What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-18 compared with 2025-02-24 · 311 added, 300 removed, 782 unchanged (44% of the section changed)

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To the stockholders and Board of Directors of AEye, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of AEye, Inc.

and subsidiaries (the "Company") as of December 31, 2024, the related consolidated statement of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for the year then ended, and the related notes to the consolidated financial statements.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with U.S.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of AEye, Inc.

and subsidiaries (the “Company”) as of December 31, 2025 and December 31, 2024, the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and December 31, 2024, and the results of its operations and its cash flows for the years then ended, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the accounting for and valuation of convertible debt

As discussed in Notes 1 and 9 to the consolidated financial statements, in January 2025, the Company entered into a Securities Purchase Agreement and issued (i) a senior unsecured convertible promissory note (the 2025 Note) for a principal amount of $3,240 thousand for an aggregate purchase price of $3,000 thousand and (ii) a warrant to purchase shares of the Company’s common stock.

The Company elected to apply the fair value option to measure the 2025 Note.

As a result of this election, the 2025 Note was recorded as a liability at fair value and was remeasured at each reporting period, with changes in fair value recognized in change in fair value of convertible note and warrant liabilities on the consolidated statement of operations.

We identified the evaluation of the accounting for, and valuation of, the 2025 Note as a critical audit matter.

A high degree of subjective and complex auditor judgment was required, including the involvement of professionals with specialized skills and knowledge, to evaluate the appropriate accounting treatment and fair value of the 2025 Note.

The following are the primary procedures we performed to address this critical audit matter.

We involved professionals with specialized skills and knowledge in complex debt transactions, who assisted us in evaluating the Company’s accounting assessment of the 2025 Note by inspecting the underlying agreements to identify relevant contract terms and evaluating whether the Company's accounting was in accordance with the technical accounting guidance.

We involved valuation professionals with specialized skills and knowledge, who assisted us in evaluating the Company’s fair value estimate for the 2025 Note by comparing it to an independently developed fair value estimate using publicly available data.

We have served as the Company’s auditor since 2024.

Santa Clara, California

February 24, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and Board of Directors of AEye, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of AEye, Inc.

and subsidiaries (the "Company") as of December 31, 2023, and 2022, the related consolidated statements of operations and comprehensive loss, stockholders' equity (deficit), and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in Note 16 to the financial statements, the accompanying 2023 and 2022 financial statements have been retrospectively adjusted for the adoption of Accounting Standards Update 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ DELOITTE & TOUCHE LLP

San Francisco, California

March 26, 2024 (February 24, 2025 as to Note 16)

We began serving as the Company’s auditor in 2018.

In 2024 we became the predecessor auditor.

March 18, 2026

CONSOLIDATED BALANCE SHEETS

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Property and equipment, net

Restricted cash

Other noncurrent assets

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Total current liabilities

11,307 10,027

Operating lease liabilities, noncurrent

Convertible notes

Convertible note

Other noncurrent liabilities

Total liabilities

11,996 25,294

COMMITMENTS AND CONTINGENCIES (Note 20)

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Year Ended December 31,

Prototype sales

Development contracts

Total revenue

Cost of revenue

( 321 ) ( 576 )

OPERATING EXPENSES:

Research and development

13,937 16,389

Sales and marketing

General and administrative

Impairment of long-lived assets

14,927 18,312

Total operating expenses

31,410 35,252

LOSS FROM OPERATIONS

( 31,731 ) ( 35,828 )

OTHER INCOME (EXPENSE):

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Interest expense and other

( 2,312 ) ( 433 )

Total other income (expense), net

( 2,216 ) 366

Loss before income tax

(Benefit) provision for income tax

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

Change in fair value due to instrument-specific credit risk, net of tax

Net losses reclassified into income during the period, net of tax

( 33,947 ) ( 35,462 )

Provision (benefit) for income tax

$ ( 33,958 ) $ ( 35,460 )

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

Comprehensive loss

$ ( 33,933 ) $ ( 35,465 )

PER SHARE DATA

Net loss per common share (basic and diluted)

$ ( 1.47 ) $ ( 4.89 )

Weighted average common shares outstanding (basic and diluted)

23,128,082 7,253,683

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

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Preferred Stock

Income (Loss)

BALANCE—December 31, 2024

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

Stock-based compensation

Issuance of common stock upon exercise of stock options

— — — — 5,522 — — 5,522

Issuance of common stock upon vesting of restricted stock units

— — 1,287,583 — — — — —

Taxes related to net share settlement of equity awards

— — ( 557,230 ) — ( 643 ) — — ( 643 )

Issuance of common stock under the Common Stock Purchase Agreements

Stock issuance costs related to the Common Stock Purchase Agreements

— — 27,347,167 3 89,279 — — 89,282

Transaction costs related to the Common Stock Purchase Agreements

— — — — ( 1,408 ) — — ( 1,408 )

Conversions of convertible note into common stock

— — 2,405,573 — 2,591 — — 2,591

Issuance of common stock through exercise of convertible note warrants

— — 805,263 — 4,716 — — 4,716

Issuance of common stock through the Employee Stock Purchase Plan

Other comprehensive loss, net of tax

— — 147,397 — 91 — — 91

Other comprehensive income, net of tax

— — — — — 25 — 25

— — — — — — ( 33,958 ) ( 33,958 )

BALANCE—December 31, 2025

— $ — 45,169,913 $ 4 $ 488,361 $ 30 $ ( 407,053 ) $ 81,342

Comprehensive

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BALANCE—December 31, 2023

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

Stock-based compensation

— — — — 9,047 — — 9,047

Issuance of common stock upon exercise of stock options

— — 44,255 — 134 — — 134

Issuance of common stock upon vesting of restricted stock units

— — 558,223 — — — — —

Taxes related to net share settlement of equity awards

— — ( 137,803 ) — ( 161 ) — — ( 161 )

Issuance of common stock under the Common Stock Purchase Agreement

— — 6,852,059 — 13,041 — — 13,041

Stock issuance costs related to the Common Stock Purchase Agreement

— — — — ( 588 ) — — ( 588 )

Issuance of common stock through the Employee Stock Purchase Plan

Conversions of convertible note into common stock

Other comprehensive income, net of tax

— — 107,336 — 93 — — 93

Other comprehensive loss, net of tax

— — — — — ( 5 ) — ( 5 )

— — — — — — ( 35,460 ) ( 35,460 )

BALANCE—December 31, 2024

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

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

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CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 33,958 ) $ ( 35,460 )

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

Depreciation and amortization

(Gain) loss on sale of property and equipment, net

Gain on sale of property and equipment, net

Noncash lease expense relating to operating lease right-of-use assets

Gain on termination of operating lease, net

Impairment of long-lived assets

( 1,014 ) ( 491 )

Common stock purchase agreement costs

Debt issuance costs

Gain on extinguishment of warrant

Inventory write-downs, net of scrapped inventory

Loss on advances to suppliers

Change in fair value of convertible note and warrant liabilities

Realized loss on instrument-specific credit risk

Stock-based compensation

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

( 378 ) ( 611 )

Expected credit losses, net of write-off

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Prepaid and other current assets

( 1,054 ) 1,490

Other noncurrent assets

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Accrued expenses and other current liabilities

