
New Jersey						22-2746503
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

(Address of principal executive offices) (Zip Code)


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common stock, no par value	EMKR	The Nasdaq Stock Market LLC	(Nasdaq Global Market)

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 E change 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 ~~August~~May 2, ~~2021,~~2022, the number of shares outstanding of our no par value common stock totaled ~~36,884,544.~~37,521,023.

For the Quarterly Period Ended ~~June 30, 2021~~March 31, 2022

REGARDING FORWARD-LOOKING STATEMENTS

•uncertainties regarding the effects of the COVID-19 pandemic and the impact of measures intended to reduce its spread on our business and operations, which is evolving and beyond our control;

•the effect of component shortages and any alternatives thereto;

•the rapidly evolving markets for our products and uncertainty regarding the development of these markets;

•our historical dependence on sales to a limited number of customers and fluctuations in the mix of products and customers in any period;

•delays and other difficulties in commercializing new products;

•the failure of new products: (a) to perform as expected without material defects, (b) to be manufactured at acceptable volumes, yields, and cost, (c) to be qualified and accepted by our customers, and (d) to successfully compete with products offered by our competitors;

•uncertainties concerning the availability and cost of commodity materials and specialized product components that we do not make internally;

•actions by competitors;

•risks and uncertainties related to applicable laws and regulations, including the impact of changes to applicable tax laws and tariff regulations;

•acquisition-related risks, including that (a) ~~the revenues~~revenue and net operating results obtained from the Systron Donner Inertial, Inc. ("SDI") business or the L3Harris Space and Navigation ("S&N") business may not meet our expectations, (b) the costs and cash expenditures for integration of the S&N business operations may be higher than expected, (c) there could be losses and liabilities arising from the acquisition of SDI or S&N that we will not be able to recover from any source and ~~(c)~~(d) we may not realize sufficient scale in our Navigation and Inertial Sensing product line from the SDI acquisition and the S&N acquisition and will need to take additional steps, including making additional acquisitions, to achieve our growth objectives for this product line;

•risks related to our ability to obtain capital;

•risks related to the transition of certain of our manufacturing operations from our Beijing facility to a contract manufacturer’s facility;

•risks and uncertainties related to manufacturing and production capacity and expansion plans related thereto; and

•other risks and uncertainties discussed in Part ~~II, Item 1A, Risk Factors in this Quarterly Report on Form 10-Q and in Part~~ I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2020,~~2021, as such risk factors may be amended, supplemented or superseded from time to time by our subsequent periodic reports we file with the Securities and Exchange Commission (“SEC”).

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income ~~(Loss)~~

For the ~~three~~Three and ~~nine months ended June 30,~~Six Months Ended March 31, 2022 and 2021 ~~and 2020~~

(in thousands, except per share data)

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

Condensed Consolidated Balance Sheets

As of ~~June 30, 2021~~March 31, 2022 and September 30, ~~2020~~2021

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

Condensed Consolidated Statements of Shareholders’ Equity

For the ~~three~~Three and ~~nine months ended June 30,~~Six Months Ended March 31, 2022 and 2021 ~~and 2020~~

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

Condensed Consolidated Statements of Cash Flows

For the ~~nine months ended June 30,~~Six Months Ended March 31, and 2021 ~~and 2020~~

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

•~~In March 2020,~~ the ~~FASB issued ASU 2019-12~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,~~ which removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. The new standard is effective for annual periods beginning after December 15, 2020, including interim periods within those annual periods. The new standard will be effective for our fiscal year beginning October 1, 2021 and early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on its condensed consolidated financial statements ~~and related~~upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited condensed consolidated statements of ~~consolidated~~ cash flows:

As of
(in thousands) June 30, 2021 September 30, 2020
Cash $ 12,121 $ 11,325
Cash equivalents 55,070 19,065
Restricted cash 1,106 148
Total cash, cash equivalents and restricted cash $ 68,297 $ 30,538

~~Accounting Standards Codification Topic 820 (“ASC 820”),~~ ~~Fair Value Measurement,~~ establishes a valuation hierarchy for disclosure of the inputs to valuation techniques used to measure fair value. This standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

•~~Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.~~

•Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly, through market corroboration, for substantially the full term of the financial instrument.

•~~Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets or liabilities at fair value.~~

As of
(in thousands) June 30, 2021 September 30, 2020
Accounts receivable, gross $ 31,728 $ 25,551
Allowance for credit loss (192) (227)
Accounts receivable, net $ 31,536 $ 25,324

As of
(in thousands) June 30, 2021 September 30, 2020
Equipment $ 36,778 $ 35,218
Furniture and fixtures 1,125 1,125
Computer hardware and software 3,585 3,473
Leasehold improvements 6,616 3,169
Construction in progress 8,893 10,301
Property, plant, and equipment, gross $ 56,997 $ 53,286
Accumulated depreciation (35,150) (32,234)
Property, plant, and equipment, net $ 21,847 $ 21,052


	As of
(in thousands)	March 31, 2022		September 30, 2021
Equipment	$	38,944	$	37,985
Furniture and fixtures	1,125		1,125
Computer hardware and software	3,576		3,575
Leasehold improvements	6,701		6,663
Construction in progress	11,377		9,247
Property, plant, and equipment, gross	$	61,723	$	58,595
Accumulated depreciation	(37,886)		(36,051)
Property, plant, and equipment, net	$	23,837	$	22,544

~~Table of Contents~~Geographical Concentrations

Long-lived assets consist of land, building, property, plant, and equipment. As of March 31, 2022 and September 30, 2021, 97% and 96%, respectively, of our long-lived assets were located in the United States. The remaining long-lived assets are primarily located in China.

NOTE 8.7. Accrued Expenses and Other Current Liabilities

The components of accrued expenses and other current liabilities consisted of the following:


		As of					As of
(in thousands)	(in thousands)	June 30, 2021		September 30, 2020		(in thousands)	March 31, 2022		September 30, 2021
Compensation	Compensation	$	7,146	$	6,916	Compensation	$	5,028	$	7,192
Warranty	Warranty	1,062		803		Warranty	1,112		1,125
Legal expenses and other professional fees	Legal expenses and other professional fees	127		211		Legal expenses and other professional fees	370		152
Contract liabilities	Contract liabilities	399		502		Contract liabilities	582		364
Income and other taxes	Income and other taxes	150		1,265		Income and other taxes	—		104
Severance and restructuring accruals	Severance and restructuring accruals	0		17		Severance and restructuring accruals	845		—
Deferred revenue						Deferred revenue	674		4
Litigation settlement						Litigation settlement	575		70
Other	Other	1,077		1,863		Other	1,284		925
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	$	9,961	$	11,577	Accrued expenses and other current liabilities	$	10,470	$	9,936

On May 3, 2020, we entered into a Paycheck Protection Program Promissory Note and Agreement with Wells Fargo Bank, N.A. (the "Lender") under the Paycheck Protection Program (“PPP”) established under the Coronavirus Aid, Relief and Economic Security Act and administered by the U.S. Small Business Administration (the “SBA”) to receive loan proceeds of $6.5 million (the “PPP Loan”), which the Company received on May 6, 2020.

Intellectual Property Lawsuits

Resilience Litigation

In April 2021, we filed with the Delaware Chancery Court our answer to the Resilience complaint and counterclaims against Resilience, in which we are seeking, among other items, ~~(i)~~(a) dismissal of the Resilience complaint and/or granting of judgment in favor of EMCORE with respect to the Resilience complaint, ~~(ii)~~(b) entering final judgment against Resilience awarding damages to us for Resilience’s fraud and breaches of the SDI Purchase Agreement in an amount to be proven at trial and not less than $1,565,000, ~~(iii)~~(c) a judicial determination of the respective rights and duties of us and Resilience under the SDI Purchase Agreement, ~~(iv)~~(d) an award to us of costs and expenses and ~~(v)~~(e) pre- and post-judgment interest. We believe that the claims made by Resilience in its complaint are without merit and we intend to vigorously defend ourselves against them.

•the 2010 Equity Incentive Plan,

•the 2012 Equity Incentive Plan, and

•the 2019 Equity Incentive Plan.

