss of $14.4 million. We regularly monitor potential financing and capital sources, including equity and debt markets, in an effort to meet our planned capital expenditures and liquidity requirements. …”see in full comparison
“The terms “Astrotech”, “the Company”, “we”, “us”, or “our” refer to Astrotech Corporation (Nasdaq: ASTC), a Delaware corporation organized in 1984. Our use of “products” and “devices” refer to the TRACER 1000™, BreathTest-1000™, AGLAB 1000™, and Pro-Control 1000™ along with related accessories and consumables.”see in full comparison
Until such time, if ever, as we can generate positive cash flows from operations, we expect to finance our additional cash needs through a combination of equity offerings, debt financing, equity financing, merging, or engaging in a strategic partnership. Such funding may not be available to us on acceptable terms, or at all, and such funding may become even more difficult to obtain due to macroeconomic conditions, including rising interest rates, tariffs and trade restrictions, global conflicts and other conditions that could result in volatility in the U.S. capital markets. To the extent that we raise additional capital through the sale of equity, our existing stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect the rights of holders of common stock. Even if successful in raising new capital, we could be limited in the amount of capital we raise due to investor demand. Debt financing, if available, may involve agreements that include restrictive covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.see in full comparison
“On May 26, 2026, EN-SCAN, a subsidiary of Astrotech, announced the commercial launch of the Labrador HH-GC, a rugged, field-portable gas chromatograph engineered to bring laboratory-grade volatile organic compound analysis directly to the point of investigation. The Labrador HH-GC delivers rapid on-site detection reducing the delay, uncertainty, and cost associated with traditional off-site laboratory workflows.”see in full comparison
“On June 2, 2026, we entered into the ATM Agreement with Wainwright relating to an at-the-market offering program, pursuant to which we have the ability to offer and sell, from time to time at our sole discretion, shares of our common stock, having aggregate gross proceeds of up to $50.0 million through Wainwright as sales agent subject to applicable limitations. During the fiscal year ended June 30, 2026, the Company sold 168,980 shares under the ATM Program and received net proceeds of approximately $6.7 million, which it used to support working capital and general corporate purposes. …”see in full comparison
Full comparison: every changed paragraph (54)
The terms “Astrotech”, “the Company”, “we”, “us”, or “our” refer to Astrotech Corporation (Nasdaq: ASTC), a Delaware corporation organized in 1984. Our use of “products” and “devices” refer to the TRACER 1000™, BreathTest-1000™, AGLAB 1000™, and Pro-Control 1000™ along with related accessories and consumables.
Our mission encompasses the advancement of both mass spectrometry and gas chromatography, two powerful analytical techniques that together enable precise detection and identification of chemical compounds across a wide range of high-demand environments. We aim to expand access to mass spectrometry by simplifying the complexity of operating these devices within real-time testing environments such as airports, border checkpoints, cargo hubs, infrastructure security, correctional facilities, military bases, law enforcement centers, and industrial locations. We are introducing our new line of products that are ultra-portable, on-site, rugged environmental testing instruments, featuring our proprietary ATi Mass Spectrometer Technology ("“MS"”) and ATi Gas Chromatography Column ("“GC"”) to achieve our mission through simplifying the user interface, ruggedizing the critical components to endure MS/GC field work, and enabling multiple configurations for sample intake options. The Astrotech Mass Spectrometer Technology™ and ATi Gas Chromatograph Column (GC) platforms achieve our mission through simplifying the user interface, automating the complicated calibration process, ruggedizing the critical components to endure MS/GC field work, and enabling multiple configurations for sample intake options.
Our Board of Directors (the “Board”) recently approved strategic initiatives focused on future lunar resource development, autonomous lunar industrial infrastructure, Moon-based advanced computing, semiconductor manufacturing, lunar power generation and power infrastructure, mining, chemical manufacturing, product transportation and equipment leasing opportunities on the Moon (our “Lunar Initiatives”). As part of the Lunar Initiatives, Astrotech intends to evaluate and potentially develop infrastructure technologies that could support future semiconductor processing, advanced computing systems, and quantum computing manufacturing operations on the lunar surface. Astrotech believes the convergence of abundant solar energy, extreme lunar thermal conditions, reduced gravity, autonomous robotics, and access to strategic lunar materials such as Si-28 and 3He may ultimately make the Moon an attractive long-term platform for advanced computational infrastructure and next-generation quantum manufacturing systems.
Recent Developments
On August 15, 2025, we introduced our new EN-SCAN product line of ultra-portable rugged environmental testing instruments, featuring its proprietary ATi Gas Chromatograph Column (“GC”) and ATi Mass Spectrometer Technology (“MS”). Customers can now gain access to real-time results and on-demand reporting, enabling continuous monitoring and immediate response in critical applications In November 2025, we initiated a review of strategic alternatives in order to explore ways to maximize shareholder value, including raising equity capital, reverse mergers, combination transactions, and the sale of all or part of our business, and other possible strategic or financial transactions. The review of such alternatives is ongoing and we have not set a deadline or definitive timetable for the completion of the strategic alternatives review process, and there can be no assurance that this process will result in any transaction or specific outcome.
On May 26, 2026, EN-SCAN, a subsidiary of Astrotech, announced the commercial launch of the Labrador HH-GC, a rugged, field-portable gas chromatograph engineered to bring laboratory-grade volatile organic compound analysis directly to the point of investigation. The Labrador HH-GC delivers rapid on-site detection reducing the delay, uncertainty, and cost associated with traditional off-site laboratory workflows.
On May 27, 2026, we announced that our Board has approved a strategic initiative focused on lunar resource development, autonomous lunar industrial infrastructure and future Moon-based advanced computing and semiconductor manufacturing opportunities. As part of the initiative, we intend to evaluate and potentially develop infrastructure technologies that could support future semiconductor processing, advanced computing systems, and quantum computing manufacturing operations on the lunar surface.
In June 2026, our Board authorized our management to pursue a potential sale process of 1st Detect, developer of the TRACER 1000 mass spectrometry-based explosives and narcotics trace detection platform. We are evaluating a potential sale of 1st Detect to provide additional capital for the announced strategic initiatives we are committed to building.
