Management's Discussion and Analysis of Financial Condition and Results of Operations
The following information should be read in conjunction with the Consolidated Financial Statements and the accompanying Notes included below in Item 8 of this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements.
The terms "Astrotech", "the Company", "we", "us", or "our" refer to Astrotech Corporation (Nasdaq: ASTC), a Delaware corporation organized in 1984. Our use of "products" and "devices" refer to the TRACER 1000™, BreathTest-1000™, AGLAB 1000™, and Pro-Control 1000™ along with related accessories and consumables.
Overview
Our mission encompasses the advancement of both mass spectrometry and gas chromatography, two powerful analytical techniques that together enable precise detection and identification of chemical compounds across a wide range of high-demand environments. We aim to expand access to mass spectrometry by simplifying the complexity of operating these devices within real-time testing environments such as airports, border checkpoints, cargo hubs, infrastructure security, correctional facilities, military bases, law enforcement centers, and industrial locations. We are introducing our new line of products that are ultra-portable, on-site, rugged environmental testing instruments, featuring our proprietary ATi Mass Spectrometer Technology ("MS") and ATi Gas Chromatography Column ("GC") to achieve our mission through simplifying the user interface, automating the complicated calibration process, ruggedizing the critical components to endure MS/GC field work, and enabling multiple configurations for sample intake options.
Our Board of Directors (the "Board") recently approved strategic initiatives focused on future lunar resource development, autonomous lunar industrial infrastructure, Moon-based advanced computing, semiconductor manufacturing, lunar power generation and power infrastructure, mining, chemical manufacturing, product transportation and equipment leasing opportunities on the Moon (our "Lunar Initiatives"). As part of the Lunar Initiatives, Astrotech intends to evaluate and potentially develop infrastructure technologies that could support future semiconductor processing, advanced computing systems, and quantum computing manufacturing operations on the lunar surface. Astrotech believes the convergence of abundant solar energy, extreme lunar thermal conditions, reduced gravity, autonomous robotics, and access to strategic lunar materials such as Si-28 and 3He may ultimately make the Moon an attractive long-term platform for advanced computational infrastructure and next-generation quantum manufacturing systems.
Additional details about our business are provided in Part I, Item 1. "Business" of this Form 10-K.
Recent Developments
On August 15, 2025, we introduced our new EN-SCAN product line of ultra-portable rugged environmental testing instruments, featuring its proprietary ATi Gas Chromatograph Column ("GC") and ATi Mass Spectrometer Technology ("MS"). Customers can now gain access to real-time results and on-demand reporting, enabling continuous monitoring and immediate response in critical applications
In November 2025, we initiated a review of strategic alternatives in order to explore ways to maximize shareholder value, including raising equity capital, reverse mergers, combination transactions, and the sale of all or part of our business, and other possible strategic or financial transactions. The review of such alternatives is ongoing and we have not set a deadline or definitive timetable for the completion of the strategic alternatives review process, and there can be no assurance that this process will result in any transaction or specific outcome.
On May 26, 2026, EN-SCAN, a subsidiary of Astrotech, announced the commercial launch of the Labrador HH-GC, a rugged, field-portable gas chromatograph engineered to bring laboratory-grade volatile organic compound analysis directly to the point of investigation. The Labrador HH-GC delivers rapid on-site detection reducing the delay, uncertainty, and cost associated with traditional off-site laboratory workflows.
On May 27, 2026, we announced that our Board has approved a strategic initiative focused on lunar resource development, autonomous lunar industrial infrastructure and future Moon-based advanced computing and semiconductor manufacturing opportunities. As part of the initiative, we intend to evaluate and potentially develop infrastructure technologies that could support future semiconductor processing, advanced computing systems, and quantum computing manufacturing operations on the lunar surface.
In June 2026, our Board authorized our management to pursue a potential sale process of 1st Detect, developer of the TRACER 1000 mass spectrometry-based explosives and narcotics trace detection platform. We are evaluating a potential sale of 1st Detect to provide additional capital for the announced strategic initiatives we are committed to building.
