What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-03-21 compared with 2024-03-28 · 240 added, 294 removed, 1065 unchanged (33% of the section changed)

21 unchanged sentences

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.

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

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

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

8 unchanged sentences

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

Merger with Velodyne Lidar, Inc.

– Valuation of Hardware Developed Technology and Customer Relationships

As described in Notes 1, 2 and 3 to the consolidated financial statements, on February 10, 2023, the Company completed its merger with Velodyne Lidar, Inc.

for an acquisition price of $306.6 million.

Management accounted for the merger as a business combination using the acquisition method of accounting and allocated the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date.

Of the identified intangible assets acquired, $2.5 million of hardware developed technology and $5.4 million of customer relationships were recorded.

Management valued the hardware developed technology using the relief-from-royalty method, which involved significant assumptions related to the relief-from-royalty rate, the migration curve, the discount rate, and the economic life.

Management valued the customer relationships using the distributor method, which involved significant assumptions related to the distributions margin.

Revenue Recognition – Product revenue

As described in Note 2 to the consolidated financial statements, the Company’s revenue was $111.1 million for the year ended December 31, 2024, of which the majority related to product revenue.

Product revenue is recognized at a point in time when control of the goods is transferred to the customer, generally occurring upon shipment or delivery dependent upon the terms of the underlying contract.

The transaction price is the amount of consideration the Company expects to be entitled in exchange for transferring products to the customer.

The principal consideration for our determination that performing procedures relating to revenue recognition for product revenue is a critical audit matter is a high degree of auditor effort in performing procedures over the Company’s revenue recognition.

As disclosed by management, material weaknesses were identified that impacted this matter.

Table of C ontents

The principal considerations for our determination that performing procedures relating to the valuation of hardware developed technology and customer relationships acquired in the merger with Velodyne Lidar, Inc.

is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the hardware developed technology and customer relationships acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the relief-from-royalty rate, the migration curve, the discount rate, and the economic life for hardware developed technology and the distributions margin for customer relationships;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included, among others (i) reading the agreement and plan of merger;

(ii) testing management’s process for developing the fair value estimate of the hardware developed technology and customer relationships acquired;

(iii) evaluating the appropriateness of the relief-from-royalty and distributor methods used by management;

(iv) testing the completeness and accuracy of the underlying data used by management in the relief-from-royalty and distributor methods;

and (v) evaluating the reasonableness of the significant assumptions used by management related to the relief-from-royalty rate, the migration curve, the discount rate, and the economic life for hardware developed technology and the distributions margin for customer relationships.

Evaluating management’s assumptions related to the distributions margin for customer relationships involved considering (i) the consistency with external market and industry data;

(ii) the completeness and accuracy of the distributor data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the relief-from-royalty and distributor methods and (ii) the reasonableness of the relief-from-royalty rate, the migration curve, the discount rate, and the economic life assumptions for hardware developed technology.

These procedures included, among others (i) testing revenue recognized for a sample of product revenue transactions by obtaining and inspecting source documents, such as contracts, sales quotes, purchase orders, sales orders, invoices, proof of shipment, and subsequent cash receipts and (ii) confirming a sample of outstanding customer invoice balances as of December 31, 2024 and, for confirmations not returned, obtaining and inspecting source documents, such as contracts, sales quotes, purchase orders, sales orders, invoices, and subsequent cash receipts.

/s/ PricewaterhouseCoopers LLP

15 unchanged sentences

Operating lease, right-of-use assets 14,308 18,561

Unbilled receivable, long-term portion 10,567 —

Goodwill — 51,152

Unbilled receivable, non-current portion 10,133 10,567

Intangible assets, net 17,830 24,436

6 unchanged sentences

Accrued and other current liabilities 30,591 58,166

Contract liabilities 12,885 402

Contract liabilities, current 34,351 12,885

Operating lease liability, current portion 7,196 7,096

Total current liabilities 78,426 81,692

Operating lease liability, long-term portion 18,827 13,400

Operating lease liability, non-current portion 13,054 18,827

Debt — 43,975

Contract liability, long-term portion 4,967 342

Contract liabilities, non-current portion 2,538 4,967

Other non-current liabilities 1,219 1,610

7 unchanged sentences

Accumulated deficit ( 913,071 ) ( 816,026 )

Accumulated other comprehensive income (loss) 192 ( 149 )

Accumulated other comprehensive (loss) income ( 1,003 ) 192

Total stockholders’ equity 180,911 179,672

15 unchanged sentences

Loss from operations ( 104,177 ) ( 373,192 )

Other (expense) income:

Other income (expense):

Interest income 8,846 9,038

Interest expense ( 1,823 ) ( 9,303 )

Other (expense) income, net

( 130 ) 7,654

Total other (expense) income, net ( 395 ) 7,168

Other income (expense), net

Total other income (expense), net 7,669 ( 395 )

Loss before income taxes ( 96,508 ) ( 373,587 )

2 unchanged sentences

Other comprehensive loss

Changes in unrealized gain (loss) on available for sale securities $ 354 $ —

Changes in unrealized (loss) gain on available for sale securities

$ ( 386 ) $ 354

Foreign currency translation adjustments ( 809 ) ( 13 )

7 unchanged sentences

Common Stock Additional

Capital Accumulated Deficit Accumulated other comprehensive loss Total Stockholders’ Equity

Capital Accumulated Deficit Accumulated other comprehensive income (loss)

Total Stockholders’ Equity

Shares Amount

1 unchanged sentence

18,658,798 $ 19 $ 613,665 $ ( 441,916 ) $ ( 149 ) $ 171,619

Issuance of common stock upon Velodyne Merger 19,483,269 20 306,582 — — 306,602

Common Stock adjustment reflected as a result of the one-for-10 reverse stock split effectuated on April 6, 2023 85,893 — — — — —

Proceeds from at-the-market offering, net of commissions and fees of $ 872 and issuance costs of $ 327

1 unchanged sentence

Issuance of common stock upon exercise of stock options 142,117 — 270 — — 270

Issuance of common stock upon vesting of restricted stock units - net of tax withholding

443,971 1 ( 59 ) — — ( 58 )

Issuance of common stock upon vesting of restricted stock units 1,755,157 — — — — —

Issuance of common stock to employees under employee stock purchase plan 257,506 — 1,175 — — 1,175

Repurchase of common stock ( 3,753 ) — ( 3 ) — — ( 3 )

Cancellation of Sense acquisition shares ( 5,513 ) — ( 358 ) — — ( 358 )

Common stock warrants issuable to customer — — 528 — — 528

Vesting of early exercised stock options — — 98 — — 98

1 unchanged sentence

Net loss — — — ( 374,110 ) — ( 374,110 )

Other Comprehensive loss — — — — ( 143 ) ( 143 )

Other Comprehensive income — — — — 341 341

Balance — December 31, 2023 43,257,862 42 995,464 ( 816,026 ) 192 179,672

Issuance of common stock upon Velodyne Merger 19,483,269 20 306,582 — — 306,602

Common Stock adjustment reflected as a result of the one-for-10 reverse stock split effectuated on April 6, 2023 85,893 — — — — —

Issuance of common stock upon exercise of stock options 105,581 — 206 — — 206

Issuance of restricted stock awards 533,601 1 — — — 1

Proceeds from at-the-market offering, net of commissions and fees of $ 1,749 and issuance costs of $ 346

6,045,428 2 56,214 — — 56,216

Issuance of common stock upon exercise of stock options 142,117 — 270 — — 270

Issuance of common stock upon vesting of restricted stock units 1,755,157 — — — — —

Issuance of common stock in connection with Velodyne Merger 211,216 — — — — —

Issuance of common stock upon vesting of restricted stock 2,022,741 2 — — — 2

Issuance of common stock to employees under employee stock purchase plan 384,341 — 1,703 — — 1,703

Repurchase of common stock ( 3,753 ) — ( 3 ) — — ( 3 )

Common stock warrants issuable to customer — — 892 — — 892

Vesting of early exercised stock options — — 98 — — 98

Stock-based compensation expense — — 40,459 — — 40,459

Net loss — — — ( 97,045 ) — ( 97,045 )

Other Comprehensive income — — — — 341 341

Other Comprehensive loss — — — — ( 1,195 ) ( 1,195 )

Balance — December 31, 2024 52,560,770 $ 47 $ 1,094,938 $ ( 913,071 ) $ ( 1,003 ) $ 180,911

43,257,862 $ 42 $ 995,464 $ ( 816,026 ) $ 192 $ 179,672

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

8 unchanged sentences

Depreciation and amortization 9,836 17,148

Loss on write-off of construction in progress and right-of-use asset impairment 1,732 —

Loss on write-off and disposal of property and equipment and right-of-use asset impairment 401 1,673

Gain on lease termination — ( 807 )

2 unchanged sentences

Amortization of right-of-use asset 4,904 4,519

Non-cash interest income ( 732 ) —

Interest expense and loss on debt extinguishment — 4,001

Amortization of debt issuance costs and debt discount — 190

Non-cash interest income ( 619 ) ( 732 )

Accretion or amortization on short-term investments ( 5,095 ) ( 4,685 )

1 unchanged sentence

Inventory write down 2,080 10,047

Provision for doubtful accounts 1,346 346

(Gain)/loss from disposal of property and equipment ( 59 ) 430

Provision (recovery of) for doubtful accounts ( 587 ) 1,346

Realized gain on sale of investments ( 275 ) —

Changes in operating assets and liabilities:

13 unchanged sentences

Cash and cash equivalents acquired in the Velodyne Merger — 32,137

Net cash used in investing activities 50,601 ( 5,147 )

Net cash provided by investing activities 14,652 50,601

CASH FLOWS FROM FINANCING ACTIVITIES

Repurchase of common stock — ( 45 )

Proceeds from exercise of stock options 205 271

4 unchanged sentences

At-the-market offering costs for the issuance of common stock ( 346 ) ( 363 )

Taxes paid related to net share settlement of restricted stock units — ( 59 )

Net cash provided by financing activities 15,393 15,657

6 unchanged sentences

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION:

Proceeds from the issuance of common stock under at-the-market offering not received $ 1,255 $ —

Property and equipment purchases included in accounts payable and accrued liabilities $ 480 $ 524

16 unchanged sentences

No fractional Public warrants were issued upon separation of the CLA units.