( 767 ) ( 2,389 )

Operating lease liabilities

Contract liabilities

( 236 ) ( 955 )

Other noncurrent liabilities

Net cash used in operating activities

( 27,777 ) ( 26,620 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

( 109 ) ( 486 )

Proceeds from sale of property and equipment

Proceeds from redemptions and maturities of marketable securities

23,079 32,426

Purchases of marketable securities

Net cash provided by investing activities

( 53,768 ) ( 24,241 )

Net cash provided by (used in) investing activities

( 30,798 ) 7,744

CASH FLOWS FROM FINANCING ACTIVITIES:

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Payments for convertible note redemptions

Transaction costs related to issuance of convertible note

Taxes paid related to the net share settlement of equity awards

( 643 ) ( 161 )

Proceeds from issuance of common stock under the Common Stock Purchase Agreements

90,961 11,080

Stock issuance costs related to the Common Stock Purchase Agreements

( 1,835 ) ( 1,232 )

Proceeds from exercise of warrant

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

Net cash provided by (used in) financing activities

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Net cash provided by financing activities

91,665 10,060

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

33,090 ( 8,816 )

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period

10,266 19,082

CASH AND CASH EQUIVALENTS—End of period

$ 43,356 $ 10,266

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest

Cash (refunded) paid for income taxes, net

Cash paid (refunded) for income taxes, net

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

Noncash debt issuance costs

Stock issuance costs included in accounts payable and accrued liabilities

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

Operating lease liabilities extinguished upon termination of lease

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Operating lease right-of-use assets obtained in exchange for lease obligation

Conversion of convertible notes and accrued interest into Class A common stock

Stock issuance costs included in accounts payable and accrued liabilities

Stock issuance costs through issuance of common stock

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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™ 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.

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

AEye, formerly known as CF Finance Acquisition Corp.

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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.

The Company has funded its operations primarily through the issuances of common stock.

Since its inception, the Company has incurred net losses and negative cash flows from operations and 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 of December 31, 2025 , the Company's existing sources of liquidity included cash, cash equivalents, and marketable securities of $ 86,460 .

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.

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.

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

produce and deliver lidar and software products meeting acceptable performance metrics;

attract new and retain existing customers;

develop, obtain, or progress strategic partnerships;

secure an automotive OEM design win;

secure additional capital to support the business plan;

and other risks and uncertainties related to liquidity.

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

As of December 31, 2024 , the Company had an accumulated deficit of $ 373,095 .

For the years ended December 31, 2024 and 2023 , the Company incurred a net loss of $ 35,460 and $ 87,126 , respectively, and the Company had net cash outflows from operating activities of $ 26,620 and $ 50,725 , respectively.

As of December 31, 2024 , the Company had $ 22,278 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.

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 twelve months ended December 31, 2024 , the Company issued shares through stock purchase agreements and a convertible note totaling $ 12,905 .

Subsequent to year-end, the Company raised an additional $ 11,055 in gross proceeds through financing activities (see Note 23, Subsequent Events.) 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.

Based on cash, cash equivalents and marketable securities at December 31, 2024, together with the net proceeds from financing activities subsequent to year-end, cash, available cash equivalents and marketable securities is sufficient to fund the Company’s operations for at least the next 12 months from the filing date of these consolidated financial statements.

At some point after that time, the Company anticipates it will require additional financing to fund its future operations.

Based upon the results of Management’s assessment, which has been performed as of February 24, 2025 , these consolidated financial statements have been prepared on a going concern basis.

Reverse Stock Split

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

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

The Company 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, all historical per share data, number of shares issued and outstanding, stock awards, and other common stock equivalents for the periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the Reverse Stock Split.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2 (a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102 (b)( 1 ) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

The Company has elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards.

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

Management believes that the Company 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 consolidated financial statements.

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified for consistency with the current year presentation.

Use of Estimates

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Actual results could differ from those estimates.

Significant items subject to such estimates and assumptions include lease termination liability, write-downs of inventory to the lower of cost or net realizable value, investments, embedded derivative and warrant liabilities, stock-based compensation, impairment of long-lived assets, and fair value of the 2022 convertible note.

Cash, Cash Equivalents, and Marketable Securities

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Amortization of premiums and accretion of discounts are included within interest expense and other on the consolidated statements of operations.

Restricted Cash

Restricted cash of $ 2,150 as of December 31, 2023 , consisted of funds that were contractually restricted as to usage or withdrawal due to a contractual agreement.

The Company had a letter of credit to the amount of $ 2,150 with Citibank N.A.

as of December 31, 2023 as security for the payment of rent on its headquarters.

In August 2024, the former landlord drew down on the letter of credit and the restricted cash was used to offset the letter of credit draw (see further discussion in Note 6 ).

The Company had no restricted cash as of December 31, 2024 .

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentration of credit risk consist primarily of cash, cash equivalents, and marketable securities, and accounts receivable.

Financial instruments which potentially subject the Company to concentration of credit risk consist primarily of cash, cash equivalents, and marketable securities, and accounts receivable, net.

The Company places its cash and cash equivalents with major financial institutions, which management assesses to be of high credit quality, to limit the exposure of each investment.

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, net 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.

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For additional discussion on fair value of financial instruments, see Note 2.

The Company accounts for derivative instruments in accordance with Financial Accounting Standards Board's (FASB) Accounting Standards Codification (ASC) Topic 815, Derivatives and Hedging (“ASC 815” ).

The Company accounts for derivative instruments in accordance with the Financial Accounting Standards Board's (FASB) Accounting Standards Codification (ASC) Topic 815, Derivatives and Hedging (“ASC 815” ).

The Company’s objectives and strategies for using derivative instruments, and how the derivative instruments and related hedged items are accounted for affect the financial statements.

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During the years ended December 31, 2025 and 2024 , the Company had write-offs of $ 2 and $ 70 , respectively.

As of December 31, 2023, the Company recorded a $ 35 provision for expected credit losses.

There is no provision for credit losses as of December 31, 2024.

There are no provisions for credit losses as of December 31, 2025 and 2024 .

Inventories, net

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Inventories that are not expected to be consumed in the next 12 months are classified within Other noncurrent assets.

Prototype inventory cost consists of the associated raw material, direct labor, indirect labor and other overhead costs.

Inventory cost consists of the associated raw material, direct labor, indirect labor and other overhead costs.

The Company evaluates the need for inventory write-downs associated with obsolete, slow moving, and non-sellable inventory by reviewing estimated net realizable values on a periodic basis and records a provision for excess and obsolete inventory to adjust the carrying value of inventory as needed.

The Company's current and noncurrent inventory held as of December 31, 2024 and 2023 was written down by $ 4,659 and $ 5,062 , respectively, in order to record inventory at its estimated net realizable value.

Property and Equipment, net

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When an impairment loss is recognized for assets to be held and used, the adjusted carrying amount of the long-lived asset becomes its new cost basis which is depreciated over the asset's remaining useful life.

The Company recorded $ 9,988 of non-cash impairment charges in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023 .

No impairment charges were recorded for the year ended December 31, 2024.

No impairment charges were recorded for the years ended December 31, 2025 and 2024 .

Warrant Liability

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance.

