What changed in this filing

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Item 1A. Risk Factors

2026-05-14 compared with 2025-11-07 · 91 added, 65 removed, 849 unchanged (16% of the section changed)

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We have incurred net losses in each year since our inception.

In the nine months ended September 30, 2025 and 2024, we incurred net losses of approximately $26.6 million and $26.9 million, respectively.

In the three months ended March 31, 2026 and 2025, we incurred net losses of approximately $8.3 million and $8.0 million, respectively.

We expect that we will continue to incur significant losses through at least the next few years as we:

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maintain a level of general and administrative spending to meet the requirements of operating as a public company.

As of September 30, 2025, we had an accumulated deficit of approximately $399.7 million.

As of March 31, 2026, we had an accumulated deficit of approximately $415.4 million.

Even if we are able to increase sales or licensing of our products, there can be no assurance that we will be commercially successful.

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In the past, design wins, the first step towards commercialization with a particular OEM, have taken longer than originally expected.

Similarly, in the Non-Automotive market, a proof-of concept, or POC, which usually occurs prior to the placement of a commercial order, is taking longer than expected, sometimes 12 months or more.

Such delays, including delays that may occur in the future, will impact the timing of our revenue.

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If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business and to respond to business challenges could be significantly limited.

Additionally, under current SEC regulations, if our public float is less than $75 million at the time we file our Annual Report on Form 10-K, and for so long as our public float remains less than $75 million thereafter, the amount we can raise through primary public offerings of securities in any twelve-month period after such filing using a shelf registration statement on Form S-3 will be limited to an aggregate of one-third of our public float, which is referred to as the “baby shelf” rules.

In the recent past, we have been subject to the “baby shelf” rules and we may become subject to such rules again.

In the event we again become subject to the “baby shelf” rules, it would limit our ability to raise additional capital.

In the event we again become subject to the “baby shelf” rules, it would limit our ability to raise additional capital to one-third of our public float in any twelve-month period.

Any restructuring actions and cost reduction initiatives that we undertook, or may undertake in the future, may not deliver the results we expect, and these actions may adversely affect our business.

Since 2023, we have implemented multiple restructuring actions aimed at focusing the organization on the commercialization of our automotive products, while reducing fixed operating costs, including the elimination of our internal sales and marketing teams.

Our capital light business model allows us to leverage one or more Tier 1 partners and their manufacturing capabilities, supply chains, OEM relationships, and sales teams to bring our products to market.

Our capital light business model allows us to leverage one or more Tier 1 partners and their manufacturing capabilities, supply chains, OEM relationships to bring our products to market.

In our Non-Automotive markets, including for our OPTIS™ platform, we may also seek to leverage the sales channels, customer relationships, and integration capabilities of our software, perception, and ecosystem partners to expand market reach.

These restructurings could result in disruptions to our operations and adversely affect our business and our ability to maintain or obtain additional Tier 1 partners.

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the mix of products sold or licensed by us in any given quarter;

the duration or worsening of the military conflicts in Ukraine and the Middle East, and the time it will take for the economic recovery for such impact to occur;

the duration or worsening of the military conflicts in Iran, Ukraine, and elsewhere in the Middle East, and the time it will take for the economic recovery for such impact to occur;

changing international trade policies, including the imposition or modification of tariffs, increasing trade tensions, and the implementation of potential trade restrictions;

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maintain and enhance the value of our reputation and brand;

effectively manage our growth and business operations, including the lingering impacts of macroeconomic factors on our business, such as the wars in Ukraine and in the Middle East;

effectively manage our growth and business operations, including the lingering impacts of macroeconomic factors on our business, such as the wars in Iran, Ukraine, and elsewhere in the Middle East;

effectively manage our supply chain to address changing international trade policies, including tariffs, trade tensions, and potential trade restrictions;

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There can be no assurance that we will be able to maintain compliance with Nasdaq’s continued listing requirements in the future.

In addition, the trading volume of our common stock may fluctuate significantly, which can have significant impact on the price of our common stock.

In addition, the trading volume of our common stock has in the past, and may, in the future, fluctuate significantly, which can have a significant impact on the price of our common stock.

If the market price of our common stock declines significantly, you may be unable to resell your shares at an attractive price, or at all.

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If we fail to obtain design wins for a significant number of vehicle models from one or more automotive OEMs or their suppliers, our business, results of operations, and financial condition will be materially and adversely affected.

The integration of our lidar technology into Nvidia’s DRIVE AGX Orin platform does not guarantee that automotive OEMs will select our lidar technology for their ADAS or autonomous driving solutions, even if such automotive OEMs select the Nvidia DRIVE AGX Orin platform instead of the platform of one of Nvidia’s competitors or the automotive OEM decides to use an in-house solution.

