What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-02 compared with 2025-03-21 · 279 added, 378 removed, 927 unchanged (41% of the section changed)

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm ( PCAOB ID 238 )

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Operating lease liability, non-current portion 12,938 13,054

Debt — 43,975

Contract liabilities, non-current portion 3,106 2,538

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Year Ended December 31,

Revenue $ 111,101 $ 83,279

Product revenue $ 146,578 $ 111,101

Royalties 22,806 —

Total revenue 169,384 111,101

Cost of revenue 85,948 70,641

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General and administrative 64,641 58,701

Goodwill impairment charges — 166,675

Total operating expenses 157,435 144,637

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Loss before income taxes ( 63,312 ) ( 96,508 )

Provision for income tax expense

Provision for (benefit from) income tax ( 2,935 ) 537

Net loss $ ( 60,377 ) $ ( 97,045 )

Other comprehensive loss

Other comprehensive income (loss)

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

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Balance — January 1, 2024 43,257,862 $ 42 $ 995,464 $ ( 816,026 ) $ 192 $ 179,672

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 — — — — —

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

Issuance of common stock upon exercise of stock options 43,904 — 83 — — 83

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

Forfeited restricted stock awards ( 68,072 ) — — — — —

Proceeds from at-the-market offering, net of commissions and fees of $ 1,951 and issuance costs of $ 421

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Issuance of common stock in connection with Velodyne Merger 205,642 — — — — —

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

Issuance of common stock upon vesting of restricted stock units 3,139,352 — — — — —

Issuance of common stock to employees under employee stock purchase plan 394,755 — 1,955 — — 1,955

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Net loss — — — ( 60,377 ) — ( 60,377 )

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

Other comprehensive income — — — — 561 561

Balance — December 31, 2025 60,947,757 $ 48 $ 1,235,580 $ ( 973,448 ) $ ( 442 ) $ 261,738

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

Goodwill impairment charges — 166,675

Depreciation and amortization 7,781 9,836

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

Gain on lease termination — ( 807 )

Loss on write-off and disposal of property and equipment 113 401

Stock-based compensation 40,824 40,459

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Amortization of right-of-use asset 5,108 4,904

Interest expense and loss on debt extinguishment — 4,001

Amortization of debt issuance costs and debt discount — 190

Non-cash interest income ( 214 ) ( 619 )

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Change in fair value of warrant liabilities ( 126 ) ( 103 )

Inventory write down 2,080 10,047

(Recovery) provision for inventory write-down ( 373 ) 2,080

Provision (recovery of) for doubtful accounts ( 8 ) ( 587 )

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Purchase of short-term investments ( 149,613 ) ( 144,573 )

Proceeds from sales of short-term investments 162,313 158,014

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

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

Proceeds from sales and maturities of short-term investments 138,255 162,313

Net cash provided by (used in) investing activities ( 36,251 ) 14,652

CASH FLOWS FROM FINANCING ACTIVITIES

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Proceeds from ESPP purchase 1,955 1,703

Proceeds from borrowings, net of debt discount and issuance costs — 43,975

Payments received (remitted) to fund employees tax obligation for vested RSUs 410 —

Repayments of borrowings — ( 43,975 )

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Property and equipment purchases included in accounts payable and accrued liabilities $ 1,166 $ 480

Common stock shares issued in the Velodyne Merger $ — $ 297,425

Common stock warrants issued in the Velodyne Merger $ — $ 9,177

Right-of-use assets obtained in exchange for operating lease liabilities $ 6,862 $ —

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Description of Business and Basis of Presentation

Description of Business and Basis of Presentation

Description of Business

was incorporated in the Cayman Islands on June 4, 2020 as “Colonnade Acquisition Corp.” (“CLA”).

Following the closing of the business combination in March 2021, the Company domesticated as a Delaware corporation and changed its name to “Ouster, Inc.” The Company’s prior operating subsidiary, Ouster Technologies, Inc.

(“OTI” and prior to the Merger (as defined below)), was incorporated in the state of Delaware on June 30, 2015.

(the “Company”) was incorporated in the Cayman Islands on June 4, 2020 as “Colonnade Acquisition Corp.”.

Following the closing of a business combination between the Company and Ouster Technologies, Inc.

(formerly, Ouster, Inc.) in March 2021 (the “Colonnade Merger”), the Company domesticated as a Delaware corporation and changed its name to “Ouster, Inc.” References to “CLA” refer to the Company prior to the business combination.

Ouster Technologies, Inc., the Company’s predecessor was founded on June 30, 2015.

The Company is a leading provider of high-resolution digital lidar sensors that offer advanced 3D vision to machinery, vehicles, robots, and fixed infrastructure assets, allowing each to understand and visualize the surrounding world and ultimately enabling safe operation and ubiquitous autonomy.

Unless the context otherwise requires, references in this subsection to “the Company” refer to the business and operations of OTI (formerly known as Ouster, Inc.) and its consolidated subsidiaries prior to the Merger (as defined below) and to Ouster, Inc.

(formerly known as CLA) and its consolidated subsidiaries following the consummation of the Merger.

CLA, the Company’s legal predecessor, was originally a blank check company incorporated as a Cayman Islands exempted company on June 4, 2020.

CLA was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.

On March 11, 2021, CLA consummated a merger (the “Merger”) with OTI pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) dated as of December 21, 2020.

As a result of the Merger, among a number of other things, (1) each of the then issued and outstanding 10,000,000 redeemable warrants of CLA (the “CLA warrants”) converted automatically into a redeemable warrant to purchase one share of Ouster common stock (the “Public warrants”) pursuant to the Warrant Agreement, dated August 20, 2020 (the “Warrant Agreement”), between CLA and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent and (2) each of the then issued and outstanding 6,000,000 private placement warrants of CLA (the “Private Placement warrants”) converted automatically into a Public warrant pursuant to the Warrant Agreement.

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

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

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All intercompany balances and transactions have been eliminated in consolidation.

The presentation of certain prior period amounts has been reclassified to conform with current year presentation.

On April 6, 2023, the Board of Directors approved a one-for-10 reverse stock split and a corresponding reduction in authorized shares of common stock (the “Reverse Stock Split”).

On April 20, 2023, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Certificate of Incorporation to effect the one-for-10 Reverse Stock Split of the Company’s common stock and a corresponding reduction in authorized shares of common stock.

The par value of the Company’s common stock was not adjusted as a result of the Reverse Stock Split.

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 sales of the Company’s products, sales of common stock under its at-the-market equity offering program and debt financing.

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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.

On November 4, 2022, the Company entered into an Agreement and Plan of Merger (the “Velodyne Merger Agreement”) with Velodyne Lidar, Inc., a Delaware corporation (“Velodyne”), Oban Merger Sub, Inc., a Delaware corporation and one of the Company’s direct, wholly owned subsidiaries (“Velodyne Merger Sub I”) and Oban Merger Sub II LLC, a Delaware limited liability company and one of the Company’s direct, wholly owned subsidiaries (“Velodyne Merger Sub II”).

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).

At the Market Issuance Sales Agreement

On April 29, 2022, the Company entered into an At-Market-Issuance Sales Agreement (the “ATM Agreement”) with B.

On April 29, 2022, the Company entered into an open market sale agreement with B.

Riley Securities, Inc., Cantor Fitzgerald & Co.

and Oppenheimer & Co.

Inc., pursuant to which the Company may offer and sell, from time to time, through or to the agents, acting as agent or principal, shares of the Company’s common stock having an aggregate offering price of up to $ 150.0 million under the Company’s Form S-3 registration statement.