The warrants assumed in connection with the 2022 convertible note are accounted for in accordance with ASC 815 - 40, Derivatives and Hedging — Contracts in Entity ’ s Own Equity , under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities.

The warrants assumed in connection with the 2022 convertible note, the 2025 convertible note, and the warrants issued in connection with the lease settlement are accounted for in accordance with ASC 815 - 40, Derivatives and Hedging — Contracts in Entity ’ s Own Equity , under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities.

The Private Placement Warrants issued in connection with the business combination are classified as liabilities.

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The Company evaluates the classification of leases at commencement, and, as necessary, at modification.

Operating leases, consisting of office leases, are included in Right-of-use ("ROU") assets, Accrued expenses and other current liabilities, and Operating lease liabilities, noncurrent, on the Company's consolidated balance sheets.

The Company did not have any finance leases as of December 31, 2024.

Operating leases, consisting of office leases, are included in Right-of-Use ("ROU") assets, Accrued expenses and other current liabilities, and Operating lease liabilities, non-current, on the Company's consolidated balance sheets.

The Company did not have any finance leases as of December 31, 2025 and 2024 .

ROU assets represent the Company's right to an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease.

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The incremental borrowing rate is a hypothetical rate based on the Company's understanding of what its credit rating would be for a secured borrowing when the lease was executed.

The Company's lease term includes the noncancelable period, any rent-free periods provided by the lessor, and options to extend or terminate the lease when it is reasonably certain that it will exercise that option.

The Company's lease term includes the non-cancelable period, any rent-free periods provided by the lessor, and options to extend or terminate the lease when it is reasonably certain that it will exercise that option.

At lease inception, and in subsequent periods as necessary, the Company estimates the lease term based on its assessment of extension and termination options that are reasonably certain to be exercised.

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Accounting for Convertible instruments and Contracts in an Entity’s Own Equity (“ASU 2020 - 06” ).

The Company has elected to apply the fair value measurement option to the 2022 convertible note on the date that the Company first recognized the convertible note on September 15, 2022.

The Company elected to apply the fair value measurement option to the 2022 convertible note and the 2025 convertible note on the dates that the Company first recognized the respective convertible note in the consolidated balance sheets.

The Company acknowledges that its election to apply the fair value option is irrevocable.

As of December 31, 2024 , the 2022 convertible note has no outstanding principal balance as all outstanding principal and accrued interest has been fully settled.

As of December 31, 2025 , the 2022 convertible note and the 2025 convertible note have no outstanding principal balance, as all outstanding principal and accrued interest has been fully settled.

Changes in fair value were recorded in the consolidated statements of operations and changes in fair value related to credit risk are recorded in other comprehensive loss.

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Revenue Recognition

The Company generates revenues from the sale of prototypes and from development arrangements with automakers and suppliers to automakers.

The Company generates revenues from the sale of products and from development arrangements with companies in both the Automotive and Non-Automotive markets.

Under FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606” ), the Company accounts for such arrangements as contracts with customers and accordingly recognizes revenue by applying the following steps:

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Recognition of revenue when, or as, the Company satisfies a performance obligation

Revenue from the sale of prototypes is generally recognized at a point in time when control of the goods is transferred.

Certain prototype sales contracts include services to install and commission or customize the prototypes for customers.

Revenues from these services are categorized as prototype revenue and recognized either over time as the services are being performed, or at a point in time, depending on the nature of the services and whether the criteria for recording revenue over time are met in accordance with ASC 606.

Revenue from the sale of products is generally recognized at a point in time when control of the goods is transferred.

Certain sales contracts include services to install and commission or customize the product for customers.

Revenues from these services are categorized as product revenue and recognized either over time as the services are being performed, or at a point in time, depending on the nature of the services and whether the criteria for recording revenue over time are met in accordance with ASC 606.

Revenue from development arrangements is either recognized at a point in time or over time depending on the performance obligations in the contract.

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Cost of Revenue

Cost of revenue primarily consists of costs directly associated with the production of those prototypes that are held for sale and certain costs associated with development arrangements.

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

Direct and indirect labor includes personnel-related costs and packaging and procurement respectively associated with the production of prototypes.

Cost of revenue primarily consists of costs directly associated with the production of lidar units that are held for sale and certain costs associated with development arrangements.

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

Direct and indirect labor includes personnel-related costs and packaging and procurement respectively associated with the production of lidar units.

Other costs such as indirect manufacturing costs are recognized in research and development and general and administrative expenses on the consolidated statements of operations and comprehensive loss.

1 unchanged sentence

Research and Development Expenses

Research and development expenses include personnel costs (including salaries, benefits, bonuses, one -time termination benefits, and stock-based compensation), new hardware and software materials to the extent no future economic benefits are expected, other related expenses such as lab equipment, third party development-related contractors, and allocated overhead expenses.

Research and development expenses include personnel costs (including salaries, benefits, bonuses, and stock-based compensation), new hardware and software materials to the extent no future economic benefits are expected, other related expenses such as lab equipment, third party development-related contractors, and allocated overhead expenses.

Substantially all the R&D expenses are related to the development of new products and services, including contract development expenses.

26 unchanged sentences

Comprehensive Income (Loss)

Comprehensive income (loss) includes all changes in equity (net assets) from non-owner sources during a period, changes in fair value due to instrument-specific credit risk, and net unrealized gains (losses) on available-for-sale debt securities.

Comprehensive income (loss) includes all changes in equity (net assets) from non-owner sources during a period and net unrealized gains (losses) on available-for-sale debt securities.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update ("ASU") 2023 - 09, Income Taxes (Topic 740 ) - Improvements to Income Tax Disclosures to increase the transparency and usefulness of income tax information through improvements to the income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

The guidance is effective for fiscal years beginning after December 15, 2024.

The Company is currently in the process of evaluating the effects of the new guidance.

In November 2024, the FASB issued ASU 2024 - 03, Disaggregation of Income Statement Expenses , which requires annual and interim disclosure of disaggregated disclosures of certain costs and expenses on the income statement.

3 unchanged sentences

Recently Adopted Accounting Pronouncements

The Company adopted ASU 2023 - 07, Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures , in the fourth quarter of 2024.

The amendments in this update require public entities to disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”) and which are included within each reported measure of segment profit or loss as well as disclosure of other segment items and a description of their composition.

The amendments also require public entities to disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

The Company adopted, ASU 2023 - 09, Income Taxes (Topic 740 ) - Improvements to Income Tax Disclosures, in the fourth quarter of 2025.

The amendments in this update require public entities to increase the transparency and usefulness of income tax information through improvements to the income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

The adoption of this guidance resulted in incremental disclosures in the Company’s consolidated financial statements.

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Level 3 —Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The Company's financial instruments that are not remeasured at fair value include accounts receivable, prepaid and other current assets, accounts payable, accrued expenses, other current and noncurrent liabilities, and convertible note.

The carrying values of these financial instruments approximate their fair values.

9 unchanged sentences

8,003 9 8,012 — 8,012

2,018 — 2,018 — 2,018

Asset backed securities

5,902 5 5,907 — 5,907

Total financial assets

27 unchanged sentences

The Company holds financial assets consisting of fixed-income U.S.

government agency securities, corporate bonds, and commercial paper.

government securities, corporate bonds, commercial paper, agency bonds, and asset-backed securities.