By Award Type For the three months ended June 30, For the nine months ended June 30,
(in thousands) 2021 2020 2021 2020
Employee stock options $ 1 $ 4 $ 3 $ 13
Restricted stock units and awards 573 403 1,505 1,331
Performance stock units and awards 403 255 989 910
Employee stock purchase plan 85 52 258 145
Outside director equity awards and fees in common stock 114 65 255 226
Total stock-based compensation expense $ 1,176 $ 779 $ 3,010 $ 2,625

Table of Contents

By Expense Type For the three months ended June 30, For the nine months ended June 30,
(in thousands) 2021 2020 2021 2020
Cost of revenue $ 220 $ 166 $ 564 $ 504
Selling, general, and administrative 752 488 1,830 1,564
Research and development 204 125 616 557
Total stock-based compensation expense $ 1,176 $ 779 $ 3,010 $ 2,625


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
(in thousands)	2022		2021		2022		2021
Employee stock options	$	—	$	1	$	—	$	2
RSUs and RSAs	549		501		1,103		932
PSUs and PRSAs	487		269		894		586
ESPP	—		84		��		173
Outside director equity awards and fees in common stock	108		76		235		141
Total stock-based compensation expense	$	1,144	$	931	$	2,232	$	1,834


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
(in thousands)	2022		2021		2022		2021
Cost of revenue	$	178	$	203	$	329	$	344
Selling, general, and administrative	781		519		1,536		1,078
Research and development	185		209		367		412
Total stock-based compensation expense	$	1,144	$	931	$	2,232	$	1,834

For the three months ended June 30, For the nine months ended June 30,
(in thousands, except per share data) 2021 2020 2021 2020
Numerator:
Income (Loss) from continuing operations $ 13,615 $ (1,287) $ 20,568 $ (7,703)
Undistributed earnings allocated to common stock shareholders for basic and diluted net income (loss) per share 13,615 (1,287) 20,568 (7,703)
Denominator:
Denominator for basic net income (loss) per share - weighted average shares outstanding 36,768 29,295 33,069 29,052
Denominator for fully diluted net (income) loss per share - weighted average shares outstanding 38,893 29,295 34,777 29,052
Net income (loss) per basic share $ 0.37 $ (0.04) $ 0.62 $ (0.27)
Net income (loss) per fully diluted share $ 0.35 $ (0.04) $ 0.59 $ (0.27)
Weighted average antidilutive options, unvested restricted stock units and awards, unvested performance stock units and ESPP shares excluded from the computation 2,138 1,410 1,947 1,316


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
(in thousands, except per share data)	2022		2021		2022		2021
Numerator
Net (loss) income	$	(2,225)	$	4,384	$	189	$	6,953
Denominator
Weighted average number of shares outstanding - basic	37,217		32,968		37,082		31,219
Effect of dilutive securities
Stock options	—		6		4		2
PSUs, RSUs, and restricted stock	—		1,477		1,298		1,271
Weighted average number of shares outstanding - diluted	37,217		34,451		38,384		32,492
Earnings per share - basic	$	(0.06)	$	0.13	$	0.01	$	0.22
Earnings per share - diluted	$	(0.06)	$	0.13	$	0.01	$	0.21
Weighted average antidilutive options, unvested restricted RSUs and RSAs, unvested PSUs and ESPP shares excluded from the computation	75		1,536		72		1,331

Table of ~~net loss per share for the three and nine months ended June 30, 2020 due to the Company incurring a net loss for such periods.~~Contents

~~Employee Stock Purchase Plan~~

We maintain an Employee Stock Purchase Plan (“ESPP”) which provides employees an opportunity to purchase common stock through payroll deductions. The ESPP is a 6-month duration plan with new participation periods beginning on approximately February 25 and August 26 of each year. The purchase price is set at 85% ofCompany's outstanding share-based awards, noted in the ~~average high and low market price of our common stock on either~~table above, were excluded because they were anti-dilutive, but they could become dilutive in the ~~first or last trading day of the participation period, whichever is lower, and annual contributions are limited to the lower of 10% of an employee’s compensation or $25,000.~~

~~Public Offering~~

On February 16, 2021, we closed our offering of 6,655,093 shares of our common stock, which included the full exercise of the underwriters’ option to purchase 868,056 additional shares of common stock, at a price to the public of $5.40 per share, resulting in net proceeds to us from the offering, after deducting the underwriting discounts and commissions and other offering expenses, of approximately $33.1 million. The shares were sold by us pursuant to an underwriting agreement with Cowen and Company, LLC, dated as of February 10, 2021.future.

Future Issuances

As of ~~June 30, 2021,~~March 31, 2022, we had common stock reserved for the following future issuances:

~~Table of Contents~~


			Number of Common Stock Shares Available for Future Issuances
Exercise of outstanding stock options			~~19,869~~13,884
Unvested ~~restricted stock units~~RSUs and ~~awards~~RSAs			~~1,851,187~~2,445,307
Unvested ~~performance stock units~~PSUs and ~~awards~~PRSAs (at 200% maximum payout)			~~1,934,000~~
~~Purchases under the ESPP~~			~~186,197~~4,098,106
Issuance of stock-based awards under the Equity Plans			~~1,774,341~~312,137
Purchases under the officer and director share purchase plan			88,741
Total reserved			~~5,854,335~~6,958,175

NOTE ~~13.~~12. Segment and Revenue Information

Reportable Segments

Reported below are the Company’s segments for which separate financial information is available and upon which operating results are evaluated by the chief operating decision maker, the Chief Executive Officer, to assess performance and to allocate resources. The Company’s Chief Executive Officer is the chief operating decision maker and he assesses the performance of the operating segments and allocates resources based on segment profits. The Company has determined that it has 2 reportable segments: (a) Aerospace and Defense and (b) Broadband:

•~~The Aerospace and Defense segment is comprised of two product lines: (i) Navigation and Inertial Sensing; and (ii) Defense Optoelectronics.~~

•~~The Broadband segment is comprised of three product lines: (i) CATV Lasers and Transmitters; (ii) Chip Devices; and (iii) Other.~~

~~Information on reportable segments utilized by our chief operating decision maker is as follows:~~

~~Table of Contents~~

(in thousands) For the three months ended June 30, For the nine months ended June 30,
2021 2020 2021 2020
Revenue:
Aerospace and Defense $ 12,327 $ 14,025 $ 39,097 $ 40,742
Broadband 30,331 13,241 75,393 35,856
Total revenue $ 42,658 $ 27,266 $ 114,490 $ 76,598
Segment Profit:
Aerospace and Defense gross profit $ 3,872 $ 4,877 $ 11,747 $ 12,209
Aerospace & Defense R&D expense 3,598 3,925 10,441 11,867
Aerospace and Defense segment profit $ 274 $ 952 $ 1,306 $ 342
Broadband gross profit $ 13,353 $ 4,341 $ 32,684 $ 10,910
Broadband R&D expense 902 882 2,126 2,166
Broadband segment profit $ 12,451 $ 3,459 $ 30,558 $ 8,744
Total consolidated segment profit $ 12,725 $ 4,411 $ 31,864 $ 9,086
Unallocated (income) expense:
Selling, general and administrative 6,081 5,936 17,941 18,962
Loss (gain) on sale of assets 250 (312) 439 (2,229)
Gain on extinguishment of debt (6,561) 0 (6,561) 0
Interest (income) expense, net (579) 40 (481) 54
Foreign exchange (gain) loss (87) 20 (256) 29
Total unallocated (income) expense (896) 5,684 11,082 16,816
Income (loss) before income tax expense (benefit) $ 13,621 $ (1,273) $ 20,782 $ (7,730)

We do not allocate sales and marketing, general and administrative expenses, or interest expense and interest income to our segments, because management does not include the information in its measurement of the performance of the operating segments. Also, a measure of segment assets and liabilities has not been provided to the Company's chief operating decision maker and therefore is not shown ~~above.~~below.