On June 2, 2026, we entered into an at-the-market offering agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) relating to an at-the-market offering program (the “ATM Program”), pursuant to which we have the ability to offer and sell, from time to time at our sole discretion, shares of our common stock through Wainwright as sales agent subject to applicable limitations. On June 3, 2026, we filed a prospectus supplement (the “Prior Prospectus Supplement”) to the prospectus dated January 30, 2026, relating to the offer and sale of our common stock under the ATM Program, whereby we initially registered shares having an aggregate offering price of approximately $24.4 million. On August 19, 2026, the Company filed a prospectus supplement to a shelf registration statement on Form S-3 (File No. 333-297144) and the related base prospectus with the SEC, which was declared effective on July 7, 2026, to increase the remaining shares of our common stock available for issuance under the ATM Agreement to $50 million, which replaced and superseded in its entirety, the Prior Prospectus Supplement. As of September 23, 2026, we have sold 258,856 shares of our common stock under the ATM Program for gross proceeds of approximately $7.9 million.
Fiscal Year 2025 Business Highlights
On January 8, 2025, we announced that 1st Detect Corporation had been awarded a research and development contract with the U.S. Department of Homeland Security ("DHS") to research the TRACER 1000 for DHS next generation explosives trace detection.
On January 14, 2025, our wholly owned subsidiary, 1st Detect Corporation, announced that it has been awarded research and development contract 70RSAT24CB0000015 with the U.S. Department of Homeland Security (“DHS”) to research, develop and mature the TRACER 1000 for DHS next generation explosives trace detection.
Astrotech received a $429,000 purchase order for TRACER 1000™ explosive trace detectors ("ETDs") from Intuitive Research and Technology, a TSA approved contractor. On January 24, 2025, we fulfilled the purchase order and sold six TRACER 1000 explosive trace detectors to Intuitive Research and Technology Corporation. This is the first TSA-approved sale of our TRACER 1000 ETD, which utilizes mass spectrometry technology, known for its accuracy and low false alarm rate.
On February 28, 2025, Astrotech Corporation (the “Company”) issued a press release announcing that it has created a new wholly owned subsidiary, EN-SCAN, Inc., to manufacture and sell a new line of instruments built for environmental testing applications using its proprietary ATi Gas Chromatograph and Astrotech Mass Spectrometer Technology™.
On March 10, 2025, Astrotech Corporation announced the launch of its enhanced TRACER 1000 Narcotic Trace Detector from its 1st Detect subsidiary. This innovative mobilized mass spectrometer is specifically configured to screen for the full range of synthetic opiates and novel psychoactive substances, delivering accuracy and speed to counter the global drug crisis.
On June 12, 2025, our wholly owned subsidiary, 1st Detect Corporation sold the first sale and deployment of its TRACER 1000 Narcotic Trace Detector in Vietnam, by way of its subsidiary 1st Detect. This milestone marks a significant step in expanding the 1st Detect footprint across Southeast Asia and reinforces its commitment to enhancing narcotics trace detection inspection capabilities.
We have also started the process to pass TSA checkpoint testing. This process involves Developmental Test and Evaluation in which the Transportation Security Laboratory ("“TSL"”) will test the TRACER 1000 and work with 1st Detect to ensure its readiness to enter certification testing. The certification test is then completed by the Independent Test & Evaluation department of TSL. As of the fiscal year 2023 budget the government had over 6,000 ETD units at checkpoint and baggage screening points for which we believe that the TSA would benefit from utilizing our AMS Technology.
Astrotech recognizes revenue employing the generally accepted revenue recognition methodologies described under the provisions of Accounting Standards Codification (“ASC”) Topic 606 “Revenue from Contracts with Customers” (“Topic 606”), which was adopted by us in fiscal year 2019. The methodology used is based on contract type and how products and services are provided. The guidelines of Topic 606 establish a five-step process to govern the recognition and reporting of revenue from contracts with customers. The five steps are: (i) identify the contract with a customer, (ii) identify the performance obligations within the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations within the contract,contract and (v) recognize revenue when or as the performance obligations are satisfied.
An additional factor is reasonable assurance of collectability. This necessitates deferral of all or a portion of revenue recognition until collection. For the year ended June 30, 2025,2026, we generated approximately $1.0$913 millionthousand in revenue from ninethree customers that represented a significant portion of total revenue for fiscal year end 2025.2026.
The timetable for fulfillment of each of the distinct performance obligations can range from completion in a short amount of time and entirely within a single reporting period to completion over several reporting periods. The timing of revenue recognition for each performance obligation may be dependent upon several milestones, including physical delivery of equipment, completion of site acceptance test, and in the case of after-market consumables and service deliverables, the passage of time. The total revenue was approximately $638 thousand in point in time and $275 thousand over time for 2026 and $920 thousand in point in time and $130 thousand over time for 20252025. Product and $1.56consumables millionrevenue represented the majority of revenue recognized at a point in time andduring $88fiscal thousandyear over time for 2024. All revenue was substantially related to one product category for both 2025 and 2024.2026.
Revenue – Total revenue decreased by $136 thousand, or 13.0% in fiscal year ended June 30, 2026, compared to the prior year. The decrease was primarily attributable to lower product sales volume. Product revenue decreased by $458 thousand as the Company sold three TRACER 1000 units and one Labrador Handheld Gas Chromatograph unit during fiscal year ended June 30, 2026, compared to eight TRACER 1000 units during fiscal year ended June 30, 2025. The decrease was also attributable to the absence of approximately $195 thousand of DHS grant-related revenue that was recorded within product revenue during fiscal year ended June 30, 2025. These decreases were partially offset by increases in consumables, grant and training revenue of approximately $264 thousand, $90 thousand and $28 thousand, respectively.
Revenue – Total revenue decreased by $615 thousand, or 37.0%, to $1.0 million for the fiscal year ended June 30, 2025, compared to $1.7 million for the fiscal year ended June 30, 2024. In both fiscal years 2025 and 2024, revenue was primarily derived from sales of TRACER 1000 units, a government grant, as well as ongoing sales of consumables and recurring maintenance services for the TRACER 1000. The decrease was due to TRACER 1000 units sold compared to the prior year.
