airsp_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission File No. 001-40222

Airship AI Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware		93-4974766
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

8210 154th Ave NE, Redmond, WA		98052
(Address of principal executive offices)		(Zip Code)

(877) 462-4250

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	AISP	The Nasdaq Stock Market LLC
Warrant	AISPW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 14, 2025, there were a total of 34,175,563 shares of the registrant’s common stock issued and outstanding.

Airship AI Holdings, Inc.

Quarterly Report on Form 10-Q

Quarterly Period Ended September 30, 2025

TABLE OF CONTENTS

PART I
Item 1.	Financial Statements (Unaudited).	3
	Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	3
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2025 and 2024	4
	Condensed Consolidated Statements of Changes in Stockholders’ Deficit	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024	6
	Notes to the Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33

PART II
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 5.	Other Information	34
Item 6.	Exhibits	35
	SIGNATURES	36

Table of Contents

PART I

ITEM 1. FINANCIAL STATEMENTS.

AIRSHIP AI HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2025 and December 31, 2024

	September 30, 2025			December 31, 2024 (1)
ASSETS	Unaudited

CURRENT ASSETS:
Cash and cash equivalents	$	5,755,661		$	11,414,830
Accounts receivable, net of allowance for credit losses of $0		1,247,321			1,226,757
Prepaid expenses and other		31,431			17,883
Total current assets		7,034,413			12,659,470

OTHER ASSETS
Other assets		160,528			165,960
Operating lease right of use asset		908,029			882,024

TOTAL ASSETS	$	8,102,970		$	13,707,454

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable - trade	$	339,468		$	759,480
Advances from founders		-			1,300,000
Accrued expenses		45,819			51,649
Current portion of operating lease liability		427,498			305,178
Deferred revenue- current portion		4,652,485			3,238,483
Total current liabilities		5,465,270			5,654,790

NON-CURRENT LIABILITIES:
Operating lease liability, net of current portion		539,375			638,525
Warrant liability		27,822,380			34,180,618
Earnout liability		11,607,790			23,304,808
Deferred revenue- non-current		2,749,263			2,951,850
Total liabilities		48,184,078			66,730,591

COMMITMENTS AND CONTINGENCIES (Note 9)

STOCKHOLDERS' DEFICIT:
Preferred stock - no par value, 5,000,000 shares authorized, 0 shares issued and outstanding as of September 30, 2025 and December 31, 2024		-			-
Common stock - $0.0001 par value, 200,000,000 shares authorized, 32,013,300 and 30,588,413 shares issued and outstanding as of September 30, 2025 and December 31, 2024		3,198			3,056
Additional paid in capital		28,507,356			21,918,867
Accumulated deficit		(68,580,783	)		(74,941,590	)
Accumulated other comprehensive loss		(10,879	)		(3,470	)
Total stockholders' deficit		(40,081,108	)		(53,023,137	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	8,102,970		$	13,707,454

(1)	Derived from the audited consolidated balance sheet.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

AIRSHIP AI HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the three and nine months ended September 30, 2025 and 2024

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30, 2025			September 30, 2024			September 30, 2025			September 30, 2024
	Unaudited			Unaudited			Unaudited			Unaudited
NET REVENUES:
Product	$	218,568		$	1,730,521		$	4,989,261		$	16,525,515
Post contract support		956,042			1,137,128			3,784,989			3,318,180
Other services		2,840			-			53,118			-
		1,177,450			2,867,649			8,827,368			19,843,695
COST OF NET REVENUES:
Cost of Sales		203,182			285,448			3,406,130			9,381,244
Post contract support		337,001			428,820			1,000,109			1,174,737
Other services		33,431			-			49,772			-
		573,614			714,268			4,456,011			10,555,981
GROSS PROFIT		603,836			2,153,381			4,371,357			9,287,714
RESEARCH AND DEVELOPMENT EXPENSES		753,229			1,073,735			2,213,182			2,471,872
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		2,717,388			2,667,130			8,761,194			8,829,544
TOTAL OPERATING EXPENSES		3,470,617			3,740,865			10,974,376			11,301,416
OPERATING LOSS		(2,866,781	)		(1,587,484	)		(6,603,019	)		(2,013,702	)
OTHER INCOME (EXPENSE) :
Gain (loss) from change in fair value of earnout liability		3,892,874			5,511,961			6,414,894			(1,095,962	)
Gain (loss) from change in fair value of warrant liability		5,331,239			2,471,186			6,358,238			(2,833,558	)
Gain (loss) from change in fair value of convertible debt		-			370,548			-			(141,636	)
Loss on note conversion		-			(434,797	)		-			(593,591	)
Interest income (expense), net		52,541			(133,824	)		190,694			(587,149	)
Other expense		-			16,366			-			(22,922	)
Total other income (expense), net		9,276,654			7,801,440			12,963,826			(5,274,818	)

