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Item 1. Business

2026-03-18 compared with 2025-02-24 · 129 added, 107 removed, 132 unchanged (64% of the section changed)

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

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

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

We are a provider of physical AI sensing solutions built on high-performance, active lidar systems for vehicle autonomy, advanced driver-assistance systems (ADAS), robotic vision and a range of Non-Automotive applications.

Our physical AI approach combines software‑defined sensing with adaptive perception capabilities that enable machines to interpret and respond to complex physical environments in real time.

Our proprietary Intelligent Sensing Platform incorporates a solid‑state, software‑definable active lidar sensor;

an adaptive SmartScan architecture that dynamically adjusts scan patterns for different scenes and targets;

and a signal‑processing pipeline designed to deliver precise measurements and imaging for safety‑critical use cases.

This platform is designed to support a broad set of markets beyond passenger vehicles, including rail, aerospace and defense, smart infrastructure, and security, where long‑range performance, environmental robustness, and software‑based configurability are key requirements.

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

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military provided us with the background to develop a differentiated approach to visual sensing.

While traditional sensing systems passively collect data, our active 4Sight TM Intelligent Sensing Platform leverages principles from automated targeting systems and biomimicry to scan the environment, while intelligently focusing on what matters in order to enable safer, smarter, and faster decisions in complex scenarios.

While traditional sensing systems passively collect data, our active Intelligent Sensing Platform leverages principles from automated targeting systems and biomimicry to scan the environment, while intelligently focusing on what matters in order to enable safer, smarter, and faster decisions in complex scenarios.

From our inception, our culture drew from esteemed scientists and electro-optics engineers from the National Aeronautics and Space Administration, or NASA, Lockheed Martin Corporation, Northrop Grumman Corporation, the U.S.

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

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

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

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

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

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

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

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

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

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

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

The platform is also software‑adaptable, enabling adjustments to scan pattern, frame rate, and other performance characteristics without hardware changes.

This software‑defined approach allows us to tailor a common architecture into application‑specific products across multiple markets.

Our systems‑based approach supports partnerships not only within the established automotive supply chain, such as OEMs and Tier 1 and Tier 2 suppliers, but also with solution providers in non‑automotive markets.

In automotive, we expect Tier 1 partners to add value through industrialization, manufacturing, integration, sales, marketing, product liability management, and warranty support.

Tier 2 partners contribute automotive‑grade sub‑components that can also be leveraged in products sold into adjacent markets where similar reliability, environmental robustness, and performance standards are required.

Beyond automotive, our OPTIS TM solution enables us to collaborate directly with system integrators, software partners, and domain‑specific solution providers across intelligent transportation systems, rail, aviation, ports, industrial automation, defense, and emerging infrastructure applications.

OPTIS TM allows us to combine our software‑defined sensing capabilities with third‑party perception, analytics, and workflow software to deliver application‑specific functionality without requiring new hardware variants.

This approach broadens the utility of our technology and allows partners to build turnkey solutions tailored to their end markets.

We believe this combined model, leveraging automotive‑grade components, software‑defined configurability, and partnerships with specialized integrators, supports the development of high‑quality, high‑performance products at scalable cost structures.

This positions our platform to enable lidar adoption across a range of markets, both within automotive and in non‑automotive domains where sensing requirements continue to expand.

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

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and other risks and uncertainties such as those described in Part I, Item 1A of this Form 10-K.

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

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

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

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

Reverse Stock Split

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

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

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

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

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

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

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

Since inception, we have incurred net losses and negative cash flows from operations and expect to continue incurring losses and negative operating cash flows as we continue to focus on achieving commercialization of our lidar solutions and execute on our strategic initiatives.

Market Outlook/Overview

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

According to the World Health Organization, the number of fatalities globally on roadways exceeds one million annually, road traffic injuries are the leading cause of death for children and young adults aged 5 to 29 years, and road traffic accidents cost most countries 3% of their gross domestic product on an annual basis.

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

pedestrian fatalities have increased by over 80% since 2009.

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

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

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

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

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

For vehicles to achieve greater autonomous functionality and perform those functions at higher speeds, we believe long-range lidar will be necessary.

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

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

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

We believe that our strategy to partner with Tier 1 automotive suppliers to produce high-quality, long-range lidar at scale will help drive adoption of lidar into series production across major global OEMs.

According to the World Health Organization, more than one million people die annually in roadway accidents worldwide, road traffic injuries are the leading cause of death for children and young adults aged 5 to 29, and road traffic incidents cost most countries approximately 3% of their gross domestic product each year.

