What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-24 compared with 2024-03-27 · 95 added, 110 removed, 144 unchanged (59% of the section changed)

We are a provider of high-performance, active lidar systems for vehicle autonomy, advanced driver-assistance systems, or ADAS, and robotic vision applications.

We are a provider of high-performance, active lidar systems for vehicle autonomy, advanced driver-assistance systems (ADAS), and robotic vision applications.

We have developed an artificial intelligence technology that enables adaptive “intelligent sensing,” differentiating us in the marketplace from our competition.

Our proprietary software-definable 4Sight TM Intelligent Sensing Platform combines solid-state active lidar, an optionally fused low-light HD camera, and integrated deterministic artificial intelligence to capture more intelligent information with less data, enabling faster, more accurate, and more reliable perception of the surroundings.

Our proprietary 4Sight TM Intelligent Sensing Platform includes a solid-state software definable active lidar sensor, an adaptive sensing SmartScan architecture to scan dynamic scenes/targets, and a sophisticated signal processing capability that provides precise measurements and imaging for various safety-critical applications.

We were founded in 2013 by Luis Dussan, a member of our Board of Directors and our first Chief Executive Officer, with the goal of creating a deterministic AI-driven sensing system that performs better than the human eye and visual cortex.

5 unchanged sentences

As a result, our adaptive lidar is designed to enable higher levels of autonomy and functionality — SAE Levels 2 through 5 — with the goal of optimizing performance, power, and reducing cost.

Our 4Sight Intelligent Sensing Platform is software-definable and network-optimized, and leverages deterministic artificial intelligence at the edge.

Our 4Sight TM Intelligent Sensing Platform is software-definable and network-optimized, and leverages deterministic artificial intelligence at the edge.

We have made substantial investments in our R&D processes and deliver value to our customers through our manufacturing partners.

We perform the majority of our R&D activities in our 56,549 square foot corporate headquarters in Dublin, California.

Our modular design facilitates product hardware updates as technologies evolve, and its small size and modest heat dissipation enable very flexible placement options on the interior or exterior of a vehicle.

4Sight also leverages a common architecture to create application-specific products across different markets.

Our systems-based approach encourages partnerships from the well-established automotive supply chain, including original equipment manufacturers, or OEMs, as well as Tier 1 and Tier 2 OEM suppliers.

We perform the majority of our R&D activities in our 6,522 square foot corporate headquarters located in Pleasanton, California.

Our modular design facilitates product hardware updates as technologies evolve, and its small size and modest heat generation enable very flexible placement options on the interior or exterior of a vehicle.

4Sight TM also leverages a common architecture to create application-specific products across different markets.

Our systems-based approach encourages partnerships from the well-established automotive supply chain, including original equipment manufacturers (OEMs), as well as Tier 1 and Tier 2 OEM suppliers.

There is strong alignment between us and our partners given what is required to produce high-performance automotive grade products at scale, including quality, reliability, and affordability.

Our Tier 1 partners will add value with OEM customers through industrialization, manufacturing, integration, sales, marketing, product liability, and warranty.

Our Tier 2 partners will provide automotive-grade sub-components, which are used not only in automotive lidar for ADAS use cases, but could also be used for products we may sell into the Industrial market.

We expect the result

will be a high-quality, high-performance product at the right price point, which we believe to be a key enabler in accelerating adoption of lidar across various markets in Automotive and beyond.

We anticipate our Tier 1 partners will add value with OEM customers through industrialization, manufacturing, integration, sales, marketing, product liability, and warranty.

We anticipate our Tier 2 partners will provide automotive-grade sub-components, which are used not only in automotive lidar for ADAS use cases, but could also be used for products we may sell into the Non-Automotive market.

We expect the result will be a high-quality, high-performance product at the right price point, which we believe to be a key enabler in accelerating adoption of lidar across various markets in Automotive and beyond.

In pursuing this strategy, we have partnered, and will continue seeking partnerships, with leading Tier 1 automotive suppliers.

