What changed in this filing

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Item 1. Financial Statements

2025-08-08 compared with 2025-05-12 · 319 added, 148 removed, 687 unchanged (40% of the section changed)

2 unchanged sentences

(In thousands, except share amounts and par value data)

March 31, 2025

June 30, 2025

December 31, 2024

33 unchanged sentences

600,000,000 shares authorized;

18,690,177 and 13,734,160 shares issued and outstanding at March 31, 2025 and December 31, 2024

20,550,266 and 13,734,160 shares issued and outstanding at June 30, 2025 and December 31, 2024

Additional paid-in capital

10 unchanged sentences

(In thousands, except share amounts and per share data)

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

$ 22 $ 32 $ 86 $ 52

Cost of revenue

108 160 $ 204 423

( 86 ) ( 128 ) ( 118 ) ( 371 )

OPERATING EXPENSES:

Research and development

3,670 3,838 $ 7,160 8,370

Sales and marketing

601 67 $ 984 408

General and administrative

4,348 4,223 $ 7,243 9,838

Total operating expenses

8,619 8,128 15,387 18,616

LOSS FROM OPERATIONS

( 8,705 ) ( 8,256 ) ( 15,505 ) ( 18,987 )

OTHER INCOME (EXPENSE):

Change in fair value of convertible note and warrant liabilities

( 593 ) ( 15 ) $ 87 ( 13 )

Interest income and other

393 228 $ 607 423

Interest expense and other

( 365 ) 56 $ ( 2,473 ) 373

Total other income (expense), net

( 565 ) 269 ( 1,779 ) 783

Loss before income tax expense

( 9,270 ) ( 7,987 ) ( 17,284 ) ( 18,204 )

Provision for income tax expense

$ ( 9,270 ) $ ( 7,987 ) $ ( 17,286 ) $ ( 18,206 )

Change in net unrealized gain (loss) on available-for-sale securities, net of tax

( 6 ) ( 4 ) ( 5 ) ( 18 )

Comprehensive loss

$ ( 9,276 ) $ ( 7,991 ) $ ( 17,291 ) $ ( 18,224 )

PER SHARE DATA

Net loss per share (basic and diluted)

$ ( 0.48 ) $ ( 1.16 ) $ ( 0.95 ) $ ( 2.80 )

Weighted average shares outstanding (basic and diluted)

19,125,970 6,874,454 18,137,050 6,499,089

The accompanying notes are an integral part of these condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY

For the three months ended March 31, 2025 and 2024

For the six months ended June 30, 2025 and 2024

(In thousands, except share amounts)

3 unchanged sentences

Stockholders’

Income (Loss)

BALANCE—December 31, 2024

— $ — 13,734,160 $ 1 $ 388,213 $ 5 $ ( 373,095 ) $ 15,124

Stock-based compensation

— — — — 2,501 — — 2,501

Issuance of common stock upon vesting of restricted stock units

— — 838,656 — — — — —

Taxes related to net share settlement of equity awards

— — ( 396,662 ) — ( 333 ) — — ( 333 )

Issuance of common stock under the Common Stock Purchase Agreements

— — 4,514,023 1 7,815 — — 7,816

Transaction costs related to the Common Stock Purchase Agreements

— — — — ( 95 ) — — ( 95 )

Other comprehensive income, net of tax

— — — — — 1 — 1

— — — — — — ( 8,016 ) ( 8,016 )

BALANCE—March 31, 2025

— $ — 18,690,177 $ 2 $ 398,101 $ 6 $ ( 381,111 ) $ 16,998

Stock-based compensation

— — — — 1,160 — — 1,160

Issuance of common stock upon vesting of restricted stock units

— — 126,766 — — — — —

Taxes related to net share settlement of equity awards

— — ( 44,536 ) — ( 31 ) — — ( 31 )

Issuance of common stock under the Common Stock Purchase Agreements

— — 508,003 — 581 — — 581

Transaction costs related to the Common Stock Purchase Agreements

— — — — ( 18 ) — — ( 18 )

Conversions of convertible note into common stock

1,184,549 — 716 716

Issuance of common stock through Employee Stock Purchase Plan

— — 85,307 — 52 — — 52

Other comprehensive loss, net of tax

— — — — — ( 6 ) — ( 6 )

— — — — — — ( 9,270 ) ( 9,270 )

BALANCE—June 30, 2025

— $ — 20,550,266 $ 2 $ 400,561 $ — $ ( 390,381 ) $ 10,182

Accumulated Other

4 unchanged sentences

BALANCE—December 31, 2023

— $ — 6,310,090 $ 1 $ 366,647 $ 10 $ ( 337,635 ) $ 29,023

Stock-based compensation

— — — — 3,014 — — 3,014

Issuance of common stock upon vesting of restricted stock units

— — 98,623 — — — — —

Taxes related to net share settlement of equity awards

— — ( 34,694 ) — ( 45 ) — — ( 45 )

Issuance of common stock under the Common Stock Purchase Agreement

Other comprehensive income, net of tax

— — 129,000 — 165 — — 165

Other comprehensive loss, net of tax

— — — — — ( 14 ) — ( 14 )

— — — — — — ( 10,219 ) ( 10,219 )

BALANCE—March 31, 2024

— — 6,503,019 1 369,781 ( 4 ) ( 347,854 ) 21,924

Stock-based compensation

— — — — 1,740 — — 1,740

Issuance of common stock upon exercise of stock options

— — 44,255 — 134 — — 134

Issuance of common stock upon vesting of restricted stock units

— — 167,143 — — — — —

Taxes related to net share settlement of equity awards

— — ( 1,292 ) — ( 2 ) — — ( 2 )

Issuance of common stock under the Common Stock Purchase Agreements

— — 1,693,929 — 5,395 — — 5,395

Stock issuance costs related to Common Stock Purchase Agreements

— — — — ( 416 ) — — ( 416 )

Issuance of common stock through Employee Stock Purchase Plan

— — 30,679 — 26 — — 26

Other comprehensive loss, net of tax

— — — — — ( 4 ) — ( 4 )

— — — — — — ( 7,987 ) ( 7,987 )

BALANCE—June 30, 2024

— $ — 8,437,733 $ 1 $ 376,658 $ ( 8 ) $ ( 355,841 ) $ 20,810

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

(In thousands)

Three months ended March 31,

Six months ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 17,286 ) $ ( 18,206 )

Adjustments to reconcile net loss to net cash used in operating activities:

8 unchanged sentences

Amortization of premiums and accretion of discounts on marketable securities, net of change in accrued interest

( 157 ) ( 428 )

Expected credit losses, net of write-off

6 unchanged sentences

Accrued expenses and other current liabilities

( 1,522 ) ( 1,402 )

Operating lease liabilities

( 1,532 ) ( 799 )