In the United States, pedestrian fatalities have increased by more than 80% since 2009, according to the Insurance Institute for Highway Safety.

We believe that existing sensing and safety technologies are insufficient to mitigate these trends and that lidar, when integrated into advanced driver‑assistance systems (ADAS) and autonomous driving systems, may play an increasingly important role in improving road safety.

In April 2024, the National Highway Traffic Safety Administration (NHTSA) issued a final rule requiring automatic emergency braking (AEB) and pedestrian AEB on all new passenger vehicles, with phased adoption beginning in model year 2029.

In addition, the Federal Motor Carrier Safety Administration (FMCSA) has issued a Notice of Proposed Rulemaking that would require AEB systems on heavy trucks.

If enacted, meeting these requirements may necessitate additional sensing hardware and software beyond the capabilities of current camera‑ or radar‑only systems.

As a result, passenger and commercial vehicle OEMs may introduce lidar sensors to augment ADAS functions and improve detection performance across a wider range of operating conditions.

Our Apollo TM long‑range lidar was designed to detect, classify, and track small objects at extended distances, which we believe will be necessary for vehicles to achieve higher‑speed autonomous functions and improved situational awareness.

In addition to our long‑range, forward‑looking configurations, we also offer an in‑cabin lidar architecture capable of operating behind the windshield, enabling vehicle‑integrated sensing solutions that reduce environmental exposure and improve packaging flexibility.

Over time, we may expand our product family to include mid‑range and short‑range systems based on the same software‑defined Intelligent Sensing Platform that underpins Apollo TM .

Because our platform performs critical data processing at the sensor level, it is designed to reduce system‑level compute load, power consumption, and latency for ADAS and autonomous driving applications.

We believe our strategy of partnering with Tier 1 suppliers to support industrialization, automotive qualification, and high‑volume manufacturing will help enable high‑quality lidar solutions to be produced at scale and adopted in series‑production programs across global OEMs.

Passenger vehicle ADAS — highway autonomy in passenger vehicles is a highly relevant use case for our technology, as passenger vehicle OEMs are actively in the process of adding new features that enhance the consumer driving experience.

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Non-Automotive

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

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

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

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

In 2023, we decided to wind down our legacy non‑automotive product line and reduced our engagement in those end markets.

Since the launch of our Apollo TM product in 2024, we have seen renewed and growing interest from non‑automotive customers across a broad range of sectors, and we have entered into multiple customer engagements and development programs.

We believe there are numerous use cases for lidar outside automotive, including rail, construction, mining, agriculture, aerospace, defense, security, foreign‑object detection, and intelligent transportation systems.

Apollo’s TM software‑defined architecture allows key performance parameters, such as scan pattern, frame rate, and region‑of‑interest configuration, to be adapted for specific applications without requiring separate hardware variants.

This flexibility enables us to address diverse non‑automotive markets using a common hardware platform, reducing the cost and lead time traditionally associated with developing and supporting multiple dedicated products.

Through our OPTIS TM platform, we also collaborate with system integrators and solution providers to deliver application‑specific functionality, allowing partners to combine our sensing capabilities with their own perception, analytics, or workflow software to broaden the value of the overall solution.

Sales cycles in non‑automotive markets are generally shorter than in automotive, and we expect these markets to represent a more meaningful component of our near‑term revenue.

Our typical engagement model begins with a proof‑of‑concept or an evaluation program, which may evolve into higher‑volume commercial opportunities as customer requirements mature and validation milestones are met.

Certain customers in non‑automotive sectors have also shown willingness to fund development initiatives aimed at enabling new features or performance enhancements.

We believe Apollo’s TM versatility, combined with our software‑adaptable architecture and partnerships with specialized solution providers, positions us to participate in a wide range of non‑automotive applications without the need for costly new hardware platforms.

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

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

We employ two different go-to-market models:

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

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

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

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

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

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

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

Systems integrators will build our technology into mass produced systems, such as autonomous mining haulers, locomotives, or intelligent transportation systems.

We generally begin our customer engagements through direct sales, both in Automotive and Non‑Automotive markets.

In the early phases of adoption, such as prototype builds, pilot programs, and proof‑of‑concept deployments, OEMs and commercial customers typically work directly with us or through system integrators and solution providers.

In these situations, we may supply sensors or software directly to the customer or to the integration partner supporting the application.

As Automotive programs mature and move toward higher‑volume series production, we expect these relationships to transition to a traditional Tier‑1 supply model.

