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We have incurred net losses in each year since our inception.
−Removed: In the six months ended June 30, 2024 and 2023, we incurred net losses of approximately $18.2 million and $42.3 million, respectively.
+Added: In the nine months ended September 30, 2024 and 2023, we incurred net losses of approximately $26.9 million and $59.3 million, respectively.
We expect that we will continue to incur significant losses through at least the next few years as we:
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maintain a level of general and administrative spending to meet the requirements of operating as a public company.
−Removed: As of June 30, 2024, we had an accumulated deficit of approximately $355.8 million.
+Added: As of September 30, 2024, we had an accumulated deficit of approximately $364.5 million.
Even if we are able to increase sales or licensing of our products, there can be no assurance that we will be commercially successful.
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In 2021, we entered into an agreement with a subsidiary of Continental AG, a well-established Tier 1 automotive supplier, pursuant to which Continental licensed from us the rights to manufacture and integrate our lidar solution into automotive OEM model lines through long-term series production contracts with automotive OEMs.
−Removed: In late 2023, Continental informed us that they intended to discontinue our joint lidar development program due to internal restructuring of their business model.
+Added: In late 2023, Continental informed us that they intended to discontinue our joint lidar development program due to their internal restructuring.
Thereafter, we engaged LITEON as our new Tier 1 automotive partner and are actively working with LITEON to bring our products to the market.
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We will remain constrained by the baby shelf rules under our Form S-3 shelf registration statement until such time as our public float exceeds $75 million, at which time, the number of securities we may sell under a Form S-3 registration statement will no longer be limited by the baby shelf rules.
+Added: In addition, regardless of the size of our public float, we are generally prohibited from issuing a number of shares at or below market price in an amount equal to 20% or more of our outstanding shares at the time of such issuance, without the consent of a majority of our stockholders.
+Added: This will also limit our ability to raise additional capital.
Any restructuring actions and cost reduction initiatives that we undertook, or may undertake in the future, may not deliver the results we expect, and these actions may adversely affect our business.
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Our recent restructurings could result in disruptions to our operations and adversely affect our business and our ability to maintain or obtain additional Tier 1 partners.
−Removed: For example, we are actively working with our new Tier 1 partner to pursue multiple RFQ opportunities and if our restructuring actions impede our ability to win these awards, this could materially impact our business.
+Added: For example, we are actively working with our current Tier 1 partner to pursue multiple RFQ opportunities and if our restructuring actions impede our ability to win these awards, this could materially impact our business.
In addition, we cannot be sure that the cost reduction initiatives will be successful in reducing our overall expenses to the extent anticipated, or that unexpected costs will not offset any such reductions or related initiatives.
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Our business could be materially and adversely affected by the lingering impacts of the global COVID-19 pandemic or other epidemics and outbreaks.
−Removed: The COVID-19 pandemic had disrupted and affected our business operations, which has led to business and supply chain disruptions.
+Added: The COVID-19 pandemic has disrupted and affected our business operations.
The lingering effects of the pandemic are likely to continue to disrupt our business and supply chain in the future.
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If we fail to obtain design wins for a significant number of vehicle models from one or more automotive OEMs or their suppliers, our business, results of operations, and financial condition will be materially and adversely affected.
−Removed: Our business model for the Automotive market is based on our relationships with Tier 1 suppliers.
−Removed: If these relationships do not materialize, automotive OEMs may be less inclined to select our products for use in their vehicle models.
−Removed: The period of time from a design win to implementation is long and we are subject to the risks of cancellation or postponement of the contract or unsuccessful implementation.
Our forward-looking estimates of certain financial metrics may prove inaccurate.
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We expect to continue to incur R&D costs as part of our efforts to design, develop, manufacture, and commercialize new products and enhance existing products.
−Removed: Our R&D expenses were approximately $8.4 million and $15.3 million during the six months ended June 30, 2024 and 2023, respectively, and may increase in the future.
+Added: Our R&D expenses were approximately $12.1 million and $21.0 million during the nine months ended September 30, 2024 and 2023, respectively, and may increase in the future.
Because we account for R&D as an operating expense, these expenditures will adversely affect our results of operations in the future.