During the years ended December 31, 2024 and 2023, the Company sold 6,045,428 and 2,878,875 shares, respectively.

(the “Former ATM Agreement”), pursuant to which we could offer and sell shares of our common stock with an aggregate offering price of up to $ 150.0 million under an “at-the-market” offering program.

During the years ended December 31, 2024 and 2023, the Company sold 6,045,428 and 2,878,875 shares, respectively under the Former ATM Agreement.

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 Company used the net proceeds from the Former ATM Agreement for working capital and general corporate purposes.

We terminated the Former ATM Agreement in April 2025 in anticipation of the scheduled expiration of our registration statement on Form S-3 (File No.

The Company filed a new registration statement on Form S-3 on May 2, 2025 (File No.

333-286936), which was subsequently declared effective by the SEC.

On May 12, 2025, the Company entered into an At the Market Issuance Sales Agreement (the “ATM Agreement”) with Oppenheimer & Co.

Inc., pursuant to which the Company may offer and sell, from time to time, through or to the agent, acting as agent or principal, having an aggregate offering price of up to $ 100.0 million.

During the year ended December 31, 2025, we sold 4,671,406 shares at a weighted-average sales price of $ 20.88 per share, resulting in cumulative gross proceeds to us totaling approximately $ 95.6 million before deducting offering costs, sales commissions and fees.

Cumulative net proceeds to us totaled approximately $ 97.5 million after deducting offering costs, sales commissions and fees.

The remaining availability under the ATM Agreement as of December 31, 2025 is approximately $ 2.5 million.

Note 2 – Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Use of Estimates

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A contract with a customer exists when the contract is approved, each party’s rights regarding the product or services to be transferred and the payment terms for the product or services can be identified, it is determined that the customer has the ability and intent to pay and the contract has commercial substance.

The Company applies judgement in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit and financial information pertaining to the customer.

The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit and financial information pertaining to the customer.

Accounts receivable are due under normal trade terms, typically three months or less.

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Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised product or service to a customer.

If revenue is derived from more than one of the subcaptions described below, each class which is not more than 10 percent of the sum of the items is combined with another class.

Product revenue

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Restricted Cash

Restricted cash consists of certificates of deposit held by banks as security for outstanding letters of credit.

Restricted cash consists of collateral to merchant credit card, deposit account to secure foreign entity closure costs, issuance of a 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 Company considers investments with an original maturity greater than three months and remaining maturities less than one year to be short-term investments.

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Property and Equipment

Property and equipment is comprised of all land, buildings and leasehold improvements and machinery and equipment used in our operations and corporate administration.

Property and equipment are stated at cost less accumulated depreciation.

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Upon disposition, the cost and related accumulated depreciation and amortization are removed from the accounts and resulting gain or loss is reflected in the consolidated statement of income.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets (see Note 5).

Assets, excluding land, are depreciated using the straight-line method over their estimated useful lives.

(see Note 4).

Impairment of Long-Lived Assets

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If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Goodwill represents the excess of the purchase price over the fair value of net tangible and identified intangible assets acquired in a business combination.

Goodwill is not amortized but is evaluated at least annually for impairment or when a change in facts and circumstances indicate that the fair value of the goodwill may be below the carrying value.

Goodwill is tested for impairment at the reporting unit level annually in the fourth quarter, or more frequently when events or changes in circumstances indicate that the asset might be impaired.

Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition.

The Company has determined that it operates in a single operating segment and has a single reporting unit.

Prior to performing the impairment test, the Company assesses qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of the reporting unit was less than the carrying amount.

If after assessing the totality of events or circumstances, the Company were to determine that it is more likely than not that the fair value of the reporting unit is less than the carrying amount, then the Company would perform a quantitative impairment test.

The quantitative impairment test involves comparing the fair value of the reporting unit to the carrying value.

If the fair value of the reporting unit exceeds the carrying value of the net assets, goodwill is not impaired, and no further testing is required.

If the fair value of the reporting unit is less than the carrying value, the Company measures the amount of impairment loss, if any, as the excess of the carrying value over the fair value of the reporting unit.

In connection with the Company’s goodwill impairment assessments during the year ended December 31, 2023, the Company impaired all of its goodwill.

Intangible Assets

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• Level 3 - Instruments whose significant value drivers are unobservable.

Warrant Liabilities

Warrant liabilities consist of Private Placement warrants.

The Private Placement warrants are not redeemable for cash so long as they are held by the initial purchasers or their permitted transferees but may be redeemable for common stock if certain other conditions are met.

If the Private Placement warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement warrants are redeemable by the Company and exercisable by such holders subject to certain conditions, such as the reported closing price of our common stock equaling or exceeding $ 180.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending three business days before the Company sends the notice of redemption to the holders of Private Placement warrants.

The Company evaluated the Private Placement warrants and concluded that they do not meet the criteria to be classified within stockholders’ equity.

The agreement governing the Private Placement warrants includes a provision, the application of which could result in a different settlement value for the Private Placement warrants depending on their holder.

Because the holder of an instrument is not an input into the pricing of a fixed-for-fixed option on the Company’s ordinary shares, the Private Placement warrants are not considered to be “indexed to the Company’s own stock.” This provision precludes the Company from classifying the Private Placement warrants in stockholders’ equity.

As the Private Placement warrants meet the definition of a derivative, the Company recorded these warrants as liabilities on the consolidated balance sheet at fair value, with subsequent changes in their respective fair values recognized in the consolidated statements of operations and comprehensive loss at each reporting date.

Concentrations of Credit Risk

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.

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

As of December 31, 2025 and 2024, the Company had cash, cash equivalents, short-term investments and restricted cash with financial institutions in the U.S.

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Customer B 14 % *

Customer D 13 % *

*Customer accounted for less than 10% of total accounts receivable and unbilled receivable.

Concentrations of supplier risk

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Supplier B 26 % 15 %

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.

Accounts payable from the Company’s suppliers and vendors representing 10% or more of total accounts payable were as follows:

*Supplier accounted for less than 10% of total accounts payable.

Amazon Warrant

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Stock-based Compensation

The Company measures and recognizes stock-based compensation expense for stock-based awards granted to employees, directors, and consultants over the requisite service periods based on the estimated grant date fair value, which for options is using the Black-Scholes-Merton option pricing model using the following variables:

• Common Stock Valuation – The fair value of the shares of common stock underlying the Company’s stock-based awards issued after the Colonnade Merger is based on the grant date closing fair market value of the Company’s common stock.

Before closing of the Colonnade Merger, the fair value of the shares of common stock underlying the Company’s stock-based awards was historically determined by management and approved by the board of directors.

Because there was no public market for the Company’s common stock, the board of directors determined the fair value of the common stock at the time of grant of the option by considering a number of objective and subjective factors, including contemporaneous valuations performed by an unrelated third-party specialist, valuations of comparable public companies, operating and financial performance, the lack of liquidity of capital stock, and general and industry-specific economic outlook.

Valuations performed by the third-party valuation specialist used methodologies, approaches, and assumptions consistent with the American Institute of Certified Public Accountants Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (“AICPA” Accounting and Valuation Guide).

In relation to options, the Board intends all options granted to be exercisable at a price per share not less than the per share fair value of the common stock underlying those options on the date of grant.

• Expected Term – The expected term represents the period that the Company’s stock-based awards are expected to be outstanding and is determined using the simplified method, which deems the term to be the average of the time to vesting and the contractual life of the options.

• Expected Volatility – The expected volatility is based on the historical volatility for the period commensurate with the expected term of the awards for a peer group of comparable companies with publicly traded shares.