~~Geographical~~ Information on reportable segments utilized by the chief operating decision maker is as follows:


(in thousands)	For the Three Months Ended March 31,				For the Six Months Ended March 31,
	2022		2021		2022		2021
Revenue
Aerospace and Defense	$	9,006	$	13,134	$	18,906	$	26,770
Broadband	23,644		25,272		55,980		45,062
Total revenue	$	32,650	$	38,406	$	74,886	$	71,832
Segment income
Aerospace and Defense gross profit	$	1,233	$	3,775	$	2,917	$	7,875
Aerospace and Defense research and development expense	4,041		3,157		8,203		6,843
Aerospace and Defense segment profit	$	(2,808)	$	618	$	(5,286)	$	1,032
Broadband gross profit	$	7,784	$	10,859	$	21,897	$	19,331
Broadband research and development expense	494		614		959		1,224
Broadband segment profit	$	7,290	$	10,245	$	20,938	$	18,107
Consolidated segment profit	$	4,482	$	10,863	$	15,652	$	19,139
Unallocated expense
Selling, general, and administrative	$	7,563	$	6,062	$	14,750	$	11,860
Severance	20		—		1,318		—
(Gain) loss on sale of assets	(788)		218		(601)		189
Interest expense, net	12		49		23		98
Foreign exchange loss (gain)	17		68		(25)		(169)
Total unallocated expense	$	6,824	$	6,397	$	15,465	$	11,978
(Loss) income before income tax benefit (expense)	$	(2,342)	$	4,466	$	187	$	7,161

Product Categories

Table of Contents

Revenue is classified by major product category and is presented below:


	For the Three Months Ended March 31,
(in thousands)	2022		% of Revenue		2021		% of Revenue
Aerospace and Defense
Navigation and Inertial Sensing	$	7,615	23	%	$	8,993	23	%
Defense Optoelectronics	1,391		4		4,141		11
Broadband
CATV Lasers and Transmitters	20,984		64		21,120		55
Chip Devices	1,113		3		841		2
Other Optical Products	1,547		5		3,311		9
Total revenue	$	32,650	100	%	$	38,406	100	%


	For the Six Months Ended March 31,
(in thousands)	2022		% of Revenue		2021		% of Revenue
Aerospace and Defense
Navigation and Inertial Sensing	$	15,760	21	%	$	18,195	25	%
Defense Optoelectronics	3,146		4		8,575		12
Broadband
CATV Lasers and Transmitters	49,443		66		38,435		54
Chip Devices	2,181		3		1,584		2
Other Optical Products	4,356		6		5,043		7
Total revenue	$	74,886	100	%	$	71,832	100	%

Geographical Concentration

The following table sets forth revenue by geographic area based on our customers’ billing address:

For the three months ended June 30, For the nine months ended June 30,
(in thousands) 2021 2020 2021 2020
United States and Canada $ 37,705 $ 23,209 $ 100,157 $ 63,291
Asia 2,305 2,041 9,475 5,999
Europe 1,603 1,075 2,817 4,480
Other 1,045 941 2,041 2,828
Total revenue $ 42,658 $ 27,266 $ 114,490 $ 76,598

~~Long-lived Assets~~

Long-lived assets consist of land, building and property, plant, and equipment. As of June 30, 2021 and September 30, 2020, 96% and 97%, respectively, of our long-lived assets were located in the United States. The remaining long-lived assets are primarily located in China.

~~Table of Contents~~

~~Disaggregated Revenue~~

~~Revenue is classified based on the product line of business:~~

For the three months ended June 30, For the nine months ended June 30,
(in thousands) 2021 % of
Revenue 2020 % of
Revenue 2021 % of
Revenue 2020 % of
Revenue
Navigation and Inertial Sensing $ 9,280 22 % $ 9,861 36 % $ 27,475 24 % $ 28,970 38 %
Defense Optoelectronics 3,047 7 4,164 16 11,622 10 11,772 15
CATV Lasers and Transmitters 27,364 64 10,905 40 65,799 57 29,070 38
Chip Devices 819 2 1,443 5 2,403 2 4,033 5
Other 2,148 5 893 3 7,191 6 2,753 4
Total revenue $ 42,658 100 % $ 27,266 100 % $ 114,490 100 % $ 76,598 100 %


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
(in thousands)	2022		2021		2022		2021
United States and Canada	$	29,652	$	33,106	$	67,708	$	62,452
Asia	1,728		4,145		4,814		7,170
Europe	936		558		1,756		1,214
Other	334		597		608		996
Total revenue	$	32,650	$	38,406	$	74,886	$	71,832

~~Revenue by~~Significant Customers

Significant customers are defined as customers representing greater than 10% of ~~our~~ consolidated revenue. Revenue from 2 and 3 of our significant customers represented an aggregate of 62% and 58% of our consolidated revenue for the three months ended June 30, 2021 and 2020, respectively. The percentage from significant customers increased driven by higher Broadband revenue.

Revenue from three of our significant customers represented an aggregate of 70% and 55% of our consolidated revenue for the nine months ended June 30, 2021 and 2020, respectively. The percentage from significant customers increased driven by higher Broadband revenue.

Significant portions of the Company’s sales are concentrated among a limited number of customers. Revenue from two and three of our significant customers represented an aggregate of 62% and 68% of our consolidated revenue for the three months ended March 31, 2022 and 2021, respectively. Revenue from two and three of our significant customers represented an aggregate of 64% and 69% of our consolidated revenue for the six months ended March 31, 2022 and 2021, respectively. The percentage from significant customers decreased due to lower Aerospace and Defense revenue.

The duration, severity, and future impact of the COVID-19 pandemic ~~are~~is highly uncertain and could result in significant disruptions to the business operations of the Company’s customers. If one or more of these significant customers significantly decreases their orders for the Company’s products, or if we are unable to deliver finished products to the customer in connection with such orders, the Company’s business could be materially and adversely affected.

NOTE 13. Subsequent Event

Table of Contents

On April 29, 2022, we completed the previously announced acquisition of the L3Harris Technologies, Inc. (“L3H”) Space and Navigation business (“S&N”) pursuant to that certain Sale Agreement, dated as of February 14, 2022 (as amended, the “Sale Agreement”), entered into by and among the Company, Ringo Acquisition Sub, Inc. and L3H, pursuant to which we acquired certain intellectual property, assets, and liabilities of S&N for aggregate consideration of approximately $5.0 million, exclusive of transaction costs and expenses and subject to certain post-closing working capital adjustments. In consideration of the recency of the completion of the purchase, we have not completed the initial accounting for the business combination and have not evaluated stand-alone acquiree revenue and earnings in the pre-acquistion period for supplemental pro-forma presentation and, accordingly have not included disclosure related to such items.

Table of Contents

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included in Financial Statements under Item 1 within this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. See Cautionary Statement Regarding Forward-Looking Statements preceding Item 1 of this Quarterly Report.

Business Overview

EMCORE Corporation (referred to herein, together with its subsidiaries, as the “Company,” “we,” “our,” or “EMCORE”) ~~was established in 1984 as a New Jersey corporation. The Company became publicly traded in 1997 and is listed on The Nasdaq Stock Market under the ticker symbol EMKR. EMCORE~~ is a leading provider of sensors for navigation in the ~~Aerospace~~aerospace and ~~Defense~~defense market as well as a manufacturer of lasers and optical subsystems for use in the Cable TV ~~(“CATV”~~("CATV") industry.

~~EMCORE~~We pioneered the linear fiber optic transmission technology that enabled the world’s first delivery of CATV directly on fiber, and today isare a leading provider of advanced ~~Mixed-Signal Optics~~mixed-signal products serving the aerospace and defense and broadband communications ~~and Aerospace and Defense~~ markets. The ~~Mixed-Signal Optics~~mixed-signal technology, at the heart of our broadband communications products, is shared with our fiber optic ~~gyros~~gyroscopes ("FOG") and inertial sensors to provide the aerospace and defense markets with state-of-the-art ~~navigations~~navigation systems technology. With the acquisition of Systron Donner Inertial, Inc. (“SDI”), a navigation systems provider with a scalable, chip-based platform for higher volume gyro applications utilizing Quartz MEMS technology, in June 2019, EMCORE further expanded its portfolio of gyros and inertial sensors with SDI’s quartz MEMS gyro and accelerometer technology.

~~EMCORE has~~We have fully vertically-integrated manufacturing capability through our indium phosphide ("InP") compound semiconductor wafer fabrication facility at our headquarters in Alhambra, CA, and through our quartz processing and sensor manufacturing facility in Concord, CA. These facilities support ~~EMCORE’s~~our vertically-integrated manufacturing strategy for quartz and ~~fiber optic gyro~~FOG products for navigation systems, and for our chip, laser, transmitter, and receiver products for broadband applications.

We have two reporting segments: (a) Aerospace and Defense and (b) Broadband. Aerospace and Defense is comprised of two product lines: (i) Navigation and Inertial ~~Sensing;~~Sensing, and (ii) Defense Optoelectronics. ~~The~~ Broadband ~~segment~~ is comprised of three product lines: (i) CATV Lasers and ~~Transmitters;~~Transmitters, (ii) Chip ~~Devices;~~Devices, and (iii) ~~Other.~~Other Optical Products.

Recent Developments

Acquisition of L3Harris Space & Navigation Business

COVID-19

We are subject to ongoing risks and uncertainties as a result of the COVID-19 pandemic. The full extent of the COVID-19 impact ~~of COVID-19~~ on ~~our~~ operational and financial performance is highly uncertain, out of our control, and cannot be predicted.