In this phase, Tier‑1 suppliers would industrialize, manufacture, and sell lidar systems incorporating our proprietary hardware and software to OEM customers.

Under this structure, we may receive royalty or other payments for each unit sold by the Tier‑1 supplier, which could take the form of a fixed amount per unit, a percentage of the selling price, profit‑sharing, or a combination of these mechanisms

For Non‑Automotive markets, we expect that most engagements will continue to be supported either through direct sales or through system integrators and solution providers, depending on the deployment model.

These partners often integrate our technology into complete, mission‑specific systems such as autonomous mining haulers, locomotives, industrial automation equipment, security platforms, and intelligent transportation systems.

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

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

We utilize those same components to address the Non-Automotive market, which should enable us to leverage expected higher volumes in Automotive to drive down overall costs.

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

(“ATI”) and LighTekton Co., Ltd.

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

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

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

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

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

This improves range, refresh rate, and resolution over conventional coaxial architectures employed by our competitors, by allowing the transmitter to direct energy independently of the receiver’s focus.

to support delivery of our lidar solutions in the China market.

Since then, we have broadened our network of technology and solution‑provider partnerships to include Flasheye, Blue Band, Black Sesame, and Vueron.

These partners integrate our sensing platform into their perception, analytics, and system‑level solutions across a wide range of non‑automotive applications, including industrial automation, security, foreign‑object detection, intelligent transportation systems, and mobility infrastructure.

Through these collaborations, we are able to extend the functionality of our products, accelerate deployment cycles, and address diverse customer requirements without developing separate hardware variants.

We expect that these types of partnerships will continue to play an important role in our commercialization strategy, particularly in non‑automotive markets where customers often adopt complete solutions delivered through integrators and domain‑specific software partners.

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 a 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.

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

This improves range, refresh rate, and resolution over conventional coaxial architectures employed by many of our competitors, allowing the transmitter to direct energy independently of the receiver’s focus.

The lidar system employs time-of-flight based scanning, delivered with extremely low latency.

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

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

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

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

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

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

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

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

4Sight TM Intelligent Sensing Platform

4Sight™ is our proprietary intelligent sensing lidar platform.

This intelligence is enabled by our patented bistatic architecture, which keeps the transmit and receive channels separate, allowing 4Sight™ to optimize for both.

We have made substantial progress in our collaboration efforts with NVIDIA, and our lidar systems are now integrated into the NVIDIA DRIVE AGX platform.

As part of this integration, our sensors interface directly with NVIDIA’s perception stack, enabling evaluation, benchmarking, and application development within the DRIVE AGX environment.

This integration supports alignment with NVIDIA’s Hyperion reference architecture and are intended to facilitate future interoperability with autonomous driving and ADAS compute platforms used by global OEMs.

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

Apollo provides long‑range detection of up to one kilometer, high resolution, and a compact, power‑efficient design suitable for installation behind the windshield, on the roofline, or in the grille.

Apollo is built on our Intelligent Sensing Platform, a software‑defined architecture that allows operating parameters to be reconfigured through software and enhanced through over‑the‑air updates.

These characteristics support use in both the Automotive and Non‑automotive markets.

In January 2026, we introduced STRATOS TM , the next product in this family.

STRATOS TM is based on the same underlying architecture as Apollo TM but offers extended detection range of approximately 1.5 kilometers and roughly twice the angular resolution.

STRATOS TM is intended for applications that require enhanced long‑distance performance or operate at higher speeds, including certain automotive, infrastructure, defense, and industrial sensing environments.

Like Apollo TM , STRATOS TM leverages our software‑defined sensing approach, enabling performance updates without a hardware redesign.

Intelligent Sensing Platform

Apollo TM is our proprietary intelligent sensing lidar platform.

This intelligence is enabled by our patented bistatic architecture, which keeps the transmit and receive channels separate, allowing Apollo TM to optimize for both.

As each laser pulse is transmitted, the receiver is told where and when to look for its return.

Ultimately, this establishes the 4Sight™ platform as active — allowing it to focus on what matters most in a vehicle’s surroundings.

The result mimics how the human visual cortex conceptually focuses on and evaluates the environment around the vehicle, driving conditions, and road hazards, enabling smarter, more accurate decision making — radically improving the probability of detection and the accuracy of classification.

Ultimately, this establishes the Apollo TM platform as active — allowing it to focus on what matters most in a vehicle’s surroundings.

The result is intended to mimic how the human visual cortex conceptually focuses on and evaluates the environment around the vehicle, driving conditions, and road hazards, enabling smarter, more accurate decision making — radically improving the probability of detection and the accuracy of classification.

