Ouster, Inc. 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OUSTER, INC. Report of Independent Registered Public Accounting Firm ( PCAOB ID 238 ) 59 Consolidated Balance Sheets as of December 31, 202 5 and 202 4 61 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 202 5 , and 20 24 62 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 202 5 and 2024 63 Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 64 Notes to Consolidated Financial Statements 65 58 Table of C ontents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Ouster, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Ouster, Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, of stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition – Product revenue As described in Note 2 to the consolidated financial statements, the Company’s revenue was $146.6 million for the year ended December 31, 2025, of which the majority related to product revenue. Product revenue is recognized at a point in time when control of the goods is transferred to the customer, generally occurring upon shipment or delivery dependent upon the terms of the underlying contract. The transaction price is the amount of consideration the Company expects to be entitled in exchange for transferring products to the customer. The principal consideration for our determination that performing procedures relating to revenue recognition for product revenue is a critical audit matter is a high degree of auditor effort in performing procedures over the Company’s revenue recognition. As disclosed by management, material weaknesses were identified that impacted this matter. 59 Table of C ontents Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) testing revenue recognized for a sample of product revenue transactions by obtaining and inspecting source documents, such as contracts, sales quotes, purchase orders, sales orders, invoices, proof of shipment, and subsequent cash receipts and (ii) confirming a sample of outstanding customer invoice balances as of December 31, 2025 and, for confirmations not returned, obtaining and inspecting source documents, such as contracts, sales quotes, purchase orders, sales orders, invoices, and subsequent cash receipts. /s/ PricewaterhouseCoopers LLP San Jose, California March 2, 2026 We have served as the Company’s auditor since 2019. 60 Table of C ontents OUSTER, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 67,413 $ 45,542 Restricted cash, current 1,467 722 Short-term investments 141,172 126,480 Accounts receivable, net 27,753 17,941 Inventory 23,566 16,417 Prepaid expenses and other current assets 17,517 12,750 Total current assets 278,888 219,852 Property and equipment, net 31,891 10,164 Operating lease, right-of-use assets 13,452 14,308 Unbilled receivable, non-current portion 8,560 10,133 Intangible assets, net 13,316 17,830 Restricted cash, non-current 1,100 1,835 Other non-current assets 2,309 2,026 Total assets $ 349,516 $ 276,148 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 19,984 $ 6,288 Accrued and other current liabilities 26,200 30,591 Contract liabilities, current 20,705 34,351 Operating lease liability, current portion 4,142 7,196 Total current liabilities 71,031 78,426 Operating lease liability, non-current portion 12,938 13,054 Contract liabilities, non-current portion 3,106 2,538 Other non-current liabilities 703 1,219 Total liabilities 87,778 95,237 Commitments and contingencies (Note 8) Stockholders’ equity: Common stock, $ 0.0001 par value; 100,000,000 shares authorized at December 31, 2025 and 2024; 60,947,757 and 52,560,770 issued and outstanding at December 31, 2025 and 2024, respectively 48 47 Additional paid-in capital 1,235,580 1,094,938 Accumulated deficit ( 973,448 ) ( 913,071 ) Accumulated other comprehensive (loss) income ( 442 ) ( 1,003 ) Total stockholders’ equity 261,738 180,911 Total liabilities and stockholders’ equity $ 349,516 $ 276,148 The accompanying notes are an integral part of these consolidated financial statements 61 Table of C ontents OUSTER, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except share and per share data) Year Ended December 31, 2025 2024 Revenue: Product revenue $ 146,578 $ 111,101 Royalties 22,806 — Total revenue 169,384 111,101 Cost of revenue 85,948 70,641 Gross profit 83,436 40,460 Operating expenses: Research and development 65,170 58,084 Sales and marketing 27,624 27,852 General and administrative 64,641 58,701 Total operating expenses 157,435 144,637 Loss from operations ( 73,999 ) ( 104,177 ) Other income (expense): Interest income 9,485 8,846 Interest expense — ( 1,823 ) Other income (expense), net 1,202 646 Total other income (expense), net 10,687 7,669 Loss before income taxes ( 63,312 ) ( 96,508 ) Provision for (benefit from) income tax ( 2,935 ) 537 Net loss $ ( 60,377 ) $ ( 97,045 ) Other comprehensive income (loss) Changes in unrealized (loss) gain on available for sale securities $ 83 $ ( 386 ) Foreign currency translation adjustments 478 ( 809 ) Total comprehensive loss $ ( 59,816 ) $ ( 98,240 ) Net loss per common share, basic and diluted $ ( 1.07 ) $ ( 2.08 ) Weighted-average shares used to compute basic and diluted net loss per share 56,334,911 46,584,479 The accompanying notes are an integral part of these consolidated financial statements 62 Table of C ontents OUSTER, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share data) Common Stock Additional Paid-in- Capital Accumulated Deficit Accumulated other comprehensive income (loss) Total Stockholders’ Equity Shares Amount Balance — January 1, 2024 43,257,862 $ 42 $ 995,464 $ ( 816,026 ) $ 192 $ 179,672 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 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 Common stock warrants issuable to customer — — 892 — — 892 Stock-based compensation expense — — 40,459 — — 40,459 Net loss — — — ( 97,045 ) — ( 97,045 ) 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 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 4,671,406 1 95,157 — — 95,158 Issuance of common stock in connection with Velodyne Merger 205,642 — — — — — 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 