Each region we and our supply chain partners operate in has been affected by COVID-19 at varying times and magnitudes, often creating unforeseen challenges associated with logistics, raw material supply, and labor shortages. ~~Many of our suppliers have at times temporarily ceased or limited operations as a result of COVID-19 and failed to deliver parts or components to us.~~ For example, induring the three months ended ~~June 30, 2021, COVID-19 driven~~March 31, 2022, unexpected delays and cancellations of key component ~~shortages~~deliveries required us to ~~spend significant time sourcing~~source critical components from alternative sources ~~and, in some cases, forced us to design in alternative parts and qualify them with customers~~ on short ~~schedules. In addition, we continue to closely monitor~~schedules and at increased prices. These and other actions resulting from the ~~level~~effects of COVID-19 ~~transmission in Thailand, which has negatively affected and~~ may continue in the future and cause additional challenges to ~~affect production levels~~and disruptions of our ~~CATV module~~business, inventory levels, operating results, and ~~transmitter products by our contract manufacturer located there.~~cash flows.

In addition, restrictions related to the COVID-19 pandemic have negatively affected the timing of the sale and transfer of certain CATV module and transmitter manufacturing equipment to the Buyers (defined below), as described in more detail below under “Hytera Transactions”. Travel into Thailand by our manufacturing engineers to support the transfer remains difficult. While we are taking actions within our supply chain and manufacturing operations to mitigate the effects of these delays, the timing and completion of these transfers may be further disrupted as a result of COVID-19, which could delay our recognition of the anticipated benefits of transferring this equipment and could disrupt our manufacturing activities for these products.

Our customer orders to date have generally remained stable with our pre-COVID-19 outlook, except with respect to customer orders related to the CATV Lasers and Transmitters product line, which have increased. However, qualification testing for

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certain of our products has continued to be delayed due to customer engineering shortages and limitations on their ability to access their facilities, and development timelines for certain programs continue to be extended. We continue to analyze on an ongoing basis how COVID-19 related actions could affect our product development efforts, future customer demand, timing of orders, recognized ~~revenues,~~revenue, and cash flows.

Equity Offering

On February 16, 2021, we closed ~~our~~an offering of 6,655,093 shares of our common stock, which included the full exercise of the underwriters’ option to purchase 868,056 additional shares of common stock, at a price to the public of $5.40 per share, resulting in net proceeds to us from the offering, after deducting the underwriting discounts and commissions and other offering

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expenses, of approximately $33.1 million. The shares were sold by us pursuant to an underwriting agreement with Cowen and Company, LLC, dated ~~as of~~ February 10, 2021.

Hytera and Fastrain Transactions

As part of the effort to streamline operations and move to a variable cost model in our CATV Lasers and Transmitters product line, on October 25, 2019, we entered into an Asset Purchase Agreement (the ~~“Asset~~“Hytera Asset Purchase Agreement”) with Hytera Communications (Hong Kong) Company Limited, a limited liability company incorporated in Hong Kong (“Hytera HK”), and Shenzhen Hytera Communications Co., Ltd., a corporation formed under the laws of the P.R.C. (“Shenzhen Hytera”, and together with Hytera HK, ~~the “Buyers”~~“Hytera”), pursuant to which ~~the Buyers~~Hytera agreed to purchase from ~~EMCORE~~us certain CATV module and transmitter manufacturing equipment (the “Equipment”) that we owned ~~by EMCORE~~ and ~~currently~~that was located at the manufacturing facility of ~~EMCORE’s~~our wholly-owned subsidiary, EMCORE Optoelectronics (Beijing) Co, Ltd., a corporation formed under the laws of the P.R.C..

On August 9, 2021, we entered into an Asset Purchase Agreement (the “Fastrain Asset Purchase Agreement”) with each of Shenzhen Fastrain Technology Co., Ltd., a corporation formed under the laws of the P.R.C. (“Shenzhen Fastrain”), and Hong Kong Fastrain Company Limited, a limited liability company incorporated in Hong Kong (“HK Fastrain”, and together with Shenzhen Fastrain, collectively, “Fastrain”), pursuant to which, among other items, Fastrain agreed to purchase all of the Equipment subject to the Hytera Asset Purchase Agreement, along with certain other equipment owned by us, for an aggregate ~~purchase~~ price of ~~$5.5 million.~~$6.2 million, of which (a) $4.9 million had been paid to us as of March 31, 2022 and (b) $1.1 million remains to be paid to us in connection with the Equipment that is expected to be transferred pursuant to one or more closings occurring in the quarter ending June 30, 2022.

Concurrently with the execution of the Fastrain Asset Purchase Agreement, we and Fastrain entered into a Manufacturing Supply Agreement, dated August 9, 2021 (as amended, the “Fastrain Manufacturing Agreement”), pursuant to which Fastrain agreed to manufacture for us, from a manufacturing facility or facilities located in Thailand or Malaysia and for an initial term ending on December 31, 2025, the CATV Laser and Transmitter products set forth in the Fastrain Manufacturing Agreement. In the Fastrain Manufacturing Agreement, (a) we agreed to pay certain shortfall penalties in the event that orders for manufactured products are below certain thresholds beginning in calendar year 2021 and continuing through calendar year 2025, and (b) Fastrain agreed to pay certain surplus bonuses to us in the event that deliveries for manufactured products in either of the 24 month periods beginning on January 1, 2021 and ending on December 31, 2022 or beginning on January 1, 2023 and ending on December 31, 2024 exceed certain thresholds. No such shortfall penalties had accrued or become payable as of the quarter ended March 31, 2022.

The transfer of the Equipment currently owned by us is in the process of being transferred to the Buyers in multiple closings, some of which have been delayed due to travel restrictions and the customer product qualification process during the COVID-19 pandemic, the last of which is now expected to occur during the quarter ending ~~March 31,~~June 30, 2022, with corresponding payments totaling $1.3 million expected to be received during the quarter ending June 30, 2022. Concurrently, with our entry into the Asset Purchase Agreement, we entered into a Contract Manufacturing Agreement (the “Manufacturing Agreement”) on October 25, 2019, pursuant to which the Buyers agreed to manufacture certain CATV module and transmitter products for us from a manufacturing facility located in Thailand for an initial five year term at product prices agreed to between the parties. The manufacture, purchase and sale of certain CATV module and transmitter products from the Thailand manufacturing facility pursuant to the Manufacturing Agreement has commenced and is ongoing.

~~Sale/Leaseback Transaction~~

SDI entered into a Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate (Non-Residential) (the “Concord Purchase Agreement”) dated as of December 31, 2019 with Parkview Management Group, Inc., pursuant to which the parties agreed to consummate a sale and leaseback transaction (the “Sale and Leaseback Transaction”). Under the terms of the Concord Purchase Agreement, SDI sold the property located in Concord, California (the “Concord Real Property”) to Eagle Rock Holdings, LP (“Buyer”), an affiliate of Parkview Management Group, Inc. on February 10, 2020 for a total purchase price of $13.2 million. SDI received net proceeds of $12.8 million after transaction commissions and expenses incurred in connection with the sale. At the consummation of the Sale and Leaseback Transaction, SDI entered into a Single-Tenant Triple Net Lease (the “Lease Agreement”) with Buyer, pursuant to which SDI leased back from Buyer the Concord Real Property for a term commencing on the consummation of the Sale and Leaseback Transaction and ending fifteen (15) years after the consummation of the Sale and Leaseback Transaction, unless earlier terminated or extended in accordance with the terms of the Lease Agreement. Under the Lease Agreement, SDI’s financial obligations will include a base monthly rent of $0.75 per square foot, or approximately $77,500 per month, which rent will increase on an annual basis at three percent (3%) over the life of the lease. In connection with the execution of the Lease Agreement, EMCORE executed a Lease Guaranty (the “Guaranty”) with Buyer under which EMCORE guaranteed payment of the monthly rent, any additional rent, interest, and any charges to be paid by SDI under the Lease Agreement.