The securities are valued using prices from independent pricing services based on quoted prices of identical instruments in less active or inactive markets.

2 unchanged sentences

On September 15, 2022, the Company entered into a convertible note agreement with a face value of $ 10,500 (the "2022 Note").

The Company’s derivative warrant liability includes the warrants that were issued by the Company as part of the 2022 Note.

The Company issued warrants as part of the 2022 Note.

The warrants are recorded on the consolidated balance sheets at fair value.

6 unchanged sentences

Treasury rates, commensurate with a similar term to the warrants.

The term to expiration was calculated as the contractual term of the warrants of four years.

The term to expiration was calculated as the contractual term of the warrants of five years.

Finally, the Company does not currently anticipate paying a dividend.

1 unchanged sentence

Changes in fair value are recognized in other income (expense) for each reporting period.

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

These warrants were cancelled on July 28, 2025.

In January 2025, the Company entered into a convertible note agreement with a face value of $ 3,000 (the "2025 Note").

The Company issued a warrant to purchase up to 805,263 shares of the Company’s common stock.

The warrant was recorded on the accompanying consolidated balance sheet at fair value.

The fair value is based on unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.

The fair value estimate of the warrant was based on a Black-Scholes model.

Inherent in a Black-Scholes model are assumptions related to price, volatility, risk-free interest rate, term to expiration, and dividend yield.

Changes in fair value were recognized in other income (expense) for each reporting period.

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

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

In August 2025 , in connection with the lease settlement (see Note 5 for details of the settlement), the Company issued warrants, which are recorded on the accompanying consolidated balance sheets at fair value.

The fair value is based on unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.

The fair value estimate of the warrants was based on a Black-Scholes model.

Inherent in a Black-Scholes model are assumptions related to price, volatility, risk-free interest rate, term to expiration, and dividend yield.

Changes in fair value are recognized in other income (expense) for each reporting period.

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

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

The Company measures certain nonfinancial assets at fair value on a nonrecurring basis, primarily property and equipment and ROU assets, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

The fair value of the Company's property and equipment was based upon estimated salvage value or estimated orderly liquidation value, depending on the asset's highest and best use.

As the fair value of property and equipment was estimated using primarily unobservable inputs, these are considered Level 3 fair value measurements.

The fair value of the Company’s headquarters ROU asset and associated leasehold improvements were based on a value-in-use approach utilizing market rent comparable information, and is considered a Level 2 fair value measurement.

For more information regarding impairment charges, see Notes 1, 6, 7, and 18.

For the years ended December 31, 2025 and 2024 , there were no transfers between Level 1 and Level 2 inputs.

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

Cash, cash equivalents, and restricted cash as of December 31, 2024 and 2023 were as follows (in thousands):

As of December 31,

Cash and cash equivalents

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

Balance at December 31, 2024

1,945 3,266 5,211

Restricted cash

Total cash, cash equivalents, and restricted cash

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

1,581 314 1,895

Restricted cash of $ 2,150 as of December 31, 2023 consisted of funds that were contractually restricted as to usage or withdrawal due to a contractual agreement.

The Company had a letter of credit in the amount of $ 2,150 with Citibank N.A.

as security for the payment of rent on its headquarters.

In August 2024, the landlord drew down on the letter of credit and the restricted cash was used to offset the letter of credit draw (see further discussion in Note 6, Leases).

Payments and conversions

— ( 3,580 ) ( 3,580 )

Extinguishment and exercise

( 2,992 ) — ( 2,992 )

Balance at December 31, 2025

$ 560 $ — $ 560

The key inputs into the Black-Scholes model for the derivative warrant issued as a result of the lease settlement valued at December 31, 2025 are as follows:

December 31, 2025

Expected term (years)

Expected volatility

Risk-free interest rate

Dividend yield

Exercise price

If factors or assumptions change, the estimated fair values could be materially different.

The value of the Company’s derivative warrant liabilities would increase if a higher risk-free interest rate was used and would decrease if a lower risk-free interest rate was used.

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 December 31, 2025 and 2024 were as follows (in thousands):

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Total inventory, net

The Company also had $ 209 and $ 208 of noncurrent inventory (raw materials), net of write-downs, classified within other noncurrent assets on the consolidated balance sheet as of December 31, 2024 and December 31, 2023 , respectively.

$ 1,015 $ 176

The Company also had $ 0 and $ 209 of noncurrent inventory (raw materials), net of write-downs, classified within other noncurrent assets on the consolidated balance sheet as of December 31, 2025 and 2024 , respectively.

PREPAID AND OTHER CURRENT ASSETS

3 unchanged sentences

$ 2,022 $ 966

Advances to suppliers

Receivable for issuance of common stock

1 unchanged sentence

$ 2,081 $ 2,706

The Company's advances to suppliers as of December 31, 2024 and 2023 were written down by $ 1,041 and $ 1,385 , respectively, associated with the winding down of its legacy Non-Automotive product as part of its revised strategic plan in 2023.

See Note 18, Restructuring, for further details.

The Company leases office facilities in Northern California under non-cancelable operating leases.

In July 2024, the Company entered into two new long-term leases, one of which the Company uses as its headquarters.

Some of the Company's leases include options to renew, with renewal terms that, if exercised by the Company, extend the lease term from two to five years.

In July 2024, the Company entered into two new long-term leases, one of which the Company uses as its headquarters, which was amended in February 2026 to extend the term and add additional square footage.

Some of the Company's leases include options to renew, with renewal terms that, if exercised by the Company, extend the lease term for five years.

The exercise of these renewal options is at the Company's discretion.

10 unchanged sentences

Additionally, in accordance with terms in the lease agreement and based on certain assumptions, the Company recorded a lease termination loss of $ 5,463 , representing estimated unpaid rent for the remaining term.

The net gain was recorded in general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss.

The net gain was recorded in general and administrative expenses in the consolidated statement of operations and comprehensive loss.

The lease termination liability was reduced by the draw-down of the $ 2,150 letter of credit by the landlord in August 2024;

the remaining lease termination liability of $ 3,313 is recorded in accrued expenses and other current liabilities in the consolidated balance sheets.

See Note 18, Restructuring, and Note 21, Commitments and Contingencies, for further discussion.

The Company recorded a gain of $ 35 on early lease termination for one of its leases, originally set to expire in August 2027, within interest income and other on the consolidated statements of operations during the twelve months ended December 31, 2023.

During the year ended December 31, 2023, the Company recorded an impairment charge on right-of-use assets of $ 2,570 , included within impairment of long-lived assets within the Company's consolidated statements of operations.

See Note 18, Restructuring.

No impairment charges were recorded for the year ended December 31, 2024.

the remaining lease termination liability of $ 3,313 as of December 31, 2024 was recorded in accrued expenses and other current liabilities in the consolidated balance sheet.

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 $ 1,400 in cash and issued a warrant to purchase up to 350,000 shares of the Company's common stock at an exercise price of $ 2.22 per share, which had a fair value of $ 899 on the date of issuance.

The Company recorded a net gain on termination of operating lease of $ 1,014 during the year ended December 31, 2025 .