It is anticipated that our Tier 1 partners will bid for long range lidar series production awards with OEMs and that these awards will represent a substantial portion of our future revenues, however, there is no guarantee that this Tier 1 partnership strategy will be successful.

For example, in late 2023, Continental informed us that they intended to discontinue our joint lidar development program due to corporatewide restructuring and expense reduction efforts.

If we fail to find a replacement Tier 1 automotive supplier, it will have a material and adverse effect on our business, which is predicated on licensing our lidar designs and other intellectual property to our Tier 1 partners.

The main markets for lidar, primarily Automotive and Industrial, are projected to see significant growth in both the near and long term.

It is anticipated that our Tier 1 partners will bid for long-range lidar series production awards with OEMs and that these awards will represent a substantial portion of our future revenues;

however, there is no guarantee that this Tier 1 partnership strategy will be successful.

If we fail to remain engaged with one or more Tier 1 automotive suppliers, it may have an adverse effect on our business.

The markets for lidar are projected to see significant growth in both the near and long term.

We believe this expected growth will allow us to capture market share as well as pursue specialized opportunities like highway autonomous driving applications that benefit from our products.

We expect that lidar will be a required sensing solution across many end markets, and we intend to be one of the leading solutions provider in these spaces.

We expect that lidar will be a required sensing solution across many end markets, and we intend to be one of the leading solutions providers in these spaces.

As is common in early-stage companies with limited operating histories, we are subject to risks and uncertainties such as our ability to develop and commercialize our products;

6 unchanged sentences

Since inception, we have incurred net losses and negative cash flows from operations and expect to continue incurring losses in the near-term.

We plan to improve our liquidity position through securing additional financing and finding a replacement Tier 1 partner.

Should we not be able to achieve these goals, we have a plan to further reduce operating expenses and cash outlays.

The Company believes that these plans are probable of being successfully implemented, which will result in adequate cash flows to support our ongoing operations for at least one year following the date these financial statements are issued.

As a result, it remains critical for us to preserve cash and manage spending to extend our liquidity.

We also plan to improve our liquidity position through securing additional financing, engaging with partners and OEMs, and executing on our critical milestones.

However, successfully raising capital is outside of our control and there can be no assurance that we will be able to obtain additional financing on terms acceptable to us, on a timely basis, or at all.

Reverse Stock Split

On December 27, 2023, we effected a 1-for-30 reverse stock split of its issued and outstanding shares of common stock (the "Reverse Stock Split").

Pursuant to the Reverse Stock Split, every thirty (30) shares of issued and outstanding shares of common stock were combined into one (1) share of common stock.

On December 27, 2023, we effected a 1-for-30 reverse stock split of our issued and outstanding shares of common stock (the "Reverse Stock Split").

Pursuant to the Reverse Stock Split, every thirty (30) shares of issued and outstanding shares of our common stock were combined into one (1) share of common stock.

We did not issue fractional shares in connection with the Reverse Stock Split.

1 unchanged sentence

The number of shares of common stock issuable under our equity incentive plans and exercisable under the outstanding warrants were also proportionately adjusted.

In connection with the Reverse Stock Split, there was no change to the shares authorized or in the par value per share of common stock of $0.0001.

In connection with the Reverse Stock Split, there was no change to the number of shares authorized or in the par value per share of common stock of $0.0001.

Accordingly, unless we indicate otherwise, all historical per share data, number of shares issued and outstanding, stock awards, and other common stock equivalents for the periods presented in this Annual Report on Form 10-K have been adjusted retroactively, where applicable, to reflect the Reverse Stock Split.

1 unchanged sentence

We believe that lidar will be a required sensing solution across many end markets.

We broadly define our two key end markets as Automotive and Industrial, although at the current time we are almost exclusively focused on the Automotive market.

According to the World Health Organization, the number of fatalities globally on roadways exceeds one million annually, road traffic injuries are the leading cause of death for children and young adults aged 5 to 29 years and in the U.S.

pedestrian fatalities have increased by over 80% in the last ten years.

