CNTM 10-K & 10-Q changes, risk factors and insider trading
ConnectM Technology Solutions, Inc. · OTC · Construction - Special Trade Contractors · CIK 1895249 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Summary of Risk Factors”
New heading “Risks Related to ConnectM’s Common Stock”
New heading “Business and Operational Risks”
New heading “Risks Related to Data Privacy”
New heading “Risks Related to Electrification and Decarbonization Business”
New heading “Risks related to ConnectM’s Technology, Intellectual Property and Infrastructure”
New heading “Risks Related to Customers”
New heading “Risks Related to Finance, Tax and Accounting”
New heading “Risks Related to Legal Matters, Regulations, and Policy”
New heading “Risks Relating to Projections”
New heading “Risks Related to Ownership of our Common Stock”
New heading “Changes in U.S. energy policy, including the enactment of the “Big Beautiful Bill,” could materially and adversely affect our business, financial condition, and results of operations.”
New heading “ConnectM’s operations in India, including through its subsidiaries such as ConnectM India and Cambridge Energy Resources, subject the Company to additional business, regulatory and operational risks that could adversely affect its results of operations.”
New heading “Our business currently depends on government incentives and policies supporting clean energy adoption, and any reduction, delay, or repeal of such programs could adversely affect our results of operations.”
New heading “Risks Related to Our Securities”
New heading “Risks Related to the Reverse Stock Split”
New heading “The Reverse Stock Split may decrease the liquidity of the shares of our Common Stock.”
New heading “Following the Reverse Stock Split, the resulting market price of our Common Stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our Common Stock may not improve.”
Removed heading “We need to raise additional capital to support our operations.”
Removed heading “A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.”
Removed heading “If the trading price of the Common Stock decreases, the amount of cash ConnectM receives through the Forward Purchase Agreement mechanisms will decrease.”
Removed heading “ConnectM will have cash payment obligations that could, as a result, significantly reduce ConnectM’s cash reserves.”
Removed heading “Other events may result in Meteora having no payment obligations to ConnectM at settlement under the Forward Purchase Agreement.”
Removed heading “ConnectM may be required to make a future cash payment or issue additional shares of Common Stock to Meteora pursuant to the Forward Purchase Agreement at the Maturity Date, which would reduce the amount of cash available to ConnectM to fund its operations or dilute the percentage ownership held by the existing stockholders.”
Removed heading “Our results of operations have been and may continue to be adversely impacted by the COVID-19 pandemic, and the duration and extent to which it will impact our results of operations remains uncertain.”
Removed heading “Increases and uncertainty in our health insurance costs could adversely impact our results of operations and cash flows.”
Removed heading “Our business currently depends on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives. We may be adversely affected by changes in U.S. tax laws, and the expiration, elimination or reduction of these benefits could adversely impact our business.”
Removed heading “Concentration of ownership among existing executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions.”
Removed heading “ConnectM’s financial forecasts may not prove accurate.”
Largest changes
“In addition, ConnectM and certain of its subsidiaries may collect, process or store sensitive consumer financial information, including payment card data, in connection with its operations. The handling of such information subjects ConnectM to additional legal, regulatory and industry requirements, including the Payment Card Industry Data Security Standard (“PCI DSS”) and applicable data protection and privacy laws. …”see in full comparison
“The report of our independent registered public accounting firm on our financial statements for the years ended December 31, 2024 and 2023 contains explanatory language that substantial doubt exists about our ability to continue as a going concern. We may find it difficult to raise money on terms favorable to us or at all. The failure to obtain sufficient capital to support our operations would have a material adverse effect on our business, financial condition and results of operations. …”see in full comparison
“Following the Reverse Stock Split, the resulting market price of our Common Stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our Common Stock may not improve.”see in full comparison
“Demand for EVs may also be affected by factors directly impacting automobile prices or the cost of purchasing and operating automobiles, such as sales and financing incentives, prices of raw materials and parts and components, cost of fuel and governmental regulations, including tariffs, import regulation and other taxes. …”see in full comparison
“A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.”see in full comparison
“The Reverse Stock Split may decrease the liquidity of the shares of our Common Stock.”see in full comparison
Full comparison: every changed paragraph (128)
Summary of Risk Factors
The following list provides a summary of our risk factors, which are further discussed below:
Risks Related to ConnectM’s Common Stock
Business and Operational Risks
Risks Related to Data Privacy
Risks Related to Electrification and Decarbonization Business
Risks related to ConnectM’s Technology, Intellectual Property and Infrastructure
Risks Related to Customers
Risks Related to Finance, Tax and Accounting
Risks Related to Legal Matters, Regulations, and Policy
Risks Relating to Projections
Risks Related to Ownership of our Common Stock
We need to raise additional capital to support our operations.
We have incurred substantial losses since our inception. Net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital. We expect to continue to incur significant losses for the foreseeable future.
The report of our independent registered public accounting firm on our financial statements for the years ended December 31, 2024 and 2023 contains explanatory language that substantial doubt exists about our ability to continue as a going concern. We may find it difficult to raise money on terms favorable to us or at all. The failure to obtain sufficient capital to support our operations would have a material adverse effect on our business, financial condition and results of operations. If sufficient financing is not received in a timely manner, we would then need to pursue a plan to license or sell assets, seek to be acquired by another entity, cease operations and/or seek bankruptcy protection.
In order to raise additional capital, we will need to offer and issue additional shares of our common stock or other securities convertible into or exchangeable for our common stock in the future. We cannot assure you that we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors in this offering, and investors purchasing other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher or lower than the price per share at which you purchase our securities.
During the past year, the market price of our common stock fluctuated from a low of $0.67 per share to a high of $12.47 per share, and our stock price continues to fluctuate. The market price and trading volume of our common stock may continue to fluctuate significantly in response to numerous factors, some of which are beyond our control, such as:
Further, the stock market in general has recently experienced extreme price and volume fluctuations. Continued market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the value of our common stock and the loss of some or all of your investment.
The market price of shares of our Common Stock could decline as a result of substantial sales of common stock, particularly by our significant stockholders, a large number of shares of common stock becoming available for sale or the perception in the market that holders of a large number of shares intend to sell their shares.
In connection with the Business Combination MCAC and certain stockholders of ConnectM entered into a registration rights agreement (the “Business Combination Registration Rights Agreement”) with ConnectM. An aggregate of 5,340,000 shares of Common Stock will be entitled to registration pursuant to the Business Combination Registration Rights Agreement, which consist of 2,300,000 Founder Shares and 3,040,000 Placement Warrant Shares issuable upon exercise of the Placement Warrants. At any time and from time to time after the Closing, either (i) the Demanding ConnectM Holder or (ii) the Demanding Sponsor Holders may make a written demand for registration under the Securities Act of all or part of their Registrable Securities. The Demanding Sponsor Holders and the Demanding ConnectM Holder may each demand not more than four (4) Underwritten Shelf Takedowns in any twelve (12) month period. If at any time following the Closing, ConnectM proposes to file a registration statement under the Securities Act, the holders of the Registrable Securities shall be offered an opportunity to register the sale of such number of Registrable Securities as such holders may request in writing. The demand registration rights and “piggy-back” registration rights under the Business Combination Registration Rights Agreement are subject to certain requirements and customary conditions.
A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.
The exercise price for our Public Warrants is $11.50 per share. There can be no assurance that the Public Warrants will be in the money prior to their expiration and, as such, the warrants may expire worthless. The terms of Public Warrants may be amended in a manner that may be adverse to the holders. The warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us, provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of a majority of the then-outstanding Public Warrants to make any change that adversely affects the interests of the registered holders. Accordingly, we may amend the terms of the warrants in a manner adverse to a holder if holders of at least a majority of the then-outstanding Public Warrants approve of such amendment. Our ability to amend the terms of the Public Warrants with the consent of a majority of the then-outstanding Public Warrants is unlimited. Examples of such amendments could be amendments to, among other things, increase the exercise price of the Public Warrants, shorten the exercise period or decrease the number of shares of Common Stock purchasable upon exercise of a Public Warrant.
Risks Related to the ForwardReverse PurchaseStock AgreementSplit
If the trading price of the Common Stock decreases, the amount of cash ConnectM receives through the Forward Purchase Agreement mechanisms will decrease.
From time to time, Meteora may sell the Recycled Shares and ConnectM will recoup the proceeds at 95% of the Reset Price (as defined therein) less the Prepayment Shortfall. While ConnectM may receive cash proceeds out of the escrow account from sales of Recycled Shares by Meteora, Meteora may not have any incentive to sell such Recycled Shares unless the trading price of the Common Stock is above the Reset Price. There is no guarantee that the trading price of the Common Stock will equal or exceed the Reset Price at any given time. In such a case, Meteora may not sell the Recycled Shares, in which case ConnectM may not receive cash settlement proceeds from the Forward Purchase Agreement and Meteora may retain ownership of all of the Recycled Shares it purchased pursuant to the Forward Purchase Agreement. If Meteora decides to sell the Recycled Shares into the market, it may cause the trading price of our Common Stock to decline significantly.
ConnectM will have cash payment obligations that could, as a result, significantly reduce ConnectM’s cash reserves.
Pursuant to the Forward Purchase Agreement, at the Maturity Date, ConnectM is required to purchase from Meteora all of the unsold Recycled Shares for consideration equal to the Maturity Consideration, payable in cash or stock at ConnectM’s option. If ConnectM elected to pay the Maturity Consideration in cash, the amount of cash on hand to fund operations would be reduced accordingly, which could adversely affect ConnectM’s ability to make necessary investments, and, therefore, could adversely affect its results of operations.
Other events may result in Meteora having no payment obligations to ConnectM at settlement under the Forward Purchase Agreement.
In addition to the risk of a substantial decline in the market price of the shares of Common Stock, the occurrence of certain events will accelerate the maturity date and may result in Meteora having no payment obligation to ConnectM at settlement. Such events include (a) if the VWAP Price, for any 20 trading days during a 30 consecutive trading day-period beginning 30 days following the closing of the Merger, is below $5.00 per share, (b) if ConnectM’s shares of Class A Common Stock cease to be listed on a national securities exchange or upon the filing of a Form 25, or (c) if the Registration Statement is not declared effective by the Commission within the time periods set forth in the Forward Purchase Agreement, or if the Registration Statement after it is declared effective ceases to be continuously effective as required by the Forward Purchase Agreement, which will result in the unregistered shares being excluded from the calculation of the amounts due at settlement.
ConnectM may be required to make a future cash payment or issue additional shares of Common Stock to Meteora pursuant to the Forward Purchase Agreement at the Maturity Date, which would reduce the amount of cash available to ConnectM to fund its operations or dilute the percentage ownership held by the existing stockholders.
Pursuant to the Forward Purchase Agreement, at the Maturity Date, ConnectM is required to purchase from Meteora all of the unsold Recycled Shares for the Maturity Consideration equal to an amount, in cash or shares of Common Stock at the sole discretion of ConnectM, equal to (a) in the case of cash, the product of the unsold Recycled Shares and $2.00, or $2.50, solely in the event of a Registration Failure (as defined in the Forward Purchase Agreement), and (b) in the case of shares of Class A Common Stock, such number of shares (the “Maturity Shares”) with a value equal to the product of the unsold Recycled Shares and $2.00, or $2.50, solely in the event of a Registration Failure, divided by the VWAP Price of the Common Stock for the 30 trading days ending on the Maturity Date, subject to the payment of Penalty Shares if such shares are not freely tradable. Depending on the amount of the Maturity Consideration and the trading price of the Common Stock, the issuance of these shares in payment of such consideration could result in substantial dilution and decreases to ConnectM’s stock price. If ConnectM elected to pay the Maturity Consideration in cash, the amount of cash on hand to fund operations would be reduced accordingly, which could adversely affect our ability to make necessary investments, and, therefore, could affect our results of operations.
Sales of a substantial number of shares of our Common Stock, or the perception that such sales may occur, could depress the market price of our Common Stock and impair our ability to raise capital.
We have a significant number of shares issued and outstanding, as well as additional shares issuable upon the exercise, conversion or settlement of warrants, options, convertible notes and other equity-linked securities. The issuance or potential issuance of these securities, including at prices below the current market price, could result in substantial dilution and place downward pressure on our stock price.
In addition, holders of our securities may sell shares into the public market at their discretion, including shares acquired at prices below the current market price, which could increase volatility and further depress the trading price of our Common Stock.
Sales of a substantial number of shares of ConnectM’s common stock in the public market or the perception that these sales might occur could depress the market price of ConnectM’s common stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of ConnectM’s common stock. In addition, the sale of substantial amounts of ConnectM’s common stock or the perception such sales may occur, could adversely impact its price.
The selling stockholders will determine the timing, pricing and rate at which they sell such shares into the public market. Certain selling stockholders will have an incentive to sell because they will still realize a profit from such sales because they purchased shares and/or warrants at prices below the price per share paid by public investors in the IPO and/or below the recent trading prices of the shares of Common Stock. Sales by such investors may prevent the trading price of the shares of ConnectM’s common stock from exceeding the price per share in the IPO of MCAC and may cause the trading prices of our securities to experience a further decline.