The Nvidia DRIVE AGX Orin platform supports a number of lidar sensors that are competitive to our solution and Nvidia is expected to remain neutral with respect to the automotive OEM’s decision as to choice of lidar sensor for that automotive OEM’s solution.

It is difficult to predict how many automotive OEMs will ultimately adopt the Nvidia DRIVE AGX Orin platform.

The integration of our lidar technology into the NVIDIA DRIVE AGX platform does not guarantee that automotive OEMs will select our lidar technology for their ADAS or autonomous driving solutions, even if such automotive OEMs select the NVIDIA DRIVE AGX platform instead of the platform of one of NVIDIA’s competitors or a solution developed internally by the automotive OEM.

Moreover, if we are unable to achieve complete integration on current or future versions of the NVIDIA DRIVE AGX platform, that would severely impact our ability to support automotive OEMs adopting the NVIDIA DRIVE AGX platform.

The NVIDIA DRIVE AGX platform supports a number of lidar sensors that are competitive to our solution and NVIDIA is expected to remain neutral with respect to the automotive OEM’s decision as to choice of lidar sensor for that automotive OEM’s solution.

It is difficult to predict how many automotive OEMs will ultimately adopt the NVIDIA DRIVE AGX platform.

Our forward-looking estimates of certain financial metrics may prove inaccurate.

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Long development cycles and product cancellations or postponements may adversely affect our business, results of operations, and financial condition.

A significant portion of the components used in our products are manufactured abroad, which subjects us to various international risks and costs, including foreign trade issues, tariffs, trade wars, currency exchange rate fluctuations, shipment delays, supply chain disruptions, and political instability, any of which could adversely affect our business and financial condition.

Most of our products, and the components thereof, are manufactured abroad.

Relying on foreign-produced products subjects us to risks relating to changes in import duties, quotas, the potential for introduction of U.S.

A significant portion of the components currently used in our products are manufactured abroad, which subjects us to various international risks and costs, including foreign trade issues, tariffs, trade wars, currency exchange rate fluctuations, shipment delays, supply chain disruptions, and political instability, any of which could adversely affect our business and financial condition.

Most of the components found in our products are currently manufactured abroad.

Relying on foreign-produced components subjects us to risks relating to changes in import duties, quotas, the potential for introduction of U.S.

taxes on imported goods, the potential loss of “most favored nation” status with the U.S., and freight cost increases, as well as economic and political uncertainties, that could result in a trade war causing ever-increasing tariffs, although we have not seen a significant impact yet.

We may also experience shipment delays caused by shipping port constraints, labor strikes, work stoppages, acts of war, including the current conflicts in Ukraine and in the Middle East, and terrorism, or other supply chain disruptions, including those caused by extreme weather, natural disasters, and pandemics or other public health concerns.

We may also experience shipment delays caused by shipping port constraints, labor strikes, work stoppages, acts of war, including the current conflicts in Iran, Ukraine, and elsewhere in the Middle East, and terrorism, or other supply chain disruptions, including those caused by extreme weather, natural disasters, and pandemics or other public health concerns.

If any of these or other factors, including trade tensions between the U.S.

and other nations, including China and Russia, as a result of the war in Ukraine or otherwise, were to cause a disruption of trade from other countries, and in particular, Taiwan, our ability to source products, components, or raw materials could be adversely affected.

and other nations, including China and Russia, as a result of the wars in Iran, Ukraine, or otherwise, were to cause a disruption of trade from other countries, and in particular, Taiwan, our ability to source products, components, or raw materials could be adversely affected.

We may need to seek alternative suppliers or vendors, which may not be available, or make changes to our operations, any of which could have a material adverse effect on our business, results of operations, or financial condition.

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Cost-cutting initiatives adopted by our customers may result in continued downward pressure on pricing.

Our agreements and partnerships with automotive OEMs and Tier 1 suppliers may require step-downs in pricing over the term of the agreement or partnership, or if commercialized, over the period of production.

Our agreements with automotive OEMs and Tier 1 suppliers may require step-downs in pricing over the term of the agreement or if commercialized, over the period of production.

In addition, our automotive OEM and Tier 1 suppliers often reserve the right to terminate their supply contracts for convenience, which enhances their ability to obtain price concessions.

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We expect to continue to incur R&D costs as part of our efforts to design, develop, manufacture, and commercialize new products and enhance existing products.

Our R&D expenses were approximately $10.2 million and $12.1 million during the nine months ended September 30, 2025 and 2024, respectively, and may increase in the future.

Our R&D expenses were approximately $3.8 million and $3.5 million during the three months ended March 31, 2026 and 2025, respectively, and may increase in the future.

Because we account for R&D as an operating expense, these expenditures will adversely affect our results of operations in the future.

