Core Points - The U.S. President ordered HieFo Corporation to divest a $2.9 million acquisition of chip assets from Emcore due to national security concerns [1] - HieFo's acquisition included semiconductor manufacturing facilities and digital chips, which posed a risk of diverting supply away from the U.S. [2] - The deal was not reported to the Committee on Foreign Investment in the United States (CFIUS), leading to a review of the transaction [3] Company Overview - HieFo Corporation was founded by Genzao Zhang and Harry Moore through a management buyout of Emcore's wafer fabrication and chip-related assets [5] - The company claims to have over 40 years of experience in indium phosphide chip manufacturing [6] - Emcore specializes in manufacturing navigation equipment, including gyroscopes and sensors for various applications, including defense [6] Regulatory Actions - CFIUS identified national security risks related to potential access to Emcore's intellectual property and expertise [4] - HieFo has been ordered to divest all acquired assets within 180 days and restrict access to Emcore's technical information [4]

Core Insights - EMCORE LLC has launched the TAC-DSP-1750 Fiber Optic Gyroscope (FOG), which is a re-engineered version of the legacy DSP-1750, incorporating advanced Photonic Integrated Chip (PIC) technology for enhanced performance and reliability [1] Company Overview - EMCORE LLC is recognized as a leading provider of advanced inertial sensors specifically tailored for the aerospace and defense industries [1] Product Details - The TAC-DSP-1750 FOG features modernized electronics that contribute to higher performance and improved reliability, as well as expanded applications compared to its predecessor [1]

Company Transition and Restructuring - The company completed its transition from a broadband company to an inertial navigation company by selling its cable TV, wireless, sensing, and defense optoelectronics business lines in October 2023[92]. - The April 2023 restructuring eliminated approximately 200 positions, representing about 50% of the total workforce, and resulted in annualized cost savings of approximately $17.0 million[101][104]. - The company eliminated approximately 200 positions, representing about 50% of its total workforce prior to the reductions, as part of the May 2024 Restructuring[132]. - Annualized cost savings from the May 2024 Restructuring are approximately $17.0 million, excluding severance costs[133]. - The company incurred one-time employee severance costs of approximately $2.9 million during the fiscal year ended September 30, 2024, along with $2.2 million in restructuring expenses[104]. Financial Performance - Revenue for the three months ended December 31, 2024, decreased by $4.8 million, or 20.0%, compared to the same period in the prior year, primarily due to decreased FOG sales and the termination of the TAIMU program[122]. - Gross profit increased by $0.2 million, or 3.0%, with gross margin rising from 25% to 36% relative to the same period in the prior year, driven by lower costs from restructuring activities[124]. - Selling, general, and administrative expenses increased by $0.6 million, or 8.5%, primarily due to higher professional service costs associated with a proposed Merger Agreement[126]. - Research and development expenses decreased by $2.0 million, or 54.8%, compared to the same period in the prior year, due to completed cost reduction activities[128]. - The company incurred a net loss of $5.5 million for the three months ended December 31, 2024, with cash used in operating activities decreasing by 17.0% compared to the previous period[139]. Mergers and Acquisitions - The company expects the merger with Parent to close during the quarter ending March 31, 2025, with shareholders receiving $3.10 per share in cash[97][100]. - The merger agreement is subject to customary closing conditions, including shareholder approval and the absence of any material adverse effects[99]. - The company has expanded its portfolio through acquisitions, including Systron Donner Inertial, L3Harris Technologies' S&N business, and KVH Industries' FOG and inertial navigation systems[92]. - The company is exploring options to address capitalization and liquidity, including a Merger Agreement entered into on November 7, 2024[135]. Capital and Liquidity - The company has a credit facility with a reduced borrowing capacity of $4.6 million under the Forbearance Agreement, down from $40.0 million[108]. - The company prepaid approximately $9.4 million to fully repay amounts outstanding under the Credit Agreement, including $8.5 million of principal and $0.8 million of accrued interest[111]. - The company raised approximately $15.6 million from an offering of 2,260,000 shares at $5.00 per share in August 2023[136]. - The company anticipates sufficient financial resources to meet cash requirements for operations and capital expenditures for at least the next 12 months[134]. - The company has substantial doubt about its ability to continue as a going concern, which could significantly impact its stock price and shareholder value[134]. Manufacturing and Operations - The company has fully vertically-integrated manufacturing capabilities at its facilities in Budd Lake, NJ, Concord, CA, and Tinley Park, IL, supporting its inertial navigation products[93]. - The company’s manufacturing processes involve extensive quality assurance systems and performance testing, maintaining ISO 9001 and AS9100 certifications[93][94]. - Restructuring expenses totaled approximately $0.9 million, primarily related to the Chief Restructuring Officer and discontinuance of in-house component manufacturing[129]. - The company is facing increased instability in global economic conditions, which may lead to longer sales cycles and increased manufacturing costs[118]. Stock and Warrants - A reverse stock split at a ratio of 10:1 was approved and became effective on April 1, 2024, adjusting the number of shares and equity awards accordingly[105]. - The company issued a warrant to purchase 1,810,528 shares of common stock at an exercise price of $2.73 per share, exercisable for 10 years[130]. - The fair value of the warrant liability was recorded as $6.6 million as of December 31, 2024, reflecting a net expense of $1.9 million for the three months ended December 31, 2024[130]. Asset Sales - The company entered into an Asset Purchase Agreement with HieFo Corporation for the sale of assets related to its discontinued chips business for a purchase price of $2.9 million[113]. - The company completed the PF Transaction during the three months ended December 31, 2023, with a purchase price of $2.9 million in cash[136].