Contract liabilities

Other noncurrent liabilities

Net cash (used in) operating activities

( 14,158 ) ( 14,241 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

( 14 ) ( 234 )

Purchases of marketable securities

( 14,303 ) ( 15,173 )

Proceeds from redemptions and maturities of marketable securities

Net cash (used in) provided by investing activities

( 4,686 ) 2,993

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options

Proceeds from issuance of convertible note

Payments for convertible note redemptions

Transaction costs related to issuance of convertible note

Taxes paid related to the net share settlement of equity awards

Proceeds from issuance of common stock under Common Stock Purchase Agreements

Stock issuance costs related to Common Stock Purchase Agreements

( 404 ) ( 288 )

Taxes paid related to the net share settlement of equity awards

( 364 ) ( 47 )

Proceeds from issuance of common stock through the Employee Stock Purchase Plan

Net cash provided by financing activities

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

( 7,892 ) ( 5,717 )

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period

10,266 19,082

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period

$ 2,374 $ 13,365

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for income taxes, net of refund

Cash paid for interest

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

2 unchanged sentences

Debt issuance costs included in accounts payable and accrued liabilities

Purchases of property and equipment included in accounts payable and accrued liabilities

The accompanying notes are an integral part of these condensed consolidated financial statements.

3 unchanged sentences

and its wholly owned subsidiaries (the “Company” or “AEye”) is a provider of high-performance, active lidar systems for vehicle autonomy, advanced driver-assistance systems, or ADAS, and robotic vision applications.

AEye’s 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 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.

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

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

AEye, formerly known as CF Finance Acquisition Corp.

20 unchanged sentences

All intercompany balances and transactions have been eliminated in consolidation.

The Company has funded its operations primarily through the business combination and issuances of stock.

As of March 31, 2025 , the Company’s existing sources of liquidity included cash, cash equivalents, and marketable securities of $ 25,926 .

ASC 205 - 40, Presentation of Financial Statements - Going Concern , requires management to assess an entity’s ability to continue as a going concern within one year of the date the financial statements are issued.

Management is required to assess its ability to continue as a going concern within one year of the date the financial statements are issued in accordance with ASC 205 - 40, Presentation of Financial Statements - Going Concern.

In each reporting period, including interim periods, an entity is required to assess conditions known and reasonably knowable as of the financial statement issuance date to determine whether it is probable an entity will not meet its financial obligations within one year from the financial statement issuance date.

8 unchanged sentences

Since its inception, the Company has incurred net losses and negative cash flows from operations.

As of March 31, 2025 , the Company had an accumulated deficit of $ 381,111 .

For the three months ended March 31, 2025 and 2024 , the Company incurred a net loss of $ 8,016 and $ 10,219 , respectively, and the Company had net cash outflows from operating activities of $ 7,803 and $ 7,885 , respectively.

As of March 31, 2025 , the Company had $ 25,926 of cash, cash equivalents, and marketable securities.

As the Company is still in its early stages, it is expected to incur additional operating losses and negative cash flows as it continues to focus on achieving commercialization of its lidar solutions.

It remains critical for the Company to preserve cash and manage spending to extend its liquidity.

When conditions and events, in the aggregate, impact an entity’s ability to continue as a going concern, management evaluates the mitigating effect of its plans to determine if it is probable that the plans will be effectively implemented, and, when implemented, the plans will mitigate the relevant conditions or events.

The Company is dependent upon raising additional capital to provide the cash necessary to continue its ongoing operations and execute against its strategic objectives.

During the three months ended March 31, 2025 , the Company issued shares through stock purchase agreements and a convertible note totaling $ 11,055 .

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

The extent of the Company’s ability to raise additional capital through the issuance of equity is dependent on the market price of its common stock and declines in stock price may materially and adversely affect the Company’s capacity to secure necessary financing to support ongoing operations.

Should the Company not be able to raise additional capital, the Company plans to adjust spending to preserve and extend liquidity over the next 12 months, these plans include managing its workforce to reduce payroll costs and managing other discretionary spending.

There can be no assurance that the Company will be successful in these efforts to preserve cash.

Management believes that these plans can be successfully implemented and alleviate the substantial doubt that was raised about the Company's ability to continue as a going concern, which will result in sufficient liquidity and cash flows to support its ongoing operations and meet its obligations for at least one year following the date these condensed consolidated financial statements are issued.

As of June 30, 2025 , the Company had an accumulated deficit of $ 390,381 .

As the Company is still in its early stages, management expects to incur additional operating losses and negative operating cash flows as management continues to focus on achieving commercialization of its lidar solutions and execute on its strategic initiatives.

As the Company incurs additional losses in the future, management may need to raise additional capital through issuances of equity and debt.

The Company has funded its operations primarily through the business combination and issuances of stock.

As of June 30, 2025 , the Company's existing sources of liquidity included cash, cash equivalents, and marketable securities of $ 19,210 .

Subsequent to June 30, 2025 , the Company successfully raised additional capital of $ 68,844 through its common stock purchase agreements and an exercise of warrants (see Note 18 ).

As such, management believes that with total cash, cash equivalents and marketable securities at June 30, 2025, together with the additional net proceeds raised subsequent to quarter-end, the Company currently has sufficient financial resources to fund operations and meet its capital requirements and anticipated obligations as they come due in the next twelve months from the date of issuance of these condensed consolidated financial statements.

As such, management has concluded that the conditions and events that previously raised substantial doubt no longer exist.

Emerging Growth Company

8 unchanged sentences

The Company’s marketable securities have investment grade ratings when purchased which mitigates risk.

The Company’s accounts receivable are derived from customers located in the U.S.

The Company’s accounts receivable are derived from customers located in the U.S., Europe, and Asia Pacific.

The Company mitigates its credit risks by performing ongoing credit evaluations of its customers’ financial conditions.

18 unchanged sentences

The Company’s financial assets and liabilities measured at fair value on a recurring basis and the level of inputs used for such measurements were as follows (in thousands):

Fair Value Measured as of March 31, 2025 Using:

Fair Value Measured as of June 30, 2025 Using:

Adjusted Cost

66 unchanged sentences

Derivative Warrant Liability is included within other noncurrent liabilities on the condensed consolidated balance sheets.

These warrants were cancelled on July 28, 2025.

In January 2025, in connection with the 2025 Note, the Company issued warrants, which are recorded on the accompanying condensed consolidated balance sheets at fair value.

4 unchanged sentences

Derivative Warrant Liability is included within other noncurrent liabilities on the condensed consolidated balance sheets.

These warrants were exercised in full on July 28, 2025.

Private Placement Warrant Liability :

3 unchanged sentences

Private Placement Warrant liability is included within other noncurrent liabilities on the condensed consolidated balance sheets.