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There can be no assurance that we will discover any reliability, compatibility, design, or manufacturing issues prior to sale or, that if such issues arise after a sale, that the issue can be resolved to the customers’ satisfaction or that the resolution of such problems will not cause us to incur significant additional development costs or warranty expenses or to cause us to lose significant sales opportunities.

In January 2026 we introduced STRATOS™, which was specifically designed to address markets requiring the ability to detect objects at distances of up to 1.5 kilometers, such as in aviation, defense, and rail.

For STRATOS™ to be successful, it will require market adoption in industries that can benefit from ultra-long-range detection.

As with OPTIS™, because STRATOS™ is a new product that has not been previously offered, market acceptance is unknown.

Moreover, as STRATOS™ is manufactured and deployed, we may encounter reliability, compatibility, design, or manufacturing issues.

There can be no assurances that any such issues will be discovered prior to sale, or that is such issues arise after a sale, that the issue can be resolved to the satisfaction of the customer or that the resolution will not cause us to incur significant additional development or warranty expenses or cause us to lose significant sales opportunities.

Our strategic partnerships may not result in OEM program wins or commercial success, and the success of our OPTIS ™ strategy depends on attracting developers and partners to expand our ecosystem.

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While these partnerships may help position our technology for adoption by OEM and other end customers, there can be no assurance that our collaborations will result in design wins, commercial agreements, or large-scale adoption by OEMs or other customers.

The integration of our lidar technology into platforms such as Nvidia’s DRIVE AGX Orin is an important milestone, but it does not guarantee that automotive OEMs or Tier 1 suppliers will select our solutions for their production programs, or that such programs will be successful or generate significant revenue for us.

The integration of our lidar technology into platforms such as NVIDIA DRIVE AGX is an important milestone, but it does not guarantee that automotive OEMs or Tier 1 suppliers will select our solutions for their production programs, or that such programs will be successful or generate significant revenue for us.

Delays, changes in OEM strategies, or the selection of competing technologies could materially and adversely affect our business, results of operations and financial condition.

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Furthermore, the development of a robust ecosystem requires significant investment of time and resources, and there is no guarantee that these efforts will be successful or that the ecosystem will reach the scale necessary to drive meaningful revenue or market adoption.

In addition, we are observing increased customer demand for fully integrated, end-to-end solutions rather than discrete components.

While we believe our OPTIS™ platform is designed to address this demand, the process of integrating third-party perception, analytics, and other software with our hardware platform is technically complex and can be time-consuming, with no guarantee that any particular integration will be completed successfully or on the timeline we anticipate.

Our success in addressing these markets will depend on our ability to (i) source and engage qualified partners, (ii) build, validate, and support compelling integrated solutions, and (iii) effectively market and sell those solutions to end customers.

A failure or delay in any of these areas could limit our growth in our Non-Automotive markets and impair the value of our OPTIS™ strategy.

Our inability to secure OEM program wins through our partnerships, or to successfully build and expand the OPTIS™ ecosystem, could materially and adversely affect our business, financial condition, results of operations, and prospects.

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Even if lidar products are used in initial generations of autonomous driving technology and ADAS products, we cannot guarantee that lidar products will be designed into or included in subsequent generations of such commercialized technology.

The speed of market adoption and growth for ADAS or autonomous vehicles is difficult, if not impossible, to predict, and it is more difficult to predict this market’s future growth in light of the economic consequences of the unresolved global conflicts and increasing trade tensions, as well as other macroeconomic factors.

The speed of market adoption and growth for ADAS or autonomous vehicles is difficult, if not impossible, to predict, and it is more difficult to predict this market’s future growth in light of the economic consequences of unresolved global conflicts and increasing trade tensions, as well as other macroeconomic factors.

Although we currently believe we have a differentiated market leading technology for the autonomous vehicle market, by the time mass market adoption of autonomous vehicle technology is achieved, we expect competition among providers of sensing technology based on lidar and other modalities to increase substantially.

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We cannot be certain that lidar will be sold into these markets, or that lidar will be sold into any markets at scale.

Adoption of lidar products, including our products, will depend on numerous factors, including whether the technological capabilities of lidar and lidar-based products meet users’ current or anticipated needs, whether the benefits associated with designing lidar into larger sensing systems outweighs the costs, complexity, and time needed to deploy such technology or replace or modify existing systems that may have used other modalities, such as cameras and radar, whether users in other applications can move beyond the testing and development phases and proceed to commercializing systems supported by lidar technology and whether lidar developers such as us can keep pace with the expected rapid technological change in certain developing markets, and the global response to the unresolved global conflicts and increasing trade tensions, as well as other macroeconomic factors, and the length of any associated economic recovery.