The components of operating lease expenses, excluding the gain on lease termination, for the years ended December 31, 2025 and 2024 were as follows (in thousands):

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Operating lease right-of-use assets

$ 652 $ 11,226

Operating lease liabilities:

Operating lease liabilities, current

$ 267 $ 2,415

Lease termination liability

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6.40 % 6.40 %

Maturities of lease liabilities, excluding the lease termination liability, were as follows (in thousands).

Maturities of lease liabilities as of December 31, 2025 , are as follows (in thousands).

Years ending - December 31:

12 unchanged sentences

Less accumulated depreciation and amortization

( 258 ) ( 102 )

Property and equipment, net

During the year ended December 31, 2023 , the Company recorded impairment charges on assets classified as property and equipment of $ 7,418 , included within impairment of long-lived assets within the Company's consolidated statements of operations.

No impairment charges were recorded for the year ended December 31, 2024 .

Depreciation and amortization expense related to property and equipment amounted to $ 155 and $ 129 recognized within research and development, sales and marketing, and general and administrative expenses within the consolidated statements of operations and comprehensive loss for the years ended December 31, 2025 and 2024 , respectively.

The Company recorded disposals of gross property and equipment of $ 59 and $ 1,041 in the years ended December 31, 2024 and 2023 , respectively.

The carrying amounts of the property and equipment disposed in the years ended December 31, 2024 and 2023 were $ 32 and $ 342 , respectively.

The Company recorded disposals of gross property and equipment of $ 59 in the year ended December 31, 2024 .

The carrying amount of the property and equipment disposed in the year ended December 31, 2024 was $ 32 .

There were no disposals during the year ended December 31, 2025 .

OTHER NONCURRENT ASSETS

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Operating lease liabilities

Accrued severance

Accrued payroll taxes

1 unchanged sentence

Total accrued expenses and other current liabilities

$ 4,957 $ 7,709

CONVERTIBLE NOTES

2024 Promissory Note

On May 10, 2024 , the Company entered into a Securities Purchase Agreement with an investor for the sale and issuance of 330,823 shares of common stock and a 5 -year promissory note with a principal balance of $ 146 ( “May 2024 Note”) for total gross cash proceeds of $ 1,000 .

The May 2024 Note bears interest at an annual rate equal to the Secured Overnight Financing Rate plus 1.0 %, which is compounded quarterly in arrears, and has a maturity date of June 4, 2029 .

At maturity, the principal balance and accrued, unpaid and uncapitalized interest can be settled in cash, shares of common stock based on the closing price of the common stock as of the immediately preceding trading day, or any combination of the foregoing at the option of the investor.

2025 Convertible Note

On September 14, 2022 , the Company entered into a Securities Purchase Agreement with an investor allowing for the sale and issue of up to two convertible notes, each with a principal balance of $ 10,500 and gross cash proceeds of $ 10,000 , for a total of $ 20,000 in proceeds between the two issuances (each, a "Note Closing").

The first Note Closing ("First Closing") occurred on September 15, 2022 , and the Company entered into a Senior Unsecured Convertible Note with the investor pursuant to which the Company issued to the investor one convertible note ( "2022 Note") with a principal balance of $ 10,500 for net cash proceeds of $ 9,850 .

As part of the First Closing, the Company also issued warrants to the investor see Note 12 for further details.

The second Note Closing ("Second Closing") lapsed on March 15, 2024 , upon which the Company's right to effect a Second Closing automatically terminated.

The 2022 Note bore interest at an annual rate of 5.0 %, in addition to an original issue discount of 4.76 %, and had an initial a maturity date of March 15, 2024 .

Beginning December 14, 2022 , and the first trading day of each subsequent month (each a "Monthly Redemption Date" or an "Installment Date"), the Company was required to redeem the Monthly Redemption Amount until the 2022 Note was fully redeemed.

The Monthly Redemption Amount, in most instances, was 1/15 th of the original principal amount, plus any amount accelerated pursuant to the 2022 Note, accrued but unpaid interest, and late fees, if any.

The principal and interest could be settled in cash or, so long as certain equity conditions were met and at the option of the Company, shares of common stock, which was payable together with the Monthly Redemption Amount.

If the Company elected to settle the Monthly Redemption Amount in shares of common stock, the number of shares to be settled was based on an Installment Conversion Price equal to the lower of (i) $ 75.00 or (ii) 95 % of the lowest daily volume weighted average price of the common stock during the five trading days immediately preceding the applicable Monthly Redemption Date.

If the Company elected to settle the Monthly Redemption Amount in cash, the Monthly Redemption Amount would have included a 5 % premium.

The investor was permitted to accelerate up to four Monthly Redemption Amounts in any calendar month (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, subject to a $ 2,800 limit per month.

The Acceleration Conversion Price was the lower of (i) the Installment Conversion Price for such current Installment Date or (ii) the greater of $ 9.00 and 95 % of the lowest daily volume weighted average price of the common stock during the five trading days immediately preceding the Acceleration Date.

If either the relevant Installment Conversion Price or Acceleration Conversion Price, as applicable, was less than $ 9.00 per share, then a Conversion Floor Price Condition existed and the Company must deliver to the investor the Conversion Installment Floor Amount in cash, in addition to the required number of shares, which were valued at $ 9.00 regardless of the actual trading price of the Company's shares.

The Conversion Installment Floor Amount was an amount in cash equal to the product obtained by multiplying (A) the higher of (i) the highest price that the common stock traded at on the Trading Day immediately preceding the relevant Share Delivery Date and (ii) the applicable Installment Conversion Price or Acceleration Conversion Price and (B) the difference obtained by subtracting (i) the number of shares of common stock delivered to the investor on the applicable Share Delivery Date with respect to such Conversion from (ii) the quotient obtained by dividing ( x ) the applicable Installment or Acceleration amount subject to such Conversion, by (y) the applicable Installment Conversion Price.

Interest payments were also trued-up in cash when the value of the Company's shares was below $ 9.00 per share.

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

The 2025 Note, subject to an original issue discount of 7.4 %, had a term of eighteen months and accrued interest at the rate of 7 % per annum.

The interest may be settled in cash or shares at the option of the Company and was payable together with monthly redemptions of the outstanding principal amount of the 2025 Note.

The 2025 Note was convertible into common stock, at a per share conversion price equal to $ 2.22 , subject to adjustments noted in the 2025 Note.

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

The Company was required to redeem the Monthly Redemption Amount until the 2025 Note was fully redeemed, paid in cash or, so long as certain equity conditions are met, shares of our common stock.

The equity conditions that must be met in order for the Company to settle the Monthly Redemption Amount in common stock 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).

The Monthly Redemption Amount, in most instances, will be 1/15th of the original principal amount, plus any amount accelerated pursuant to the 2025 Note, accrued but unpaid interest, and late fees, if any.

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, 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.

The 2025 Note may not be converted into common stock to the extent such conversion would result in the investor and its affiliates having beneficial ownership of more than 19.99 % of our then outstanding shares of common stock.

This limitation is waived if the Company either obtains stockholder approval as required by the applicable exchange rules or secures a satisfactory written opinion from its counsel stating that such approval is unnecessary.

The Company and investor entered into a registration rights agreement (the “Registration Rights Agreement”) to which the Company was required to file a registration statement registering the resale by the investor of any shares of the Company’s common stock issuable upon conversion, including the resale of shares issuable upon exercise of the associated warrants.