On February 10, 2023, the Company completed the merger with Velodyne Lidar, Inc., a Delaware corporation (“Velodyne”) pursuant to the terms of the Agreement and Plan of Merger (the “Velodyne Merger Agreement”) with Velodyne, Oban Merger Sub, Inc.

(“Merger Sub I”) and Oban Merger Sub II LLC (“Merger Sub II”) (the “Velodyne Merger”) dated as of November 4, 2022, accounted for as a business combination with the Company being an accounting acquiror (Note 3).

On February 10, 2023, the Company completed a merger with Velodyne Lidar, Inc., a Delaware corporation (“Velodyne”) pursuant to the terms of the Agreement and Plan of Merger (the “Velodyne Merger Agreement”) with Velodyne, Oban Merger Sub, Inc.

(“Merger Sub I”) and Oban Merger Sub II LLC (“Merger Sub II”) (the “Velodyne Merger”) dated as of November 4, 2022, accounted for as a business combination with the Company being the accounting acquirer (Note 3).

Basis of Presentation and Principles of Consolidation

7 unchanged sentences

All share and per share amounts and related stockholders’ equity balances presented herein have been retroactively adjusted to reflect the Reverse Stock Split.

The Company’s principal sources of liquidity are its cash and cash equivalents, short-term investments, cash generated from revenues, sales of common stock under its at-the-market equity offering program and debt financing.

The Company’s principal sources of liquidity are its cash and cash equivalents, short-term investments, cash generated from sales of the Company’s products, sales of common stock under its at-the-market equity offering program and debt financing.

The accompanying consolidated financial statements have been prepared on a going concern basis.

1 unchanged sentence

As of December 31, 2024, the Company’s existing sources of liquidity included cash and cash equivalents, restricted cash, and short-term investments of $ 174.6 million.

Management expects significant operating losses and negative cash flows from operations to continue for the foreseeable future.

The Company expects to continue investing in product development and sales and marketing activities.

The long-term continuation of the Company’s business plan is dependent upon the generation of sufficient revenues from its products to offset expenses.

The Company may require additional capital in order to execute management’s current business plan and in the event that the Company does not generate sufficient cash flows from operations and is unable to obtain funding, the Company may be forced to delay, reduce, or eliminate some or all of its discretionary spending, which could adversely affect the Company’s business prospects, ability to meet long-term liquidity needs or ability to continue operations.

The Company has concluded that it has sufficient capital to fund its obligations in the ordinary course of business for at least one year from the date these consolidated financial statements were issued.

The Company has incurred losses and negative cash flows from operations for several years.

If the Company continues to incur losses in the future, it may need to improve liquidity and raise additional capital through the issuance of equity and/or debt.

There can be no assurance that the Company would be able to raise such capital.

However, management believes that the Company’s existing sources of liquidity are adequate to fund its operations for at least twelve months from the date the consolidated financial statements were available for issuance.

Merger Agreement with Velodyne Lidar, Inc.

9 unchanged sentences

The weighted-average sales price and gross proceeds to the Company before deducting offering costs, sales commissions and fees were approximately $ 9.64 and $ 5.67 per share and $ 58.3 million and $ 16.3 million, respectively, during the year ended December 31, 2024 and 2023.

The Company plans to use the net proceeds from the ATM Agreement for working capital and general corporate purposes.

The remaining availability under the ATM Agreement as of December 31, 2024 is approximately $ 58.6 million.

Note 2 – Summary of Significant Accounting Policies

59 unchanged sentences

All related shipping costs are accrued and recognized within cost of revenue when the related revenue is recognized.

The Company’s services revenue consists primarily of product development and validation services.

The Company’s services revenue consists primarily of software development and compliance services.

The obligation to provide services is generally satisfied over time, with the customer simultaneously receiving and consuming the benefits as the Company satisfies its performance obligations.

57 unchanged sentences

Beginning balance $ 1,104 $ 853

Provisions 1,346 346

Uncollectible accounts written off, net of recoveries ( 1,095 ) —

Provision (recovery of) for doubtful accounts ( 587 ) 1,346

Net write-offs and other 236 ( 1,095 )

Ending balance $ 753 $ 1,104

47 unchanged sentences

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist primarily of cash, cash equivalents, short-term investments, restricted cash and accounts receivable.

Cash, cash equivalents, restricted cash are deposited with federally insured commercial banks in the U.S.

and UK, Netherlands, France, Hong Kong, China, Thailand, India, Canada and Germany.

At times, cash balances in the U.S.

may be in excess of federal insurance limits.

As of December 31, 2023 and 2022, the Company had cash, cash equivalents, short-term investment and restricted cash with financial institutions in U.S.

Financial instruments that potentially subject the Company to credit risk consist primarily of cash, cash equivalents, restricted cash, short-term investments, and accounts receivable.

Although the Company deposits its cash, cash equivalents, restricted cash and short-term investments with financial institutions that Company believes are of high credit quality, its deposits, at times, may exceed federally insured limits.

As of December 31, 2024 and 2023, the Company had cash, cash equivalents, short-term investments and restricted cash with financial institutions in the U.S.

of $ 161.8 million and $ 184.8 million, respectively.

6 unchanged sentences

Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable.

Accounts receivable from the Company’s major customers representing 10% or more of total accounts receivable was as follows:

Accounts receivable from the Company’s major customers representing 10% or more of total accounts receivable and unbilled receivable was as follows:

Customer A 39 % 42 %

5 unchanged sentences

Supplier B 15 % 17 %

Supplier B accounted for 44 % and 39 % of total accounts payable balance as of December 31, 2023 and 2022.

No professional services vendor accounted for 10% greater of total accounts payable balance as of December 31, 2023.

One professional services vendor accounted for approximately 14 % of total accounts payable balance as of December 31, 2022.

Supplier A accounted for 18 % of total accounts payable balance as of December 31, 2024.

Supplier A accounted for less than 10% of total accounts payable balance as of December 31, 2023.

Supplier B accounted for 55 % and 44 % of total accounts payable balance as of December 31, 2024 and 2023, respectively.

Amazon Warrant

22 unchanged sentences

Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Due to its history of operating losses, the Company has recorded a full valuation allowance against its deferred tax assets as of December 31, 2023 and 2022.

Due to its history of operating losses, the Company has recorded a full valuation allowance against its U.S.

deferred tax assets as of December 31, 2024 and 2023.

The Company accounts for uncertainty in income taxes using a two-step approach to recognize and measure uncertain tax positions.

The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of the related appeals or litigation processes, if any.

An uncertain tax position that meets a more likely than not standard based on its technical merit would then be evaluated under the measurement step to determine the largest tax benefit that the taxpayer more likely than not will realize.

more likely than not will realize.

The Company classifies any liabilities for unrecognized tax benefits as current to the extent that the Company anticipates payment of cash within one year.

1 unchanged sentence

Recently Issued and Adopted Accounting Pronouncements

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which amends ASC 805 to add contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and to require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and should be applied prospectively to business combinations occurring on or after the effective date of the amendments.

Early adoption of the amendments is permitted, including adoption in an interim period.

In the fourth quarter of 2022, Ouster adopted the amendments and recognized contract assets acquired and contract liabilities assumed in the mergers in accordance with ASC 606.

Ouster has elected to apply the practical expedient under paragraph ASC 805-20-30-29(b) of the adopted amendments and allocated the transaction price based on the standalone selling price of each performance obligation in the contract with a customer for all contracts acquired in the mergers.

As of December 31, 2022, the adoption of this new standard had no impact on the Company’s consolidated financial statements and related footnote disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

The Company considers the applicability and impact of all ASUs.

ASUs not referenced below were assessed and determined to be either not applicable or are not expected to have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU No.

2 unchanged sentences

The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective adoption.

The Company does not expect ASU 2023-07 to have a material impact on the Company’s financial statement and related disclosures.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted the amendments in this update for the annual period beginning fiscal year 2024 and retrospectively applied to all periods presented.

Refer to Note 16 regarding the additional disclosures included within the consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

The Company considers the applicability and impact of all ASUs.

ASUs not referenced below were assessed and determined to be either not applicable or are not expected to have a material impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU No.