Pursuant to the Registration Rights Agreement and the Amended Bylaws, after the consummation of the Business Combination and subject to certain exceptions, the Sponsor, those receiving shares of ConnectM’s common stock pursuant to the Merger Agreement, directors, officers and employees of the Company receiving shares of ConnectM’s common stock upon the settlement or exercise of warrants, stock options or other equity awards, and warrantholders of the Company receiving shares of ConnectM’s common stock upon the settlement or exercise of such warrants (other than holders of warrants that are currently listed) will be contractually restricted from selling or transferring any of their shares of common stock. Such restrictions begin at Closing and end on the date that is the earlier of (1) 180 days after Closing and (2)(x) the date on which the closing price of ConnectM’s common stock equals or exceeds $16.50 per share for any 20 trading days within any 30-day period commencing at least 150 days after the Closing, or (y) a Change of Control (as defined in the Lock-Up Agreement). Immediately following the Closing, 8,155,880 shares of ConnectM common stock, representing approximately 38.4% of the outstanding shares of ConnectM common stock, were freely tradable.
However, following the expiration of the applicable lock-up period, such equityholders will not be restricted from selling shares of ConnectM’s common stock held by them, other than by applicable securities laws. Further, thereThere is a likelihood that ConnectM will need to continue to raise capital through one or more equity financings in order to continue growing its business. As such, sales of a substantial number of shares of ConnectM’s commonCommon stockStock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of ConnectM’s commonCommon stock.Stock. As restrictions on resale end and registration statements (filed after the Closing to provide for the resale of such shares from time to time) are available for use, the sale or possibility of sale of these shares could have the effect of increasing the volatility in ConnectM’s share price or the market price of ConnectM’s commonCommon stockStock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.
The Charter and Amended Bylaws contain provisions that could significantly reduce the value of our shares to a potential acquiror or delay or prevent changes in control or changes in our management without the consent of our board of directors. The provisions in our charter documents will include the following:
We willare also be subject to the anti-takeover provisions contained in Section 203 of the DGCL.General Corporation Law of the State of Delaware (the “DGCL”). Under Section 203, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other exceptions, the board of directors has approved the transaction.
ConnectM is an emerging growth company, as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). For as long as ConnectM continues to be an emerging growth company, it may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including exemption from compliance with the auditor attestation requirements under Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. ConnectM will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of the IPO of Monterey Capital Acquisition Corporation, the special purpose acquisition company with which we merged; (December 31, 20262027), (b) in which ConnectM has total annual gross revenue of at least $1.235 billion or (c) in which ConnectM is deemed to be a large accelerated filer, which means the market value of shares of ConnectM’s commonCommon stockStock that are held by non-affiliates exceeds $700 million as of the priorlast Junebusiness 30,day of its most recently completed second fiscal quarter, and (2) the date on which ConnectM has issued more than $1.0 billion in non-convertible debt during the prior three-year period.
We need to raise additional capital to support our operations. We believe our cash and cash equivalents on hand and cash we expect to obtain from this offering, together with cash we expect to generate from future operations, will be sufficient to meet our working capital and capital expenditure requirements in the near future. However, in the future we may still require additional capital to respond to customer demands, technological advancements, competitive dynamics or technologies, business opportunities, challenges, acquisitions or unforeseen circumstances and we may determine to engage in equity or debt financings or enter into credit facilities for other reasons. We may not be able to timely secure additional debt or equity financing on favorable terms, or at all. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our existing stockholders could experience significant dilution and any new securities we issue could have rights, preferences, and privileges superior to those of holders of our Common Stock.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.
Due to ConnectM operating as a going concern, and there is a possibility that ConnectM may never be profitable and you may lose all or part of your investment. During the twelve months ended December 31, 20242025 and 2023,2024, ConnectM incurred net losses of approximately $23 million$16,058,000 and $9 million,$22,508,000, respectively. Continued operations are dependent on ConnectM’s ability to complete equity or debt financings or generate profitable operations. Such financings may not be available or may not be available on reasonable terms.
During the twelve months ended December 31, 20242025 and 2023,2024, ConnectM has incurred net losses of approximately $22.5 million$16,058,000 and $9.2 million,$22,508,000, respectively. As of December 31, 2025 and 2024, ConnectM had an accumulated deficit of $45.4approximately million.$61,671,000 and $45,426,000. ConnectM expects to incur additional losses and higher operating expenses for the foreseeable future. These conditions raises substantial doubt about ConnectM’s ability to continue as a going concern within one year after the date that these combined consolidated financial statements are issued that has not been alleviated. Management’s plans to alleviate the substantial doubt identified include obtaining additional financing from related parties and third parties, and potentially extending existing debt agreements. Due to the Company operating as a going concern, and there is a possibility that we may never be profitable, there is the possibility that you may lose all or part of your investment.
The MEE industry is frequently experiencing significant disruption and, as a result, shortages of MEE key components may be more likely to occur, which in turn may result in price increases for such components. Even if industry-wide shortages do not occur, suppliers may decide to allocate key components with high demand or insufficient production capacity to more profitable customers, customers with long-term supply agreements or customers other than us and our supply of such components may be reduced as a result. The supply of components from various locales is also uncertain due to COVID-19 that has resulted in travel restrictions and shutdowns of businesses in various regions.
We will beare subject to the reporting requirements of the Exchange Act, and other applicable securities rules and regulations. Compliance with these rules and regulations has increased our legal and financial compliance costs, made some activities more difficult, time-consuming or costly and increased demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and results of operations and maintain effective disclosure controls, procedures, and internal controls over financial reporting. Maintaining our disclosure controls and procedures and internal controls over financial reporting in accordance with this standard requires significant resources and management oversight. As a result, management’s attention may be diverted from other business concerns, which could harm our business and results of operations. We will need to hire more employees in the future to manage these reporting and compliance obligations, which will increase our costs and expenses.
Our results of operations have been and may continue to be adversely impacted by the COVID-19 pandemic, and the duration and extent to which it will impact our results of operations remains uncertain.
A significant outbreak of epidemic, pandemic, or contagious diseases in the human population, such as the current COVID-19 pandemic, could result in a widespread health crisis that could adversely affect the broader economies, financial and capital markets, commodity and energy prices, and overall demand environment for our products. A global health crisis could affect, and has affected, our workforce, customers and vendors, as well as economies and financial markets globally, potentially leading to an economic downturn, which could decrease spending, adversely affecting the demand for our products.
In response to the COVID-19 pandemic, federal, state, local, and foreign governments put in place, and in the future may again put in place, travel restrictions, quarantines, “stay at home” orders and guidelines, and similar government orders and restrictions, in an attempt to control the spread of the disease. Such restrictions or orders resulted in, and in the future may result in, business closures, work stoppages, slowdowns and delays, among other effects that negatively impacted, and in the future may negatively impact, our operations, as well as the operations of our customers and business partners. Such results have had and will continue to have a material adverse effect on our business, operations, financial condition, results of operations, and cash flows.
Although we have continued to operate consistent with federal guidelines and state and local orders, the extent to which the COVID-19 pandemic impacts our business, operations, financial results and financial condition will depend on numerous evolving factors which are uncertain and cannot be predicted, including:
These effects of the COVID-19 pandemic and related economic repercussions have materially affected how we and our customers, vendors, subcontractors, developers, and general contractors are operating our businesses, and the duration and extent to which this will negatively impact our future results of operations and overall financial performance remains uncertain. ConnectM faces risks related to health pandemics, including the aftereffects of the COVID-19 pandemic or potential future pandemics, which could have a material and adverse effect on our business, operations, financial condition, results of operations, and cash flows.
In addition, while we believe we have taken appropriate steps to maintain a safe workplace to protect our employees from contracting and spreading the coronavirus, including following the guidance set out from both the Occupational Safety and Health Administration and Centers for Disease Control and Prevention, we may not be able to completely prevent the spread of the virus among our employees. We may face litigation or other proceedings making claims related to unsafe working conditions, inadequate protection of our employees or other claims. Any of these claims, even if without merit, could result in costly litigation or divert management’s attention and resources.
Furthermore, we may face a sustained disruption to our operations due to one or more of the factors described above. Although the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic instability that has occurred or may occur in the future. Any of these events could amplify the other risks and uncertainties described in this Report and could materially adversely affect our business, operations, financial condition, results of operations, cash flows or the market price of our common stock.
In addition, ConnectM and certain of its subsidiaries may collect, process or store sensitive consumer financial information, including payment card data, in connection with its operations. The handling of such information subjects ConnectM to additional legal, regulatory and industry requirements, including the Payment Card Industry Data Security Standard (“PCI DSS”) and applicable data protection and privacy laws. Any failure to comply with these requirements, or any actual or perceived compromise of payment card or other financial information, could result in fines, penalties, increased transaction fees, loss of payment processing privileges, contractual liability, regulatory investigations and reputational harm. Furthermore, the collection and storage of payment information may increase ConnectM’s exposure to cyber-attacks and fraud, and any such incident could result in significant financial losses, remediation costs and litigation.
Increases and uncertainty in our health insurance costs could adversely impact our results of operations and cash flows.
The costs of employee health insurance have been increasing in recent years due to rising health care costs, legislative changes, and general economic conditions. Additionally, we may incur additional costs as a result of the Patient Protection and Affordable Care Act (the “Affordable Care Act”) that was signed into law in March 2010. Future legislation could also have an impact on our business. The status of the Affordable Care Act, any amendment, repeal or replacement thereof, is currently uncertain. For example, in December 2019, the United States Court of Appeals for the Fifth Circuit struck down a central provision of the Affordable Care Act, ruling that the requirement that people have health insurance was unconstitutional, sending the case back to a federal district judge in Texas to determine which of the law’s many parts could survive without the mandate. On March 2, 2020, the United States Supreme Court granted certiorari to review this case, and on June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. The Affordable Care Act will remain in effect in its current form; however, we continue to evaluate the effect that the Affordable Care Act has on our business.
Generally accepted accounting principles in the U.S. are subject to change and interpretation by the Financial Accounting Standards Board (“FASB”), the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results and on the financial results of other companies in our industry and may even affect the reporting of transactions completed before the announcement or effectiveness of a change. The Company has adopted all recently effective accounting standards, including ASU No. 2016-13, Financial Instruments — Credit Losses (ASC 326), and ASU No. 2016-02, Leases (ASC 842). Future accounting standard updates issued by the FASB may require changes to our recognition, measurement, or disclosure practices and could affect comparability of our financial statements with those of other companies in our industry that may adopt such standards at different times or apply them differently.
Generally accepted accounting principles in the U.S. are subject to change and interpretation by the Financial Accounting Standards Board (“FASB”), the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results and on the financial results of other companies in our industry and may even affect the reporting of transactions completed before the announcement or effectiveness of a change. For example, in June 2016 the FASB issued Accounting Standards Update No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU No. 2016-13”), which replaces the current incurred loss impairment methodology with a current expected credit losses model. Other companies in our industry may be affected differently by the adoption of ASU No. 2016-13 or other new accounting standards, including timing of the adoption of new accounting standards, adversely affecting the comparability of financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which primarily changes the lessee’s accounting for operating leases by requiring recognition of lease right-of-use assets and lease liabilities. This standard is effective for annual reporting periods beginning after December 15, 2021. ConnectM adopted this standard, effective January 1, 2022, under the alternative transition method as permissible under ASU 2018-11 and will apply this standard to all leases. As a result, comparative financial information of ConnectM has not been restated and continues to be reported under the accounting standards in effect for those periods.
In connection with the preparation and audit of itsour consolidated financial statementsstatements, to meet the requirements applicable to its current status as a publicly traded company, ConnectMmanagement and itsour independent registered public accounting firm identified material weaknesses in itsour internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Management's Discussion & Analysis (MD&A)
New heading “Industry Context and Market Drivers”
New heading “Revenue Model and Cost Structure”
New heading “Post-Business Combination Outlook”
New heading “Convertible Notes”
New heading “Summary of Convertible Notes Outstanding as of December 31, 2025 (Amounts in U.S. dollars)”
New heading “Known Trends and Uncertainties”
New heading “Electrification of Buildings and HVAC Systems”
New heading “Expansion of Distributed Energy and Energy Storage”
New heading “Artificial Intelligence and Data Infrastructure in Energy Systems”
New heading “Digitalization and Optimization of Logistics and Mobility”
New heading “Government Spending and Policy Support for Energy Transition and AI”
New heading “Macroeconomic and Supply Chain Considerations”
New heading “Technology Evolution and Competitive Dynamics”
New heading “Key Components of Our Results of Operations”
New heading “Selling, General and Administrative expenses”
Removed heading “Business Combination and Public Company Costs”
Removed heading “Derivative Financial Instruments”
Removed heading “Forward Purchase Agreement (“FPA”)”
Removed heading “Debt Conversion Adjustments and SEPA Derivative Liability”
Removed heading “Convertible Debt”
Removed heading “Contingent Consideration Obligation”
Removed heading “Business Combinations”
Removed heading “Long lived assets”
Removed heading “Share-based Compensation”
Largest changes
“As of the date of this filing, the Company has not made certain scheduled payments under the SEPA Convertible Note or made timely SEC filings and is therefore in default under the agreement. However, Yorkville has not issued a formal notice of default, and the Company remains in ongoing discussions with Yorkville regarding a potential resolution and restructuring of the outstanding obligations. The Company is required to maintain a minimum cash balance equal to the lesser of (a) $2,000,000 and (b) the sum of the next three Installment Payments, as defined in the promissory note, coming due. …”see in full comparison
“In January 2025, the Company entered into a promissory note (the “January 2025 Note”) with the individual from whom the Company acquired a business from in August 2024 which converts the unpaid cash consideration of $170,000 and accrued interest of approximately $6,000 from accounts payable to a sellers note that matures on June 30, 2025. The unpaid balance of the principal amount bears interest at a rate of 14.0% per annum, except in the event of a default when interest increases to 19.0% per annum. …”see in full comparison
“The Company’s operations are influenced by broader macroeconomic conditions, including interest rates, inflation, and supply chain dynamics. Higher interest rates may impact consumer financing for electrification projects, while inflationary pressures may affect equipment costs and labor availability.”see in full comparison
“Loss on impairment of intangible assets and goodwill consist of non-cash charges recognized when the carrying value of certain intangible assets exceeds their recoverable amount. This includes impairment losses related to customer relationships and trademarks associated with ATS and SESB, which were assessed for recoverability based on changes in circumstances and business conditions impacting the expected future economic benefits attributable to these assets. …”see in full comparison
Net cash used in operating activities for the year ended December 31,see in full comparison20232024 was$approximately4,621,692.$5,959,000. Net cash used in operating activities consisted primarily of net loss of$9,198,854,approximately $22,508,000 offset by$2,174,197approximately $13,261,000 of noncash items, primarily related to the loss on extinguishment of debt of approximately $1,645,000, loss on fair value measurement of debt of approximately $17,078,000, change in fair value of forward purchase agreement put option liability resulting in a loss of approximately $8,254,000 depreciation and amortization of long-lived assets and intangible assets of$776,397,approximatelyamortization$746,000 offset by a gain on modification oftheforwardCompany’spurchasedebt discount recorded on its different debt facilitiesagreement of$346,557,approximatelya$1,572,000,write down of inventory due to obsolescence of $187,098, aimpairment loss onimpairmentgoodwill and intangible assets of$181,853,approximately $2,403,000 andathelossgain ontheextinguishment of debt of$370,320.approximately $2,258,000. In addition, for the year ended December 31,2023,2024, net changes in operating assets and liabilities resulted in cash provided by operating activities of$2,402,965.approximately $3,288,000.