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~~Result~~Results of Operations

The following table sets forth our ~~Condensed Consolidated Statements~~results of ~~Operations and Comprehensive Income (Loss)~~operations as a percentage of revenue:
For the three months ended June 30, For the nine months ended June 30,
2021 2020 2021 2020
Revenue 100.0 % 100.0 % 100.0 % 100.0 %
Cost of revenue 59.6 66.2 61.2 69.8
Gross profit 40.4 33.8 38.8 30.2
Operating expense:
Selling, general, and administrative 14.3 21.8 15.7 24.8
Research and development 10.5 17.6 11.0 18.3
Loss (gain) on sale of assets 0.6 (1.1) 0.4 (2.9)
Total operating expense 25.4 38.3 27.0 40.2
Operating income (loss) 15.0 (4.5) 11.8 (10.0)
Other income (expense) :
Gain on extinguishment of debt 15.4 — 5.7 —
Interest income (expense), net 1.4 (0.1) 0.4 (0.1)
Foreign exchange gain (loss) 0.2 (0.1) 0.2 —
Total other income (expense) 16.9 (0.2) 6.4 (0.1)
Income (loss) before income tax expense 31.9 (4.7) 18.2 (10.1)
Income tax expense — — (0.2) —
Net income (loss) 31.9 % (4.7) % 18.0 % (10.1) %
Foreign exchange translation adjustment — — — —
Comprehensive income (loss) 31.9 % (4.7) % 17.9 % (10.1) %


	For the Three Months Ended March 31,				For the Six Months Ended March 31,
	2022		2021		2022		2021
Revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of revenue	72.4		61.9		66.9		62.1
Gross profit	27.6		38.1		33.1		37.9
Operating expense:
Selling, general, and administrative	23.2		15.8		19.7		16.5
Research and development	13.9		9.8		12.2		11.2
Severance	0.1		—		1.8
(Gain) loss on sale of assets	(2.4)		0.6		(0.8)		0.3
Total operating expense	34.7		26.2		32.9		28.0
Operating (loss) income	(7.1)	%	11.9	%	0.2	%	9.9	%

Comparison of ~~Financial~~ Results

For the three months ended June 30,
(in thousands, except percentages) 2021 2020 Change
Revenue $ 42,658 $ 27,266 $ 15,392 56.5 %
Cost of revenue 25,433 18,048 7,385 40.9
Gross profit 17,225 9,218 8,007 86.9
Operating expense:
Selling, general, and administrative 6,081 5,936 145 2.4
Research and development 4,500 4,807 (307) (6.4)
Loss (gain) on sale of assets 250 (312) 562 180.1
Total operating expense 10,831 10,431 400 3.8
Operating income (loss) 6,394 (1,213) 7,607 627.1
Other income (expense):
Gain on extinguishment of debt 6,561 — 6,561 100.0
Interest income (expense), net 579 (40) 619 1,547.5
Foreign exchange gain (loss) 87 (20) 107 535.0
Total other income (expense) 7,227 (60) 726 1,210.0
Income (loss) before income tax (expense) benefit 13,621 (1,273) 8,333 654.6
Income tax (expense) benefit (6) (14) 8 57.1
Net income (loss) $ 13,615 $ (1,287) $ 8,341 648.1 %
Foreign exchange translation adjustment (5) 2 (7) (350.0)
Comprehensive income (loss) $ 13,610 $ (1,285) $ 14,895 1,159.1 %

of Operations

2220

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	For the Three Months Ended March 31,
(in thousands, except percentages)	2022		2021		Change
Revenue	$	32,650	$	38,406	$	(5,756)	(15.0)	%
Cost of revenue	23,633		23,772		(139)		(0.6)
Gross profit	9,017		14,634		(5,617)		(38.4)
Operating expense:
Selling, general, and administrative	7,563		6,062		1,501		24.8
Research and development	4,535		3,771		764		20.3
Severance	20		—		20		100.0
(Gain) loss on sale of assets	(788)		218		(1,006)		(461.5)
Total operating expense	11,330		10,051		1,279		12.7
Operating (loss) income	$	(2,313)	$	4,583	$	(6,896)	(150.5)	%


	For the Six Months Ended March 31,
(in thousands, except percentages)	2022		2021		Change
Revenue	$	74,886	$	71,832	$	3,054	4.3	%
Cost of revenue	50,072		44,626		5,446		12.2
Gross profit	24,814		27,206		(2,392)		(8.8)
Operating expense:
Selling, general, and administrative	14,750		11,860		2,890		24.4
Research and development	9,162		8,067		1,095		13.6
Severance	1,318		—		1,318		100.0
(Gain) loss on sale of assets	(601)		189		(790)		(418.0)
Total operating expense	24,629		20,116		4,513		22.4
Operating income	$	185	$	7,090	$	(6,905)	(97.4)	%

Revenue


		For the three months ended June 30,									For the Three Months Ended March 31,
(in thousands, except percentages)	(in thousands, except percentages)	2021		2020		Change				(in thousands, except percentages)	2022		2021		Change
Aerospace and Defense revenue		$	12,327	$	14,025	$	(1,698)	(12.1)	%
Broadband revenue		30,331		13,241		17,090		129.1
Aerospace and Defense										Aerospace and Defense	$	9,006	$	13,134	$	(4,128)	(31.4)	%
Broadband										Broadband	23,644		25,272		(1,628)		(6.4)
Total revenue	Total revenue	$	42,658	$	27,266	$	15,392	56.5	%	Total revenue	$	32,650	$	38,406	$	(5,756)	(15.0)	%


	For the Six Months Ended March 31,
(in thousands, except percentages)	2022		2021		Change
Aerospace and Defense	$	18,906	$	26,770	$	(7,864)	(29.4)	%
Broadband	55,980		45,062		10,918		24.2
Total revenue	$	74,886	$	71,832	$	3,054	4.3	%

Aerospace and Defense ~~Revenue~~

Broadband ~~Revenue~~


	For the Six Months Ended March 31,
(in thousands, except percentages)	2022		2021		Change
Aerospace and Defense	$	2,917	$	7,875	$	(4,958)	(63.0)	%
Broadband	21,897		19,331		2,566		13.3
Total gross profit	$	24,814	$	27,206	$	(2,392)	(8.8)	%

Aerospace and Defense ~~Gross Profit~~

~~Broadband Gross Profit~~ Higher manufacturing costs were a result of our change in contract manufacturer, as well as under-absorption of fixed overhead at our Alhambra manufacturing facility.

Selling, General and Administrative ~~(“SG&A”)~~

Research and Development ~~(“R&D”)~~

(Gain) Loss on Sale of Assets

Operating (Loss) Income ~~(Loss)~~

~~Gain on Extinguishment of Debt~~

~~Interest Income (Expense), net~~

~~Foreign Exchange Gain (Loss)~~

For the nine months ended June 30,
(in thousands, except percentages) 2021 2020 Change
Revenue $ 114,490 $ 76,598 $ 37,892 49.5 %
Cost of revenue 70,059 53,479 16,580 31.0
Gross profit 44,431 23,119 21,312 92.2
Operating expense:
Selling, general, and administrative 17,941 18,962 (1,021) (5.4)
Research and development 12,567 14,033 (1,466) (10.4)
Loss (gain) on sale of assets 439 (2,229) 2,668 119.7
Total operating expense 30,947 30,766 181 0.6
Operating income (loss) 13,484 (7,647) 21,131 276.3
Other income (expense):
Gain on extinguishment of debt 6,561 — 6,561 100.0
Interest income (expense), net 481 (54) 535 990.7
Foreign exchange gain (loss) 256 (29) 285 982.8
Total other income (expense) 7,298 (83) 7,381 8892.8
Income (loss) before income tax expense 20,782 (7,730) 28,512 368.8
Income tax (expense) benefit (214) 27 (241) (892.6)
Net income (loss) $ 20,568 $ (7,703) $ 28,271 367.0 %
Foreign exchange translation adjustment (26) (5) (21) (420.0)
Comprehensive income (loss) $ 20,542 $ (7,708) $ 28,250 366.5 %

For the nine months ended June 30,
(in thousands, except percentages) 2021 2020 Change
Aerospace and Defense revenue $ 39,097 $ 40,742 $ (1,645) (4.0) %
Broadband revenue 75,393 35,856 39,537 110.3
Total revenue $ 114,490 $ 76,598 $ 37,892 49.5 %

~~Aerospace and Defense Revenue~~

~~Broadband Revenue~~

For the nine months ended June 30,
(in thousands, except percentages) 2021 2020 Change
Aerospace and Defense gross profit $ 11,747 $ 12,209 $ (462) (3.8) %
Broadband gross profit 32,684 10,910 21,774 199.6 %
Total gross profit $ 44,431 $ 23,119 $ 21,312 92.2 %

~~Aerospace and Defense Gross Profit~~

~~Broadband Gross Profit~~

~~Gain on Extinguishment of Debt~~

~~Interest Income (Expense), net~~

~~Foreign Exchange Gain~~ ~~(Loss)~~

•We maintain a credit facility with Wells Fargo ~~Bank, N.A. (“Wells Fargo”)~~ that provides us with a revolving credit line of up to $15.0 million that can be used as required for operations, subject to certain liquidity and availability ~~requirements (the “Credit Facility”).~~requirements. The Credit Facility had ~~$13.4~~$6.1 million available for borrowing as of ~~June 30, 2021.~~March 31, 2022. See Note 98 - Credit Facility and Debt in the notes to the condensed consolidated financial statements for additional information regarding the Credit Facility.