On June 2, 2026, we entered into an at-the-market offering agreement (the "ATM Agreement") with H.C. Wainwright & Co., LLC ("Wainwright") relating to an at-the-market offering program (the "ATM Program"), pursuant to which we have the ability to offer and sell, from time to time at our sole discretion, shares of our common stock through Wainwright as sales agent subject to applicable limitations. On June 3, 2026, we filed a prospectus supplement (the "Prior Prospectus Supplement") to the prospectus dated January 30, 2026, relating to the offer and sale of our common stock under the ATM Program, whereby we initially registered shares having an aggregate offering price of approximately $24.4 million. On August 19, 2026, the Company filed a prospectus supplement to a shelf registration statement on Form S-3 (File No. 333-297144) and the related base prospectus with the SEC, which was declared effective on July 7, 2026, to increase the remaining shares of our common stock available for issuance under the ATM Agreement to $50 million, which replaced and superseded in its entirety, the Prior Prospectus Supplement. As of September 23, 2026, we have sold 258,856 shares of our common stock under the ATM Program for gross proceeds of approximately $7.9 million.
As of June 30, 2026, we have deployed the TRACER 1000 in approximately 37 locations in 16 countries across the United States, Europe and Asia.
We have also started the process to pass TSA checkpoint testing. This process involves Developmental Test and Evaluation in which the Transportation Security Laboratory ("TSL") will test the TRACER 1000 and work with 1st Detect to ensure its readiness to enter certification testing. The certification test is then completed by the Independent Test & Evaluation department of TSL.
Each of these fiscal year 2026 announcements reflect the progress made by our business units in developing and demonstrating relevant solutions to problems faced by companies and agencies operating in our target markets. The additional applications of the AMS Technology and our growing channel partner relationships create opportunities for us to generate revenue growth in subsequent fiscal years.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP"). The preparation of these financial statements requires us to make estimates and judgments that directly affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities in our consolidated financial statements and accompanying notes. A critical accounting estimate is one that involves a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management continuously evaluates its critical accounting policies and estimates, including those used in evaluating the recoverability of long-lived assets, recognition of revenue, valuation of inventory, and the recognition and measurement of loss contingencies, if any. Actual results may differ from these estimates under different assumptions or conditions. We believe the following accounting policies require us to make significant judgments and estimates in the preparation of our consolidated financial statements.
Revenue Recognition
Astrotech recognizes revenue employing the generally accepted revenue recognition methodologies described under the provisions of Accounting Standards Codification ("ASC") Topic 606 "Revenue from Contracts with Customers" ("Topic 606"), which was adopted by us in fiscal year 2019. The methodology used is based on contract type and how products and services are provided. The guidelines of Topic 606 establish a five-step process to govern the recognition and reporting of revenue from contracts with customers. The five steps are: (i) identify the contract with a customer, (ii) identify the performance obligations within the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations within the contract and (v) recognize revenue when or as the performance obligations are satisfied.
Astrotech has multiple revenue sources such as product and related consumable sales, grant revenue, recurring maintenance & extended warranty services, repairs and training.
An additional factor is reasonable assurance of collectability. This necessitates deferral of all or a portion of revenue recognition until collection. For the year ended June 30, 2026, we generated approximately $913 thousand in revenue from three customers that represented a significant portion of total revenue for fiscal year end 2026.
Contract Assets and Liabilities. We enter into contracts to sell products and provide services, and it recognizes contract assets and liabilities that arise from these transactions. We recognize revenue and corresponding accounts receivable according to Topic 606 and, at times, recognizes revenue once all performance obligations have been met, in advance of the time when contracts give us the right to invoice a customer. We may also receive consideration, per the terms of a contract, from customers prior to transferring goods to the customer. We record customer deposits as deferred revenue. Additionally, we may receive payments, most typically for service and warranty contracts, at the onset of the contract and before services have been performed. In such instances, we record a deferred revenue liability. We recognize these contract liabilities as sales after all revenue recognition criteria are met.