“On March 16, 2026, the Company refinanced and replaced the foregoing facility by entering into a new business loan and security agreement with a lender for $650,000. After deducting an origination fee of approximately $32,800, the payoff of the remaining balance on the prior facility and other applicable fees, net proceeds of approximately $428,400 were disbursed to the Company. The new facility requires 36 weekly payments of approximately $25,639 for a total repayment amount of $923,000 and matures in November 2026. …”see in full comparison
Full comparison: every changed paragraph (219)
ConnectM (the “Company”) is a Delaware corporation headquartered in Marlborough, Massachusetts. On July 12, 2024 (the “Merger Closing Date” or the “Merger Closing”), Monterey Capital Acquisition Corporation (“MCAC”) entered intoconsummated an Agreement and Plan of Merger (the “Merger Agreement”) with ConnectM Technology Solutions, Inc. (“Legacy ConnectM”) in which MCAC acquired all of the issued and outstanding shares of commonCommon stockStock from Legacy ConnectM shareholders (the “Business Combination”) in exchange for 14,500,000 shares of MCAC’s commonCommon stock.Stock. On the Merger Closing Date, MCAC changed its name to ConnectM Technology Solutions, IncInc. (“ConnectM”) and weit became a publicly listed company.
ConnectM conducts its operations through its subsidiaries and operates a unified, AI-enabled technology platform powering the modern energy economy. Through this platform, the Company connects OEMs, service providers and end customers to enable electrification, decarbonization and grid-aware energy management across residential, commercial and infrastructure applications.
The Company delivers solutions to its customers for (i) the decarbonization of homes, critical infrastructure and businesses through energy management-as-a-service offerings, including weatherization, HVAC, solar, battery and EV charging solutions, (ii) the facilitation of business-to-business transportation through its online and mobile last-mile delivery platform utilizing contracted drivers, and (iii) the management of connected operations through its industrial internet of things (“IIoT”) platform. These offerings are integrated and optimized through the Company’s proprietary platform, developed and continuously enhanced by Keen Labs, its AI and technology subsidiary.
The Company also offers physical products as part of its solutions offerings, including AI-enabled heat pump systems for use in the decarbonization of homes and businesses, as well as display clusters, digital control units and vehicle control units used in the management of connected operations.
The Company also provides managed solutions offerings, including human resources management, procurement services, omnichannel marketing and lead generation services, and access to working capital solutions designed to improve operating efficiency and enhance profitability for service providers.
The Company’s platform and associated software continuously collect and analyze operational data, generating actionable insights that customers use for monitoring, optimization and decision-making, and enabling applications such as predictive maintenance and virtual power plant integration.
The Company earns revenue across six operating segments:
Collectively, these businesses are interconnected through ConnectM’s data infrastructure, which enables predictive maintenance, energy optimization, and operational efficiency across the energy and logistics ecosystems.
Industry Context and Market Drivers
ConnectM operates at the intersection of three global macro-trends:
These structural shifts create sustained tailwinds for ConnectM’s technology and services across residential, commercial, and industrial asset classes.
Revenue Model and Cost Structure
Primary operating expenses include personnel costs, facility leases, depreciation and amortization, technology development, marketing, insurance, and professional services. ConnectM also incurs additional compliance and reporting costs associated with its public-company status.
Post-Business Combination Outlook
Following the Business Combination, ConnectM continues to integrate its acquired subsidiaries and expand its technology platform capabilities. Through a series of strategic transactions completed during and subsequent to the fiscal year, the Company has significantly broadened its operational footprint across distributed energy, defense sustainment, and AI-driven infrastructure.
In November 2025, the Company acquired certain assets of Amperics Holdings LLC pursuant to an Asset Purchase Agreement, consisting solely of proprietary technology related to nanotechnology-based energy storage. The acquired technology, which combines the rapid-response characteristics of supercapacitors with lithium-ion energy density to enable long-cycle-life storage systems suited for grid stabilization, data-center energy buffering, and electric-fleet charging applications, has been integrated into the Company’s Keen Labs subsidiary as a new product line. Keen Labs subsequently introduced its Hi-C™ and Hi-E™ energy storage product lines, targeting high-power and long-duration distributed energy storage markets, respectively.
In January 2026, the Company acquired a 40% equity interest in Sun Solar LLC, a leading U.S. residential and small-commercial solar developer and installer. The transaction increased stockholders’ equity by approximately $6.5 million. Under a related VPP kit supply agreement, Keen Labs will supply solar panels, batteries, and balance-of-system components to Sun Solar as the Company scales its AI-driven Energy Intelligence Network across Sun Solar’s install base. ConnectM is consolidating its solar operations under the “Sun Solar Northeast” banner and deploying additional capital to expand solar-plus-storage installations across the Northeast corridor.
In March 2026, the Company acquired Harry Kahn Associates, Inc. (“HKA”), an 80-year-old defense contractor specializing in mission-critical technical data systems and lifecycle support for U.S. military platforms, in exchange for 400,000 shares of ConnectM common stock. HKA’s structured operational datasets, when combined with Keen Labs’ AI platform, are expected to support advanced analytics, predictive maintenance, and digital lifecycle optimization across defense and government infrastructure.
The Company’s strategic priorities for the next twelve months include:
Management believes that the combination of recurring energy-as-a-service and VPP revenue, diversified technology and service offerings spanning electrification, defense sustainment, and distributed energy, and the expanding Keen Labs AI platform positions ConnectM for continued growth and margin improvement through 2026 and beyond.
ConnectM is a constellation of companies connecting and powering next generation equipment, mobility and distributed energy—thus enabling a faster, smarter transition to a modern energy economy. We deliver an advanced, proprietary Energy Intelligence Network (EIN) platform designed to empower residential and commercial service providers and original equipment manufacturers, to optimize energy efficiency, enhance operational performance, and support sustainable innovation. Leveraging technology, data, artificial intelligence, and behavioral economics, ConnectM aims to lower energy costs and reduce carbon emissions globally. Our Service Provider-facing technology platform encompasses marketing to life cycle management, customer care to claims processing, finance to rebates/incentives. Our architecture combines artificial intelligence with human expertise, continuously learning from the data it generates. This enables us to refine and improve our technology solutions for B2B customers while maximizing customer lifetime value. In addition to digitizing electrification end-to-end, we also transform the underlying business model to minimize customer churn while maximizing trust and improving environmental impact.
Our OEM-facing technology platform provides essential hardware and software services for EV fleet management and battery diagnostics—helping to capture data, synthesize that data, and in turn monetizing that data on behalf of our enterprise customers. By empowering OEMs and mobility companies with connected operations, our portfolio companies directly contribute to their continued explosive growth.
We believe that our cocktail of enhanced user experience, aligned values, and competitive cost enjoys broad appeal. End user electrification consumption has grown over time to encompass higher value products such as heat pumps, highly efficient air conditioners, solar roof, battery storage, electric vehicles and weatherization. These progressions can generate increases in customer lifetime value. We anticipate sustained growth through predictable, recurring revenue streams and automation that reduces costs while meeting our B2B customer needs. Our data-driven architecture further enhances precision in pricing and implementing electrification solutions, creating additional value for our customers.
We derive revenue through the sale of hardware, software, and services across four different business segments: our Owned Service Network, Managed Solutions, Transportation, and Logistics. The key elements of our products and services are discussed in Part I, Item 1. “Business – Our Products and Services.” Our expenses consist primarily of payroll and benefit costs, facility costs, leasehold improvement amortization, utility costs, repair and maintenance, advertising, insurance, equipment depreciation and professional fees.
In January 2025, the Company entered into a promissory note (the “January 2025 Note”) with the individual from whom the Company acquired a business from in August 2024 which converts the unpaid cash consideration of $170,000 and accrued interest of approximately $6,000 from accounts payable to a sellers note that matures on June 30, 2025. The unpaid balance of the principal amount bears interest at a rate of 14.0% per annum, except in the event of a default when interest increases to 19.0% per annum. An event of default is to have occurred if the unpaid principal and accrued interest thereon is not paid in full prior to the maturity date, if the Company makes an assignment for the benefit of creditors, or if the Company files for bankruptcy or another similar proceeding.
On January 28, 2025, the Company entered into a settlement and stipulation agreement (the “Settlement Agreement”) with Last Horizon, LLC (“Last Horizon”), pursuant to which the Company agreed to issue shares of the Company’s common stock to Last Horizon in exchange for the settlement of an aggregate $8,908,000 (the “Claim”) to resolve outstanding overdue liabilities with one of our lenders and certain of our vendors. The Company has issued 13,744,131 shares of the Company’s common stock to Last Horizon as Settlement Shares between January 28, 2025 and the date this Form 10-K was issued. The issuance of common stock to Last Horizon pursuant to the terms of the Settlement Agreement is exempt from the registration requirements of the Securities Act pursuant to Section 3(a)(10) thereof, as an issuance of securities in exchange for bona fide outstanding claims.
On March 26, 2025, wethe wereCompany was awarded ourits first Home and Building Electrification (HBE) project in India through a strategic partnership with Zenitha Energylocal Servicesenergy Pvt.services Ltd.provider.
During the quarter ended March 31, 2025, 2,737,168 shares of our common stock were issued in connection with the share reset derivative liabilities.
During the three months ended March 31, 2025, the Company entered into twelve convertible note agreements in exchange for aggregate gross proceeds of $2,530,000 to eleven lenders (the “Q1 2025 Convertible Notes”). The Q1 2025 Convertible Notes bear interest at a rate of 20.0% per annum. The Q1 2025 Convertible Notes have maturity dates that range from 40-days to one year from the convertible note issuance date, optional conversion period that ranges from thirty to ninety days, and a conversion price that ranges from $1.00 to $1.15. The Company entered into convertible note agreements with two related-party investors holding beneficial ownership interests exceeding 5.0% of the Company's common stock. The aggregate principal amount of these convertible notes was $500,000.
On April 11, 2025, the Company held a special meeting of shareholders. The shareholders voted to approve a reverse stock split and issuance of up to 25,000,000 shares via a standby equity purchase agreement.agreement Thehowever termsno ofshares were issued under the reverseagreement. stock split are not yet finalized asAs of the date of this filing.filing, the reverse stock split authorized at the April 11, 2025 special meeting had not been effected.
In April 2025, we acquired all of the issued and outstanding equity securities of Air Temp Service Co, Inc. ("Air Temp") and Solar Energy Systems of Brevard, Inc ("SES") in exchange for the issuance of 4,900,000 shares of our common stock with a fair value of $3,200,000, as determined using the closing share price on the date of issuance in May 2025. Air Temp Services is considered a related party due to its ownership by SriSid LLC and Arumilli LLC, which are related parties to the Company. The Company had a Managed Services Agreement in place with Air Temp during the reporting period.
On May 5, 2025, the Company's board of directors designated 100,000 shares of preferred stock as Series A Convertible Preferred Stock, par value $0.0001 per share (the "Series A Stock") and 100,000 shares of preferred stock as Series B Convertible Preferred Stock, par value $0.0001 per share (the "Series B Stock"). The Series A Stock and the Series B Stock have an initial stated value of $100.00 per share, subject to adjustment in the event of a stock split, combination or other similar recapitalization. Further terms are detailed in the Subsequent Events section.