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

4Sight TM for Automotive

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

Apollo TM for Automotive

Built on our Intelligent Sensing Platform, the Apollo TM lidar is specifically designed to address system requirements for advanced driver-assistance systems (ADAS) and autonomous vehicles (AV) applications.

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

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

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

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

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

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

We believe the unique combination of features of Apollo TM include:

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

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

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

4Sight TM for Non-Automotive

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

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

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

Apollo TM for Non-Automotive

Built on our Intelligent Sensing Platform, Apollo TM is designed to support a broad range of Non-Automotive applications requiring long-range, high resolution sensing and flexible system integration.

We believe the unique combination of features of Apollo TM for Non-Automotive includes:

Software‑defined configurability, enabling application‑specific scan patterns, detection ranges, and ROIs without requiring new hardware variants.

Versatility across multiple sectors, including rail, construction, mining, agriculture, aerospace, defense, security/foreign‑object detection, and intelligent transportation systems

Shorter sales and deployment cycles relative to Automotive, making Non‑Automotive applications an important component of expected near‑term revenue.

Partnership enablement through integrators such as Flasheye, Blue Band, Black Sesame, and Vueron, who incorporate our sensors into broader perception, analytics, and automation solutions.

Opportunities for customer‑funded development, particularly in markets requiring new sensing modes, enhanced feature sets, or application‑specific software extensions.

Compatibility with our product family roadmap, including STRATOS TM , which extends range and resolution using the same underlying architecture for applications requiring enhanced long‑distance performance.

Flexible sensor location within the car

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

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

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

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As a result, OEMs that install competing products may need to substantially alter the physical appearance of their vehicles to accommodate those products.

Lidar-based perception solutions for autonomous applications is an emerging market with a wide variety of possible applications across many different markets.

We face competition from numerous companies worldwide that are developing lidar solutions, and some of these solutions may use a similar wavelength or scanning methodology.

For example, we and at least two of our major competitors use lasers that have a 1550nm wavelength.

Other competitors use MEMS-based scanning technologies, but we believe our MEMS solution is uniquely robust due its very small size and high resonant frequency.

In addition to companies focused specifically on developing lidar solutions, we also face competition from current or potential partners and customers that may be developing lidar solutions internally.

We believe that many of the other companies developing lidar solutions are focused on shorter-range sensors that passively collect data, and most of these sensors utilize 905nm lasers that limit their performance.

We believe that we are differentiated from competitors by virtue of our ultra long-range performance, coupled with high resolution and software-based customization of scanning, and a compact form factor suitable for a variety of integrations.

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

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

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

Lidar‑based perception solutions for autonomous applications represent an emerging and competitive market, with companies pursuing a wide range of technical approaches across multiple end markets.

We face competition from numerous companies worldwide that are developing lidar systems, some of which use similar wavelengths or scanning methodologies.

For example, we and several competitors use 1550 nm lasers, while others utilize 905 nm lasers that offer less photon budget but have been widely deployed in shorter‑range applications.

In addition, several companies are developing frequency‑modulated continuous‑wave (FMCW) lidar systems, which use coherent detection methods and differ materially from our time‑of‑flight architecture.

FMCW‑based approaches may offer advantages in certain specialized applications, although most current implementations are still in early stages of commercialization and may face different integration, cost, or supply‑chain considerations.

Other competitors also employ MEMS‑based scanning solutions.

We believe our MEMS approach remains differentiated due to its small size, high resonant frequency, and robustness.

In addition to companies focused solely on lidar, we may also face competition from current or potential partners and customers that are developing lidar systems internally.

We further believe that many lidar developers are focused on shorter‑range, passively scanning sensors that rely on 905 nm lasers, which limit performance in long‑range or in high‑speed environments.

By contrast, our architecture is designed to deliver long‑range performance with high resolution, software‑defined configurability, and a compact form factor suitable for diverse integrations.

This is enabled in part by our use of 1550 nm lasers, which support a higher photon budget than many 905 nm‑based systems.

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

Research and Development

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

Research and Development ("R&D")

We have made substantial investments into our R&D efforts historically, but now, plan to be more focused on investments that support our strategy and product development goals in the near-term.

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

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and foreign issued patents and we had 32 pending U.S.

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

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

and foreign patent applications.

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

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

Sales and Marketing

Historically we have utilized a combination of channel (indirect) sales and direct sales methods.