For the three months ended March 31, 2025 , there were no net transfers between Level 1 and Level 2 inputs.

The following table presents a summary of the changes in fair value of the Company’s Level 3 financial instruments for the three months ended March 31, 2025 (in thousands):

For the six months ended June 30, 2025 , there were no net transfers between Level 1 and Level 2 inputs.

The following table presents a summary of the changes in fair value of the Company’s Level 3 financial instruments for the six months ended June 30, 2025 (in thousands):

Derivative Warrant Liabilities

2 unchanged sentences

1,046 3,266 4,312

Payments and conversions

— ( 1,466 ) ( 1,466 )

Change in fair value included in other income (expense), net

( 284 ) 197 ( 87 )

Balance at March 31, 2025

Balance at June 30, 2025

$ 788 $ 1,997 $ 2,785

The key inputs into the Black-Scholes model for the derivative warrant liability from the 2025 Note valued at March 31, 2025 are as follows:

March 31, 2025

The key inputs into the Black-Scholes model for the derivative warrant liability from the 2025 Note valued at June 30, 2025 are as follows:

June 30, 2025

Expected term (years)

3 unchanged sentences

Exercise price

The key inputs into the binomial-lattice model for the 2025 Note valued at March 31, 2025 are as follows:

March 31, 2025

The key inputs into the binomial-lattice model for the 2025 Note valued at June 30, 2025 are as follows:

June 30, 2025

Expected term (years)

6 unchanged sentences

Similarly, a higher volatility assumption would increase the value of the liabilities, and a lower volatility assumption would decrease the value of the liabilities.

Inventory, net of write-downs, as of March 31, 2025 and December 31, 2024 were as follows (in thousands):

March 31, 2025

Inventory, net of write-downs, as of June 30, 2025 and December 31, 2024 were as follows (in thousands):

June 30, 2025

December 31, 2024

3 unchanged sentences

Total inventory, net

The Company also had $ 256 and $ 209 of noncurrent inventory (raw materials), net of write-downs, classified within other noncurrent assets on the condensed consolidated balance sheet as of March 31, 2025 and December 31, 2024 , respectively.

The Company’s current and noncurrent inventory as of March 31, 2025 and December 31, 2024 was written down by $ 4,668 and $ 4,659 , respectively, in order to reduce inventory to the lower of cost or net realizable value.

The Company also had $ 243 and $ 209 of noncurrent inventory (raw materials), net of write-downs, classified within other noncurrent assets on the condensed consolidated balance sheet as of June 30, 2025 and December 31, 2024 , respectively.

The Company’s current and noncurrent inventory as of June 30, 2025 and December 31, 2024 was written down by $ 4,648 and $ 4,659 , respectively, in order to reduce inventory to the lower of cost or net realizable value.

PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets as of March 31, 2025 and December 31, 2024 were as follows (in thousands):

March 31, 2025

Prepaid and other current assets as of June 30, 2025 and December 31, 2024 were as follows (in thousands):

June 30, 2025

December 31, 2024

3 unchanged sentences

$ 943 $ 2,706

The Company’s advances to suppliers as of March 31, 2025 and December 31, 2024 were written down by $ 1,041 and $ 1,041 , respectively, associated with the winding down of its legacy Non-Automotive product as part of its revised strategic plan.

The Company’s advances to suppliers as of June 30, 2025 and December 31, 2024 were written down by $ 1,041 and $ 1,041 , respectively, associated with the winding down of its legacy Non-Automotive product as part of its revised strategic plan.

See Note 15, Restructuring, for further details.

9 unchanged sentences

On April 28, 2025, the Company and the former landlord entered into a settlement agreement to resolve all outstanding disputes related to the early termination of the lease.

Under the terms of the agreement, the Company will pay $ 1,400 in cash and issue a warrant to purchase up to 350,000 shares of common stock at an initial exercise price of $ 2.22 per share with an estimated fair value of $ 228 .

The settlement was treated as a Type 1 subsequent event, and as a result, the Company adjusted the termination liability to $ 1,628 as of March 31, 2025 and recorded a gain on termination of operating lease of $ 1,685 during three months ended March 31, 2025 .

Under the terms of the agreement, the Company paid $ 1,400 in cash and will issue a warrant to purchase up to 350,000 shares of the Company's common stock at an initial exercise price of $ 2.22 per share with an estimated fair value of $ 301 .

The Company recorded a net gain on termination of operating lease of $ 1,612 during the six months ended June 30, 2025 .

See Note 17, Commitments and Contingencies, for further discussion.

The components of operating lease expenses, excluding the gain on early termination of operating lease, for the three months ended March 31, 2025 and 2024 , are as follows (in thousands):

Three months ended March 31,

The components of operating lease expenses, excluding the gain on early termination of operating lease, for the six months ended June 30, 2025 and 2024 , are as follows (in thousands):

Three months ended June 30,

Six months ended June 30,

Operating lease cost

$ 70 $ 582 $ 141 $ 1,171

Variable lease cost

Total operating lease cost

$ 74 $ 667 $ 149 $ 1,340

Maturities of lease liabilities, excluding the lease termination liability, are as follows (in thousands):

1 unchanged sentence

Years ending - December 31:

2025 (remaining nine months)

2025 (remaining six months)

Total lease payments

2 unchanged sentences

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities as of March 31, 2025 and December 31, 2024 are as follows (in thousands):

March 31, 2025

Accrued expenses and other current liabilities as of June 30, 2025 and December 31, 2024 are as follows (in thousands):

June 30, 2025

December 31, 2024

18 unchanged sentences

The 2025 Note is convertible into Common Stock, at a per share conversion price equal to $ 2.22 , subject to adjustments noted in the Note.

Beginning April 2025, and the first of each subsequent month (each a "Monthly Redemption Date or an "Installment Date"), the Company shall redeem the Monthly Redemption Amount until the 2025 Note is fully redeemed, payable in cash or, so long as certain equity conditions are met, shares of Common Stock at the option of the Company.

Monthly redemptions began in April 2025 and are due on the first of each subsequent month (each a "Monthly Redemption Date or an "Installment Date").

The Company shall redeem the Monthly Redemption Amount until the 2025 Note is fully redeemed, payable in cash or, so long as certain equity conditions are met, shares of Common Stock, at the option of the Company.

The equity conditions that must be met in order for the Company to settle the Monthly Redemption Amount in shares include requirements for the daily volume weighted average price of the Company's Common Stock to exceed $ 0.50 and the average daily trading volume of the Company's Common Stock to exceed $ 100 for the twenty ( 20 ) trading days prior to the applicable Installment Notice Date (which is the sixth ( 6th ) trading day prior to each Installment Date).