• Expected Dividends – The Company does not currently pay cash dividends on its common stock and does not anticipate doing so in the foreseeable future.

Accordingly, the expected dividend yield is 0 %.

• Risk-Free Interest Rate – The risk-free interest rate is based on the U.S.

Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant.

The fair values of the restricted stock awards and restricted stock units were determined based on the fair value of the Company’s common stock on the grant date.

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The Company’s policy for issuing stock upon stock option exercise is to issue new common stock.

Government Credits

The employee retention credit (“ERC”), as originally enacted through the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) on March 27, 2020, is a refundable credit against certain employment taxes equal to 50% of the qualified wages an eligible employer paid to employees from March 17, 2020 to December 31, 2020.

The Disaster Tax Relief Act, enacted on December 27, 2020, extended the ERC for qualified wages paid from January 1, 2021 to June 30, 2021 and the credit was increased to 70% of qualified wages an eligible employer pays to employees during the extended period.

The American Rescue Plan Act of 2021, enacted on March 11, 2021, further extended the employee retention credit through December 31, 2021.

The Company qualified for the ERC for the period between March 17, 2020 and September 30, 2021.

The Company recognizes government credits for which there is a reasonable assurance of compliance with credit conditions and receipt of credits.

The Company received credits in the amount of $ 8.0 million in the year ended December 31, 2025.

For the year ended December 31, 2025, the ERC was recorded as follows:

$ 2.4 million as a reduction in cost of revenue, $ 3.3 million as a reduction in research and development expense, $ 1.1 million as a reduction in sales and marketing expense and $ 1.2 million as a reduction to general and administrative expense in the consolidated statement of operations and comprehensive loss.

The qualified wages and health insurance benefits paid by the Company were related to the first, second and third quarters of 2021.

We account for income taxes using an asset and liability approach.

Deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities and net operating loss (“NOL”) and tax credit carryforwards.

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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.

appeals or litigation processes, if any.

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

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Recently Issued and Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07 “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”).

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.

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.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-09, “Income Taxes (Topic 740) Improvements to Income Tax Disclosures” (“ASU 2023-09”), which prescribes standard categories for the components of the effective tax rate reconciliation and requires disclosure of additional information for reconciling items meeting certain quantitative thresholds, requires disclosure of disaggregated income taxes paid, and modifies certain other income tax-related disclosures.

ASU 2023-09 is effective for annual periods beginning after December 15, 2025 and can be adopted on a prospective or retrospective basis.

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

The Company adopted the amendments in this update for the annual period beginning fiscal year 2025 and applied the new disclosure requirements prospectively to the current annual period.

Prior period disclosures have not been adjusted to reflect the new disclosure requirements.

Refer to Note 13.

Income Taxes 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 not applicable and are not expected to have a material impact on the Company’s consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05").

This standard introduces a practical expedient that companies can choose to apply when determining allowances for credit losses.

Specifically, it permits companies to assume that the current conditions as of the balance sheet date remain unchanged throughout the remaining life of the assets.

This standard is effective for the Company for annual reporting periods beginning after December 15, 2025, and requires prospective application.

The Company is currently evaluating the impact of ASU 2025-05, however, does not expect it to have a material impact on its financial statements.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810) ("ASU 2025-03"), which clarifies the requirements for determining the accounting acquirer in the acquisition of a variable interest entity.

ASU 2025-03 beginning after December 15, 2026, and interim reporting periods within those annual reporting periods.

The amendments in this update require that an entity apply the new guidance prospectively to any acquisition transaction that occurs after the initial application date.

Early adoption is permitted as of the beginning of an interim or annual reporting period.

The Company is currently evaluating the disclosure impact that ASU 2025-03 may have on its financial statement presentation and disclosures.

In May 2025, the FASB issued ASU 2025-04, Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) ("ASU 2025-04"), which clarifies the requirements for share-based consideration payable to a customer.

The amendments in this update are effective for all entities for annual reporting periods (including interim reporting periods within annual reporting periods) beginning after December 15, 2026.

Early adoption is permitted for all entities.

The Company is currently evaluating the disclosure impact that ASU 2025-04 may have on its financial statement presentation and 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.

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

Business Combination and Related Transactions

On February 10, 2023, the Company completed the Velodyne Merger.

Velodyne shares ceased trading on the Nasdaq Stock Market LLC after market close on February 10, 2023, and each Velodyne share was exchanged for 0.8204 shares of the Company’s common stock.

Velodyne is treated as the acquired company for financial reporting purposes.

This determination is primarily based on the Company’s senior management prior to the Velodyne Merger comprising a majority of the senior management of the Company following the Velodyne Merger, the Company being the initiator of acquiring Velodyne and the Company being the party issuing shares in the Velodyne Merger.

The acquisition price for the Velodyne Merger was $ 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.

Through December 31, 2023, transaction costs incurred by the Company in connection with the Velodyne Merger, including professional fees, were $ 13.0 million.

Under the acquisition method of accounting in accordance with ASC 805, the total purchase price was allocated to identifiable tangible and intangible assets acquired and liabilities assumed based on their respective estimated fair values using management’s best estimates and assumptions to assign fair value as of the acquisition date.

The purchase accounting, including the identification and allocation of consideration to assets acquired was completed as of the fourth quarter of 2023.

The following table provides the assets acquired and liabilities assumed as of the date of acquisition (in thousands):

Estimated Fair Value

Purchase consideration $ 306,602

Amounts of identifiable assets and liabilities assumed

Cash and cash equivalents $ 32,137

Short-term investments 155,031

Accounts receivable, net 8,611

Inventory 9,700

Prepaid expenses and other current assets 4,387

Unbilled receivable, non-current portion 6,657

Property and equipment, net 9,900

Operating lease, right-of-use assets 10,887

Intangible assets, net 13,000

Other non-current assets 1,047

Accounts payable ( 3,356 )

Accrued and other current liabilities ( 32,821 )

Contract liabilities, current ( 5,475 )

Operating lease liability, current portion ( 3,735 )

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

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

Other non-current liabilities ( 745 )

Total identifiable net assets $ 191,079

Goodwill 115,523

Identified intangible assets acquired and their estimated useful lives as of February 10, 2023, were (in thousands, except years):

Estimated Useful Life

(in years) Estimated Fair Value

Developed technology - Hardware 3 $ 2,500

Developed technology - Software 5 5,100

Customer relationships 8 5,400

Intangible assets, net 5.9 $ 13,000

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.

The Company valued the hardware developed technology using the relief-from-royalty method under the income approach.

Software developed technology was valued using the excess earnings method.

The economic useful life was determined based on the technology cycle related to each developed technology, as well as the cash flows over the forecasted period.

The estimated fair value of the customer relationships was determined using the distributor method, which involved significant assumptions related to the distributions margin.

The Company estimated customer relationships useful life of 8 years that approximates the pattern in which the economic benefits are expected to be realized.

The estimated fair value of the inventory was determined using the comparative sales method, which estimated the expected sales price of the product, reduced by all costs expected to be incurred to complete or dispose of the inventory, as well as a profit on the sale.

The estimated fair value of property and equipment utilized a replacement cost method incorporating the age, quality and condition of the assets.

The excess of the purchase consideration and the fair value of identifiable assets acquired and liabilities assumed at the acquisition date over the fair value of net tangible and identified intangible assets acquired was recorded as goodwill, which is not deductible for tax purposes.

Goodwill is primarily attributable to the assembled workforce and the anticipated operational synergies at the time of the Velodyne Merger.