In the Automotive market, we work with Tier 1 partners that are suppliers to OEMs and leverage their sales channels which allows us to substantially reduce our investment in sales and marketing.

We intend to license our lidar designs and other intellectual property to our Tier 1 partners, who will then industrialize and sell our technology to their OEM customers.

Working with Tier 1 partners allows us to use this existing automotive value chain and provides us with an opportunity to increase our penetration of the Automotive market more rapidly than would otherwise be possible.

This, in turn, will substantially reduce our investment in sales and marketing, and it will also substantially reduce the associated costs for manufacturing, working capital, validation, and testing, as well as the overhead of product liability and warranty over the life of the multiyear series production programs with OEMs.

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

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

Historically, we have utilized a combination of direct sales and indirect channel relationships.

In practice, we generally begin our customer engagements through direct sales in both the Automotive and Non‑Automotive markets, particularly during the early stages of evaluation, prototyping, and pilot deployments.

These early phases typically involve hands‑on technical collaboration, system integration support, and application‑specific configuration work, which are most effectively managed through direct engagement with customers and their integrators.

In the Automotive market, as customer programs mature and move toward higher‑volume series production, we expect these relationships to transition to a traditional Tier‑1 supply model.

Under this structure, Tier‑1 suppliers would industrialize, manufacture, and sell lidar systems incorporating our hardware and software to OEM customers, and we may receive royalty or other payments for each unit sold.

We anticipate that our direct engagement with OEMs will continue during earlier stages of development in order to understand product requirements and support integration, but that commercial pathways for high‑volume programs will ultimately be driven through Tier‑1 partners.

In parallel, we are increasing our investment in direct sales channels in the Non‑Automotive market, where customers often purchase directly from technology suppliers or through specialized system integrators.

Sales cycles in these markets tend to be shorter, and solution providers frequently incorporate our technology into complete systems for applications such as rail, aerospace and defense, smart infrastructure, industrial automation, and security.

As a result, direct sales—supported by partnerships with integrators and solution providers—represent an important component of our near‑term commercialization strategy.

We expect that continuing to expand our direct sales capabilities will enable us to more effectively capture opportunities across both Automotive and Non‑Automotive markets, while transitioning to the Tier‑1 channel model as Automotive programs scale into high‑volume production.

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

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Regulations governing these products are intended to protect the public from hazardous or unnecessary exposure.

Manufacturers are required to certify in product labeling and reports to the FDA that their products comply with applicable performance standards as well as maintain manufacturing, testing, and distribution records for their products.

Manufacturers are required to certify in product labeling and report to the FDA that their products comply with applicable performance standards as well as maintain manufacturing, testing, and distribution records for their products.

We are also subject to import and export regulations of the U.S.

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Our leadership team comes from sectors including automotive, aerospace and defense, semiconductors, software, and computer hardware.

As of December 31, 2024, we had over 45 employees worldwide.

As of December 31, 2025, we had 56 employees.

The majority of our employees are in the R&D function.

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To date, we have not experienced any work stoppages.

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

Our corporate headquarters is located in Pleasanton, California, where we lease approximately 18,605 square feet pursuant to a lease, as amended in February 2026, that expires on February 28, 2029, with an option to extend the term for a five year period.

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

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Legal Proceedings

In 2025, the Company was notified by a former vendor that it intended to pursue a claim against the Company’s wholly owned subsidiary, AEye Technologies, Inc., arising out of an agreement entered into in May 2020, in which the former vendor alleges that AEye Technologies, Inc.

failed to pay approximately $3.3 million plus interest from the date the former vendor alleges such payments were due.

In February 2026, the former vendor initiated a binding arbitration proceeding against our subsidiary pursuant to the underlying purchase agreement.

AEye Technologies, Inc.

has, and continues to dispute the total amount owed based, in part, on the claim that the products supplied by the former vendor were largely defective and such former vendor was repeatedly made aware of the existence of such defects.

While it is reasonably possible that a loss may be incurred, we are unable to estimate the possible loss or range of loss that could result from an unfavorable outcome in this legal proceeding.

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

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

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

Securities and Exchange Commission on May 13, 2021.

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

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

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

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

The Landlord claimed that the amount owed could be up to $8.5 million.

Thereafter, in August 2024, the landlord fully drew down the standby letter of credit of $2.15 million, which was held as security for the payment of rent, due to the alleged default of the lease.

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 paid $1.4 million in cash in May 2025 and issued warrants to purchase up to 350,000 shares of common stock at an exercise price of $2.22 per share in August 2025.

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

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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-K

Item 1. Business