On May 6, 2025, the Company received a determination letter (the "Delisting Notification") from the Nasdaq Hearings Advisor stating that the Panel has determined to delist the Company's common stock, par value $0.0001 per share from the Nasdaq Capital Market, and Nasdaq suspended the trading of the Company's Common Stock on May 7, 2025 because the Company has not demonstrated compliance with the MVLS Rule, nor does it meet any of the alternative requirements under Nasdaq Listing Rule 5550 (b) and has failed to demonstrate that additional time to regain compliance is appropriate.
On MayApril 15,25, 2025, the Company completed its acquisition of Cambridge Energy Resources Pvt. Ltd. ("“CER"”), a privately held India -India- based Energy - Management - as - a - ServiceEnergy-Management-as-a-Service provider, following receipt of all necessary regulatory approvals. Under the terms of the transaction, ConnectMthe purchase price was approximately $1,108,640 out of which, the Company has paid INRapproximately 120 million$719,897 (approximatelyas $1.4discussed millionin Note 5). CER brings an established operating presence in India'sIndia’s rooftop solar and telecommunication energy - management sectors, complementing the Company'sCompany’s Owned Service Network segment and Energy Intelligence Network. Management expects the integration of CER to accelerate strategic growth across distributed energy and telecom infrastructure markets in India.India Withand to contribute to an increased share of the acquisition,Company’s the Company projects India - basedIndia-based operations toas expanda from approximately 5% to 15%percentage of global revenue (approximately $10 million annualized) over the next twelve months.
On April 28, 2025, the Company entered into a stock purchase agreement with W4 Partners LLC (the “Seller”), for the purposes of acquiring from the Seller all of the issued and outstanding equity securities of Air Temp Service Co, Inc. (“ATS”) and Solar Energy Systems of Brevard, Inc (“SESB”) in exchange for the issuance of 2,200,000 shares of the Company’s common stock. Per the terms of the stock purchase agreement, if the Company was delisted from the Nasdaq exchange within 90 days of closing, the Company was required to issue an additional 2,700,000 shares of the Company’s common stock. The total fair value of the 4,900,000 shares of the Company’s common stock issued as consideration to the Seller was approximately $3,199,480, as determined using the closing share price on the date of agreement on April 28, 2025.
On May 5, 2025, the Company’s board of directors designated 100,000 shares of preferred stock as Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Stock”) and 100,000 shares of preferred stock as Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Stock”). The Series A Stock and the Series B Stock have an initial stated value of $100.00 per share, subject to adjustment in the event of a stock split, combination or other similar recapitalization.
On May 6, 2025, the Company received a determination letter (the “Delisting Notification”) from the Nasdaq Hearings Advisor stating that the Panel had determined to delist the Company’s common stock, par value $0.0001 per share from the Nasdaq Capital Market, and Nasdaq suspended the trading of the Company’s Common Stock on May 7, 2025 because the Company had not demonstrated compliance with the MVLS Rule, nor did it meet any of the alternative requirements under Nasdaq Listing Rule 5550 (b) and had failed to demonstrate that additional time to regain compliance was appropriate.
During April 2025 and May 2025, the Company entered into twenty fivetwenty-five note exchange agreements with twelve of its lenders under which sixteen secured promissory notes totaling $4,435,000, nine convertible notes totaling $1,840,000, and accrued interest and fees totaling $1,189,939 were exchanged for 15,290,930 shares of the Company'sCompany’s common stock with a fair value of $8,224,386, as determined on the issuance date using the reported closing share price. Certain of these note exchanges involved related parties, including Arumilli LLC, SriSid LLC, Win - Light Global Co. Ltd., and W4 Partners LLC.
The Company entered into six promissory note agreements in exchange for aggregate gross proceeds of $735,000 during April 2025 and May 2025. Each of the notes bears interest at a rate of 20.0% per annum and matures 180 days from its respective issuance date. Five of the promissory notes were held by W4 Partners LLC, a related party due to its equity ownership in the Company.
During May 2025 and June 2025, we issued 1,622,222 shares of our common stock to its directors and employees as consideration for past services performed with a fair value of approximately $372,000, as determined on the issuance date using the reported closing share price.
During 2025, we issued 2,758,309 shares of our common stock to its directors and employees as consideration for past services performed with a fair value of approximately $512,000, as determined on the issuance date using the reported closing share price. During May 2025 and June 2025, we sold 3,658,333 shares of our common stock for gross proceeds of approximately $805,000 with a fair value of approximately $948,000, as determined on the issuance date using the reported closing share price.
On July 10, 2025, the Company entered into the first amendment to the January 2025 Note (the “Amended January 2025 Note”), under which the Company is required to pay the lender approximately $26,000 towards the principal, approximately $14,000 of accrued interest, and the lender’s legal fees of approximately $3,000. The Amended January 2025 Note extended the maturity date from June 30, 2025 to August 8, 2025 and increased the interest rate to 18.0% effective July 1, 2025.
On August 14 2025, the Company entered into a Second Amendment to the January 2025 Note (the “Second Amended January 2025 Note”), which extended the maturity date from August 8, 2025 to September 30, 2025 and required payment of an approximately $10,000 forbearance fee to the lender. This debt was subsequently paid off as on October 21, 2025.
DuringFrom July 1, 2025 through September 30, 2025, the Company entered into afive convertible note agreementagreements in exchange for aggregate gross proceeds of $500,000$1,900,000 towith afour lenderlenders (the "“Q3 2025 Convertible Note"Notes”). The Q3 2025 Convertible NoteNotes bearsbear interest at a rate of 20.0% per annum and maturesmature 210 days from the agreement date. The Q3 2025 Convertible NoteNotes isare convertible any time before the maturity date at the option of the holder into shares of the Company'sCompany’s common stock at a conversion price equal to the lower of (i) $0.25 or (ii) the quotient obtained by dividing (x) the sum of the principal and accrued by unpaid interest by (y) 90.0% of the VWAP on the primary trading market of the Company'sCompany’s common stock the three trading day period immediately preceding the measurement date..date. The number of shares issuable upon conversion is determined by dividing the sum of the outstanding principal and accrued interest by the conversion price.
On September 24, 2025, ConnectM entered into a Settlement and Termination Agreement with Libertas Funding, LLC, resolving all outstanding obligations related to a prior Agreement of Sale of Future Receivables and Debt Conversion Agreement. Under the terms of the settlement, Libertas agreed to terminate its senior secured lien and release all related financing statements and security interests in the Company’s assets. In consideration, ConnectM acknowledged a remaining debt balance of approximately $3,100,000 and agreed to a structured repayment plan providing for initial weekly payments followed by bi-monthly installments beginning in October 2025, with stepped increases tied to the Company’s planned uplisting to a senior market tier. The agreement also provides ConnectM with the right to redeem 1,557,796 shares of its common stock held by Libertas for nominal consideration following full repayment of the debt. The settlement eliminated all prior claims between the parties and restored full ownership control of the related equity securities to the Company’s shareholders From October 6, 2025 through December 31, 2025, the Company entered into seven convertible note agreements in exchange for aggregate gross proceeds of $2,550,000 with five lenders (the “Q4 2025 Convertible Notes”). The Q4 2025 Convertible Notes bear interest at a rate of 20.0% per annum and mature 210 days from the agreement dates. The Q4 2025 Convertible Notes are convertible any time before the maturity date at the option of the holder into shares of the Company’s Common Stock at a conversion price equal to the lower of (i) $0.25 or (ii) the quotient obtained by dividing (x) the sum of the principal and accrued by unpaid interest by (y) 90.0% of the VWAP on the primary trading market of the Company’s Common Stock the three trading day period immediately preceding the measurement date. The number of shares issuable upon conversion is determined by dividing the sum of the outstanding principal and accrued interest by the conversion price.
On October 23, 2025, the Company entered into a funding agreement with an institutional investment fund pursuant to which it issued a promissory note in the principal amount of $275,000. The note was issued with a 10% original issue discount, resulting in net proceeds to the Company of $250,000, and carries a one-time interest charge of 10%. The note matures 12 months from issuance and requires monthly amortization payments beginning 180 days after the issue date. The Company may prepay the note at any time without penalty in accordance with the terms of the agreement.
The note includes a contingent conversion feature that becomes exercisable only upon the occurrence of an event of default, at which time the holder may elect to convert all or a portion of the outstanding balance into shares of the Company’s Common Stock at a conversion price equal to 75% of the lowest closing bid price during the 15 trading days immediately preceding the conversion date. In connection with the note, the Company instructed its transfer agent to reserve a sufficient number of shares of Common Stock (initially 5,723,214 shares, subject to adjustment) to satisfy any potential conversions in the event of default. The proceeds from this financing are being used for working capital and general corporate purposes.
On October 27, 2025, the Company announced the formation of Keen Labs Operations LLC, a wholly owned subsidiary established to consolidate and expand our AI and technology operations. In December 2025, upon advice of counsel, the Company implemented an updated entity structure and organized Keen Labs, which now serves as the Company’s wholly owned subsidiary for these purposes. Keen Labs serves as our dedicated technology and innovation arm, housing all of our AI, industrial IoT, battery systems, and distributed energy platforms and products. The subsidiary provides a focused structure to accelerate product development, improve capital efficiency, and pursue both organic and acquisition-driven growth across the energy transition, logistics, and mobility sectors. Keen Labs builds on the strong foundation of our existing technology operations, which have demonstrated substantial revenue and margin growth over the past several years. The subsidiary is expected to serve as the central platform for future technology development and strategic partnerships, enabling us to strengthen our leadership position in AI-powered electrification and the modern energy economy.
On November 3, 2025, we entered into an Asset Purchase Agreement with Amperics Holdings LLC and its parent, Amperics Inc. (together, “Amperics”), pursuant to which we acquired certain assets related to Amperics’ nanotechnology-based energy-storage business (the “Acquisition”). We obtained control upon execution and closing of the Asset Purchase Agreement and the related Bill of Sale and Assignment and Assumption Agreement.
Consideration and ownership acquired: The consideration consisted of 2,700,000 shares of our Common Stock issued to the seller, valued at approximately $864,000 based on the closing price of $0.32 per share on the acquisition date. No cash consideration was paid. Because the transaction was structured as an asset purchase, we did not acquire voting equity interests of an acquiree entity, and therefore a percentage ownership disclosure is not applicable.
Contingent consideration: The Asset Purchase Agreement does not provide for earn-outs or other contingent consideration. The only potential adjustment is a mechanical equitable adjustment for stock splits occurring between signing and closing.
Assets acquired and liabilities assumed: Although the Asset Purchase Agreement contemplated the acquisition of contracts, intellectual property (including patents), and other assets, at the acquisition date Amperics had no contracts in place that would give rise to identifiable future economic benefits, the acquired patents had expired and offered no legal protection or separate future economic benefits, and no tangible assets existed. Accordingly, the sole identifiable asset acquired was proprietary technology related to pseudocapacitors, conductive ink formulations, production techniques, and product specifications. No liabilities existed or were assumed as of the acquisition date.
Purchase price allocation: The Company completed its purchase price allocation with the assistance of a third-party valuation specialist. The entire purchase consideration of approximately $864,000 was allocated to the acquired proprietary technology, which is being amortized on a straight-line basis over an estimated useful life of 10 years. No goodwill was recognized.
The sole asset acquired was proprietary technology related to Amperics’ nanotechnology-based energy-storage business, which will be integrated into Keen Labs, the Company’s AI and technology subsidiary.
On November 3, 2025, we acquired control of Geo Impex through an Exchange and Acquisition Agreement. Under the agreement, (i) We acquired approximately 86.22% of the voting equity interests of Geo Impex India in exchange for newly issued shares of our common stock and promissory notes indirectly through our wholly owned subsidiary in India. The remaining 13.78% is held by third-party shareholders and is reported as non-controlling interest of $984,025.
As part of the consideration, we issued 33,300,000 shares of our common stock valued at approximately $10,656,000 based on the closing price on the acquisition date and a promissory note with a principal amount of $788,900 for a total purchase price of $11,444,900.
The agreement contains no earn-outs or other contingent consideration. The number of shares issued is subject only to an equitable adjustment for stock splits between signing and closing. The promissory note has a fixed principal and no variable features.The transaction was evaluated under ASC 805, Business Combinations.
Accounting treatment: The Company concluded that the transaction did not meet the definition of a business combination and was accounted for as an asset acquisition under U.S. GAAP. The allocation of purchase consideration to identifiable assets (including land and related rights) and liabilities have been determined based on their relative fair values at the acquisition date. No goodwill was recognized.
On November 10, 2025, the Company announced it had entered into a distribution agreement with Greentech Renewables, a U.S. distributor of solar and electrical products, for the sale and distribution of the Company’s Keen-branded high-efficiency heat pumps and related smart controls. The agreement is intended to expand the Company’s distribution reach across Greentech’s national contractor network and support broader adoption of the Company’s heat-pump technology developed by its subsidiary, Keen Labs.
On December 29, 2025, ConnectM entered into a Settlement and Termination Agreement (the “Yorkville Agreement”) with Yorkville related to the Company’s December 17, 2024 SEPA. The Yorkville Agreement provides for continued $250,000 cash payments on alternate Mondays, applied to reduce the outstanding pre-paid advance obligation (including principal, interest and applicable premiums), and confirms the December 15, 2025 payment was applied first to satisfy the $187,500 deferred fee, with the balance applied to the pre-paid advance obligation.