The Company’s consolidated statement of operations as of December 31, 2023, includes Velodyne revenue of $ 29.0 million for the period from the acquisition date of February 10, 2023 to December 31, 2023.

Due to the integration of the combined businesses, it was impractical to determine the earnings.

The unaudited supplemental pro forma information below presents the combined historical results of operations of the

Company and Velodyne as if the Velodyne Merger had been completed as of January 1, 2022 (in thousands):

Year Ended December 31,

Revenue $ 86,935

Net loss $ ( 372,689 )

The unaudited supplemental pro forma information above includes the following adjustments to net loss in the appropriate pro forma periods (in thousands):

Year Ended December 31,

An increase in amortization expense related to the fair value of acquired identifiable intangible assets, net of the amortization expense already reflected in actual historical results $ ( 277 )

A decrease (increase) in expenses related to the transaction expenses $ 6,058

A net increase in revenue related to the impact of the acceleration of the Amazon Warrant vesting recognized by Velodyne at the close of the Velodyne Merger transaction $ 3,656

A decrease in expenses related to the impact of the acceleration of the Amazon Warrant vesting recognized by Velodyne at the close of the Velodyne Merger transaction $ 26,704

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

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

The unaudited supplemental pro forma information has been presented for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the Velodyne Merger taken place on the date indicated, or of the Company’s future consolidated results of operations.

The supplemental pro forma information presented above has been derived from the Company’s historical consolidated financial statements and from historical consolidated financial statements and the historical accounting records of Velodyne.

Fair Value of Financial Instruments

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Commercial paper — 68,326 — 68,326

Corporate debt and U.S.

government agency securities — 69,594 — 69,594

Corporate debt — 72,846 — 72,846

Total short-term investments — 141,172 — 141,172

Total financial assets $ 54,475 $ 141,172 $ — $ 195,647

Warrant liabilities $ — $ — $ 126 $ 126

Total financial liabilities $ — $ — $ 126 $ 126

December 31, 2024

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

Commercial paper — 2,989 — 2,989

Short-term investments:

Commercial paper — 56,886 — 56,886

Corporate debt and U.S.

government agency securities — 58,538 — 58,538

Corporate debt — 69,594 — 69,594

Total short-term investments — 126,480 — 126,480

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Money market funds are included within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.

The fair value of the Private Placement warrant liabilities is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.

In determining the fair value of the warrant liabilities, the Company used the Black-Scholes option pricing model to estimate the fair value using unobservable inputs including the expected term, expected volatility, risk-free interest rate and dividend yield (see Note 7).

Level 3 liabilities that are measured on a recurring basis for the years ended December 31, 2025 and 2024 were not material.

Non-Recurring Fair Value Measurements

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Money market funds (1)

Commercial paper — 2,989

54,475 24,740

Total cash and cash equivalents

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Cash is invested in short-term money market funds that earn interest.

The Company acquired short-term investments consisting of commercial paper, corporate debt and U.S.

government agency securities as a result of the merger with Velodyne that closed on February 10, 2023 (see Note 3).

The Company’s short-term investments consist of commercial paper and corporate debt.

Short-term investments were $ 141.2 million as of December 31, 2025.

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.

Unrealized gains and losses on the Company’s short-term investments were not material as of December 31, 2025 and therefore, the amortized cost of the Company’s short-term investments approximated their fair value.

Restricted Cash

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Total inventory $ 23,566 $ 16,417

During the years ended December 31, 2024 and 2023, $ 2.1 million and $ 10.0 million of inventory write downs were charged to cost of revenue.

During the years ended December 31, 2025 and 2024, $( 0.4 ) million and $ 2.1 million of inventory (recoveries) write downs were (credited) charged to cost of revenue.

Prepaid Expenses and Other Current Assets

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Receivable from contract manufacturers 3,497 2,882

IRS Income tax refund receivable 2,993 —

Insurance receivable — 2,000

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Total prepaid and other current assets $ 17,517 $ 12,750

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

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(in years) December 31,

Land Not depreciated

Building 25 9,453 —

Machinery and equipment 3 16,640 12,146

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$ 31,891 $ 10,164

On December 16, 2025, the Company purchased the building and land at 2741 16th Street, San Francisco, California which were previously leased (see Note 7.

Depreciation expense associated with property and equipment was $ 3.3 million and $ 3.2 million in the years ended December 31, 2025 and 2024, respectively.

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Total $ 31,891 $ 10,164

Goodwill and Acquired Intangible Assets, Net

In the first quarter of 2023, the Company completed the acquisition of Velodyne.

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 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.

Goodwill is not deductible for tax purposes.

The following table presents goodwill activity (in thousands):

December 31, 2022 $ 51,152

Goodwill addition related to Velodyne Merger

Goodwill impairment charges

December 31, 2023 $ —

Goodwill is not amortized and is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

In 2023 the Company experienced a significant decline in its stock price.

This decline resulted in the total market value of its shares of stock outstanding (“market capitalization”) being less than the carrying value of its reporting unit as of March 31, 2023 and June 30, 2023.

The Company also considered the impact of current macroeconomic conditions in the lidar sensor industry that potentially impact the fair value of the Company’s reporting unit.

The macroeconomic conditions considered include deterioration in the equity markets evidenced by sustained declines in the Company’s stock price, those of its peers, along with an increase in the weighted-average cost of capital primarily driven by an increase in interest rates.

After considering all available evidence in the evaluation of goodwill impairment indicators, the Company determined it was appropriate to perform an interim quantitative assessment of its goodwill as of March 31, 2023 and June 30, 2023.

In connection with the Company’s interim goodwill impairment assessments the Company recorded goodwill impairment charges of approximately $ 99.4 million in the three months ended March 31, 2023 and $ 67.3 million in the three months ended June 30, 2023.

The Company’s goodwill impairment analysis included a comparison of the aggregate estimated fair value of our reporting unit to our total market capitalization.

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

Acquired Intangible Assets, Net

The following tables present acquired intangible assets, net as of December 31, 2025 and 2024 (in thousands):

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Beginning balance $ 3,049 $ 3,661

Additions from acquisitions — 802

Warranty expenditures ( 927 ) ( 901 )

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Total accrued and other current liabilities $ 26,200 $ 30,591

Loan and Security Agreement

On April 29, 2022 the Company entered into a loan agreement with Hercules Capital, Inc.

(“Hercules”) (as amended, the “Loan Agreement”).

The Loan Agreement provided the Company with a term loan facility of up to $ 50.0 million, subject to certain terms and conditions.

The Company borrowed the initial tranche of $ 20.0 million on April 29, 2022.

On October 17, 2022, the Company borrowed an additional $ 20.0 million.

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 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.

The Loan Agreement included covenants, limitations, and events of default customary for similar facilities.

In connection with the Loan Agreement, the Company paid the lender a cash facility and legal fees of $ 0.6 million and incurred debt issuance costs to third parties that were directly related to issuing debt in the amount of $ 0.3 million.

The effective interest rate on this debt was 17.90 % after giving effect to the debt discount, debt issuance costs and the end of term charge.

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.

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.

resulting in a loss on extinguishment of debt of $ 3.6 million and recorded it as interest expense in its consolidated statements of operations and comprehensive loss for the twelve months ended December 31, 2023.

Revolving Credit

On October 25, 2023, the Company entered into the Credit Line Account Application and Agreement for Organizations and Businesses (the “Credit Agreement”) and the Addendum to Credit Line Account Application and Agreement (the “Addendum”;

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 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.

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.

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.