1 unchanged sentence

If the Company elects to settle such redemptions in shares of Common Stock, the number of shares to be settled shall be based on an Installment Conversion Price equal to the lower of (i) $ 2.22 or (ii) the greater of $ 0.30 and 90 % of average volume weighted average price of the Common Stock during the five ( 5 ) trading days immediately preceding the applicable Monthly Redemption Date.

The investor is permitted to accelerate up to one Monthly Installment Amount, not exceeding five times between Installments, (each, an "Acceleration," and each such amount, an "Acceleration Amount", and the Conversion Date of any such Acceleration, each an "Acceleration Date") at the Acceleration Conversion Price.

The investor is permitted, not exceeding five times, to accelerate up to one Monthly Installment Amount, between Installments, (each, an "Acceleration," and each such amount, an "Acceleration Amount", and the Conversion Date of any such Acceleration, each an "Acceleration Date") at the Acceleration Conversion Price.

The Acceleration Conversion Price shall be the lower of (i) $ 2.22 or (ii) the greater of $ 0.30 and 90 % of average volume weighted average price of the Common Stock during the five ( 5 ) trading days immediately preceding the applicable Acceleration Date.

10 unchanged sentences

This resulted in an initial fair value of $ 3,266 being allocated to the 2025 Note, and $ 1,046 allocated to the associated warrants (see Note 2 for further details).

The Company recorded a non-cash issuance costs of $ 1,312 , representing the difference between the fair value and proceeds received, within Interest expense and other on the condensed consolidated statement of operations.

The Company recorded a non-cash issuance cost of $ 1,312 , representing the difference between the fair value and proceeds received, within Interest expense and other on the condensed consolidated statement of operations.

The fair value measurement includes the assumption of accrued interest and expense and thus a separate amount is not reflected on the condensed consolidated statement of operations.

As of March 31, 2025, the 2025 Note has an outstanding principal balance and accrued interest of $ 3,296 and is recorded as a current liability at fair value of $ 3,233 .

As of June 30, 2025 , the 2025 Note has an outstanding principal balance and accrued interest of $ 1,958 and is recorded as a current liability at fair value of $ 1,997 .

INTEREST EXPENSE AND OTHER

Interest expense and other for the three months ended March 31, 2025 and 2024 consisted of the following (in thousands):

Three months ended March 31,

Interest expense and other for the six months ended June 30, 2025 and 2024 consisted of the following (in thousands):

Three months ended June 30,

Six months ended June 30,

Common stock purchase agreements costs

$ 195 $ — $ 306 $ —

Debt issuance costs

2 unchanged sentences

Expected credit losses

222 94 326 34

Interest expense and other

13 unchanged sentences

The Company determined that the right to sell additional shares represents a freestanding put option under ASC 815, Derivatives and Hedging , and as such, the financial instrument was classified as a derivative asset with a fair value of zero at inception of the CSPA on July 25, 2024 .

The Company has issued 3,480,713 shares of its common stock to New Circle under the CSPA for gross proceeds totaling $ 6,480 through March 31, 2025.

The Company has issued 3,480,713 shares of its common stock to New Circle under the CSPA for gross proceeds totaling $ 6,480 through June 30, 2025 .

Alliance Global Partners ( “ A.G.P.

7 unchanged sentences

under the ATM Agreement, having a new aggregate value offering of up to $ 15,292 .

The Company has sold 5,887,640 shares under the ATM Agreement for gross proceeds totaling $ 8,244 through March 31, 2025.

The Company has sold 6,395,643 shares under the ATM Agreement for gross proceeds totaling $ 8,825 through June 30, 2025 .

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2025 and 2024 are as follows (in thousands):

The changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2025 and 2024 are as follows (in thousands):

Unrealized gains on available-for-sale securities

2 unchanged sentences

Balance at March 31, 2025

Other comprehensive loss, net of tax

Balance at June 30, 2025

Unrealized gains (losses) on available-for-sale securities

2 unchanged sentences

Balance at March 31, 2024

Other comprehensive income, net of tax

Balance at June 30, 2024

NET LOSS PER SHARE

The following table sets forth the basic and diluted net loss per share attributable to common stockholders for the periods presented (in thousands, except share amounts and per share data):

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Net loss attributable to common stockholders

6 unchanged sentences

$ ( 0.48 ) $ ( 1.16 ) $ ( 0.95 ) $ ( 2.80 )

Due to net losses for the three months ended March 31, 2025 and 2024 , basic and diluted net loss per share were the same, as the effect of all potentially dilutive securities would have been anti-dilutive.

Due to net losses for the six months ended June 30, 2025 and 2024 , basic and diluted net loss per share were the same, as the effect of all potentially dilutive securities would have been anti-dilutive.

The following table sets forth the anti-dilutive common share equivalents for the periods listed:

Three months ended March 31,

Six months ended June 30,

Common stock options issued and outstanding

5 unchanged sentences

27,572,156 206,780

Conversion of convertible notes

Conversion of convertible note

1,790,955 75,469

18,513 30,679

31,384,942 1,491,955

STOCK-BASED COMPENSATION

The following table summarizes stock-based compensation expense recorded in each financial statement line item in the Company’s condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025 and 2024 (in thousands):

Three months ended March 31,

The following table summarizes stock-based compensation expense recorded in each financial statement line item in the Company’s condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three months ended June 30,

Six months ended June 30,

Research and development

1 unchanged sentence

Sales and marketing

126 3 255 185

General and administrative

718 1,238 2,395 2,861

Total stock-based compensation

2 unchanged sentences

The Company adopted ASU 2023 - 07 during the year ended December 31, 2024.

The Company has one reportable segment managed on a consolidated basis by the Chief Executive Officer (CEO) who is the chief operating decision maker (“CODM”).

The Company has one reportable segment managed on a consolidated basis by the Chief Executive Officer who is the chief operating decision maker (“CODM”).

In identifying one reportable segment, the Company considered the basis of organization for the design and development of high-performance, active lidar systems and applications.

4 unchanged sentences

Sale of Prototypes

The Company recorded revenue for prototype sales of $ 0 and $ 20 in the three months ended March 31, 2025 and 2024 , respectively.

The Company recorded revenue for prototype sales of $ 22 and $ 22 in the three and six months ended June 30, 2025 , respectively, and $ 6 and $ 26 in the three and six months ended June 30, 2024 , respectively.

The Company does not incur significant contract costs in fulfilling or obtaining its contracts with customers.

D evelopment Contracts

The Company has entered into research and development contracts as well as a sales, marketing and technical support services contract with companies primarily in the automotive industry.

The Company assessed the number of performance obligations associated with the promises under each agreement, primarily the delivery of customized 4Sight TM perception-related goods and services, and recognized $ 64 and $ 0 in revenue for performance obligations that had been satisfied as of March 31, 2025 and 2024 , respectively, in the condensed consolidated statements of operations and comprehensive loss.