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If market adoption of lidar does not continue to develop, or adoption is deferred, or otherwise develops more slowly than we expect, our business will be adversely affected.
−Removed: While our artificial intelligence-driven lidar-based sensing system can be applied to different use cases across end markets, approximately 0% and 71% of our revenue during the six months ended June 30, 2024 and 2023, respectively, was generated from automotive applications with a few customers in the aerospace, delivery, shuttle, railway, mining, and aviation sectors.
+Added: While our artificial intelligence-driven lidar-based sensing system can be applied to different use cases across end markets, approximately 0% and 71% of our revenue during the nine months ended September 30, 2024 and 2023, respectively, was generated from automotive applications with a few customers in the aerospace, delivery, shuttle, railway, mining, and aviation sectors.
Despite the fact that the automotive industry has expended considerable effort to research and test lidar products for ADAS and autonomous driving applications, the automotive industry may not introduce lidar products in commercially available vehicles on a time frame that matches our expectations, or at all.
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Given this is a new endeavor, there is no guarantee that this will be successful or be effective at mitigating the risks associated with our outsourced manufacturing business model.
−Removed: We, our outsourcing partners, and our suppliers rely on complex machinery for production of our lidar solutions, which involves a significant degree of risk and uncertainty in terms of operational performance and costs.
−Removed: We, our outsourcing partners, and our suppliers rely on complex machinery for the production, assembly, and installation of our lidar solutions, which involve a significant degree of uncertainty and risk in terms of operational performance and maintenance costs.
−Removed: In addition, the cost to procure such machinery can be significant and, in certain instances, such costs will be paid by us.
−Removed: Our limited in-house production facility, and the facilities of our outsourcing partners and suppliers, consist of large-scale machinery combining many components.
−Removed: These components may suffer unexpected malfunctions from time to time and will require repairs and spare parts to resume operations, which may not be available when needed.
−Removed: Unexpected malfunctions of these components may significantly affect intended operational efficiency.
−Removed: Operational performance and costs can be difficult to predict and are often influenced by factors outside of our control, such as, but not limited to, scarcity of natural resources, environmental hazards and remediation, costs associated with decommissioning of machines, labor disputes and strikes, difficulty or delays in obtaining governmental permits, damages or defects in electronic systems, industrial accidents, fires, seismic activity, and other natural and manufactured disasters.
−Removed: Should such operational risks materialize, it may result in personal injury to or death of workers, loss of production equipment, damage to production facilities, monetary losses, delays, and unanticipated fluctuations in production, environmental damage, administrative fines, increased insurance costs and potential legal liabilities, some of which may be the responsibility of our outsourcing partners and suppliers, but could have a material adverse effect on our business, prospects, financial condition, or operating results.
Our sales and operations in international markets expose us to associated operational, financial, and regulatory risks.
−Removed: Sales to international customers accounted for 21% and 18% of our revenue during the six months ended June 30, 2024 and 2023, respectively.
+Added: Sales to international customers accounted for 49% and 17% of our revenue during the nine months ended September 30, 2024 and 2023, respectively.
In May of 2024, we announced that we have partnered with Accelight Technologies, Inc.
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global or regional health crises, such as the lingering effects of the COVID-19 pandemic or other epidemics or outbreaks of other contagions;
−Removed: increasing military conflicts in Ukraine and the Middle East;
+Added: military conflicts in Ukraine and the Middle East;
potential for violations of anti-corruption laws and regulations, such as those related to bribery and fraud;
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While we make our strategic planning decisions based on the assumption that the markets we are targeting will grow, our business is dependent, in large part on, and directly affected by, business cycles and other factors affecting the global automotive industry and the global economy generally.
−Removed: Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences, changes in interest rates (which have recently seen significant increases) and credit availability, changes in inflation rates (which the U.S.
+Added: Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences, changes in interest rates (which significantly increased beginning in 2022) and credit availability, changes in inflation rates (which the U.S.
has recently experienced), consumer confidence, fuel costs, fuel availability, environmental impact, governmental incentives and regulatory requirements, and political volatility, especially in energy-producing countries and growth markets.
Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks, which may impact our ability to raise additional capital in the future.