Practical Expedients. Under its contracts with customers, we stand ready to deliver product upon receipt of a purchase order. Accordingly, we have no performance obligations under its contracts until its customers submit a purchase order. We do not enter into commitments to provide goods or services that have terms greater than one year. In limited cases, we do require payment in advance of shipping product. Typically, product is shipped within a few days after prepayment is received. These prepayments are recorded as contract liabilities on the consolidated balance sheet and are included in accounts payable and accrued liabilities. As the performance obligation is part of a contract that has an original expected duration of less than one year, we have applied the practical expedient to omit disclosures regarding remaining performance obligations. In cases where we are responsible for shipping after the customer has obtained control of the goods, it has elected to treat the shipping activities as fulfillment activities rather than as a separate performance obligation. We also apply a practical expedient to expense direct costs of obtaining a contract when incurred because the amortization period would have been one year or less.
Product Sales. We recognize revenue from sales of products upon shipment or delivery when control of the product transfers to the customer, depending on the terms of each sale, and when collection is probable. In the circumstance where terms of a product sale include subjective customer acceptance criteria, revenue is deferred until we have achieved the acceptance criteria unless the customer acceptance criteria are perfunctory or inconsequential. We generally offer customers payment terms of 60 days or less.
Freight. We record shipping and handling fees that it charges to its customers as revenue and related costs as cost of revenue.
Multiple Performance Obligations. Certain agreements with customers include the sale of equipment involving multiple elements in cases where obligations in a contract are distinct and thus require separation into multiple performance obligations, revenue recognition guidance requires that contract consideration be allocated to each distinct performance obligation based on its relative standalone selling price. The value allocated to each performance obligation is then recognized as revenue when the revenue recognition criteria for each distinct promise or bundle of promises has been met. Government contracts have specific individual performance obligations known as milestones. Each milestone has a standalone selling price and is allocated directly to that performance obligation. Revenue under long-term government contracts is recorded under the percentage of completion method.
The standalone selling price for each performance obligation is an amount that depicts the amount of consideration to which the entity expects to be entitled in exchange for transferring the good or service. When there is only one performance obligation associated with a contract, the entire amount of consideration is attributed to that obligation. When a contract contains multiple performance obligations, the standalone selling price is first estimated using the observable price, which is generally a list price net of applicable discount or the price used to sell the good or service in similar circumstances. In circumstances when a selling price is not directly observable, we will estimate the standalone selling price using information available to it including its market assessment and expected cost, plus margin.
The timetable for fulfillment of each of the distinct performance obligations can range from completion in a short amount of time and entirely within a single reporting period to completion over several reporting periods. The timing of revenue recognition for each performance obligation may be dependent upon several milestones, including physical delivery of equipment, completion of site acceptance test, and in the case of after-market consumables and service deliverables, the passage of time. The total revenue was approximately $638 thousand in point in time and $275 thousand over time for 2026 and $920 thousand in point in time and $130 thousand over time for 2025. Product and consumables revenue represented the majority of revenue recognized at a point in time during fiscal year 2026.
Valuation of Inventory
Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost on a first-in, first-out basis. We reserve or write down inventory for estimated obsolescence, inventory in excess of reasonably expected sales, or unmarketable inventory, in an amount equal to the difference between the cost of inventory and the estimated market value, based upon assumption about future demand and market conditions. If actual market conditions are less favorable than those projected, additional inventory adjustments may be required. Inventory impairment charges establish a new cost basis for inventory and charges are not reversed subsequently to income, even if circumstances later suggest that increased carrying amounts are recoverable.
Warranty Provision
We offer our customers warranties on the products that we sell. These warranties typically provide for repairs and maintenance of the products if problems arise during a specified time period after original shipment. Concurrent with the sale of products, we record a provision for estimated warranty expenses with a corresponding increase in cost of goods sold. We periodically adjust this provision based on historical experience and anticipated expenses, which could impact our cost of revenue and gross margin. We charge actual expenses of repairs under warranty, including parts and labor, to this provision when incurred. The current obligation for warranty provision is included in accrued expenses and other liabilities in the consolidated balance sheets.