Cost of Revenue and Gross Profit – Gross profit is comprised of revenue less cost of revenue. Our cost of revenue includeincludes materials, overhead, warranty expenses, shipping, and labor. Cost of revenue decreasedincreased $339by $122 thousand, or 37.1%,21.3%, for the fiscal year ended June 30, 2025,2026, compared to the year ended June 30, 2024,2025, primarily due to thehigher decreaselabor inassociated TRACERwith 1000grant unitsrelated sold.activities and increased warranty expenses. Gross profit decreased $276by $258 thousand, and gross margin increased slightly by 0.2%decreased to 23.8% from 45.3% duringin the fiscalprior year ended June 30, 2025, compared to 45.1% for the fiscal year ended June 30, 2024. The device sales in fiscal year 2025 had a higher margin compared to the device sales in fiscal year 2024 which resulted in an increase in gross margin.year.
Operating Expenses – Our operating expenses increaseddecreased $1.2by million,$854 thousand, or 8.4%,5.6%, during the fiscal year ended June 30, 2025,2026, compared to the fiscal year ended June 30, 2024.2025. Significant changes to operating expenses include the following:
Total Other Income (expense), net – Other income and expense, net decreased by $1.2 million, from income of $886 thousand in 2025 to a loss of $285 thousand in 2026. The decline was primarily attributable to a $623 thousand reduction in interest and dividend income, driven by a lower investment balance and a $538 thousand increase in realized losses on securities. These decreases were partially offset by a $10 thousand increase in other expense, net.
• Income Taxes – Income tax expense was immaterial.
Other income and expense, net – Other income and expense decreased by approximately decreased by approximately $730 thousand, or 45.2%, compared to the prior period, due to less investments earning interest income.
Income Taxes – For the fiscal year ended June 30, 2025, income taxes were consistent with prior year.
As of June 30, 2026, we had cash and cash equivalents of $8.4 million as compared to cash and cash equivalents of $3.1 million at June 30, 2025. We have incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of approximately $265 million at June 30, 2026, and reported a net loss of $14.4 million. We regularly monitor potential financing and capital sources, including equity and debt markets, in an effort to meet our planned capital expenditures and liquidity requirements. Our future success may depend on our ability to access outside sources of capital including through public or private equity offerings, additional debt financing, or via strategic collaborations, partnerships, or other arrangements with third parties. The availability and terms of future financing will depend on a variety of factors, including general economic and market conditions, our operating performance, and investor interest. Additional funding may not be available on acceptable terms, if at all. If we are unable to obtain adequate financing when needed, we may be forced to delay, reduce the scope of, or eliminate certain operations, commercialization efforts, or other aspects of our business. In addition, raising additional funds through equity offerings may result in dilution to our stockholders, while debt or other financing could involve covenants or obligations that restrict our business operations. Until we can generate sufficient revenue from product sales, if at all, we expect to finance our operations primarily through existing cash reserves and additional capital-raising activities.
On June 2, 2026, we entered into the ATM Agreement with Wainwright relating to an at-the-market offering program, pursuant to which we have the ability to offer and sell, from time to time at our sole discretion, shares of our common stock, having aggregate gross proceeds of up to $50.0 million through Wainwright as sales agent subject to applicable limitations. During the fiscal year ended June 30, 2026, the Company sold 168,980 shares under the ATM Program and received net proceeds of approximately $6.7 million, which it used to support working capital and general corporate purposes. As of June 30, 2026, $43.4 million remained available for issuance under the ATM Program, subject to market conditions and the terms of the applicable sales agreement. Management believes the ATM Program provides a flexible source of capital that may be used opportunistically to strengthen liquidity and fund future growth.
On January 28, 2026, we filed a shelf registration statement on Form S-3 (File No. 333-293023), declared effective on January 30, 2026 by the SEC, which included a base prospectus that allows the Company to offer and sell, from time to time, in one or more offerings, common stock, preferred stock, debt securities, warrants, rights or units up to an aggregate public offering price of $30 million. On June 3, 2026, we filed a prospectus supplement (the “Prior Prospectus Supplement”) to the prospectus dated January 30, 2026, relating to the offer and sale of our common stock under the ATM Program, whereby we initially registered shares having an aggregate offering price of approximately $24.4 million.
On June 30, 2026, we filed a shelf registration statement on Form S-3 (File No. 333-297144), declared effective on July 7, 2026 (the “Registration Statement”) by the SEC, which included a base prospectus that allows the Company to offer and sell, from time to time, in one or more offerings, common stock, preferred stock, debt securities, warrants, rights or units up to an aggregate public offering price of $200 million. On August 19, 2026, the Company filed a prospectus supplement to the Registration Statement to increase the remaining shares of our common stock available for issuance under the ATM Agreement to $50 million, which replaced and superseded in its entirety, the Prior Prospectus Supplement.
Cash and cash equivalents at June 30, 2025 were $3.1 million as compared to cash and cash equivalents of $10.4 million at June 30, 2024. Historically, the Company has financed its operations through the successful completions of several public offerings of our common stock, raising net proceeds of approximately $67.6 million. We expect that our short-term and long-term liquidity requirements will consist of working capital and general corporate expenses associated with the growth of our business, including, without limitation, expenses associated with scaling up our operations and continuing to increase our manufacturing capacity, sales and marketing expense associated with rollout of our products to commercial customers, additional research and development expenses associated with expanding our product offerings, and expenses associated with being a public company. OurIn short-termaddition, as further described below, we expect that our Lunar Initiatives will require substantial capital expenditure needs relate primarilyexpenditures to thedesign, develop, expand, and maintain our technologies and infrastructure to support development of such initiatives, including costs associated with research and development, construction and expansion of ourproduction researchcapabilities, acquisition of property and development capabilitiesequipment, and optimizationongoing ofmaintenance existingand businessupgrades processes.to Weensure believereliability and competitiveness. While management believes that our cash and cash equivalents andat investmentsJune 30, 2026, together with operational cash flows will enable us to fund our current operating expensesplans and capitalmeet expenditureour requirementsanticipated obligations for at least twelve months following the datenext these12 consolidatedmonths, financialsubstantial statementsadditional arecapital issued.may be required to support longer-term growth and operational objectives. Our short-term investments have been utilized as a source of liquidity to fund our operating expenses.