2 unchanged sentences

The Company is currently evaluating the potential impact of the adoption of ASU 2023-09 on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses.” The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures.

The guidance is effective for public business entities for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

Early adoption is permitted.

The guidance is to be applied prospectively, with the option for retrospective application.

The Company is currently evaluating the impact of the ASU on the disclosures within the consolidated financial statements.

Business Combination and Related Transactions

10 unchanged sentences

Purchase consideration $ 306,602

Preliminary amounts of identifiable assets and liabilities assumed

Amounts of identifiable assets and liabilities assumed

Cash and cash equivalents $ 32,137

3 unchanged sentences

Prepaid expenses and other current assets 4,387

Unbilled receivable, long-term portion 6,657

Unbilled receivable, non-current portion 6,657

Property and equipment, net 9,900

4 unchanged sentences

Accrued and other current liabilities ( 32,821 )

Contract liabilities ( 5,475 )

Contract liabilities, current ( 5,475 )

Operating lease liability, current portion ( 3,735 )

Operating lease liability, long-term portion ( 11,940 )

Operating lease liability, non-current portion ( 11,940 )

Contract liabilities, long-term portion ( 2,206 )

9 unchanged sentences

Intangible assets, net 5.9 $ 13,000

Developed technology relates to Velodyne’s lidar sensors and Blue City AI software used to monitor traffic networks and public spaces.

Developed technology relates to Velodyne’s lidar sensors and BlueCity software used to monitor traffic networks and public spaces.

The Company applied significant judgment in estimating the fair value of the developed technology, which involved significant assumptions related to the relief-from-royalty rate, the migration curve, the discount rate, and the economic life.

22 unchanged sentences

Represents decrease (increase) in additional stock-based compensation expense related to Ouster employee terminations due to change in control.

$ 6,383 $ ( 5,195 )

Represents a decrease (increase) in severance expense in connection with the Velodyne Merger transaction $ 10,586

7 unchanged sentences

Money market funds $ 24,740 $ — $ — $ 24,740

Commercial paper — 2,989 — 2,989

Short-term investments:

8 unchanged sentences

Level 1 Level 2 Level 3 Total

Cash and cash equivalents:

Money market funds $ 7,354 $ — $ — $ 7,354

Commercial paper — 2,989 — 2,989

Short-term investments:

Commercial paper — 80,620 — 80,620

Corporate debt and U.S.

government agency securities — 58,538 — 58,538

Total short-term investments — 139,158 — 139,158

Total financial assets $ 7,354 $ 142,147 $ — $ 149,501

11 unchanged sentences

Balance Sheet Components

Cash and Cash Equivalents and Short-Term Investments

Cash and Cash Equivalents

The Company’s cash and cash equivalents consist of the following (in thousands):

2 unchanged sentences

Money market funds (1)

7,354 121,100

Commercial paper — 2,989

7 unchanged sentences

Unrealized gains and losses on the Company’s short-term investments were not significant as of December 31, 2023 and therefore, the amortized cost of the Company’s short-term investments approximated their fair value.

Restricted Cash

Restricted cash consists of our collateral to merchant credit card, deposit account to secure foreign entity closure costs, issuances of deposit performance guarantee issued in favor of a customer, and certificates of deposit held by a bank as security for outstanding letters of credit.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets to the total of the amounts reported in the consolidated statements of cash flows (in thousands):

2023 2022 2021

Cash and cash equivalents

2 unchanged sentences

Restricted cash, non-current

1,091 1,089 1,035

Total cash, cash equivalents and restricted cash

14 unchanged sentences

Total prepaid and other current assets $ 12,750 $ 34,647

The insurance receivable in the amount of $ 23.4 million was settled in the year ended December 31, 2024 (see Note 9).

Property and Equipment, net

18 unchanged sentences

France 3,208 2,416

Taiwan 1,180 —

Others 342 112

3 unchanged sentences

The transaction has been accounted for as a business combination.

The Company acquired Velodyne for the price of $ 306.6 million, primarily consisting of fair value of the Company’s common stock issued in exchange for Velodyne shares and fair value of the Amazon Warrant (Note 7) of $ 8.6 million.

Goodwill represents the excess of the purchase price over the preliminary estimated fair values of the identifiable assets and assumed liabilities acquired and is primarily attributable to the assembled workforce and expected synergies at the time of the acquisition.

14 unchanged sentences

As of December 31, 2023, remaining goodwill balance was nil .

No goodwill impairment charges were recognized during the year ended December 31, 2022.

The following tables present acquired intangible assets, net as of December 31, 2024 and 2023 (in thousands):

3 unchanged sentences

Developed technology 3 - 8 $ 23,500 $ ( 9,795 ) $ 13,705

$ 23,500 $ ( 5,948 ) $ 17,552

Vendor relationship 3 6,600 ( 6,600 ) —

Customer relationships 3 - 8 6,300 ( 2,175 ) 4,125

6,300 ( 1,249 ) 5,051

Intangible assets, net $ 36,400 $ ( 18,570 ) $ 17,830

15 unchanged sentences

Warranty expenditures ( 901 ) ( 2,820 )

Increase to warranty accrual 3,583 2,815

Change to warranty accrual 289 3,583

Ending balance $ 3,049 $ 3,661

1 unchanged sentence

Accrued and other current liabilities consist of the following (in thousands):

Accrued legal fees and contingencies $ 8,493 $ 28,415

Uninvoiced receipts 4,368 12,980

Accrued compensation 6,115 6,387

Accrued legal contingencies 27,500 —

Sales and use taxes 2,667 403

Sales and use tax 2,215 2,667

Other 9,400 7,717

7 unchanged sentences

The Loan Agreement included a minimum liquidity financial covenant whereby the Company was required to maintain at least $ 60.0 million of cash in deposit accounts that are subject to an account control agreement in favor of Hercules.

On February 10, 2023, the Company entered into the Third Amendment, which amended the Loan Agreement to (i) increase the existing debt baskets for (a) purchase money debt and capital leases and (b) letter of credit obligations, (ii) provide for increased flexibility to maintain cash in non-US accounts, and (iii) provide for increased flexibility to relocate certain equipment.

On February 10, 2023, the Company amended the Loan Agreement to (i) increase the existing debt baskets for (a) purchase money debt and capital leases and (b) letter of credit obligations, (ii) provide for increased flexibility to maintain cash in non-US accounts, and (iii) provide for increased flexibility to relocate certain equipment.

Advances under the Loan Agreement bore interest at the rate of interest equal to greater of either (i) (x) the prime rate as reported in The Wall Street Journal plus (y) 6.15 %, and (ii) 9.40 %, subject to compliance with financial covenants and other conditions.

3 unchanged sentences

Amortization expense included in the interest expense related to debt discount and debt issuance costs of the Loan Agreement was not material for the year ended December 31, 2023.

Prior to repayment of the Loan Agreement, interest on amounts borrowed was payable on a monthly basis until June 1, 2025 (the “Amortization Date”).

On and as of the Amortization Date, payments consist of equal monthly installments of principal and interest payable until the secured obligations are repaid in full.

However, if the Company achieved certain equity proceeds, revenue or profit targets for the twelve-month period ending December 31, 2023, then the Amortization Date would have been extended to the Maturity Date.

The entire principal balance and all accrued but unpaid interest were to be due and payable on the Maturity Date.

On the earliest to occur of May 1, 2026, the date on which the obligations under the Loan Agreement were paid and the date on which such obligations became due and payable, the Company was also required to pay Hercules an end of term fee in an amount equal to 7.45 % of the aggregated amount of all Advances made under the Loan Agreement.

The Company was permitted to prepay the principal of any advance made pursuant to the terms of the Term Loan Facility at any time subject to a prepayment charge equal to:

2.50 %, if such advance was prepaid in any of the first 12 months following the Closing Date, 1.50 %, if such advance was prepaid after 12 months but prior to 24 months following the Closing Date, and 1.0 %, if such advance was prepaid anytime thereafter.

On October 25, 2023, the Loan Agreement was repaid with proceeds of the loans drawn under the Credit Agreement (as defined below) with UBS Bank USA and UBS Financial Services Inc.

3 unchanged sentences

and the Credit Agreement as amended, modified, and/or supplemented by the Addendum, the “UBS Agreement”) by and among the Company, UBS Bank USA (the “Bank”), and UBS Financial Services Inc.

The facility under the UBS Agreement matures and terminates on August 2, 2025 (the “Maturity Date”).

The UBS Agreement provides the Company with a revolving credit line of up to $ 45.0 million, subject to certain terms and conditions.

The maturity date under the UBS Agreement was August 2, 2025 (the “Maturity Date”).

The UBS Agreement provided the Company with a revolving credit line of up to $ 45.0 million, subject to certain terms and conditions.

The Company borrowed $ 44.0 million on October 25, 2023, and all of the proceeds were used to prepay and terminate the Company’s Loan Agreement on October 25, 2023.

The Company recognized constructive financing cash outflows and financing cash inflows on the statement of cash flows of $ 44.0 million, respectively, even though no funds were actually paid or received.

Pursuant to the terms of the UBS Agreement, the Company has agreed to maintain minimum liquidity, that can be comprised of unencumbered cash and cash equivalents, U.S.