The Company has entered into research and development contracts as well as a sales, marketing and technical support services contract with companies in both the Automotive and in Non-Automotive industries.

The Company assessed the number of performance obligations associated with the promises under each agreement, primarily the delivery of customized perception-related goods and services, and recognized $ 0 and $ 64 in revenue for performance obligations that had been satisfied as of the three and six months ended June 30, 2025 , respectively, and $ 26 during both the three and six months ended June 30, 2024 in the condensed consolidated statements of operations and comprehensive loss.

Disaggregation of Revenue

1 unchanged sentence

Total revenue based on the disaggregation criteria described above is as follows (in thousands):

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Revenue by primary geographical market:

United States

$ 5 $ 26 $ 5 $ 41

$ 22 $ 32 $ 86 $ 52

Revenue by timing of recognition:

Recognized at a point in time

$ 22 $ 6 $ 22 $ 26

Recognized over time

$ 22 $ 32 $ 86 $ 52

Contract Liabilities

There were no changes in contract liabilities balance for the three months ended March 31, 2025 and 2024 and there were no remaining performance obligations as of March 31, 2025 , and December 31, 2024.

The Company had $ 0 and $ 74 in contract liabilities balance as of June 30, 2025 and 2024.

There were no remaining performance obligations as of June 30, 2025 and December 31, 2024.

Remaining Performance Obligations

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In August 2024, the Company further reduced fixed operating costs and terminated its headquarters lease and in 2025, settled the amount of the lease termination liability.

See discussion in Note 5, Leases and Note 17, Commitment and Contingencies for the settlement of the lease termination liability.

Restructuring charges are summarized as follows as of March 31, 2025 (in thousands):

See discussion in Note 5, Leases and Note 17, Commitment and Contingencies for further discussion regarding the settlement of the lease termination liability.

Restructuring charges are summarized as follows for the six months ended June 30, 2025 (in thousands):

Losses on purchase commitments

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( 30 ) ( 1,400 ) — ( 1,430 )

Balance as of March 31, 2025

Balance as of June 30, 2025

$ 267 $ 301 $ 5 $ 573

For the three months ended March 31, 2025 and 2024 , the Company recognized $ 2 and $ 2 provision for income taxes, respectively.

For the six months ended June 30, 2025 and 2024 , the Company recognized $ 2 and $ 2 provision for income taxes, respectively.

The income tax rates vary from the federal and state statutory rates due to the valuation allowances on the Company’s net operating losses and foreign tax rate differences.

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The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

On August 28, 2024 , the Company was served with a complaint that was filed in the Superior Court of California for the County of Alameda on August 26, 2024 that ( 1 ) alleges the Company was in breach of the lease for its former headquarters office in Dublin, California because of the Company’s failure to pay rent as required by the lease and ( 2 ) provides notice that the lease had been terminated by the landlord effective as of August 23, 2024.

On August 28, 2024 , the Company was served with a complaint that was filed in the Superior Court of California for the County of Alameda on August 26, 2024 that ( 1 ) alleged the Company was in breach of the lease for its former headquarters office in Dublin, California because of the Company’s failure to pay rent as required by the lease and ( 2 ) provided notice that the lease had been terminated by the landlord effective as of August 23, 2024.

The landlord claimed that the amount owed could be up to $ 8,500 .

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On April 28, 2025, the Company and the former landlord entered into a settlement agreement to resolve all outstanding disputes related to the early termination of the lease.

Under the terms of the agreement, the Company will pay $ 1,400 in cash and issue a warrant to purchase up to 350,000 shares of common stock at an initial exercise price of $ 2.22 per share.

Under the terms of the agreement, the Company paid $ 1,400 in cash in May 2025, and will issue warrants to purchase up to 350,000 shares of common stock at an initial exercise price of $ 2.22 per share.

SUBSEQUENT EVENTS

On April 28, 2025, the Company and the former landlord entered into a settlement agreement to resolve all outstanding disputes related to the early termination of the lease.

The settlement was treated as a Type 1 subsequent event and the lease termination liability was adjusted from $ 3,313 as of December 31, 2024 to $ 1,628 as of March 31, 2025 , reflecting the final settlement of $ 1,400 in cash and 350,000 of warrants, which were valued at $ 228 .

Subsequent to June 30, 2025, the Company issued 17,889,400 shares of its common stock under the common stock purchase agreements for total gross proceeds of $ 67,057 .

Additionally, a noteholder exercised warrants to purchase 805,263 shares of common stock for a total exercise price of $ 1,788 .

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

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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 the three months ended March 31, 2025, as well as our future prospects.

We believe that an understanding of these trends is important to understanding our financial results for the six months ended June 30, 2025, 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 Quarterly Report, including our condensed consolidated financial statements and accompanying notes.

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Market Trends and Uncertainties

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

We believe this expected growth will enable us to capture market share across both the Automotive and Non-Automotive markets.

We plan to pursue opportunities in advanced driver-assistance systems, or ADAS, autonomous driving, and commercial trucking, while also exploring opportunities in the Non-Automotive market, such as in the railway, security, and intelligent transportation systems, or ITS segments.

We anticipate growing demand for our Intelligent Sensing Platform across our two major markets, Automotive and Non-Automotive, and we believe this expected growth will enable us to capture market share across both the Automotive and Non-Automotive markets.

We plan to pursue opportunities in advanced driver-assistance systems, or ADAS, autonomous driving, and commercial trucking, while also exploring opportunities in the Non-Automotive market, such as in the railway, airport safety and security, perimeter monitoring, transportation logistics, and intelligent transportation systems, or ITS segments.

This diversified approach provides us with multiple opportunities for sustained growth by enabling new applications and product features across a broad range of industries and market segments.

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

We recently raised additional capital that we expect will provide us with an operating runway for at least the next 12 months and allow us to fund our short- and mid-term strategic initiatives.

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

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.

Since inception, we have incurred net losses and negative cash flows from operations and expect to continue incurring losses until at least commercialization.

Accordingly, we expect to remain dependent on 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.

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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 the three months ended March 31, 2025, we raised $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 equity line of credit and ATM facilities.

During the six months ended June 30, 2025, we raised $11,637 in gross proceeds through share issuances through our common stock purchase agreements and a convertible note.

Subsequent to June 30, 2025, we raised $68,844 in gross proceeds through issuance of shares through our common stock purchase agreements and an exercise of warrants.

We also have additional liquidity available through our equity line of credit and ATM facilities.

Partnerships and Commercialization

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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, with Apollo having entered Nvidia’s independent testing phase.

We have also made substantial progress in our collaboration efforts with Nvidia.

Most recently, we announced the integration of our lidar technology into Nvidia’s DRIVE AGX Orin platform, which we believe represents a significant milestone in expanding our reach within the automotive ecosystem.