Road traffic accidents cost most countries 3% of their gross domestic product on an annual basis.

We broadly define our two key end markets as Automotive and Non-Automotive.

According to the Insurance Institute for Highway Safety, in the U.S.

pedestrian fatalities have increased by over 80% since 2009.

We believe the current technology solutions in the market are insufficient for mitigating this issue and that lidar, incorporated as a component of ADAS and fully autonomous driving or self-driving systems, could play a critical role in addressing this issue in the future.

In 2023, the National Highway Traffic Safety Administration, or NHTSA, introduced proposed rulemaking to mandate that passenger vehicles have automatic emergency braking, or AEB, and pedestrian AEB, and the Federal Motor Carrier

Safety Administration introduced proposed rulemaking to mandate AEB in heavy trucks.

Final rules are expected soon, and these may require additional hardware and software to meet performance requirements.

With that in mind, passenger and commercial vehicle OEMs are expected to introduce lidar sensors to add ADAS features and improve safety for passengers and pedestrians.

In 2024, the National Highway Traffic Safety Administration, or NHTSA, adopted a new rule which mandates that passenger vehicles have automatic emergency braking, or AEB, and pedestrian AEB, and the Federal Motor Carrier Safety Administration introduced proposed rulemaking to mandate AEB in heavy trucks.

These rules may require additional hardware and software to meet these requirements.

With that in mind, passenger and commercial vehicle OEMs are expected to introduce lidar sensors to enhance ADAS features and improve safety for passengers and pedestrians.

Applications for the Automotive end market include lidar sensors and software for passenger and commercial vehicles.

1 unchanged sentence

Our sensors were designed to search, detect, acquire, and track small objects at long distances.

In the future, we may also introduce other mid- and short-range lidar systems based on the same 4Sight Intelligent Sensing Platform.

In the future, we may also introduce other mid- and short-range lidar systems based on the same 4Sight TM Intelligent Sensing Platform.

Our system is particularly well-suited to reduce the intensive compute (and associated power and latency) requirements of autonomous systems because our platform handles critical data processing at the sensor level, thereby allowing the self-driving system to focus limited compute resources on the vehicle's path planning.

5 unchanged sentences

We believe that adoption rates for long-range lidar will be higher in commercial vehicles initially due to the significant share of time that highway driving represents for commercial customers.

In 2023, we decided to wind down our existing industrial product line and will be dialing back support for this end market until we have sufficient scale in the Automotive market, which is our largest and highest priority market.

We still believe there will be a broad range of use cases for lidar in Industrial markets, including but not limited to rail, construction, mining, agriculture, aerospace, defense, and intelligent transportation systems.

Such use cases may include:

Non-Automotive

In 2023, we decided to wind down our legacy Non-Automotive product line and we dialed back support for this end market.

Since the launch of our new product, Apollo, in 2024, we have seen renewed interest from Non-Automotive customers across a broad range of sectors and are actively engaged on multiple opportunities.

We believe there is a broad range of use cases for lidar in Non-Automotive markets, including but not limited to rail, construction, mining, agriculture, aerospace, defense, security/foreign object detection, and intelligent transportation systems.

We anticipate that our Apollo product will be well-suited to address the Non-Automotive markets without significant additional modifications.

Such use cases in the Non-Automotive market may include:

Rail — detecting and acquiring railway debris at long distances to stop the train to prevent derailment;

2 unchanged sentences

Construction, Mining, & Agriculture — detecting and acquiring obstacles, pedestrians, and animals in the path of large, autonomous construction and mining vehicles and agricultural equipment.

• Aerospace & Defense — detecting wires or other obstacles above ground for helicopters;

automating logistics vehicles for the military;

enabling mid-air refueling.

Aerospace & Defense — detecting airborne threats and automating logistics vehicles for the military.

Security and Foreign Object Detection (FOD) — Identifying and detecting unwanted objects or debris in various environments which can pose significant safety hazards and cause damage to equipment, products, or even people.