Pursuant to the terms of the UBS Agreement, the Company agreed to maintain minimum liquidity, that could be comprised of unencumbered cash and cash equivalents, U.S.

treasuries and other assets acceptable to the Bank, of $ 52.0 million in an account maintained with the Bank or its affiliates at all times.

As of December 31, 2023, the Company is in compliance with this minimum liquidity requirement within the loan agreement.

Loans under the UBS Agreement bear interest at a rate equal to (x) for variable rate loans, the sum of (i) the applicable SOFR average plus 0.110 %, plus (ii) 1.20 %, and (y) for fixed rate loans, the sum of either (1) CME Term Rate or (2) the U.S.

Loans under the UBS Agreement bore interest at a rate equal to (x) for variable rate loans, the sum of (i) the applicable SOFR average plus 0.110 %, plus (ii) 1.20 %, and (y) for fixed rate loans, the sum of either (1) CME Term Rate or (2) the U.S.

Treasury Rate, as applicable and as defined in the UBS Agreement, as determined based on the duration of the advance, plus the applicable liquidity premium with a range of 0.15 % to 0.50 %, as set forth in the UBS Agreement.

Interest payments are due (x) for variable rate loans, on the last day of each calendar month, and on each date that any portion of the principal amount is due, including on the Maturity Date, and (y) for fixed rate loans, on the last day of the applicable interest period, and on each date that any portion of the principal amount is due, including on the Maturity Date.

The Company may repay any variable rate loans at any time in whole or in part, without penalty.

The Company may repay any fixed rate loans in whole, but not in part, subject to certain breakage costs.

The Company has agreed to pay an unused line fee in an amount equal to (i) the commitment amount of $ 45.0 million less the average daily balance of the sum of the principal amount of the obligations outstanding during the preceding calendar quarter, multiplied by (ii) 0.50 % per annum, and such unused line fee is payable quarterly in arrears on the last day of each calendar quarter.

The UBS Agreement also contains affirmative and negative covenants customary for a credit line of this type, including requirements for maintenance of the collateral accounts and certain limitations on withdrawal of cash from such collateral accounts.

The UBS Agreement also provides for customary events of default, including, among others, non-payment, failure to maintain an amount equal to the greater of (x) the outstanding loans and (y) the collateral value as determined by the Bank, in the securities accounts maintained with the Bank, bankruptcy, or breach of a covenant, representation and warranty.

As of December 31, 2023, the Company was in compliance with the covenants set forth in the UBS Agreement.

Interest payments were due (x) for variable rate loans, on the last day of each calendar month, and on each date that any portion of the principal amount is due, including on the Maturity Date, and (y) for fixed rate loans, on the last day of the applicable interest period, and on each date that any portion of the principal amount is due, including on the Maturity Date.

The Company was able to repay any variable rate loans at any time in whole or in part, without penalty.

The Company could repay any fixed rate loans in whole, but not in part, subject to certain breakage costs.

Interest expense was recognized over the life of the respective debt, which approximates the effective interest rate method.

The Company had agreed to pay an unused line fee in an amount equal to (i) the commitment amount of $ 45.0 million less the average daily balance of the sum of the principal amount of the obligations outstanding during the preceding calendar quarter, multiplied by (ii) 0.50 % per annum, and such unused line fee is payable quarterly in arrears on the last day of each calendar quarter.

The UBS Agreement also contained affirmative and negative covenants customary for a credit line of this type, including requirements for maintenance of the collateral accounts and certain limitations on withdrawal of cash from such collateral accounts.

The UBS Agreement also provided for customary events of default, including, among others, non-payment, failure to maintain an amount equal to the greater of (x) the outstanding loans and (y) the collateral value as determined by the Bank, in the securities accounts maintained with the Bank, bankruptcy, or breach of a covenant, representation and warranty.

On August 12, 2024, the Company repaid in full, with cash on hand, all outstanding indebtedness and terminated all commitments and obligations under the UBS Agreement.

The UBS Agreement payoff amount included the revolving loans in the principal amount of $ 44.0 million, plus accrued and unpaid interest.

Private Placement Warrants

Simultaneously with the closing of the Company’s initial public offering (the “IPO”) in August 2020, the sponsor of CLA, Colonnade Sponsor LLC, purchased an aggregate of 600,000 Private Placement warrants at a price of $ 10.00 per warrant, for an aggregate purchase price of $ 6,000,000 .

The Private Placement warrants became exercisable 12 months following the closing of the Company’s IPO, and will expire 5 years from the completion of the Colonnade Merger, or earlier upon redemption or liquidation.

Simultaneously with the closing of the Company’s initial public offering (the “IPO”) in August 2020, the sponsor of CLA, Colonnade Sponsor LLC, purchased an aggregate of 6,000,000 Private Placement warrants, for an aggregate purchase price of $ 6,000,000 .

The Private Placement warrants became exercisable 12 months following the closing of the Company’s IPO, and expire 5 years from the completion of the Colonnade Merger, or earlier upon redemption or liquidation.

On March 11, 2021, as adjusted to reflect the Reverse Stock Split, each outstanding Private Placement warrant automatically converted into a warrant to purchase one-tenth of a share of Ouster common stock pursuant to the Warrant Agreement.

Each 10 Private Placement warrants is exercisable for one share of Ouster common stock at an exercise price of $ 115.00 per share, with no fractional shares being issuable upon exercise of a warrant.

The private placement warrant liability was initially recognized as a liability at a fair value of $ 19.4 million and the private placement warrant liability was remeasured to fair value as of December 31, 2023 and 2022, resulting in a loss of $ 0.05 million and $ 7.4 million in the years ended December 31, 2023 and 2022, respectively, classified within other income (expense), net in the consolidated statements of operations and comprehensive loss.

The private placement warrant was valued using the following assumptions under the Black-Scholes option-pricing model:

2023 December 31,

The Private Placement warrant liability was initially recognized as a liability at a fair value of $ 19.4 million and the Private Placement warrant liability was remeasured to fair value as of December 31, 2024 and 2023, resulting in immaterial changes in fair value in the years ended December 31, 2024 and 2023, respectively, classified within other income (expense), net in the consolidated statements of operations and comprehensive loss.

The Private Placement warrant were valued using the following assumptions under the Black-Scholes option-pricing model:

Stock price $ 12.22 $ 7.67

Exercise price of warrant $ 115.00 $ 115.00

Term (years) 2.19 3.19

Expected term (years) 1.19 2.19

Expected volatility 95.00 % 94.00 %

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Amazon Warrant

On February 10, 2023, as part of the Velodyne Merger, the Company assumed a warrant agreement and a transaction agreement, pursuant to which Velodyne agreed to issue to Amazon.com NV Investment Holdings LLC, a wholly-owned subsidiary of Amazon Inc.

(“Amazon”), a warrant to acquire, following customary antidilution adjustments, up to an aggregate of 3,263,898 shares of the Company’s common stock at an exercise price of $ 50.71 per share (the “Amazon Warrant”).

The exercise price and the warrant shares issuable upon exercise of the Amazon Warrant are subject to further antidilution adjustments, including in the event the Company makes certain sales of common stock (or securities exercisable or convertible into or exchangeable for shares of the Company’s common stock) at a price less than the exercise price of the Amazon Warrant.

As a result of the issuance and sale by the Company of an additional 2,878,875 shares of common stock in the twelve months ended December 31, 2023 pursuant to the At-Market-Issuance Sales Agreement at prices below the exercise price of the Amazon Warrant, an antidilution adjustment to the terms of the Amazon Warrant occurred (see Note 11), resulting in the increase in the number of shares issuable under the Amazon Warrant by 618 shares of common stock and a reduction to the original strike price of the Amazon Warrant to $ 50.70 per share.

As a result of the issuance and sale by the Company of an additional 6,045,428 shares of common stock in the twelve months ended December 31, 2024 pursuant to the At-Market-Issuance Sales Agreement at prices below the exercise price of the Amazon Warrant, an antidilution adjustment was made in accordance to the terms of the Amazon Warrant occurred (see Note 11), resulting in the increase in the number of shares issuable under the Amazon Warrant by 3,374 shares of common stock and a reduction to the original strike price of the Amazon Warrant to $ 50.64 per share.

As of December 31, 2024, there were 3,267,890 shares of common stock issuable under the Amazon Warrant.

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(i) 26,125 square feet of office space pursuant to a lease that is scheduled to expire in August 2027 and (ii) 20,032 square feet of office space in a building adjacent to our corporate headquarters, which term is scheduled to expire in August 2027.

Prior to 2023, the Company had executed or assumed as lessee other five operating leases for rental of office space.

Prior to 2023, the Company had executed or assumed as lessee other five other operating leases for rental of office space.

The terms of those leases range from 1 to 3 years.

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The Company incurred total lease costs in its consolidated statements of operations and comprehensive loss of $ 6.9 million and $ 8.1 million for the years ended December 31, 2024 and 2023, respectively.

Additionally, the Company determined that the lease office facility located in Bengalaru, India assumed in the Velodyne Merger was not needed to support the future growth of its business.

The Company fully vacated the facilities in March 2023 and remained contractually obligated to the lessor for the underlying lease.

The Company recorded $ 0.8 million for right-of-use asset impairment in connection with these leased office facilities in the three months ended March 31, 2023.

