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Item 5. Market for Registrant’s Common Equity

2025-02-24 compared with 2024-03-27 · 322 added, 1 removed, 11 unchanged (97% of the section changed)

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Our common stock has been listed on The Nasdaq Global Select Market under the symbol “LIDR” since we started trading on the public markets following the close of the business combination on August 16, 2021.

As of March 20, 2024, we had approximately 61 holders of record of our common stock and thousands of additional beneficial holders.

As of February 18, 2025, we had approximately 57 holders of record of our common stock and thousands of additional beneficial holders.

Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

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Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

Please read the following discussion and analysis of our financial condition and results of operations together with “ Note about Forward-Looking Statements, ” Part I, Item 1 “ Business, ” Part I, Item 1A “ Risk Factors, ” and our consolidated financial statements and related notes included under Item 8 of this Annual Report on Form 10-K.

This overview provides a high-level discussion of our operating results and some of the trends that affect our business.

We believe that an understanding of these trends is important to understanding our financial results for fiscal year 2024, as well as our future prospects.

This summary is not intended to be exhaustive, nor is it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this Annual Report, including our consolidated financial statements and accompanying notes.

All dollar amounts expressed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are in thousands of dollars, except for per share amounts and unless otherwise specified.

Reverse Stock Split

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 common stock were combined into one (1) share of common stock.

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

Stockholders who were otherwise entitled to fractional shares of common stock were instead entitled to receive a proportional cash payment.

The number of outstanding warrants was also proportionately adjusted.

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 $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.

Dowslake Transaction

On May 10, 2024, we entered into a Securities Purchase Agreement with Dowslake Microsystems Corporation, or Dowslake, pursuant to which Dowslake agreed to purchase 330,823 shares of common stock for a purchase price of $854, which represents a per share purchase price of $2.58, and an unsecured promissory note in the principal amount of $146 for an aggregate purchase price of $1,000.

Registered Direct Offering

On May 29, 2024, we entered into a Securities Purchase Agreement with certain institutional investors pursuant to which we agreed to issue and sell, in a registered direct offering, an aggregate of 727,706 shares of Common Stock at a per share purchase price of $3.448 for gross proceeds of approximately $2,509, before deducting estimated offering expenses payable by us.

New Circle Transaction

On July 25, 2024, we entered into a Stock Purchase Agreement with New Circle Principal Investments LLC, or New Circle, pursuant to which we have the right, but not the obligation, to sell to New Circle, and New Circle is obligated to purchase, up to $50,000 of our Common Stock.

Such sales of common stock by us, if any, may occur from time to time at our sole discretion, over a 36-month period.

On September 12, 2024, we entered into an At Market Issuance Sales Agreement with Alliance Global Partners, or A.G.P., pursuant to which we may issue and sell through A.G.P., up to $2,600 of our common stock from time to time through an "at-the-market" equity offering program.

Such sales of common stock by us, if any, may occur from time to time at our sole discretion, over a 36-month period.

In December 2024 and January 2025, we increased the amount of our common stock that we may issue and sell through AGP, up to $5,230 and $15,293, respectively.

Convertible Note Transaction

On January 2, 2025, we entered into a Securities Purchase Agreement to finance an aggregate principal amount of up to $3,240 with a certain institutional investor and issued (i) a senior unsecured convertible promissory note (the "Note") in the aggregate principal amount of $3,240 for an aggregate purchase price of $3,000 and (ii) a warrant to purchase up to 805,263 shares of our common stock.

The Note, subject to an original issue discount of 7.4%, has a term of eighteen months and accrues interest at the rate of 7.0% per annum.

The Note is convertible into Common Stock, at a per share conversion price equal to $2.22, subject to adjustments noted in the Note.

The Warrant has an initial exercise price of $2.22, and is exercisable after the six month and one day anniversary of its issuance (the “Initial Exercisability Date”) until for four years following the Initial Exercisability Date.

Key Factors Affecting Our Operating Results

We believe that our future performance and success depends to a substantial extent on our ability to capitalize on the opportunities described herein, which in turn are subject to significant risks and challenges, including those discussed below and the risk factors described in the “Risk Factors” section of this Annual Report on Form 10-K.