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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 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, 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

Expected term (years) 1.19 2.19

Expected volatility 95.00 % 94.00 %

Risk-free interest rate 4.18 % 4.19 %

Public Warrants

CLA, in its IPO in August 2020, issued units that each consisted of one Class A ordinary share and one-half warrant to purchase a Class A ordinary share (the “Public warrants”).

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

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

On March 11, 2021, upon the closing of the Colonnade Merger each of the 9,999,996 outstanding warrants, as adjusted for any fractional warrants that were not issued upon separation, was converted automatically into a redeemable Public warrant to purchase one share of the Company’s common stock.

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The Public warrants were recognized as equity upon the Merger in the amount of $ 17.9 million.

These warrants expire on March 11, 2026.

Prior to their expiration, the Company may redeem the Public warrants at a price of $ 0.10 per warrant, provided that the closing price of the Company’s common stock equals or exceeds $ 180.00 per share for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which the Company gives proper notice of such redemption to the warrants holders.

The Company also assumed 5,973,170 outstanding public warrants upon closing the Velodyne Merger to purchase shares of the Company’s common stock (the “Velodyne Public warrants”).

Each warrant entitles the holder to purchase 0.06153 shares of the Company’s common stock.

Each 10 Velodyne Public warrants is exercisable for 0.6153 shares of the Company’s common stock at an exercise price of $ 140.20 per 0.6153 share of common stock, with no fractional shares being issuable upon exercise of a warrant.

The warrants are exercisable at any time and expire in September 2025.

The Company may redeem the outstanding warrants in whole and not in part at a price of $ 0.10 per warrant at any time after they become exercisable, provided that the last sale price of the Company’s common stock equals or exceeds $ 219.41 per share, subject to adjustments, for any 20 -trading days within a 30 -trading day period ending three business days prior to the date on which the Company sends the notice of redemption to the warrant holders.

The Velodyne Public warrants were recognized as equity upon the Velodyne Merger.

Amazon Warrant

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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 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 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 in the Company’s “at-the-market” offering 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, 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 a result of the issuance and sale by the Company of an additional 4,671,406 shares of common stock in the twelve months ended December 31, 2025 in the Company’s “at-the-market” offering 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 9), resulting in the increase in the number of shares issuable under the Amazon Warrant by 4,077 shares of common stock and a reduction to the original strike price of the Amazon Warrant to $ 50.57 per share.

As of December 31, 2025, there were 3,271,970 shares of common stock issuable under the Amazon Warrant.

The Amazon Warrant is subject to vesting.

As a result of the Velodyne Merger, 50 % of the unvested Amazon Warrant as of the date of the Velodyne Merger have vested and the remainder will vest over time based on payments by Amazon or its affiliates to us in connection with Amazon’s purchase of goods and services from the Company.

The vested portion of the Amazon Warrant, representing 1,848,694 shares of Ouster common stock with a fair value of $ 8.6 million, was included in the Velodyne Merger purchase price consideration on February 10, 2023.

The Amazon Warrant shares vest in multiple tranches over time based on payments of up to $ 100.0 million by Amazon or its affiliates (directly or indirectly through third parties) to the Company in connection with Amazon’s purchase of goods and services.

The fair value of the unvested Amazon Warrant, representing 1,107,586 unvested Ouster common stock shares will be recognized as a non-cash stock-based reduction to revenue when Amazon makes payments and vesting conditions become probable of being achieved.

The fair value of the unvested Amazon Warrant shares will be recorded as an increase to additional paid‑in capital, with a corresponding reduction to revenue as qualifying revenues are recognized and vesting conditions become probable of being achieved.

For the year ended December 31, 2025, 568,680 Amazon Warrant shares vested and the Company recognized non-cash stock-based reduction to revenue of $ 2.6 million.

For the year ended December 31, 2024, 226,691 Amazon Warrant shares vested and the Company recognized non-cash stock-based reduction to revenue of $ 0.9 million.

The fair value of the Amazon Warrant shares was estimated on February 10, 2023, the date of completion of the Velodyne Merger, using the Black-Scholes option pricing model on the remaining contractual term of 6.98 years, an expected volatility of 53.7 %, a 3.86 % risk-free interest rate and a 0 % expected dividend yield.

The Company estimated expected volatility by using historical volatility of the Company’s publicly traded stock and historical volatility of a group of publicly traded peer companies for the period commencing February 16, 2016 and ending on the date of the Merger.

The right to exercise the Amazon Warrant and receive the warrant shares that have vested expires February 4, 2030.

As of December 31, 2025, 2,728,985 Amazon Warrant shares have vested.

The Company leases its headquarters located in San Francisco, California, where the Company lease properties as follows:

(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 other operating leases for rental of office space.

The Company leases its headquarters located in San Francisco, California, where the Company leases 26,125 square feet of office space pursuant to a lease that is scheduled to expire in August 2034.

In December 2025, the Company acquired 20,032 square feet of office space in a building adjacent to our corporate headquarters that was previously held under lease.

Prior to 2024, the Company had executed or assumed as lessee an additional 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 $ 6.7 million and $ 6.9 million for the years ended December 31, 2025, and 2024, respectively.

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

In September 2017, the Company entered into a lease agreement (the “350 Treat Building Lease”) to lease approximately 26,125 square feet of office and warehouse space located in San Francisco, California for its corporate headquarters.

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 lease terms were subsequently amended multiple times, most recently in December 2025, when the Company and the landlord agreed to extend the term of the lease for an additional eight years and eight months and provided for an additional tenant improvement allowance.

The total base lease payments for the extended period of 8.7 years equal $ 12.3 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.

The amendment resulted in an adjustment of $ 6.1 million to the right-of-use asset and right-of-use operating lease liability which was recorded in December 2025.

As of December 31, 2025 the remaining lease term is 8.7 years, expiring on August 31, 2034.

2 unchanged sentences

As of December 31, 2025, the operating lease right-of-use asset and operating lease liability were $ 8.3 million and $ 9.3 million, respectively.

At the amendment date of the lease, a discount rate of 6.50 % was used to calculate the present value of the minimum lease payments to determine the lease liability.

As of December 31, 2024, the operating lease right-of-use asset and operating lease liability were $ 3.3 million and $ 4.5 million, respectively.

The discount rate used to determine the lease liability was 3.7 %.

2741 16 th Street Lease

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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 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 total base lease payments for the extended period of four years equaled $ 8.5 million and the increase in total base lease payments for the lease term provided for by the original agreement was $ 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, 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.

The 2741 16 th Street Lease is considered to be an operating lease as it does not meet the criteria of a finance lease.

As of December 31, 2024, the operating lease right-of-use asset and lease liability were $ 4.0 million and $ 5.4 million, respectively.

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

The 2741 16 th Street Lease was considered to be an operating lease as it did not meet the criteria of a finance lease.

As of December 31, 2024, the operating lease right-of-use asset and operating lease liability were $ 4.0 million and $ 5.4 million, respectively.

The discount rate used to determine the operating lease liability was 5.25 %.

On December 16, 2025, the Company purchased the building and land at 2741 16th Street, which were previously leased, for $ 18.2 million (including approximately $ 202,000 of transactions costs).

Management assessed the fair market value using the market and replacement cost methods and, per the assessment, allocated approximately 45 % of the purchase price to the land and 55 % of the purchase price to the building.

The transaction resulted in the termination of the related ROU asset, and lease liability, of $ 2.6 million and $ 3.6 million, respectively.

No gain or loss was recognized as the lease termination occurred due to the purchase of the leased asset.

This allocation of the purchase price, after accounting for the impact of the lease termination, resulted in $ 7.8 million allocated to the land and $ 9.5 million allocated to the building.