FOD is crucial in industries such as aviation, aerospace, manufacturing, and perimeter security.

Intelligent Transportation Systems (ITS) — intersection traffic management, highway monitoring, tolling automation, smart mobility infrastructure, autonomous/smart parking, and work zone safety.

We employ two different go-to-market models:

one model addresses the traditional Automotive end market and the other model addresses the Industrial end market.

one model addresses the traditional Automotive end market and the other model addresses the Non-Automotive end market.

We employ a channel model in the traditional Automotive market by working through Tier 1 suppliers that sell products to OEM customers.

Those Tier 1 suppliers will industrialize, manufacture, and sell lidar sensor solution units to OEMs that incorporate our proprietary design and software.

We anticipate those Tier 1 suppliers will industrialize, manufacture, and sell lidar sensor solution units to OEMs that incorporate our proprietary design and software.

We expect that we will receive royalty or other payments from those Tier 1 suppliers for each unit they sell to their OEM customers.

The payments may take the

form of a fixed amount per unit, a percentage of the average selling price of the sensor, profit-sharing, or some combination of these methods.

We are currently engaged in partnership discussions with other Tier 1 suppliers.

For the Industrial market, we may either sell directly to the customer or employ a licensing model through systems integrators.

The payments may take the form of a fixed amount per unit, a percentage of the average selling price of the sensor, profit-sharing, or some combination of these methods.

For the Non-Automotive market, we may either sell directly to the customer or work through systems integrators.

Contract manufacturers with whom we have agreements assemble, test, and deliver these products.

1 unchanged sentence

Our lidar products employ a single product platform that is based on components sourced from an established Tier 2 automotive supply chain to drive down costs and increase reliability.

We expect to utilize those same components to be used to address the Industrial market, which enables us to leverage our volume in automotive, and drive costs down for the products made by our contract manufacturing partners.

We developed the 4Sight Intelligent Sensing Platform, to combine solid-state active lidar, an optionally fused low-light HD camera, and integrated deterministic artificial intelligence to capture more intelligent information with less data, enabling faster, more accurate, and more reliable perception of the surroundings.

The 4Sight Intelligent Sensing Platform enables the integration of various types of sensor inputs, including camera, lidar, and radar.

Our 4Sight products are developed on this framework and incorporate both camera and lidar sensors.

We expect to utilize those same components to address the Non-Automotive market, which enables us to leverage our volume in Automotive and drive costs down for the products made by our contract manufacturing partners.

In May, 2024, we announced our partnership with Accelight Technologies, Inc.

(“ATI”) and LighTekton Co., Ltd.

to deliver AEye’s 4Sight™ lidar solutions to the China market.

China is leading the market in lidar adoption, where the TAM is expected to grow to $2.5 billion over the next 3 years.

AEye's 4Sight™ Intelligent Sensing Platform includes a solid-state software definable active lidar sensor, an adaptive sensing SmartScan architecture to scan dynamic scenes/targets, and a sophisticated signal processing capability that provides precise measurements and imaging for various safety-critical applications.

The 4Sight™ Intelligent Sensing platform captures more information with less data, facilitating faster, more accurate, and more reliable perception of the environment.

The 4Sight™ Intelligent Sensing Platform leverages a bistatic architecture, allowing for physically separated transmit and receive paths.

4 unchanged sentences

We leverage custom high resonance micro-electro-mechanical systems, or MEMS, for agile scanning over a wide field of view.

The MEMS that we use are extremely small when compared to competing MEMS-based lidar solutions, and when coupled with the extremely high resonant frequency at which they can operate, our MEMS meet and exceed shock and vibration requirements for both the Automotive and Industrial markets.

All of the data collected is processed directly on the system-on-a-chip, where our algorithms continually evaluate the certainty of object detection in order to direct system energy and focus.

We have made substantial progress in our collaboration efforts withe Nvidia, demonstrating significant advances in the high-speed and long range detection performance of our lidar systems, which we believe puts us on track for future integration with their Hyperion platform.