What changed in the latest 10-Q
Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” on Form 10-K for the year ended December 31, 2025, as the same may be updated from time to time, which could materially affect our business, financial condition, and future results. The risks described in our Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and operating results. Except to the extent previously updated or to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, Item 2 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there have been no material changes to the risk factors set forth on Form 10-K for the year ended December 31, 2025, as the same may be updated from time to time.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Bridge Loan Facility”
New heading “Result of operations for discontinued operations”
Removed heading “Contribution Profit and Contribution Margin”
Largest changes
“On July 1, 2026, the Company issued two convertible promissory notes (each, a “July 1 Note” and together, the “July 1 Notes”) to two separate accredited investors, each in the aggregate principal amount of $122,222, including an original issue discount of $12,222, for a purchase price of $110,000, and each on substantially identical terms. In the aggregate, the July 1 Notes have a principal amount of $244,444, including aggregate original issue discount of $24,444, for an aggregate purchase price of $220,000. …”see in full comparison
“On June 10, 2026, the Company entered into a Securities Purchase Agreement with an institutional accredited investor and issued a convertible promissory note (the “June 10 Note”) in the original principal amount of $227,150, including an original issue discount of $20,650, for a purchase price of $206,500. The investor withheld $4,000 from the purchase price to cover legal fees and $2,500 to cover due diligence costs, resulting in net proceeds to the Company of $200,000. …”see in full comparison
“The Facility is secured by a security interest in substantially all assets of the Company, including accounts receivable, cash, deposit accounts, investment property, inventory, equipment, intellectual property and general intangibles, which security interest is subordinate to the interests of the Company’s existing senior secured creditors. Upon an Event of Default, the lender may declare all outstanding Tranches and accrued fees immediately due and payable, and outstanding amounts bear default interest at 20% per annum. …”see in full comparison
“On June 9, 2026, the Company issued a convertible promissory note (the “June Convertible Note”) to an accredited investor in the principal amount of $150,000, for a purchase price of $150,000. The June Convertible Note carries a one-time guaranteed interest charge of 15% per annum for twelve months, applied to the principal on the issue date and added to the principal balance, resulting in a total repayment obligation of $172,500 due on June 8, 2027. …”see in full comparison
“On June 1, 2026, the Company issued a bridge note (the “June Bridge Note”) to an accredited investor in the aggregate principal amount of $134,960, including an original issue discount of $14,460, for a purchase price of $120,500. At closing, the Company reimbursed the investor $5,500 for legal fees and due diligence costs. The June Bridge Note matures on March 30, 2027. …”see in full comparison
“On August 17, 2026, the Company issued an unsecured convertible promissory note to an institutional accredited investor in the principal amount of $250,000, for a purchase price of $225,000, reflecting an original issue discount of $25,000. After $11,000 of legal and due diligence costs withheld by the investor, net proceeds to the Company were approximately $214,000. The note bears interest at 10% per annum, with the first twelve months of interest, equal to $25,000, guaranteed and earned upon issuance, and matures on August 17, 2027. …”see in full comparison
Full comparison: every changed paragraph (80)
ConnectM (the “Company”) is a Delaware corporation headquartered in Marlborough, Massachusetts. On July 12, 2024 (the “Merger Closing Date” or the “Merger Closing”), Monterey Capital Acquisition Corporation (“MCAC”) consummated an Agreement and Plan of Merger (the “Merger Agreement”) with ConnectM Technology Solutions, Inc. (“Legacy ConnectM”) in which MCAC acquired all of the issued and outstanding shares of Common Stock from Legacy ConnectM shareholders (the “Business Combination”) in exchange for 14,500,000 shares of MCAC’s Common Stock. On the Merger Closing Date, MCAC changed its name to ConnectM Technology Solutions, Inc. (“ConnectM”) and it became a publicly listed company. ConnectM is a constellationU.S.-based technology company that develops, sells, and operates hardware and software to power the physical layer of technology-driven businesses powering the modern energyAI economy. The Company’s missionstrategy is toorganized reshapearound howtwo energyhigh-growth, isU.S.-centered usedplatforms: inDeliveryCircle, homes,asset-light businesses,logistics-technology transportation, infrastructure,subsidiary, and logisticsKeen Labs, the Company’s wholly owned AI and technology subsidiary. Over the past year, the Company has simplified its portfolio to createconcentrate aon higherthese qualitytwo ofplatforms, life,divesting loweror costs,winding down its legacy Owned Service Network, Managed Solutions, and helpIndia-based chartoperations, aas coursedescribed forfurther a more sustainable future.below.
DeliveryCircle’s Decios platform uses AI to optimize business-to-business last-mile delivery, matching shipments to a network of independent, contracted drivers in real time to enable same-day movement of freight from warehouses and distribution centers to retail points of sale. Keen Labs designs, sources, and distributes AI-enabled distributed-energy and electrification hardware, including smart heat pumps and smart controls, the Hi-C™ and Hi-E™ families of battery energy storage systems, and virtual power plant software, alongside solar, battery storage, and EV charging offerings; including business-to-business sales to multi-billion dollar national distribution partners. Both platforms are supported by a common data and intelligence layer built and continuously enhanced by Keen Labs, which accesses more than 30 gigabytes of operating and performance data per day across the Company’s portfolio and partner network, and applies AI and machine-learning models intended to deliver customer outcomes such as predictive maintenance, energy optimization, and route efficiency.
The Company’s OSN segment provides energy solutions directly to residential, commercial and enterprise customers. OSN’s operations primarily include the installation, maintenance and servicing of electrified heating and cooling systems and distributed energy solutions, including solar and battery systems. The installed equipment is supported by the Company’s AI-driven energy intelligence platform, which enables monitoring of equipment performance and efficiency and facilitates the identification of maintenance requirements.
The Company delivers AI-enabled platform solutions for (i) the electrification and decarbonization of homes, critical infrastructure, and businesses through the wholesale distribution of AI-enabled heat pump equipment and smart controls — including business-to-business sales to multi-billion dollar national distribution partners — alongside solar, battery storage, and EV charging offerings, (ii) the facilitation of business-to-business commerce through the Company’s proprietary online and mobile last-mile delivery platform utilizing contracted drivers, and (iii) the management of connected operations through its industrial internet of things (“IIoT”) platform. These offerings are integrated and continuously enhanced through proprietary software developed by Keen Labs, the Company’s AI and technology subsidiary, which leverages a long-term data licensing arrangement entered into in connection with the divestiture of certain India transportation operations (disclosed as a subsequent event) to continue training and refining the Company’s AI models.
The Company also offers physical products as part of its solutions offerings, including AI-enabled heat pump systems for use in the decarbonization of homes and businesses, and solar panels, inverters, battery storage systems, and related balance-of-system components procured and distributed through its Keen Labs Operations, Inc. subsidiary to installation partners including Sun Solar, LLC. The Company also offers display clusters, digital control units, and vehicle control units used in the management of connected operations, which are sold in the India market through the Company’s subsidiary, ConnectM India Private Limited (“CMI”).
The Company alsopreviously providesprovided managed solutions offerings, including human resources management, procurement services, omnichannel marketing and lead generation services, and access to working capital solutions designed to improve operating efficiency and enhance profitability for service providers. In April 2026, the Company terminated its last remaining managed service agreement and is exploring options with respect to its Managed Solutions offerings. No formal plans are currently in place.
The Company is actively rationalizing its segment portfolio to focus on its highest-quality, U.S.-basedU.S. based verticals that contribute positively to operating results. During the three and six months ended MarchJune 31,30, 2026, the Company continued to streamline certain HVAC, solar, and other home service operations within the Owned Service Network segment were divested or wound down as the Company shifted its decarbonization strategy toward product-led and technology-enabled offerings. Concurrently, the Company recast its segment reporting structure to separately present itsThe Keen Labs segment,segment which conducts the Company’s technology platform operations and U.S. wholesale procurement and distribution of solar, energy storage, and related balance-of-system components through Keen Labs Operations, Inc., and which contributed approximately $1,850,000$3,855,000 and $5,705,000 of product sales revenue during the quarterthree and six months ended June 30, 2026, respectively under VPP kit supply arrangements with installation partners. The remaining Owned Service Network and Managed Solutions operations are subject to ongoing strategic review. InAs addition,discussed as further described in Note 15: Subsequent Events,above, the Company hasterminated enteredits intolast aremaining shareManaged exchangeSolutions service agreement with Blue Cloud Softech Solutions Ltd. (“BCSSL”) pursuant to which the Company expects to transfer its Cambridge Energy Resources, India-based Transportation, and Geo Impex operations to BCSSL in exchangeApril for BCSSL equity (the “BCSSL Transaction”). Upon consummation of the BCSSL Transaction, the Distributed Energy & Renewables segment is expected to be substantially eliminated.2026.
On April 3, 2026, the Company completed its previously announced acquisition of HKA, a defense-focused technical data development company headquartered in Hagerstown, Maryland, acquiring 100% of HKA’s issued and outstanding capital stock in exchange for 12,500 shares of the Company’s common stock. HKA has maintained an uninterrupted contracting relationship with the U.S. Naval Air Systems Command since 1976 and provides logistics support analysis databases, technical manuals, and training materials to the U.S. Department of Defense, the U.S. Coast Guard, and major defense original equipment manufacturers, including Boeing, Northrop Grumman, and Lockheed Martin. The acquisition expands the Company’s technology platform into the defense and government infrastructure market and is expected to enable the application of Keen Labs’ AI and data analytics capabilities to predictive maintenance, lifecycle sustainment, and logistics intelligence use cases. The Company accounted for the acquisition as a business combination under ASC 805 effective April 3, 2026, the closing date, and has allocated HKA to its Other segment for segment reporting purposes, as HKA does not meet the quantitative thresholds to qualify as a separately reportable segment under ASC 280.
On June 17, 2026, the Company completed the previously announced Share Swap Agreement with Blue Cloud Softech Solutions Limited (“Blue Cloud”) (BSE: 539607), transferring 94.12% of the issued and outstanding equity of Global Impx Inc. (“GIX”), which held the Company’s India-based operations, to Blue Cloud in exchange for 160,000,000 newly issued equity shares of Blue Cloud, representing approximately 17.33% of Blue Cloud’s post-issue share capital. Upon closing, the Company deconsolidated GIX and its subsidiaries and recorded its Blue Cloud shares as an equity security at fair value under ASC 321, resulting in a non-cash gain of approximately $14,154,000, net of tax. As a result of the transaction, the Distributed Energy & Renewables and Transportation segments were substantially eliminated during the quarter.
The Company earns revenue across sevenfive operating segments:
Collectively, these businesses are interconnected through ConnectM’s data infrastructure, which enables predictive maintenance, energy optimization, and operational efficiency across the energy and logistics ecosystems.
On March 10, 2026, the Company entered into an Exchange Agreement to acquire Harry Kahn Associates, Inc., a defense-focused technical data development company. The transaction closed subsequenton toApril March 31,3, 2026 upon satisfaction of the share transfer closing condition. See Note 15: Subsequent Events.
During Januarythe six months ended June 30, 2026, the Company issued seven convertible promissory notes with aggregate principalgross proceeds of $1,555,150,approximately and in February 2026, the Company issued one convertible promissory notes with principal of $228,000.$3,540,000.
In addition, in March and April 2026, the Company issued additional convertible promissory notes with aggregate principal of $574,000, including (i) $224,000 issued on March 30, 2026, and (ii) an aggregate of $350,000 issued on April 2, 2026.
During Januarythe andsix Februarymonths ended June 30, 2026, the Company issued multiple promissory notes, including notes with principal amounts of $500,000, and $230,000. In addition, the Company entered into term loan agreements with third-party lenders with aggregate principal amounts of $500,000 and $80,000 with third-party lenders.$1,700,000. The promissory notes generally bear interest and mature in accordance with their contractual terms, and the term loans are repayable pursuant to scheduled principal and interest payments. InDuring Februarythe 2026,period, the Company also amended one of its existing promissory note agreements to modify certain terms. Proceeds from these financings were used for working capital and general corporate purposes.
On April 6, 2026, the Company entered into a definitive Share Swap Agreement with Blue Cloud Softech Solutions Limited (“Blue Cloud”) (BSE: 539607), a publicly listed Indian technology and infrastructure company, pursuant to which Blue Cloud willacquired acquire 100%94.12% of the issued and outstanding equity shares of Global ImpexImpx Inc. (“GIX”), a Delaware corporation and subsidiary of the Company, in exchange for newly issued equity shares of Blue Cloud on a preferential basis. GIX holds, directly and through its subsidiaries, the Company’s India-based operating platform, including ConnectM Technology Solutions Private Limited, Cambridge Energy Resources Private Limited, CER Microgrids Private Limited, CER Rooftop Private Limited, and Geo Impex & Logistics Private Limited. The operations held through GIX were reported within the Distributed Energy & Renewables, Transportation and Other segments. The Share Swap Agreement is includedgoverned inby the “other”laws segment.of India and is subject to the exclusive jurisdiction of the courts at Hyderabad, Telangana.