Management continues to monitor liquidity needs closely and will adapt strategy as appropriate to align with both near- and long-term business objectives. Management anticipates that significant additional expenditures will be necessary to develop and expand our business, before significant positive operating cash flows can be achieved, as current available funds are insufficient to complete our business plan and strategic objectives. Until we can generate sufficient revenue from sales, if at all, we expect to finance our operations primarily through existing cash reserves and additional capital-raising activities.
We expect our expenses to increase in connection with our ongoing activities,operations, particularlypublic ascompany we continue our research and developmentobligations, efforts andto expand our business efforts. Furthermore, we have incurred and willdevelop continueour toLunar incur additional costs as a result of being a public company.Initiatives. Accordingly, we will needexpect to obtainrequire additional funding into connection withsupport our continuing operations.operations and working capital needs. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs,programs or future commercialization efforts.
Until such time, if ever, as we can generate positive cash flows from operations, we expect to finance our additional cash needs through a combination of equity offerings, debt financing, equity financing, merging, or engaging in a strategic partnership. Such funding may not be available to us on acceptable terms, or at all, and such funding may become even more difficult to obtain due to macroeconomic conditions, including rising interest rates, tariffs and trade restrictions, global conflicts and other conditions that could result in volatility in the U.S. capital markets. To the extent that we raise additional capital through the sale of equity, our existing stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect the rights of holders of common stock. Even if successful in raising new capital, we could be limited in the amount of capital we raise due to investor demand. Debt financing, if available, may involve agreements that include restrictive covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
Current assets – Current assets decreased $12.8by $6.0 million as of June 30, 2025,2026, compared to June 30, 2024,2025, asprimarily due to a resultreduction in short-term investments following the sale of investments, partially offset by an increase in cash used for continuing operating expenses and personnelcash costs.equivalents.
Property and equipment, net – Property and equipment, net of depreciation, decreasedremained $320relatively thousandconsistent as of June 30, 2025,2026 compared to June 30, 2024,2025. Capital additions during the year, primarily duerelated to depreciationleasehold improvements for the Braker facility and anthe assetcapitalization impairment.of demo units, were substantially offset by depreciation expense and the disposal of certain obsolete assets.
Operating lease right-of-use assets, net – Operating lease right-of-use assetsassets, increasednet $2.1decreased millionby approximately $391 thousand as of June 30, 2025,2026, compared to June 30, 2024,2025, primarily due to enteringthe intoamortization of the MetricBraker facilitylease lease.right of use asset.
Other assets, net – Other assetsassets, increasednet decreased by $316approximately $32 thousand duringas theof fiscalJune year30, 2026, compared to June 30, 2025, primarily due to the receipt of a lease deposit paidrefund forfrom the MetricDonley facility.Facilities landlord.
Current liabilities – Current liabilities decreased by approximately $194 thousand as of June 30, 2026, compared to June 30, 2025, primarily due to decreases in accrued expenses and payroll-related liabilities, partially offset by an increase in goods received not invoiced liabilities.
Current liabilities – Current liabilities were consistent with the prior year.
Lease liabilities, net– Lease liabilities increaseddecreased $2.2by million$250 thousand as of June 30, 2025,2026, compared to June 30, 2024,2025, primarily due to enteringBraker intolease the Metric facility lease.payments.
Other liabilities, net – Other liabilities, net decreased by $110 thousand primarily due to $83 thousand Netsuite financing payments and a decrease in non-current sales warranty reserve.
Stockholders’ equity – The stockholders equity decreased by approximately $5.9 million as of June 30, 2026, primarily due to our net loss of approximately $14.4 million, partially offset by an increase in additional paid in capital of approximately $8 million related to share issuances in connection with the ATM Agreement, equity compensation, and increase of $548 thousand in unrealized gain on available for sale securities.
Other liabilities, net – Other liabilities were consistent with the prior year.
AtAs of June 30, 2026, we held cash and cash equivalents of $8.4 million, and our net working capital was approximately $13.7 million. As of June 30, 2025, we held cash and cash equivalents of $3.1 million, and our net working capital was approximately $19.5 million. At June 30, 2024, we held cash and cash equivalents of $10.4 million, and our net working capital was approximately $32.2 million. Cash and cash equivalents decreasedincreased by approximately $13.7$5.3 million during thefiscal year ended June 30, 2025, due to funding our continuing operating expenses.2026. The Company hasheld $15.1approximately $2.9 million in short term investments toas fundof operations.June 30, 2026.
Net cash used in operating activities was $13.5 million for the year ended June 30, 2026, compared to cash used in operating activities of $13.0 million for the year ended June 30, 2025, compared to cash used in operating activities of $9.7 million for the year ended June 30, 2024. The increase in cash was due by increases in recurring operating expenses and accounts payable.2025.
Net cash provided by investing activities was $11.8 million for the year ended June 30, 2026, compared to $5.8 million for the year ended June 30, 2025. The increase was primarily due to higher proceeds from short-term investments.
Net cash used in investing activities for the year ended June 30, 2025 was $5.8 million, compared to $6.1 million in the year ended June 30, 2024. The decrease in cash provided by investing activities due to purchasing of property, plant, and equipment, offset by the proceeds of short-term investments.
Net cash provided by financing activities was $6.9 million for the year ended June 30, 2026, compared to net cash used in financing activities of $0.2 thousand for the year ended June 30, 2025. The increase was primarily due to proceeds from the Company’s ATM offering and employee stock option exercises.
Cash used in financing activities was $185 thousand for the year ended June 30, 2025, and $181 thousand for the year ended June 30, 2024. The decrease was due to repayment of finance leases.
(1) Consists of payments due for our lease of the manufacturing property in Austin, Texas that expireexpires in November 2032.
(2) Consists of payments due for an equipment lease that expireexpires in May 2028.
What changed in the latest 10-Q
Risk Factors
New heading “We have incurred significant losses since inception and anticipate that we will incur continued losses for the foreseeable future, as a result we will need to raise additional capital.”
New heading “Our failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our Common Stock.”