5521 Hellyer Avenue Lease

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The Company has executed or assumed as lessee operating leases for rental of office space.

The terms of those leases range from 1 to 5 years.

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

The Company is obligated to make lease payments totaling approximately $ 1.1 million for those leases over the respective lease terms.

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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, France, 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, 2025 and 2024.

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

The amount collateralizing the 2741 16th Street lease letter of credit following the purchase of the property and the termination of the 2741 16th Street lease was released during the first fiscal quarter of 2026.

The outstanding amount of the letters of credit was $ 1.4 million and 1.4 million as of December 31, 2025 and 2024, respectively.

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The complaint was based on allegations similar to those in the earlier class actions and sought, among other things, an award of compensatory damages on behalf of a putative class of persons who purchased or otherwise acquired Velodyne’s securities between July 2, 2020 and March 17, 2021.

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.

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 class actions were consolidated.

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.

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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.

The Halls sought to recover damages for financial and other injuries they allegedly sustained as a result of the merger between Graf and Velodyne.

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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.

On or about August 22, 2023, Ms.

Hall filed an application in Texas District Court, Dallas County to compel arbitration of two of the individuals who had been dismissed from the prior court action for lack of personal jurisdiction;

these two individuals agreed to participate in the arbitration and thus the Texas action has been stayed.

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.

Gopalan, Graf and Dee.

The parties agreed to a confidential settlement, without any admission or concession of wrongdoing or liability by Velodyne or the individual respondents, and executed the definitive agreement on April 16, 2025.

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

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

The Halls filed notices of dismissal with prejudice of the arbitration on June 4, 2025, and of the Texas action on June 10, 2025.

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 prior 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 named Velodyne as a nominal defendant, captioned In Re Velodyne Lidar, Inc.

Derivative Action , Case No.

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On November 21, 2023, Velodyne denied all allegations.

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.

The parties agreed to a confidential settlement, without any admission or concession of any wrongdoing or liability by Velodyne or Ouster, and executed the definitive settlement agreement on April 16, 2025.

This lawsuit was dismissed with prejudice on or around April 18, 2025.

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.

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2023 0873 LWW.

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 court has set trial for July 14, 2025.

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

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

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

The parties agreed to a settlement without any admission or concession of wrongdoing or liability by any of the defendants, subject to final approval by the court.

As of June 30, 2025, the Company accrued the expected settlement expenses associated with this action.

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

On October 7, 2025, the court approved the settlement and subsequently entered final judgment and dismissed the case on October 8, 2025.

Ouster Litigation

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

§ 1337 (“Section 337”).

The complaint requests that the Commission institute an investigation relating to the unlawful importation, sale for importation, and/or sale after importation into the United States by Hesai Group, Hesai Technology Co., Ltd., and Hesai Inc.

(collectively “Hesai”) of certain LiDAR (Light Detection and Ranging) systems and/or components thereof.

The complaint alleges that Hesai’s LiDAR products infringe certain claims of the Company’s U.S.

11,175,405, 11,178,381, 11,190,750, 11,287,515 and/or 11,422,236.

The complaint seeks the issuance of a permanent exclusion order and cease and desist order.

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 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 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 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 arbitrators should decide whether the Company has an obligation to arbitrate.

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

On September 14, 2023, Hesai responded.

On October 11, 2023, the Commission issued a notice of its determination to review and, on review, to affirm with modification the ALJ’s initial determination granting the motion to terminate the investigation in its entirety based upon the arbitration agreement.

As a result, the investigation was terminated.

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.

On April 11, 2023, the Company filed a complaint in the District of Delaware alleging patent infringement of certain claims of the Company’s U.S.

11,175,405, 11,178,381, 11,190,750, 11,287,515, and/or 11,422,236 against Hesai Group and Hesai Technology Co., Ltd.

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

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

Subject to the terms of a confidential decision in the arbitration described below, the Company dismissed without prejudice this case on April 11, 2025.

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 Lidar, Inc., 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 Lidar, Inc.

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

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

The Company denied all allegations.

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

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

Hesai Photonics alleges that the Company is bound as a result of the Company’s 2023 merger with Velodyne Lidar, Inc.

by the terms and conditions, including an obligation to arbitrate disputes, of a long-term, global cross-licensing settlement agreement signed in 2020 between Hesai Photonics and Velodyne Lidar, Inc.

(“Velodyne-Hesai Settlement Agreement”).

On June 13, 2023, the Company responded to the arbitration demand and denied all allegations.

On March 28, 2025, the tribunal issued a confidential interim decision, finding that the Company was subject to the Velodyne-Hesai Photonics Settlement Agreement.

On September 15, 2025, the tribunal issued a confidential final decision, affirming the earlier finding of a global licensing settlement agreement that requires Hesai Photonics to pay royalties and deciding on fees in the amount of approximately $ 6.4 million, which the Company paid in the fourth quarter of fiscal 2025.

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.

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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.

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

On June 2 and 3, 2025, the Company filed notices of appeal for IPR2023-01421, IPR 2023-01426, and IPR 2023-01457, but the parties dismissed all but IPR2023-01421, which is awaiting hearing.

Regarding the fifth patent (Patent No.

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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.

On March 20, 2025, the Director again denied review.

As of December 31, 2025, the Company accrued $ 1.1 million in connection the Velodyne Legacy and Ouster legal proceedings as of December 31, 2025.

Indemnification

From time to time, the Company enters into agreements in the ordinary course of business that include indemnification provisions.

The Company enters into agreements in the ordinary course of business that include indemnification provisions.

Generally, in these provisions the Company agrees to defend, indemnify, and hold harmless the indemnified parties for claims and losses suffered or incurred by such indemnified parties for which the Company is responsible under the applicable indemnification provisions.

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The holder of each share of common stock is entitled to one vote.

On April 29, 2022, the Company entered into the ATM Agreement pursuant to which the Company may, subject to the terms and conditions set forth in the agreement offer and sell, from time to time, through or to the agents, acting as agent or principal, shares of the Company’s common stock, par value $ 0.0001 per share, having an aggregate offering price of up to $ 150.0 million.

During the years ended December 31, 2024 and 2023, the Company sold 6,045,428 and 2,878,875 shares, respectively.

On April 29, 2022, we entered into an open market sale agreement with B.

Riley Securities, Inc., Cantor Fitzgerald & Co.

and Oppenheimer & Co.

During the years ended December 31, 2024 and 2023, the Company sold 6,045,428 and 2,878,875 shares, respectively under the Former ATM Agreement.

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

The Company used the net proceeds from the Former ATM Agreement for working capital and general corporate purposes.

We terminated the Former ATM Agreement in April 2025 in anticipation of the scheduled expiration of our registration statement on Form S-3 (File No.

The Company filed a new registration statement on Form S-3 on May 2, 2025 (File No.

333-286936), which was subsequently declared effective by the SEC.

On May 12, 2025, the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with Oppenheimer & Co.

Inc., pursuant to which the Company may offer and sell, from time to time, through or to the agent, acting as agent or principal, having an aggregate offering price of up to $ 100.0 million.

During the year ended December 31, 2025, the Company sold 4,671,406 shares at a weighted-average sales price of $ 20.88 per share, resulting in cumulative gross proceeds to us totaling approximately $ 97.5 million before deducting offering costs, sales commissions and fees.

Cumulative net proceeds to the Company totaled approximately $ 95.6 million after deducting offering costs, sales commissions and fees.

The remaining availability under the ATM Agreement as of December 31, 2025 is approximately $ 2.5 million.

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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.