−Removed: The March 2023 failure of Silicon Valley Bank and its potential near- and long-term effects on the technology industry and its participants such as our vendors, suppliers, and investors, may also adversely affect our operations and stock price.
−Removed: In addition, the recent outbreak of hostilities between Russia and Ukraine, the war in the Middle East, and global reactions thereto have increased U.S.
+Added: In addition, the ongoing hostilities between Russia and Ukraine, the war in the Middle East, and global reactions thereto have increased U.S.
domestic and global energy prices.
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If our products are not selected by these potential customers or if these potential customers develop or acquire competitive technology, it will have an adverse effect on our business.
−Removed: Our business could be materially and adversely affected if we lost any of our large customers or strategic partners, if their demand for our products declined due to factors outside of our control, including component shortages (whether related to our products or otherwise) that impact our customers ’ overall production plans or product development plans, or if our customers were unable to pay their invoices.
−Removed: Although we have and continue to pursue a broad customer base, we are dependent on a collection of customer relationships which are currently in development with strong purchasing power.
−Removed: For the six months ended June 30, 2024 and 2023, Continental AG accounted for approximately 0% and 71% of our revenue, respectively.
+Added: Our business could be materially and adversely affected if we lost any of our customers or strategic partners, if their demand for our products declined due to factors outside of our control, including component shortages (whether related to our products or otherwise) that impact our customers ’ overall production plans or product development plans, or if our customers were unable to pay their invoices.
+Added: Although we have and continue to pursue a broad customer base, we are currently dependent on a limited number of customer with strong purchasing power and for which the relationships are currently in development.
+Added: For the nine months ended September 30, 2024 and 2023, Continental AG accounted for approximately 0% and 71% of our revenue, respectively.
At the end of 2023, Continental informed us of their decision to end our existing arrangement as our Tier 1 partner.
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We expect that these Tier 1 suppliers will be responsible for certain hardware and software configuration activities specific to each automotive OEM, and they may not exclusively carry our solutions.
−Removed: There is also a risk that one or more of our major customers could be unable to pay our invoices as they become due or that a customer will simply refuse to make such payments if it experiences financial difficulties.
+Added: There is also a risk that one or more of our major customers could be unable to pay our invoices as they become due or that a customer will simply refuse to make such payments if it experiences financial difficulties, or otherwise.
If our customers face financial difficulties, they may also cancel current or future product programs that could materially and adversely impact our financial results.
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Our current and future competitors may enjoy competitive advantages, such as greater name recognition, established relationships, or existing contracts with Tier 1 suppliers and/or OEMs, and substantially greater financial, technical, and other resources.
+Added: Because automotive lidar technology appears to have been successfully commercialized in China, our competitors in that market have likely gained experience that comes with productization that suppliers outside of China, including us, have yet to gain.
We face competition from a number of sources including camera and radar companies, other developers of lidar products, Tier 1 suppliers, and other technology and automotive supply companies.
In the Automotive market, our competitors have commercialized both lidar and non-lidar-based ADAS technology that has achieved market adoption, strong brand recognition, and is expected to improve over time.
−Removed: Other competitors are working towards commercializing autonomous driving technology and either by themselves, or with a publicly announced partner, and have substantial financial, marketing, R&D, and other resources.
+Added: Other competitors are working towards commercializing autonomous driving technology, either by themselves or with a publicly announced partner, and have substantial financial, marketing, R&D, and other resources.
Some of our customers in the autonomous vehicle and ADAS markets have announced development efforts or made acquisitions directed at creating their own lidar-based or other sensing technologies, which would compete with our solutions.
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Securities and Exchange Commission, or the SEC with respect to any shares New Circle may purchase at our request.
−Removed: Should we be eligible to do so and decide to sell our Common Stock to New Circle, existing stockholders at such time will experience dilution of their interest in us, which dilution will be heightened if the price at which we sell Common Stock is low, as there is no minimum price at which we can sell our Common Stock under the Purchase Agreement.