This integration is expected to open new opportunities to engage with global automotive OEMs and Tier 1 suppliers as they adopt Nvidia’s autonomous driving solutions.

In addition, we continue to demonstrate significant advances in the high-speed and long-range detection performance of our lidar systems, which we believe positions us well for future integration with Nvidia’s Hyperion platform.

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

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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.

In July 2025, we announced the launch of OPTIS TM , a complete physical AI solution designed to enhance legacy infrastructure and deliver actionable intelligence across a wide range of industries.

OPTIS TM combines our software-defined Apollo lidar technology with advanced computing to bridge the gap between perception and action in real time.

This solution is intended to not only address critical needs in transportation, safety, and security, but also opens our platform to third-party partners and developers, creating an ecosystem for innovation and growth beyond automotive applications.

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.

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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 market 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.

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 product's 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.

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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 TM 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.

Unlike traditional sensing systems that passively collect data, our active 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, our next-generation lidar sensor.

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 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 continually enhanced via software updates.

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.

This innovative sensor leverages our Intelligent Sensing Platform, providing a highly programmable and customizable lidar solution that can be continually enhanced via software updates.

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

In July 2025, we announced OPTIS™, a physical AI solution designed to modernize legacy infrastructure by delivering actionable intelligence in real time.

This platform opens our ecosystem to third-party partners and developers, creating opportunities for growth across industries.

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

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Total Revenues

Our prototype sales revenue primarily related to unit sales of our 4Sight TM product.

Our prototype sales revenue primarily related to unit sales of our lidar products.

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.

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.

These contracts primarily focus on customization of our product's 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.

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R&D expenses include:

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

personnel-related expenses, including salaries, benefits, bonuses, one-time termination benefits, and stock-based compensation expense, net of allocations to other departments;

third-party engineering and contractor costs;

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R&D costs are expensed as they are incurred.

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

We expect our R&D costs to increase from 2024 as we continue to invest in the development and commercialization of our products.

Sales and Marketing

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allocated personnel and overhead expenses.

We expect our S&M expenses to increase as we pursue Non-Automotive opportunities to accelerate profitability while continuing to leverage our Tier 1 partners to commercialize our products and manage relationships with the OEMs in the Automotive market.

We expect our S&M expenses to increase from 2024 as we pursue Non-Automotive opportunities to accelerate profitability while continuing to leverage our Tier 1 partners to commercialize our products and manage relationships with the OEMs in the Automotive market.

General and Administrative

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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;

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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.

We expect our G&A expenses to decrease slightly from 2024 with reduced facility costs, while continuing to incur expenses to support other departments as we continue to develop and commercialize our products.

Change in Fair Value of Convertible Note and Warrant Liabilities

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We also elected to record interest expense on the 2025 Note as changes in fair value.

We expect the change in fair value of warrant liability to decrease given that subsequent to June 30, 2025, the warrants associated with the 2022 convertible note were cancelled and the warrants associated with the 2025 convertible note were exercised in full.

Interest Income, Interest Expense and Other

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

We expect interest income will increase due to funds raised subsequent to June 30, 2025.

Results of Operations

Comparison of the three months ended March 31, 2025 and 2024

Comparison of the three months ended June 30, 2025 and 2024

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

The following table sets forth our consolidated results of operations data for the three months ended March 31, 2025 and 2024 (in thousands, except for percentages):

Three months ended March 31,

The following table sets forth our consolidated results of operations data for the three months ended June 30, 2025 and 2024 (in thousands, except for percentages):

Three months ended June 30,

Cost of revenue

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Provision for income tax expense

Revenues increased by $44, or 220%, to $64 for the three months ended March 31, 2025, from $20 for the three months ended March 31, 2024.

This increase is primarily due to contract development revenues, partially offset by lower prototype unit sales in the current quarter.

Revenues decreased by $10, or 31%, to $22 for the three months ended June 30, 2025, from $32 for the three months ended June 30, 2024.

This decrease is primarily due to lower contract development revenues, partially offset by an increase in the number of prototype unit sales in the current quarter.

Cost of Revenue

Cost of revenue decreased by $167, or 63%, to $96 for the three months ended March 31, 2025, from $263 for the three months ended March 31, 2024.

This decrease was primarily due to fewer units sold in the current quarter to Non-Automotive customers.

The decrease was also due to inventory write-downs and losses on purchase commitments recorded in the three months ended March 31, 2024, which was primarily associated with transitioning to certain higher-grade components in our products for the Automotive market as a result of our revised strategic plan.

Cost of revenue decreased by $52, or 33%, to $108 for the three months ended June 30, 2025, from $160 for the three months ended June 30, 2024.

This decrease was primarily due to lower contract development costs in the current quarter and inventory write-downs recorded in the three months ended June 30, 2024.

Operating Expenses

Research and Development

Research and development expenses decreased by $1,042, or 23%, to $3,490 for the three months ended March 31, 2025, from $4,532 for the three months ended March 31, 2024.

This decrease was primarily driven by decreases in personnel costs of $323, stock-based compensation expense of $477, and information technology and facilities expense of $463.

The decrease was offset by a $350 increase in fees paid to third parties for development work.

Research and development expenses decreased by $168, or 4%, to $3,670 for the three months ended June 30, 2025, from $3,838 for the three months ended June 30, 2024.

This decrease was primarily driven by decreases in stock-based compensation expense of $189 and information technology and facilities expense of $431.

The decreases were offset by a $361 increase in fees paid to third parties for development work and personnel costs, net of allocations, of $120.

Sales and Marketing

Sales and marketing expenses increased by $42, or 12%, to $383 for the three months ended March 31, 2025, from $341 for the three months ended March 31, 2024.

This increase was primarily driven by increases in allocated personnel costs of $294 as we pursue Non-Automotive opportunities.

The increase is partially offset by decreases in stock-based compensation of $181 and facilities and information technology allocations of $90.

Sales and marketing expenses increased by $534, or 797%, to $601 for the three months ended June 30, 2025, from $67 for the three months ended June 30, 2024.

This increase was primarily driven by increases in allocated personnel costs and stock-based compensation of $484 and marketing and consulting costs of $60 as we pursue Non-Automotive opportunities.

General and Administrative

General and administrative expenses decreased by $2,720, or 48%, to $2,895 for the three months ended March 31, 2025, from $5,615 for the three months ended March 31, 2024.

This decrease was primarily driven by a favorable adjustment of $1,685 upon settlement of a lease dispute, decreases in personnel cost of $803 and insurance of $106.

These decreases were partially offset by an increase in stock-based compensation of $146.

General and administrative expenses increased by $125, or 3%, to $4,348 for the three months ended June 30, 2025, from $4,223 for the three months ended June 30, 2024.