Equity Plans Assumed from Acquisition

Equity Plans Assumed from Acquisitions

On October 22, 2021 (“Effective Time”), the Company closed the acquisition of Sense pursuant to the Agreement and Plan of Merger and Plan of Reorganization (“Sense Agreement”).

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Pursuant to the terms of the Velodyne Plan, the number of shares reserved for issuance increases on January 1 of each year by the lesser of 820,400 shares or such smaller number of shares determined by the board of directors.

In addition, any shares that are subject to awards forfeited and any shares of restricted stock that are forfeited will be available for grant under the Velodyne Plan.

As of December 31, 2023, the Company had reserved 1,077,184 shares of the Company’s common stock for issuance under the Velodyne Plan.

The Company recognized stock-based compensation for all stock options in the statements of operations and comprehensive loss as follows (in thousands):

In addition, any shares that are subject to awards forfeited and any shares of restricted stock that are forfeited will be available for grant under the Velodyne Pla n.

The Company recognized stock-based compensation for all stock awards in the statements of operations and comprehensive loss as follows (in thousands):

Year Ended December 31,

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Total stock-based compensation $ 40,824 $ 40,459

Stock-based compensation expense is based on awards which vest.

accounts for forfeitures as they occur, rather than estimating expected forfeitures.

Stock option activity for the years ended December 31, 2025 and 2024 is as follows:

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Term (in years) Aggregate

(in thousands)

Outstanding—January 1, 2024 1,871,649 $ 7.36 6.72 $ 6,191

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No options were granted during the years ended December 31, 2025 and December 31, 2024.

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.

As of December 31, 2025, there was no remaining unamortized stock-based compensation expense related to unvested stock options.

Restricted Stock Units (“RSU”)

A summary of RSUs activity under the Plan is as follows:

A summary of RSUs activity under the Plan for the years ended December 31, 2025 and, 2024 is as follows:

Shares Weighted Average

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Unvested—January 1, 2024 3,074,939 $ 13.19

Granted during the year 3,976,916 9.05

Canceled during the year ( 793,135 ) 21.24

Vested during the year ( 1,759,657 ) 25.18

Granted 2,836,726 9.45

Canceled ( 424,161 ) 12.70

Vested ( 2,022,740 ) 12.37

Unvested—December 31, 2024 3,464,764 $ 10.68

Granted during the year 2,836,726 9.45

Canceled during the year ( 424,161 ) 12.70

Vested during the year ( 2,022,740 ) 12.37

Granted 4,278,834 12.46

Canceled ( 519,171 ) 10.22

Vested ( 3,139,352 ) 11.43

Unvested—December 31, 2025 4,085,075 $ 12.02

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Restricted Stock Awards

A summary of RSA activity is as follows:

A summary of RSA activity for the years ended December 31, 2025 and 2024 is as follows:

Shares Weighted Average

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Value (per share)

Unvested—December 31, 2023 376,919 $ 15.30

Unvested—January 01, 2024 376,919 $ 15.30

Granted 533,601 7.94

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Unvested—December 31, 2024 456,698 $ 11.28

Canceled ( 68,072 ) 8.79

Vested ( 388,626 ) 10.27

Unvested—December 31, 2025 — $ —

Stock compensation expense is recognized on a straight-line basis over the vesting period of each award of RSAs.

As of December 31, 2024, total compensation expense related to unvested RSAs granted to employees, but not yet recognized, was $ 3.2 million, with a weighted-average remaining vesting period of 0.70 years.

As of December 31, 2025, there was no remaining compensation expense related to unvested RSAs granted to employees yet to be recognized.

The common stock comprising RSAs is issued at grant but, generally, is subject to a risk of forfeiture if the holder terminates service with the Company and its subsidiaries prior to vesting.

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Restricted Stock Units 4,085,075 3,464,764

Unvested early exercised common stock options — 16,087

Share purchase rights under the ESPP 290,918 569,048

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Foreign 187 314

Total current expense 348 494

Total current (benefit) expense ( 3,200 ) 348

Federal — 135

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Total deferred expense 265 189

Total income tax expense

A reconciliation between the statutory U.S.

federal rate and the Company’s effective tax rate is as follows:

Total income tax (benefit) expense

$ ( 2,935 ) $ 537

A reconciliation between the U.S.

federal statutory rate and the Company’s effective tax rate for tax year 2025 after the adoption of ASU 2023-09 is as follows (in thousands, except percentages):

Year Ended December 31,

Tax at federal statutory rate $ ( 20,267 ) $ ( 78,453 )

federal statutory tax rate $ ( 13,296 ) 21.0 %

State and local income taxes, net of federal income tax effect* 57 ( 0.1 ) %

Foreign tax effects 455 ( 0.7 ) %

Effects of cross-border tax laws

Global intangible low-taxed income 195 ( 0.3 ) %

Subpart F income 2 — %

Research and development credits 4,069 ( 6.4 ) %

Changes in Valuation Allowances 8,932 ( 14.1 ) %

Nontaxable or deductible items

Stock-based and non-deductible employee compensation ( 1,221 ) 1.9 %

Other 258 ( 0.4 ) %

Changes in unrecognized tax benefits ( 1,359 ) 2.1 %

2017 and 2018 IRS examination resolution ( 3,720 ) 5.9 %

Return-to-provision adjustment 2,695 ( 4.3 ) %

Other ( 2 ) — %

Total tax provision (benefit) $ ( 2,935 ) 4.6 %

*State taxes in Massachusetts for 2025 made up the majority (greater than 50%) of the tax effect in this category.

A reconciliation between the U.S.

federal statutory rate and the Company’s effective tax rate for the tax year 2024 prior to the adoption of ASU 2023-09 is as follows:

Year Ended December 31,

federal statutory rate $ ( 20,267 ) 21.0 %

State income taxes, net of federal benefit 23 — %

Stock compensation 7,213 8,185

Stock-based compensation 7,213 ( 7.5 ) %

Foreign rate differential 10 — %

Fair value changes - warrants ( 22 ) — %

Goodwill impairment — 35,002

Valuation allowance 13,174 ( 13.7 ) %

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Deferred tax liabilities:

Fixed assets ( 227 ) —

Intangible property ( 1,823 ) ( 3,022 )

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Net deferred tax assets $ — $ 265

Deferred income taxes have not been provided for undistributed earnings of the Company’s consolidated foreign subsidiaries because of the Company’s intent to reinvest such earnings indefinitely in active foreign operations.

The Company believes that future domestic cash generation will be sufficient to meet future domestic cash needs.

The Company has not recorded a deferred tax liability on the undistributed earnings of non-U.S.

subsidiaries.

The Company has established a full valuation allowance of $ 266.2 million and $ 259.7 million for the years ended December 31, 2025 and 2024, respectively, against its U.S.

Federal and state deferred tax assets.

Federal, state and foreign deferred tax assets.

The Company determines its valuation allowance on deferred tax assets by considering both positive and negative evidence in order to ascertain whether it is more likely than not that deferred tax assets will be realized.

Due to the history of losses the Company has generated in the past, the Company believes that it is not more likely than not that all of its U.S.

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

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.

Federal, state, and foreign deferred tax assets can be realized as of December 31, 2025.

Accordingly, the Company has recorded a full valuation allowance on its deferred tax assets.

The valuation allowance on the Company’s net deferred taxes increased by $ 6.5 million during the year ended December 31, 2025 as compared to a decrease of $ 45.3 million during the year ended December 31, 2024 .

The current year increase in valuation allowance is primarily attributable to the generation of net operating losses.