We are subject to those risks common in the technology industry and also those risks common to early stage companies including, but not limited to:

the possibility of not being able to successfully develop or commercialize our products;

securing additional capital in a timely manner in order to meet operating cash flow needs;

doing so on terms that are favorable to us, or at all, which may be challenging given the current capital markets and overall macroeconomic conditions;

maintain and establish relationships with one or more Tier 1 automotive suppliers to facilitate "design wins" with potential end customers, which in our case are automotive OEMs;

develop and protect our intellectual property;

comply with existing and new or modified laws and regulations applicable to our business;

maintain and enhance the value of our reputation and brand;

hire, integrate, and retain talented people at all levels of our organization;

successfully develop new solutions to enhance the experience of, and deliver value to, our customers.

Market Trends and Uncertainties

We anticipate growing demand for our 4Sight TM Intelligent Sensing Platform across two major markets, Automotive and Non-Automotive.

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 anticipate concentrating on the Automotive market by more effectively leveraging our business model, focusing on advanced driver-assistance systems, or ADAS, autonomous driving, and commercial trucking.

In addition, we will look for opportunities in the Non-Automotive market, such as in the railway, security, and intelligent transportation systems, or ITS segments.

This strategy provides us with multiple opportunities for sustained growth by enabling new applications and product features across these market segments.

However, as our customers continue their R&D projects to commercialize solutions that rely on lidar technology, it is difficult to estimate the timing of ultimate end market demand and customer adoption.

In the Automotive market for example, which accounted for an insignificant portion of our revenues in 2024 and 70% of our revenues in 2023, our growth and financial performance will be heavily influenced by our ability to successfully integrate into OEM programs that require years of development, testing, and validation.

Because of the size and complexity of these OEM programs, having Tier 1 partnerships should provide a substantial competitive advantage over our competitors given their large scale, mass-production capabilities, and existing OEM relationships held by our Tier 1 partners.

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.

As is common in early-stage companies with limited operating histories, we are subject to risks and uncertainties such as those described in Part I, Item 1A of this Annual Report on Form 10-K.

Since inception, we have incurred net losses and negative cash flows from operations and expect to continue incurring losses up to commercialization, which means we are dependent upon raising additional capital to provide the cash necessary to continue our ongoing operations.

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.

During 2024, we raised $12,905 in gross proceeds through share issuances on our stock purchase agreements and other financing initiatives.

After year-end, we raised an additional $11,055 in gross proceeds through share issuances on our stock purchase agreements and a convertible note.

We also have access to additional liquidity through our ELOC and ATM facilities.

Partnerships and Commercialization

Our technology is designed to be a key enabler in certain Automotive and Non-Automotive market applications.

Because our technology must be integrated into a broader solution by our customers, it is critical that we achieve design wins with these customers.

The time to achieve a design win varies based on the market and application.

We consider design wins to be critical to our future success, although the revenue that may be generated by each design win and the time necessary to achieve such a design win can vary significantly, making it difficult to predict our financial performance.

In the Non-Automotive market, our strategy has been to sell our lidar solutions to customers utilizing components that are sourced, in part, from the Tier 2 automotive supply chain and assembled by our contract manufacturing partners.

In the Automotive market, we will utilize a licensing model with Tier 1 suppliers that would generate a royalty for us and, hence, can be more easily replicated with multiple Tier 1 suppliers.

As the Tier 2 automotive supply chain matures, we intend to leverage those suppliers, and the volume created for the Automotive market, to participate in the Non-Automotive market.

With that in mind, in the fourth quarter of 2023, we made the decision to wind down our legacy product line for the Non-Automotive market and curtailed support.

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.

In early 2024, we engaged LITEON as our Tier 1 automotive supplier and are actively working with them to bring our products to market.

As part of this initiative, LITEON has committed to building and delivering Apollo B0 samples to us by the first quarter of 2025, marking a significant milestone in our product development.

This partnership has enabled us to leverage their manufacturing expertise to produce high-quality samples that meet stringent performance standards, which is a critical step towards scaling production and delivering our advanced lidar solutions to the market.

In May 2024, we announced a strategic partnership with ATI and LighTekton Co., Ltd to manufacture and distribute our products in China.

This collaboration opens access to a potential $2.5 billion market opportunity.

By leveraging ATI's and LighTekton's extensive networks and manufacturing capabilities, we aim to accelerate our market penetration and deliver our advanced lidar solutions to a broader audience.