−Removed: Under the Purchase Agreement, we can only sell to New Circle up to 1,721,755 shares of our Common Stock, which is equal to 19.99% of the shares of the Company’s Common Stock outstanding as of the date of the Purchase Agreement, unless we first obtain stockholder approval or the average purchase price per share paid by New Circle exceeds the lower of the closing price on the execution date of the Purchase Agreement, or the average closing prices for our Common Stock during the 5-trading day period immediately preceding the execution of the Purchase Agreement.
−Removed: Moreover, we may not issue shares to New Circle whereby they would own more than 4.99% of our outstanding shares at any one time, which at July 25, 2024, was 429,792 shares.
+Added: Should we decide to sell our common stock to New Circle, existing stockholders at such time will experience dilution of their interest in us, which dilution will be heightened if the price at which we sell common stock is low, as there is no minimum price at which we can sell our common stock under the Purchase Agreement.
+Added: Under the Purchase Agreement, we can only sell to New Circle up to 1,721,755 shares of our common stock, which is equal to 19.99% of the shares of the Company’s common stock outstanding as of the date of the Purchase Agreement, unless we first obtain stockholder approval or the average purchase price per share paid by New Circle exceeds $1.41, which is the lower of the closing price on the execution date of the Purchase Agreement, and the average closing prices for our common stock during the 5-trading day period immediately preceding the execution of the Purchase Agreement.
+Added: Moreover, we may not issue shares to New Circle whereby they would own more than 4.99% of our outstanding shares at any one time, which on July 25, 2024, was 429,792 shares.
At values below $2.00 per share, we would likely not be in a position to realize the full commitment of $50 million under the Purchase Agreement and existing stockholders would experience significant dilution.
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To the extent that any such disruptions result in delays or cancellations of orders or impede our suppliers’ ability to timely deliver components, or the deployment of our products, our business, operating results, and financial condition would be adversely affected.
−Removed: Interruption or failure of our information technology and communications systems could impact our ability to effectively provide services we may implement in the future.
−Removed: We may, in the future, include in-vehicle services and functionality that utilize data connectivity to monitor performance and timely capture opportunities to enhance performance and functionality.
−Removed: The availability and effectiveness of our services depend on the continued operation of information technology and communications systems.
−Removed: Our systems will be vulnerable to damage or interruption from, among others, physical theft, fire, terrorist attacks, natural disasters, power loss, war, telecommunication failures, viruses, denial or degradation of service attacks, ransomware, social engineering schemes, insider theft or misuse, or other attempts to harm our systems.
−Removed: We primarily utilize reputable third-party service providers and vendors for our data, including among other things, financial data, human resources data, manufacturing and production data, sales data, and electronic mail, other than for our source code and related materials that are managed internally.
−Removed: These third-party providers could also be vulnerable to issues similar to those that could damage our systems, including sabotage and intentional acts of vandalism causing potential disruptions.
−Removed: Some of our systems will not be fully redundant, and our disaster recovery planning cannot account for all eventualities.
−Removed: Any problems with our third-party cloud hosting providers could result in lengthy interruptions in our business.
−Removed: In addition, our future in-vehicle services and functionality, if developed and deployed, are expected to be highly technical and complex technology which may contain errors or vulnerabilities that could result in interruptions in our business or the failure of our systems.
We, as well as our suppliers and partners, are subject to cybersecurity risks to operational systems, security systems, infrastructure, integrated software in our lidar solutions, and the data processed by those solutions, and any material failure, weakness, interruption, cyber event, incident, or breach of security could adversely affect our business by causing a disruption of our operations, a compromise or corruption of our confidential or other business-critical information, and/or damage our business relationships, all of which could negatively impact our business financial condition, and operating results.
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These matters may include disputes with our suppliers and customers, intellectual property claims, stockholder litigation, government investigations, class action lawsuits, personal injury claims, environmental issues, customs and value-added tax disputes, and employment and tax issues.
−Removed: In early 2023, we discovered that there may have been some uncertainty with respect to the validity of our Second Amended and Restated Certificate of Incorporation, which was approved by our stockholders at the special meeting of stockholders held on August 12, 2021.
+Added: On August 28, 2024, we were purported to be served with a complaint that alleges we are in breach of the lease at for our former office in Dublin, California because of an alleged failure to pay rent as required by the lease.