Adoption of lidar products, including our products, will depend on numerous factors, including whether the technological capabilities of lidar and lidar-based products meet users’ current or anticipated needs, whether the benefits associated with designing lidar into larger sensing systems outweighs the costs, complexity, and time needed to deploy such technology or replace or modify existing systems that may have used other modalities, such as cameras and radar, whether users in other applications can move beyond the testing and development phases and proceed to commercializing systems supported by lidar technology and whether lidar developers such as us can keep pace with the expected rapid technological change in certain developing markets, and the global response to unresolved global conflicts and increasing trade tensions, as well as other macroeconomic factors, and the length of any associated economic recovery.

If lidar technology does not achieve commercial success, or if adoption of lidar is deferred or the market otherwise develops at a pace slower than we expect, our business, results of operations, and financial condition will be materially and adversely affected.

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If the models are incorrectly designed, the data we use to train them is incomplete, inadequate, or biased in some way, or if we do not have sufficient rights to use the data on which our models rely, the performance of our products, services, and business, as well as our reputation, could suffer or we could incur liability through the violation of laws, third-party privacy or other rights, or contracts to which we are a party.

Our investments in artificial intelligence may not yield the benefits we expect, and we may be at a disadvantage relative to competitors with greater resources to invest in artificial intelligence.

We are making, and expect to continue to make, investments in artificial intelligence to drive operational efficiency, improve the performance of our lidar and software solutions, and enhance our research and development productivity.

The artificial intelligence landscape is evolving rapidly, and there can be no assurance that our investments will yield the benefits we anticipate, that we will be able to successfully integrate artificial intelligence capabilities into our products or operations, or that any benefits realized will be sustained over time.

In addition, certain of our competitors and other industry participants have substantially greater financial, engineering, and data resources than we do, and may be able to invest in and deploy artificial intelligence capabilities at a scale that we cannot match.

If our artificial intelligence investments do not produce the intended benefits, or if competitors deploy more advanced or cost-effective artificial intelligence capabilities than we are able to deploy, our competitive position, results of operations, and prospects could be materially and adversely affected.

Our outsourced manufacturing business model for the Non-Automotive market may not be successful, which could harm our ability to deliver products and recognize revenue in the Non-Automotive market.

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We may experience delays in shipments or issues concerning product quality from our third-party manufacturers.

If any of our third-party manufacturers experience interruptions, delays, or disruptions in supplying our products, including by (i) natural disasters, (ii) the effects of any epidemics or outbreaks of other contagions, such as "bird-flu," (iii) increased military conflict, especially in Ukraine and the Middle East, (iv) increasing trade tensions around the globe, or (v) work stoppages or capacity constraints, our ability to ship products would be delayed.

If any of our third-party manufacturers experience interruptions, delays, or disruptions in supplying our products, including by (i) natural disasters, (ii) the effects of any epidemics or outbreaks of other contagions, such as "bird-flu," (iii) increased military conflict, especially in Iran, Ukraine, and elsewhere in the Middle East, (iv) increasing trade tensions around the globe, or (v) work stoppages or capacity constraints, our ability to ship products would be delayed.

In addition, unfavorable economic conditions could result in financial distress among third-party manufacturers upon which we rely, thereby increasing the risk of disruption of supplies necessary to fulfill our production requirements and meet customer demands.

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Our sales and operations in international markets expose us to associated operational, financial, and regulatory risks.

Sales to international customers accounted for 65% and 49% of our revenue during the nine months ended September 30, 2025 and 2024, respectively.

Sales to international customers accounted for 26% and 100% of our revenue during the three months ended March 31, 2026 and 2025, respectively.

In May 2024, we announced that we have partnered with Accelight Technologies, Inc.

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global or regional health crises, such as epidemics or outbreaks of other contagions;

military conflicts in Ukraine and the Middle East;

military conflicts in Iran, Ukraine, and elsewhere in the Middle East;

potential for violations of anti-corruption laws and regulations, such as those related to bribery and fraud;

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The complexity of our products could result in unforeseen delays or expenses from undetected defects, errors, or reliability issues in our hardware or software which could reduce the market adoption of our products, damage our reputation with current or prospective customers, expose us to product liability and other claims, and thereby adversely affect our operating costs.

Our products are highly technical, very complex, and require high standards to manufacture.

Our products are highly technical, very complex, and require precision to manufacture.

Our products have in the past experienced, and will likely in the future experience, defects, errors, or reliability issues at various stages of development, production, and use.

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Our products are intended to be combined with third-party hardware and software as part of a larger system.

These larger systems are also highly technical, complex, and require high standards to manufacture.

These larger systems are also highly technical, complex, and require precision to manufacture.

The third-party components incorporated into these larger systems have been and will be subject to defects, errors, and reliability issues during development, production, and use.