We have also 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.

Given these engagements are relatively recent, there is no guarantee that these endeavors will be successful.

We believe our revenue and profitability will also be dependent upon our success in licensing our technology to Tier 1 automotive suppliers, such as our current Tier 1 partner, LITEON, or our previous partner Continental, which represented 70% of 2023 revenue, and these partners securing program awards from OEMS and scaling to high volume production of our lidar sensors.

Delays in autonomy programs by OEMs that we are currently or plan to be working with through our Tier 1 partners could result in us being unable to achieve our revenue and profitability targets in the time frame we anticipate, or at all.

Restructuring

In 2023, we implemented a revised strategic plan, which focused on key products and critical customer engagements and aligned our operations with evolving business needs by focusing on our transition from research and development to the commercialization of our automotive products, while winding down our legacy Non-Automotive product and reducing fixed operating costs.

In August 2024, fixed operating costs were further reduced by the termination of the prior headquarters lease.

The winding down of our legacy Non-Automotive product, combined with an accumulation of other triggering events such as the termination of our partnership with Continental, and a current period and history of cash flow losses, indicated that the carrying amount of our long-lived assets may not be recoverable.

We performed an impairment review of our long-lived assets as of December 31, 2023 and wrote down our property and equipment and the ROU asset and leasehold improvements related to the prior headquarters lease to its fair value.

As a result of the implementation of our revised strategic plan and the impairment review of our long-lived assets, we recorded restructuring charges of $19,153 for the year ended December 31, 2023 primarily relating to one-time employee termination benefits, inventory and other current asset write-downs, losses on purchase commitments, and impairment and disposal charges on our long-lived assets.

We recorded restructuring gains of $368 for the year ended December 31, 2024, primarily relating to the net gain on the termination of the prior headquarters lease, losses on purchase commitments and one-time termination benefits.

Our gross margins will depend on numerous factors, including, among others, the selling price of our products, pricing of our development contracts with customers, royalty rates on licenses we grant to our customers, unit volumes, product mix, component costs, personnel costs, contract manufacturing costs, overhead costs, and product features.

Our gross margins have in the past and may continue to be negatively impacted by inventory write-downs.

As an example, in 2023, we recorded inventory write-downs of $7,005 relating to the transition to certain higher grade components in our automotive products as well as the winding down of our legacy product line for the Non-Automotive market.

In the future, we expect to generate attractive gross margins from licensing our lidar technology and software to our Tier 1 partners in the Automotive market.

We also anticipate being able to leverage on our foundation in the Automotive market to move to other markets.

To date, our revenue has primarily been generated through development contracts with OEMs and Tier 1 suppliers, as well as unit sales of our products to Non-Automotive customers.

These development contracts primarily focus on customization of our proprietary 4Sight TM product capabilities to our customers’ applications, typically involving software implementation to assist with sensor connection and control, customization of scan patterns, and enhancement of particular perception capabilities to meet specific customer needs.

In general, development contracts that require more complex configurations have higher prices.

We expect development contracts to remain a significant part of our business in the near-term, but represent a smaller share of our total revenue over time, as we increase our focus on technology licensing in the Automotive market and over time leverage the economies of scale we achieve to move into other markets including the Non-Automotive market.

Investment and Innovation

Our proprietary adaptive, intelligent lidar technology delivers industry-leading performance, addressing the toughest challenges in achieving partial or full autonomy.

Unlike traditional sensing systems that passively collect data, our active 4Sight™ Intelligent Sensing Platform employs principles from automated targeting systems and biomimicry to actively scan the environment, intelligently focusing on critical elements to enable safer, smarter, and faster decisions in complex scenarios.

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

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

Apollo can be integrated behind the windshield, on the roof, or in the grille, allowing original equipment manufacturers (OEMs) to implement essential safety features with minimal impact on vehicle design.

This innovative sensor leverages our 4Sight™ Intelligent Sensing Platform, providing a highly programmable and customizable lidar solution that can be updated through software.

With a horizontal field of view up to 120° and long-range detection capabilities of up to 1 km, Apollo is poised to be a key player in advancing vehicle safety and autonomy, as well as smart infrastructure and logistics applications.

We believe our financial performance is significantly dependent on our ability to maintain a technology leadership position.

This is further dependent on the investments we make in research and development and our ability to commercialize our products.