Financial Performance - Revenue for fiscal 1Q25 was $19.3 million, a decrease of $2.4 million from $21.7 million in 4Q24, representing an 11% decline [4]. - Gross margin increased to 32% in 1Q25, up from 21% in 4Q24, reflecting an 11% improvement [4]. - Non-GAAP net income from continuing operations was $0.5 million in 1Q25, a significant increase of $2.5 million compared to a loss of $2.0 million in 4Q24 [4]. - Adjusted EBITDA for 1Q25 was $1.1 million, an increase of $1.5 million from a negative $0.4 million in 4Q24 [4]. - The net loss on continuing operations was $5.5 million in 1Q25, compared to a loss of $3.2 million in 4Q24, indicating a worsening of $2.3 million [4]. - Cash, cash equivalents, and restricted cash at the end of the period totaled $9.0 million, down from $10.8 million at the end of 4Q24, a decrease of $1.8 million [4]. - Operating expenses rose to $9.7 million in 1Q25, an increase of $1.9 million from $7.8 million in 4Q24 [4]. - Non-GAAP gross margin improved to 36% in 1Q25, up from 23% in 4Q24, reflecting a 13% increase [4]. Future Outlook - The company reported a backlog that remains strong, indicating positive future revenue potential [3]. - The company is focused on leveraging its Photonic Integrated Chip (PIC) and Quartz MEMS technology for future product development and market expansion [5].

