Mobix Labs Inc. (NASDAQ: MOBX) saw its stock price surge 78.74% to close at $3.11 on Thursday, following the announcement of a non-binding letter of intent to acquire Special Project Delivery LLC (SPD), a U.S.-based platform focused on critical minerals and energy storage. Trading volume reached 158.8 million shares, according to delayed Nasdaq data from LSEG.
Acquisition Details
SPD, founded in 2019 and headquartered in Newport Beach, California, holds assets in critical minerals, energy storage, and Western U.S. water infrastructure. The non-binding letter of intent sets the stage for due diligence and negotiations, but neither party is obligated to finalize the deal.
Mobix Labs Chairman James Peterson, former CEO of Microsemi, described rare earths and critical minerals as "one of the defining competitive battlegrounds" of the coming decade. SPD CEO Paul Singarella noted that the deal would connect SPD with a publicly listed defense and dual-use technology company already active in aerospace and defense.
Financing Moves
Investor enthusiasm was also fueled by a financing development. Mobix disclosed an amendment to its senior secured convertible note with Leviston Resources, increasing the principal from $3.0 million to $4.0 million. In return, Mobix received approximately $833,000 in new cash. Convertible notes operate as debt that can be converted into equity under certain conditions.
Cash remains a pressing concern. Mobix's 10-Q for the December quarter reported net revenue of $1.875 million, a 41% year-over-year decline, and a net loss of $10.125 million. As of December 31, cash on hand was just $268,000. The company expressed "substantial doubt" about its ability to continue without additional funding.
Market Context
The rare earth supply chain is a critical issue. Rare earth elements are essential for magnets, electronics, and defense, but remain heavily dependent on Chinese supply chains. The U.S. is pushing to reduce this dependence, with stricter defense procurement rules set to take effect on January 1, 2027, targeting the entire neodymium-iron-boron magnet supply chain.
U.S. Trade Representative Jamieson Greer noted some progress in rare-earth shipments from China, though certain export licenses remain delayed. "I would give them a passing grade," Greer said in a Bloomberg Television interview.
Policy support is already flowing. MP Materials secured a multibillion-dollar Defense Department deal last year to boost rare-earth magnet production, described as a "game changer" by Adamas Intelligence's Ryan Castilloux. In March, Lynas Rare Earths announced a U.S. government supply arrangement for rare-earth oxides, including roughly $96 million in Pentagon purchases.
Risks and Outlook
Execution is the primary risk. The SPD letter is non-binding, and Mobix must negotiate final terms and secure financing. The note amendment also raises dilution concerns: a May 7 prospectus showed Leviston registered up to 2.5 million shares for resale tied to the note conversion, representing about 23.94% of outstanding Class A shares as of April 16.
Mobix has had a volatile Nasdaq history. In April, the company executed a 1-for-10 reverse stock split to meet the $1 minimum bid requirement, which Nasdaq confirmed it now satisfies.
Prediction markets reflect uncertainty. On Polymarket, traders place only a 26% chance of "rare earth export relief" for the U.S. from the Trump-Xi summit by May 22, indicating that swift action remains unlikely.
Currently, Mobix is viewed as a niche, leveraged bet on defense supply-chain reshoring rather than a full-fledged rare-earth player. Key developments to watch include whether SPD negotiations yield a binding deal, how Mobix plans to finance it, and whether the company can convert the critical minerals boom into sustainable revenue.