In the twelve months ended December 31, 2023, the Company recorded $ 0.8 million gain on lease modification due to the termination of its Bengalaru, India lease.

Additionally, the Company determined that a leased office facility located in Bengalaru, India assumed in the Velodyne Merger was not needed to support the future growth of its business.

The Company fully vacated the facilities in March 2023 and its subsidiary remained contractually obligated to the lessor for the underlying lease until it was terminated.

The Company recorded $ 0.8 million for right-of-use asset impairment in connection with this leased office facility in the three months ended March 31, 2023.

In the twelve months ended December 31, 2023, the Company recorded $ 0.8 million gain on lease modification due to the termination of the Bengalaru, India lease.

350 Treat Building Lease

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In November 2021, the Company entered into an amendment to the 350 Treat Building Lease agreement, whereby the parties agreed to extend the term of the lease for an additional four years and seven months and provided for an additional tenant improvement allowance.

The total base lease payments for the extended period of 4.6 years equals $ 7.6 million.

The total base lease payments for the extended period of 4.6 years equal $ 7.6 million.

The amendment resulted in an adjustment of $ 5.5 million to the right-of-use asset and right-of-use operating lease liability which was recorded in November 2021.

As of December 31, 2023 the remaining lease term is 3.7 years that expires on August 31, 2027.

As of December 31, 2024 the remaining lease term is 2.7 years, expiring on August 31, 2027.

In addition to minimum lease payments, the lease requires the Company to pay associated taxes and operating costs.

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2741 16 th Street Lease

In September 2017 the Company entered into a lease agreement (the “2741 16 th Street Lease”) to lease approximately 20,032 square feet of office space and 25,000 of parking space located in San Francisco, California.

In September 2017 the Company entered into a lease agreement (the “2741 16 th Street Lease”) to lease approximately 20,032 square feet of office space and 25,000 square feet of parking space located in San Francisco, California.

In May 2020, the Company entered into an amendment to the 2741 16 th Street Lease agreement, whereby the parties agreed to extend the term of the lease for an additional four years , restructure the monthly rent payable under the lease and provide for an additional tenant improvement allowance.

The total base lease payments for the extended period of 4.0 years equals $ 8.5 million and the increase in total base lease payments for the lease term provided for by the original agreement is $ 0.7 million.

The total base lease payments for the extended period of four years equals $ 8.5 million and the increase in total base lease payments for the lease term provided for by the original agreement is $ 0.7 million.

The amendment resulted in an adjustment of $ 6.2 million to the right-of-use asset and right-of-use operating lease liability which was recorded in May 2020.

As of December 31, 2023 the remaining lease term is 3.7 years that expires on August 31, 2027.

As of December 31, 2024 the remaining lease term is 2.7 years, expiring on August 31, 2027.

In addition to minimum lease payments, the lease requires the Company to pay associated taxes and operating costs.

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5521 Hellyer Avenue Lease

As part of the Velodyne Merger, the Company assumed a long-term non-cancellable lease agreement of 5521 Hellyer Avenue (the “5521 Hellyer Avenue Lease”), which was entered into in January 2017, to lease approximately 204,000 square feet of office, research and development, manufacturing and storage space in San Jose, California.

These leased premises are no longer used for any essential manufacturing or research and development functions.

In October 2019, as part of the second amendment to the 5521 Hellyer Avenue Lease, the lease term was extended for an additional five years ending in December 31, 2027.

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As of December 31, 2024, the operating lease right-of-use asset and operating lease liability were $ 6.3 million and $ 9.6 million, respectively.

As of December 31, 2023, the operating lease right-of-use asset and operating lease liability were $ 8.4 million and $ 12.0 million, respectively.

The discount rate used to determine the operating lease liability was 9.75 %.

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Year ending December 31,

2029 and thereafter 23

Total undiscounted lease payments 22,609

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Letters of Credit

In connection with certain office leasehold interests in real property located in San Francisco (350 Treat Ave and, 2741 16th Street) and in Paris, the Company obtained letters of credit from certain banks as required by the lease agreements.

In connection with certain office leasehold interests in real property located in San Francisco (350 Treat Ave and, 2741 16th Street) and in Paris, France, the Company obtained letters of credit from certain banks as required by the lease agreements.

If the Company defaults under the terms of the applicable lease, the lessor will be entitled to draw upon the letters of credit in the amount necessary to cure the default.

The amounts covered by the letters of credit are collateralized by certificates of deposit, which are included in restricted cash on the consolidated balance sheets as of December 31, 2024 and 2023.

The immaterial amount collateralizing the Paris letter of credit was released in October 2024 following the expiry of the Paris lease.

The outstanding amount of the letters of credit was $ 1.4 million and $ 1.4 million as of December 31, 2024 and 2023, respectively.

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The Company is involved in various legal proceedings arising in the ordinary course of business.

Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable.

Significant judgment is required in both the determination of probability and the determination as to whether any exposure is reasonably estimable.

Actual outcomes of these legal and regulatory proceedings may materially differ from our current estimates.

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The class actions have been consolidated, lead plaintiffs have been appointed and an amended consolidated complaint was filed on September 1, 2021, based on allegations similar to those in the earlier class actions.

Velodyne filed a motion to dismiss the amended and consolidated complaint on November 1, 2021.

The plaintiffs filed a first amended complaint on February 11, 2022.

Velodyne filed a motion to dismiss on March 4, 2022.

On July 1, 2022, the court denied the motion to dismiss as it relates to the claims related to David Hall’s role with Velodyne, but granted the motion to dismiss as to all other claims.

After multiple motions to dismiss, on July 1, 2022, the court denied the motion to dismiss as it relates to the claims related to David Hall’s role with Velodyne, but granted the motion to dismiss as to all other claims.

On July 14, 2023, the Court granted Diane Smith’s motion for class certification.

The Court encouraged the parties to conduct mediation and the parties conducted mediation.

On March 13, 2024, the parties to the securities class action lawsuit entitled Moradpour v.

Velodyne Lidar, Inc., et al.

3:21-cv01486-SI (N.D.

Cal.) filed a stipulation of settlement to settle this lawsuit, without any admission or concession of wrongdoing or liability by Velodyne or the individual defendants.

The settlement is subject to, among other things, final documentation and court approval.

The proposed settlement provides for a payment of $ 27.5 million, of which the Company expects approximately $ 23.4 million to be funded by insurance proceeds.

The Company accrued for and recorded the entire amount of this $ 27.5 million settlement liability and recorded the expense within general and administrative expenses in 2023 after concluding that such settlement amount is probable and reasonably estimable.

On March 13, 2024, the parties to the consolidated securities class action lawsuit filed a stipulation of settlement to settle this lawsuit, without any admission or concession of wrongdoing or liability by Velodyne or the individual defendants.

On April 19, 2024, the court preliminarily approved the settlement that provides for a payment of $ 27.5 million , of which $ 23.4 million was funded by insurance proceeds.

The Company had accrued for and recorded the entire amount of this $ 27.5 million settlement liability and had recorded the expense within general and administrative expenses in 2023 after concluding that such settlement amount is probable and reasonably estimable.

As of December 31, 2023, the Company recorded an insurance receivable of $ 23.4 million in prepaid expenses and other current assets to be funded by insurance proceeds based on the terms of the settlement.

The $ 23.4 million insurance proceeds allows the Company to recover the majority of the settlement expense, resulting in a net charge of $ 4.1 million in its consolidated statement of operations.

The Company will continue to assess the probable amount of insurance proceeds expected to be received in future reporting periods based on any additional facts that arise and make adjustments, if necessary.

On March 12, 2021, a putative shareholder derivative lawsuit entitled D’Arcy v.

Gopalan, et al.

1:21-cv-00369-MN, was filed in the United States District Court for the District of Delaware against current and former directors and/or officers Anand Gopalan, Andrew Hamer, David S.

Hall, Marta Thoma Hall, Joseph B.

Culkin, Michael E.

Dee, James A.

Graf, Barbara Samardzich, and Christopher A.

Thomas, and names Velodyne as a nominal defendant.

The complaint asserted claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets against all of the individual defendants, and asserted a contribution claim under the federal securities laws against Mr.

Gopalan and Mr.

On March 16, 2021, a second shareholder derivative lawsuit entitled Kondner, et al.

Culkin, et al.

1:21cv-00391-MN, was filed in the United States District Court for the District of Delaware against most of the same defendants named in the earlier derivative complaint, and asserted claims against the individual defendants for alleged breaches of fiduciary duty and waste of corporate assets.

Both derivative actions are based on allegations similar to those in the class actions discussed above, and have now been consolidated.

On January 3, 2022, the plaintiffs filed an amended complaint.

On November 7, 2023, the court approved the parties’ stipulation to dismiss the derivative action and directed that the case be closed.

The $ 23.4 million insurance receivable allows the Company to recover the majority of the settlement expense, resulting in a net charge of $ 4.1 million in its consolidated statement of operations.

The settlement charge of $ 4.1 million was paid in June 2024.

As a result of the court approving the settlement, issuing final judgment, and dismissing the lawsuit on August 19, 2024, the Company unrecognized the related liability and receivable in the amount of $ 23.4 million.