•In October 2019, we entered into an outsourcing arrangement with Hytera pursuant to which we agreed to sell to Hytera, for total consideration of $5.5 million, certain of our CATV Lasers and Transmitters manufacturing equipment for purposes of outsourcing manufacturing of our CATV Lasers and Transmitters product lines to Hytera. We have received a total of $3.8 million pursuant to this sale through June 30, 2021, with the remaining amount expected to be paid during the fiscal year ending September 30, 2022. See Management’s Discussion and Analysis of Financial Condition and Results of Operations Recent Developments under the heading "Hytera Transactions" for additional information regarding the transaction with Hytera.

•In May 2020, we entered into the Paycheck Protection Program Promissory Note and Agreement with Wells Fargo under the Paycheck Protection Program (“PPP”) established under the Coronavirus Aid, Relief and Economic Security Act and received loan proceeds of $6.5 million (the “PPP Loan”). In March 2021, we applied for forgiveness of the PPP Loan and, in July 2021, we received notice that the PPP Loan had been forgiven in full, including accrued interest

~~thereon. See Note 9 – Credit Facilities and Debt in the notes to the consolidated financial statements for additional information regarding our PPP Loan.~~

•In February 2020, SDI entered into the Sale and Leaseback Transaction with the Buyer for the sale of the Concord Real Property for a total purchase price of $13.2 million, netting proceeds of $12.8 million after transaction commissions and expenses incurred in connection with the sale. See Management’s Discussion and Analysis of Financial Condition and Results of Operations Recent Developments for additional information regarding the Sale/Leaseback Transaction.

•On February 16, 2021, we closed our offering of 6,655,093 shares of our common stock at a price of $5.40 per share, resulting in net proceeds to us from the offering of $33.1 million. See Management’s Discussion and Analysis of Financial Condition and Results of Operations Recent Developments under the heading "Equity Offering" for additional information regarding the equity offering.

•In October 2019, we entered into the Hytera Asset Purchase Agreement pursuant to which we agreed to sell certain of our CATV Lasers and Transmitters manufacturing equipment for purposes of outsourcing manufacturing of our CATV Lasers and Transmitters product lines to Hytera. In August 2021, we entered into the Fastrain Asset Purchase Agreement, pursuant to which, among other items, Fastrain agreed to purchase the same equipment subject to the Hytera Asset Purchase Agreement, along with additional equipment, for aggregate consideration of $6.2 million. See Management’s Discussion and Analysis of Financial Condition and Results of Operations - Recent Developments under the heading "Hytera and Fastrain Transactions" for additional information regarding the transactions with Hytera and Fastrain.

We believe that our existing balances of cash and cash equivalents, cash flows from operations and amounts expected to be available under our Credit Facility (or a replacement facility, if any, to the extent the expiration of the Credit Facility occurs in ~~November 2021)~~

May 2022) will provide us with sufficient financial resources to meet our cash requirements for operations, working capital, and capital expenditures for at least the next twelve months from the issuance date ~~of the issuance~~ of these financial statements.

Operating Activities

Working Capital Components

Accounts Receivable We generally expect the level of accounts receivable at any given quarter end to reflect the level of sales in that quarter. ~~Our accounts~~Accounts receivable balances have fluctuated historically ~~fluctuated~~ due to the timing of account collections, timing of product shipments, and/or change in customer credit terms.

Inventory We generally expect the level of inventory at any given quarter end to reflect the change in our expectations of forecasted sales during the quarter. ~~Our inventory~~Inventory balances have fluctuated historically ~~fluctuated~~ due to the timing of customer orders and product shipments, changes in ~~our~~ internal forecasts related to customer demand, as well as adjustments related to excess and obsolete ~~inventory and the purchase of non-current~~ inventory.

Accounts Payable The fluctuation of our accounts payable balances is primarily driven by changes in inventory purchases as well as changes related to the timing of actual payments to vendors.

Accrued Expenses Our largest accrued expense typically relates to compensation. Historically, fluctuations of ~~our~~ accrued expense accounts have primarily related to changes in the timing of actual compensation payments, receipt or application of advanced payments, adjustments to ~~our~~ warranty accrual, and accruals related to professional fees.

Investing Activities

Financing Activities

For the nine months ended June 30,
(in thousands, except percentages) 2021 2020 Change
Net cash provided by financing activities $ 33,397 $ 1,190 $ 32,207 2,706.5 %


	For the Six Months Ended March 31,
(in thousands, except percentages)	2022		2021		Change
Net cash (used in) provided by financing activities	$	(127)	$	33,486	$	(33,613)	(100.4)	%

a.Evaluation of Disclosure Controls and Procedures

Our management, with the participation of its Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer and Accounting Officer), evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of ~~June 30, 2021.~~March 31, 2022. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

b.Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act) during the quarter ended ~~June 30, 2021~~March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

See the disclosures under the caption “Legal Proceedings” in "Note 1110 - Commitments and Contingencies" in the notes to ~~our~~ condensed consolidated financial statements for disclosures related to our legal proceedings, which disclosures are incorporated herein by reference.

The full effects of COVID-19 and other potential future public health crises, epidemics, pandemics or similar events are uncertain and could have a material and adverse effect on our business, financial condition, operating results and cash flows.

The ongoing COVID-19 pandemic has negatively affected the U.S. and global economy, disrupted global supply chains, significantly restricted travel and transportation, resulted in mandated closures and orders to “shelter-in-place,” and created significant disruption of the financial markets. The full extent of the COVID-19 impact on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic, the emergence of new strains of the virus, the impact of vaccination efforts and related actions taken by the U.S. government, state and local government officials, and international governments to prevent disease spread, all of which are uncertain, out of our control and cannot be predicted.

We rely on other companies to provide materials, major components and products, and to perform a portion of the services that are provided to our customers under the terms of most of our contracts where we rely on these third parties. Many of our suppliers have at times temporarily ceased or limited operations as a result of COVID-19 and failed to deliver parts or components to us. For example, in the quarters ended March 31, and June 30, 2021, COVID-19 driven component shortages required us to spend significant time sourcing critical components from alternative sources and, in some cases, forced us to design in alternative parts and qualify them with customers on short schedules.These or similar actions may continue in the future, and an extended period of global supply chain disruption caused by the response to COVID-19 could impact our ability to perform on our contracts and, if we are not able to implement alternatives or other mitigations, product deliveries could be adversely impacted.

As a result of COVID-19, we could see reduced customer orders in certain of our product lines, which could adversely affect our revenues, financial performance and cash flows, and could result in inventory write-downs and impairment losses. Significant delays in inspection, acceptance and payment by our customers, many of whom are teleworking, could also affect our revenues and cash flows, and current limitations on travel to customers could impact orders. For example, ~~qualification testing for certain of our products continues to be delayed due to customer engineering shortages and limitations on their ability to access their facilities. In addition, l~~imitations on government operations can also impact regulatory approvals such as export licenses that are needed for international sales and deliveries for certain of our products. Government funding priorities may change as a result of the costs of COVID-19, which could adversely affect our revenues arising from government contracts or subcontracts, and with respect to such contracts, we could experience delays in new program starts or awards of future work or in timelines for current programs, as well as the uncertain impact of contract modifications to respond to the national emergency.