This increase was primarily driven by increases in accounting, legal and consulting fees of $554, partially offset by decreases in stock-based compensation and personnel costs, net of allocations, of $515.

Change in Fair Value of Convertible Note and Warrant Liabilities

Change in fair value of convertible note and warrant liabilities increased by $678 to a gain of $680 for the three months ended March 31, 2025, from a gain of $2 for the three months ended March 31, 2024.

This increase was primarily due to the change in fair value of the the 2025 Note and related warrants in January 2025.

Change in fair value of convertible note and warrant liabilities increased by $578 to $593 for the three months ended June 30, 2025, from $15 for the three months ended June 30, 2024.

This increase was primarily due to the change in fair value of the 2025 Note and related warrants, which were newly issued in 2025.

Interest Income and Other

Interest income and other increased by $19, or 10%, to $214 for the three months ended March 31, 2025, from $195 for the three months ended March 31, 2024.

This increase was primarily due to higher interest earned on our cash equivalents and marketable securities in the current period.

Interest income and other increased by $165, or 72%, to $393 for the three months ended June 30, 2025, from $228 for the three months ended June 30, 2024.

This increase was primarily due to insurance proceeds received of $250, partially offset by lower interest earned on our cash equivalents and marketable securities in the current period.

Interest Expense and Other

Interest expense and other increased by $2,425, or 765%, to a net expense of $2,108 for the three months ended March 31, 2025, from a net income of $317 for the three months ended March 31, 2024.

This increase was primarily due to an increase in costs related to financing arrangements of $2,095 and a decrease in amortization of premiums on marketable securities, net, of $180.

Interest expense and other increased by $421, or 752%, to a net expense of $365 for the three months ended June 30, 2025, from a net income of $56 for the three months ended June 30, 2024.

This increase was primarily due to an increase in costs related to financing arrangements of $231 and foreign exchange losses.

Provision for Income Tax Expense

Provision for income tax expenses remained constant at $2 for the three months ended March 31, 2025 and March 31, 2024.

Net loss decreased by $2,203, or 22%, to $8,016 for the three months ended March 31, 2025, from $10,219 for the three months ended March 31, 2024.

This decrease was primarily due to decreases in personnel and facilities expenses, partially offset by increased investments in the development of Apollo.

Provision for income tax expenses remained constant at $0 for the three months ended June 30, 2025 and June 30, 2024.

Net loss increased by $1,283, or 16%, to $9,270 for the three months ended June 30, 2025, from $7,987 for the three months ended June 30, 2024.

This increase was primarily due to increased personnel costs, investments in the development of Apollo and changes in fair value of convertible note and warrants, partially offset by decreases in stock-based compensation and facilities expenses.

Results of Operations

Comparison of the six months ended June 30, 2025 and 2024

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

The following table sets forth our consolidated results of operations data for the six months ended June 30, 2025 and 2024 (in thousands, except for percentages):

Six months ended June 30,

Total revenue

Cost of revenue

Research and development

Sales and marketing

General and administrative

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 expense

Provision for income tax expense

Revenues increased by $34, or 65%, to $86 for the six months ended June 30, 2025, from $52 for the six months ended June 30, 2024.

This increase is primarily due to higher contract development revenues, partially offset by lower prototype unit sales in the current quarter.

Cost of Revenue

Cost of revenue decreased by $219, or 52%, to $204 for the six months ended June 30, 2025, from $423 for the six months ended June 30, 2024.

This decrease was primarily due to inventory write-downs and losses on purchase commitments recorded in the six months ended June 30, 2024, resulting from implementation of our strategic plan to wind down support for our legacy Non-Automotive product.

Operating Expenses

Research and Development

Research and development expenses decreased by $1,210, or 14% to $7,160 for the six months ended June 30, 2025, from $8,370 for the six months ended June 30, 2024.

This decrease was primarily driven by decreases in stock-based compensation expense and personnel costs, net of allocation, of $869, and information technology and facilities expense of $893.

The decreases were offset by a $711 increase in fees paid to third parties for development work.

Sales and Marketing

Sales and marketing expenses increased by $576, or 141% to $984 for the six months ended June 30, 2025, from $408 for the six months ended June 30, 2024.

This increase was primarily driven by increases in allocated personnel and stock-based compensation costs of $778 and marketing and consultant spend of $85 as we pursue Non-Automotive opportunities.

General and Administrative

General and administrative expenses decreased by $2,595, or 26%, to $7,243 for the six months ended June 30, 2025, from $9,838 for the six months ended June 30, 2024.

This decrease was primarily driven by a favorable adjustment of $1,612 upon settlement of a lease dispute, decreases in stock-based compensation and personnel cost, net of allocations, of $1,202.

These decreases were partially offset by an increase in accounting, legal, and professional fees of $579.

Change in Fair Value of Convertible Note and Warrant Liabilities

Change in fair value of convertible note and warrant liabilities increased by $100 to $87 for the six months ended June 30, 2025, from a net gain $13 for the six months ended June 30, 2024.

This increase was primarily due to the change in fair value of the 2025 Note and related warrants, which were newly issued in 2025.

Interest Income and Other

Interest income and other increased by $184 or 43%, to $607 for the six months ended June 30, 2025, from $423 for the six months ended June 30, 2024.

This increase was primarily due to insurance proceeds received of $250, partially offset by lower interest earned on our cash equivalents and marketable securities in the current period.

Interest Expense and Other

Interest expense and other increased by $2,846, or 763%, to a net expense of $2,473 for the six months ended June 30, 2025, from a net income of $373 for the six months ended June 30, 2024.

This increase was primarily due to an increase in costs related to financing arrangements in the current period and a decrease in amortization of premiums on marketable securities, net.

Provision for Income Tax Expense

Provision for income tax expenses remained constant at $2 for the six months ended June 30, 2025 and June 30, 2024.

Net loss decreased by $920, or 5% to $17,286 for the six months ended June 30, 2025, from $18,206 for the six months ended June 30, 2024.

This decrease was primarily due to decreases in stock-based compensation, personnel and facilities expenses, partially offset by the increase in the change in fair value of convertible note and warrants, and investments in the development of Apollo.

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 a relationship with one or more Tier 1 automotive suppliers and the timing of any OEM design wins, our ability to extend our cash runway based on the restructuring initiatives announced in prior years, the timing and extent of spending to support R&D efforts, how quickly we can commercialize our products, and the market adoption of new and enhanced products and features.

As of March 31, 2025, our cash, cash equivalents, and marketable securities totaled $25,926.

For the three months ended March 31, 2025 and 2024, we had a net loss of $8,016 and $10,219, respectively.