Company Transition and Restructuring - The company completed its transition from a broadband company to an inertial navigation company, having sold its cable TV, wireless, sensing, and defense optoelectronics business lines in October 2023[203]. - The restructuring initiatives resulted in the elimination of approximately 200 positions, representing about 50% of the total workforce prior to the reductions[215]. - Annualized cost savings from the May 2024 restructuring are estimated at approximately $17.0 million, excluding severance costs[216]. - The company incurred one-time employee severance costs of approximately $2.9 million during the fiscal year ended September 30, 2024[216]. - The company has consolidated its operations, resulting in a 35% reduction in the aggregate square footage occupied by its facilities[215]. - The company entered into a transition services agreement with HieFo to provide migration services for up to 12 months following the Chips Transaction[226]. - Restructuring expenses totaled approximately $2.2 million, including costs related to the Chief Restructuring Officer and impairments at the Alhambra Facility[252]. - Severance expenses amounted to approximately $2.9 million, largely due to a restructuring plan that included a 40% workforce reduction[253]. - Impairment charges for the fiscal year ended September 30, 2024, totaled approximately $3.0 million, primarily from the shutdown of the Alhambra Facility[254]. Financial Performance - For the fiscal year ended September 30, 2024, revenue decreased by $11.8 million or 12.1% to $85.9 million compared to $97.7 million in the prior fiscal year[244]. - Gross profit for the fiscal year ended September 30, 2024, decreased by $4.6 million or 19.5%, resulting in a gross margin decline from 23.9% to 21.9%[246]. - Selling, general, and administrative expenses decreased by $10.5 million or 31.9% to $22.3 million, primarily due to headcount reductions[248]. - Research and development expenses decreased by $5.0 million or 27.9% to $12.9 million, driven by headcount reductions and cost management[251]. - Other income for the fiscal year ended September 30, 2024, totaled approximately $3.6 million, mainly from adjustments related to the HieFo Sublease and a business settlement[260]. - For the fiscal year ended September 30, 2024, cash used in operating activities for continuing operations was $5.5 million, a decrease of 81.8% compared to $30.3 million in the previous year[266][269]. - Cash provided by investing activities for the fiscal year ended September 30, 2024, was $31 thousand, a significant decrease of 99.7% from $9.2 million in 2023[266][271]. - Financing activities used cash of $10.6 million for the fiscal year ended September 30, 2024, primarily due to repayment of credit facilities, compared to cash provided of $24.4 million in 2023[273]. Mergers and Acquisitions - The company expects the merger to close during the quarter ending March 31, 2025, with shareholders set to receive $3.10 per share in cash[209][211]. - The merger agreement is subject to customary closing conditions, including shareholder approval and the absence of any material adverse effects[210]. - The company entered into a Merger Agreement on November 7, 2024, as part of its strategy to focus on the Inertial Navigation business[261]. - The company entered into a Merger Agreement on November 7, 2024, to address capitalization and liquidity issues[265]. Asset Management and Liabilities - The company has a credit facility with a reduced borrowing capacity of $4.6 million under the Forbearance Agreement, down from $40.0 million[219]. - The company prepaid approximately $9.4 million to fully repay amounts outstanding under the Credit Agreement, including $8.5 million of principal and $0.8 million of accrued interest[222][223]. - As of September 30, 2024, total contractual obligations and commitments amount to $55.2 million, including purchase obligations of $12.5 million and operating lease obligations of $35.0 million[273][275]. - The company has known conditional Asset Retirement Obligations (ARO) totaling $2.4 million as of September 30, 2024[276]. - The company has a right to force the Successor Agent to exercise the warrant under certain conditions, and the total shares issuable under the warrant is limited to 19.99% of outstanding shares[221]. - The company provided a guaranty of up to approximately $5.5 million related to long-term liabilities in the PF Transaction, with $4.2 million not expected to be payable until January 2026[228]. Market Conditions and Future Outlook - The company has faced increased instability in global economic conditions, which may lead to longer sales cycles and increased manufacturing costs[229]. - The company has substantial doubt about its ability to continue as a going concern, which could significantly impact stock price and shareholder value[264]. - The company anticipates that operating activities for the fiscal year ending September 30, 2025, may provide approximately $1.0 million to $2.5 million[270]. - The company expects investing activities to use cash of $1.3 million for the fiscal year ending September 30, 2025[272]. Stock and Shareholder Information - A reverse stock split was approved at a ratio of 10:1, effective April 1, 2024, impacting the outstanding shares of common stock[217]. - The company issued a warrant to purchase 1,810,528 shares of common stock at an exercise price of $2.73 per share, exercisable for 10 years[220]. - The company closed an offering of 2,260,000 shares at $5.00 per share in August 2023, resulting in net proceeds of approximately $15.6 million[267].

Core Viewpoint - Rowley Law PLLC is investigating potential securities law violations by EMCORE Corporation and its board regarding the proposed acquisition by Velocity One, where stockholders will receive $3.10 per share [1]. Group 1 - EMCORE Corporation is set to be acquired by Velocity One, with the transaction expected to close in the first quarter of 2025 [1]. - Stockholders of EMCORE will receive $3.10 for each share they hold in the company as part of the acquisition deal [1]. Group 2 - Rowley Law PLLC is representing shareholders in this investigation and offers additional information through their website and contact details [2]. - The firm specializes in class actions and derivative lawsuits in complex corporate litigation, indicating a focus on protecting shareholder interests [3].

Group 1 - Halper Sadeh LLC is investigating EMCORE Corporation for potential violations related to its sale to Velocity One at $3.10 per share in cash [1] - The firm is also looking into AlloVir, Inc.'s merger with Kalaris Therapeutics, seeking increased consideration for shareholders and additional disclosures [2] - Shareholders are encouraged to contact Halper Sadeh LLC to discuss their legal rights and options, with the firm representing investors globally [3]

Group 1 - Monteverde & Associates PC is investigating EMCORE Corporation regarding its proposed merger with Velocity One Holdings, LP, where EMCORE stockholders will receive $3.10 per share of common stock [1] - Monteverde & Associates PC has been recognized as a Top 50 Firm in the 2018-2022 ISS Securities Class Action Services Report, indicating a strong track record in recovering money for shareholders [1] - The firm operates from the Empire State Building in New York City and has a successful history in trial and appellate courts, including the U.S. Supreme Court [2][3] Group 2 - EMCORE Corporation is currently involved in a merger agreement that may impact its stockholders financially [1] - The firm encourages shareholders with concerns to reach out for additional information, emphasizing that no company or officer is above the law [3]