Results of Operations for the Years Ended June 30, 2026 and 2025
Selected financial data for the fiscal years ended June 30, 2026 and 2025 of our operations are as follows:
Years Ended June 30, | ||||||||||||
(In thousands) | 2026 | 2025 | Variance | |||||||||
Revenue | $ | 913 | $ | 1,049 | $ | (136 | ) | |||||
Cost of revenue | 696 | 574 | 122 | |||||||||
Gross profit | 217 | 475 | (258 | ) | ||||||||
Gross margin | 23.8 | % | 45.3 | % | (21.5 | )% | ||||||
Operating expenses | ||||||||||||
Selling, general and administrative | 7,871 | 7,067 | 804 | |||||||||
Research and development | 6,484 | 8,142 | (1,658 | ) | ||||||||
Total operating expenses | 14,355 | 15,209 | (854 | ) | ||||||||
Loss from operations | (14,138 | ) | (14,734 | ) | 596 | |||||||
| Interest and dividend income | 471 | 1,094 | (623 | ) | ||||||||
| Realized loss | (543 | ) | (5 | ) | (538 | ) | ||||||
Other income and expense, net | (213 | ) | (203 | ) | (10 | ) | ||||||
| Total other income (expense) | (285 | ) | 886 | (1,171 | ) | |||||||
Income tax benefit/ (expense) | (4) | (2) | (2 | ) | ||||||||
Net loss | $ | (14,427 | ) | $ | (13,850 | ) | $ | (577 | ) | |||
Net unrealized gain | 548 | 313 | 235 | |||||||||
Total comprehensive loss | $ | (13,879 | ) | $ | (13,537 | ) | $ | (342) | ||||
Revenue - Total revenue decreased by $136 thousand, or 13.0% in fiscal year ended June 30, 2026, compared to the prior year. The decrease was primarily attributable to lower product sales volume. Product revenue decreased by $458 thousand as the Company sold three TRACER 1000 units and one Labrador Handheld Gas Chromatograph unit during fiscal year ended June 30, 2026, compared to eight TRACER 1000 units during fiscal year ended June 30, 2025. The decrease was also attributable to the absence of approximately $195 thousand of DHS grant-related revenue that was recorded within product revenue during fiscal year ended June 30, 2025. These decreases were partially offset by increases in consumables, grant and training revenue of approximately $264 thousand, $90 thousand and $28 thousand, respectively.
Cost of Revenue and Gross Profit - Gross profit is comprised of revenue less cost of revenue. Our cost of revenue includes materials, overhead, warranty expenses, shipping, and labor. Cost of revenue increased by $122 thousand, or 21.3%, for the fiscal year ended June 30, 2026, compared to the year ended June 30, 2025, primarily due to higher labor associated with grant related activities and increased warranty expenses. Gross profit decreased by $258 thousand, and gross margin decreased to 23.8% from 45.3% in the prior year.
Operating Expenses - Our operating expenses decreased by $854 thousand, or 5.6%, during the fiscal year ended June 30, 2026, compared to the fiscal year ended June 30, 2025. Significant changes to operating expenses include the following:
• | Selling, General and Administrative Expenses - Our selling, general and administrative expenses increased by approximately $804 thousand, or 11.4% in fiscal year ended June 30, 2026, compared to the prior year. The increase was primarily attributable to higher legal expense of approximately $392 thousand related to the Company's 2026 offering activities, increased labor and fringe expense of approximately $230 thousand primarily due to higher salary expense and severance costs, including a severance accrual related to the former Chief Financial Officer, and increased facilities expense of approximately $181 thousand. The increase in facilities expense was primarily due to higher property tax expense, as fiscal year ended June 30, 2025 included a favorable property tax true-up and refund resulting in a net property tax credit, whereas fiscal year ended June 30, 2026 incurred property tax expense, as fiscal year ended June 30, 2025. The increase was also attributable to higher accounting, compliance and investor relations costs of approximately $78 thousand. These increases were partially offset by a decrease in sales and marketing expense of approximately $320 thousand, primarily due to lower marketing and business development consulting costs. |
• | Research and Development Expenses - Research and development expenses decreased by $1.7 million, or 20.4%. This decrease was primarily due to lower consulting expenses of $1.4 million, as well as lower material and equipment costs of $436 thousand, depreciation expense of $200 thousand, and recruiting costs. These decreases were partially offset by higher facility-related costs associated with the Company's Braker facility. |
Total Other Income (expense), net - Other income and expense, net decreased by $1.2 million, from income of $886 thousand in 2025 to a loss of $285 thousand in 2026. The decline was primarily attributable to a $623 thousand reduction in interest and dividend income, driven by a lower investment balance and a $538 thousand increase in realized losses on securities. These decreases were partially offset by a $10 thousand increase in other expense, net.