Management contract or compensatory plan

*** Furnished herewith

EMCORE CORPORATION

Date:

~~August~~May 5, ~~2021~~2022

By:

/s/ Jeffrey Rittichier

Jeffrey Rittichier

Chief Executive Officer
(Principal Executive Officer)

Date:

~~August~~May 5, ~~2021~~2022

By:

/s/ Tom Minichiello

Tom Minichiello

Chief Financial Officer
(Principal Financial and Accounting Officer)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended ~~June 30, 2021~~March 31, 2022
or
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from ___ to ___


		As of					As of
		June 30, 2021		September 30, 2020			March 31, 2022		September 30, 2021
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	67,191	$	30,390	Cash and cash equivalents	$	80,928	$	71,621
Restricted cash	Restricted cash	1,106		148		Restricted cash	21		61
Accounts receivable, net of credit loss of $192 and $227, respectively		31,536		25,324
Accounts receivable, net of credit loss of $225 and $260, respectively						Accounts receivable, net of credit loss of $225 and $260, respectively	27,203		31,849
Contract assets	Contract assets	220		1,566		Contract assets	491		361
Inventory	Inventory	33,362		25,525		Inventory	28,049		32,309
Prepaid expenses and other current assets	Prepaid expenses and other current assets	6,295		5,589		Prepaid expenses and other current assets	6,543		6,877
Assets held for sale	Assets held for sale	1,404		1,568		Assets held for sale	735		1,241
Total current assets	Total current assets	141,114		90,110		Total current assets	143,970		144,319
Property, plant, and equipment, net	Property, plant, and equipment, net	21,847		21,052		Property, plant, and equipment, net	23,837		22,544
Goodwill	Goodwill	69		69		Goodwill	69		69
Operating lease right-of-use assets	Operating lease right-of-use assets	13,744		14,566		Operating lease right-of-use assets	19,930		13,489
Other intangible assets, net	Other intangible assets, net	175		202		Other intangible assets, net	149		167
Other non-current assets	Other non-current assets	243		242		Other non-current assets	213		225
Total assets	Total assets	$	177,192	$	126,241	Total assets	$	188,168	$	180,813
LIABILITIES and SHAREHOLDERS’ EQUITY	LIABILITIES and SHAREHOLDERS’ EQUITY					LIABILITIES and SHAREHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	19,184	$	16,484	Accounts payable	$	15,317	$	16,686
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	9,961		11,577		Accrued expenses and other current liabilities	10,470		9,936
Operating lease liabilities - current	Operating lease liabilities - current	1,153		992		Operating lease liabilities - current	938		1,198
Total current liabilities	Total current liabilities	30,298		29,053		Total current liabilities	26,725		27,820
PPP liability - non-current		0		6,488
Operating lease liabilities - non-current	Operating lease liabilities - non-current	12,954		13,735		Operating lease liabilities - non-current	19,479		12,684
Asset retirement obligations	Asset retirement obligations	2,040		2,022		Asset retirement obligations	2,067		2,049
Other long-term liabilities	Other long-term liabilities	794		794		Other long-term liabilities	115		794
Total liabilities	Total liabilities	46,086		52,092		Total liabilities	48,386		43,347
Commitments and contingencies (Note 11)		0		0
Commitments and contingencies (Note 10)						Commitments and contingencies (Note 10)	0		0
Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:
Common stock, 0 par value, 50,000 shares authorized; 43,787 shares issued and 36,881 shares outstanding as of June 30, 2021; 36,461 shares issued and 29,551 shares outstanding as of September 30, 2020		780,776		744,361
Treasury stock at cost; 6,906 shares as of June 30, 2021 and 6,910 shares as of September 30, 2020		(47,721)		(47,721)
Common stock, no par value, 50,000 shares authorized; 44,301 shares issued and 37,395 shares outstanding as of March 31, 2022; 43,890 shares issued and 36,984 shares outstanding as of September 30, 2021						Common stock, no par value, 50,000 shares authorized; 44,301 shares issued and 37,395 shares outstanding as of March 31, 2022; 43,890 shares issued and 36,984 shares outstanding as of September 30, 2021	784,371		782,266
Treasury stock at cost; 6,906 shares as of March 31, 2022 and September 30, 2021						Treasury stock at cost; 6,906 shares as of March 31, 2022 and September 30, 2021	(47,721)		(47,721)
Accumulated other comprehensive income	Accumulated other comprehensive income	892		918		Accumulated other comprehensive income	709		687
Accumulated deficit	Accumulated deficit	(602,841)		(623,409)		Accumulated deficit	(597,577)		(597,766)
Total shareholders’ equity	Total shareholders’ equity	131,106		74,149		Total shareholders’ equity	139,782		137,466
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	177,192	$	126,241	Total liabilities and shareholders’ equity	$	188,168	$	180,813


		For the three months ended June 30,				For the nine months ended June 30,					For the Three Months Ended March 31,				For the Six Months Ended March 31,
		2021		2020		2021		2020			2022		2021		2022		2021
Shares of Common Stock
Shares of common stock										Shares of common stock
Balance, beginning of period	Balance, beginning of period	36,775		29,291		29,551		28,893		Balance, beginning of period	37,275		29,783		36,984		29,551
Stock-based compensation	Stock-based compensation	101		117		534		283		Stock-based compensation	120		203		405		433
Stock option exercises	Stock option exercises	5		0		15		1		Stock option exercises	—		8		6		10
Issuance of restricted stock units		0		0		0		116
Issuance of common stock - ESPP	Issuance of common stock - ESPP	0		0		126		115		Issuance of common stock - ESPP	—		126		—		126
Sale of common stock	Sale of common stock	0		0		6,655		0		Sale of common stock	—		6,655		—		6,655
Balance, end of period	Balance, end of period	36,881		29,408		36,881		29,408		Balance, end of period	37,395		36,775		37,395		36,775
Value of Common Stock
Value of common stock										Value of common stock
Balance, beginning of period	Balance, beginning of period	$	779,681	$	742,416	$	744,361	$	739,926	Balance, beginning of period	$	783,329	$	745,188	$	782,266	$	744,361
Stock-based compensation	Stock-based compensation	1,176		779		3,010		2,625		Stock-based compensation	1,144		931		2,232		1,834
Stock option exercises	Stock option exercises	31		0		77		2		Stock option exercises	—		39		29		46
Tax withholding paid on behalf of employees for stock-based awards	Tax withholding paid on behalf of employees for stock-based awards	(112)		(35)		(195)		(82)		Tax withholding paid on behalf of employees for stock-based awards	(102)		—		(156)		(83)
Issuance of restricted stock units		0		0		0		410
Issuance of common stock - ESPP	Issuance of common stock - ESPP	0		0		382		279		Issuance of common stock - ESPP	—		382		—		382
Sale of common stock, net of offering costs	Sale of common stock, net of offering costs	0		0		33,141		0		Sale of common stock, net of offering costs	—		33,141		—		33,141
Balance, end of period	Balance, end of period	780,776		743,160		780,776		743,160		Balance, end of period	784,371		779,681		784,371		779,681
Treasury stock, beginning and ending of period	Treasury stock, beginning and ending of period	(47,721)		(47,721)		(47,721)		(47,721)		Treasury stock, beginning and ending of period	(47,721)		(47,721)		(47,721)		(47,721)
Accumulated Other Comprehensive Income
Accumulated other comprehensive income										Accumulated other comprehensive income
Balance, beginning of period	Balance, beginning of period	897		943		918		950		Balance, beginning of period	707		908		687		918
Translation adjustment	Translation adjustment	(5)		2		(26)		(5)		Translation adjustment	2		(11)		22		(21)
Balance, end of period	Balance, end of period	892		945		892		945		Balance, end of period	709		897		709		897
Accumulated Deficit
Accumulated deficit										Accumulated deficit
Balance, beginning of period	Balance, beginning of period	(616,456)		(622,825)		(623,409)		(616,409)		Balance, beginning of period	(595,352)		(620,840)		(597,766)		(623,409)
Net income (loss)		13,615		(1,287)		20,568		(7,703)
Net (loss) income										Net (loss) income	(2,225)		4,384		189		6,953
Balance, end of period	Balance, end of period	(602,841)		(624,112)		(602,841)		(624,112)		Balance, end of period	(597,577)		(616,456)		(597,577)		(616,456)
Total Shareholders’ Equity		$	131,106	$	72,272	$	131,106	$	72,272
Total shareholders’ equity										Total shareholders’ equity	$	139,782	$	116,401	$	139,782	$	116,401