We believe price is becoming a critical differentiator in the marketplace and OEMs are favoring companies that have the infrastructure to build lower cost products at higher volumes.

It is essential that we continually identify and respond to rapidly evolving customer requirements, develop and introduce innovative new products, enhance and service existing products, lower bill of materials, or BOM costs, industrialize, the manufacturing process, and generate strong market demand for our products.

If we fail to do this, our market position and revenue may be adversely affected, and our investments in that area will not be recovered.

Basis of Presentation

We currently conduct our business through one operating segment.

Components of Results of Operations

Total Revenues

We categorize our revenue as (1) prototype sales and (2) development contracts.

In 2024 and 2023, our prototype sales revenue primarily related to unit sales of our 4Sight TM product.

Revenue from prototype sales is typically recognized at a point in time when the control of goods is transferred to the customer, generally upon delivery or shipment to the customer.

Development contracts represented the majority of our total revenues in 2024 and 2023.

Revenue from development and/or collaboration arrangement contracts are earned from R&D activities and collaboration with OEMs and Tier 1 suppliers.

These contracts primarily focus on customization of our proprietary 4Sight TM capabilities to our customers’ applications, typically involving software implementation to assist with sensor connection and control, customization of scan patterns, and enhancement of perception capabilities to meet specific customer needs.

Revenue from development contracts is recognized when we satisfy performance obligations in the contract, which can result in recognition at either a point in time or over time.

This assessment is made at the outset of the arrangement for each performance obligation.

Cost of Revenue

Cost of revenue includes the costs directly associated with the production of prototypes and certain costs associated with development contracts.

Such costs for prototypes include direct materials, direct labor, indirect labor, inventory write downs, losses on purchase commitments, warranty expense, and allocation of overhead.

Costs associated with development contracts include the direct costs and allocation of overhead costs involved in the execution of the contracts.

Operating Expenses

Research and Development

Our research and development, or R&D, efforts are focused primarily on hardware, software, and system engineering related to the design and development of our advanced lidar solutions.

R&D expenses include:

personnel-related expenses, including salaries, benefits, bonuses, one-time termination benefits, and stock-based compensation expense;

third-party engineering and contractor costs;

lab equipment;

engineering parts and test units;

new hardware and software expenses;

allocated overhead expenses.

R&D costs are expensed as they are incurred.

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 future.

We expect our R&D costs to increase slightly from 2024 as we continue to invest in the development of our Apollo product.

Sales and Marketing

Historically, our sales and marketing, or S&M, efforts were focused primarily on sales, business development, and marketing programs in pursuit of revenue contracts from potential and existing customers.

S&M expenses include:

personnel-related expenses, including salaries, benefits, bonuses, one time termination benefits, and stock-based compensation expense;

demonstration equipment;

trade shows expenses, advertising, and promotions expenses for press releases and other public relations services;

allocated overhead expenses.

We expect our S&M expenses to continue to be relatively low as we expect to leverage our Tier 1 partners to commercialize our products and manage relationships with the OEMs in the Automotive market.

In the Non-Automotive market, we anticipate using the same supply chain to manufacture through global contract manufacturers, and we expect to 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.

General and Administrative

Our general and administrative, or G&A, spending supports all business functions.

G&A expenses include:

personnel-related costs, including salaries, benefits, bonuses, one-time termination benefits, and stock-based compensation expense for executive, finance, legal, operations, human resources, technical support, and other administrative personnel;

consulting, accounting, audit, legal, and other professional fees;

insurance premiums, software and computer equipment costs, general office expenses;

allocated overhead expenses.

We expect our G&A expenses to decrease slightly with reduced facility costs and professional fees, while continuing to incur expenses to support other departments as we continue to develop and commercialize our Apollo product.

Change in Fair Value of Convertible Note and Warrant Liabilities

The changes in fair value of the 2022 Note and warrant liabilities are the result of the change in fair value at each reporting date.

The 2022 Note and warrant liabilities are recorded at fair value for each reporting period, and the changes in fair value are reported within other income (expense), net during the period.

We also elected to record interest expense on the 2022 Note as changes in fair value.

Interest Income, Interest Expense and Other

Interest income and other consists primarily of interest earned on our cash, cash equivalents, and marketable securities.

These amounts will vary based on our cash and cash equivalents balances and market rates.