• Income Taxes - Income tax expense was immaterial.
LIQUIDITY AND CAPITAL RESOURCES
Sources of Liquidity
As of June 30, 2026, we had cash and cash equivalents of $8.4 million as compared to cash and cash equivalents of $3.1 million at June 30, 2025. We have incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of approximately $265 million at June 30, 2026, and reported a net loss of $14.4 million. We regularly monitor potential financing and capital sources, including equity and debt markets, in an effort to meet our planned capital expenditures and liquidity requirements. Our future success may depend on our ability to access outside sources of capital including through public or private equity offerings, additional debt financing, or via strategic collaborations, partnerships, or other arrangements with third parties. The availability and terms of future financing will depend on a variety of factors, including general economic and market conditions, our operating performance, and investor interest. Additional funding may not be available on acceptable terms, if at all. If we are unable to obtain adequate financing when needed, we may be forced to delay, reduce the scope of, or eliminate certain operations, commercialization efforts, or other aspects of our business. In addition, raising additional funds through equity offerings may result in dilution to our stockholders, while debt or other financing could involve covenants or obligations that restrict our business operations. Until we can generate sufficient revenue from product sales, if at all, we expect to finance our operations primarily through existing cash reserves and additional capital-raising activities.
On June 2, 2026, we entered into the ATM Agreement with Wainwright relating to an at-the-market offering program, pursuant to which we have the ability to offer and sell, from time to time at our sole discretion, shares of our common stock, having aggregate gross proceeds of up to $50.0 million through Wainwright as sales agent subject to applicable limitations. During the fiscal year ended June 30, 2026, the Company sold 168,980 shares under the ATM Program and received net proceeds of approximately $6.7 million, which it used to support working capital and general corporate purposes. As of June 30, 2026, $43.4 million remained available for issuance under the ATM Program, subject to market conditions and the terms of the applicable sales agreement. Management believes the ATM Program provides a flexible source of capital that may be used opportunistically to strengthen liquidity and fund future growth.
On January 28, 2026, we filed a shelf registration statement on Form S-3 (File No. 333-293023), declared effective on January 30, 2026 by the SEC, which included a base prospectus that allows the Company to offer and sell, from time to time, in one or more offerings, common stock, preferred stock, debt securities, warrants, rights or units up to an aggregate public offering price of $30 million. On June 3, 2026, we filed a prospectus supplement (the "Prior Prospectus Supplement") to the prospectus dated January 30, 2026, relating to the offer and sale of our common stock under the ATM Program, whereby we initially registered shares having an aggregate offering price of approximately $24.4 million.
On June 30, 2026, we filed a shelf registration statement on Form S-3 (File No. 333-297144), declared effective on July 7, 2026 (the "Registration Statement") by the SEC, which included a base prospectus that allows the Company to offer and sell, from time to time, in one or more offerings, common stock, preferred stock, debt securities, warrants, rights or units up to an aggregate public offering price of $200 million. On August 19, 2026, the Company filed a prospectus supplement to the Registration Statement to increase the remaining shares of our common stock available for issuance under the ATM Agreement to $50 million, which replaced and superseded in its entirety, the Prior Prospectus Supplement.
We expect that our short-term and long-term liquidity requirements will consist of working capital and general corporate expenses associated with the growth of our business, including, without limitation, expenses associated with scaling up our operations and continuing to increase our manufacturing capacity, sales and marketing expense associated with rollout of our products to commercial customers, additional research and development expenses associated with expanding our product offerings, and expenses associated with being a public company. In addition, as further described below, we expect that our Lunar Initiatives will require substantial capital expenditures to design, develop, expand, and maintain our technologies and infrastructure to support development of such initiatives, including costs associated with research and development, construction and expansion of production capabilities, acquisition of property and equipment, and ongoing maintenance and upgrades to ensure reliability and competitiveness. While management believes that our cash and cash equivalents at June 30, 2026, together with operational cash flows will fund our current operating plans and meet our anticipated obligations for at least the next 12 months, substantial additional capital may be required to support longer-term growth and operational objectives. Our short-term investments have been utilized as a source of liquidity to fund our operating expenses.