Under the terms of the agreement, Blue Cloud willagreed to issue an aggregate of 170,000,000 equity shares of face value ₹1 each at ana issueprice of not less than the floor price of ₹21.93 per share (the “BCSSLBlue Cloud Consideration Shares”) to the shareholders of GIX in exchange for 212,500,000 equity shares of GIX, reflecting a swap ratio of 100 Blue Cloud shares for every 125 GIX shares. Of the total consideration shares, ConnectM is expected to receivereceived 160,000,000 shares in exchange for the 200,000,000 GIX shares held by it, representing approximately 94.1% of GIX, and AstraBridge Inc., a minority shareholder of GIX, is expected to receivereceived 10,000,000 shares.shares in exchange for the 12,500,000 GIX shares held by it, representing approximately 5.9% of GIX. The implied aggregate transaction value is approximately ₹372.81 crores (approximately $39.6 million based on prevailing exchange rates). The sharefloor valuationsprice werewas determined by an independent IBBI-registered valuervaluer, in a report dated April 06, 2026, as the higher of the 90-trading-day and 10-trading-day volume weighted average prices of Blue Cloud’s equity shares preceding the relevant date of April 02, 2026, in accordance with the Companies Act, 2013 and the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.2018 (the “SEBI ICDR Regulations”).
Upon closing, ConnectM’s 160,000,000 Blue Cloud shares would representrepresented approximately 17.33% of Blue Cloud’s post-issue equity share capital of 923,081,600 shares.shares, comprising 753,081,600 shares outstanding immediately prior to the preferential allotment and the 170,000,000 Blue Cloud Consideration Shares. The BCSSLCompany held no Blue Cloud shares prior to the allotment. AstraBridge Inc.’s 10,000,000 shares represent approximately 1.08% of post-issue capital, and the Blue Cloud Consideration Shares represent approximately 18.42% in the aggregate. The Blue Cloud Consideration Shares will rank pari passu with existing Blue Cloud equity shares and will be subject to a lock-in period of six months from the date of trading approval, in accordance with Regulation 167 of the SEBI ICDR Regulations. The Company had an unconditional right to receive the shares as of June 17, 2026, however the actual delivery of shares happened post June 30, 2026.
On May 4, 2026, Blue Cloud’s shareholders approved the transaction at an Extraordinary General Meeting, including the increase in authorized share capital, the preferential issuance of equity shares for consideration other than cash, and all related resolutions required under Indian corporate and securities law. The transaction remains subject to additionalremaining conditions precedent, includingconsisting of receipt of in-principle approval from BSE Limited for the preferential allotment,allotment and execution and delivery of all transfer instruments and board resolutions required to effect the transfer of the GIX shares, were satisfied, and satisfactionthe transaction closed on June 17, 2026. Because the transaction falls under the 100% automatic route, no approval of otherthe customaryReserve regulatoryBank requirements.of BasedIndia onunder the expectedForeign regulatoryExchange timeline,Management managementAct, currently1999 anticipateswas that closing will occur during the fourth quarter of calendar year 2026.required.
Upon closing, the Company’s Blue Cloud shareholding accounting evaluation is under consideration, with final classification and measurement under U.S. GAAP to be determined based on then-applicable facts and circumstances, including the availability of quoted market prices, the existence of transfer restrictions during the lock-in period, the Company’s level of influence over Blue Cloud, and other relevant considerations. The Share Swap Agreement provides that no transferor acquires any special management, control, veto, nomination or affirmative rights beyond those available to any public shareholder of Blue Cloud, and that no transferor is entitled to appoint any director or nominee to Blue Cloud’s board of directors by virtue of the agreement. The Company expects the transaction to result in a non-cash gain, subject to finalfinalization of its technical accounting determination at closing.analysis.
On MarchApril 10,3, 2026, the Company enteredacquired into100% an Exchange Agreement (the “HKA Exchange Agreement”) withof the stockholdersissued and outstanding capital stock of Harry Kahn Associates, Inc. (“HKA”), a defense-focused technical data development company headquartered in Hagerstown, Maryland. The acquisition was completed pursuant to an Exchange Agreement (the “HKA Exchange Agreement”) provided forwith the Company’s acquisitionstockholders of HKA, under which the Company acquired 100% of the issued and outstanding capital stock of HKA in exchange for 12,500 shares of the Company’s common stock. Closing of the transaction was conditioned upon, among other items, the transfer of the consideration shares to the HKA stockholders, which occurred on April 3, 2026. Accordingly, the Company will accountaccounted for the acquisition of HKA as a business combination under ASC 805 effective April 3, 2026, the closing date.
HKA is a provider of logistics support analysis databases, technical manuals, and training materials for the U.S. Department of Defense, the U.S. Coast Guard, and major defense original equipment manufacturers including Boeing, Northrop Grumman, and Lockheed Martin. HKA has maintained an uninterrupted contracting relationship with the Naval Air Systems Command since 1976 and holds ISO 9001:2015 certification for technical data development. The acquisition expands the Company’s technology platform into the defense and government infrastructure market and is expected to enable the application of Keen Labs’ AI and data analytics capabilities to predictive maintenance, lifecycle sustainment, and logistics intelligence use cases. In connection with the transaction, HKA issued a $203,072 promissory note to the Company. No cash consideration was paid and no third-party debt was assumed.
Between April 14, 2026 and May 13, 2026, the Company and its wholly owned subsidiary, Global Impx, Inc., issued three short-term promissory notes (collectively, the “Bridge Notes”) in an aggregate principal amount of $600,000, each to the same unaffiliatedlender third-party(the lender.“Bridge Lender”), which is also a minority shareholder of Global Impx, Inc. The material terms of the individual Bridge Notes are summarized below.
On April 14, 2026, Global Impx, Inc., a wholly owned subsidiary of the Company, issued a short-term promissory note (the “First Bridge Note”) to anthe unaffiliatedBridge third-party lenderLender in the principal amount of $150,000. The First Bridge Note bears interest at a rate of 14% per annum, computed on a simple interest basis on a 360-day year (actual days elapsed), and matures 90 days from the date of disbursement, on or about July 13, 2026. In addition, the Company agreed to pay the lender a one-time processing fee of $1,500 (representing 1% of the principal amount), payable upfront or, at the lender’s option, deducted from the disbursement proceeds. The First Bridge Note does not contain conversion or other equity-linked features and may be prepaid, in whole or in part, at any time without penalty. Upon an Event of Default, outstanding amounts bear interest at an accelerated default rate of 20% per annum, representing a 6% per annum increase over the contractual rate. The First Bridge Note was issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. Proceeds were applied to working capital and general corporate purposes.
On April 19, 2026, the Company issued a short-term promissory note (the “Second Bridge Note”) to anthe unaffiliatedbridge third-party lenderLender in the principal amount of $250,000. The Second Bridge Note bears interest at a rate of 20% per annum, computed on a simple interest basis on a 360-day year. The Second Bridge Note was originally scheduled to mature 30 days from the date of disbursement, on or about May 19, 2026; pursuant to a subsequent extension agreement between the Company and the lender, the maturity date was extended by two weeks, towas, on or about JuneAugust 2,31, 2026. In addition, the Company agreed to pay the lender a facilitation fee of $5,000 (representing 2% of the principal amount), which is fully earned on the date of disbursement and payable in full at maturity together with the principal and accrued interest. The Second Bridge Note does not contain conversion or other equity-linked features. Upon an Event of Default, outstanding amounts bear interest at an accelerated default rate of 26% per annum, and a late payment charge equal to 2% of the then-outstanding balance becomes payable. The Second Bridge Note was issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. Proceeds were applied to working capital and general corporate purposes.
On May 13, 2026, the Company issued a short-term promissory note (the “Third Bridge Note”) to anthe unaffiliatedBridge third-party lenderLender in the principal amount of $200,000. The Third Bridge Note bears interest at a rate of 20% per annum, computed on a simple interest basis on a 360-day year, and matures 30 days from the date of disbursement, onwhich orwas aboutfurther Juneextended 12,to increase the maturity date to August 31, 2026. In addition, the Company agreed to pay the lender a facilitation fee of $4,000 (representing 2% of the principal amount), which is fully earned on the date of disbursement and payable in full at maturity together with the principal and accrued interest. The Third Bridge Note does not contain conversion or other equity-linked features. Upon an Event of Default, outstanding amounts bear interest at an accelerated default rate of 26% per annum, and a late payment charge equal to 2% of the then-outstanding balance becomes payable. The Third Bridge Note was issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. Proceeds were applied to working capital and general corporate purposes.
Bridge Loan Facility
On May 15, 2026, the Company entered into a bridge loan agreement with the Bridge Lender providing for a short-term loan facility in an aggregate principal amount of up to $1,500,000 (the “Facility”). The Facility may be drawn in one or more advances (each, a “Tranche”) upon the Company’s request, subject to the lender’s approval of each drawdown request. Each Tranche, together with the applicable fee described below, is payable in full on the date falling 60 calendar days after such Tranche is funded. No interest accrues on any Tranche; in lieu of interest, the Company is obligated to pay a fee equal to 10% of the principal amount of each Tranche, which is fully earned upon funding of that Tranche and payable upon its repayment. The Company may prepay any Tranche at any time without penalty, provided that any such prepayment includes the full outstanding principal amount and the full applicable fee for that Tranche. Repayment of a Tranche does not create a right to redraw absent the lender’s separate agreement.
The Facility is secured by a security interest in substantially all assets of the Company, including accounts receivable, cash, deposit accounts, investment property, inventory, equipment, intellectual property and general intangibles, which security interest is subordinate to the interests of the Company’s existing senior secured creditors. Upon an Event of Default, the lender may declare all outstanding Tranches and accrued fees immediately due and payable, and outstanding amounts bear default interest at 20% per annum. The Facility contains affirmative covenants requiring the Company to furnish copies of its filings with the Securities and Exchange Commission, to provide periodic updates regarding its pursuit of a listing on a national securities exchange, and to provide prompt written notice upon obtaining commitments for alternative financing that would be used to repay the Facility.
During the three months ended June 30, 2026, the Company drew Tranches in principal amounts of $200,000, $300,000, $150,000, $100,000 and $100,000, funded on May 18, 2026, May 27, 2026, June 5, 2026, June 9, 2026 and June 25, 2026, respectively, with corresponding fees of $20,000, $15,000, $10,000 and $10,000 and stated maturities of July 17, 2026, July 27, 2026, August 4, 2026, August 8, 2026 and August 25, 2026, respectively. Aggregate principal drawn under the Facility through June 30, 2026 was $850,000, together with aggregate fees of $85,000. Subsequent to June 30, 2026, the Company and the Bridge Lender agreed to extend the maturity date of each outstanding Tranche to August 31, 2026. For the reasons described under “Short-Term Bridge Loans” above, borrowings under the Facility constitute transactions with a related party. Proceeds were applied to working capital and general corporate purposes.
Subsequent to June 30, 2026, the Company drew two additional Tranches under the Facility, in principal amounts of $110,000 and $150,000, funded on July 17, 2026 and July 21, 2026, respectively, with corresponding fees of $11,000 and $15,000 and stated maturities of September 15, 2026 and September 19, 2026, respectively. Each such Tranche was drawn on the same terms as the Tranches described above, bearing no interest and carrying a fee equal to 10% of the principal amount of that Tranche, fully earned upon funding and payable upon repayment. After giving effect to these draws, $910,000 in principal and $91,000 in fees had been drawn under the Facility, leaving $590,000 of the $1,500,000 commitment available. As of the date of this filing, the full $910,000 principal amount drawn remained outstanding.
On June 1, 2026, the Company issued a bridge note (the “June Bridge Note”) to an accredited investor in the aggregate principal amount of $134,960, including an original issue discount of $14,460, for a purchase price of $120,500. At closing, the Company reimbursed the investor $5,500 for legal fees and due diligence costs. The June Bridge Note matures on March 30, 2027. A one-time interest charge of 12% was applied to the principal at issuance, resulting in an aggregate repayment obligation of $151,155, payable in five monthly installments beginning November 30, 2026 through the maturity date; amounts not paid when due accrue default interest at 22% per annum. The Company may prepay the June Bridge Note in full, subject to a prepayment discount equal to 97% of outstanding principal and accrued interest if prepaid within 90 days of issuance, or 98% if prepaid between 91 and 180 days after issuance. The June Bridge Note becomes convertible into shares of the Company’s common stock only following an Event of Default and after 180 days have elapsed from issuance, at a conversion price equal to 65% of the lowest trading price of the Company’s common stock during the ten trading days prior to the conversion date, subject to a 4.99% beneficial ownership limitation. In connection with the transaction, the Company delivered irrevocable instructions to its transfer agent with respect to the reservation and issuance of shares of common stock issuable upon any such conversion. A registered broker-dealer acted in connection with the transaction and is entitled to compensation in respect thereof. The June Bridge Note was issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder. Proceeds were applied to working capital and general corporate purposes.
On June 9, 2026, the Company issued a convertible promissory note (the “June Convertible Note”) to an accredited investor in the principal amount of $150,000, for a purchase price of $150,000. The June Convertible Note carries a one-time guaranteed interest charge of 15% per annum for twelve months, applied to the principal on the issue date and added to the principal balance, resulting in a total repayment obligation of $172,500 due on June 8, 2027. Any unpaid amounts not satisfied by the maturity date bear interest at the lesser of 25% per annum or the maximum amount permitted by applicable law. The Company issued the investor 807 restricted shares of common stock as additional consideration for the purchase of the June Convertible Note, deemed earned in full as of the closing date. Following an Event of Default, the holder may elect to convert outstanding principal, accrued interest, and applicable penalties into shares of the Company’s common stock at a conversion price equal to 65% of the lowest trading price of the common stock during the twenty (20) trading days immediately preceding the delivery of a conversion notice, subject to a 4.99% beneficial ownership limitation. Upon the occurrence of an Event of Default, amounts outstanding become due at 150% of outstanding principal plus accrued interest and fees. The June Convertible Note and the related Securities Purchase Agreement contain a most-favored-nation provision in favor of the investor, restrictions on the incurrence of additional indebtedness and on the disposition of assets outside the ordinary course of business without the holder’s consent, and cross-default provisions. The June Convertible Note was issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. Proceeds were applied to working capital and general corporate purposes.