Interest income and other also includes gains on sale of property and equipment.

Interest expense and other consists primarily of financing costs, and amortization of premiums and accretion of discounts on marketable securities, net.

Results of Operations

Comparison of the Years Ended December 31, 2024 and 2023

The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this report.

The following table sets forth our consolidated results of operations data for the years ended December 31, 2024 and 2023 (in thousands, except for percentages):

Year ended December 31,

Prototype sales

Development contracts

Total revenue

Cost of revenue

Research and development

Sales and marketing

General and administrative

Impairment of long-lived assets

Total operating expenses

Loss from operations

Change in fair value of convertible note and warrant liabilities

Interest income and other

Interest expense and other

Total other income (expense), net

Loss before income tax

(Benefit) provision for income tax

Prototype Sales

Prototype sales decreased by $380, or 80%, to $97 for the year ended December 31, 2024 from $477 for the year ended December 31, 2023.

This was primarily due to a decrease in units sold of our 4Sight™-based Non-Automotive product due to our focus in 2024 on executing key automotive product development milestones.

Development Contracts

Development contracts decreased by $882, or 89%, to $105 for the year ended December 31, 2024, from $987 for the year ended December 31, 2023.

The decrease was primarily due to lower development contract revenue as we fulfilled our obligations under a Tier 1 automotive supplier contract in the fourth quarter of 2023.

Cost of Revenue

Cost of revenue decreased by $14,541, or 95%, to $778 for the year ended December 31, 2024, from $15,319 for the year ended December 31, 2023.

This decrease was primarily due to fewer Non-Automotive product units sold in the current year, and also due to lower development contract costs as we completed our obligations under a Tier 1 automotive supplier contract in the fourth quarter of 2023.

The decrease was also due to non-routine inventory write-downs associated with transitioning to certain higher-grade components in our automotive products as well as the implementation of our revised strategic plan which resulted in further inventory write-downs and losses related to purchase commitments.

Operating Expenses

Research and Development

Research and development expenses decreased by $9,782, or 37%, to $16,389 for the year ended December 31, 2024, from $26,171 for the year ended December 31, 2023.

This decrease was primarily driven by the implementation of our revised strategic plan in 2023, with decreases in personnel costs of $4,055, stock-based compensation expense of $3,388, information technology and facilities expense of $778, engineering parts and lab equipment expense of $639, depreciation expense of $567, and third party research and development work of $534.

Sales and Marketing

Total sales and marketing expenses decreased by $11,977, or 96%, to $551 for the year ended December 31, 2024, from $12,528 for the year ended December 31, 2023.

This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in personnel costs of $5,853, stock-based compensation of $2,746, marketing and consultant spend of $2,090, travel and entertainment expenses of $446, and information technology and facilities expense of $642.

General and Administrative

Total general and administrative expenses decreased by $6,922, or 27%, to $18,312 for the year ended December 31, 2024, from $25,234 for the year ended December 31, 2023.

This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in stock-based compensation of $2,754, accounting, legal, and consulting fees of $1,036, insurance of $947, facility and information technology, net of allocations, of $853, depreciation expense of $644 and personnel costs of $547.

Impairment of Long-Lived Assets

Impairment of long-lived assets decreased to zero for the year ended December 31, 2024, from $9,988 for the year ended December 31, 2023, primarily as a result of the non-cash impairment of property and equipment and right-of-use assets that occurred in 2023, but no similar event in 2024.

In the fourth quarter of 2023 we determined that an accumulation of triggering events, including the winding down of our legacy Non-Automotive product as a result of the implementation of our automotive-first strategic plan to focus on commercialization of our automotive product, the termination of our partnership with a large Tier 1 automotive supplier, and a current period and history of cash flow losses, required an impairment review of our long-lived assets, resulting in our long-lived assets being written down to their fair values.

Change in Fair Value of Convertible Note and Warrant Liabilities

Change in fair value of convertible note and warrant liabilities decreased by $858, or 100%, to zero for the year ended December 31, 2024, from a loss of $858 for the year ended December 31, 2023.

This decrease was primarily due to settlement of the 2022 Note in 2023 and an immaterial change in the fair value of warrant liabilities in 2024.

Interest Income and Other

Interest income and other decreased by $518, or 39%, to $799 for the year ended December 31, 2024, from $1,317 for the year ended December 31, 2023.