Management continues to monitor liquidity needs closely and will adapt strategy as appropriate to align with both near- and long-term business objectives. Management anticipates that significant additional expenditures will be necessary to develop and expand our business, before significant positive operating cash flows can be achieved, as current available funds are insufficient to complete our business plan and strategic objectives. Until we can generate sufficient revenue from sales, if at all, we expect to finance our operations primarily through existing cash reserves and additional capital-raising activities.
Funding Requirements
We expect our expenses to increase in connection with our ongoing operations, public company obligations, efforts to expand our business and develop our Lunar Initiatives. Accordingly, we expect to require additional funding to support our continuing operations and working capital needs. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.
Because of the numerous risks and uncertainties associated with our research and development efforts, we are unable to estimate the exact amount of our operating capital requirements. Our future capital requirements will depend on many factors, including:
● | future research and development efforts; |
● | our ability to enter into and terms and timing of any collaborations, licensing agreements, or other arrangements; |
● | the costs of sales, marketing, distribution and manufacturing efforts; |
● | our headcount growth and associated costs as we expand our business; |
● | the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against intellectual property related claims; and |
● | the costs of operating as a public company. |
Until such time, if ever, as we can generate positive cash flows from operations, we expect to finance our additional cash needs through a combination of equity offerings, debt financing, equity financing, merging, or engaging in a strategic partnership. Such funding may not be available to us on acceptable terms, or at all, and such funding may become even more difficult to obtain due to macroeconomic conditions, including rising interest rates, tariffs and trade restrictions, global conflicts and other conditions that could result in volatility in the U.S. capital markets. To the extent that we raise additional capital through the sale of equity, our existing stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect the rights of holders of common stock. Even if successful in raising new capital, we could be limited in the amount of capital we raise due to investor demand. Debt financing, if available, may involve agreements that include restrictive covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
If we raise funds through additional strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or future revenue streams or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity offerings, debt financing, equity financing or engaging in a strategic partnership, we may be required to delay, limit, or reduce our expansion efforts.
Trends and Uncertainties
Inflation and changing prices have not had a material impact on our historical results of operations. We do not currently anticipate that inflation and changing prices will have a material impact on our future results of operations.
Consolidated Balance Sheet
Total assets for the year ended June 30, 2026, were $20.5 million compared to total assets of $27 million as of the end of fiscal year 2025, a decrease of $6.5 million. The following table sets forth the significant components of the consolidated balance sheet as of June 30, 2026, compared with June 30, 2025:
Years Ended June 30, | ||||||||||||
(In thousands) | 2026 | 2025 | Variance | |||||||||
Assets: | ||||||||||||
Current assets | $ | 15,926 | $ | 21,975 | $ | (6,049 | ) | |||||
Property and equipment, net | 2,433 | 2,443 | (10 | ) | ||||||||
Operating lease right-of-use assets, net | 1,834 | 2,225 | (391 | ) | ||||||||
Other assets, net | 314 | 346 | (32 | ) | ||||||||
Total | $ | 20,507 | $ | 26,989 | $ | (6,482 | ) | |||||
Liabilities and stockholders' equity: | ||||||||||||
Current liabilities | $ | 2,257 | $ | 2,451 | $ | (194 | ) | |||||
Lease liabilities, net of current portion | 2,024 | 2,274 | (250 | ) | ||||||||
| Other liabilities, net | 54 | 164 | (110 | ) | ||||||||
Stockholders' equity | 16,172 | 22,100 | (5,928 | ) | ||||||||
Total | $ | 20,507 | $ | 26,989 | $ | (6,482 | ) | |||||
Current assets - Current assets decreased by $6.0 million as of June 30, 2026, compared to June 30, 2025, primarily due to a reduction in short-term investments following the sale of investments, partially offset by an increase in cash and cash equivalents.