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Fluctuations in the adoption of lidar products may affect our ability to forecast our future operating results, including revenue, gross margins, cash flows, and profitability.

Our ability to accurately forecast demand for our products could be affected by many factors, including the accuracy of the forecasts that we receive from our customers, the rapidly changing nature of the autonomous driving and ADAS markets in which we operate, the uncertainty surrounding the market acceptance and commercialization of lidar technology, the emergence of new markets, an increase or decrease in customer demand for our products or for products and services of our competitors, product introductions by competitors, epidemics or outbreaks of other contagions, such as "bird-flu," should they materialize, any work stoppages or interruptions, unanticipated changes in general market conditions, and the general weakening of economic conditions or consumer confidence, which may be exacerbated by the on-going military actions in Ukraine and the Middle East, or escalating trade tensions around the globe.

Our ability to accurately forecast demand for our products could be affected by many factors, including the accuracy of the forecasts that we receive from our customers, the rapidly changing nature of the autonomous driving and ADAS markets in which we operate, the uncertainty surrounding the market acceptance and commercialization of lidar technology, the emergence of new markets, an increase or decrease in customer demand for our products or for products and services of our competitors, product introductions by competitors, epidemics or outbreaks of other contagions, such as "bird-flu," should they materialize, any work stoppages or interruptions, unanticipated changes in general market conditions, and the general weakening of economic conditions or consumer confidence, which may be exacerbated by the on-going military actions in Iran, Ukraine, and elsewhere in the Middle East, or escalating trade tensions around the globe.

Some of our component manufacturers offer significant price concessions for volume purchases.

In the past, we have taken advantage of such price concessions, however, the additional volume commitments we make could lead to excess component inventories if we overestimate the demand for our products.

If our lidar products are commercialized in autonomous driving and ADAS applications, both of which are experiencing rapid growth in demand, we may face challenges acquiring adequate supplies to manufacture our products and/or we and our manufacturing partners may not be able to manufacture our products at a rate necessary to satisfy the levels of demand, which would negatively affect our revenue.

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The average selling prices of our products or our fees or royalties from technology licenses could decrease rapidly over the life of the product or license term, which may negatively affect our revenue and gross margin.

We may experience declines in the average selling prices of our products generally as our customers seek to commercialize autonomous systems at prices low enough to achieve market acceptance or due to competitive pressures.

We may experience declines in the average selling prices of our products generally as our customers seek to commercialize lidar-based systems at prices low enough to achieve market acceptance or due to competitive pressures.

In order to sell products that have a falling average unit selling price and maintain margins at the same time, we will need to continually reduce product and manufacturing costs.

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While we make our strategic planning decisions based on the assumption that the markets we are targeting will grow, our business is dependent, in large part on, and directly affected by, business cycles and other factors affecting the global automotive industry and the global economy generally.

Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences, changes in interest rates (which significantly increased beginning in 2022 and have fallen in 2025) and credit availability, changes in inflation rates (which the U.S.

Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences, changes in interest rates (which significantly increased beginning in 2022 and have fallen starting in 2025) and credit availability, changes in inflation rates (which the U.S.

has recently experienced and may continue to do so), consumer confidence (which may be starting to wane), fuel costs, fuel availability, environmental impact, tariffs (especially those targeting automobiles or components used by the automotive industry in particular, such as steel and aluminum), governmental incentives and regulatory requirements, and political volatility, especially in energy-producing countries and growth markets.

Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks, which may impact our ability to raise additional capital in the future.

In addition, the ongoing hostilities between Russia and Ukraine, the war in the Middle East, and global reactions thereto have caused significant fluctuations in U.S.

In addition, the ongoing hostilities between Russia and Ukraine, the war in Iran and elsewhere in the Middle East, and global reactions thereto have caused significant fluctuations in U.S.

domestic and global energy prices.

Oil supply disruptions related to the Russia-Ukraine conflict, and sanctions and other measures taken by the U.S.

and its allies, could lead to higher costs for gas, food, and goods in the U.S.

Oil supply disruptions related to the military action in Iran, and prior to that, the Russia-Ukraine conflict, as well as sanctions and other measures taken by the U.S.

and its allies, has lead to higher costs for gas, food, and goods in the U.S.

and exacerbate the inflationary pressures on the economy, with potentially adverse impacts on our customers and on our business, results of operations, and financial condition.

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In addition, the Cybersecurity and Infrastructure Security Agency, or CISA, has in the past warned organizations in the U.S.

to be on guard against possible cyber-attacks coming from Russia which has the potential to disrupt business operations, limit access to essential services, and threaten public safety.

to be on guard against possible cyber-attacks coming from Russia and Iran which has the potential to disrupt business operations, limit access to essential services, and threaten public safety.