Our capital requirements will depend on many factors, including, but not exclusively, sales volume and timing of revenue, our efforts to establish and maintain a relationship with one or more Tier 1 automotive suppliers and the timing of any OEM design wins, our ability to effectively and efficiently manage our expenses, the timing and extent of spending to support R&D efforts, how quickly we can commercialize our products, and the market adoption of new and enhanced products and features.

As of June 30, 2025, our cash, cash equivalents, and marketable securities totaled $19,210.

Subsequent to June 30, 2025, we successfully raised additional capital of $68,844 on the issuance of shares from our common stock purchase agreements and the exercise of certain warrants.

For the six months ended June 30, 2025 and 2024, we had a net loss of $17,286 and $18,206, respectively.

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

Our principal sources of liquidity have been proceeds received from the issuance of equity.

Our principal source of liquidity are the proceeds received from the issuance of equity.

We recently raised additional capital that we expect will provide us with an operating runway for at least 12 months and allow us to fund our short- and mid-term strategic initiatives.

Tumim Stone Transaction

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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 a limitation of one-third of our public float over a rolling twelve-month period, when our public float is below $75 million (which it is as of the date of this Quarterly Report on Form 10-Q is filed), which is referred to as the “baby shelf" rules.

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 a limitation of one-third of our public float over a rolling twelve-month period, when our public float is below $75 million, which is referred to as the “baby shelf" rules.

As of July 28, 2025, we were no longer subject to the "baby shelf" rules.

Dowslake Transaction

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

As of March 31, 2025, we have issued 3,255,150 shares of our common stock to New Circle under the CSPA for gross proceeds totaling $6,480.

As of June 30, 2025, we have issued 3,480,713 shares of our common stock to New Circle under the CSPA for gross proceeds totaling $6,480.

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 $15,292 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.

As of March 31, 2025, we have sold 5,887,640 shares under the ATM Agreement for gross proceeds totaling $8,244.

As of June 30, 2025, we have sold 6,395,643 shares under the ATM Agreement for gross proceeds totaling $8,825.

2025 Convertible Note

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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.

Until we are able to 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 earlier, 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.

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We expect that our expenses will continue to exceed our operating income and, as a result, we may need additional capital resources to fund our operations.

We believe that our potential liquidity and the implementation of our plans should we be unable to secure additional financing will sufficiently alleviate the risk of substantial doubt about our ability to continue as a going concern and 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 Quarterly Report on Form 10-Q.

For additional discussion of our plans, see Note 1 in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.

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

We believe that our cash, cash equivalents and marketable securities at June 30, 2025, together with the additional proceeds raised subsequent to quarter-end of $68,844, we currently have sufficient financial resources to fund our operating expenses, working capital, and capital expenditure requirements for a period of at least twelve months from the date of this Quarterly Report on Form 10-Q.

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 Quarterly Report on Form 10-Q) 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 5 and 17 to the Condensed Consolidated Financial Statements in Item 1of Part I of this Quarterly Report on Form 10-Q.

For additional information regarding our cash requirements from contractual obligations, see Note 17 to the Condensed Consolidated Financial Statements in Item 1of Part I of this Quarterly Report on Form 10-Q.

Cash Flow Summary

Three months ended March 31,

Six months ended June 30,

(in thousands)

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Operating Activities

For the three months ended March 31, 2025, net cash used in operating activities was $7,803.

For the six months ended June 30, 2025, net cash used in operating activities was $14,158.

Factors affecting our operating cash flows during this period were net loss of $17,286, a gain on termination of an operating lease of $1,612, and change in fair value of convertible notes and warrant liabilities of $87, partially offset by stock-based compensation of $3,661, debt issuance costs of $2,020, and common stock purchase agreement costs of $306.

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Cash used was offset by cash provided by decreases in prepaid and other current assets and other noncurrent assets of $84 and $134, respectively, and an increase in accounts payable of $1,761.

For the three months ended March 31, 2024, net cash used in operating activities was $7,885.

For the six months ended June 30, 2024, net cash used in operating activities was $14,241.

Factors affecting our operating cash flows during this period were a net loss of $18,206, amortization of premiums and accretion of discounts on marketable securities, net of $428, offset by stock-based compensation of $4,754, and noncash lease expense of $727.

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Investing Activities

For the three months ended March 31, 2025, net cash used in investing activities was $8,578.

For the six months ended June 30, 2025, net cash used in investing activities was $4,686.

The primary factors affecting net cash used in investing activities during this period were the purchases of marketable securities of $14,303, partially offset by redemptions and maturities of marketable securities of $9,631.

For the three months ended March 31, 2024, net cash provided by investing activities was $368.

For the six months ended June 30, 2024, net cash provided by investing activities was $2,993.

The primary factors affecting net cash provided by investing activities during this period were the proceeds from redemptions and maturities of marketable securities of $18,400, partially offset by the purchases of marketable securities of $15,173 and purchases of property and equipment of $234.

Financing Activities

For the three months ended March 31, 2025, net cash provided by financing activities was $11,382.

The primary factors affecting our financing cash flows during this period were proceeds from common stock purchase agreements of $9,495 and from the issuance of a convertible note of $2,950, partially offset by debt issuance costs of $578, taxes paid on net settlement of equity awards of $333 and stock issuance costs related to common stock purchase agreements of $152.

For the three months ended March 31, 2024, net cash used in financing activities was $120.

The primary factors affecting our financing cash flows during this period were proceeds from the exercise of the CSPA of $165, partially offset by payments for taxes related to net settlement of equity awards of $45.

Critical Accounting Policies and Estimates

For the six months ended June 30, 2025, net cash provided by financing activities was $10,952.

The primary factors affecting our financing cash flows during this period were proceeds from common stock purchase agreements of $10,076 and from the issuance of a convertible note of $2,950, partially offset by payments on convertible note of $750, payments of debt issuance costs of $608, taxes paid on net settlement of equity awards of $364 and payments of stock issuance costs related to common stock purchase agreements of $404.

For the six months ended June 30, 2024, net cash used in financing activities was $5,531.

The primary factors affecting our financing cash flows during this period were proceeds from the exercise of the common stock purchase agreement of $5,560, partially offset by payments for taxes related to net settlement of equity awards of $47.

Critical Accounting Estimates

Our condensed consolidated financial statements are in accordance with GAAP.

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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 judgment and complexity and have the greatest potential impact on our condensed consolidated financial statements.

During the three months ended March 31, 2025, there were no significant changes in our critical accounting policies and estimates as compared to those previously disclosed in “Critical Accounting Policies and Estimates” in “Management's Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Annual Report on Form 10-K.

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

During the six months ended June 30, 2025, there were no significant changes in our critical accounting estimates as compared to those previously disclosed in “Critical Accounting Policies and Estimates” in “Management's Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Annual Report on Form 10-K.

Emerging Growth Company Status

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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.

What changed 10-Q

Item 1. Financial Statements