Largest changes
“We will require additional financing as we continue to execute our business strategy, including the need for additional funds for the development of our products. We may seek to raise additional capital through issuances of equity or debt securities, entrance into a credit facility or another form of third-party funding or seek other debt financing. …”see in full comparison
“Our failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our Common Stock.”see in full comparison
“Our common stock is currently listed for trading on the Nasdaq Capital Market. We must satisfy the Nasdaq Capital Market’s continued listing requirements or risk delisting, which would have a material adverse effect on our business. A delisting of our common stock from the Nasdaq Capital Market could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock. …”see in full comparison
“If our common stock were delisted from Nasdaq, trading of our common stock would most likely take place on an over-the-counter market established for unlisted securities, such as one maintained by OTC Markets Group Inc. …”see in full comparison
“We have incurred significant losses since inception and anticipate that we will incur continued losses for the foreseeable future, as a result we will need to raise additional capital.”see in full comparison
“● file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, operating results and prospects.”see in full comparison
Full comparison: every changed paragraph (13)
Our business, financial condition, results of operations, and cash flows may be impacted by several factors, many of which are beyond our control, including those set forth in Item 1A. "Risk Factors" of our 2025 Form 10-K and our subsequently filed Form 10-Qs, the occurrence of any one of which could have a material adverse effect on our actual results. Other than below, there have been no material changes to the risk factors and other cautionary statements disclosed in our 2025 Form 10-K.
We have incurred significant losses since inception and anticipate that we will incur continued losses for the foreseeable future, as a result we will need to raise additional capital.
As of March 31, 2026, the Company had cash of approximately $2.7 million and short-term investments of approximately $3.9 million. If our available cash resources and anticipated cash flows from operations are insufficient to satisfy our liquidity requirements, we will need to raise additional capital to continue to fund our operations in the future. In addition, as of March 31, 2026, we had an accumulated deficit of approximately $262 million and reported a net loss of $11.2 million. We are unable to predict the extent of any future losses or when we will become profitable, if at all. If we are unable to achieve and then maintain profitability or raise capital, the market value of our common stock will likely experience significant decline.
We will require additional financing as we continue to execute our business strategy, including the need for additional funds for the development of our products. We may seek to raise additional capital through issuances of equity or debt securities, entrance into a credit facility or another form of third-party funding or seek other debt financing. Such funding may not be available to us on acceptable terms, or at all, and such funding may become even more difficult to obtain due to macroeconomic conditions, including rising interest rates, tariffs and trade restrictions, global conflicts and other conditions that could result in volatility in the U.S. capital markets. We may be unable to raise capital through public offerings of our common stock and may need to turn to alternative financing arrangements. Such arrangements could involve issuances of one or more types of securities, including common stock, preferred stock, convertible debt, warrants to acquire common stock or other securities. Even if successful in raising new capital, we could be limited in the amount of capital we raise due to investor demand. There can be no assurance that funding will be available on acceptable terms, on a timely basis, or at all. The various ways that we could raise capital carry potential risks. Any additional financing will likely involve the issuance of our equity securities, which will have a dilutive effect on our stockholders. Any debt financing, if available, may involve restrictive covenants that may impact our ability to conduct our business. If we raise funds through partnering, such as collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or grant licenses on terms that are not favorable to us. If we do not succeed in raising additional funds on acceptable terms or at all, we may be unable to develop our products.
If we are unable to raise additional capital when required or on acceptable terms, we may be required to:
● significantly scale back, or discontinue the development or commercialization of our products;
● dispose of technology assets, or relinquish or license on unfavorable terms, our rights to technologies or any of our products that we otherwise would seek develop or commercialize ourselves;
● pursue the sale of our company to a third party at a price that may result in a loss on investment for our stockholders; or
● file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, operating results and prospects.
Our failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our Common Stock.
Our common stock is currently listed for trading on the Nasdaq Capital Market. We must satisfy the Nasdaq Capital Market’s continued listing requirements or risk delisting, which would have a material adverse effect on our business. A delisting of our common stock from the Nasdaq Capital Market could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. In addition, Nasdaq has filed a rule proposal with the SEC to adopt a new continued listing requirement that would require all companies listed on the Nasdaq Global Market or Nasdaq Capital Market to maintain a minimum market value of listed securities of $5 million. Under the proposed rule, if a company’s market value of listed securities falls below this threshold for 30 consecutive trading days, Nasdaq may immediately suspend trading and initiate delisting proceedings without affording the company a compliance cure period. This proposed rule, if adopted, would be in addition to Nasdaq’s existing continued listing requirements, which include minimum bid price, publicly held shares, and shareholders’ equity, among others. As of the date hereof, the market value of our listed securities falls below $5 million. The SEC has instituted formal proceedings to extend the period to determine whether to approve or disapprove the proposed rule change, which remains pending as of the date of this filing. If adopted in its current form, and our market value of securities continues to fall below the proposed $5 million threshold, or we otherwise fail to satisfy Nasdaq’s continued listing standards, we could face delisting proceedings on an accelerated basis. Moreover, even if we remain in compliance with quantitative criteria, Nasdaq retains discretionary authority under Rule IM-5101-1 to suspend or terminate a company’s listing if necessary to protect investors or ensure the orderly operation of the market. We may not be able to maintain compliance with Nasdaq’s continued listing standards, particularly in light of our trading volume, market capitalization, public float and other qualitative factors.
If our common stock were delisted from Nasdaq, trading of our common stock would most likely take place on an over-the-counter market established for unlisted securities, such as one maintained by OTC Markets Group Inc. An investor would likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our common stock on an over-the-counter market, and many investors would likely not buy or sell our common stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. A delisting of our common stock from Nasdaq could negatively impact us by (i) reducing the liquidity and market price of our common stock; (ii) reducing the number of investors willing to hold or acquire our common stock, which could negatively impact our ability to raise equity financing; (iii) impacting our ability to use a registration statement to offer and sell freely tradable securities, thereby preventing or limiting us from accessing the public capital markets; and (iv) impairing our ability to provide equity incentives to our employees. For these reasons and others, a delisting could have a material adverse effect on us.
There have been no material changes to the risk factors and other cautionary statements described under the heading “Item 1A Risk Factors” included in our 2025 Form 10-K.