The Company is required to meet certain obligations with respect to the timeliness of the filing and effectiveness of the registration statement.

The Company filed such registration statement on January 16, 2025, and an amendment thereto on February 25, 2025, which was declared effective by the U.S.

Securities and Exchange Commission on March 4, 2025.

The Company elected to apply the fair value option to the measurement of the 2025 Note.

As a result of adopting the fair value option, no embedded derivatives were bifurcated from the 2022 Note.

As a result of adopting the fair value option, no embedded derivatives are bifurcated from the 2025 Note.

The Company classified the 2025 Note as a liability at fair value and remeasured the 2025 Note to fair value at each reporting period.

The total proceeds received from the investor of $ 3,000 was allocated between the 2025 Note and the related warrants issued using the relative fair value method at issuance date.

This resulted in an initial fair value of $ 3,266 being allocated to the 2025 Note, and $ 1,046 allocated to the associated warrants.

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 consolidated statement of operations.

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

The 2022 Note was fully settled through Monthly Redemptions and Accelerations in 2023.

As part of the debt extinguishment, the Company reclassified the accumulated change in fair value due to instrument-specific credit risk out of accumulated other comprehensive loss on the consolidated balance sheet and into interest expense and other on the consolidated statement of operations and comprehensive loss.

The Company evaluated the Second Closing and associated warrants to be a contingently issuable financial asset with a fair value of zero at inception in accordance with ASC 815 - 40 Contracts in an Entity's own Equity.

The contingently issuable warrants are considered issued for accounting purposes - see Note 12 for further details.

2024 Convertible Note

The May 2024 Note bears interest at an annual rate equal to the Secured Overnight Financing Rate plus 1.0 %, which is compounded quarterly in arrears, and has a maturity date of June 4, 2029 .

During the year ended December 31, 2025, the Company made cash payments of $ 989 .

Additionally, $ 2,591 in aggregate principal and interest were converted into 2,405,573 shares of common stock.

As of December 31, 2025, the 2025 Note was fully repaid and all associated warrants fully exercised.

INTEREST EXPENSE AND OTHER

2 unchanged sentences

Common stock purchase agreement costs

$ 337 $ 1,124

Debt issuance costs

Amortization of premiums (accretion of discounts) on marketable securities, net

1 unchanged sentence

Expected credit losses

Loss on disposal of assets

Loss (gain) on foreign currency

Interest expense and other

19 unchanged sentences

Each warrant entitles the registered holder to purchase one share of the Company's common stock at a price of $ 345.00 per share.

In January 2025 , in connection with the 2025 Note, the Company issued warrants to the investor.

The warrants entitled the investor to purchase up to 805,263 shares of the Company’s common stock at a stock price of $ 2.22 per share.

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

In August 2025 , in connection with the lease settlement (see Note 5 for details of the settlement), the Company issued warrants.

The warrant entitled the previous landlord to purchase up to 350,000 shares of the Company’s common stock with an exercise price of $ 2.22 per share, subject to a five year term.

As of December 31, 2025 , no shares were exercised pursuant to the warrants.

On September 15, 2022 , in connection with the issuance of the 2022 Note, the Company issued warrants to the investor.

The warrants are immediately exercisable and entitle the investor to purchase up to 58,333 shares of common stock at a price of $ 105.00 per share, subject to a four year term.

As of December 31, 2024 , no shares were exercised pursuant to the warrants.

Contingent Warrants - As of December 31, 2023 , the Company had 58,333 contingently issuable warrants outstanding associated with the potential Second Closing under the Securities Purchase Agreement.

As the Company did not effect a Second Closing by March 15, 2024 , these warrants are no longer outstanding and will not be issued to the investor.

These warrants were cancelled on July 28, 2025 and the Company recorded a gain of $ 64 in other income in the consolidated statements of operations during the year ended December 31, 2025.

Tumim Stone Common Stock Purchase Agreement — On December 8, 2021, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) and a Registration Rights Agreement with Tumim Stone Capital LLC (“Tumim Stone”).

6 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 Purchase Agreement on December 8, 2021.

During the year ended December 31, 2024 , the Company issued 939,200 shares of its common stock under the Purchase Agreement for gross proceeds of $ 2,489 .

During the year ended December 31, 2023 , the Company issued 19,500 shares of its common stock under the Purchase Agreement for gross proceeds of $ 136 .

In July 2024 this Purchase Agreement was terminated.

This Purchase Agreement was terminated in July 2024.

In total, 996,866 shares were issued under the Tumim Stone Purchase Agreement for gross proceeds totaling $ 5,516 .

New Circle Principal Investments LLC (“New Circle”) Common Stock Purchase Agreement (the “CSPA”) — On July 25, 2024, the Company entered into a CSPA and a Registration Rights Agreement with New Circle.

13 unchanged sentences

July 25, 2024.

As of December 31, 2024 , including the commitment shares, the Company had issued 1,325,713 shares of its common stock to New Circle under the CSPA for gross proceeds totaling $ 1,679 .

Alliance Global Partners (“AGP”) At Market Issuance Sales Agreement (the “ATM Agreement”) — On September 12, 2024, the Company entered into the ATM and a Registration Rights Agreement with A.G.P.

Under the terms and subject to the conditions of the ATM Agreement, the Company may issue and sell through AGP the Company's common stock having an aggregate value offering price of up to $ 2,600 ("Placement Shares") from time to time through an "at-the-market" equity offering program.

This CSPA agreement was terminated in December 2025.

In total, the Company issued 8,980,713 shares of its common stock, including commitment shares, for gross proceeds totaling $ 27,754 .

Alliance Global Partners (“A.G.P.”) At Market Issuance Sales Agreement (the “ATM Agreement”) — On September 12, 2024, the Company entered into the ATM and a Registration Rights Agreement with A.G.P.

Under the terms and subject to the conditions of the ATM Agreement, the Company may issue and sell through A.G.P.

the Company's common stock having an aggregate value offering price of up to $ 2,600 ("Placement Shares") from time to time through an "at-the-market" equity offering program.

The Company has sole discretion to initiate such sales of common stock over a period of 36 months.

1 unchanged sentence

The Company will pay a cash commission rate of up to 3.0 % of the gross proceeds from the sale of Placement Shares sold pursuant to the ATM Agreement.

In December 2024, the Company increased the amount of the Company's common stock that it may issue and sell through AGP, having a new aggregate value offering of up to $5,230.

As of December 31, 2024, the Company sold 3,528,617 shares through A.G.P.

under the ATM Agreement for gross proceeds totaling $ 5,229 .

In December 2025, the Company increased the aggregate amount available under the ATM program to $ 125,000 , following multiple prior increases since the original agreement.

The Company sold 23,220,784 shares through A.G.P.

under the ATM Agreement for gross proceeds totaling $ 68,436 through December 31, 2025 .

The remaining availability under the agreement is $ 56,564 as of December 31, 2025 .

Registered Direct Offering — On May 29, 2024, the Company entered into a Securities Purchase Agreement with certain institutional investors pursuant to which the Company agreed to issue and sell, in a registered direct offering, an aggregate of 727,706 shares of the Company's common stock, par value $ 0.0001 per share, at a per share purchase price of $ 3.4480 for gross proceeds totaling $ 2,509 .