This decrease was primarily due to less interest earned on our marketable securities in the current period.

Interest Expense and Other

Interest expense and other increased by $681, or 275%, to a loss of $433 for the year ended December 31, 2024, from a gain of $248 for the year ended December 31, 2023.

This increase was primarily due to costs of $1,124 related to financing arrangements executed in the period, partially offset by an increase in accretion of discounts on marketable securities, net of $220.

(Benefit) Provision for Income Tax

(Benefit) provision for income tax decreased to a benefit of $2 for the year ended December 31, 2024, from a provision of $57 for the year ended December 31, 2023.

This change is due to changes in pretax income (loss) in the U.S.

and certain foreign entities and changes in tax rates.

Net loss decreased by $51,666, or 59%, to $35,460 for the year ended December 31, 2024, from $87,126 for the year ended December 31, 2023.

This decrease was primarily due to decreases in operating expenses following restructuring and cost reduction efforts in connection with our revised strategic plan as announced during 2023 and decreases in cost of revenues as we completed our obligations related to a Tier 1 automotive supplier contract in the fourth quarter of 2023.

Liquidity and Capital Resources

Sources of Liquidity

Our capital requirements will depend on many factors, including, but not exclusively, sales volume and timing of revenue, our efforts to establish and maintain relationship with one or more Tier 1 automotive suppliers and the timing of an OEM design win, our ability to extend our cash runway based on the restructuring initiatives announced in the previous year, the timing and extent of spending to support R&D efforts, how quickly we can commercialize our products, and market adoption of new and enhanced products and features.

As of December 31, 2024, our cash, cash equivalents, and marketable securities totaled $22,278.

For the years ended December 31, 2024 and 2023, we had a net loss of $35,460 and $87,126, respectively.

We anticipate that we will continue to incur losses for at least the next several years.

To date, our principal sources of liquidity have been proceeds received from the issuance of equity.

In December 2021, we entered into a Purchase Agreement, with Tumim Stone Capital LLC, or Tumim Stone, pursuant to which we had the right, but not the obligation, to issue and sell to Tumim Stone over a 36-month period up to $125,000 of our common stock.

On May 6, 2022, we filed a Registration Statement on Form S-1, which related to the offer and resale of up to 1,028,847 shares of our common stock to be purchased by Tumim Stone, pursuant to the Purchase Agreement.

On July 24, 2024, this Purchase Agreement was terminated in conjunction with us entering into a Common Stock Purchase Agreement, or CSPA, with New Circle.

In total, 996,866 shares were issued under the Tumim Stone CSPA.

In September 2022, we entered into a Securities Purchase Agreement with an investor allowing for the sale and issuance of up to two convertible notes, each with cash proceeds of $10,000, for a total of $20,000 in proceeds between the two issuances (each, a "Note Closing").

On September 15, 2022, we closed the first Note Closing with the investor and received cash proceeds of $9,850 (net of fees paid to the investor).

On March 15, 2024, our right to effect a Second Closing under the Securities Purchase Agreement terminated.

On September 26, 2023, the U.S.

Securities and Exchange Commission declared our registration statement on Form S-3 to be effective which allows us to raise up to $200,000 in capital over the next three years subject to baby shelf limitations.

On May 10, 2024, we entered into a Securities Purchase Agreement with Dowslake, pursuant to which Dowslake agreed to purchase 330,823 shares of common stock for a purchase price of $854, which represents a per share purchase price of $2.58, and an unsecured convertible promissory note with a principal amount of $146 for an aggregate purchase price of $1,000.

On May 29, 2024, we entered into a Securities Purchase Agreement with certain institutional investors pursuant to which we agreed to issue and sell, in a registered direct offering using our shelf registration statement on Form S-3, an aggregate of 727,706 shares of common stock at a per share purchase price of $3.448 for gross proceeds of $2,509, before deducting estimated offering expenses payable by us.

On July 25, 2024, we entered into a CSPA with New Circle, pursuant to which we agreed to issue and sell up to $50,000 of common stock, at our discretion from time to time, subject to the satisfaction of the conditions in the CSPA.