4Sight Intelligent Sensing Platform

We have made substantial progress in our collaboration efforts with Nvidia, demonstrating significant advances in the high-speed and long range detection performance of our lidar systems, which we believe puts us on track for future integration with their Hyperion platform.

In June, 2024, we launched Apollo, the first product in our 4Sight™ Flex family of next-generation lidar sensors.

Apollo delivers best-in-class range and resolution in a compact, power-efficient, and cost-effective form factor, making it suitable for both automotive and non-automotive applications.

Apollo supports integration behind the windshield, on the roof, or in the grille, enabling OEMs to implement critical safety features with minimal impact on vehicle design.

This innovative sensor leverages AEye's 4Sight™ Intelligent Sensing Platform, offering a highly programmable and customizable lidar solution that can be reconfigured through software updates.

With a horizontal field of view up to 120° and long-range detection capabilities of up to 1 km.

Apollo, we believe, is positioned as a key player in advancing vehicle safety and autonomy, as well as smart infrastructure and logistics applications.

4Sight TM Intelligent Sensing Platform

4Sight™ is our proprietary intelligent sensing lidar platform.

4 unchanged sentences

The sensor captures more intelligent information with less data, enabling faster, more accurate and more reliable perception.

We have identified four increasingly complex levels of software which differentiate our system:

4Sight at Design:

4Sight at Design (software configured scan patterns) enables customers to create a single, deterministic scan pattern to deliver optimal information for any specific use case.

This level is particularly beneficial for repetitive motion applications, such as power line or pipeline inspection (which cameras alone cannot achieve), or robots in a closed-loop environment that is unlikely to experience

anything unexpected.

Through 4Sight at Design, the customers’ unique, deterministic scan pattern will give them precisely the information they need for their repetitive pattern application.

Triggered 4Sight:

With Triggered 4Sight, customers can create a library of deterministic, software-configurable scan patterns at design time, each one addressing a specific use case.

Maps, IMU, speed, tilt, weather, and direction of the vehicle can all trigger the sensor to switch from one scan pattern to another.

For example, a customer can create different scan patterns for highway, urban, and suburban driving, as well as an “exit ramp” pattern.

In addition, the customer can create scan patterns for those same driving environments, but optimized for bad weather (e.g., “highway rain scan pattern” vs “highway sunlight scan pattern”).

Responsive 4Sight:

With Responsive 4Sight, scan patterns can be created at design and run time.

In this level, the entire platform is completely software-configurable and situationally aware, adjusting, in real time, how it scans the scene, where to apply density and extra power, and what scan rate to employ.

In this level, deterministic feedback loops or other sensors, such as camera and radar, inform the lidar to interrogate objects discretely or via dense, dynamic regions of interest, or ROIs, at various points throughout the scene.

It can also dynamically alter its scan pattern on the fly.

The system is intelligent, with the ability to interrogate the scene, and perpetually optimize its own scan patterns and data collection to focus on the information that matters most and respond based on firmware feedback.

Predictive 4Sight:

Predictive 4Sight (motion forecasting) can take what is offered in Responsive 4Sight but look ahead enabling even smarter interrogation.

In this level, basic perception can be distributed to the edge of the sensor network.

Predictive 4Sight seeks to understand the motion of everything it sees, thereby enabling the system to deliver more information with less data by focusing its energy on the most important objects in a scene while paying attention to everything else in its periphery.

Predictive 4Sight can “sense” (i.e., predict) where an object will be at different times in the future, enabling the vehicle to solve challenging edge cases.

4Sight for Automotive

Built on a modular architecture, the 4Sight series is easily customizable to address the specific design requirements for multiple Automotive OEMs.

Industrialized, manufactured, tested, and validated by our Tier 1 partners, the 4Sight series features industry leading, long-range ADAS performance, designed to address the need for high-performance applications.

4Sight is built on our patented 1550nm, solid-state, active lidar.

We expect that the 4Sight solutions for Automotive will generally utilize one of the first three software levels described above:

4Sight at Design, Triggered 4Sight, or Responsive 4Sight.