		For the nine months ended June 30,					For the Six Months Ended March 31,
		2021		2020			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)		$	20,568	$	(7,703)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Net income						Net income	$	189	$	6,953
Adjustments to reconcile net income to net cash provided by operating activities:						Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	Depreciation and amortization expense	3,053		4,359		Depreciation and amortization expense	2,037		1,989
Stock-based compensation expense	Stock-based compensation expense	3,010		2,625		Stock-based compensation expense	2,232		1,825
Provision adjustments related to credit loss	Provision adjustments related to credit loss	(35)		188		Provision adjustments related to credit loss	165		(52)
Provision adjustments related to product warranty	Provision adjustments related to product warranty	313		178		Provision adjustments related to product warranty	139		222
Loss (gain) on disposal of property, plant and equipment		439		(2,229)
Issuance of restricted stock units		0		410
(Gain) loss on disposal of property, plant, and equipment						(Gain) loss on disposal of property, plant, and equipment	(601)		189
Other	Other	(396)		(113)		Other	464		(292)
Total non-cash adjustments	Total non-cash adjustments	6,384		5,418		Total non-cash adjustments	4,436		3,881
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable and contract assets	Accounts receivable and contract assets	(4,827)		(2,566)		Accounts receivable and contract assets	4,351		(3,574)
Inventory	Inventory	(7,395)		(293)		Inventory	6,663		(3,909)
Other assets	Other assets	(345)		(13,706)		Other assets	(4,857)		1,121
Accounts payable	Accounts payable	1,423		2,738		Accounts payable	(4,893)		(660)
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	(9,079)		10,707		Accrued expenses and other current liabilities	5,646		(2,040)
Total change in operating assets and liabilities	Total change in operating assets and liabilities	(20,223)		(3,120)		Total change in operating assets and liabilities	6,910		(9,062)
Net cash provided by (used in) operating activities		6,729		(5,405)
Net cash provided by operating activities						Net cash provided by operating activities	11,535		1,772
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchase of equipment	Purchase of equipment	(3,004)		(3,391)		Purchase of equipment	(3,297)		(1,142)
Proceeds from disposal of property, plant and equipment		582		15,300
Net cash (used in) provided by investing activities		(2,422)		11,909
Proceeds from disposal of property, plant, and equipment						Proceeds from disposal of property, plant, and equipment	1,128		583
Net cash used in investing activities						Net cash used in investing activities	(2,169)		(559)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Net payments on credit facilities		0		(5,497)
Proceeds from PPP loan		0		6,488
Proceeds from employee stock purchase plan and equity awards	Proceeds from employee stock purchase plan and equity awards	451		281		Proceeds from employee stock purchase plan and equity awards	29		428
Proceeds from sale of common stock	Proceeds from sale of common stock	35,937		0		Proceeds from sale of common stock	—		35,937
Issuance cost associated with sale of common stock	Issuance cost associated with sale of common stock	(2,796)		0		Issuance cost associated with sale of common stock	—		(2,796)
Taxes paid related to net share settlement of equity awards	Taxes paid related to net share settlement of equity awards	(195)		(82)		Taxes paid related to net share settlement of equity awards	(156)		(83)
Net cash provided by financing activities		33,397		1,190
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(127)		33,486
Effect of exchange rate changes provided by foreign currency	Effect of exchange rate changes provided by foreign currency	55		11		Effect of exchange rate changes provided by foreign currency	28		44
Net increase in cash, cash equivalents and restricted cash		37,759		7,705
Cash, cash equivalents and restricted cash at beginning of period		30,538		21,977
Cash, cash equivalents and restricted cash at end of period		$	68,297	$	29,682
Net increase in cash, cash equivalents, and restricted cash						Net increase in cash, cash equivalents, and restricted cash	9,267		34,743
Cash, cash equivalents, and restricted cash at beginning of period						Cash, cash equivalents, and restricted cash at beginning of period	71,682		30,538
Cash, cash equivalents, and restricted cash at end of period						Cash, cash equivalents, and restricted cash at end of period	$	80,949	$	65,281
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION	SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION					SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest	Cash paid during the period for interest	$	46	$	98	Cash paid during the period for interest	$	30	$	31
Cash paid during the period for income taxes	Cash paid during the period for income taxes	$	547	$	60	Cash paid during the period for income taxes	$	361	$	295
NON-CASH INVESTING AND FINANCING ACTIVITIES	NON-CASH INVESTING AND FINANCING ACTIVITIES					NON-CASH INVESTING AND FINANCING ACTIVITIES
Changes in accounts payable related to purchases of equipment	Changes in accounts payable related to purchases of equipment	$	1,026	$	(357)	Changes in accounts payable related to purchases of equipment	$	(11)	$	(256)


		As of					As of
(in thousands)	(in thousands)	June 30, 2021		September 30, 2020		(in thousands)	March 31, 2022		September 30, 2021
Raw materials	Raw materials	$	16,729	$	13,354	Raw materials	$	14,861	$	16,146
Work in-process	Work in-process	11,066		8,381		Work in-process	9,864		11,410
Finished goods	Finished goods	5,567		3,790		Finished goods	3,324		4,753
Inventory balance at end of period		$	33,362	$	25,525
Inventory						Inventory	$	28,049	$	32,309


By Award Type	For the three months ended June 30,				For the nine months ended June 30,
(in thousands)	2021		2020		2021		2020
Employee stock options	$	1	$	4	$	3	$	13
Restricted stock units and awards	573		403		1,505		1,331
Performance stock units and awards	403		255		989		910
Employee stock purchase plan	85		52		258		145
Outside director equity awards and fees in common stock	114		65		255		226
Total stock-based compensation expense	$	1,176	$	779	$	3,010	$	2,625


By Expense Type	For the three months ended June 30,				For the nine months ended June 30,
(in thousands)	2021		2020		2021		2020
Cost of revenue	$	220	$	166	$	564	$	504
Selling, general, and administrative	752		488		1,830		1,564
Research and development	204		125		616		557
Total stock-based compensation expense	$	1,176	$	779	$	3,010	$	2,625


2.1						Asset Purchase Agreement, dated as of October 25, 2019 by and among EMCORE Corporation, Hytera Communications (Hong Kong) Company Limited and Shenzhen Hytera Communications Co., Ltd. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on October 30, 2019).
2.2						Purchase and Sale Agreement, dated as of June 7, 2019 by and among EMCORE Corporation, The Resilience Fund IV, L.P., The Resilience Fund IV-A, L.P., Aerospace Newco Holdings, Inc. and Ember Acquisition Sub, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on June 10, 2019).
2.3						Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate (Non-Residential) dated as of December 31, 2019 by and between Parkview Management Group, Inc. and Systron Donner Inertial, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 6, 2020).
2.4						First Amendment to Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate (Non-Residential) dated as of January 13, 2020 by and between Parkview Management Group, Inc. and Systron Donner Inertial, Inc. (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed on February 10, 2020).
~~3.1~~2.5						~~Certificate~~Asset Purchase Agreement, dated as of ~~Amendment to the Restated Certificate of Incorporation~~August 9, 2021 by and among EMCORE Corporation, Shenzhen Fastrain Technology Co., Ltd. and Hong Kong Fastrain Company Limited (incorporated by reference to Exhibit ~~3.1~~2.1 to the Company’s Current Report on Form 8-K filed on August 11, 2021).
2.6						Sale Agreement, dated as of February 14, 2022 by and among EMCORE Corporation., Ringo Acquisition Sub, Inc., and L3Harris Technologies, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 15, 2022).
2.7						First Amendment to Sale Agreement, dated as of March 1, 2022 by and among EMCORE Corporation., Ringo Acquisition Sub, Inc., and L3Harris Technologies, Inc. (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on May ~~13, 2021)~~2, 2022).
2.8						Second Amendment to Sale Agreement, dated as of March 31, 2022 by and among EMCORE Corporation., Ringo Acquisition Sub, Inc., and L3Harris Technologies, Inc. (incorporated by reference to Exhibit 2.3 to the Company’s Current Report on Form 8-K filed on May 2, 2022).
2.9						Third Amendment to Sale Agreement, dated as of April 29, 2022 by and among EMCORE Corporation., Ringo Acquisition Sub, Inc., and L3Harris Technologies, Inc. (incorporated by reference to Exhibit 2.4 to the Company’s Current Report on Form 8-K filed on May 2, 2022).
10.1**						Amendment to Manufacturing Supply Agreement, dated as of February 25, 2022 by and among by and among EMCORE Corporation, Shenzhen Fastrain Technology Co., Ltd. and Hong Kong Fastrain Company Limited .
10.2†						Amended and Restated EMCORE Corporation 2019 Equity Incentive Plan, as amended and restated on November 29, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 10-K filed on March 17, 2022).
10.3†**						Form of Performance-Based Restricted Stock Unit Award (for executive officers and non-executive employees) under the Amended and Restated EMCORE Corporation 2019 Equity Incentive Plan.
31.1**						Certificate of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2**						Certificate of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1***						Certificate of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2***						Certificate of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**						Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH**						XBRL Taxonomy Extension Schema Document.
101.CAL**						XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB**						XBRL Taxonomy Extension Label Linkbase Document.
101.PRE**						XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF**						XBRL Taxonomy Extension Definition Linkbase Document.
104**						Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).