Automotive production and sales can also be significantly affected by our automotive OEM and Tier 1 supplier customers’ ability to operate effectively in the face of challenging economic conditions and in response to labor relations issues, regulatory requirements, and other factors, such as the unavailability of unrelated components in the assembly of automobiles, an example of which was the shortage of semiconductors necessary for automobile production.

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Our business could be materially and adversely affected if we lose any of our customers or strategic partners, if their demand for our products declined due to factors outside of our control, including component shortages (whether related to our products or otherwise) that impact our customers ’ overall production plans or product development plans, or if our customers were unable to pay their invoices.

Although we have and continue to pursue a broad customer base, in the Automotive markets, there exist only limited number of customers, most of which have strong purchasing power and for which the relationships continue to develop.

Although we have and continue to pursue a broad customer base, in the Automotive markets, there exist only a limited number of customers, most of which have strong purchasing power and for which the relationships continue to develop.

In the Non-Automotive markets, there are considerably more potential customers, but the market is highly fragmented.

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Developments in alternative technologies may adversely affect the demand for our technology.

Significant developments in alternative technologies, such as cameras and radar, may materially and adversely affect our business, prospects, financial condition, and operating results in ways we do not currently anticipate.

Significant developments in alternative technologies, such as cameras and radar, or a fusion of lidar with cameras and/or radar, may materially and adversely affect our business, prospects, financial condition, and operating results in ways we do not currently anticipate.

Existing and future camera and radar technologies may emerge as customers’ preferred alternative to our solutions.

Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced products in the autonomous vehicle industry, which could result in the loss of competitiveness of our lidar solutions, decreased revenue, and a loss of market share to competitors (or a failure to increase revenue and/or market share).

In addition, some of our competitors are developing lidar based on frequency-modulated continuous wave, or FMCW, sensors or single photon avalanche diode, or SPAD, sensors, rather than the time-of-flight, or ToF, sensors we utilize.

Each type of sensor has advantages and disadvantages over the others and it is impossible to predict which one, or if any or all of these sensors will ultimately be adopted by various markets.

Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced products, which could result in the loss of competitiveness of our lidar solutions, decreased revenue, and a loss of market share to competitors (or a failure to increase revenue and/or market share).

Our R&D efforts may not be sufficient to adapt to changes in technology.

As technologies change, we plan to upgrade or adapt our lidar solutions with the latest technology.

However, our solutions may not compete effectively with alternative systems if we are not able to source and integrate the latest technology into our existing lidar solutions.

The New Circle Purchase Agreement contains contractual limitations that may not allow us to draw all of the $50 million committed under the Purchase Agreement and to the extent we do draw under the Purchase Agreement, existing stockholders will be diluted.

On July 25, 2024, we entered into the Purchase Agreement with New Circle Principal Investments LLC, or New Circle, pursuant to which New Circle committed to purchase, subject to certain limitations, up to $50 million of our Common Stock should we elect to sell our common stock to them.

Should we decide to sell our common stock to New Circle, existing stockholders at such time will experience dilution of their interest in us, which dilution will be heightened if the price at which we sell common stock is low, as there is no minimum price at which we can sell our common stock under the Purchase Agreement.

Under the Purchase Agreement, we can only sell to New Circle up to 1,721,755 shares of our common stock, which is equal to 19.99% of the shares of the Company’s common stock outstanding as of the date of the Purchase Agreement, unless we first obtain stockholder approval or the average purchase price per share paid by New Circle exceeds $1.41, which is the lower of the closing price on the execution date of the Purchase Agreement, and the average closing prices for our common stock during the 5-trading day period immediately preceding the execution of the Purchase Agreement.

Moreover, we may not issue shares to New Circle whereby they would own more than 4.99% of our outstanding shares at any one time, which on September 30, 2025, was equal to 2,084,656 shares.

At values below $2.00 per share, we would likely not be in a position to realize the full commitment of $50 million under the Purchase Agreement and existing stockholders would experience significant dilution.

Therefore, the actual number of shares we will be able to sell to New Circle, the amount of dilution our stockholders will experience upon the sale of our common stock under the Purchase Agreement, and the total proceeds that we will derive from such sales, cannot be determined at this time.

As technologies change, we plan to upgrade or adapt our lidar solutions with the latest, yet cost effective, technology.

However, our solutions may not compete effectively with alternative systems if we are not able to source and integrate the latest technology into our existing lidar solutions in a cost-effective manner.

If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be adversely affected.

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Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could adversely affect our operating results or cause us to fail to meet our reporting obligations, and may result in a restatement of our financial statements for prior periods.

Any failure to implement and maintain effective internal controls also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in the periodic reports we will file with the SEC under Section 404 of the Sarbanes-Oxley Act.

Ineffective disclosure controls and procedures and a lack of internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information.