4Sight TM for Automotive

Built on this 4Sight™ platform, the Apollo lidar is specifically designed to address system requirements for advanced driver-assistance systems (ADAS) and autonomous vehicles (AV) applications.

It delivers best-in-class long-range and resolution in a small, power-efficient, low-cost form factor.

Apollo’s design supports integration behind the windshield, on the roof, or in the grille, enabling automotive OEMs to implement safety features with minimal impact on vehicle design.

Apollo is industrialized, manufactured, tested, and validated by our Tier 1 partners keeping in mind supply chain resiliency goals.

We believe the unique combination of features of 4Sight™ include:

Active lidar enables user’s choice of deterministic scan patterns catered to specific use cases and applications, such as highway autopilot;

• Feature-specific Fixed Regions of Interest (ROIs) designed to detect objects from various locations;

Feature-specific ROIs designed to detect objects from various locations;

Lidar perception made available through a software partner;

• Windshield, grill, and other discreet vehicle integration options that are optimized by software configurability;

Windshield, grille, and other discreet vehicle integration options that are optimized by software configurability;

Size, Weight, and Power (“SWaP”) optimized;

• Functional Safety (“FuSa”)/Safety of the Intended Functionality (“SOTIF” or ISO 21448) compliant for signal path — providing necessary determinism for testing and validation.

4Sight for Industrial

Built on our unique 4Sight Intelligent Sensing Platform, 4Sight meets the diverse array of performance and functional requirements for the Industrial market with our industry-leading lidar performance, integrated intelligence, advanced vision capabilities, and unmatched reliability and safety.

Once we achieve economies of scale in the Automotive market, we anticipate that 4Sight will be a cost-effective, customizable perception solution in

Industrial markets that may leverage the complete 4Sight software platform and will include a comprehensive software development kit for an extensible roadmap to autonomous functionality.

4Sight for the Industrial market may utilize any of the four software levels described above:

4Sight at Design, Triggered 4Sight, Responsive 4Sight, or Predictive 4Sight.

Designed with Functional Safety (“FuSa” or ISO26262) requirements in mind - providing necessary determinism for testing and validation for wide variety of edge cases.

4Sight TM for Non-Automotive

Built on our unique 4Sight™ Intelligent Sensing Platform, 4Sight™ meets the diverse array of performance and functional requirements for the Non-Automotive market with our industry-leading lidar performance, integrated intelligence, advanced vision capabilities, and unmatched reliability and safety.

Once we achieve economies of scale in the Automotive market, we anticipate that 4Sight™ will be a cost-effective, customizable perception solution in Non-Automotive markets that may leverage the complete 4Sight™ software platform and will include a comprehensive software development kit for an extensible roadmap to autonomous functionality.

Flexible sensor location within the car

Our 4Sight™ Flex next-generation design allows for unique flexibility with respect to sensor placement.

The unit’s power requirements and small form factor makes it easier for OEM designers to integrate our sensors into a variety of locations in a vehicle, such as behind the windshield, on the roof, or in the grille.

The unit’s performance level, power requirements, and small form factor makes it easier for OEM designers to integrate our sensors into a variety of locations in a vehicle, such as behind the windshield, on the roof, or in the grille.

Competing solutions, on the other hand, may need to be integrated into the roof of the car in order to resolve challenges with excess heat or size.

8 unchanged sentences

This is possible, in part, because we utilize 1550nm lasers that enable our lidar solutions to achieve a higher photon budget than many of our competitors that rely upon 905nm lasers.

While 1550nm lasers are more costly than 905nm lasers on a per unit basis, 1550nm lasers have much higher performance and our product only requires one such laser.

Some 905nm systems utilize up to 128 lasers and still do not attain the performance results we achieve with a single 1550 nm laser.

As a result, we believe that we are able to compete favorably in the lidar market, particularly in market segments such as passenger vehicle ADAS highway pilot applications that can benefit from our active, long-range, high-resolution capabilities.