Management's Discussion & Analysis (MD&A)
Largest changes
“The Company’s unaudited consolidated financial statements have been prepared in accordance with US GAAP, which assumes that the Company’s management will evaluate whether it will be able to meet its obligations and continue its operations in the normal course of business. As of March 31, 2026, the Company had cash of approximately $2.7 million, short-term investments of approximately $3.9 million, and had positive working capital of $9.5 million. …”see in full comparison
“Management believes that its current available resources, along with potential funds to be received from potential equity offerings, will be sufficient to fund the Company’s planned expenditures over the next 12 months. However, management recognizes that it may be required to obtain additional resources to successfully execute its business plans. No assurances can be given that management will be successful in raising additional capital, if needed, or on acceptable terms. …”see in full comparison
“Management continues to monitor liquidity needs closely and will adapt strategy as appropriate to align with both near- and long-term business objectives. Management anticipates that significant additional expenditures will be necessary to develop and expand our business, before significant positive operating cash flows can be achieved, as current available funds are insufficient to complete our business plan and strategic objectives. …”see in full comparison
“On May 11, 2026, we announced the TRACER 1000 system has achieved ECAC/EU G1 approval, meeting the highest European standards for aviation security. This approval reflects compliance with the European Civil Aviation Conference and European Commission requirements for trace detection systems, supporting enhanced security for airline passengers.”see in full comparison
“Revenue – Total revenue decreased by $113 thousand during the three months ended December 31, 2025, compared to the same period in 2024. This decrease was primarily due to lower instrument and grant revenue recognized during the quarter. Consumables revenue increased meaningfully compared to the prior period; however, this increase was not sufficient to offset the decline across other products categories. Revenue during the three months ended December 31, 2025, continued to be concentrated among one or two customers, consistent with prior periods. …”see in full comparison
Cost of Revenue – Gross profit is comprised of revenue less cost of revenue. Cost of revenue includes materials, overhead, warranty expenses, shipping, and labor. Our cost of revenuesee in full comparisonincreaseddecreased by$34$21 thousand during the three months endedDecemberMarch 31,2025,2026, compared to the same period in2024.2025,Theprimarilyincreaseduewastodrivenlower device sales, partially offset by higherwarranty-relatedconsumables and grant related costs. The decrease was primarily attributable to consumables sold at costsandexceedingexpenses incurred to support service and maintenance activitiesrevenue during thethreecurrentmonthsquarter.endedTheseDecemberconsumables31,were2025.purchased at elevated costs during the COVID period and subsequently sold below cost to recover value rather than write off the inventory, which resulted in revenue that was lower than the related cost of revenue. As a result, gross margin decreased by54%25% during the three months endedDecemberMarch 31,2025,2026, compared to the same period in2024.2025.
Full comparison: every changed paragraph (33)
Our mission encompasses the advancement of both mass spectrometry and gas chromatography, two powerful analytical techniques that together enable precise detection and identification of chemical compounds across a wide range of high-demand environments. We aim to expand access to mass spectrometry and its use through the deployment of devices designed specifically for the appropriate levels of precision required in high-volume, real-time testing environments such as airports, border checkpoints, cargo hubs, infrastructure security, correctional facilities, military bases, law enforcement centers, and industrial locations. We are introducing our new line of products that are ultra-portable, on-site, rugged environmental testing instruments, featuring our proprietary ATi Gas Chromatography Column ("GC") and ATi Mass Spectrometer Technology ("MS") to achieve our mission through simplifying the user interface, ruggedizing the critical components to endure MS/GC field work, and enabling multiple configurations for sample intake options.The Astrotech Mass Spectrometer Technology™ ("AMS Technology") and ATi GC platforms achieve our mission through simplifying the user interface, automating the complicated calibration process, ruggedizing the critical components to endure MS/GC field work, and enabling multiple configurations for sample intake options.
We are commercializing the Astrotech Mass Spectrometer Technology™ platform (“AMS Technology”) platform through application specific, wholly owned subsidiaries.
Astrotech Technologies, Inc. ("ATI") owns and licenses the AMS Technology, the platform MS technology originally developed by 1st Detect. The AMS Technology has been designed to be inexpensive, smaller, and easier to use when compared to traditional mass spectrometers. Unlike other technologies, the AMS Technology works under ultra-high vacuum, which eliminates competing molecules, yielding higher resolution and fewer false alarms. The intellectual property includes 16 patents granted along with extensive trade secrets. With a number of diverse market opportunities for our core technology, ATI is structured to license our intellectual property for different fields of use. ATI currently licenses the AMS Technology to our four wholly-ownedwholly owned subsidiaries on an exclusive basis.
We obtained ECAC certification in 2019 which allows us to sell the TRACER 1000 to airport and cargo security customers in the European Union and certain other countries. We currently sell the TRACER 1000 to customers who accept ECAC certification. As of DecemberMarch 31, 2025,2026, we have the TRACER 1000 in approximately 3537 locations in 16 countries throughout the United States of America, Europe and Asia.
On May 11, 2026, we announced the TRACER 1000 system has achieved ECAC/EU G1 approval, meeting the highest European standards for aviation security. This approval reflects compliance with the European Civil Aviation Conference and European Commission requirements for trace detection systems, supporting enhanced security for airline passengers.
Three months ended DecemberMarch 31, 2025,2026, compared to three months ended DecemberMarch 31, 20242025:
Selected consolidated financial data for the three months ended DecemberMarch 31, 2025,2026, and 20242025 is as follows:
Revenue – Total revenue was $343 thousand for the three months ended March 31, 2026, compared to $534 thousand for the three months ended March 31, 2025. During the three months ended March 31, 2026, revenue was primarily derived from consumables, with additional product sales of the TRACER 1000. The decrease in revenue was primarily due to lower product revenue and negative grant revenue, reflecting additional hours incurred as a result of re-testing phase, partially offset by increased consumables revenue.
Revenue – Total revenue decreased by $113 thousand during the three months ended December 31, 2025, compared to the same period in 2024. This decrease was primarily due to lower instrument and grant revenue recognized during the quarter. Consumables revenue increased meaningfully compared to the prior period; however, this increase was not sufficient to offset the decline across other products categories. Revenue during the three months ended December 31, 2025, continued to be concentrated among one or two customers, consistent with prior periods. In the three months ended December 31, 2025, there was also the addition of a new customer, which may help mitigate revenue volatility associated with customer concentration.