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If our internal controls are perceived as inadequate or that we are unable to produce timely or accurate financial statements, investors may lose confidence in our operating results and the price of our common stock could decline.

Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until we are no longer an emerging growth company or a non-accelerated filer.

Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until we are no longer a smaller reporting company or a non-accelerated filer.

At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed, or operating.

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We are highly dependent on the services of our executive officers.

We are highly dependent on our executive officers, in particular, Matthew Fisch, our Chief Executive Officer, Andrew S.

Hughes, our General Counsel, and Conor Tierney, our Chief Financial Officer.

We are highly dependent on our executive officers, in particular, Matthew Fisch, our Chief Executive Officer, and Conor B.

Tierney, our Chief Financial Officer.

The loss of any of our executive officers or other senior executives could adversely affect our business because the loss could make it more difficult to, among other things, compete with other market participants, continue to develop innovative product designs, and retain existing customers or cultivate new ones.

Negative public perception of, or negative news related to any of our executive officers or senior executives may adversely affect our brand, relationship with customers, or standing in the industry.

In the past, we have lost the services of some of our executive officers for various reasons, including the departure of Luis C.

Dussan as of November 15, 2023, who, until that time, was our Chief Technology Officer and Chief Product Strategist, but continues as a member of our Board of Directors, and T.R.

Ramachandran, who resigned, effective April 5, 2024, as our Chief Operating Officer.

Our business depends substantially on the efforts of our executive officers and highly skilled personnel, and our operations may be severely disrupted if we lost their services.

In the past, we have lost the services of some of our executive officers for various reasons.

Our business depends substantially on the efforts of our executive officers and highly skilled personnel, and our operations may be severely disrupted if we lose their services.

Competition for highly skilled personnel is often intense, especially in the San Francisco Bay Area, where we are headquartered, and we may incur significant costs to attract the highly skilled personnel we require.

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Our ability to attract and retain the highly skilled personnel we require has been further hampered by the overall reductions in personnel we have implemented, which places more responsibility on fewer individuals, our focus on cash conservation, which has limited our ability to provide increases in compensation, and the decline in our stock price, which has decreased the retention value of the stock awards we have made to our employees.

In addition, our equity plan is not well funded.

In addition, our equity plan for the past several years has not been well funded.

We asked stockholders to approve an increase in the number of shares issuable under our equity plan at the 2024 and 2025 annual meeting of stockholders.

Our stockholders failed to approve the additional shares, therefore we have been unable to issue what we believe is sufficient equity to our employees, thereby decreasing our ability to retain them.

In addition, our executive officers have not received an equity grant as part of our long-term incentive program for more than two years, substantially increasing the risk of retention.

Even if stockholders had approved the additional shares, the retention value of such shares may have been insufficient to adequately retain some or all of our employees, including our executive officers.

Our stockholders failed to approve the additional shares, therefore we were unable to issue what we believe is sufficient equity to our employees, thereby decreasing our ability to retain them.

In addition, our executive officers did not receive an equity grant as part of our long-term incentive program in 2024 and 2025, substantially increasing the risk of retention.

At our 2026 annual meeting of stockholders, our stockholders did approve the addition of 6,750,000 shares to our equity plan.

Even with the additional shares, the retention value of such shares may have been insufficient to adequately retain some or all of our employees, including our executive officers.

Moreover, with the personnel reductions we have implemented, it may create, in some instances, single points of failure, such that if certain individuals voluntarily resign from the Company, it may adversely impact, or significantly delay, our ability to bring our products to market, which would severely impact our operations and have an adverse impact on our business prospects.

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In March 2025, we experienced a physical break-in at our headquarters.

Although it does not appear that any property, either personal or intellectual, was taken, the break-in caused a temporary disruption to our operations.

Although no property, either personal or intellectual, was taken, the break-in caused a temporary disruption to our operations.

In mid-2022, our previous partner, Continental, experienced a cyberattack in which data was improperly taken from their servers.

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A cyber incident could be caused by disasters, insiders (through inadvertence or with malicious intent), or malicious third parties (including nation-states or nation-state supported actors) using sophisticated, targeted methods to circumvent firewalls, encryption, and other security defenses, including hacking, fraud, trickery, phishing, or other forms of deception.

The risks of a cybersecurity breach against companies based in the U.S., like us, may be enhanced as a byproduct of the on-going war in Ukraine, or by state-sponsored actors, primarily located in, or sponsored by, China, Russia, or North Korea.

The risks of a cybersecurity breach against companies based in the U.S., like us, may be enhanced as a byproduct of the on-going war in Iran or Ukraine, or by state-sponsored actors, primarily located in, or sponsored by, China, Russia, Iran, or North Korea.

Despite careful security and controls design, our information technology systems and the systems used by our third-party vendors, may be subject to security breaches and cyberattacks the result of which could include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation, and damage to business relationships.