On June 10, 2026, the Company entered into a Securities Purchase Agreement with an institutional accredited investor and issued a convertible promissory note (the “June 10 Note”) in the original principal amount of $227,150, including an original issue discount of $20,650, for a purchase price of $206,500. The investor withheld $4,000 from the purchase price to cover legal fees and $2,500 to cover due diligence costs, resulting in net proceeds to the Company of $200,000. The June 10 Note carries a one-time interest charge of 10% applied to the principal amount on the issuance date, equal to $22,715, which is guaranteed and fully earned as of the issuance date, and matures twelve months from issuance, on June 10, 2027. In addition to all other payment obligations, the Company is required to make seven amortization payments in cash, consisting of six monthly payments of $35,695 commencing December 10, 2026 and a final payment of all remaining outstanding amounts on June 10, 2027; each amortization payment is applied first to accrued and unpaid interest and then to outstanding principal. The Company issued the investor 4,000 restricted shares of common stock as commitment shares, deemed earned in full as of the closing date. The June 10 Note becomes convertible at the holder’s election on the earlier of (i) the occurrence of an Event of Default, (ii) the Company’s failure to pay an amortization payment when due, and (iii) the date that is 180 calendar days after the issuance date, at a conversion price equal to 75% of the lowest closing bid price of the common stock during the fifteen trading days immediately preceding the applicable conversion date, subject to a 4.99% beneficial ownership limitation that the holder may increase to not more than 9.99% upon 61 days’ prior written notice. The Company is required to reserve for issuance the greater of 500,000 shares of common stock and three times the number of shares issuable upon full conversion of the June 10 Note. The June 10 Note is an unsecured obligation of the Company and may be prepaid only during the first 180 days following issuance, at 95% to 98% of the principal and accrued interest then outstanding depending on the date of prepayment. Amounts not paid when due bear interest at the lesser of 22% per annum and the maximum rate permitted by law, and upon an Event of Default amounts outstanding become due at 150% of the then-outstanding principal and accrued interest. The June 10 Note and the related Securities Purchase Agreement contain a most-favored-nation provision, a prohibition on the Company entering into any transaction structured under Section 3(a)(10) of the Securities Act, a right of prior notice with respect to subsequent placements of debt or equity securities, a covenant requiring the Company to obtain directors’ and officers’ liability insurance within 60 days of closing, and a provision entitling the holder, at its election, to require the Company to apply up to 25% of the cash proceeds of certain future financings and asset sales to repayment of the June 10 Note. The June 10 Note was issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder. Proceeds were applied to working capital and general corporate purposes.
Subsequent to June 30, 2026, the Company issued six additional notes, the material terms of which are summarized below.
On July 1, 2026, the Company closed one convertible note financing with an unaffiliated institutional accredited investors, with face principal of $150,000 and a purchase price of $135,000. The note is accompanied by the issuance 2,000 of commitment shares. Note was issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
On July 1, 2026, the Company issued two convertible promissory notes (each, a “July 1 Note” and together, the “July 1 Notes”) to two separate accredited investors, each in the aggregate principal amount of $122,222, including an original issue discount of $12,222, for a purchase price of $110,000, and each on substantially identical terms. In the aggregate, the July 1 Notes have a principal amount of $244,444, including aggregate original issue discount of $24,444, for an aggregate purchase price of $220,000. In each case the investor withheld $5,000 from the purchase price to cover legal fees, resulting in net proceeds to the Company of $105,000 per note and $210,000 in the aggregate. Each July 1 Note bears interest at 12% per annum from the issuance date and matures on July 1, 2027. Accrued interest is payable in shares of the Company’s common stock rather than in cash. Each July 1 Note is convertible at the holder’s election at any time following the six-month anniversary of the issuance date at a conversion price equal to 65% of the lowest trading price of the common stock during the fifteen trading days immediately preceding the applicable conversion date, subject to a 4.99% beneficial ownership limitation that the holder may increase to not more than 9.9% upon 60 days’ prior written notice. If the common stock becomes subject to a deposit chill at The Depository Trust Company, the conversion price is reduced to 55% of the lowest trading price during the same measurement period for so long as the chill remains in effect. The Company may prepay a July 1 Note prior to the 180th day following issuance at premiums ranging from 105% to 140% of principal plus accrued interest depending on the date of prepayment, and may not prepay thereafter. The Company is required to reserve 169,669 shares of common stock for issuance upon conversion of each July 1 Note, or 339,338 shares in the aggregate. Upon an Event of Default, interest accrues at 24% per annum and the conversion price is reduced to 50% of the lowest trading price during the applicable measurement period. Events of Default under each July 1 Note include the failure of the common stock to maintain a bid price in the market on which it trades, the penalty for which is an increase in the then-outstanding principal amount by 20%, delinquency in the Company’s periodic report filings with the Securities and Exchange Commission, which after the six-month anniversary of the note entitles the holder to use the lowest closing bid price during the delinquency period as the base price for subsequent conversions, and a change in a majority of the members of the Board of Directors serving as of the issuance date. The related securities purchase agreements contain a most-favored-nation provision in favor of each investor. Each July 1 Note was issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. Proceeds were applied to working capital and general corporate purposes.
On July 9, 2026, the Company entered into a Securities Purchase Agreement with an accredited investor and issued a convertible promissory note (the “July 9 Note”) in the aggregate principal amount of $90,000, including an original issue discount of $8,000, for a purchase price of $82,000. The investor withheld $2,000 from the purchase price to cover legal fees, resulting in net proceeds to the Company of $80,000. The July 9 Note carries a one-time guaranteed interest charge of 14%, equal to $12,600, which is fully earned as of the issuance date and added to the principal balance, resulting in a total repayment obligation of $102,600 due on July 9, 2027. Repayment is structured through six installments of $17,100 commencing on the 180th day following issuance and continuing at thirty-day intervals thereafter, with any remaining balance due on the maturity date. The Company issued the investor 525 restricted shares of common stock as commitment shares, deemed earned in full as of the closing date. The July 9 Note becomes convertible at the holder’s election only following an Event of Default, at a fixed conversion price of $10.00 per share or, at the holder’s election following an uncured Event of Default, at 75% of the lowest trading price of the common stock during the ten trading days immediately preceding the applicable conversion date, in each case subject to a 4.99% beneficial ownership limitation. The Company is required to reserve 53,700 shares of common stock for issuance upon conversion. Amounts not paid when due bear interest at the lesser of 24% per annum and the maximum rate permitted by law, and upon an Event of Default amounts outstanding become due at 150% of the then-outstanding principal and accrued interest. The July 9 Note and the related Securities Purchase Agreement contain a most-favored-nation provision in favor of the investor, restrictions on the incurrence of additional indebtedness and on the disposition of assets outside the ordinary course of business without the holder’s consent, and cross-default provisions. The July 9 Note was issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. Proceeds were applied to working capital and general corporate purposes.
On July 18, 2026, the Company issued a promissory note (the “July 18 Note”) to an institutional accredited investor in the aggregate principal amount of $150,000, including an original issue discount of $15,000, for a purchase price of $135,000. The July 18 Note carries a one-time interest charge of 12% applied to the principal amount on the issuance date, equal to $18,000, which is guaranteed and fully earned as of the issuance date, resulting in a total repayment obligation of $168,000 due on July 18, 2027. In addition to all other payment obligations, the Company is required to make eight amortization payments in cash, consisting of six payments of $24,000 commencing 140 calendar days after the closing date and continuing at thirty-day intervals thereafter, a seventh payment of $23,000, and a final payment of all remaining outstanding amounts on July 18, 2027; each amortization payment is applied first to accrued and unpaid interest and then to outstanding principal. The July 18 Note becomes convertible at the holder’s election on the earlier of the occurrence of an Event of Default and the Company’s failure to pay an amortization payment when due, at a conversion price equal to 65% of the lowest traded price of the common stock during the fifteen trading days immediately preceding the applicable conversion date, subject to a 4.99% beneficial ownership limitation. The Company is required to reserve for issuance the greater of 1,000,000 shares of common stock and three times the number of shares issuable upon full conversion of the July 18 Note. The July 18 Note is an unsecured obligation of the Company and may be prepaid upon three trading days’ prior written notice at 100% of the principal and accrued interest then outstanding plus a $750 administrative fee, during which notice period the holder may instead elect to convert. Amounts not paid when due bear interest at the lesser of 22% per annum and the maximum rate permitted by law, and upon an Event of Default amounts outstanding become due at 150% of the then-outstanding principal and accrued interest. Events of Default under the July 18 Note include the Company’s failure to maintain a market capitalization of at least $10,000,000 on any trading day, the suspension or halting of trading in the common stock or its failure to be quoted or listed on a principal market, and cross-defaults with other indebtedness of the Company. The July 18 Note and the related Securities Purchase Agreement contain a most-favored-nation provision, a dilutive issuance adjustment to the conversion price, a prohibition on the Company entering into any transaction structured under Section 3(a)(10) of the Securities Act, restrictions on affiliate transactions and asset dispositions, and a provision entitling the holder, at its election, to require the Company to apply up to 50% of the cash proceeds of any public offering of securities or sale of assets to repayment of the July 18 Note. The July 18 Note was issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. Proceeds were applied to working capital and general corporate purposes.
On August 17, 2026, the Company issued an unsecured convertible promissory note to an institutional accredited investor in the principal amount of $250,000, for a purchase price of $225,000, reflecting an original issue discount of $25,000. After $11,000 of legal and due diligence costs withheld by the investor, net proceeds to the Company were approximately $214,000. The note bears interest at 10% per annum, with the first twelve months of interest, equal to $25,000, guaranteed and earned upon issuance, and matures on August 17, 2027. Repayment is structured through six monthly amortization payments of approximately $39,000 commencing 180 days after closing, with the remaining balance due at maturity. Following an Event of Default or missed amortization payment, the holder may convert outstanding amounts into shares of the Company’s common stock at 75% of the lowest traded price during the fifteen trading days preceding conversion, subject to a 4.99% beneficial ownership limitation. The note was issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D. Proceeds are to be used for business development and general working capital.
The Company is evaluating the accounting for the July 1 Notes, the July 9 Note and the July 18 Note, including whether the conversion features embedded in each note require bifurcation and separate measurement as derivative liabilities under ASC 815, and the amount and amortization of the related debt discounts. See Note 15: Subsequent Events.
On April 8, 2026, the Company’s wholly owned subsidiary, Keen Labs Operations, Inc., received an additional advance under the previously disclosed factoring and security agreement (as amended) with its lender. Pursuant to a supplier letter agreement among the lender, Keen Labs Operations, Inc., and a third-partythird party vendor, the lender remitted approximately $134,000 directly to the vendor representing the balance due on an approved purchase order, net of a deposit previously paid by Keen Labs Operations, Inc. and a warranty holdback payable upon delivery and acceptance of the goods.
The advance is governed by the existing terms of the facility, with charges accruing at 1.625% per 15-day15 day period from the date of advance until the related invoice is verified and funded. The obligation is secured by substantially all assets of the applicable obligors under the facility’s cross-collateralizationcross collateralization and cross-defaultcross default provisions and is guaranteed by the Company.
On August 6, 2026, Keen Labs Operations, Inc. received two additional advances under the same facility with the same lender. The advances were remitted directly to the manufacturer representing final payments due on two separate approved purchase orders, in the amounts of approximately $179,000 and $142,000, respectively. Charges on these advances accrue at 1.55% for the initial 30 day period, plus 0.55% for each 10 day period thereafter, from the date of advance until the related invoices are verified and funded. These advances are secured and guaranteed on the same basis as the facility’s existing terms described above.
On April 23, 2026, the Company entered into a settlement and termination agreement with the seller and former chief executive officer of the Company’s DeliveryCircle, LLC subsidiary to fully and finally resolve all obligations under the contingent earn-out arrangement for the measurement year of 2024 and 2025 entered into in connection with the Company’s prior acquisition of DeliveryCircle, LLC. The agreement extinguished the Company’s accrued earn-out obligations for the 2024 and 2025 measurement periods in full, resulting in a gain on extinguishment of approximately $167,162.$167,162 in accordance with ASC 405-20, Liabilities—Extinguishments of Liabilities. As of June 30, 2026, $206,000 is outstanding payable to Seller.
We regularly review a number of metrics, including the following key operating and financial metrics, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions. We believe the operating and financial metrics presented below are useful in evaluating our operating performance, as they are similar to measures by our public competitors and are regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures, aswhich theyexclude the results of discontinued operations, are not financial measures calculated in accordance with GAAP and should not be considered as substitutes for net (loss) income or net (loss) income margin, respectively, calculated in accordance with GAAP. See “Non-GAAP Financial Measures” for additional information on non-GAAP financial measures and a reconciliation of these non-GAAP measures to the most comparable GAAP measures.