Core Viewpoint - EMCORE Corporation has received an unsolicited proposal from Mobix Labs, Inc. to acquire all outstanding shares for $3.80 per share in cash [1] Group 1: Company Overview - EMCORE Corporation is the largest independent provider of inertial navigation solutions for the aerospace and defense industry [1] - The company utilizes advanced technologies such as Photonic Integrated Chip (PIC), Quartz MEMS, and Lithium Niobate chip-level technology to deliver high-quality products [3] - EMCORE has vertically-integrated manufacturing capabilities at its facilities located in Budd Lake, NJ, Concord, CA, and Tinley Park, IL, all of which maintain ISO 9001 quality management certification and AS9100 aerospace quality certification [3] Group 2: Board of Directors' Actions - The Board of Directors is evaluating various strategic and financial options to enhance shareholder value and is committed to acting in the best interests of all shareholders [2] - The Board will review Mobix's proposal in consultation with financial and legal advisors to determine the best course of action [2] - The company does not plan to provide further comments on potential transactions unless required by law or regulatory bodies [2]

Company Transition and Restructuring - EMCORE Corporation completed its transition from a broadband company to an inertial navigation company, having divested its cable TV, wireless, sensing, and chips product lines[102]. - The company initiated a restructuring program in April 2023, resulting in the strategic shutdown of its Broadband business segment and defense optoelectronics product line due to declining revenue and profitability[105]. - Approximately 200 positions were eliminated across all locations, representing about 50% of the total workforce prior to the reductions[107]. - The May 2024 restructuring is expected to yield annualized cost savings of approximately $17.0 million, excluding severance costs[108]. - The company has consolidated its facility space, resulting in a 35% reduction in the aggregate square footage occupied by its facilities[107]. - The company eliminated approximately 200 positions, representing about 50% of its total workforce prior to the reductions, as part of its restructuring efforts[138]. Financial Performance - For the three months ended June 30, 2024, revenue decreased by $6.3 million or 23.5% compared to the same period in the prior year, primarily due to a decrease of $7.1 million related to Budd Lake operations[131]. - For the nine months ended June 30, 2024, revenue decreased by $6.8 million or 9.5% compared to the same period in the prior year, mainly due to the termination of the TAIMU program and lower demand for FOG and QMEMS products[131]. - Gross profit for the three months ended June 30, 2024, was $5.0 million, a decrease of $2.2 million or 31.0% compared to the prior year[129]. - Total operating expenses for the three months ended June 30, 2024, increased by $4.2 million or 41.8% to $14.3 million compared to the same period in the prior year[129]. - The company incurred a total operating loss of $9.3 million for the three months ended June 30, 2024, compared to a loss of $2.8 million in the same period last year, representing an increase of 229.6%[129]. - The company reported a gross margin decrease, with gross profit as a percentage of revenue declining due to increased costs and lower sales[132]. - For the three months ended June 30, 2024, gross profit decreased by $2.2 million or 31.0%, and gross margin decreased from 27.2% to 24.5% compared to the same period in the prior year[133]. Cash Flow and Financing - As of June 30, 2024, cash and cash equivalents totaled $9.0 million, including restricted cash of $0.5 million and cash in escrow of $0.7 million, with net working capital totaling $44.2 million[138]. - The company prepaid approximately $9.4 million to fully repay amounts outstanding under the Credit Agreement, including $8.5 million of principal and $0.8 million of accrued interest[120]. - The company entered into a Credit Agreement providing for a revolving credit facility of up to $40.0 million and a term loan facility of $5,965,000[111]. - Following a restructuring, the borrowing capacity under the revolving credit facility was reduced to $4.6 million[113]. - For the nine months ended June 30, 2024, net cash used in operating activities decreased by 51.2% compared to the previous period, primarily due to the April 2023 Restructuring[143]. - For the nine months ended June 30, 2024, net cash provided by investing activities decreased by 93.4% due to the absence of a sale leaseback transaction that occurred in the previous period[144]. - For the nine months ended June 30, 2024, net cash used in financing activities decreased by 129.4% due to the lack of proceeds from common stock issuance that occurred in the previous period[145]. Equity and Stock - A reverse stock split was executed at a ratio of 10:1 on April 1, 2024, affecting all outstanding shares of common stock[110]. - A warrant was issued to purchase 1,810,528 shares of common stock at an exercise price of $2.73 per share as part of the Forbearance Agreement[114]. - The company closed an equity offering in August 2023, raising approximately $15.6 million from the sale of 2,260,000 shares at $5.00 per share[127]. Economic Conditions and Outlook - The company is facing increased instability in global economic conditions, which may lead to longer sales cycles and increased manufacturing costs[129]. - There have been no material changes in the company's critical accounting estimates since the Annual Report on Form 10-K for the fiscal year ended September 30, 2023[147]. - As of September 30, 2023, there were no material changes to the company's contractual obligations and commitments outside the ordinary course of business[146]. - The company provided a guaranty of approximately $5.5 million related to the PF Transaction, with $4.2 million not becoming payable until January 2026[146].