On January 18, 2022, David and Marta Hall filed a lawsuit in the Superior Court of California, County of Alameda, against current and former officers and directors of Velodyne, as well as Jeff Vetter, Velodyne’s outside counsel.

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The court conducted a hearing on the motions on July 20, 2022.

On August 30, 2022, the court granted the motion to quash service with respect the out of state defendants.

On August 30, 2022, the court granted the motion to quash service with respect to the out of state defendants.

On October 3, 2022, the court granted the motion to compel Mr.

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Hall’s claims.

On October 20, 2022, the Halls voluntarily dismissed the action without prejudice.

On January 3, 2023, the Halls filed an arbitration demand with substantially the same allegations as the prior lawsuit.

On or about August 22, 2023, the Halls filed an application in Texas District Court, Dallas County to compel arbitration of Messrs.

On October 20, 2022, Mr.

Hall voluntarily dismissed the action without prejudice.

On January 3, 2023, Mr.

Hall filed an arbitration demand with substantially the same allegations as the prior lawsuit.

On or about August 22, 2023, and Ms.

Hall filed an application in Texas District Court, Dallas County to compel arbitration of Messrs.

Graf and Dee who had been dismissed from the prior court action for lack of personal jurisdiction.

Graf and Dee agreed to participate in the arbitration and thus the Texas action has been stayed.

The arbitrator has not yet set a schedule in the arbitration.

The Company does not believe the claims are meritorious and intends to defend the action vigorously.

On January 17, 2025, three of the individual respondents were dismissed with prejudice, and Mr.

Hall dismissed certain claims against the three remaining respondents Messrs.

Goplan, Graf and Dee.

The arbitration hearing previously set for February 3, 2025 was vacated.

The parties agreed to a confidential settlement, without any admission or concession of wrongdoing or liability by Velodyne or the individual respondents, and subject to final documentation.

As of December 31, 2024, the Company had accrued the expected settlement expenses associated with this action.

An insurance receivable allows the Company to recover the majority of the expected settlement expenses, resulting in a net charge that is immaterial to its consolidated statement of operations.

On August 10, 2023, Plaintiffs David and Marta Hall filed a complaint against Velodyne in the Superior Court of California, County of San Francisco asserting claims for breach of contract and failure to reimburse expenses in violation of California Labor Code Section 2802 (the “2023 Hall Matter”).

The 2023 Hall Matter seeks indemnification for legal fees incurred on the Halls’ behalf in connection with a derivative action against certain Velodyne officers and directors, and naming Velodyne as a nominal defendant , captioned In Re Velodyne Lidar, Inc.

The 2023 Hall Matter seeks indemnification for legal fees incurred on the Halls’ behalf in connection with a prior derivative action against certain Velodyne officers and directors, and naming Velodyne as a nominal defendant , captioned In Re Velodyne Lidar, Inc.

Derivative Action, Case No.

1:21-cv-00369-TMH (D.

Del.) (dismissed on November 7, 2023).

On November 21, 2023, Velodyne denied all allegations.

The 2023 Hall Matter is set for trial on September 9, 2024.

The Company does not believe the claims are meritorious and intends to defend the action vigorously.

On December 8, 2021, Velodyne received a subpoena for documents related to Wei Weng’s trading in stock of Graf Acquisition Corp.

(Velodyne’s predecessor) stock during 2020, prior to the announcement that Velodyne was planning to merge into Graf Acquisition Corp.

Velodyne has complied with the SEC’s requests to date;

however, the SEC may request additional documents or information.

No such follow up requests have been received to date.

On December 1, 2022 and December 20, 2022, purported stockholders of Velodyne filed the following lawsuits against Velodyne and certain of its directors in the Southern District of New York for violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and U.S.

Securities and Exchange Commission ("SEC") Rule 14a-9:

Velodyne Lidar, Inc., et al., Civil Action No.

22-cv-10211, Carlisle v.

Velodyne Lidar, Inc., et al., Civil Action No.

On December 29, 2022, a complaint alleging generally the same claims was filed in the United States District Court for the District of Delaware, captioned Wheeler v.

Velodyne Lidar, Inc., et al., Civil Action No.

22-cv-01641-UNA.

All of the lawsuits were voluntarily dismissed by the respective Plaintiffs.

The parties settled for immaterial mootness fees in September 2023.

On August 25, 2023, a putative shareholder class action suit was filed in the Delaware Court of Chancery against six former officers and directors of Graf Industrial Corp.

(“GIC”), the predecessor entity of Velodyne, as well as two other entities, entitled Berger v.

The 2023 Hall Matter is set for trial on April 8, 2025.

While the Company does not believe the claims are meritorious;

a settlement for an immaterial amount was agreed upon in principle by the parties.

On August 25, 2023, a putative shareholder class action suit was filed in the Delaware Court of Chancery against six former officers and directors of Graf Acquisition LLC, the predecessor entity of Velodyne, as well as two other entities (one of which has since been dismissed without prejudice), entitled Berger v.

Graf Acquisition, LLC, et al ., No.

2023 0873 LWW.

The Company, GIC and Velodyne are not named as defendants.

The Company, Graf Acquisition LLC and Velodyne are not named as defendants.

The plaintiff, who was allegedly a GIC shareholder, asserts claims for breach of fiduciary duty and unjust enrichment in connection with the merger of GIC and Velodyne on September 29, 2020, and seeks damages, disgorgement and other recovery on behalf of the putative class of GIC shareholders in an unspecified amount.

The Company is obligated to indemnify such former officers and directors under certain circumstances.

The Company does not believe the claims are meritorious.

The court has set trial for July 14, 2025.

The Company does not believe the claims are meritorious and intends to defend the action vigorously.

Ouster Litigation

On June 10, 2021, the Company received a letter from the SEC notifying us of an investigation and document subpoena.

The subpoena seeks documents regarding projected financial information in CLA’s Form S-4 registration statement filed on December 22, 2020.

On August 15, 2023, the SEC informed the Company that they have concluded the investigation and that they do not intend to recommend any enforcement action.

On April 11, 2023, the Company filed a complaint with the United States International Trade Commission (the “Commission”) pursuant to 19 U.S.C.

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On May 11, 2023, the Commission decided to institute an investigation based on the Company’s complaint as In the Matter of Certain LiDAR (Light Detection and Ranging) Systems and Components Thereof, 337-TA-1363.

On May 25, 2023, the Administrative Law Judge issued a

procedural schedule whereby the evidentiary hearing is set to begin on January 4, 2024, with a target date for completion of the Investigation by the Commission on October 17, 2024.

On May 25, 2023, the Administrative Law Judge issued a procedural schedule whereby the evidentiary hearing was to begin on January 4, 2024, with a target date for completion of the Investigation by the Commission on October 17, 2024.

On June 7, 2023, Hesai responded to the complaint and denied all allegations.

On June 22, 2023, Hesai filed a motion to terminate or alternatively stay the investigation in light of an alleged agreement to arbitrate based on the Settlement Agreement signed in 2020 between Hesai and Velodyne (the "Settlement Agreement”).

Hesai alleges that the Company is bound to the 2020 Settlement Agreement as a result of the Company’s merger with Velodyne in 2023.

The Company has opposed the motion, including any allegation that the Company has any obligation to arbitrate or that its patents are subject to any terms of the 2020 Settlement Agreement, which the Company never signed.

On August 24, 2023, the administrative law judge (“ALJ”) issued an initial determination granting the motion to terminate, holding that a valid arbitration agreement exists as part of the Settlement Agreement, and thus the Company has obligation to arbitrate.

Hesai alleged that the Company is bound to the 2020 Settlement Agreement as a result of the Company’s merger with Velodyne in 2023.

The Company opposed the motion, including any allegation that the Company has any obligation to arbitrate or that its patents are subject to any terms of the 2020 Settlement Agreement, which the Company never signed.

On August 31, 2023, the Company filed a petition for review of the initial determination with the Commission.

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As a result, the investigation was terminated.

The Company has until December 11, 2023 to file a notice of appeal with the Federal Circuit.

On April 11, 2023, the Company also filed a complaint in the District of Delaware alleging patent infringement of the same patents as in the aforestated Section 337 proceeding against Hesai Group and Hesai Technology Co., Ltd.

On April 11, 2023, the Company also filed a complaint in the District of Delaware alleging patent infringement of the same patents as in the aforementioned Section 337 proceeding against Hesai Group and Hesai Technology Co., Ltd.

The complaint seeks monetary damages as well as the issuance of a permanent injunction.

On May 30, 2023, the Court granted stay the case pending the resolution, including all appeals, of In the Matter of Certain LiDAR (Light Detection and Ranging) Systems and Components Thereof, 337-TA-1363.

On May 30, 2023, the Court granted to stay the case pending the resolution, including all appeals, of In the Matter of Certain LiDAR (Light Detection and Ranging) Systems and Components Thereof, 337-TA-1363.

On February 10, 2025, the parties filed a joint request to maintain the stay.

On May 17, 2023, Hesai Photonics Technology Co.

and Hesai Group (collectively “Hesai Photonics”) filed a request for arbitration with JAMS against the Company, Velodyne, Velodyne, LLC, and Oban Merger Sub II LLC.