Property and equipment, net - Property and equipment, net of depreciation, remained relatively consistent as of June 30, 2026 compared to June 30, 2025. Capital additions during the year, primarily related to leasehold improvements for the Braker facility and the capitalization of demo units, were substantially offset by depreciation expense and the disposal of certain obsolete assets.
Operating lease right-of-use assets, net -Operating lease right-of-use assets, net decreased by approximately $391 thousand as of June 30, 2026, compared to June 30, 2025, primarily due to the amortization of the Braker lease right of use asset.
Other assets, net - Other assets, net decreased by approximately $32 thousand as of June 30, 2026, compared to June 30, 2025, primarily due to the receipt of a lease deposit refund from the Donley Facilities landlord.
Current liabilities - Current liabilities decreased by approximately $194 thousand as of June 30, 2026, compared to June 30, 2025, primarily due to decreases in accrued expenses and payroll-related liabilities, partially offset by an increase in goods received not invoiced liabilities.
Lease liabilities, net- Lease liabilities decreased by $250 thousand as of June 30, 2026, compared to June 30, 2025, primarily due to Braker lease payments.
Other liabilities, net - Other liabilities, net decreased by $110 thousand primarily due to $83 thousand Netsuite financing payments and a decrease in non-current sales warranty reserve.
Stockholders'equity -The stockholders equity decreased by approximately $5.9 million as of June 30, 2026, primarily due to our net loss of approximately $14.4 million, partially offset by an increase in additional paid in capital of approximately $8 million related to share issuances in connection with the ATM Agreement, equity compensation, and increase of $548 thousand in unrealized gain on available for sale securities.
Cash Flows
The following is a summary of the change in our cash and cash equivalents:
Years Ended June 30, | ||||||||||||
(In thousands) | 2026 | 2025 | Variance | |||||||||
Change in cash and cash equivalents: | ||||||||||||
Net cash used in operating activities | $ | (13,453 | ) | $ | (12,952 | ) | (501 | ) | ||||
Net cash provided by (used in) investing activities | 11,817 | 5,795 | 6,022 | |||||||||
Net cash provided by (used in) financing activities | 6,923 | (185 | ) | 7,108 | ||||||||
Net change in cash and cash equivalents | $ | 5,287 | (7,342 | ) | $ | 12,629 | ||||||
Cash and Cash Equivalents
As of June 30, 2026, we held cash and cash equivalents of $8.4 million, and our net working capital was approximately $13.7 million. As of June 30, 2025, we held cash and cash equivalents of $3.1 million, and our net working capital was approximately $19.5 million. Cash and cash equivalents increased by approximately $5.3 million during fiscal year ended June 30, 2026. The Company held approximately $2.9 million in short term investments as of June 30, 2026.
Operating Activities
Net cash used in operating activities was $13.5 million for the year ended June 30, 2026, compared to cash used in operating activities of $13.0 million for the year ended June 30, 2025.
Investing Activities
Net cash provided by investing activities was $11.8 million for the year ended June 30, 2026, compared to $5.8 million for the year ended June 30, 2025. The increase was primarily due to higher proceeds from short-term investments.
Financing Activities
Net cash provided by financing activities was $6.9 million for the year ended June 30, 2026, compared to net cash used in financing activities of $0.2 thousand for the year ended June 30, 2025. The increase was primarily due to proceeds from the Company's ATM offering and employee stock option exercises.
We did not have any material off-balance sheet arrangements as of June 30, 2026.
Contractual Obligations and Commitments
The following table summarized our commitments to settle contractual obligations as of June 30, 2026:
Payments Due by Period | ||||||||||||||||||||
(In thousands) | Total | Less than 1 Year | 1 to 3 Years | 4 to 5 Years | More than 5 Years | |||||||||||||||
Operating lease commitments (1) | $ | 2,653 | $ | 361 | $ | 727 | 892 | 673 | ||||||||||||
Finance lease commitments (2) | 52 | 26 | 26 | - | - | |||||||||||||||
Total | $ | 2,705 | $ | 387 | $ | 753 | $ | 892 | $ | 673 | ||||||||||
(1) Consists of payments due for our lease of the manufacturing property in Austin, Texas that expires in November 2032.
(2) Consists of payments due for an equipment lease that expires in May 2028.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of June 30, 2026.