+Added: The landlord claimed that the amount owed could be up to $8.5 million.
+Added: We dispute, among other things, that the total damages claimed by the landlord equal the amount claimed.
+Added: If the matter were decided adverse to us, it could have a material adverse effect on our financial position, results of operations, or cash flows.
+Added: Additionally, in early 2023, we discovered that there may have been some uncertainty with respect to the validity of our Second Amended and Restated Certificate of Incorporation, which was approved by our stockholders at the special meeting of stockholders held on August 12, 2021.
While this matter has been fully resolved, we cannot provide assurances that other matters similar in nature may not arise in the future.
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While we have developed system components designed to prevent our lidar lasers from causing property damage (including to cameras), in the event an unforeseen issue arises that results in property damage, our reputation or brand may be damaged and we could face material legal claims for breach of contract, product liability, tort, or breach of warranty as a result.
−Removed: Defending a lawsuit, regardless of our merit, could be costly and may divert management’s attention and adversely affect the market’s perception of us and our products.
+Added: Defending a lawsuit, regardless of merit, could be costly and may divert management’s attention and adversely affect the market’s perception of us and our products.
In addition, our business liability insurance coverage could prove inadequate with respect to any claim and future coverage may be unavailable on acceptable terms, or at all.
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In addition to patented technology, we rely on our unpatented proprietary technology, trade secrets, processes, and know-how.
−Removed: We rely on trade secrets, designs, manufacturing know-how, and confidential information to protect intellectual property that may not be patentable or subject to copyright, trademark, trade dress, or service mark protection, or that we believe is best protected by means that do not require public disclosure.
+Added: We rely on trade secrets, designs, know-how, and other confidential information to protect our intellectual property that may not be patentable or subject to copyright, trademark, trade dress, or service mark protection, or that we believe is best protected by means that do not require public disclosure.
We generally seek to protect this information by entering into confidentiality agreements, or consulting services or employment agreements that contain non-disclosure and non-use provisions with our employees, consultants, contractors, commercial partners, vendors, and other third parties.
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We will incur increased costs as a result of operating as a public company, and our management will devote substantial time to compliance initiatives.
−Removed: We expect to incur significant legal, accounting, and other expenses that we did not incur as a private company, and these expenses will likely increase more after we are no longer an emerging growth company, as defined in Section 2(a) of the Securities Act.
−Removed: As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the Dodd-Frank Act, as well as rules adopted, and to be adopted, by the SEC and Nasdaq.
+Added: We expect to incur significant legal, accounting, and other expenses that we did not incur as a private company, and these expenses will likely increase after we are no longer an emerging growth company, as defined in Section 2(a) of the Securities Act.
+Added: As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the Dodd-Frank Act, as well as rules adopted, and to be adopted, by the SEC and Nasdaq.
Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives.
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These increased costs will increase our net loss.
−Removed: For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be forced to accept reduced policy limits or incur substantially higher costs to maintain the same or similar coverage.
We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements.
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Most of the members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies.
−Removed: Additionally, many members of our management team were recently hired, including our Chief Executive Officer, Matthew Fisch, who joined us in February 2023;
−Removed: our General Counsel, Andrew Hughes, who joined us in March 2021;
−Removed: and our Chief Financial Officer, Conor B.
−Removed: Tierney, who joined us in January 2022.
Our management team may not successfully or efficiently manage their roles and responsibilities.
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Stockholder activism, which can take many forms or arise in a variety of situations, including making public demands that we consider certain strategic alternatives, engaging in public campaigns to attempt to influence our corporate governance and/or our management, and commencing proxy contests to attempt to elect the activists’ representatives or others to our Board, has been increasing recently.
−Removed: Volatility in the stock price of our common stock or other reasons has caused, and may continue in the future to cause, us to become the target of securities litigation or stockholder activism.
+Added: Volatility in the price of our common stock or other reasons has caused, and may continue in the future to cause, us to become the target of securities litigation or stockholder activism.
Activist stockholders who disagree with the composition of our Board, our strategy, or the way our Company is managed may seek to effect change through various strategies and channels, such as through commencing a proxy contest, making public statements critical of our performance or business, or engaging in other similar activities.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.