The prior year 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, 2025, the Company had federal net operating loss carryforwards and state net operating loss carryforwards of approximately $ 1.1 billion and $ 458.2 million, respectively.

As of December 31, 2025, federal net operating loss carryforwards generated after December 31, 2017 will be carried forward indefinitely and the state net operating loss carryforward begins expiring in 2028 through 2045.

As of December 31, 2024, the amount of federal net operating loss that does not expire is $ 833.3 million.

As of December 31, 2025, the amount of federal net operating loss that does not expire is $ 1.1 billion.

As of December 31, 2025, the Company had federal and state research and development credit carryforwards of approximately $ 0.9 million and $ 12.8 million, respectively.

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Federal and state net operating loss carryforwards or other tax attributes may be limited or eliminated.

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

The OBBBA provides for significant U.S.

tax law changes and modifications including making permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation.

The enactment of OBBBA resulted in an immaterial impact on the income tax provision due to the Company’s valuation allowance and the Company does not expect that portions of OBBBA with future effective dates will have a material impact.

Net cash paid (refunds received) for income taxes consisted of the following (in thousands):

Year Ended December 31,

Federal $ ( 857 )

state and local jurisdictions 22

United Kingdom ( 282 )

Netherlands 180

Canada ( 61 )

Net cash paid (refunds received) for income taxes $ ( 685 )

The amount of cash income taxes paid by the Company during the year ended December 31, 2024 was $ 0.4 million.

The balance of gross unrecognized tax benefits as of December 31, 2025, and 2024 was $ 23.4 million and $ 24.8 million, respectively.

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For prior years’ tax positions ( 1,355 ) —

For prior years’ tax positions — 7,901

Balance at the end of the year $ 23,400 $ 24,755

The Company files income tax returns in the U.S.

for Federal, California, and other US states, as well as miscellaneous foreign jurisdictions.

for Federal, California, and other U.S.

states, as well as miscellaneous foreign jurisdictions.

In the normal course of business, the Company is subject to examination by taxing authorities.

The earliest year open for examination is the 2016 tax year.

The Company’s 2017 and 2018 tax years are currently under IRS examination.

The Company believes that an adequate provision has been made for any adjustments that may result from the tax examination.

Although the timing of the resolution, settlement, and closure of the examination is not certain, the Company does not believe it is reasonably possible that the Company’s unrecognized tax benefits will materially change in the next 12 months.

During the year ended December 31, 2025, the Company reached a resolution of its IRS examination for the 2017 and 2018 tax years and the Company recorded a refund receivable of $ 3.0 million.

The Company does not believe it is reasonably possible that the Company’s unrecognized tax benefits will materially change in the next 12 months.

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.

The Company believes that future domestic cash generation will be sufficient to meet future domestic cash needs.

The Company has not recorded a deferred tax liability on the undistributed earnings of non-U.S.

subsidiaries.

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.

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Year Ended December 31,

Customer A 11 % *

Customer E 21 % 12 %

*Customer accounted for less than 10% of total revenue in the period.

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

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Sweden * 10 %

*Country accounted for less than 10% of total revenue in the period.

Revenue Contract Balances

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As of December 31, 2025, the current portion of these unbilled receivables in the amount of $ 6.4 million, primarily consisting of unbilled receivables from multi-year license contracts, is included in “Accounts receivable, net” on the consolidated balance sheet.

As of December 31, 2024, the current portion of these unbilled receivables in the amount of $ 3.3 million, primarily consisting of unbilled receivables from multi-year license contracts, is included in “Accounts receivable, net” on the consolidated balance sheet.

Contract Assets

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Contract asset also arises when the timing of billing differs from the timing of revenue recognized, such as when revenue is recognized on guaranteed minimum payments at the inception of the contract when there is not yet a right to invoice in accordance with contract terms and payment is contingent upon future event.

Contract assets, current are included in prepaid expenses and other current assets on the accompanying consolidated balance sheets.

Contract assets, non-current portion are included in other non-current assets on the accompanying consolidated balance sheets.

Contract Liabilities

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Contract assets and liabilities are presented net at the individual contract level in the consolidated balance sheet and are classified as current or long-term based on the nature of the underlying contractual rights and obligations.

The following table provides information about contract asset and liability balances as of December 31, 2025 and 2024 (in thousands).

2025 December 31,

Contract assets, current $ 937 $ —

Contract assets, non-current portion 281 —

Total contract assets $ 1,218 $ —

Contract liabilities, current

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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 fiscal years 2024 and 2023 because the Company concluded there is significant uncertainty associated with resolving the Company’s performance.

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

During the fourth quarter of fiscal 2025, the Company recognized $ 22.8 million in royalty revenue that included $ 16.1 million in cumulative royalty revenue associated with a multi-year IP license contract entered into in a prior year which granted a customer a right-to-use our functional intellectual property for the duration of the stated license term.

The associated royalties were previously deferred pending the resolution of significant uncertainty associated with resolving the Company’s performance under the license contract.

As of December 31, 2025 those uncertainties have been resolved, which resulted in recognition of such amounts.

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.

As a result, the Company received an additional $ 16.2 million in payments from this customer, which was recorded in other contract liabilities during the year ended December 31, 2024.

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

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Contract Liabilities

Ending balance as of December 31, 2022 $ 744

Beginning balance as of January 1, 2024 $ 17,852

Net revenue deferred in the period 21,031

Revenue recognized that was included in the contract liability balance at the beginning of the period ( 1,994 )

Contract liabilities acquired in the Velodyne Merger 8,384

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

Net revenue deferred in the period 7,557

Reclassification to contract asset 2,802

Revenue recognized that was included in the contract liability balance at the beginning of the period ( 23,437 )

Ending balance as of December 31, 2025 $ 23,811

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’s chief operating decision maker (“CODM”) is the Chief Executive Officer.

The Chief Executive Officer reviews financial information including revenue, expenses and net loss 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 CODM assesses financial performance of the reportable segment and decides how to allocate resources based on the net loss that also is reported as the net loss attributable to the Company on the consolidated statements of operations and comprehensive loss.

The net loss is also used by our CODM 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 stockholders.

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

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

7 unchanged sentences

General and administrative 64,641 58,701

Goodwill impairment charges — 166,675

Total other (income) expense, net ( 10,687 ) ( 7,669 )

Provision for income tax expense 537 523

Provision for (benefit from) income tax ( 2,935 ) 537

Net loss $ ( 60,377 ) $ ( 97,045 )

(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.

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

Subsequent Event

On February 4, 2026 (“Closing Date”), the Company completed the acquisition of Stereolabs SAS (“Stereolabs”), a developer, manufacturer and seller of vision systems headquartered in France.

The acquisition expanded the Company's product portfolio, and is expected to further strengthen its software capabilities and accelerate customer development.

In exchange for 100 % of the outstanding share capital of Stereolabs, shareholders of Stereolabs received cash consideration of $ 35.4 million and 1,847,677 newly-issued shares of the Company’s common stock valued at $ 35.4 million based on the trading price on the Closing Date, and of which 660,005 shares are subject to a staggered lock-up arrangement lasting through a four-year period, whereby twenty-five ( 25 %) percent will be released upon each anniversary of the completion date as long as the key employees are still employees of the Company.

The acquisition will be accounted for as a business combination, and the Company will begin consolidating Stereolabs’ financial results in its condensed consolidated financial statements starting as of Closing Date.

Given the recent date of the acquisition, the Company has not finalized its determination of the fair value of the assets acquired and liabilities assumed.

The Company has engaged third-party consultants to assist with determining the fair value of assets and liabilities acquired from Stereolabs as of the acquisition date.

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