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These matters may include disputes with our suppliers and customers, intellectual property claims, stockholder litigation, government investigations, class action lawsuits, personal injury claims, environmental issues, customs and value-added tax disputes, and employment and tax issues.

In 2025, we were notified by a former vendor that it intended to pursue a claim against our subsidiary, AEye Technologies, Inc., arising out of an agreement entered into in May 2020, in which the former vendor alleges that our subsidiary failed to pay approximately $3,300, plus interest from the date the former vendor alleges such payments were due.

Our subsidiary has, and continues to dispute the total amount owed based, in part, on our subsidiary’s 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.

In 2025, we were notified by a former vendor that it intended to pursue a claim against our subsidiary, AEye Technologies, Inc., arising out of an agreement entered into in May 2020, in which the former vendor alleges that our subsidiary failed to pay approximately $3.3 million, plus interest from the date the former vendor alleges such payments were due.

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

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

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

In 2024, we were purportedly served with a complaint that alleged we were in breach of a lease for office space in Dublin, California, entered into by our subsidiary, AEye Technologies, Inc.

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

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

We disputed, among other things, the total damages claimed by the landlord.

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

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

Under the terms of the settlement agreement, the Company paid $1.4 million in cash and issued a warrant to purchase up to 350,000 shares of common stock at an exercise price of $2.22 per share.

In early 2023, we discovered that there may have been some uncertainty with respect to the validity of our Second Amended and Restated Certificate of Incorporation, which was approved by our stockholders at the special meeting of stockholders held on August 12, 2021.

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If we cannot rapidly address any safety concerns or defects with our products, our business, results of operations, and financial condition may be adversely affected.

Certain of our target Non-Automotive markets are subject to industry-specific certifications, domestic content rules, and other regulatory requirements that may delay or limit our ability to commercialize our products.

Many of the Non-Automotive markets we are targeting, including aerospace and defense, transportation infrastructure, rail, and aviation, are subject to industry-specific certifications, domestic content, and source-of-supply requirements, as well as other regulatory regimes with which we have limited or no prior experience.

For example, certain U.S.

federal infrastructure and transportation programs (including programs administered or funded by the U.S.

Department of Transportation and other federal agencies) generally impose domestic content and “Buy America” requirements, including under the Build America, Buy America Act, that may require our products to be manufactured, and components sourced, in the United States in order to qualify for use in funded programs.

defense procurement is subject to additional restrictions and requirements, including those imposed under the Federal Acquisition Regulation and the Defense Federal Acquisition Regulation Supplement, the Berry Amendment, specialty-metals and other domestic-source rules, and various security and clearance requirements.

In aviation and certain other heavily regulated industries, our products and the platforms in which they are integrated may need to obtain type certification, technical standard order authorization, or other regulatory approvals from the U.S.

Federal Aviation Administration or analogous regulatory authorities before they can be deployed.

Obtaining and maintaining these certifications and complying with these requirements can be lengthy, costly, and uncertain, and may require modifications to our products, supply chain, manufacturing operations, or contractual arrangements with our partners.

If we are unable to obtain or maintain required certifications, satisfy applicable domestic content or source-of-supply rules, or otherwise meet customer regulatory requirements on a timely basis or at all, our ability to address these markets could be limited or delayed, and our addressable opportunity in these markets could be materially smaller than we currently anticipate.

Any of the foregoing could materially and adversely affect our business, results of operations, financial condition, and prospects.

We are subject to governmental import and export control laws and regulations.

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If new, unanticipated regulations significantly impact our use and sourcing of various components or require more expensive components, those regulations could materially and adversely affect our business, results of operations, and financial condition.

Our products are intended to be used for autonomous driving and ADAS applications, which are subject to complicated and evolving regulatory schemes that vary from jurisdiction to jurisdiction.

Our products are intended to be used for autonomous driving and ADAS applications as well as Non-Automotive applications, which are subject to complicated and evolving regulatory schemes that vary from jurisdiction to jurisdiction.

These are rapidly evolving areas where new regulations could impose limitations on the use of lidar generally or our products specifically.

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We will incur increased costs as a result of operating as a public company, and our management will devote substantial time to compliance initiatives.

We incur significant legal, accounting, and other expenses that we did not incur as a private company, and these expenses will likely increase after we are no longer an emerging growth company, in 2026, as defined in Section 2(a) of the Securities Act.

We incur significant legal, accounting, and other expenses that we did not incur as a private company, and these expenses will likely increase in 2026 now that we are no longer an emerging growth company, as defined in Section 2(a) of the Securities Act.

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the Dodd-Frank Act, as well as rules adopted, and to be adopted, by the SEC and Nasdaq.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors