8 unchanged sentences
Certain factors that could alone or in combination prevent us from successfully commercializing our products include:
+Added: • recession or economic downturn globally or in the jurisdictions in which we do business;
+Added: • inflation or deflation, as well as changes in existing and expected rates of inflation or deflation, which may vary across the jurisdictions in which we do business;
• our reliance on third parties to manufacture our products or supply significant parts needed for our production process;
8 unchanged sentences
• our ability to forecast our revenue, budget, and manage our expenses;
+Added: • difficulty in collecting, or failure to collect, accounts receivable, as well as longer collection periods;
• our ability to comply with existing and new or modified local laws and regulations applicable to our business, or laws and regulations applicable to our customers for applications in which they may use our products;
8 unchanged sentences
Table of C ontents
−Removed: Our future results will suffer if we do not recognize anticipated synergies, effectively manage the expanded operations or successfully integrate the businesses of Velodyne.
−Removed: Our future success will depend, in part, upon our ability to manage the expanded business, including challenges related to the management and monitoring of new operations and associated increased costs and complexity associated with the Velodyne Merger and other mergers.
−Removed: If we are not able to successfully complete integrations in an efficient and cost-effective manner, the anticipated benefits of this merger may not be realized fully, or at all, or may take longer to realize than expected, and the value of our common stock may be affected adversely.
−Removed: An inability to realize the full extent of the anticipated benefits of the Velodyne Merger, as well as any delays encountered in the integration processes, could have an adverse effect on our business, financial condition or results of operations.
−Removed: In addition, the actual integrations may result in additional and unforeseen expenses, including increased legal, accounting and compliance costs.
We have incurred significant losses to date and may never achieve or sustain profitability.
7 unchanged sentences
• increase our sales and marketing functions, including expansion of our customer support and distribution capabilities;
−Removed: • continue to integrate the operations of Velodyne following our recent merger;
• expand operations and manufacturing.
6 unchanged sentences
To remain competitive, we continue to develop new products and expand our existing product offerings.
−Removed: For instance, in October 2022, we announced our newest OS series scanning sensor, REV7, powered by its next-generation L3 chip.
−Removed: REV7 features the all-new OSDome sensor, as well as upgraded OS0, OS1, and OS2 sensors that deliver double the range, enhanced object detection, increased precision and accuracy, and greater reliability.
−Removed: introduced the market.
−Removed: In January 2023, we announced the release of our software, Ouster Gemini, a cloud-backed digital lidar perception platform for crowd analytics, security, and intelligent transportation systems.
+Added: For instance, in January 2023, we announced the release of our software, Ouster Gemini, a cloud-backed digital lidar perception platform for crowd analytics, security, and intelligent transportation systems.
Ouster Gemini offers the ability to detect, classify, and track moving objects in real-time using the 3D data from a single or multiple fused Ouster lidar sensors.
−Removed: In connection with REV7, Ouster Gemini, and future releases, we expect to incur substantial, and potentially increasing, R&D costs.
−Removed: Our R&D expenses were $91.2 million and $64.3 million during the years ended December 31, 2023 and 2022, respectively, and are likely to grow in the future, particularly as a result of the Velodyne Merger.
+Added: In connection with the development of our products, we incur and expect to continue to incur substantial R&D costs, which may increase over time.
+Added: Our R&D expenses were $58.1 million and $91.2 million during the years ended December 31, 2024 and 2023, respectively.
Because we account for R&D as an operating expense, these expenditures will adversely affect our results of operations in the future.
4 unchanged sentences
Additionally, the success of our competitors’ R&D efforts, including producing higher performing products or providing products competitive to our new products to our customers before us, may result in loss of business to us.
−Removed: Table of C ontents
The promise of new products and successful R&D may even decrease our expected and actual revenue attributable to existing products, as historically, customers have delayed or cancelled outstanding purchasing commitments for certain products in anticipation of the release of new generation products from the Company.
4 unchanged sentences
Our relationships with many of our existing customers are limited as they may not be prepared to select Ouster as a long-term supplier given our limited operating and sales history.
−Removed: To establish preliminary relationships with certain customers and to build their confidence, we have entered, and may continue to enter, into evaluation agreements, spot buy purchase orders, non-binding letters of intent, and strategic customer agreements.
+Added: To establish preliminary relationships with certain customers and to build their confidence, we have entered, and may continue to enter, into evaluation agreements, spot buy purchase
+Added: Table of C ontents
+Added: orders, non-binding letters of intent, and strategic customer agreements.
These agreements are largely non-binding, do not include any minimum obligation to purchase any quantities of any products at this time, and do not require that the parties enter into a subsequent definitive, long-term, binding agreements;
1 unchanged sentence
If we are unable to build confidence with our existing customers, either through these preliminary agreements (due to any failure to enter into or perform under the agreements) or otherwise, or if we are unable to secure opportunities from these non-binding agreements, including those involving strategic customers, we may be unable to produce accurate forecasts or become profitable.
−Removed: Our new customers, or customers that we inherited from the Velodyne Merger, may be less confident in us and less likely to purchase our products because of a lack of awareness about our products.
+Added: Our new customers may be less confident in us and less likely to purchase our products because of a lack of awareness about our products.
They may also not be convinced that our business will succeed because of the absence of an established sales, service, support, and operating history.
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• developments involving our competitors;
−Removed: • changes in governmental regulations affecting us or applications in which our customers use our products or software;
+Added: • changes in governmental regulations affecting us, our supply chain, or applications in which our customers use our products or software, including export controls, tariffs, data privacy and security, or new regulatory standards for automotive, industrial, infrastructure, or robotics;
• future accounting pronouncements or changes in our accounting policies;
−Removed: • the impact of epidemics or pandemics, including current or future business disruption and related financial impact resulting from the global COVID-19 health crisis;
−Removed: Table of C ontents
• adverse litigation, judgments, settlements or other litigation-related costs, or claims that may give rise to such costs;
6 unchanged sentences
Such a stock price decline could occur even if our performance is consistent with any previously publicly stated guidance.
+Added: Table of C ontents
Our revenue and margins could be adversely affected if we fail to maintain competitive average selling prices, high sales volumes, and/or fail to reduce product costs.
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Further, as we continue to provide support for REV6, we anticipate downward pressure on our margins.
−Removed: In addition, we must continuously drive initiatives to reduce labor cost, improve worker efficiency, reduce the cost of materials and further lower overall product costs by carefully managing component prices, inventory and shipping cost.
+Added: In addition, we must continuously drive initiatives to reduce labor cost, improve worker efficiency, reduce the cost of materials, further lower overall product costs by carefully managing component prices, inventory and shipping cost, and minimize the impacts of tariffs and other regulatory impacts.
We need to continually increase sales volume and introduce new, lower-cost products in order to maintain our overall gross margin.
9 unchanged sentences
The already competitive landscape of the lidar market, including both foreseeable and unforeseeable entries of competitors and lidar technology from those competitors in our target markets, along with the potential emergence of new non-lidar solutions, may result in downward pricing pressure, reduced margins and may impede our ability to increase the sales of our products or cause us to lose market share, any of which will adversely affect our business, results of operations and financial condition.
−Removed: Table of C ontents
We target many customers that are large corporations with substantial negotiating power and exacting product standards.
6 unchanged sentences
We therefore have no assurance that we can establish relationships with these companies, that our products will meet the needs of these or other companies, or that a contract with these companies will culminate in significant or any product sales.
+Added: Table of C ontents
Furthermore, in some instances, these large companies may have internally developed products and solutions that are competitive to our products.
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Customers in this market are often local governments, such as city governments, which may be subject to political pressures, and may not control their own budgets.
−Removed: For example, programs could be cancelled due to legislative action that is out of a local government’s control.
+Added: For example, programs could be cancelled due to executive or legislative action that is out of a local government’s control.
Our products also may be purchased by automotive OEMs and their suppliers in connection with their design and development of autonomous driving and ADAS technology.
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Our products also are used in a wide variety of existing and emerging use cases in the robotics market, in which our customers are generally engaged in the design, production, operation, or after-market modification of small mobile unmanned vehicles, which includes wheeled robots, legged robots, and drones.
−Removed: This is a competitive market that often has
−Removed: Table of C ontents
−Removed: strict functional and pricing requirements for products.
+Added: This is a competitive market that often has strict functional and pricing requirements for products.
If we are unable to make products that meet these requirements, or sell products at the required price point, we could lose this business to competitors or competitive technologies.
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Additionally, undetected errors, defects or reliability issues, especially as new products are introduced or as new versions are released, could result in serious injury to the end users of technology incorporating our products, or those in the surrounding area, our customers never being able to commercialize technology incorporating our products, litigation against us, negative publicity and other consequences.
−Removed: These risks are particularly prevalent in the autonomous driving and ADAS markets.
+Added: These risks are particularly prevalent in the
+Added: Table of C ontents
+Added: autonomous driving and ADAS markets.
Some errors or defects in our products may only be discovered after they have been tested, commercialized and deployed by customers.
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Any negative publicity related to the perceived quality of our products could affect our brand image, partner and customer demand, and adversely affect our operating results and financial condition.
−Removed: Table of C ontents
We may require additional capital in order to execute our business plan, which may not be available on terms acceptable to us, or at all.
2 unchanged sentences
We may not be able to timely secure additional debt or equity financing on favorable terms, or at all, particularly in an uncertain economic environment.
−Removed: We maintain the majority of its cash and cash equivalents in accounts with major U.S.
+Added: We maintain the majority of our cash and cash equivalents in accounts with major U.S.
and multi-national financial institutions, and our deposits at these institutions exceed insured limits.
3 unchanged sentences
If we raise additional funds through the issuance of equity or convertible debt, including through our “at-the-market” offering program, or other equity-linked securities or if we issue equity or equity-linked securities to current or potential customers to further business relationships, our existing stockholders could experience significant dilution.
−Removed: Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
−Removed: If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited and our business results and operations could be materially and adversely affected.
−Removed: We face risks related to our indebtedness.
−Removed: As of December 31, 2023, we had total outstanding debt of $44.0 million under our credit agreement with UBS Bank USA and UBS Financial Services Inc.
−Removed: We may incur additional indebtedness in the future.
−Removed: This credit agreement contains various covenants and other restrictions as described in Note 6, Debt included in the notes to consolidated financial statements included elsewhere in this Form 10-K.
−Removed: Our leverage could have important consequences to us, including:
−Removed: • exposing us to the risk of increased interest rates as our borrowings under our current debt facilities are at variable rates;
−Removed: • making it more difficult for us to make payments on our debt;
−Removed: • limiting our ability to pay future dividends;
−Removed: • increasing our vulnerability to downturns in our business, the storage and organization retail industry or the general economy and limiting our flexibility in planning for, or reacting to, changes in our business;
−Removed: • requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our debt, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures, and future business opportunities;
−Removed: • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;
−Removed: • requiring us to comply with financial and operational covenants including leverage covenants, restricting us, among other things, from placing liens on our assets, making investments, incurring debt, making payments to our equity or debt holders and engaging in transactions with affiliates;
−Removed: • limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes;
−Removed: • preventing us from taking advantage of business opportunities as they arise or successfully carrying out our plans to expand our store base and product offerings;
−Removed: • placing us at a competitive disadvantage compared to our competitors who may be less leveraged.
−Removed: Consequences of this indebtedness may require a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our debt, thereby reducing our ability to use our cash flow to fund operations, capital expenditures, and future business opportunities.
−Removed: If we cannot generate sufficient cash flow from operations to service our debt, we may need to refinance our debt, dispose of assets or issue equity to obtain necessary funds.
−Removed: We do not know whether we would be able to take any of these actions on a timely basis, on terms satisfactory to us, or at all.
−Removed: A failure by us or our subsidiaries to comply with the agreements governing our indebtedness could result in an event of default under such indebtedness, which could adversely affect our ability to respond to changes in our business and manage our operations.
−Removed: Upon the occurrence of an event of default under any of the agreements governing our indebtedness, the lenders could elect to declare all amounts outstanding to be due and payable and exercise other remedies as set forth in the
Table of C ontents
−Removed: If any of our indebtedness were to be accelerated, there can be no assurance that our assets would be sufficient to repay this indebtedness in full, which could have a material adverse effect on our ability to continue to operate as a going concern.
+Added: financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
+Added: If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited and our business results and operations could be materially and adversely affected.
Market adoption of lidar remains uncertain, and it is difficult to forecast long-term end-customer adoption rates and demand for our products.
−Removed: Substantially all of our revenue is generated by the sale of our digital lidar sensors.
+Added: The majority of our revenue is generated by the sale of our digital lidar sensors and accessories.
Given the evolving nature of the markets in which we operate, it is difficult to predict the customer demand or adoption rates for lidar technology generally or our products specifically.
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We may not be able to implement improvements in an efficient or timely manner and may discover deficiencies in existing controls, programs, systems and procedures, which could have an adverse effect on our business, reputation and financial results.
−Removed: Additionally, rapid growth in our business may place a strain on our human and capital resources.
−Removed: Furthermore, we expect to continue to conduct our business internationally and anticipate increased business operations in the United States, Europe, Asia and the Middle East.
−Removed: These diversified, global operations place increased demands on our limited resources and require us to substantially
+Added: Additionally, rapid growth
Table of C ontents
−Removed: expand the capabilities of our administrative and operational resources and to attract, train, manage and retain qualified management, technical, manufacturing, engineering, sales and other personnel.
+Added: in our business may place a strain on our human and capital resources.
+Added: Furthermore, we expect to continue to conduct our business internationally and anticipate increased business operations in the United States, Europe, Asia and the Middle East.
+Added: These diversified, global operations place increased demands on our limited resources and require us to substantially expand the capabilities of our administrative and operational resources and to attract, train, manage and retain qualified management, technical, manufacturing, engineering, sales and other personnel.
As our operations expand domestically and internationally, we will need to continue to manage multiple locations and additional relationships with various customers, partners, suppliers and other third parties across several markets.
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• political and economic instability, war, international terrorism and anti-American sentiment, particularly in emerging markets and the geographic regions affected by the Russia-Ukraine and Israel-Hamas wars;
+Added: Table of C ontents
+Added: • uncertainty regarding the trade relationships among the United States, Canada, China, Mexico and Taiwan, as well as other countries, and related impacts to our supply chain;
• potential for violations of anti-corruption laws and regulations, such as those related to bribery and fraud;
1 unchanged sentence
• increased difficulty in managing inventory;
−Removed: Table of C ontents
• increased risk in collecting trade receivables;
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• difficulties and costs of staffing and managing foreign operations;
+Added: • natural disasters and severe weather events including earthquakes, wildfires, hurricanes, tsunamis, floods, rising sea levels, as well as other impacts of climate change;
+Added: • withdrawals from, or renegotiation of existing trade agreements by the United States (or other jurisdictions) potentially affecting countries in which we do business;
• changes in local tax and customs duty laws or changes in the enforcement, application or interpretation of such laws;
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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.
−Removed: Our ability to accurately forecast demand for our products could be affected by many factors, including the rapidly changing nature of our current target markets, 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, the COVID-19 pandemic, other epidemics and public health crises, and any associated work stoppages or interruptions, unanticipated changes in general market conditions and the weakening of economic conditions or consumer confidence in future economic conditions.
+Added: Our ability to accurately forecast demand for our products could be affected by many factors, including the rapidly changing nature of our current target markets, 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
+Added: Table of C ontents
+Added: competitors, market or supply chain disruptions due to public health crises, and any associated work stoppages or interruptions, unanticipated changes in general market conditions and the weakening of economic conditions or consumer confidence in future economic conditions.
We may face challenges acquiring adequate supplies to manufacture our products and we, Benchmark and Fabrinet may not be able to manufacture our sensors at a rate necessary to satisfy the levels of demand, which would negatively affect our short-term and long-term growth.
1 unchanged sentence
If we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products available for sale, which has forced us to record inventory write-downs in the past
−Removed: Inventory levels in excess of customer demand have resulted and may in the future result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would adversely affect our financial results,
−Removed: Table of C ontents
−Removed: including our gross margin, and have a negative effect on our brand.
+Added: Inventory levels in excess of customer demand have resulted and may in the future result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would adversely affect our financial results, including our gross margin, and have a negative effect on our brand.
Conversely, if we underestimate customer demand for our products, we may not be able to deliver products to meet our requirements, and this could result in damage to our brand and customer relationships and adversely affect our revenue and operating results.
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If one or more of our major customers is unable to pay our invoices as they become due or a customer simply refuses to make such payments if it experiences financial difficulties, our business would be adversely affected.
−Removed: If a major customer were to enter into bankruptcy proceedings or similar proceedings whereby contractual commitments are subject to stay of execution and the possibility of legal or other modification, we could be forced to record a substantial loss.
+Added: If a major customer were to enter into bankruptcy proceedings or similar proceedings whereby contractual commitments are subject to stay of execution and the possibility of legal or other modification, payments received may be subject to clawback and we could be forced to record a substantial loss.
Additionally, a number of our customers are startup companies, small and mid-sized businesses, that are privately funded, have limited resources, and do not have a history of creditworthiness that we can audit to determine reliability and increase the potential risk to record potential losses.
1 unchanged sentence
Even if they are financially solvent and stable and we are successful in securing a commercial relationship with them, their business plans for future programs may be inherently uncertain and unpredictable, and less structured than established companies.
+Added: We generally do not require collateral or other security deposits for accounts receivable.
+Added: To reduce credit risk, the Company considers customer creditworthiness, past transaction history with the customer as well as changes in customer payment terms when determining the collectability of specific customer accounts.
+Added: Periodically, we may require a customer to make advanced payments in advance of product shipments.
+Added: These measures to reduce credit risk may not be sufficient and our accounts receivable could be impaired or our revenues adversely impacted.
We are exposed to credit risk on our trade accounts receivable, supplier non-trade receivables and prepayments related to long-term supply agreements, and this risk is heightened during periods when economic conditions worsen.
4 unchanged sentences
In addition, from time to time, we may make prepayments associated with long-term supply agreements to secure supply of inventory components.
−Removed: While we are implementing procedures to monitor and limit exposure to credit risk on our trade and supplier non-trade receivables, there can be no assurance such procedures will effectively limit our credit risk and avoid losses.
+Added: While we are implementing procedures to monitor and limit exposure to credit risk on our trade and
+Added: Table of C ontents
+Added: supplier non-trade receivables, there can be no assurance such procedures will effectively limit our credit risk and avoid losses.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
6 unchanged sentences
We may experience ownership changes in the future as a result of future transactions in our stock.
−Removed: If it is determined that we
−Removed: Table of C ontents
−Removed: undergo one or more ownership changes in the future, then our ability to utilize our federal and state net operating loss carryforwards or other tax attributes may be limited or eliminated.
+Added: If it is determined that we undergo one or more ownership changes in the future, then our ability to utilize our federal and state net operating loss carryforwards or other tax attributes may be limited or eliminated.
Key components in our products come from limited or single source third-party suppliers, and we expect to rely on third parties to manufacture a significant portion of our products for the foreseeable future.
Interruptions in our relationships with these third parties could adversely impact our business.
−Removed: We rely on third-party manufacturers, including Benchmark and Fabrinet, to supply our products.
+Added: We rely on third-party manufacturers, including Benchmark and Fabrinet, to supply a substantial portion of our products.
These arrangements are intended to lower our operating costs, but they also reduce our direct control over production and distribution.
This diminished control may have an adverse effect on the quality or quantity of products or services, or our flexibility to respond to changing conditions.
−Removed: If Benchmark or any of our third-party component suppliers or logistics and transportation partners experience interruptions, delays or disruptions in supplying their products or services, including by natural disasters, trade restrictions, the global COVID-19 pandemic, other epidemics and public health crises, or work stoppages or capacity constraints, our ability to ship products to distributors and customers may be delayed.
+Added: If Benchmark or any of our third-party component suppliers or logistics and transportation partners experience interruptions, delays or disruptions in supplying their products or services, including by natural disasters, trade restrictions, public health crises, or work stoppages or capacity constraints, our ability to ship products to distributors and customers may be delayed.
+Added: Similarly, we source components from countries that may be impacted by tariffs under the current U.S.
+Added: government, including Canada, China, and Mexico.
+Added: If the cost of products sourced from these or certain other countries increase significantly due to tariffs or trade restrictions, we may not be able to change suppliers or otherwise avoid or mitigate such costs.
In addition, unfavorable economic conditions could result in financial distress among third-party suppliers or 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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In the event of a component shortage, supply interruption or material pricing change from suppliers of these components, we may not be able to develop alternate sources in a timely manner or at all in the case of sole or limited sources.
+Added: Table of C ontents
Developing alternate sources of supply for these components may be time-consuming, difficult, and costly and we may not be able to source these components on terms that are acceptable to us, or at all, which may undermine our ability to meet our requirements or to fill customer orders in a timely manner.
5 unchanged sentences
Should operations at our third-party suppliers, including Benchmark and Fabrinet, encounter disruptions or losses that may be caused by work stoppages, disease outbreaks or pandemics, acts of war, terrorism, fire, earthquakes, flooding or other natural disasters, it could result in delays, postponement or reduce production of our products, which could have a material adverse effect on our business, results of operations and financial condition until such time as such production disruption is resolved or an alternate source of production or supply is secured.
−Removed: Table of C ontents
Outsourcing a substantial percentage of our manufacturing outside of the United States involves certain risks or may not be successful, which could harm our ability to deliver products and recognize revenue.
Historically, we manufactured all of our digital sensors at our facility in San Francisco, California.
−Removed: We intend to maintain a portion of our manufacturing at this facility;
+Added: We continue to maintain a portion of our manufacturing at this facility, including any production of Buy America and Buy American-compliant sensors;
however, in 2019, we began moving a portion of our manufacturing operations to a manufacturing facility in Thailand in connection with our relationship with Benchmark, which for the year ended December 31, 2024, accounted for the majority of our OS sensor manufacturing output.
−Removed: In 2023, after the merger with Velodyne, we began moving manufacturing operations of Velodyne sensors to a Fabrinet facility in Thailand.
−Removed: Any substantial delay in bringing this facility up to full production on our current schedule may hinder our ability to produce all of the products needed to meet orders and/or achieve our expected financial performance.
−Removed: Opening this facility has required, and will continue to require, additional capital expenditures and the efforts and attention of our management and other personnel, which has and will continue to divert resources from our existing business or operations.
−Removed: If and when this manufacturing facility is brought up to full production according to our current schedule, it may not provide us with all of the operational and financial benefits we expect to receive.
−Removed: We have invested in manufacturing process equipment which is held at these Thailand facilities, and we may make prepayments to some of our suppliers associated with long-term supply agreements.
−Removed: While these arrangements help ensure the supply of components and finished goods, if our co-manufacturer or suppliers experience severe financial problems or other disruptions in their business, such continued supply would be reduced or terminated, and the recoverability of manufacturing process equipment or prepayments would be negatively impacted.
+Added: After the merger with Velodyne, we moved manufacturing operations of Velodyne sensors to a Fabrinet facility in Thailand.
+Added: The Company expects to continue to outsource the higher volume product line manufacturing to its manufacturing partners, Benchmark and Fabrinet.
+Added: We have invested in manufacturing process equipment which is held at Benchmark and Fabrinet facilities.
+Added: We expect to make additional capital expenditures and to continue to devote the attention of our management and other personnel to the operations located at our outsourced manufacturing partners.
+Added: We may also need to make prepayments to some of our suppliers associated with long-term supply agreements.
+Added: While these arrangements help ensure the supply of components and finished goods, if any of the Company’s manufacturing partners or suppliers experiences severe financial problems or other disruptions in their business, such continued supply would be reduced or terminated, and the recoverability of manufacturing process equipment or prepayments would be negatively impacted.
+Added: In such cases the efforts and attention of our management and other personnel to these relationships that were diverted from our other business operations would not be recoverable.
Additionally, manufacturing outside the United States is subject to several inherent risks, including:
9 unchanged sentences
Loss of one or more of these suppliers or our inability to identify and establish relationships with new suppliers could harm our business and impede our growth.
−Removed: Because we do not maintain long-term supply contracts, any of our suppliers could seek to alter or terminate its relationship with us at any time, leaving us with periods during which we have limited or no ability to manufacture our products.
+Added: Because we do not maintain long-term supply contracts with many of our suppliers, they could seek to alter or terminate their relationship with us at any time, leaving us with periods during which we have limited or no ability to manufacture our products.
The production of our products is dependent on producing or sourcing certain key components, including semiconductor chips, and raw materials at acceptable price levels.
If we are unable to adequately reduce and control the costs of such key components, we will be unable to realize manufacturing costs targets, which could reduce the market adoption of our products, damage our reputation with current or prospective customers, and materially and adversely impact our brand, business, prospects, financial condition and operating results.
+Added: Table of C ontents
Adverse conditions in the industries we target or the global economy more generally could have adverse effects on our results of operations.
1 unchanged sentence
Our target markets are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences, changes in interest rates and credit availability, consumer confidence, inflation, environmental impact, governmental incentives and regulatory requirements, political volatility, labor relations issues, trade agreements and other factors.
−Removed: For example, general inflation in the United States, Europe and other geographies has risen to levels not experienced in recent decades.
+Added: For example, general inflation in the United States, Europe and other geographies has risen significantly in recent years.
General inflation, including rising prices for inputs and rising wages, as well as rising interest rates negatively impact our business by increasing our operating costs.
1 unchanged sentence
Inflation may cause our customers to reduce or delay orders for our products thereby causing a decrease in sales.
−Removed: Increased instability relating to this higher inflation as well as rising interest rates may enhance volatility in currency exchange rates, limit our suppliers’ and customers’ access to
−Removed: Table of C ontents
−Removed: credit and limit our ability to access debt and equity financing.
+Added: Increased instability relating to this higher inflation as well as rising interest rates may enhance volatility in currency exchange rates, limit our suppliers’ and customers’ access to credit and limit our ability to access debt and equity financing.
These uncertainties may make it difficult for us and our suppliers and customers to accurately plan future business activities and materially adversely impact our operating results and financial condition.
13 unchanged sentences
If we are unsuccessful in our recruitment and retention efforts, it may adversely affect our business and our growth prospects.
−Removed: In addition, in connection with the closing of the Velodyne Merger, in February 2023, we implemented a reduction in force to reduce redundancies with the acquired business.
−Removed: While positions have been eliminated, certain functions necessary to our operations remain, and we have distributed the duties and obligations of departed employees among our remaining employees.
−Removed: The reduction in workforce could make it difficult for us to pursue, or prevent us from pursuing, new opportunities and initiatives due to insufficient personnel, or require us to incur additional and unanticipated costs to hire new personnel to pursue such opportunities or initiatives.
−Removed: If we are unable to realize the anticipated benefits from the reduction in force, or if we experience significant adverse consequences from the reduction in force, our business, financial condition, and results of operations may be materially adversely affected.
Some of our employees are employed by professional employer organizations which may have unexpected costs that could adversely impact our business.
We contract with non-US professional employer organizations (“PEOs”), to administer our human resources, payroll and employee benefits functions for some of our subsidiaries’ employees outside of the United States.
−Removed: Although we recruit and select these employees, their employment relationship is with the relevant PEO.
+Added: Although our subsidiaries recruit and select these employees, their employment relationship is with the relevant PEO.
Accordingly, these employees are compensated through the PEO, are governed by the work policies created by the PEO and receive their annual wage statements and other payroll-related reports from the PEO.
5 unchanged sentences
If we were held liable for violations by PEOs, such monetary penalties may adversely affect our profitability and could negatively affect our business and results of operations.
−Removed: We may be unable to successfully integrate our business with Velodyne or realize the expected benefits of the Velodyne Merger on our expected timeframe or at all.
−Removed: In addition, if we choose to acquire or invest in other new businesses, products or technologies, we may be unable to complete these acquisitions or to successfully integrate them in a cost-effective and/or non-disruptive manner.
+Added: If we choose to acquire or invest in new businesses, products, or technologies, such acquisitions or investments may not be completed or result in the anticipated benefits and may present risks not originally contemplated, which may have a material adverse effect on our business, consolidated results of operations and consolidated financial condition.
Our success depends on our ability to enhance and broaden our product offerings in response to changing customer demands, competitive pressures and advances in technologies.
−Removed: Failure to successfully identify, complete, manage and integrate acquisitions could materially and adversely affect our business, financial condition and results of operations and could cause our stock price to decline.
−Removed: We continue to search for viable acquisition candidates or strategic transactions that would expand our market sector and/or global presence, as well as additional products appropriate for current distribution channels.
−Removed: Accordingly, we have previously and may in the future pursue the acquisition of new businesses, products or technologies instead of developing them internally.
−Removed: Our future success will depend, in part, upon our ability to manage the expanded business following these acquisitions, including challenges related to the management and monitoring of new
+Added: Failure to successfully identify, complete, manage and integrate acquisitions could materially and adversely affect our business, financial condition and results of operations and
Table of C ontents
−Removed: operations and associated increased costs and complexity associated with such acquisitions.
−Removed: For example, in February 2023, we completed the Velodyne Merger to help us enhance our robust suite of product offerings and software;
−Removed: grow our diverse customer base;
−Removed: increase operational efficiencies;
−Removed: further develop our innovative product roadmap in anticipation for the future needs of the market;
−Removed: reduce our production costs;
−Removed: improve our path to profitability;
−Removed: and strengthen our future financial position.
+Added: could cause our stock price to decline.
+Added: We continue to search for viable acquisition candidates or strategic transactions that would expand our market sector and/or global presence, as well as additional products appropriate for current distribution channels.
+Added: Accordingly, we have previously pursued and may in the future pursue the acquisition of new businesses, products or technologies instead of developing them internally.
+Added: Our future success will depend, in part, upon our ability to manage the expanded business following these acquisitions, including challenges related to the management and monitoring of new operations and associated increased costs and complexity associated with such acquisitions.
+Added: For example, in February 2023, we completed the Velodyne Merger and, in October 2021, we completed the acquisition of Sense.
In connection with any acquisitions, we could issue additional equity securities, which would dilute our stockholders, incur substantial debt to fund the acquisitions or assume significant liabilities.
−Removed: Acquisitions involve many and diverse risks and uncertainties, including risks associated with conduction due diligence, problems integrating the purchased operations, assets, technologies or products, unanticipated costs, liabilities, and economic, political, legal and regulatory challenges due to our inexperience operating in new regions or countries, inability to achieve anticipated synergies, overpaying for acquisitions, invalid sales assumptions underlying potential acquisitions, issues maintaining uniform standards, procedures, controls and policies, diversion of management attention, adverse effects on existing business relationships or acquired company business relationships, risks associated with entering new markets, potential loss of key employees of acquired businesses, increased legal, accounting and compliance costs, and failure to successfully integrate acquired companies, such as Sense or Velodyne, or retain key personnel from the acquired company.
+Added: Acquisitions involve many and diverse risks and uncertainties, including risks associated with conduction due diligence, problems integrating the purchased operations, assets, technologies or products, unanticipated costs, liabilities, and economic, political, legal and regulatory challenges due to our inexperience operating in new regions or countries, inability to achieve anticipated synergies, overpaying for acquisitions, invalid sales assumptions underlying potential acquisitions, issues maintaining uniform standards, procedures, controls and policies, diversion of management attention, adverse effects on existing business relationships or acquired company business relationships, risks associated with entering new markets, potential loss of key employees of acquired businesses, increased legal, accounting and compliance costs, and failure to successfully integrate acquired companies, or retain key personnel from the acquired company.
Acquisitions may divert our attention from our core business.
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Our products are frequently used in applications that are subject to evolving regulations and standards.
+Added: Similarly, our operations are subject to evolving regulations and laws.
Our customers may use our products for regulated and standardized applications that require our products to comply with regulations and standards that are applicable to both our products and to those industries and applications, including functional safety and product reliability standards.
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If we decide not to pursue or fail to achieve these regulatory or industry certifications, we may lose existing or potential commercial opportunities or be exposed to legal liability from regulators.
+Added: Similarly, our operations are subject to an evolving regulatory environment.
+Added: New and changing laws, regulations, executive orders and enforcement priorities can also create uncertainty about how such laws and regulations will be interpreted and applied, which may decrease customer spending, increase our costs or otherwise adversely impact our business and results of operations.
We are subject to governmental export and import controls and economic sanctions laws and regulations.
6 unchanged sentences
export control laws and regulations and economic sanctions prohibit the shipment of certain products and services to countries, governments, and persons targeted by U.S.
−Removed: Even though we take precautions to prevent our productions and solutions from being provided to entities subject to these restrictions, our products could find their way to such prohibited entities.
−Removed: Any such provision could have negative consequences, including government investigations, penalties, or reputational harm.
+Added: Even though we take precautions to prevent our productions and solutions from being provided to entities subject to these restrictions, our products could find their way to such prohibited
Table of C ontents
+Added: Any such provision could have negative consequences, including government investigations, penalties, or reputational harm.
In addition, complying with export control and sanctions regulations for a particular sale may be time-consuming and create delays in the introduction of our products and solutions in some international markets, and, in some cases, prevent the export of our software and services to some countries altogether.
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Any new export or import restrictions, new legislation or shifting approaches in the enforcement or scope of existing regulations, or changes in global, political, regulatory and economic conditions affecting U.S.
−Removed: trade, manufacturing, development or investment, could result in additional restrictions on our ability to conduct business.
−Removed: In recent years, the U.S.
+Added: trade, manufacturing, development or investment, could have an adverse effect on business.
+Added: In recent months, the U.S.
has instituted or proposed changes in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the U.S.
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As a result of these developments, there may be greater restrictions and economic disincentives on international trade that could adversely affect our business.
−Removed: As additional trade-related policies are instituted, we may need to modify our business operations to comply and adapt to such developments, which may be time-consuming and expensive.
−Removed: Moreover, China and the U.S.
−Removed: have each imposed tariffs, indicating the potential for further trade barriers which may escalate a nascent trade war between China and the U.S.
−Removed: The resulting environment of retaliatory trade or other practices or additional trade restrictions or barriers, if implemented on a broader range of products or raw materials, could harm our ability to obtain necessary materials.
−Removed: For example, tariffs on certain Chinese origin goods impact the cost of material and machines we import directly from our manufacturing operations in China, as well as the cost of material and components imported on our behalf by suppliers.
−Removed: The indirect impact of inflationary pressure on costs throughout the supply chain and the direct impact, for example, on costs for machines we import from our manufacturing operations in China, may result in higher input costs and lower margins on certain products we sell, which could have a material adverse effect on our business, prospects, results of operations and cash flows.
+Added: Any tariffs or sanctions that impact the Company’s custom-made components, such as our micro-optics or custom SoC, may disproportionately impact our business, prospects and operations.
+Added: As additional trade-related policies are instituted, we may need to modify our business operations to comply and adapt to such developments, which may be time-consuming and expensive or which we may not be able to do successfully at all.
+Added: Moreover, the potential for further or new tariffs or trade restrictions between the United States and Thailand, China, Canada, Europe and Mexico, and the resulting environment of retaliatory trade or other practices could materially harm our ability to obtain necessary materials or manufactured products.
+Added: For example, tariffs on certain Canadian or Chinese origin goods may impact the cost of material and components that we import or that are imported on our behalf by our manufacturing partners or suppliers.
+Added: Similarly, the majority of our end-products are manufactured in Thailand and any increased costs of manufacturing there, such as tariffs on goods imported from Thailand, would materially adversely affect our operations.
+Added: The indirect impact of inflationary pressure on costs throughout our supply chain and the direct impact, for example, on costs of material and components we import or that are imported on our behalf by our manufacturing partners or suppliers from countries adversely impacted by trade relations with the United States, may result in higher input costs and lower margins on certain products we sell, which could have a material adverse effect on our business, prospects, results of operations and cash flows.
We have been and may in the future become involved in legal and regulatory proceedings and commercial or contractual disputes, which could have a material adverse effect on our profitability and consolidated financial position.
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No assurances can be given that any proceedings and claims will not have a material adverse impact on our operating results and consolidated financial position or that our available insurance will mitigate this impact.
+Added: Table of C ontents
We are subject to, and must remain in compliance with, numerous laws and governmental regulations concerning the manufacturing, use, distribution and sale of our products.
1 unchanged sentence
We manufacture and sell products that contain components, which may contain materials that are subject to government regulation in both the locations where we manufacture and assemble our products, as well as the locations where we sell our products.
−Removed: Since we operate on a global basis, this is a complex process which requires continual monitoring of
−Removed: Table of C ontents
−Removed: regulations and an ongoing compliance process to ensure that we and our suppliers are in compliance with existing regulations in each market where we operate.
+Added: Since we operate on a global basis, this is a complex process which requires continual monitoring of regulations and an ongoing compliance process to ensure that we and our suppliers are in compliance with existing regulations in each market where we operate.
If there is an unanticipated new regulation that significantly impacts our use and sourcing of various components or requires more expensive components, that regulation could materially adversely affect our business, results of operations and financial condition.
8 unchanged sentences
These regulations and requirements apply to our vendors and suppliers, as well.
−Removed: To the extent compliance with, or the effect of, these regulations and requirements on them result in their inability to deliver their products to us on time or at all, this could materially adversely impact our business, results of operations and financial condition.
−Removed: For example, the SEC recently adopted rules that will require companies to provide certain climate-related disclosures.
−Removed: While we are still assessing the scope and impact of this rule given how recently it was adopted, we anticipate that this rule, as well as other ESG and sustainability-related regulation and legislation, may require us to incur significant additional costs to comply, including the implementation of significant additional internal controls and impose increased oversight obligations on our management and board of directors.
+Added: To the extent compliance with, or the effect of, these regulations and requirements on vendors and suppliers result in their inability to deliver their products to us on time or at all, this could materially adversely impact our business, results of operations and financial condition.
+Added: For example, the State of California has enacted a number of laws that require reporting on carbon neutrality claims and use of carbon removal credits and direct and indirect greenhouse gas emissions and climate-related financial risks.
+Added: The SEC also adopted and then stayed rules that would require companies to provide certain climate-related disclosures.
+Added: Additional local, state, federal and international laws and rules with respect to sustainability and environmental matters which have been passed or proposed may be enacted in the future and the extent and scope of their requirements and impact on our business are unknown.
+Added: Such rules, as well as other ESG and sustainability-related regulation and legislation, may require us to incur significant additional costs to comply, including the implementation of significant additional internal controls and impose increased oversight obligations on our management and board of directors.
Any new or modified environmental regulations or laws may increase the cost of raw materials or components we use in our products.
4 unchanged sentences
Costs of complying with environmental laws and regulations and any claims concerning noncompliance, or liability with respect to contamination in the future, could have a material adverse effect on our financial condition or operating results.
−Removed: Failure to meet evolving environmental, social, and governance (“ESG”) expectations or standards or to achieve our ESG goals could adversely affect our business, results of operations, financial condition, and stock price.
+Added: Failure to meet evolving and changing environmental, social, and governance (“ESG”) expectations or standards or to achieve our ESG goals could adversely affect our business, results of operations, financial condition, and stock price.
We experience pressure to make commitments or set goals or targets relating to ESG matters that affect companies in our industry, including the design and implementation of specific risk mitigation strategic initiatives relating to environmental sustainability.
−Removed: If we are not effective in addressing ESG matters affecting our industry, such as greenhouse gas emissions and climate-related risks, renewable energy, water stewardship, waste management, diversity, equality and inclusion, responsible sourcing and supply chain, human rights, and social responsibility, among other issues, or setting and meeting relevant sustainability commitments, goals, or targets, our reputation may suffer.
−Removed: As we continue to develop our voluntary ESG program and disclosures, there can be no assurance that regulators, customers, investors, and employees will determine that these programs and disclosures are sufficiently robust.
−Removed: In addition, there can be no assurance that we will be able to attain any announced goals related to our sustainability program, as statements regarding our sustainability goals reflect our current plans and aspirations and are not guarantees that we will be able to achieve them within the timelines we announce or at all.
−Removed: Changing stakeholder expectations, evolving voluntary and regulatory disclosure standards, and our efforts to manage and report on ESG issues present operational, regulatory, reputational, financial, legal, and other risks, any of which could have a material adverse impact on our business, including on our reputation and stock price.
+Added: If we are not effective in addressing ESG matters affecting our industry, such as greenhouse gas emissions and climate-related risks, renewable energy, water stewardship, waste management, diversity and inclusion, responsible sourcing and supply chain, human rights, and social responsibility, among other issues, or setting and meeting relevant
Table of C ontents
+Added: sustainability commitments, goals, or targets, our reputation may suffer.
+Added: As we continue to develop our voluntary ESG program and disclosures, there can be no assurance that regulators, customers, investors, employees, and other stakeholders will determine that these programs and disclosures are sufficiently robust, and we cannot assure that our stakeholders will agree with our ESG strategies.
+Added: In addition, there can be no assurance that we will be able to attain any announced goals related to our sustainability program, as statements regarding our sustainability goals reflect our current plans and aspirations and are not guarantees that we will be able to achieve them within the timelines we announce or at all.
+Added: Furthermore, both advocates and opponents of such ESG matters are increasingly resorting to a range of activism forms, including media campaigns, shareholder proposals, and litigation to advance their perspectives.
+Added: There has similarly been an increase in activism and litigation alleging that corporate diversity, equity and inclusion programs may discriminate against certain groups.
+Added: Changing stakeholder expectations, changing laws, evolving voluntary and regulatory disclosure standards, and our efforts to manage and report on ESG issues present operational, regulatory, reputational, financial, legal, and other risks, any of which could have a material adverse impact on our business, including on our reputation and stock price.
We are subject to U.S.
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Failure to comply with these requirements could result in enforcement action by the FDA, which could require us to cease distribution of our products, recall or remediate products already distributed to customers, or subject us to FDA enforcement.
+Added: We are exposed to risks related to the use of AI tools by us and others.
+Added: Although we are evaluating and, where we believe appropriate, incorporating the use of AI tools into our operations, such as the use of generative AI tools to assist in the development of code, our use of such tools may subject us to significant competitive, legal, regulatory and other risks, and there can be no assurance that our use of AI tools will enhance our
+Added: Table of C ontents
+Added: business operations or result in a benefit to us.
+Added: Our competitors may be more successful in their use of AI tools, including by developing superior products or improving their operations with the assistance of AI.
+Added: Additionally, there could be adverse impacts from inaccurate or flawed algorithms.
+Added: Our use of AI tools could also result in the loss of confidential information or intellectual property or an inability to claim or enforce intellectual property rights, as well as subject us to risks related to intellectual property infringement or misappropriation, data privacy, cybersecurity, and the unauthorized use of Company data.
+Added: The jurisdictions in which we conduct business have adopted and may adopt laws and regulations related to AI, which could cause us to incur greater compliance costs, limit our use of AI tools, or subject us to regulatory investigations and actions or legal liabilities.
Failures, or perceived failures, to comply with privacy, data protection, and information security requirements in the variety of jurisdictions in which we operate may adversely impact our business, and such legal requirements are evolving, uncertain and may require improvements in, or changes to, our policies and operations.
5 unchanged sentences
The full impact of these privacy regimes, and other privacy, data protection, and information security laws we may be subject to, on our business is rapidly evolving across jurisdictions and remains uncertain at this time.
−Removed: Since these data security regimes are evolving, uncertain, and complex, especially for a global business like ours, we may need to update or enhance our compliance measures as our products, markets and customer demands further develop, and
−Removed: Table of C ontents
−Removed: these updates or enhancements may require implementation costs.
+Added: Since these data security regimes are evolving, uncertain, and complex, especially for a global business like ours, we may need to update or enhance our compliance measures as our products, markets and customer demands further develop, and these updates or enhancements may require implementation costs.
In addition, we may not be able to monitor and react to all legal developments in a timely manner.
12 unchanged sentences
We have filed for patents and trademarks in the United States and in certain international jurisdictions, but such protections may not be available, and we may not have applied for protections in all countries in which we operate or sell our products.
+Added: Table of C ontents
Though we may have obtained intellectual property and related proprietary rights in various jurisdictions, it may prove difficult to enforce our intellectual property rights in practice.
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Even if we obtain favorable outcomes in any such litigation, we may not be able to obtain adequate remedies, or may have incurred costs that threaten our financial stability.
−Removed: Assertions of our attempts to enforce our rights against third parties could also lead these third parties to assert their own intellectual property or other rights
−Removed: Table of C ontents
−Removed: against us or seek invalidation or a narrowed scope of our rights, in whole or in part.
+Added: Assertions of our attempts to enforce our rights against third parties could also lead these third parties to assert their own intellectual property or other rights against us or seek invalidation or a narrowed scope of our rights, in whole or in part.
Any of these events could adversely affect our business, operating results, financial condition and prospects.
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Further, a party making such a claim against us, if successful, could secure a judgment that requires us to pay substantial damages or such a party could obtain an injunction.
−Removed: An adverse determination also could invalidate our intellectual property rights and adversely affect our ability to offer our products to our customers and may require that we procure or develop substitute products that do not infringe, which could require significant effort and expense.
+Added: An adverse determination also could invalidate our intellectual property rights and adversely affect our ability to offer our products to our customers
+Added: Table of C ontents
+Added: and may require that we procure or develop substitute products that do not infringe, which could require significant effort and expense.
Even if we obtain favorable outcomes in any such litigation, we may not be able to obtain adequate remedies, or may have incurred costs that threaten our financial stability.
8 unchanged sentences
In addition, our competitors may design around our issued patents, which may adversely affect our business, prospects, financial condition and operating results.
−Removed: Table of C ontents
In addition to patented technology, we rely on our unpatented proprietary technology, copyrights, trade secrets, proprietary processes and know-how.
16 unchanged sentences
Even if we are successful in defending against any such claims, litigation could result in substantial costs and demand on management resources.
−Removed: Risks Related to Being a Public Company
−Removed: Certain of our warrants are accounted for as liabilities and the changes in value of such warrants could have a material effect on our financial results.
−Removed: We have determined to classify the private placement warrants assumed from CLA as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.
−Removed: Due to the recurring fair value measurement, we recognize non-cash gains or losses on the private placement warrants each reporting period and the amount of such gains or losses has been material and could continue to be material in the future.
−Removed: Our accounting treatment of our warrants is based on its current interpretation of the SEC Statement and other guidance and may change in light of any further interpretive guidance, as may be applicable.
+Added: Table of C ontents
+Added: Risks Related to Being a Public Company and our Capital Structure
We have identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting, which may result in material misstatements of our consolidated financial statements, cause us to fail to meet our periodic reporting obligations, or cause our access to the capital markets to be impaired.
1 unchanged sentence
A material weakness is a deficiency, or a 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.
−Removed: Table of C ontents
+Added: Our failure to implement and maintain effective internal control over financial reporting could result in errors in our consolidated financial statements that could result in a restatement of our financial statements and could cause us to fail to meet our reporting obligations, any of which could diminish investor confidence in us and cause a decline in the price of our common stock.
+Added: Additionally, ineffective internal control could expose us to an increased risk of financial reporting fraud and the misappropriation of assets and subject us to potential delisting from the stock exchange on which we list or to other regulatory investigations and civil or criminal sanctions.
We did not design and maintain an effective control environment commensurate with our financial reporting requirements.
Specifically, we did not maintain a sufficient complement of personnel with an appropriate degree of internal controls and accounting knowledge, experience, and training commensurate with our accounting and reporting requirements.
−Removed: This material weakness contributed to the following additional material weaknesses:
−Removed: • We did not design and maintain effective controls over the period-end financial reporting process to achieve complete, accurate and timely financial accounting, reporting and disclosures, including segregation of duties and adequate controls related to journal entries and certain other business processes, and verifying transactions are properly classified in the financial statements.
−Removed: These material weaknesses resulted in adjustments to several account balances and disclosures in the consolidated financial statements for the years ended December 31, 2019 and 2018, and adjustments to the equity and warrant liabilities accounts and related disclosures in the condensed consolidated financial statements for the three months ended March 31, 2021.
+Added: This material weakness contributed to the following additional material weakness:
+Added: • We did not design and maintain effective controls over the period-end financial reporting process to ensure, for other than journal entries, that segregation of duties (SOD) conflicts were identified, reviewed and mitigated by appropriately designed mitigating controls as needed to achieve complete, accurate and timely financial accounting, reporting and disclosures.
+Added: The material weakness related to the control environment resulted in adjustments to several account balances and disclosures in the consolidated financial statements for the years ended December 31, 2019 and 2018, adjustments to the equity and warrant liabilities accounts and related disclosures in the unaudited condensed consolidated financial statements for the three months ended March 31, 2021, and an immaterial adjustment which was recorded prior to the issuance of the unaudited condensed consolidated financial statements as of June 30, 2024.
+Added: The material weakness related to segregation of duties did not result in a material misstatement to the consolidated financial statements.
Additionally, each of these material weaknesses could result in a misstatement of account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.
2 unchanged sentences
These remediation measures are ongoing and include the following:
+Added: • Improve internal controls to ensure that segregation of duties (SOD) conflicts are timely identified, reviewed and mitigated by appropriately designed mitigating controls and procedures.
+Added: This includes periodic monitoring of changes in roles and responsibilities that could impact SOD conflicts within the period-end financial reporting process.
• Continuing to recruit personnel with appropriate internal controls, accounting knowledge and experience commensurate with our accounting and reporting requirements, in addition to engaging and utilizing third party consultants and specialists.
−Removed: Our management also reallocated roles and responsibilities within the accounting team based on skills and experience of various personnel.
−Removed: • Continuing to operate entity level controls (ELCs) including Board and Audit Committee oversight, senior management review of financial and business performance and internal controls, and expansion of the internal audit team.
−Removed: We have designed and implemented these controls in the previous financial years.
+Added: Our management also continued to reallocate and align roles and responsibilities within the accounting team to optimize and leverage the skills and experience of various personnel.
• Continuing to provide internal control training for personnel responsible for implementing internal controls for the Company.
−Removed: • Continuing to operate internal controls for financial close and reporting including review of accounting policies, journal entry review controls including segregation of duties, period end close procedures, financial statement preparation, review, and reporting, and controls within various business processes as they relate to financial reporting, including controls to ensure segregation of duties.
−Removed: This included controls around classification of balances in our financial statements and strengthening processes for management oversight over financial reporting and disclosure controls.
−Removed: We have designed and implemented these controls in the previous financial years.
These investments in resources have improved the stability of our accounting organization.
−Removed: While significant progress has been made in response to the material weakness, time is needed to demonstrate sustainability as it relates to our internal control over financial reporting and improvements made to our complement of resources, including demonstrating sustained operating effectiveness of our internal controls.
+Added: While significant progress has been made in response to the material weaknesses, time is needed to demonstrate sustainability as it relates to our internal control over financial reporting and improvements made to our complement of resources, including demonstrating sustained operating effectiveness of our internal controls related to SOD.
We are committed to continuous improvement and will continue to diligently review our internal control over financial reporting.
−Removed: At this time, we cannot predict the success of these efforts or the outcome of our assessment of the remediation efforts.
−Removed: We can give no assurance that our efforts will remediate these material weaknesses in our internal control over financial reporting, or that additional material weaknesses will not be identified in the future.
−Removed: Our failure to implement and maintain effective internal control over financial reporting could result in errors in our consolidated financial statements that could result in a restatement of our financial statements and could cause us to fail to meet our reporting obligations, any of which could diminish investor confidence in us and cause a decline in the price of our common stock.
−Removed: Additionally, ineffective internal control could expose us to an increased risk of financial reporting fraud and the misappropriation of assets and subject us to potential delisting from the stock exchange on which we list or to other regulatory investigations and civil or criminal sanctions.
−Removed: As a public company, we are required pursuant to Section 404(a) of the Sarbanes-Oxley Act to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting for each annual report on Form 10-K filed with the SEC.
−Removed: This assessment includes disclosure of any material weaknesses identified by our management in internal control over financial reporting.
−Removed: In the future, to the extent we are considered an accelerated filer or a large accelerated filer, our independent registered public accounting firm will also be required pursuant to Section 404(b)
Table of C ontents
−Removed: of the Sarbanes-Oxley Act to attest to the effectiveness of our internal control over financial reporting in each annual report on Form 10-K to be filed with the SEC.
+Added: As a public company, we are required pursuant to Section 404(a) of the Sarbanes-Oxley Act of 2022 (the “Sarbanes Oxley Act”) to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting for each annual report on Form 10-K filed with the SEC.
+Added: This assessment includes disclosure of any material weaknesses identified by our management in internal control over financial reporting.
+Added: In the future, to the extent we are considered an accelerated filer or a large accelerated filer, our independent registered public accounting firm will also be required pursuant to Section 404(b) of the Sarbanes-Oxley Act to attest to the effectiveness of our internal control over financial reporting in each annual report on Form 10-K to be filed with the SEC.
We are also required to disclose material changes made in our internal control over financial reporting on a quarterly basis.
Failure to comply with the Sarbanes-Oxley Act could potentially subject us to sanctions or investigations by the SEC, the stock exchange on which our securities are listed or other regulatory authorities, which would require additional financial and management resources.
−Removed: There can be no assurance that we will be able to comply with the continued listing standards of the New York Stock Exchange (“NYSE”).
−Removed: If we fail to satisfy the continued listing requirements of NYSE, such as the corporate governance requirements or the minimum share price requirement, NYSE may take steps to delist our securities.
+Added: Certain of our warrants are accounted for as liabilities and the changes in value of such warrants could have a material effect on our financial results.
+Added: We have determined to classify the private placement warrants assumed from CLA as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.
+Added: Due to the recurring fair value measurement, we recognize non-cash gains or losses on the private placement warrants each reporting period and the amount of such gains or losses has been material and could continue to be material in the future.
+Added: Our accounting treatment of our warrants is based on its current interpretation of the SEC Statement and other guidance and may change in light of any further interpretive guidance, as may be applicable.
+Added: There can be no assurance that we, our common stock or our warrants will be able to comply with the continued listing standards of The Nasdaq Stock Market LLC (“Nasdaq”).
+Added: If we fail to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements or the minimum share price requirement, Nasdaq may take steps to delist our securities, including our warrants.
Such a delisting would likely have a negative effect on the price of the securities and would impair stockholders’ ability to trade in the Company’s securities.
−Removed: In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our securities to become listed again, stabilize the market price or improve the liquidity of our securities, prevent our securities from dropping below the NYSE minimum share price requirement or prevent future non-compliance with NYSE’s listing requirements.
−Removed: Additionally, if our securities are not listed on, or become delisted from the NYSE, for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on the NYSE or another national securities exchange.
+Added: In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our securities to become listed again, stabilize the market price or improve the liquidity of our securities, prevent our securities from dropping below the Nasdaq minimum share price requirement or prevent future non-compliance with Nasdaq’s listing requirements.
+Added: Additionally, if our securities are not listed on, or become delisted from the Nasdaq, for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on the Nasdaq or another national securities exchange.
If our securities become illiquid, stockholders may be unable to trade their securities unless a market can be established or sustained, and similarly if investors are precluded from trading their securities, it could have adverse consequences on our ability to raise more capital.
−Removed: General Risk Factors
−Removed: Our business, results of operations and financial condition have been and could continue to be adversely affected by the COVID-19.
−Removed: Other pandemics or public health crises may have similar impacts in the future.
−Removed: COVID-19 continues to evolve, with pockets of resurgence and the emergence of variant strains contributing to continued uncertainty about its scope, dur ation, severity, trajectory, and lasting impact.
−Removed: The effects of the COVID-19 pandemic on our business and our financial condition previously included and may in the future include, among others:
−Removed: the reduced pace of manufacturing ramp up due to employees’ inability to travel to our manufacturing facility in Thailand;
−Removed: disruptions to the operations of certain of our suppliers;
−Removed: supply chain disruptions;
−Removed: and increased compensation related costs resulting from overtime pay and additional personnel in San Francisco to create separate manufacturing teams that rotate every other week in our facility to avoid any possible transmission of COVID-19 between teams.
−Removed: COVID-19 or other pandemics or public health crises and the associated business interruptions may affect our sales, supply chain or the manufacture and/or distribution of products, which could re sult in a material adverse effect on our financial condition.
−Removed: The COVID-19 pandemic may also intensify or exacerbate other risks described in this section.
−Removed: Other pandemics or public health crises may have similar impacts in the future.
−Removed: Our facilities in California are located near an earthquake fault and an earthquake or other natural disaster or resource shortage could disrupt our operations.
−Removed: Important documents and records for our products and manufacturing operations are located in our various facilities in San Francisco, California near active earthquake zones.
−Removed: In the event of a natural disaster such as an earthquake, drought, flood or fire or localized extended outages of critical utilities or transportation we do not have a formal business continuity or disaster recovery plan, and therefore could experience a significant business interruption.
−Removed: In addition, California has from time to time experienced shortages of water, natural gas, and electric power.
−Removed: Future shortages and conservation measures could impact our operations and result in increased expense.
−Removed: In addition, we rely on information technology systems to communicate among our workforce and with third parties.
−Removed: Any disruption to our communications, whether caused by a natural disaster or by man-made problems, such as power disruptions, could adversely affect our business.
−Removed: To the extent that any such disruptions result in delays or cancellations of orders or impede our suppliers’ ability to timely deliver product components, our business, operating results and financial condition would be adversely affected.
−Removed: We and our third-party providers are subject to cybersecurity risks to our IT Systems and Confidential Information, and any material failure, weakness, interruption, cyber event, incident, or breach of security could materially adversely affect our business, results of operations, and financial condition.
−Removed: We rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (collectively, “IT Systems”).
−Removed: We own and manage some of these IT Systems, but also rely on third parties for a range of IT Systems and related products and services.
−Removed: We and certain of our third-party providers collect, maintain and process data about customers, employees, business partners and others,
−Removed: Table of C ontents
−Removed: including information about individuals — as well as proprietary information belonging to our business such as trade secrets (collectively, “Confidential Information”).
−Removed: We and our third-party vendors and suppliers face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity, and availability of our IT Systems and Confidential Information, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers, and hacktivists, as well as through diverse attack vectors including acts of vandalism, malware (including ransomware), social engineering, denial or degradation of service attacks, computer viruses, software bugs or vulnerabilities, supply chain attacks, phishing attacks, ransomware attacks, misplaced or lost data, human errors, malicious insiders or other similar events.
−Removed: Moreover, any integration of artificial intelligence in our or any third-party’s operations, products or services is expected to pose new or unknown cybersecurity risks and challenges.
−Removed: We and certain of our third-party providers regularly experience actual and attempted cyberattacks and other incidents.
−Removed: Although none of these actual or attempted cyber-attacks has had a material adverse impact on our operations or financial condition to date, we cannot guarantee that any such incidents will not have such an impact in the future.
−Removed: For example, we are at risk for interruptions, outages and breaches of:
−Removed: IT Systems, including in relation to business, financial, accounting, product development, data processing or production processes, owned by us or our third-party vendors or suppliers;
−Removed: facility security systems, owned by us or our third-party vendors or suppliers;
−Removed: in-product technology owned by us or our third-party vendors or suppliers;
−Removed: the integrated software in our lidar solutions;
−Removed: or Confidential Information that we process or our third-party vendors or suppliers process on our behalf.
−Removed: Such cyber incidents could materially disrupt IT Systems;
−Removed: result in loss of Confidential Information including intellectual property, trade secrets or other proprietary or competitively sensitive information, certain information of customers, employees, suppliers, drivers or others;
−Removed: jeopardize the security of our facilities;
−Removed: or affect the performance of in-product technology and the integrated software in our lidar solutions.
−Removed: Cyberattacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools—including artificial intelligence—that circumvent security controls, evade detection and remove forensic evidence.
−Removed: As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our IT Systems, Confidential Information or business.
−Removed: We also cannot guarantee that our cybersecurity risk management program and processes, including our policies, controls, or procedures will be fully implemented, complied with, or adequate to detect, prevent or mitigate cyber incidents.
−Removed: Further, the implementation, maintenance, segregation and improvement of these programs and processes require significant management time, support and cost.
−Removed: Moreover, there are inherent risks associated with developing, improving, expanding and updating current programs and processes, including the disruption of our data management, procurement, production execution, finance, supply chain and sales and service processes.
−Removed: These risks may affect our ability to manage our data and inventory, procure parts or supplies or produce, sell, deliver and service our solutions, adequately protect our intellectual property or achieve and maintain compliance with, or realize available benefits under, applicable laws, regulations and contracts.
−Removed: We cannot be sure that the programs and processes upon which we rely, including those of our third-party vendors or suppliers, will be effectively implemented, maintained or expanded as planned.
−Removed: If we do not successfully implement, maintain or expand these programs and processes as planned, our operations may be disrupted, our ability to accurately and timely report our financial results could be impaired, and deficiencies may arise in our internal control over financial reporting, which may impact our ability to certify our financial results.
−Removed: Moreover, our Confidential Information, including proprietary information or intellectual property, could be compromised or misappropriated and our reputation may be adversely affected.
−Removed: If these programs and processes do not operate as we expect them to, we may be required to expend significant resources to make corrections or find alternative sources for performing these functions.
−Removed: A significant cyber incident could impact production capability, harm our reputation, cause us to breach our contracts with other parties or subject us to regulatory actions or litigation (including class actions), and require significant incident response, system restoration, or remediation and future compliance costs, any of which could materially affect our business, prospects, financial condition and operating results.
−Removed: In addition, our insurance coverage for cyber-attacks may not be sufficient to cover all the losses we may experience as a result of a cyber incident, and we cannot guarantee that applicable insurance will be available to us or in the future on economically reasonable terms at all.
−Removed: Table of C ontents
−Removed: Risks Related to Ownership of Our Common Stock and Our Warrants
Amazon owns a warrant to purchase a significant portion of our outstanding common stock, and it may in the future be able to influence the Company’s corporate decisions.
12 unchanged sentences
• actual or anticipated fluctuations in our quarterly or annual operating results;
+Added: Table of C ontents
• publication of research reports by securities analysts about us or our competitors or our industry;
5 unchanged sentences
• the volume of shares of our common stock available for public sale;
−Removed: • general economic and political conditions, such as the effects of the COVID-19 outbreak, recessions, interest rates, local and national elections, fuel prices, international currency fluctuations, corruption, political instability and acts of war or terrorism.
+Added: • general economic, political and social conditions, such as the effects of public health crises, recessions, interest rates, local and national elections, tariffs, fuel prices, international currency fluctuations, corruption, political instability and acts of war or terrorism.
These market and industry factors may materially reduce the market price of our common stock and warrants regardless of our operating performance.
8 unchanged sentences
Similar results may occur if one or more of these analysts stop covering us in the future or fail to publish reports on us regularly.
−Removed: Table of C ontents
−Removed: We may be subject to securities litigation, class action and derivative lawsuits, which could result in substantial costs and could divert management attention away from other business concerns.
−Removed: The market price of our common stock may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.
−Removed: We may be the target of this type of litigation in the future.
−Removed: Additionally, securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements.
−Removed: Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources from other business concerns, which could seriously harm our business.
−Removed: An adverse judgment could result in monetary damages, which could have a negative impact on our liquidity and financial condition.
−Removed: For example, on December 1, 2022, December 20, 2022, December 29, 2022, and January 9, 2023, purported stockholders of Velodyne filed the following lawsuits against Velodyne and certain of its directors and officers in the Southern District of New York for violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 14a-9:
−Removed: Velodyne, et.
−Removed: al., Carlisle v.
−Removed: Velodyne, et.
−Removed: al., Wheeler v.
−Removed: , and Cristino v.
−Removed: Velodyne, et.
−Removed: The complaints allege that Velodyne’s disclosures in connection with the merger with Ouster were materially incomplete and misleading.
−Removed: The plaintiff in O’Dell v.
−Removed: voluntarily dismissed his complaint on January 17, 2023 and the plaintiff in Carlisle v.
−Removed: Velodyne, et.
−Removed: voluntarily dismissed his complaint on February 21, 2023.
−Removed: Velodyne also received eleven demand letters from stockholders making similar allegations regarding Velodyne’s disclosures relating to the Velodyne Merger.
−Removed: The parties settled for immaterial mootness fees in September 2023.
−Removed: Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm our business.
−Removed: Delaware law and our Certificate of Incorporation and Bylaws contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
−Removed: Our Certification of Incorporation and Bylaws and the Delaware General Corporations Law (“DGCL”) contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares.
−Removed: These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, and therefore depress the trading price of our common stock.
−Removed: These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of our board of directors or taking other corporate actions, including effecting changes in our management.
−Removed: Among other things, the Certification of Incorporation and Bylaws include provisions regarding:
−Removed: • providing for a classified board of directors with staggered, three-year terms;
−Removed: • the ability of our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
−Removed: • the Certificate of Incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
−Removed: • the limitation of the liability of, and the indemnification of, our directors and officers;
−Removed: • the ability of our board of directors to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt;
−Removed: • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
−Removed: These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board of directors or management.
−Removed: Table of C ontents
−Removed: The provisions of our Certificate of Incorporation requiring exclusive forum in the Court of Chancery of the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.
−Removed: Our Certificate of Incorporation provides that, to the fullest extent permitted by law, and unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) will be the sole and exclusive forum for (i) any derivative action, suit or proceeding brought on our behalf, (ii) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or stockholders to us or our stockholders, (iii) any action, suit or proceeding arising pursuant to any provision of the DGCL or our Bylaws or Certificate of Incorporation (as each may be amended from time to time), (iv) any action, suit or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (v) any action, suit or proceeding asserting a claim against us or any current or former director, officer or stockholder governed by the internal affairs doctrine.
−Removed: Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
−Removed: Accordingly, both state and federal courts have jurisdiction to entertain such Securities Act claims.
−Removed: To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, the Certificate of Incorporation will also provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act;
−Removed: however, there is uncertainty as to whether a court would enforce such provision, and investors cannot waive compliance with federal securities laws and the rules and regulations thereunder.
−Removed: Notwithstanding the foregoing, the Certificate of Incorporation provides that the exclusive forum provision will not apply to suits brought to enforce any cause of action arising under the Securities Act, any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
−Removed: Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
−Removed: These provisions may have the effect of discouraging lawsuits against our directors and officers.
−Removed: The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in the Certificate of Incorporation to be inapplicable or unenforceable in such action.
Holders of our publicly traded warrants will not be permitted to exercise their warrants unless the warrants remain registered or certain exemptions are available.
5 unchanged sentences
in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares underlying the warrants under applicable state securities laws, and in the event we do not so elect, we will use our best efforts to register or qualify the shares underlying the warrants under applicable state securities laws to the extent an exemption is not available.
−Removed: Table of C ontents
In no event will we be required to net cash settle any warrant, or issue securities (other than upon a cashless exercise as described above) or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state securities laws.
+Added: Table of C ontents
Holders of our publicly traded warrants may only be able to exercise such warrants on a “cashless basis” under certain circumstances, and if they do so, they will receive fewer shares of common stock from such exercise than if they were to exercise such warrants for cash.
18 unchanged sentences
If any action, the subject matter of which is within the scope the forum provisions of the warrant agreements, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to:
−Removed: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon
−Removed: Table of C ontents
−Removed: such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
+Added: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us, which may discourage such lawsuits.
−Removed: Alternatively, if a court were to find this provision in our warrant agreements inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
+Added: Alternatively, if a court were to find this provision in
+Added: Table of C ontents
+Added: our warrant agreements inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
We may redeem unexpired publicly traded warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making such warrants worthless.
We have the ability to redeem the outstanding publicly traded warrants at any time prior to their expiration.
−Removed: For the class of publicly traded warrants traded under the symbol “OUST.WS”, we may redeem such warrants at a price of $0.10 per warrant, provided that the closing price of our common stock equals or exceeds $180.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption to the warrant holders and provided certain other conditions are met.
−Removed: For the class of publicly traded warrants traded under the symbol “OUST.WSA”, we may redeem such warrants at a price of $0.10 per warrant, provided that the closing price of our common stock equals or exceeds $219.41 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption to the warrant holders and provided certain other conditions are met.
+Added: For the class of publicly traded warrants traded under the symbol “OUSTZ”, we may redeem such warrants at a price of $0.10 per warrant, provided that the closing price of our common stock equals or exceeds $180.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption to the warrant holders and provided certain other conditions are met.
+Added: For the class of publicly traded warrants traded under the symbol “OUSTW”, we may redeem such warrants at a price of $0.10 per warrant, provided that the closing price of our common stock equals or exceeds $219.41 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption to the warrant holders and provided certain other conditions are met.
If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
1 unchanged sentence
None of the private placement warrants initially issued by CLA will be redeemable by us so long as they are held by Colonnade Sponsor LLC or its permitted transferees.
+Added: Delaware law and our Certificate of Incorporation and Bylaws contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
+Added: Our Certification of Incorporation and Bylaws and the Delaware General Corporations Law (“DGCL”) contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares.
+Added: These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, and therefore depress the trading price of our common stock.
+Added: These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of our board of directors or taking other corporate actions, including effecting changes in our management.
+Added: Among other things, the Certification of Incorporation and Bylaws include provisions regarding:
+Added: • providing for a classified board of directors with staggered, three-year terms;
+Added: • the ability of our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
+Added: • the Certificate of Incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
+Added: • the limitation of the liability of, and the indemnification of, our directors and officers;
+Added: • the ability of our board of directors to amend the Bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt;
+Added: • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
+Added: These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board of directors or management.
+Added: Table of C ontents
+Added: The provisions of our Certificate of Incorporation requiring exclusive forum in the Court of Chancery of the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.
+Added: Our Certificate of Incorporation provides that, to the fullest extent permitted by law, and unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) will be the sole and exclusive forum for (i) any derivative action, suit or proceeding brought on our behalf, (ii) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or stockholders to us or our stockholders, (iii) any action, suit or proceeding arising pursuant to any provision of the DGCL or our Bylaws or Certificate of Incorporation (as each may be amended from time to time), (iv) any action, suit or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (v) any action, suit or proceeding asserting a claim against us or any current or former director, officer or stockholder governed by the internal affairs doctrine.
+Added: Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
+Added: Accordingly, both state and federal courts have jurisdiction to entertain such Securities Act claims.
+Added: To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, the Certificate of Incorporation will also provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act;
+Added: however, there is uncertainty as to whether a court would enforce such provision, and investors cannot waive compliance with federal securities laws and the rules and regulations thereunder.
+Added: Notwithstanding the foregoing, the Certificate of Incorporation provides that the exclusive forum provision will not apply to suits brought to enforce any cause of action arising under the Securities Act, any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
+Added: Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
+Added: These provisions may have the effect of discouraging lawsuits against our directors and officers.
+Added: The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in the Certificate of Incorporation to be inapplicable or unenforceable in such action.
+Added: We may be subject to securities litigation, class action and derivative lawsuits, which could result in substantial costs and could divert management attention away from other business concerns.
+Added: The market price of our common stock may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.
+Added: We may be the target of this type of litigation in the future.
+Added: Additionally, securities class action lawsuits and derivative lawsuits are often brought against public companies.
+Added: Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources from other business concerns, which could seriously harm our business.
+Added: An adverse judgment could result in monetary damages, which could have a negative impact on our liquidity and financial condition.
+Added: For a description of our legal proceedings, see Note 9.
+Added: Commitments and Contingencies included in the notes to our audited financial statements included elsewhere in the Annual Report on Form 10-K.
+Added: Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm our business.
+Added: General Risk Factors
+Added: Our facilities in California are located near an earthquake fault and an earthquake or other natural disaster or resource shortage could disrupt our operations.
+Added: Important documents and records for our products and manufacturing operations are located in our various facilities in San Francisco, California near active earthquake zones.
+Added: In the event of a natural disaster such as an earthquake, drought, flood or fire or localized extended outages of critical utilities or transportation we do not have a formal business continuity or disaster recovery plan, and therefore could experience a significant business interruption.
+Added: In addition, California has from time to time experienced shortages of water, natural gas, and electric power.
+Added: Future shortages and conservation measures could impact our operations and result in increased expenses.
+Added: In addition, we rely on information technology systems to communicate among our workforce and with third parties.
+Added: Any disruption to our communications, whether caused by a natural disaster or by man-made problems, such as power disruptions, could adversely affect our business.
+Added: To the extent
+Added: Table of C ontents
+Added: that any such disruptions result in delays or cancellations of orders or impede our suppliers’ ability to timely deliver product components, our business, operating results and financial condition would be adversely affected.
+Added: We and our third-party providers are subject to cybersecurity risks, and any material failure, weakness, interruption, cyber event, incident, or breach of security could materially adversely affect our business, results of operations, and financial condition.
+Added: We rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (collectively, “IT Systems”).
+Added: We own and manage some of these IT Systems, but also rely on third parties for a range of IT Systems and related products and services.
+Added: We and certain of our third-party providers collect, maintain and process data about customers, employees, business partners and others, including information about individuals — as well as proprietary information belonging to our business such as trade secrets (collectively, “Confidential Information”).
+Added: We and our third-party vendors and suppliers face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity, and availability of our IT Systems and Confidential Information, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers, and hacktivists, as well as through diverse attack vectors including acts of vandalism, malware (including ransomware), social engineering, denial or degradation of service attacks, computer viruses, software bugs or vulnerabilities, supply chain attacks, phishing attacks, ransomware attacks, misplaced or lost data, human errors, malicious insiders or other similar events.
+Added: Moreover, any integration of artificial intelligence in our or any third-party’s operations, products or services is expected to pose new or unknown cybersecurity risks and challenges.
+Added: We and certain of our third-party providers regularly experience actual and attempted cyberattacks and other incidents.
+Added: Although none of these actual or attempted cyber-attacks has had a material adverse impact on our operations or financial condition to date, we cannot guarantee that any such incidents will not have such an impact in the future.
+Added: For example, we are at risk for interruptions, outages and breaches of:
+Added: IT Systems, including in relation to business, financial, accounting, product development, data processing or production processes, owned by us or our third-party vendors or suppliers;
+Added: facility security systems, owned by us or our third-party vendors or suppliers;
+Added: in-product technology owned by us or our third-party vendors or suppliers;
+Added: the integrated software in our lidar solutions;
+Added: or Confidential Information that we process or our third-party vendors or suppliers process on our behalf.
+Added: Such cyber incidents could materially disrupt IT Systems;
+Added: result in loss of Confidential Information including intellectual property, trade secrets or other proprietary or competitively sensitive information, certain information of customers, employees, suppliers, drivers or others;
+Added: jeopardize the security of our facilities;
+Added: or affect the performance of in-product technology and the integrated software in our lidar solutions.
+Added: Cyberattacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools—including artificial intelligence—that circumvent security controls, evade detection and remove forensic evidence.
+Added: As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our IT Systems, Confidential Information or business.
+Added: We also cannot guarantee that our cybersecurity risk management program and processes, including our policies, controls, or procedures will be fully implemented, complied with, or adequate to detect, prevent or mitigate cyber incidents.
+Added: Further, the implementation, maintenance, segregation and improvement of these programs and processes require significant management time, support and cost.
+Added: Moreover, there are inherent risks associated with developing, improving, expanding and updating current programs and processes, including the disruption of our data management, procurement, production execution, finance, supply chain and sales and service processes.
+Added: These risks may affect our ability to manage our data and inventory, procure parts or supplies or produce, sell, deliver and service our solutions, adequately protect our intellectual property or achieve and maintain compliance with, or realize available benefits under, applicable laws, regulations and contracts.
+Added: We cannot be sure that the programs and processes upon which we rely, including those of our third-party vendors or suppliers, will be effectively implemented, maintained or expanded as planned.
+Added: If we do not successfully implement, maintain or expand these programs and processes as planned, our operations may be disrupted, our ability to accurately and timely report our financial results could be impaired, and deficiencies may arise in our internal control over financial reporting, which may impact our ability to certify our financial results.
+Added: Moreover, our Confidential Information, including proprietary information or intellectual property, could be compromised or misappropriated and our reputation may be adversely affected.
+Added: If these programs and processes do not operate as we expect them to, we may be required to expend significant resources to make corrections or find alternative sources for performing these functions.
+Added: A significant cyber incident could impact production capability, harm our reputation, cause us to breach our contracts with other parties or subject us to regulatory actions or litigation (including class actions), and require significant incident response, system restoration, or remediation and future compliance costs, any of which could materially affect our business, prospects, financial condition and operating results.
+Added: Table of C ontents
+Added: In addition, our insurance coverage for cyber-attacks may not be sufficient to cover all the losses we may experience as a result of a cyber incident, and we cannot guarantee that applicable insurance will be available to us or in the future on economically reasonable terms at all.
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.