Mobix Labs (MOBX) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01We are an early-stage company, and it remains difficult to evaluate our future prospects and the risks and challenges we may encounter
2. 02We cannot predict whether we will succeed in maintaining revenue growth, or when we will be able to generate income from operations
3. 03We have incurred losses in the operation of our business and anticipate that our expenses will increase, potentially leading to continued losses from operations in the near future. Moreover, we may not be able to achieve or generate sufficient income from operations to sustain ourselves
4. 04We cannot assure you that we will achieve or maintain profitability or that we will be able to continue as a going concern
5. 05We will need to raise additional capital in the future to fund our operations and execute our business plan, which may not be available on terms acceptable to us, or at all. Any fundraising involving the sale and issuance of equity securities can substantially dilute existing stockholders
6. 06We intend to continue growing our businesses, including through the acquisition of complementary businesses, products, or technologies rather than through internal development
7. 07If our customers are unable to achieve widespread market acceptance of their products which incorporate our products, we may not be able to generate the revenue necessary to support our business
8. 08Our customers generally require our products to undergo a lengthy qualification process, which does not assure product sales. If we are unsuccessful or delayed in qualifying these products with a customer, our business and operating results may suffer
9. 09Markets for our 5G semiconductor products are still developing and may not develop at the speed and scale as expected
10. 10If we are unable to execute our growth strategies effectively, our business may be materially and adversely affected
11. 11The markets for our semiconductor products and solutions are highly competitive, and some market participants have substantially greater resources. We compete against both established competitors and new market entrants with respect to, among other things, cost, technology, and engineering resources
12. 12Our non-wireless connectivity products and solutions are also subject to intense competition. If customer preferences change to demand more lower-priced products, our competitive advantage will be reduced
13. 13Our future success will greatly depend on our ability to successfully introduce new products and solutions for our markets that meet the needs of our customers
14. 14The consolidation or vertical integration of our customers may adversely affect our financial results
15. 15We generate a substantial portion of our revenues from one customer and expect that we will generate revenue from a limited number of customers in the near future; and the loss of any key customer could have a material adverse effect on its business
16. 16We generally do not obtain long-term purchase commitments, and although most of our customer orders are non-cancellable, some customers may choose to unilaterally cancel their purchase order which may adversely impact our revenue and operating results
17. 17Defects in our products or poor design and engineering solutions could result in lost sales and subject us to substantial liability
18. 18We depend on third-party offshore manufacturers for producing several of our products, and in the event of a disruption in our supply chain, any efforts to develop alternative supply sources may take longer to take effect than anticipated
19. 19Inflation and unfavorable global economic conditions could adversely affect our business, financial condition or results of operations
20. 20If we are unable to manage expected growth in the scale and complexity of our operations, our performance may suffer
21. 21Our failure to comply with the laws and regulations to which we are subject could have a material adverse effect on our business, prospects, financial condition and results of operations
22. 22Changes to trade policy, tariffs and import/export regulations may have a material adverse effect on our business, financial condition and results of operations
23. 23Our future success depends on our ability to retain key employees, and to attract, retain and motivate qualified personnel
24. 24We have begun implementation of a plan to remediate these material weaknesses, which we expect will result in significant future costs for us
25. 25Our business could suffer in the event of a security breach involving our IT systems, intellectual property or other proprietary or confidential information
26. 26Instituting and defending against intellectual property or other types of litigation and administrative proceedings could cause us to spend substantial resources, distract our personnel from their normal responsibilities, and have uncertain outcomes
27. 27We are dependent upon our officers and directors, and their loss could adversely affect our ability to operate
28. 28Some of our potential customers, including those in the military and aerospace industries, may require us to comply with additional regulatory requirements, which will increase our compliance costs
29. 29We could be adversely affected by violations of applicable anti-corruption laws or violations of our internal policies designed to ensure ethical business practices
30. 30Our intellectual property applications, including patent and trademark applications, may not be issued or granted or may take longer than expected to result in an issuance or grant, which may have a material adverse effect on our ability to enforce our intellectual property rights
31. 31We depend on our intellectual property, and our failure to protect that intellectual property could adversely affect our business
32. 32We cannot be certain that our technology and products do not or will not infringe upon the intellectual property rights of third parties. If infringement were to occur, our development, manufacturing, sales and distribution of such technology or products may be disrupted
33. 33We are subject to state, federal and international privacy and data protection laws and regulations. Our failure to comply with these laws and regulations could have an adverse effect on our business, prospects, financial condition and results of operations
34. 34We are subject to, and must remain in compliance with, numerous laws and governmental regulations across various jurisdictions concerning the development and sale of our products, including engagement of employees and contractors

Risks Related to Ownership of Our Securities

1. 35In the event that we are unable to remain in compliance with Nasdaq’s continued listing standards, Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions
2. 36The market price of our securities may be volatile
3. 37The trading price of our securities is volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Price volatility may be greater if the public float and/or trading volume of the Class A Common Stock is low
4. 38If equity research analysts do not publish research or reports, or if they publish unfavorable research or reports about our company, our stock price and trading volume could decline
5. 39We are subject to changing laws and regulations regarding corporate governance and public disclosure that have increased both our costs and the risk of non-compliance and may adversely affect our business, and our results of operations
6. 40The dual class structure of our Common Stock has the effect of concentrating voting control with the holders of our Class B Common Stock, most of whom are our directors or management; this will limit or preclude your ability to influence corporate matters
7. 41Our management may experience difficulties with operating a public company
8. 42We may become subject to securities or class action litigation, which is expensive and could divert management’s attention
9. 43We anticipate that our stockholders will experience dilution in the future
10. 44We are an “emerging growth company” and a “smaller reporting company,” and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, our securities could be less attractive to investors
11. 45Because we do not anticipate paying any cash dividends on our Class A Common Stock in the foreseeable future, capital appreciation, if any, will be your sole source of gains and you may never receive a return on your investment
12. 46Future sales of our Class A Common Stock may cause the market price of our Class A Common Stock to drop significantly, even if our business is doing well
13. 47The outstanding warrants are exercisable for Class A Common Stock, and, if exercised, would increase the number of shares eligible for future resale in the public market and would result in dilution to our stockholders
14. 48Under the Amendment to the Warrant Agreement, claims that may be brought against us must be resolved by final and binding arbitration, which follows a set of procedures and may be more restrictive than litigation
15. 49Delaware law and provisions in the Charter and the Bylaws could make a takeover proposal more difficult
16. 50These provisions, alone or together, could delay hostile takeovers and changes in control of our company or changes in the Board and our management
17. 51We may redeem your unexpired Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby rendering your warrants worthless