Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We have established disclosure controls and procedures that are designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have evaluated the effectiveness of our disclosure controls and procedures as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2021. Based on this review, our principal executive officer and principal financial officer have concluded that these disclosure controls and procedures were not effective as of December 31, 2021 due to the material weakness in our internal control over financial reporting described below.
Management’s Report on Internal Control Over Financial Reporting
As discussed elsewhere in this Annual Report on Form 10-K, we completed the Business Combination on August 16, 2021. Prior to the Business Combination, the Company was a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more target businesses. As a result, previously existing internal controls are no longer applicable or comprehensive enough as of the assessment date as the Company’s operations prior to the Business Combination were insignificant compared to those of the Post-Combination Company. The design and implementation of internal control over financial reporting for the Post-Combination Company has required and will continue to require significant time and resources from management and other personnel. Because of this, the design and ongoing development of our framework for implementation and evaluation of internal control over financial reporting is in its preliminary stages. As a result, management was unable, without incurring unreasonable effort or expense, to complete an assessment of our internal control over financial reporting as of December 31, 2021. Accordingly, we are excluding management’s report on internal control over financial reporting pursuant to Section 215.02 of the SEC Division of Corporation Finance’s Regulation S-K Compliance & Disclosure Interpretations.
Based on an initial assessment, we concluded that our internal control over financial reporting was not effective as of December 31, 2021 because of the material weakness described below. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
In connection with our financial statement close process for the year ended December 31, 2021, we identified a material weakness in our internal control over financial reporting resulting from a lack of a sufficient number of qualified personnel within our accounting and IT functions who possessed an appropriate level of expertise to effectively perform the following functions:
• identify, select and apply GAAP sufficiently to provide reasonable assurance that transactions were being appropriately recorded; and
• assess risk and design appropriate control activities over information technology systems and financial and reporting processes necessary to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements.
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Management continues to be actively engaged in remediating the material weakness through the development and implementation of systems, processes, and controls over the financial close and reporting process, and has hired additional accounting and finance personnel with technical public company accounting and financial reporting experience. We have also engaged external consultants to assist us in designing, implementing, and monitoring an appropriate system of internal controls. We will also continue to evaluate our IT systems and related processes to enhance our financial statement close process, reduce the number of manual journal entries, and facilitate review controls related to our significant classes of transactions. While we have made progress, the material weakness will not be considered remediated until management designs and implements effective controls that operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
This Annual Report on Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the rules of the SEC that permit emerging growth companies such as our company to provide only management’s report in the Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
Other than in connection with executing upon the implementation of remediation measures as noted above, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarterly period ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated herein by reference our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the year ended December 31, 2021.
Item 11. Executive Compensation
The information required by this item is incorporated herein by reference our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the year ended December 31, 2021.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated herein by reference our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the year ended December 31, 2021.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated herein by reference our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the year ended December 31, 2021.
Item 14. Principal Accounting Fees and Services
The information required by this item is incorporated herein by reference our Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the year ended December 31, 2021.
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Part IV
Item 15. Exhibits, Financial Statement Schedules
The following documents are filed as part of this report:
1.Financial Statements. The financial statements included in “Index to the Consolidated Financial Statements” in Part II, Item 8 are filed as part of this Annual Report on Form 10-K.
2.Financial Statement Schedules. None.
3.Exhibits. Exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Annual Report on Form 10-K.
Exhibit Number
Description
Form
File Number
Exhibit/Appendix Reference
Filing Date
Filed Herewith
2.1† Merger Agreement, dated as of February 17, 2021, by and among CF Finance Acquisition Corp. III, Merger Sub and AEye
S-4 333-256058 2.1 5/13/2021
2.2 Amendment to the Merger Agreement, dated as of April 30, 2021, by and among CF Finance Acquisition Corp. III, merger Sub and AEye Technologies.
S-4 333-256058 2.2 5/13/2021
3.1
Second Amended and Restated Certificate of Incorporation of AEye, Inc.
8-K
001-39699
3.1
08/23/2021
3.2
Amended and Restated Bylaws of AEye, Inc.
8-K
001-39699
3.2
08/23/2021
4.1 Registration Rights Agreement by and between AEye, Inc. and Tumim Stone Capital LLC, dated December 8, 2021.
8-K/A
001-39699 4.1 12/15/2021
4.2 Warrant Agreement dated November 12, 2020, between Continental Stock Transfer & Trust Company and CF Finance Acquisition Corp. III.
S-4 333-256058 4.1 05/13/2021
4.3 Specimen Warrant Certificate
S-4 333-256058 4.2 05/13/2021
4.5 Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934
X
10.1 Form of PIPE Subscription Agreement
S-4 333-256058 10.1 05/13/2021
10.2 Form of Stockholder Support Agreement, by and among CF Finance Acquisition Corp. III and certain stockholders of AEye, Inc.
8-K 001-39699 10.2 02/17/2021
10.3 Form of Amended and Restated Stockholder Support Agreement, by and among CF Finance Acquisition Corp. III and certain sto ckholders of AEye, Inc.
S-4 333-256058 10.2 05/13/2021
10.4 Form o f Sponsor Support Agreement, by and among CF Finance Acquisition Corp. III, CF Finance Holdings III, LL C and AEye, Inc.
S-4 333-256058 10.3 05/13/2021
10.5 Form of Amendment to Sponsor Support Agreement, by and among CF Finance Acquisition Corp. III, CF Finance Holdings III, LLC and AEye, Inc.
S-4 333-256058 10.4 05/13/2021
10.6 Form of Lock-Up Agreement , by and among CF Finance Acquisition Corp. III, AEye, Inc . and the holder signatory thereto .
S-4 333-256058 10.5 05/13/2021
10.7 Promissory Note dated April 30, 202 1.
8-K 001-39699 10.3 05/03/2021
10.8 2021 Equity Incentive Plan
8-K 001-39699 10.1 10/29/2021
10.9 Form of Indem n ification Agreement
8-K 001-39699 10.2 08/16/2021
10.10 Office Lease by and between TRT NOIP DUBLIN LP and the company, dated April 26, 2019 .
S-4 333-256058 10.9 05/13/2021
10.11 Form of Change in Control Severance Agreement
8-K 001-39699 10.1 03/18/2022
10.12 Common Stock Purchase Agreement by and between AEye , Inc. and Tunim Stone Capital LLC, dated December 8, 20 21.
8-K/A 001-39699 10.1 12/15/2021
10.13 Registration Rights Agreement, by and among CF Finance Acquisition Corp. III and the invest ors lis ted there to .
S-4 333-256058 10.6 05/13/2021
21.1 List of Significant Subsidiaries
S-1 333-259554 21.1 09/15/2021
23.1 Consent of Deloitte & Touche LLP
X
31.1
Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15(d)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
31.2
Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15(d)-14(a) under the Securities Exchange Act of 1934, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1*
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
101.INS
XBRL Instance Document
X
101.SCH
XBRL Taxonomy Extension Schema Document
X
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
X
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
X
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
X
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
X
104
Cover Page Interactive Data File (formatted as Inline XBRL)
X
† Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.
* The certifications attached as Exhibit 32.1 that accompanies this Annual Report on Form 10-K is deemed furnished and not filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of AEye, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general
incorporation language contained in such filing.
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Item 16. Form 10-K Summary
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: March 28, 2022
AEye, Inc.
By: /s/ Blair LaCorte
Blair LaCorte
Chief Executive Officer and Director
(Principal Executive Officer)
By: /s/ Robert Brown
Robert Brown
Chief Financial Officer and Treasurer
(Principal Financial Officer)
POWER OF ATTORNEY
By signing this Annual Report on Form 10-K below, I hereby appoint each of Blair LaCorte and Robert Brown as my attorney-in-fact to sign all amendments to this Form 10-K on my behalf, and to file this Form 10-K (including all exhibits and other documents related to the Form 10-K) with the Securities and Exchange Commission. I authorize each of my attorneys-in-fact to (1) appoint a substitute attorney-in-fact for himself and (2) perform any actions that he believes are necessary or appropriate to carry out the intention and purpose of this Power of Attorney. I ratify and confirm all lawful actions taken directly or indirectly by my attorneys-in-fact and by any properly appointed substitute attorneys-in-fact.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacity and on the dates indicated.
By: /s/ Blair LaCorte
Blair LaCorte
Chief Executive Officer and Director
(Principal Executive Officer)
March 28, 2022
By: /s/ Robert Brown
Robert Brown
Chief Financial Officer and Treasurer
(Principal Financial Officer)
March 28, 2022
By: /s/ Carol DiBattiste
Carol DiBattiste
Chair of the Board
March 28, 2022
By: /s/ Timothy J. Dunn
Timothy J. Dunn
Director
March 28, 2022
By: /s/ Luis C. Dussan
Luis C. Dussan
Chief Technology Officer and Director
March 28, 2022
By: /s/ Prof. Dr. Bernd Gottschalk
Prof. Dr. Bernd Gottschalk
Director
March 28, 2022
By: /s/ Wen H. Hsieh
Wen H. Hsieh
Director
March 28, 2022
By: /s/ Dr. Karl-Thomas Neumann
Dr. Karl-Thomas Neumann
Director
March 28, 2022
By: /s/ Sue Zeifman
Sue Zeifman
Director
March 28, 2022
93