On September 12, 2024, we entered into an At Market Issuance Sales Agreement, or ATM Agreement, with A.G.P., pursuant to which we agreed to issue and sell up to $2,600 of common stock, at our discretion from time to time through an "at-the-market" equity offering, subject to the satisfaction of the conditions in the ATM Agreement.

In December 2024 and January 2025, we increased the amount of our common stock that we may issue and sell through AGP, having a new aggregate value offering of up to $5,230 and $15,293 respectively.

On January 2, 2025, we entered into a Securities Purchase Agreement to finance an aggregate principal amount of up to $3,240 with a certain institutional investor and issued a note and warrant to purchase up to 805,263 shares of our common stock.

Until we can generate sufficient revenue from the sale of our products to cover operating expenses, working capital, and capital expenditures, we expect the funds raised in the transactions described above, and other potential sources of capital, to fund our near-term cash needs.

If we are required to raise additional funds by issuing equity securities, dilution of stockholders will result.

Any debt securities issued may also have rights, preferences, and privileges senior to those of holders of our common stock.

The terms of debt securities or borrowings could impose significant restrictions on our operations.

We may also be unable to raise additional capital through the sale of securities and debt financing, or to do so on terms that are favorable to us, particularly given current capital market and overall macroeconomic conditions.

We are dependent upon raising additional capital to provide the cash necessary to continue our ongoing operations and execute against our strategic objectives.

We believe that our potential liquidity will enable us to fund our operating expenses, working capital, and capital expenditure requirements for a period of at least twelve months from the date of this Annual Report on Form 10-K.

If our cash needs are greater than we anticipate, we may be required to reduce our operating expenses further or raise additional capital sooner.

Given the current macroeconomic environment, OEMs appear to be more cautious about their capital spending and investments into new technologies and as a result we have seen the timelines for certain opportunities delayed which may negatively impact the time for us to reach positive cash flows from operations.

Our plans for the use of cash in the long-term (beyond twelve months from this Annual Report) are primarily related to funding operating expenses to support the commercialization of our products.

For additional information regarding our cash requirements from lease obligations, lease termination liability, and contractual obligations, see Notes 6 and 21 in the Notes to the Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.

On March 10, 2023, Silicon Valley Bank, or SVB, was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation, or FDIC, was appointed as receiver.

On March 27, 2023, First Citizens Bank entered into a whole bank purchase of SVB.

We had and continue to have deposit accounts at SVB.

The standard deposit insurance amount is up to $250 per depositor, per insured bank, for each account ownership category.

We do not maintain any other material accounts or lines of credit with SVB.

Although we continue to maintain an operating account at SVB, we subsequently established operating accounts at other financial institutions to mitigate the risks associated with any one financial institution's potential risk of insolvency or receivership.

Cash Flow Summary

Year ended December 31,

(in thousands)

Net cash provided by (used in):

Operating activities

Investing activities

Financing activities

Operating Activities

For the year ended December 31, 2024, net cash used in operating activities was $26,620.

Factors affecting our operating cash flows during this period were a net loss of $35,460, amortization of premiums and accretion of discounts on marketable securities, net of change in accrued interest of $611, and gain on termination of operating lease, net, of $491, offset by stock-based compensation of $9,047, common stock purchase agreement costs of $1,124, noncash lease expense of $956, and depreciation and amortization of $129.

Within operating activities, the net changes in operating assets and liabilities were cash used of $1,498, primarily driven by decreases in accrued expenses and other liabilities, operating lease liabilities and other noncurrent liabilities of $2,389, $955 and $345, respectively.

Cash used was offset by cash provided by decreases in prepaid and other current assets, inventories, and other noncurrent assets of $1,490, $245 and $215, respectively, and an increase in accounts payable of $156.

For the year ended December 31, 2023, net cash used in operating activities was $50,725.

Factors affecting our operating cash flows during this period were net loss of $87,126, offset by stock-based compensation of $18,071, impairment of long-lived assets of $9,988, inventory write-downs of $7,712, depreciation and amortization of $1,547, noncash lease expense of $1,406, loss on advances to suppliers of $1,385, and change in fair value of convertible note and warrant liabilities of $858.

Within operating activities, the net changes in operating assets and liabilities were cash used of $4,460, primarily driven by increases in inventories of $2,459, and decreases in accrued expenses and other current liabilities, and operating lease liabilities of $3,135 and $1,528, respectively.

Cash used was offset by cash provided by decreases in prepaid and other current assets, accounts receivable, and other noncurrent assets of $2,279, $451, and $284, respectively, and an increase in accounts payable of $252.

Investing Activities

For the year ended December 31, 2024, net cash provided by investing activities was $7,744.

The primary factors affecting net cash provided by investing activities during this period were proceeds from redemptions and maturities of marketable securities of $32,426, partially offset by the purchases of marketable securities of $24,241 and purchases of property and equipment of $486.

For the year ended December 31, 2023, net cash provided by investing activities was $55,351.

The primary factors affecting net cash provided by investing activities during this period were proceeds from redemptions and maturities of marketable securities of $76,350, partially offset by the purchases of marketable securities of $19,331 and purchases of property and equipment of $1,951.

Financing Activities

For the year ended December 31, 2024, net cash provided by financing activities was $10,060.

The primary factors affecting our financing cash flows during this period were proceeds from common stock purchase agreements of $11,080, partially offset by stock issuance costs related to common stock purchase agreements of $1,232.

For the year ended December 31, 2023, net cash used in financing activities was $6,758.

The primary factors affecting our financing cash flows during this period were payments for convertible note redemptions of $6,235 and payments for taxes related to net settlement of equity awards of $1,445, partially offset by proceeds from the exercise of stock options and from issuance of common stock through the Employee Stock Purchase Plan of $455 and $334, respectively.

Critical Accounting Policies and Estimates

Our consolidated financial statements are in accordance with GAAP.

We are required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements, the reported amounts of revenues and expenses during the reporting periods, fair value measures, and the related disclosures in the consolidated financial statements.

Our actual results may differ significantly from these estimates due to changes in judgments, assumptions and conditions as a result of unforeseen events or otherwise, which could have a material impact on our financial position and results of operations.

We believe our critical accounting policies involve the greatest degree of judgement and complexity and have the greatest potential impact on our consolidated financial statements.

We recognize revenues from R&D and development arrangements with OEMs and suppliers to the OEMs and from the sale of prototype products.

Revenue represents the amount of expected consideration we are entitled to receive upon the transfer of promised goods or services in the ordinary course of our activities and is recorded net of sales taxes.

We recognize revenue when performance obligations are satisfied by transferring control of a promised good or service to a customer.

For performance obligations that are satisfied at a point in time, we also consider the following indicators to assess whether control of a promised good or service is transferred to the customer:

(i) right to payment;

(ii) transfer of legal title;

(iii) physical possession;

(iv) significant risks and rewards of ownership;

and (v) acceptance of the goods or service.

For performance obligations satisfied over time, we recognize revenue over time by measuring the progress toward complete satisfaction of a performance obligation.

The application of various accounting principles related to the measurement and recognition of revenue requires us to make judgments and estimates.

Specifically, complex development arrangements with nonstandard terms and conditions may require relevant contract interpretation to determine the appropriate accounting treatment, including whether the promised goods and services specified in a multiple element arrangement are capable of being distinct and accounted for as separate performance obligations.

Determining whether products or services are considered distinct performance obligations that should be accounted for separately versus together may sometimes require significant judgment.

When a contract involves multiple performance obligations, we account for individual products and services separately if the customer can benefit from the product or service on its own or with other resources that are readily available to the customer and the product or service is separately identifiable from other promises in the arrangement.

For multiple element arrangements, the transaction price is allocated to each performance obligation using the relative stand-alone selling price, or SSP.

Judgment is required to determine SSP for each distinct performance obligation.

We use a range of amounts to estimate SSP when products and services are sold separately.

In instances where SSP is not directly observable, we determine SSP using information that may include other observable inputs, or use a residual approach to estimate the SSP for performance obligations where SSP is highly variable or uncertain.

Changes in judgments with respect to these assumptions and estimates could impact the timing or amount of revenue recognition.

Emerging Growth Company Status

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable.

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act, and we have elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards.

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of common stock that is held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.07 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which we have issued more than $1.0 billion in non-convertible debt in the prior three-year period, or (iv) December 31, 2025.

We expect to continue to take advantage of the benefits of the extended transition period, although we may decide to adopt such new or revised accounting standards early to the extent permitted by such standards.

This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

Recent Accounting Pronouncements

See Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Annual Report on Form 10-K.

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 5. Market for Registrant’s Common Equity