INCOME (LOSS) BEFORE PROVISON FOR INCOME TAXES		6,409,873			6,213,956			6,360,807			(7,288,520	)

Provision for income taxes		-			-			-			-

NET INCOME (LOSS)		6,409,873			6,213,956			6,360,807			(7,288,520	)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency income (loss), net		-			354			(7,409	)		9,338

TOTAL COMPREHENSIVE INCOME (LOSS)	$	6,409,873		$	6,214,310		$	6,353,398		$	(7,279,182	)

NET INCOME (LOSS) PER SHARE:
Basic	$	0.20		$	0.25		$	0.20		$	(0.31	)
Diluted	$	0.15		$	0.17		$	0.15		$	(0.31	)

Weighted average shares of common stock outstanding
Basic		31,970,364			24,696,425			31,850,348			23,609,189
Diluted		41,972,357			35,445,694			41,672,396			23,609,189

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

AIRSHIP AI HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)

	Common		Common		Additional					Other			Total
	Stock		Stock		Paid in		Accumulated			Comprehensive			Stockholders'
			$		Capital		Deficit			Income (Loss)			Deficit
Balance as of January 1, 2024		22,812,048	$	2,281	$	-	$	(17,476,700	)	$	(12,808	)	$	(17,487,227	)
Stock-based compensation		-		-		268,989		-			-			268,989
Issuance of common stock for prior period services		15,000		-		-		-			-			-
Issuance of common stock for conversion of debt		169,204		17		835,593		-			-			835,610
Issuance of common stock for exercise of warrants		162,867		16		293,233		-			-			293,249
Foreign currency translation gain		-		-		-		-			3,239			3,239
Net loss		-		-		-		(31,964,469	)		-			(31,964,469	)
Balance as of March 31, 2024		23,159,119		2,314		1,397,815		(49,441,169	)		(9,569	)		(48,050,609	)
Stock-based compensation		-		-		261,636		-			-			261,636
Issuance of common stock for services		50,000		5		198,495		-			-			198,500
Issuance of common stock for exercise of warrants		100		-		800		-			-			800
Issuance of common stock for stock options exercise		294,448		29		146,943		-			-			146,972
Issuance of common stock for debt interest payment		232,360		23		1,008,400		-			-			1,008,423
Foreign currency translation gain		-		-		-		-			5,745			5,745
Net income		-		-		-		18,461,995			-			18,461,995
Balance as of June 30, 2024		23,736,027		2,372		3,014,089		(30,979,174	)		(3,824	)		(27,966,537	)
Stock-based compensation		-		-		273,170		-			-			273,170
Stock based compensation- warrants		-		-		284,478		-			-			284,478
Issuance of common stock for stock options exercise		30,000		3		49,197		-			-			49,200
Issuance of common stock for conversion of debt		305,961		30		934,766		-			-			934,796
Issuance of common stock and warrants for offering, net		2,882,883		288		7,289,712		-			-			7,290,000
Foreign currency translation gain		-		-		-		-			354			354
Net income		-		-		-		6,213,956			-			6,213,956
		26,954,871	$	2,693	$	11,845,412	$	(24,765,218	)	$	(3,470	)	$	(12,920,583	)
Balance as of January 1, 2025		30,588,413		3,056		21,918,867		(74,941,590	)		(3,470	)		(53,023,137	)
Stock-based compensation		-		-		428,286		-			-			428,286
Issuance of common stock for exercise of warrants		13,200		1		59,399		-			-			59,400
Issuance of common stock for stock options exercise		81,952		8		43,193		-			-			43,201
Issuance of common stock for earnout shares		1,160,906		117

SEC Form 10-Q filed by Airship AI Holdings Inc.