Hesai Photonics alleges that the Company is bound by the terms and conditions, including an obligation to arbitrate disputes, of a Settlement Agreement signed in 2020 between Hesai Photonics and Velodyne as a result of the Company’s 2023 merger with Velodyne.

and Hesai Group (collectively “Hesai Photonics”) filed a request for arbitration with JAMS against the Company, Velodyne Lidar, Inc., Velodyne, LLC, and Oban Merger Sub II LLC.

as a result of the Company’s 2023 merger with Velodyne Lidar, Inc.

On June 13, 2023, the Company responded to the arbitration demand.

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The Company also disputed that there was an obligation to arbitrate, and thus, alleged that JAMS lacked jurisdiction.

No further dates have been set.

The arbitration hearing was held on November 18-19, 2024, and the Company awaits a decision.

On September 14, September 25, and September 26, 2023, Hesai filed Petitions for Inter Partes Review with the Patent Trial and Appeal Board (“PTAB”) challenging the validity of the Company’s patents asserted in the ITC and Delaware patent actions.

The Company has an opportunity to respond in late December 2023 and early January 2024.

On March 19, 2024, the PTAB issued decisions to institute inter partes review for two of the five patents.

The PTAB is expected to issue decisions on whether to institute inter parties review for the remaining three patents by April 3, 2024.

Other than as set forth above, as of December 31, 2023 the Company is unable to estimate a possible loss or range of losses in respect to those disclosed matters.

The Company provided preliminary responses to those petitions in late December 2023 and early January 2024.

On March 19, 2024, March 28, 2024, and April 1, 2024 the PTAB issued decisions to institute inter partes review for four patents:

IPR2023-01421 (Patent No.

11,175,405), hearing date of December 17, 2024;

IPR2023-01422 (Patent No.

11,287,515), hearing date of December 17, 2024;

IPR2023-01456 (Patent No.

11,178,381), hearing date of January 13, 2025;

and IPR2023-01457 (Patent No.

11,190,750), hearing date of January 13, 2025.

On March 13, 2025, the PTAB issued final written decisions upholding the patentability of all challenged claims in IPR2023-01422, and finding unpatentable all challenged claims in IPR2023-01421 and IPR2023-01457.

On March 17, 2025, the PTAB issued a final written decision finding unpatentable all challenged clams of IPR2023-01456.

Regarding the fifth patent (Patent No.

11,422,236), the PTAB declined to institute on March 28, 2024 (see IPR2023-01458).

Hesai requested review to the Director of the United States Patent and Trademark Office (“Director Review”), who remanded to the PTAB for further review of its decision not to institute.

On January 21, 2025, the PTAB again denied institution, to which Hesai again requested Director Review, and the Company objected.

The parties are awaiting decision on whether Director Review will occur.

Indemnification

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however, typically, these indemnification obligations survive the term of the contract and the maximum potential amount of future payments the Company could be required to make pursuant to these provisions are uncapped.

To date, the Company has never incurred costs to defend lawsuits or settle claims related to these indemnification provisions.

The Company has also entered into indemnity agreements pursuant to which it has indemnified its directors and officers, to the extent legally permissible, against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or executive officer, other than liabilities arising from willful misconduct of the individual.

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Stock-based Compensation

As of December 31, 2023, the Company has five equity incentive plans:

As of December 31, 2024, the Company maintains five equity incentive plans:

its Amended and Restated 2015 Stock Plan (the “2015 Plan”), the Sense Photonics, Inc.

2017 Equity Incentive Plan (the “Sense Plan”), the Velodyne Lidar, Inc.

2020 Equity Incentive Plan (the “Velodyne Plan”), its 2021 Incentive Award Plan (the “2021 Plan”) and its 2022 Employee Stock Purchase Plan (the “2022 ESPP” and, collectively with the 2015 Plan, the Sense Plan, the Velodyne Plan and the 2021 Plan, the “Plans”).

2020 Equity Incentive Plan (the “Velodyne Plan”), its 2021 Incentive Award Plan (the “2021 Plan”) and its Amended and Restated 2022 Employee Stock Purchase Plan (the “2022 ESPP” and, collectively with the 2015 Plan, the Sense Plan, the Velodyne Plan and the 2021 Plan, the “Plans”).

The Plans, other than the 2022 ESPP, provide for the grant of stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance stock unit awards and other forms of equity compensation (collectively, “equity awards”).

In addition, the 2021 Plan provides for the grant of performance bonus awards.

New equity awards may only be granted under the Velodyne Plan and the 2021 Plan.

Awards under the Velodyne Plan may be granted to employees, including officers, and other service providers who were not previously employed by or who did not previously provide services to the Company or a subsidiary of the Company, in each case, prior to February 10, 2023, within the limits provided in the Velodyne Plan.

Awards under the 2021 Plan can also be granted to employees, including officers, directors and consultants of the Company and its subsidiaries, in each case, within the limits provided in the 2021 Plan.

New equity awards may only be granted under the 2021 Plan and Velodyne Plan.

Awards under the 2021 Plan and Velodyne Plan can be granted to employees, including officers, directors and consultants of the Company and its subsidiaries, in each case, within the limits provided in the 2021 Plan and Velodyne Plan, respectively.

Options under the Plans will be exercisable at such times and as specified in the Award Agreement (as defined in the Plans) provided that the term of an option or stock appreciation will not exceed ten years .

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All participants holding shares of restricted stock will be entitled to all the rights of a stockholder with respect to such shares and have voting power and other rights with respect to such shares, provided, however, that such shares are held in escrow and subject to forfeiture until the shares vested.

The exercise price of stock options granted before the Colonnade Merger were determined based on the fair value of stock at the date of grant obtained by the Company on a contemporaneous basis from an independent valuation firm.

The valuation firm used a PWERM to estimate the aggregate enterprise value of the Company at each valuation date.

The PWERM involves applying appropriate risk adjusted discount rates to future values for the enterprise assuming various possible scenarios.

The projections used in connection with these valuations were based on the Company’s expected operating performance over the forecast period.

Share value is based on the probability-weighted present value of expected future returns to the equity investor considering each of the likely future scenarios available to the enterprise, and the rights and preferences of each share class.

Certain employees have the right to early exercise unvested stock options, subject to rights held by the Company to repurchase unvested shares in the event of voluntary or involuntary termination.

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The offering periods are scheduled to start on the first trading day on or after May 16 and November 16 of each year.

Under the 2022 ESPP, the purchase price of a share under the ESPP equals 85 % of the lesser of the fair market value of a share of common stock on either the first or last day of the applicable offering period of the last day of the applicable purchase period.

Under the 2022 ESPP, the purchase price of a share equals 85 % of the lesser of the fair market value of a share of common stock on either the first or last day of the applicable offering period of the last day of the applicable purchase period.

In May of 2023, the Company increased the share purchase limit under the 2022 ESPP to 3,000 shares of the Company’s common stock per offering period and added Velodyne Lidar, Inc.

as a participating employer in the 2022 ESPP.

The stock-based compensation expense is calculated as of the beginning of the offering period as the fair value of the 2022 ESPP shares utilizing the Black-Scholes option valuation model and is recognized over the offering period.

The first offering period under the 2022 ESPP commenced on September 6, 2022.

The stock-based compensation expense for the 2022 ESPP is based on the estimated grant date fair value utilizing the Black-Scholes option valuation model of the 2022 ESPP shares and the number of shares that can be purchased as of the grant date, which is recognized as expense on a straight-line expense attribution method over the length of an offering period.

During fiscal 2024 employees purchased 384,341 shares of common stock under the 2022 ESPP at a weighted-average purchase price of $ 4.43 , with proceeds of $ 1.7 million.

During fiscal 2023 employees purchased 257,506 shares of common stock under the 2022 ESPP at a weighted-average purchase price of $ 4.56 , with proceeds of $ 1.2 million.

Equity Plans Assumed from Acquisition

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restricted stock were converted into shares of Company restricted stock.

Each Assumed RSU and award of restricted stock is subject to substantially the same terms and conditions as applied to the related Velodyne restricted stock unit award or restricted stock award immediately prior to the consummation of the Velodyne Merger, except that the number of shares of common stock subject to each Assumed RSU or constituting restricted stock

was adjusted in accordance with the terms of the Velodyne Merger Agreement.

In connection with the consummation of the Velodyne Merger, 961,012 Assumed RSUs and 728,646 shares of restricted stock were assumed.

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No options were granted during the years ended December 31, 2024 and December 31, 2023.

As of December 31, 2023, there was approximately $ 4.5 million of unamortized stock-based compensation expense related to unvested stock options that is expected to be recognized over a weighted average period of 0.7 years.

Cash received from option exercises and purchases of shares was $ 1.4 million and $ 0.8 million for years ended December 31, 2023 and 2022, respectively.

As of December 31, 2024, the remaining unamortized stock-based compensation expense related to unvested stock options that is expected to be recognized was immaterial.

Restricted Stock Units (“RSU”)

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Unvested early exercised common stock options — 16,087

ESPP shares pending issuance 2,068,574 251,143

Share purchase rights under the ESPP 569,048 2,068,574

Unvested RSAs 456,698 376,919

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Total current expense 348 494

Total deferred (benefit) expense 29 —

Total income tax expense (benefit) $ 523 $ 305

Federal 135 —

Foreign 54 29

Total deferred expense

Total income tax expense

A reconciliation between the statutory U.S.

