mrln-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2026

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

For the transition period from __________ to __________

Commission file number: 001-42392

MERLIN, INC.

(Exact name of registrant as specified in its charter)

Delaware		98-1797826
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

100 Causeway, Floor 23, Boston, MA 02114

(Address of principal executive offices, including zip code)

(617) 226-9968

(Registrant’s telephone number, including area code)

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, par value $0.0001 per share		MRLN		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 ☐	Smaller reporting company ☒
Non-accelerated filer ☒		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 May 13, 2026, there were 96,524,052 shares of common stock, par value $0.0001 per share, outstanding.

MERLIN, INC.

Form 10-Q

For the Quarter ended March 31, 2026

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION			1

	Item 1.	Financial Statements (Unaudited)	1
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
	Item 4.	Controls and Procedures	43

PART II – OTHER INFORMATION			45

	Item 1.	Legal Proceedings	45
	Item 1A.	Risk Factors	45
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
	Item 3.	Defaults Upon Senior Securities	47
	Item 4.	Mine Safety Disclosures	47
	Item 5.	Other Information	47
	Item 6.	Exhibits	48

SIGNATURES			50

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements, including without limitation statements regarding our business strategy, expected growth, future operations and financial performance, anticipated timing of commercialization of our autonomous flight technology, our ability to obtain and maintain regulatory approvals, our ability to secure additional capital, our expected cash runway, our ability to remediate our material weaknesses, and other plans and objectives of management for future operations. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would,” “strategy,” “outlook,” the negative of these words or other similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are neither promises nor guarantees, and are subject to a number of important factors that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements, including without limitation: our ability to realize the expected benefits of the that certain business combination (the “Business Combination”) pursuant to that certain Business Combination Agreement, dated as of August 13, 2025 (as amended on March 14, 2026, the “Business Combination Agreement”), by and among Inflection Point Acquisition Corp. IV (“Inflection Point”), IPDX Merger Sub, Inc., a Delaware corporation and direct, wholly-owned subsidiary of Inflection Point, and Merlin Labs, Inc., a Delaware corporation; our ability to maintain the listing of our Common Stock on Nasdaq; our public securities’ potential liquidity and trading; our ability to raise financing in the future and to comply with restrictive covenants related to long-term indebtedness; our ability to retain or recruit, or to effect changes required in, our officers, key employees or directors; our reliance upon the efforts of our Board and key personnel to be successful; our limited operating history; expectations regarding the time during which the Company will be an “emerging growth company”; failure to manage our growth effectively; competition from existing or new companies; changes in the market for the Company’s products and services and our ability to effectively compete in the aviation technology industry; unsatisfactory safety performance of our non-human pilot system, Merlin Pilot, or security incidents at our facilities; failure of the market to achieve the growth potential we expect; our customer concentration; our reliance on a limited number of suppliers for certain materials and supplied components; failure of our products to operate in the expected manner or defects in our products; our history of losses and failure to achieve profitability in the future; counterparty risks on contracts entered into with our customers and failure of our prime contractors to maintain their relationships with their counterparties and fulfill their contractual obligations; failure to comply with laws and regulations relating to various aspects of our business and any changes in the funding levels of various governmental entities with which we do business; failure to protect the confidentiality of our trade secrets and know how; failure to comply with the terms of third-party open source software our systems utilize; our ability to maintain an effective system of internal control over financial reporting, and remediate existing material weaknesses; the U.S. government’s budget deficit and the national debt, as well as any inability of the U.S. government to complete its budget process for any government fiscal year, and our dependence on U.S. government contracts; failure to comply with U.S. export and import control laws and regulations and U.S. economic sanctions and trade control laws and regulations; uncertain global macro-economic and geopolitical conditions and rising inflation; delays or disruptions from changes in the certification process, potential government shutdowns, budget reductions, and shifting regulatory priorities, which could jeopardize customer commitments and milestones, postpone commercialization, and adversely affect our business, results of operations, and financial condition; and the other factors detailed under the section entitled “Risk Factors” of our final prospectus, dated May 13, 2026, filed with the Securities and Exchange Commission (the “SEC”) on May 13, 2026 and in this Quarterly Report.

Any forward-looking statements made herein speak only as of the date of this Quarterly Report, and you should not rely on forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or achievements reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, we undertake no obligation to update any of these forward-looking statements for any reason after the date of this Quarterly Report or to conform these statements to actual results or revised expectations. Additionally, certain information we may disclose (either herein or elsewhere) is informed by the expectations of various stakeholders or third-party frameworks and, as such, may not necessarily be material for purposes of our filings under U.S. federal securities laws, even if we use “material” or similar language in discussing such matters.

GENERAL

Unless the context otherwise requires, all references in this Quarterly Report to “we,” “us,” “our,” “Merlin” or the “Company” refer to Merlin Labs, Inc. and its subsidiaries prior to the consummation of the Business Combination and after the consummation of the Business Combination, Merlin, Inc. and its subsidiaries. References to “Quarterly Report” herein refer to this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026 and references to the “Prospectus” refer to the final prospectus, dated May 13, 2026, filed with the SEC on May 13, 2026.

All reports we file with the SEC are available for download free of charge via the Electronic Data Gathering Analysis and Retrieval (EDGAR) System on the SEC’s website at www.sec.gov. We also make electronic copies of our reports available for download, free of charge, through our website under the heading “Investor Relations” at www.merlinlabs.com as soon as reasonably practicable after filing such material with the SEC.

We may announce material business and financial information to our investors using our investor relations website at http://investors.merlinlabs.com/. We therefore encourage investors and others interested in Merlin to review the information that we make available on our website, in addition to following our filings with the SEC, webcasts, press releases and conference calls. Information contained on our website is not incorporated into, and does not form a part of this Quarterly Report.

iii

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

MERLIN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share amounts)

	As of:
	March 31, 2026			December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	122,777		$	59,343
Short-term investments		325			330
Accounts receivable, net		1,342			368
Prepaid expenses and other current assets		5,570			3,328
Capitalized transaction costs (Note 2)		—			7,562
Total current assets		130,014			70,931
Property and equipment, net		10,285			7,108
Operating lease right-of-use assets, net		2,401			979
Restricted cash		2,569			—
Deposits		107			1,564
Total assets	$	145,376		$	80,582
LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable		6,855			3,154
Accrued expenses		6,343			7,937
Long-term debt, current portion, net ($19,175 at fair value and $96 at amortized cost, net as of December 31, 2025) (Note 8)		—			19,271
Convertible promissory notes (Note 8)		—			29,107
Contract loss provision		738			4,173
Operating lease liabilities, current		977			657
Total current liabilities		14,913			64,299
Long-term debt, non-current portion, net ($12,207 at fair value and $577 at amortized cost, net as of December 31, 2025) (Note 8)		—			12,784
Operating lease liabilities, non-current		1,442			331
Warrant liabilities (Note 9)		87,803			76,766
Total liabilities		104,158			154,180
Commitments and contingencies (Note 14)
Series A Preferred Stock: $0.0001 par value; 50,000,000 shares authorized and 21,711,880 shares issued and outstanding as of March 31, 2026. (Note 10)		180,331			—
Redeemable convertible preferred stock		—			—
Stockholders’ deficit:
Common stock: $0.0001 par value; 800,000,000 and 138,655,675 shares authorized; 84,544,557 and 70,959,389 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively		8			7
Additional paid-in capital		502,351			477,448
Accumulated deficit		(641,472	)		(551,053	)
Total stockholders’ deficit		(139,113	)		(73,598	)
Total liabilities, mezzanine equity, and stockholders’ deficit	$	145,376		$	80,582

See accompanying notes to unaudited condensed consolidated financial statements.

MERLIN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except share and per share amounts)

	Three Months Ended March 31,
	2026			2025
Revenue	$	1,002		$	868
Cost of revenue		1,640			714
Contract loss adjustments		(2,451	)		—
Gross profit		1,813			154
Operating expenses:
Research and development		14,090			6,679
General and administrative		14,092			4,520
Selling and marketing		643			359
Total operating expenses		28,825			11,558
Loss from operations		(27,012	)		(11,404	)
Other (expense) income:
Interest income		517			301
Interest expense		(9	)		(1,614	)
Other expense		(128	)		(61	)
Change in fair value of warrant liabilities		26,555			46
Change in fair value of convertible promissory notes		(87,824	)		—
Change in fair value of long-term debt		(2,470	)		—
Total other expense		(63,359	)		(1,328	)
Loss before provision for income taxes		(90,371	)		(12,732	)
Provision for income taxes		48			1
Net loss	$	(90,419	)	$	(12,733	)
Series A Preferred Stock dividends and accretion		(1,417	)		—
Net loss attributable to common stockholders	$	(91,836	)	$	(12,733	)
Net loss per share:
Basic and diluted	$	(1.27	)	$	(0.18	)
Weighted-average shares outstanding:
Basic and diluted		72,421,272			70,947,705

See accompanying notes to unaudited condensed consolidated financial statements.

MERLIN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT (UNAUDITED)

(in thousands, except share and per share amounts)

	Series A Preferred Stock				Redeemable Convertible Preferred Stock						Common Stock				Additional					Total
	Number of Shares		Amount		Number of Shares			Amount			Number of Shares		Amount		Paid-In Capital		Accumulated Deficit			Stockholders’ Deficit
Balances as of December 31, 2024		—	$	—		17,696,748		$	130,616			5,169,812	$	1	$	4,009	$	(135,532	)	$	(131,522	)
Retroactive application of recapitalization		—		—		(17,696,748	)		(130,616	)		65,750,960		7		130,609		—			130,616
Adjusted balances as of December 31, 2024*		—		—		—			—			70,920,772		8		134,618		(135,532	)		(906	)
Exercise of common stock options		—		—		—			—			38,617		—		10		—			10
Stock-based compensation		—		—		—			—			—		—		513		—			513
Net loss		—		—		—			—			—		—		—		(12,733	)		(12,733	)
Balances as of March 31, 2025		—	$	—		0		$	0			70,959,389	$	8	$	135,141	$	(148,265	)	$	(13,116	)

Balances as of December 31, 2025		—	$	—		17,154,902		$	461,963			5,306,250	$	1	$	15,491	$	(551,053	)	$	(535,561	)
Retroactive application of recapitalization		—		—		(17,154,902	)		(461,963	)		64,357,145		6		461,957		—			461,963
Adjusted balances as of December 31, 2025*		—		—		—			—			69,663,395		7		477,448		(551,053	)		(73,598	)
Exercise of common stock options		—		—		—			—			406,385		—		226		—			226
Stock-based compensation		—		—		—			—			—		—		1,295		—			1,295
Equity-based payments to non-employees		—		—		—			—			—		—		643		—			643
Issuance of common stock upon exercise of warrants		—		—		—			—			19,623		—		—		—			—
Issuance of redeemable convertible preferred stock upon exercise of warrants		—

SEC Form 10-Q filed by Merlin Inc.