3 unchanged sentences

available-for-sale

due to instrument-

specific credit risk

Balance at December 31, 2023

Other comprehensive income (loss) before reclassifications, net of tax

Amounts reclassified from accumulated other comprehensive loss, net of tax

Net other comprehensive income

Balance at December 31, 2024

Other comprehensive loss before reclassifications, net of tax

Other comprehensive income (loss) before reclassifications, net of tax

Balance at December 31, 2025

The amounts reclassified out of accumulated other comprehensive income (loss) in the years ended December 31, 2024 and 2023 are included within Interest expense and other on the consolidated statement of operations.

NET LOSS PER SHARE

5 unchanged sentences

23,128,082 7,253,683

Dilutive effect of potential common shares

Weighted average common shares outstanding- Diluted

10 unchanged sentences

611,110 319,443

Common Stock Purchase Agreements

Conversion of convertible notes

Common Stock Purchase Agreement

30,741,382 23,675,174

Conversion of convertible note

87,099 119,582

59,522 37,882

32,223,108 24,676,184

STOCK-BASED COMPENSATION

The Company has five equity incentive plans, the 2014 US LADAR Inc.

Equity Incentive Plan (the “2014 Plan”), the 2016 Stock Plan (the “2016 Plan”), the 2021 Equity Incentive Plan (the “Incentive Plan”), the 2022 Employee Stock Purchase Plan (the "ESPP"), and the 2023 CEO Inducement Grant Plan (the "CEO Plan").

The Company has six equity incentive plans, the 2014 US LADAR Inc.

Equity Incentive Plan (the “2014 Plan”), the 2016 Stock Plan (the “2016 Plan”), the 2021 Equity Incentive Plan (the “Incentive Plan”), the 2022 Employee Stock Purchase Plan (the "ESPP"), the 2023 CEO Inducement Grant Plan (the "CEO Plan"), and the 2025 Employment Inducement Incentive Award Plan, ( “2025 EIIAP”).

On August 16, 2021, the Company’s 2014 Plan and 2016 Plan were terminated in connection with the closing of the business combination as defined in Note 1, but continue to govern the terms of outstanding equity awards that were granted prior to the termination of the plans.

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For newly hired employees, RSU’s generally vest 25 % during the quarterly release date following the recipient’s one year anniversary of their start date.

The remaining amounts generally vest quarterly over the next three years.

For existing employees, these RSUs generally vest quarterly over three years.

The remaining amounts generally vest quarterly over the next two years.

For existing employees, these RSUs generally vest quarterly over one year.

The fair value of the RSU is equal to the fair value of the Company’s common stock on the date of grant.

The Company adds back cancelled, unvested shares and those shares withheld in connection with the net share settlement of vested RSU's to the pool of shares available for future grants.

As of December 31, 2025 , 3,225,045 RSUs were granted to certain individuals under the Incentive Plan.

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As the market condition was not satisfied by March 1, 2024, the market-based RSUs were forfeited.

2025 Employment Inducement Incentive Award Plan

In October 2025, the Board of Directors approved the 2025 Employment Inducement Incentive Award Plan ( “2025 EIIAP”) which was created as an inducement for accepting employment with the Company.

The maximum aggregate number of shares of common stock that may be issued under the 2025 EIIAP is 3,000,000 shares of common stock.

The awards vest over three years, with a one -year cliff of 33.3 % of the RSUs on the 15 th day of the second month of the calendar quarter following the recipient’s one year anniversary of their start date.

The remaining amounts generally vest quarterly over the following two years.

The fair value of the RSU is equal to the fair value of the Company’s common stock on the date of grant.

As of December 31, 2025, 100,000 RSUs were granted to a certain individual under the 2025 EIIAP.

A summary of stock option activity related to the Plans as of December 31, 2025 is as follows:

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( 16,398 ) 12.57

( 1,504 ) 18.79

( 103,936 ) 13.23

Balance at December 31, 2025

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( 59,291 ) 5.00

( 1,287,583 ) 4.48

Unvested at December 31, 2025

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Year ended December 31,

Cost of revenue

Research and development

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Segment Reporting

The Company adopted ASU 2023 - 07 during the year ended December 31, 2024 retrospectively to all periods presented in the consolidated financial statements.

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”).

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The measure of segment assets is reported on the balance sheet as cash, cash equivalents and marketable securities.

Sale of Prototypes

The Company recorded revenue for prototype sales of $ 97 and $ 477 in 2024 and 2023 respectively.

Product Revenue

The Company recorded revenue for product sales of $ 157 and $ 97 in 2025 and 2024 , respectively.

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

Development Contracts

The Company has entered into research and development contracts as well as a sales, marketing and technical support service 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 $ 105 and $ 987 in revenue for performance obligations satisfied during years ended 2024 and 2023 respectively, in the 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 service contract with companies primarily in both the Automotive and Non-Automotive markets.

The Company assessed the number of performance obligations associated with the promises under each agreement, and recognized $ 76 and $ 105 in revenue for performance obligations that had been satisfied as of December 31, 2025 and 2024 respectively, in the consolidated statements of operations and comprehensive loss.

Disaggregation of Revenue

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United States

$ 154 $ 1,223

$ 202 $ 1,464

Revenue by timing of recognition:

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Recognized over time

$ 202 $ 1,464

Contract Liabilities

The Company had no contract liabilities as of December 31, 2025 and 2024 .

The following table shows the significant changes in contract liabilities balance as of December 31, 2024 and 2023 (in thousands):

Year ended December 31,

Beginning balance

Revenue recognized that was included in the contract liabilities beginning balance

Ending balance

Remaining Performance Obligations

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Additionally, as a practical expedient, the Company has not disclosed the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

The contract liabilities balance represents the remaining performance obligations for contracts with an original duration of greater than one year.

RESTRUCTURING

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In August 2024, the Company further reduced fixed operating costs and terminated its headquarters lease.

See discussion in Note 6, Leases.

The winding down of the Company's legacy non-Automotive product in 2023, in combination with an accumulation of other triggering events, indicated that the carrying amount of the Company's long-lived assets may not be recoverable.

An impairment review was performed on the Company's long-lived assets as of December 31, 2023, resulting in a write-down of its property and equipment and ROU asset to fair value.

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

The Company recorded a net gain of $ 368 , primarily relating to the net gain on termination of lease, losses on purchase commitments and one -time termination benefits.

Restructuring-related liabilities are included in accrued expenses and other current liabilities in the consolidated balance sheets.

Restructuring charges were included in the consolidated statements of operations and comprehensive loss during the years ended December 31, 2024 and 2023 as follows (in thousands):

The Company recorded a net gain of $ 368 during the year ended December 31, 2024, primarily relating to the net gain on termination of lease, partially offset by losses on purchase commitments and one -time termination benefits.

Restructuring-related liabilities were included in accrued expenses and other current liabilities in the consolidated balance sheet.

There were no restructuring charges during the year ended December 31, 2025.