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Foreign rate differential 10 99

Tax credits — ( 539 )

Fair value changes - warrants ( 22 ) 10

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Non-deductible expenses 39 ( 412 )

Total tax provision (benefit) $ 523 $ 305

Other 367 206

Total tax provision

Significant components of the Company’s deferred tax assets and liabilities for federal, state and foreign income taxes are as follows (in thousands):

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Federal and state deferred tax assets can be realized as of December 31, 2024.

The valuation allowance on the Company’s net deferred taxes increased by $ 235.4 million and $ 22.2 million during the years ended December 31, 2023 and 2022, respectively.

The increase in valuation allowance is primarily attributable to the generation of net operating losses and capitalization of research and development expenditures.

The valuation allowance on the Company’s net deferred taxes decreased by $ 45.3 million during the year ended December 31, 2024 as compared to an increase of $ 235.4 million during the year ended December 31, 2023.

The decrease in valuation allowance is primarily attributable to the generation of net operating losses and capitalization of research and development expenditures.

As of December 31, 2024, the Company had federal net operating loss carryforwards and state net operating loss carryforwards of approximately $ 913.2 million and $ 415.8 million, respectively.

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For prior years’ tax positions — ( 1,958 )

For current year’s tax positions — 320

For prior years’ tax positions — 7,901

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All of the net operating losses and research and development credit carry-forwards that may be used in future years are still subject to inquiry given that the statute of limitation for these items would begin in the year of the utilization.

Revenue from the sale of lidar sensor kits, which is recognized at a point in time, was $ 83.3 million and $ 41.0 million for the years ended December 31, 2023 and 2022, respectively.

Revenue from the sale of licenses and services are not material for any period presented and, therefore, not presented separately.

The majority of the Company’s revenue is recognized at the point in time when the customer obtains control of the respective lidar sensor kits.

Revenue recognized over time is immaterial to total revenue recognized for any given period.

The following table presents total revenues by geographic area based on the location products were shipped to and services provided (in thousands):

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Americas $ 58,429 $ 45,744

Asia-Pacific 12,929 9,510

Asia and Pacific 20,158 12,929

Europe, Middle East and Africa 32,513 24,606

Total $ 111,101 $ 83,279

There were no customers that accounted for more than 10% of revenue during the years ended December 31, 2023 and 2022 .

Country that accounted for more than 10% of revenue was as follows:

Customers that accounted for more than 10% of revenue during the years ended December 31, 2024 and 2023 were as follows:

Year Ended December 31,

Customer E 12 % — %

Countries that accounted for more than 10% of revenue was as follows:

Year Ended December 31,

United States 49 % 53 %

Sweden 10 % — %

Revenue contract balances

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Unbilled receivables

A receivable for multi-year licensing contracts is generally recorded upon invoicing.

A receivable for multi-year licensing services is generally recorded upon invoicing.

A receivable for multi-year license contracts is recorded upon delivery, whether or not invoiced, to the extent the Company has an unconditional right to receive payment in the future related to those licenses.

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Contract Liabilities

Contract liabilities consist of deferred revenue, customer advanced payments and customer deposits.

Contract liabilities consist of deferred revenue, advanced payments and deposits from customers for goods and services that are yet to be provided.

Deferred revenue includes billings in excess of revenue recognized related to product sales, licenses, extended warranty and other services revenue, and is recognized as revenue when the Company performs under the contract.

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Other contract liabilities 23,429 8,162

Contract liabilities, long-term portion

Contract liabilities, non-current portion

Deferred revenues from multi-year licensing contracts $ 627 $ 3,997

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Royalties from the IP licenses are recognized at the later of the period the sales occur or the satisfaction of the performance obligation to which some or all of the royalties have been allocated.

The Company evaluated its performance obligations under multi-year licensing contracts and did not recognize any revenue under such licensing contracts in 2023 because the Company concluded there is significant uncertainty associated with resolving the Company’s performance.

Other contract liabilities mainly relates to one $ 6.6 million multiyear contract entered in 2023 with a customer to sell its products.

During the twelve months ended December 31, 2023, the Company partially satisfied the related performance obligation and recognized $ 0.7 million revenue that was included in the contract liabilities balance.

As of December 31, 2023, $ 5.9 million remained deferred until a future product delivery date.

The Company evaluated its performance obligations under multi-year licensing contracts and did not recognize any revenue under such licensing contracts in fiscal years 2024 and 2023 because the Company concluded there is significant uncertainty associated with resolving the Company’s performance.

Other contract liabilities primarily relate to a multi-year contract entered in 2023 with a customer to sell its products.

During the year ended December 31, 2024, the Company signed a new contract, which was subsequently modified, with this customer that added new service performance obligations and modified certain payment, pricing and delivery terms.

As a result, the Company received an additional $ 16.2 million in payments from this customer, which was recorded in other contract liabilities.

Modifications were accounted for in accordance with the contract modification framework.

As of December 31, 2024, $ 21.5 million remained deferred under the contract until a future product and service delivery date.

The following table provides information about contract liabilities (remaining performance obligations) and the significant changes in the balances during the years ended December 31, 2024 and 2023 (in thousands).

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Revenue recognized that was included in the contract liability balance at the beginning of the period ( 402 )

Ending balance as of December 31, 2022 744

Contract liabilities acquired in the Velodyne Merger 8,384

Ending balance as of December 31, 2023 $ 17,852

Net revenue deferred in the period 21,031

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Ending balance as of December 31, 2024 $ 36,889

Restructuring

In connection with the closing of the Velodyne Merger, in the year ended December 31, 2023, the Company initiated and completed actions to reduce operating expenses, which included a reduction in force and the closure of its India facility (see Note 8.

Leases) (collectively, the “Restructuring Initiatives”).

Non-cash stock-based compensation charge related to the vesting of share-based awards for employees who were terminated related to a "double-trigger provision" that provided for acceleration in the event of a change in control and subsequent termination of the employee from the Company.

The following table presents Restructuring Initiatives charges incurred (in thousands):

Employee termination and associated benefits $ 15,172

Stock-based compensation expense 7,139

Long-lived asset write-down 804

Total $ 23,115

For the year ended December 31, 2023, the Restructuring Initiatives were recorded as follows (in thousands):

Employee termination and associated benefits Stock-based compensation expense Long-lived asset write-down Total

Cost of product revenue $ 1,293 $ 70 $ — $ 1,363

The Company’s CODM is the Chief Executive Officer.

The Chief Executive Officer reviews financial information including revenue, expenses and net income presented on a consolidated basis, accompanied by certain supplemental information about significant expense categories for purposes of allocating resources and evaluating the Company’s financial performance.

The Company operates as one reportable and operating segment, which relates to the sale and production of lidar sensor kits and there are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level.

The CODM assesses financial performance of the reportable segment and decides how to allocate resources based on net income that also is reported as net income attributable to the Company on the consolidated statements of income.

Net income is also used by our chief operating decision maker to monitor actual results versus budget and prior periods amounts of our reportable segment and decide how to expand business or to return value to shareholders.

The measure of the segment assets is reported on the balance sheet as total assets.

The following table reflects certain financial data for our reportable segment (in thousands):

Year Ended December 31,

Total revenue $ 111,101 $ 83,279

Product manufacturing costs 57,951 51,830

Stock based compensation and amortization expense 6,377 4,498

Other costs (2)

Research and development 58,084 91,210

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General and administrative 58,701 81,982

Total $ 15,172 $ 7,139 $ 804 $ 23,115

The following table presents a roll forward of the Restructuring Initiatives liability, which is recorded in accrued expenses in the consolidated balance sheets for the twelve months ended December 31, 2023 (in thousands):

Employee termination and associated benefits

Beginning balance

Additions as a result from Velodyne Merger

Restructuring Initiative expenses related to one-time employee termination and associated benefits 15,172

Amount paid during the period ( 15,331 )

Balance at December 31, 2023

Subsequent Events

On March 13, 2024, the parties to the previously disclosed securities class action lawsuit entitled Moradpour v.

Velodyne Lidar, Inc., et al., No.

3:21-cv01486-SI (N.D.

Cal.) filed a stipulation of settlement to settle this lawsuit, without any admission or concession of wrongdoing or liability by Velodyne or the individual defendants.

The settlement is subject to, among other things, final documentation and court approval.

Defendants entered into the proposed settlement to eliminate the uncertainty, burden, distraction, and expense of further protracted litigation.

Defendants continue to deny all claims and allegations in the litigation, including but not limited to any claims of wrongdoing or impropriety, and the proposed settlement does not constitute, contain or reflect any admission of wrongdoing or liability by Velodyne, the individual defendants, or Ouster.

The proposed settlement provides for a payment of $ 27.5 million, of which the Company expects approximately $ 23.4 million to be funded by insurance proceeds.

Commitments and Contingencies for additional information regarding the settlement.

Goodwill impairment charges — 166,675

Total other (income) expense, net ( 7,669 ) 395

Provision for income tax expense 537 523

Net loss $ ( 97,045 ) $ ( 374,110 )

(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.

(2) Other costs primarily includes inventory excess and obsolescence, scrap, warranty, freight and other cost of revenue items.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosures

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data