Cost of Revenue – Gross profit is comprised of revenue less cost of revenue. Cost of revenue includes materials, overhead, warranty expenses, shipping, and labor. Our cost of revenue increaseddecreased by $34$21 thousand during the three months ended DecemberMarch 31, 2025,2026, compared to the same period in 2024.2025, Theprimarily increasedue wasto drivenlower device sales, partially offset by higher warranty-relatedconsumables and grant related costs. The decrease was primarily attributable to consumables sold at costs andexceeding expenses incurred to support service and maintenance activitiesrevenue during the threecurrent monthsquarter. endedThese Decemberconsumables 31,were 2025.purchased at elevated costs during the COVID period and subsequently sold below cost to recover value rather than write off the inventory, which resulted in revenue that was lower than the related cost of revenue. As a result, gross margin decreased by 54%25% during the three months ended DecemberMarch 31, 2025,2026, compared to the same period in 2024.2025.
Operating Expenses – Operating expenses decreased by $567$584 thousand, or 12.7%,14.2%, during the three months ended DecemberMarch 31, 2025,2026, compared to the same period in 2024.2025. Significant changes to operating expenses include the following:
Other Income and Expense, net – Other income and expense, net decreased by $338$549 thousand during the three months ended DecemberMarch 31, 2025,2026, compared to the same period in 2024,2025, primarily due to lowera dividendloss incomeon andthe disposal of assets ($210 thousand), a realized loss on securities,securities partiallyduring offsetthe bycurrent higherquarter interest($184 income.thousand) compared to a realized gain in the prior- year period, and lower dividend income ($140 thousand).
SixNine months ended DecemberMarch 31, 2025,2026, compared to sixnine months ended DecemberMarch 31, 20242025:
Selected consolidated financial data for the sixnine months ended DecemberMarch 31, 2025,2026, and 20242025 is as follows:
Revenue – Total revenue increaseddecreased by $150approximately thousand$42 forthousand, or 5.0%, during the sixnine months ended DecemberMarch 31, 2025,2026, compared to the samenine periodmonths ended March 31, 2025. Revenue in 2024.Theboth year-periods overwas year-increasegenerated from product sales, consumables, warranty services, training, and grant revenue. The decrease was primarily attributable to a $220$323 thousand increasedecline in grantproduct revenue and a $50$60 thousand increasedecline in consumables.warranty revenue. These increasesdecreases were partially offset by lowerhigher product revenue and warrantygrant revenue of $120$111 thousandthousand, increased consumables revenue of $209 thousand, and $20 respectively.thousand of training revenue recognized in the current period.
Cost of Revenue – Gross profit is comprised of revenue less cost of revenue. Our costs of revenue include materials, overhead, warranty expenses, shipping, and labor. For the nine months ended March 31, 2026, cost of revenue increased by approximately $97 thousand compared to the prior year period, primarily due to higher labor and warranty costs, including the sale of obsolete consumable parts at standard cost under contractual agreements rather than recording an inventory write‑off. These increases were partially offset by lower material costs, resulting in a decrease in gross margin compared to the prior year period.
Cost of Revenue – Gross profit is comprised of revenue less cost of revenue. Our costs of revenue include materials, overhead, warranty expenses, shipping, and labor. Cost of revenue increased by $118 thousand during the six months ended December 31, 2025, compared to the same period in 2024. This increase reflects costs associated with fulfilling grant related milestones and warranty expenses. Gross margin declined primarily because cost of revenue increased at a rate that was nearly proportional to the increase in revenue, driven by higher labor and increased warranty-related expenses.
Operating Expenses – Operating expenses decreased $480$1,064 thousand, or 5.9%8.7% during the sixnine months ended DecemberMarch 31, 20252026, compared to the same period in 2024.2025.
Other Income and Expense, net – Other income and expense, net decreased by $617$1.17 thousandmillion for the sixnine months ended DecemberMarch 31, 2025,2026, compared to the same prior year period, primarily due to lower dividend income and higher realized losslosses on securitiesthe sale of securities.
As of March 31, 2026, we held cash and cash equivalents of $2.7 million, and our working capital was approximately $9.5 million. As of June 30, 2025, we held cash and cash equivalents of $3.1 million, and our working capital was approximately $19.5 million. The decrease in working capital was primarily driven by the sale of short-term investments of approximately $11.2 million, along with a decrease in cash balances, partially offset by increases in inventory. Cash and cash equivalent decreased by $421 thousand as of March 31, 2026, compared to June 30, 2025, due to funding our operating losses. During the nine-month period, we continued to direct resources toward sales and marketing activities to support revenue generation efforts.
As of December 31, 2025, cash and cash equivalents remained approximately $3.1 million and working capital was $12.5 million, compared to cash and cash equivalents of $3.2 million, and working capital of approximately $25.5 million as of December 30, 2024. Cash decreased by approximately $5 thousand during the six months ended December 31, 2025, as operating cash outflows were largely offset by proceeds from short-term investment.
Cash used in operating activities increased by$574 approximately $0.7 millionthousand for the sixnine months ended DecemberMarch 31, 2025,2026, compared to the samenine periodmonths inended 2024,March 31, 2025, primarily due to higher operating lossesexpenses, an increase in inventory, and increaseda workingdecrease capitalin requirements.accounts payable.
Cash provided by investing activities increased by approximately $8$7.7 million drivenfor the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, primarily bydue $8.4to $11.7 million of proceeds from shortshort-term investments, partially offset by $0.9 million of capital expenditures, including leasehold improvements.
Cash used in financing activities decreasedwas by $25$80 thousand for the sixnine months ended DecemberMarch 31, 20252026, compared to $157 thousand for the samenine periodmonths inended 2024,March 31, 2025, primarily due to lower payments on finance lease obligations.payments.
We did not have any material off-balance sheet arrangements as of DecemberMarch 31, 2025.2026.