We define Adjusted EBITDA, a non-GAAP financial measure, as net income (loss) before interest and, income tax expense, depreciation and amortization, loss (gain) on change in fair value of financial instruments, stock based compensation, loss (gain) on extinguishment of debt and payable, loss on disposal of business, and mergertransaction and acquisitionintegration expensesrelated (“M&A expenses”).expenses. Adjusted EBITDA margin reflects our Adjusted EBITDA as a percentage of revenues. See “— Non-GAAP Financial Measures” for a reconciliation of GAAP net loss to Adjusted EBITDA and Adjusted EBITDA Margin.
Contribution Profit and Contribution Margin
We define contribution profit as revenue, net less direct costs of revenue, commissions expense and depreciation and amortization, and define contribution margin, expressed as a percentage, as the ratio of contribution profit to revenue, net. Contribution profit and margin can be used to understand our financial performance and efficiency and allows investors to evaluate our pricing strategy and compare against competitors. Our management uses these metrics to make strategic decisions, identify areas for improvement, set targets for future performance and make informed decisions about how to allocate resources going forward. Contribution margin reflects our Contribution profit as a percentage of revenues.
The following table provides a reconciliation of gross profit to contribution profit from continuing operations for the periods presented:
We define Adjusted EBITDA, a non-GAAP financial measure, as net income (loss) before interest and, income tax expense, depreciation and amortization, loss (gain) on change in fair value of financial instruments, stock based compensation, loss (gain) on extinguishment of debt and payable, loss on disposal of business, and mergertransaction and acquisitionintegration expensesrelated (“M&A expenses”).expenses. We utilize Adjusted EBITDA as an internal performance measure in the management of our operations because we believe the exclusion of these non-cash and non-recurring charges allow for a more relevant comparison of our results of operations to other companies in our industry. Adjusted EBITDA should not be viewed as a substitute for net (loss) income calculated in accordance with GAAP, and other companies may define Adjusted EBITDA differently. Adjusted EBITDA margin reflects our Adjusted EBITDA as a percentage of revenues. The followingadjusted tableEBIDTA providesexcludes again reconciliationfrom ofdiscontinued net (loss) income to Adjusted EBITDAoperations for theall periods presented:presented.
The following table provides a reconciliation of net (loss) income from continuing operations to Adjusted EBITDA for the periods presented:
ConnectM’s revenue is derived from contracts with customers and is recognized in accordance with ASC 606, comprising (i) installation and maintenance services for solar energy systems and HVAC solutions across customers, (ii) logistics and delivery services, (iii) product sales of hardware with embedded software to OEMs and wholesale distribution of heat pump equipment and smart controls through national distribution partners, (iv) software subscription services providing access to the Company’s IIoT platform, (v) managed solutions including HR, procurement, marketing and lead generation services, (vi) distributed energy and renewables services in India, including EPC activities, sale of electricity under power purchase agreements, and ongoing energy management, andmanagement (vii) Keen Labs platform offerings, including industrial IoT hardware, energy storage systems, smart heat pumps, connected vehicle technologies, and the wholesale procurement and distribution of solar energy equipment and balance-of-system components to U.S. installation partners.partners and (viii) HKA provides specialized engineering, logistics support, technical documentation and lifecycle support services primarily to the U.S. Department of Defense and defense industry customers. We fulfill obligations and recognize revenue under a contract with a customer by transferring products and services in exchange for consideration from the customer. Payments received or consideration billed in advance are recorded as deferred revenue.
Loss on impairment of intangible assets and goodwill
Loss on impairment of intangible assets and goodwill consist of non-cash charges recognized when the carrying value of certain intangible assets exceeds their recoverable amount. The Company performs impairment assessments whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. The recognition of such losses reflects management’s ongoing evaluation of the continued utility and value of acquired intangibles in the context of the Company’s evolving operations and strategic priorities.
Revenue increased approximately $1,909,000, or 24%, to approximately $9,794,000 for the three months ended June 30, 2026 from approximately $7,885,000 for the three months ended June 30, 2025. The increase was primarily attributable to the Company’s Logistics and Keen Labs segments, which generated revenue of $3,626,992 and $3,854,734, respectively, for the three months ended June 30, 2026 and together represented approximately 76% of total revenue, partially offset by continued declines in the Owned Service Network and Managed Solutions segments, reflecting the Company’s rationalization of certain HVAC, solar, and other home service operations, including the divestiture of Green Energy Gains and the wind-down of Blue Sky Electric, Inc., both completed in the first quarter of 2026, and the termination of the AC Authority MSA during the second quarter of 2026.
Revenue decreasedincreased approximately $816,000,$1,300,000, or 9.1%,8%, to approximately $8,173,000$17,440,000 for the threesix months ended MarchJune 31,30, 2026 from approximately $8,988,000$16,140,000 for the threesix months ended MarchJune 31,30, 2025. The decreaseincrease was primarily drivenattributable to the Company’s Logistics and Keen Labs segments, which generated revenue of $6,738,332 and $5,704,660, respectively, for the six months ended June 30, 2026 and together represented approximately 71% of total revenue, partially offset by lowercontinued revenuedeclines in the Owned Service Network and Managed Solutions segments, which declined asreflecting the CompanyCompany’s divestedrationalization or wound downof certain HVAC, solar, and other home service operations, including the saledivestiture of Green Energy Gains,Gains and the wind-down of Blue Sky Electric, Inc.Inc., both completed in the first quarter of 2026, and the notice of termination of the AC Authority MSA,MSA asduring partthe second quarter of the Company’s ongoing rationalization of its Owned Service Network and Managed Solutions operations.2026. The decreasesmaller wasincrease partiallyon offseta bysix-month incrementalbasis, contributionsrelative fromto the Company’s24% Logisticsincrease segment,for whichthe contributedquarter approximatelyalone, $573,900reflects the sequential acceleration of revenue followingin the DeliveryCircle, LLC acquisition completed in August 2024,Logistics and the Company’s Keen Labs segment,segments which recognized approximately $1,850,000 of product sales revenue fromduring the wholesalesecond distributionquarter of solar panels, inverters, batteries, and related balance-of-system componentsrelative to Sun Solar, LLC under the Keen Labs MSA.first.
Cost of revenues increased approximately $333,000,$1,986,000, or 6%,40%, to approximately $6,308,000$6,990,000 for the three months ended MarchJune 31,30, 2026 from approximately $5,975,000$5,004,000 for the three months ended MarchJune 31,30, 2025. The increase was primarily drivenattributable by the Logistics segment established in connection with the DeliveryCircle, LLC acquisition completed in August 2024, which contributed approximately $417,500 in incrementalto cost of revenue,revenue as well as costs of approximately $1,206,000 associated within the Company’s Logistics and Keen Labs segmentsegments, thatof was$2,823,815 notand operational$2,700,005, duringrespectively, for the prior-yearthree quarter,months ended June 30, 2026, partially offset by reduced costs in the Owned Service Network segment resulting from divestitures and wind-downs amidstamid the Company’s ongoing segment rationalization. Gross profit for the three months ended MarchJune 31,30, 2026 was approximately $1,865,000,$2,804,000, representing a gross margin of 22.8%,28.6%, compared to approximately $3,014,000$2,881,000 and 33.5%36.5% for the three months ended MarchJune 31,30, 2025. The decline in gross margin percentage reflects the revenue mix shift toward Logistics,the aCompany’s structurallyLogistics lowerand Keen Labs segments, which generated gross marginmargins segmentof thatapproximately generates positive operating contribution on a standalone basis,22.1% and 30.0%, respectively, for the wind-downthree ofmonths certainended June 30, 2026, below the approximately 37.0% margin generated by the Owned Service Network operations,segment, whichtogether producedwith higherthe grosscontinued marginswind-down butof werehigher-margin Owned Service Network revenue that was unprofitable at the operating level. ThisBoth mixthe shiftLogistics isand Keen Labs segments generated positive income from operations for the three months ended June 30, 2026, consistent with the Company’s continued strategic focus on segments that contribute positively to operating results.results despite lower gross margins.
Cost of revenues increased approximately $2,438,000, or 24%, to approximately $12,771,000 for the six months ended June 30, 2026 from approximately $10,333,000 for the six months ended June 30, 2025. The increase was primarily attributable to cost of revenue in the Company’s Logistics and Keen Labs segments, of $5,250,912 and $3,907,269, respectively, for the six months ended June 30, 2026, partially offset by reduced costs in the Owned Service Network segment resulting from divestitures and wind-downs amid the Company’s ongoing segment rationalization. Gross profit for the six months ended June 30, 2026 was approximately $4,669,000, representing a gross margin of 26.8%, compared to approximately $5,806,000 and 36.0% for the six months ended June 30, 2025. The decline in gross margin percentage reflects the revenue mix shift toward the Company’s Logistics and Keen Labs segments, which generated gross margins of approximately 22.1% and 31.5%, respectively, for the six months ended June 30, 2026, below the approximately 26.9% margin generated by the Owned Service Network segment for the same period. Both the Logistics and Keen Labs segments generated positive income from operations for the six months ended June 30, 2026, consistent with the Company’s continued strategic focus on segments that contribute positively to operating results despite lower gross margins.
Selling, general and administrative expenses decreased approximately $1,197,000,$1,024,000, or 19%,16%, to approximately $5,090,000$5,398,000 for the three months ended MarchJune 31,30, 2026 from approximately $6,287,000$6,421,000 for the three months ended MarchJune 31,30, 2025. The decrease reflects the Company’s ongoingcontinued cost rationalization efforts, including the wind-down and divestiture of certain Owned Service Network entities and tighter management of corporate overhead, partially offset by selling, general and administrative expenses associated with the additionCompany’s ofLogistics SG&A costs from theand Keen Labs segments of $514,521 and Distributed$960,322, Energyrespectively, & Renewables segments acquired or established sincefor the prior-yearthree quarter.months ended June 30, 2026. As a percentage of revenue, SG&A expenses declinedimproved from 70.0%81.4% in the prior-year quarter to 62.3%55.1% for the three months ended MarchJune 31,30, 2026, demonstratingreflecting improvedboth operatingthe leverage.lower expense base and higher revenue in the current quarter.
CNTM insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 7 Form 4 filings (2 insiders, 16 trade dates, 26,639 shares, about $53.7M) and open-market sales in 0 filings. Net open-market shares: 26,639 (purchases minus sales); net value about $53.7M.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 |
|---|---|---|---|---|---|
| 2026-09-17 | Choudhury Mahesh |
Open-market purchase | 100 | $5.14 | $514 |
| 2026-09-16 | Choudhury Mahesh |
Open-market purchase | 382 | $5.08 | $1.9K |
| 2026-09-02 | Choudhury Mahesh |
Open-market purchase | 201 | $5.38 | $1.1K |
| 2026-06-26 | Choudhury Mahesh |
Open-market purchase | 120 | $9.06 | $1.1K |
| 2026-06-25 | Choudhury Mahesh |
Open-market purchase | 646 | $8.83 | $5.7K |
| 2026-06-24 | Choudhury Mahesh |
Open-market purchase | 1,296 | $8.93 | $11.6K |
| 2026-06-23 | Choudhury Mahesh |
Open-market purchase | 1,310 | $8.61 | $11.3K |
| 2026-06-22 | Choudhury Mahesh |
Open-market purchase | 250 | $8.49 | $2.1K |
| 2026-06-18 | Choudhury Mahesh |
Open-market purchase | 600 | $7.62 | $4.6K |
| 2026-06-18 | Choudhury Mahesh |
Open-market purchase | 600 | $4576.00 | $2.7M |
| 2026-06-15 | Choudhury Mahesh |
Open-market purchase | 537 | $6.74 | $3.6K |
| 2026-06-15 | Choudhury Mahesh |
Open-market purchase | 537 | $3620.00 | $1.9M |
| 2026-06-11 | Panigrahi Bhaskar |
Open-market purchase | 2,050 | $6.96 | $14.3K |
| 2026-06-11 | Panigrahi Bhaskar |
Open-market purchase | 2,050 | $14280.00 | $29.3M |
| 2026-06-10 | Choudhury Mahesh |
Open-market purchase | 50 | $6.54 | $327 |
| 2026-06-10 | Panigrahi Bhaskar |
Open-market purchase | 1,309 | $6.78 | $8.9K |
| 2026-06-10 | Panigrahi Bhaskar |
Open-market purchase | 1,309 | $8887.00 | $11.6M |
| 2026-06-10 | Choudhury Mahesh |
Open-market purchase | 50 | $327.00 | $16.4K |
| 2026-06-09 | Choudhury Mahesh |
Open-market purchase | 500 | $6.91 | $3.5K |
| 2026-06-09 | Choudhury Mahesh |
Open-market purchase | 500 | $3456.00 | $1.7M |
| 2026-06-08 | Choudhury Mahesh |
Open-market purchase | 950 | $6.92 | $6.6K |
| 2026-06-08 | Choudhury Mahesh |
Open-market purchase | 950 | $6580.00 | $6.3M |
| 2026-06-03 | Choudhury Mahesh |
Open-market purchase | 2,246 | — | — |
| 2026-06-03 | Choudhury Mahesh |
Open-market purchase | 1,040 | — | — |
| 2026-06-03 | Choudhury Mahesh |
Open-market purchase | 2,421 | — | — |
| 2026-06-02 | Choudhury Mahesh |
Open-market purchase | 4,635 | — | — |
Well-known investors holding CNTM (13F)
None of the 59 investors we track reported a position in their latest 13F.