Our channel-based model with Tier 1 automotive suppliers also enable us to uniquely capitalize on Tier 1 supply chain leverage.

As a result, we believe that we are able to compete favorably on product cost in the lidar market, particularly in market segments such as passenger vehicle ADAS highway pilot applications that can benefit from our active, long-range, high-resolution capabilities.

We believe that our modular, patented design, our embedded deterministic artificial intelligence, which is inherently enabled by our unique product, and our strong R&D capabilities will enable us to remain a technology leader in the lidar market.

Research and Development

We have made substantial investments into our R&D efforts historically, but we expect these investments to be reduced as a result of our revised strategic plan.

With a reduced workforce and consolidated global footprint, we plan to be more focused on investments that support our strategy and product development goals in the near-term.

We have made substantial investments into our R&D efforts historically, but with a reduced workforce and consolidated global footprint, we plan to be more focused on investments that support our strategy and product development goals in the near-term.

We believe that this is essential to maintain our position as a provider of one of the most advanced lidar solutions in the market.

While our R&D activities occur primarily at our headquarters in Dublin, California, we work with technology developers on a worldwide basis.

Our engineers located in Dublin, California focus on developing sensor hardware, firmware, and software.

While our R&D activities occur primarily at our headquarters in Pleasanton, California, we work with technology developers on a worldwide basis.

Our engineers located in Pleasanton, California focus on developing sensor hardware, firmware, and software.

Our R&D team is responsible for both developing new technology, as well as enhancing the capabilities and performance of our lidar hardware, firmware, and software.

3 unchanged sentences

We believe that our competitive advantage and our success depend in part upon our ability to develop and protect both our intellectual property and our technology.

We own a portfolio of intellectual property which includes

patents (issued and pending), registered trademarks, copyrights, trade secrets, and know-how in the development of our lidar solutions.

We own a portfolio of intellectual property which includes patents (issued and pending), registered trademarks, copyrights, trade secrets, and know-how in the development of our lidar solutions.

We have filed patent and trademark applications in order to further secure these rights and strengthen our ability to defend against third parties who may infringe on our rights.

1 unchanged sentence

Additionally, we protect our proprietary rights through agreements with our commercial partners, vendors, employees, and consultants, as well as close monitoring of the developments, components, products, and competitors in the industry.

As of March 1, 2024, we owned 78 U.S.

As of February 1, 2025, we owned 94 U.S.

and foreign issued patents and we had 44 pending U.S.

and foreign patent applications, with three patent applications in the drafting stage.

In addition, we have two registered and one pending trademark applications.

and foreign patent applications, with one patent application in the drafting stage.

In addition, we have two registered trademarks and one pending trademark application.

Our patents and patent applications cover a broad range of system level and component level aspects of our key technology including, among other things, bistatic lidar system architecture, laser, scanner, receiver, and perception technology.

6 unchanged sentences

In the past, we also maintained direct sales channels but expect sales and marketing costs associated with this to be reduced as a result of our revised strategic plan which significantly reduced our workforce and consolidated our global footprint to leverage our Tier 1 partners’ sales channels.

Our team still continues to maintain direct contact with the OEMs, which better enables us to understand their specific product requirements and facilitate the implementation of our product design into their vehicles.

In the Industrial market, we anticipate using the same supply chain to manufacture through global contract manufacturers, and we will sell our products primarily through system integrator channel partners that may integrate our lidar sensor and software as part of a larger solution for an end customer.

We expect sales and marketing costs related to the Industrial market to decline in the near term as we made the decision in 2023 to wind down our existing Industrial product line.

We will be reducing support for the Industrial market until we have sufficient scale in the Automotive market, which is our largest and highest priority market.

Our technical team still remains in direct contact with these OEMs, which better enables us to understand the OEMs’ specific product requirements and facilitate the implementation of our product design into their vehicles.

In the Non-Automotive market, we anticipate using the same supply chain to manufacture through global contract manufacturers, and we will sell our products primarily through system integrator channel partners that may integrate our lidar sensor and software as part of a larger solution for an end customer.