The Company’s unaudited consolidated financial statements have been prepared in accordance with US GAAP, which assumes that the Company’s management will evaluate whether it will be able to meet its obligations and continue its operations in the normal course of business. As of March 31, 2026, the Company had cash of approximately $2.7 million, short-term investments of approximately $3.9 million, and had positive working capital of $9.5 million. We have incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of approximately $262 million at March 31, 2026, and reported a net loss of $11.2 million. We regularly monitor potential financings and capital sources, including equity and debt markets, in an effort to meet our planned capital expenditures and liquidity requirements. Our future success may depend on our ability to access outside sources of capital including through public or private equity offerings, additional debt financing, or via strategic collaborations, partnerships, or other arrangements with third parties. The availability and terms of future financing will depend on a variety of factors, including general economic and market conditions, our operating performance, and investor interest. Additional funding may not be available on acceptable terms, if at all. If we are unable to obtain adequate financing when needed, we may be forced to delay, reduce the scope of, or eliminate certain operations, commercialization efforts, or other aspects of our business. In addition, raising additional funds through equity offerings may result in dilution to our stockholders, while debt or other financing could involve covenants or obligations that restrict our business operations. Until we can generate sufficient revenue from product sales, if at all, we expect to finance our operations primarily through existing cash reserves and additional capital-raising activities.
While management believes that our cash and cash equivalents at March 31, 2026, together with operational cash flows will fund our current operating plans and meet our anticipated obligations for at least the next 12 months, substantial additional capital may be required to support longer-term growth and operational objectives. Future cash flows are subject to a number of variables, including the ability to generate sales under existing and future business opportunities, and significant additional capital expenditures may be required to conduct our operations. There can be no assurance that operations and other capital sources will provide sufficient cash to maintain planned or future levels of capital expenditures.
Management continues to monitor liquidity needs closely and will adapt strategy as appropriate to align with both near- and long-term business objectives. Management anticipates that significant additional expenditures will be necessary to develop and expand our business, before significant positive operating cash flows can be achieved, as current available funds are insufficient to complete our business plan and strategic objectives. Until we can generate sufficient revenue from sales, if at all, we expect to finance our operations primarily through existing cash reserves and additional capital-raising activities.
The Company’s unaudited consolidated financial statements have been prepared in accordance with US GAAP, which assumes that the Company’s management will evaluate whether it will be able to meet its obligations and continue its operations in the normal course of business. At December 31, 2025, the Company had cash of approximately $3,095,000, short-term investments of approximately $7,037,000, and has positive working capital of $12,450,000.
Management believes that its current available resources, along with potential funds to be received from potential equity offerings, will be sufficient to fund the Company’s planned expenditures over the next 12 months. However, management recognizes that it may be required to obtain additional resources to successfully execute its business plans. No assurances can be given that management will be successful in raising additional capital, if needed, or on acceptable terms. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company determine, it shall be unable to continue as a going concern.
The Company’s effective tax rate is 0% for income tax for the three and sixnine months ended DecemberMarch 31, 20252026, and the Company expects that its effective tax rate for the full fiscal year 2026 year will be 0%. Based on the weight of available evidence, including net cumulative losses and expected future losses, the Company has determined that it is more likely than not that itits U.S. federal and state deferred tax assets will not be realized and therefore a full valuation allowance has been provided on the U.S. federal and state net deferred tax assets.
The Company recognizes the financial statement effects of a tax position when it becomes more likely than not, based upon the technical merits, that the position will be sustained upon examination. The Company currently has approximately $763 thousand of uncertain tax positions as of DecemberMarch 31, 2025,2026, all of which are accounted as contra-deferred tax assets. The Company does not expect any significant changes to its uncertain tax positions in the coming 12 monthsmonths.
There wasis no income tax expense for the three and sixnine months ended DecemberMarch 31, 2025.2026. There was $1 thousand provision for income taxes during both the three and sixnine months ended DecemberMarch 31, 2024.2025.
ASTC insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 1 trade date, 1,185 shares, about $10.1K) and open-market sales in 0 filings. Net open-market shares: 1,185 (purchases minus sales); net value about $10.1K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-30 | Kreps Matthew |
Grant/award | 1,114 | — | — |
| 2026-09-30 | Winn Charles Arch |
Grant/award | 1,331 | — | — |
| 2026-09-30 | Halinski John William |
Grant/award | 1,331 | — | — |
| 2026-09-30 | Stober Eric |
Grant/award | 1,473 | — | — |
| 2026-09-30 | Mcfarland Robert N |
Grant/award | 1,331 | — | — |
| 2026-09-30 | Wilkinson Tom |
Grant/award | 1,331 | — | — |
| 2026-09-01 | Winn Charles Arch |
Grant/award | 2,150 | — | — |
| 2026-09-01 | Winn Charles Arch |
Grant/award | 2,150 | — | — |
| 2026-07-22 | Badugu Nihanth |
Grant/award | 5,000 | — | — |
| 2026-07-22 | Badugu Nihanth |
Grant/award | 5,000 | — | — |
| 2026-07-16 | Stober Eric |
Grant/award | 2,150 | — | — |
| 2026-07-16 | Halinski John William |
Grant/award | 2,150 | — | — |
| 2026-07-16 | Kreps Matthew |
Grant/award | 2,150 | — | — |
| 2026-07-16 | Halinski John William |
Grant/award | 2,150 | — | — |
| 2026-07-16 | Stober Eric |
Grant/award | 2,150 | — | — |
| 2026-07-09 | Mcfarland Robert N |
Grant/award | 1,055 | — | — |
| 2026-07-09 | Halinski John William |
Grant/award | 1,055 | — | — |
| 2026-07-09 | Winn Charles Arch |
Grant/award | 1,055 | — | — |
| 2026-07-09 | Mcfarland Robert N |
Grant/award | 1,055 | — | — |
| 2026-07-09 | Stober Eric |
Grant/award | 1,167 | — | — |
| 2026-07-09 | Wilkinson Tom |
Grant/award | 1,055 | — | — |
| 2026-04-14 | Halinski John William |
Grant/award | 6,006 | — | — |
| 2026-04-14 | Wilkinson Tom |
Grant/award | 6,006 | — | — |
| 2026-04-14 | Winn Charles Arch |
Grant/award | 6,006 | — | — |
| 2026-04-14 | Stober Eric |
Grant/award | 6,006 | — | — |
| 2026-04-14 | Mcfarland Robert N |
Grant/award | 6,006 | — | — |
| 2025-05-14 | Halinski John William |
Grant/award | 6,006 | — | — |
| 2024-03-15 | Mcfarland Robert N |
Open-market purchase | 1,185 | $8.50 | $10.1K |
Well-known investors holding ASTC (13F)
None of the 59 investors we track reported a position in their latest 13F.