Restructuring charges were included in the consolidated statements of operations and comprehensive loss during the year ended December 31, 2024 as follows (in thousands):

Year ended December 31,

Cost of revenue

$ 105 $ 5,721

Research and development

Sales and marketing

General and administrative

Impairment of long-lived assets

Total restructuring charges

$ ( 368 ) $ 19,153

A reconciliation of the beginning and ending balance of cash restructuring charges, including one -time employee termination benefits, losses on purchase commitments, and other restructuring charges, which are included in accounts payable and accrued expenses and other current liabilities in the consolidated balance sheets, is as follows (in thousands):

Total restructuring gain

A reconciliation of the beginning and ending balance of cash restructuring charges, including losses on purchase commitments, lease termination liability, and other restructuring charges, which are included in accounts payable and accrued expenses and other current liabilities in the consolidated balance sheets, was as follows (in thousands):

Balance as of December 31, 2024

$ 297 $ 3,313 $ 5 $ 3,615

— ( 1,014 ) — ( 1,014 )

Cash payments

( 297 ) ( 1,400 ) ( 5 ) ( 1,702 )

Issuance of warrants

— ( 899 ) — ( 899 )

Balance as of December 31, 2025

$ — $ — $ — $ —

EMPLOYEE BENEFIT PLAN

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The Company made contributions of $ 474 and $ 447 for the years ended December 31, 2025 and 2024 , respectively.

For the years ended December 31, 2024 and 2023 , the Company recognized a (benefit) provision for income taxes of $( 2 ) and $ 57 , respectively.

The benefit for the year ended December 31, 2024 was comprised of $ 2 and $( 4 ) in state and foreign taxes, respectively.

For the years ended December 31, 2025 and 2024 , the Company had a loss before income tax of $( 33,947 ) and $( 35,462 ), respectively, primarily from continuing operations in the United States.

For the years ended December 31, 2025 and 2024 , the Company recognized a provision (benefit) for income taxes of $ 11 and $( 2 ), respectively.

The provision for the year ended December 31, 2025 was comprised of $ 2 and $ 9 in state and foreign taxes, respectively.

The following table presents a reconciliation of the federal statutory rate of 21 % to the Company's effective tax rate for the periods presented:

The benefit for the year ended December 31, 2024 was comprised of $ 2 and $( 4 ) in state and foreign taxes, respectively.

The Company has elected to prospectively adopt the guidance in ASU 2023 - 09, Income Taxes (Topic 740 ) - Improvements to Income Tax Disclosures.

The following table presents a reconciliation of the federal statutory rate of 21 % to the Company's effective tax rate:

Year ended December 31, 2025

federal tax benefit at statutory rate

Non-deductible expenses and other

Amount (in thousands)

Federal income tax at statutory rate

$ ( 7,129 ) 21.0 %

Domestic federal

( 466 ) 1.4 %

Stock-based compensation

Stock and debt issuance costs

Change in valuation allowance, net

5,828 ( 17.2 )%

Domestic state taxes, net of federal effect

Foreign tax effects

As previously disclosed for the year ended December 31, 2024, prior to the adoption of ASU 2023 - 09, the following table is a reconciliation of the difference between the effective income tax rate and the federal statutory tax rate of 21%:

Year Ended December 31,

Federal income tax at statutory rate

Non deductible expenses and other

Share-based compensation

Research and development credits

Change in valuation allowance, net

( 15.7 )% ( 18.4 )%

Effective tax rate

0.0 % ( 0.1 )%

For 2025 and 2024 , the Company's effective tax rate differs from the amount computed by applying the statutory federal and state income tax rates to net loss before income tax, primarily as the result of state income taxes, R&D credits and changes in the Company's valuation allowance.

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Operating lease liabilities

Capitalized R&D expenses

12,401 14,194

Other accruals

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The Company has a history of operating losses and has incurred cumulative book losses since its formation.

Based upon the history of losses, the Company has determined that it is more likely than not that the net deferred tax assets will not be realized, and accordingly, a full valuation allowance has been recorded.

The valuation allowance as of December 31, 2025 was $ 109,546 which increased from $ 101,954 at December 31, 2024 .

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$ 3,740 $ 3,480

Decreases (increases) related to prior year tax provisions

Decrease related to prior year tax provisions

Increase related to current year tax provisions

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The Company is not currently under examination for federal or state income tax purposes.

Effective for tax years beginning on or after January 1, 2022, pursuant to the Tax Cuts and Jobs Act of 2017, companies are required to capitalize Internal Revenue Code ("IRC") Section 174 research and experimental expenses paid or incurred during the year.

These expenses are amortized over 5 years for research and development performed in the United States and over 15 years for expenses related to research and development performed outside of the United States.

As a result of the IRC Section 174 research and development capitalization, the Company recognized a deferred tax asset for the future tax benefit of the amortization deductions.

In accordance with the requirements of ASU 2023 - 09 for the year ended December 31, 2025, cash paid for income taxes totaled was $ 58 and was comprised of state income taxes of $ 2 made primarily to California, and $ 9 and $ 47 for foreign taxes paid in Korea and Germany, respectively.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted.

This legislation introduces several provisions impacting corporate taxes including (i) the permanent extension of certain expiring or expired elements of the Tax Cuts and Jobs Act such as 100% bonus depreciation and favorable modifications related to deductibility of interest, and (ii) expensing of research and experimental expenses.

The OBBBA contains multiple effective dates, with some provisions applicable beginning in 2025.

Because of the Company's valuation allowance on its net deferred tax assets, the change did not have a material impact on its financial statements.

COMMITMENTS AND CONTINGENCIES

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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 is 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.

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 $ 3,300 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 AEye Technologies, Inc.

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, the Company is unable to estimate the possible loss or range of loss that could result from an unfavorable outcome in this legal proceeding.

In 2024, the Company was purportedly served with a complaint 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 .

Thereafter, in August 2024, the landlord fully drew down the standby letter of credit of $ 2,150 , which was held as security for the payment of rent, due to the alleged default of the lease.

The Company disputes, among other things, that the total damages claimed by the landlord equal the amount claimed.

Depending on the outcome of this matter, there could be a material adverse effect on the financial position, results of operations, or cash flows of the Company.

An initial trial date has been set for April 2026.

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 $ 1,400 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.

RELATED PARTIES

From November 2016 to December 2023, the Company had employed a sibling of Mr.

Dussan, a director and the Company’s former Chief Technology Officer, who held the position of Director, Human Resources and Sr.

Manager of Human Resources during 2023.

For the year ended December 31, 2023, Mr.

Dussan’s sibling received total cash compensation of $ 149 and was granted 2,000 RSUs.

In addition, he participated in all other benefits that the Company generally offers to all of its employees.

There were no related party transactions during the year ended December 31, 2024.

There were no related party transactions during the years ended December 31, 2025 and 2024 .

SUBSEQUENT EVENTS

Management has evaluated subsequent events through February 24, 2025 and determined that there were no such events requiring recognition or disclosure in the financial statements, other than as noted below.

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

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

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

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

In January 2025, the Company increased the amount of the Company's common stock that it may issue and sell through A.G.P.

under the ATM Agreement, having a new aggregate value offering of up to $ 15,293 and sold 2,359,023 shares for gross proceeds totaling $ 3,015 .

Further, the Company issued 2,155,000 shares of its common stock to New Circle under the CSPA for gross proceeds totaling $ 4,800 .

Management has evaluated subsequent events through March 18, 2026 and determined that there were no such events requiring recognition or disclosure in the financial statements.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data