We anticipate that our Automotive product will be well-suited to address the Non-Automotive markets without significant additional modifications.

We solicit feedback directly from partners and customers in order to identify opportunities to improve our product design.

9 unchanged sentences

The National Highway Traffic Safety Administration, or NHTSA, is the principal legal and regulatory authority that has oversight of vehicles equipped with our sensors as they are deployed on public roadways.

for any defects related to highway safety or any non-compliance with the Federal Motor Vehicle Safety Standards.

The obligations of motor vehicle equipment manufacturers include regular reporting under the Transportation Recall Enhancement, Accountability and Documentation Act, or TREAD, as well as strict recall and reporting requirements for any defects related to highway safety or any non-compliance with the Federal Motor Vehicle Safety Standards.

Similar such reporting and recall requirements exist in foreign markets.

26 unchanged sentences

To date, we have not experienced any work stoppages.

Our corporate headquarters is located in Dublin, California, where we lease 56,549 square feet pursuant to a lease that initially expires on December 1, 2026 unless we choose to exercise a five year renewal option.

The Dublin facility contains engineering, R&D, operations, customer support, marketing, and administrative functions.

Our corporate headquarters is located in Pleasanton, California, where we lease approximately 6,522 square feet pursuant to a lease that initially expires on November 30, 2027 unless we choose to exercise a five-year renewal option.

The Pleasanton facility contains engineering, R&D, operations, customer support, marketing, and administrative functions.

We believe our existing facility is in good condition and suitable for the conduct of our business.

Legal Proceedings

From time to time, we may become involved in actions, claims, suits, and other legal proceedings arising in the ordinary course of our business, including assertions by third parties relating to intellectual property infringement, breaches of contract or warranties, or employment-related matters.

We are not currently a party to any actions, claims, suits, or other legal proceedings the outcome of which, if determined adversely to us, would individually or in the aggregate have a material effect on our business, financial condition, or results of operations.

In or about July of 2024, AEye, Inc.’s wholly owned subsidiary, AEye Technologies, Inc.

(“AEye Tech,” formerly known as AEye, Inc.) surrendered possession of the premises as described in that certain Office Lease dated April 26, 2019 (the “Lease”), entered into by and between the predecessor-in-interest to IGEP Park Place, LLC, as landlord (the “Landlord”) and AEye Tech, as tenant.

A copy of the Lease was filed as Exhibit 10.8 to the Registration Statement on Form S-4 filed with the U.S.

Securities and Exchange Commission on May 13, 2021.

In connection with AEye Tech’s surrender of possession, AEye Tech was purported to be served with a complaint that was filed in the Superior Court of California for the County of Alameda on August 26, 2024 (the “Complaint”) that (1) alleges AEye Tech is in breach of the Lease because of, among other things, AEye Tech’s failure to pay rent as required by the Lease and (2) provides notice to AEye Tech that the Lease had been terminated by the Landlord.

The Complaint does not quantify the damages sought thereunder, however, as discovery in the litigation has only recently commenced, the only quantification of damages is the Landlord’s informal demand at the outset of the litigation of approximately $4.35 million, which is net of the $2.15 million security deposit retained by the Landlord.

If we are unable to resolve the purported default under the Lease and AEye, Inc.

is subsequently found liable for the amounts claimed by the Landlord that are allegedly owed to it by AEye Tech, it could have a material adverse effect on AEye, Inc.’s liquidity, financial condition, and results of operations.

In addition, from time to time, we may become involved in actions, claims, suits, and other legal proceedings arising in the ordinary course of our business, including assertions by third parties relating to intellectual property infringement, breaches of contract or warranties, or employment-related matters.

Other than as stated above, we are not currently a party to any actions, claims, suits, or other legal proceedings the outcome of which, if determined adversely to us, would individually or in the aggregate have a material effect on our business, financial condition, or results of operations.

Available Information

4 unchanged sentences

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.

What changed 10-K

Item 1. Business