Common stock warrants issuable to customer — — 2,623 — — 2,623 Stock-based compensation expense — — 40,824 — — 40,824 Net loss — — — ( 60,377 ) — ( 60,377 ) Other comprehensive income — — — — 561 561 Balance — December 31, 2025 60,947,757 $ 48 $ 1,235,580 $ ( 973,448 ) $ ( 442 ) $ 261,738 The accompanying notes are an integral part of these consolidated financial statements 63 Table of C ontents OUSTER, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the Years ended December 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 60,377 ) $ ( 97,045 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 7,781 9,836 Loss on write-off and disposal of property and equipment 113 401 Stock-based compensation 40,824 40,459 Reduction of revenue related to stock warrant issued to customer 2,623 892 Amortization of right-of-use asset 5,108 4,904 Non-cash interest income ( 214 ) ( 619 ) Accretion or amortization on short-term investments ( 3,239 ) ( 5,095 ) Change in fair value of warrant liabilities ( 126 ) ( 103 ) (Recovery) provision for inventory write-down ( 373 ) 2,080 Provision (recovery of) for doubtful accounts ( 8 ) ( 587 ) Realized gain on sale of investments ( 12 ) ( 275 ) Changes in operating assets and liabilities: Accounts receivable ( 8,017 ) ( 1,724 ) Inventory ( 6,775 ) 4,735 Prepaid expenses and other assets ( 3,569 ) 21,317 Accounts payable 13,202 2,476 Accrued and other liabilities ( 5,865 ) ( 28,059 ) Contract liabilities ( 14,299 ) 19,036 Operating lease liability ( 6,733 ) ( 6,323 ) Net cash used in operating activities ( 39,956 ) ( 33,694 ) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property & equipment — 668 Purchases of property and equipment ( 24,893 ) ( 3,756 ) Purchase of short-term investments ( 149,613 ) ( 144,573 ) 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 Proceeds from exercise of stock options 83 205 Proceeds from ESPP purchase 1,955 1,703 Payments received (remitted) to fund employees tax obligation for vested RSUs 410 — Repayments of borrowings — ( 43,975 ) Proceeds from the issuance of common stock under at-the-market offering, net of commissions and fees 95,583 57,806 At-the-market offering costs for the issuance of common stock ( 421 ) ( 346 ) Net cash provided by financing activities 97,610 15,393 Effect of exchange rates on cash and cash equivalents 478 ( 886 ) Net increase (decrease) in cash, cash equivalents and restricted cash 21,881 ( 4,535 ) Cash, cash equivalents and restricted cash at beginning of year 48,099 52,634 Cash, cash equivalents and restricted cash at end of year $ 69,980 $ 48,099 SUPPLEMENTAL DISCLOSURES OF OPERATING ACTIVITIES: Cash paid for interest $ — $ 2,073 SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: Property and equipment purchases included in accounts payable and accrued liabilities $ 1,166 $ 480 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 64 Table of Contents OUSTER, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Description of Business and Basis of Presentation Description of Business Ouster, Inc. (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. Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries (all of which are wholly owned) and have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in consolidation. Liquidity The Company’s principal sources of liquidity are its cash and cash equivalents, short-term investments, cash generated from sales of the Company’s products, sales of common stock under its at-the-market equity offering program and debt financing. The accompanying consolidated financial statements have been prepared on a going concern basis. The Company has experienced recurring losses from operations, and negative cash flows from operations. As of December 31, 2025, the Company’s existing sources of liquidity included cash and cash equivalents, restricted cash, and short-term investments of $ 211.2 million. The Company has incurred losses and negative cash flows from operations for several years. If the Company continues to incur losses in the future, it may need to improve liquidity and raise additional capital through the issuance of equity and/or debt. There can be no assurance that the Company would be able to raise such capital. However, management believes that the Company’s existing sources of liquidity are adequate to fund its operations for at least twelve months from the date the consolidated financial statements were available for issuance. At the Market Issuance Sales Agreement 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. (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 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. 333-264600). 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. 65 Table of Contents Note 2. Summary of Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. The most significant estimates included in these consolidated financial statements are the useful lives of long-lived assets, revenue recognition, inventory write downs, the realizability of deferred tax assets, the measurement of stock-based compensation, and the valuation of the Company’s various financial instruments. The complexity of the estimation process and factors relating to assumptions, risks and uncertainties inherent with the use of the estimates affect the amount of revenue and related expenses reported in the Company’s consolidated financial statements. Internal and external factors can affect the Company’s estimates. Actual results could differ from these estimates under different assumptions or conditions. Business Combinations Business combinations are accounted for under the acquisition method. The Company recognizes the assets acquired and liabilities assumed in business combinations on the basis of their fair values at the date of acquisition. The Company assesses the fair value of assets acquired, including intangible assets, and liabilities assumed using a variety of methods. Each asset acquired and liability assumed is measured at fair value from the perspective of a market participant. The method used to estimate the fair values of intangible assets incorporates significant estimates and assumptions regarding the estimates a market participant would make in order to evaluate an asset, including a market participant’s use of the asset, future cash inflows and outflows, probabilities of success, asset lives, and the appropriate discount rates. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. Transaction costs and restructuring costs associated with a business combination are expensed as incurred. During the measurement period, which extends no later than one year from the acquisition date, the Company may record certain adjustments to the carrying value of the assets acquired and liabilities assumed with the corresponding offset to goodwill. After the measurement period, all adjustments are recorded in the consolidated statements of operations within other income (expense), net. Foreign Currencies The functional currency of the Company is the U.S. dollar. The functional currency of the Company’s wholly-owned foreign subsidiaries is generally the same as the entity’s local currency. Accordingly, the asset and liability accounts of our foreign operations are translated into U.S. dollars using the current exchange rate in effect at the balance sheet date and equity accounts are translated into U.S. dollars using historical rates. The revenues and expenses are translated using the weighted-average exchange rates in effect during the period, and gains and losses from foreign currency translation adjustments are included as a component of accumulated other comprehensive loss in the consolidated balance sheets. Foreign currency translation adjustments are recorded in other comprehensive loss in the consolidated statements of operations and comprehensive loss. Foreign currency transaction gains and losses are a result of the effect of exchange rate changes on transactions denominated in currencies other than the functional currency. Foreign currency transaction gains and losses are recorded in other income (expense), net in the consolidated statements of operations and comprehensive loss. Segment Information The Company operates as one reportable and operating segment, which relates to the sale and production of lidar sensor kits. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources. The profitability of the Company’s product group is not a determining factor in allocating resources and the CODM does not evaluate profitability below the level of the consolidated company. 66 Table of Contents Revenue Recognition The Company recognizes revenue when a customer obtains control of promised products or services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these products or services. To achieve the core principle of this standard, the Company performs the following five steps: 1) Identify the contract with a customer 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 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. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the product or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the product or services is separately identifiable from other promises in the contract. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring product or services to the customer. Royalties from the license of intellectual property (“IP”) are included in the transaction price in the period the sales occur. Other forms of variable consideration are included in the transaction price if the Company judges that it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company’s contracts contain a significant financing component. All taxes assessed by a governmental authority on a specific revenue-producing transaction collected by the Company from a customer are excluded from the transaction price. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”). In 2025 and 2024, the Company did not have a material volume of contracts that required the allocation of transaction price to multiple performance obligations. 5) Recognize revenue when or as the Company satisfies a performance obligation 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 The majority of the Company’s revenue comes from product sales of lidar sensors to direct customers and distributors. Revenue is recognized at a point in time when control of the goods is transferred to the customer, generally occurring upon shipment or delivery dependent upon the terms of the underlying contract. Product sales to certain customers may require customer acceptance due to performance acceptance criteria that are considered more than a formality. For these product sales, revenue is recognized upon the expiration of the customer acceptance period. Amounts billed to customers for shipping and handling are included in revenue, and the Company has elected to recognize the cost of shipping activities that occur after control has transferred to the customer as a fulfillment cost rather than a separate performance obligation. All related shipping costs are accrued and recognized within cost of revenue when the related revenue is recognized. 67 Table of Contents Services The Company’s services revenue consists primarily of software development and compliance services. The obligation to provide services is generally satisfied over time, with the customer simultaneously receiving and consuming the benefits as the Company satisfies its performance obligations. For product development and validation service projects, the Company bills and recognizes revenue as the services are performed. For these arrangements, control is transferred over as the Company’s inputs are incurred to complete the project; therefore, revenue is recognized over the service period with the measure of progress using the input method based on labor costs incurred to total labor cost (“cost-to-cost”) as the services are provided. IP Licenses The Company licenses rights to its IP to certain customers and collects royalties based on customer’s product sales. IP revenue recognition is dependent on the nature and terms of each agreement. The Company recognizes license revenue upon the later of (a) delivery of the IP or (b) commencement of the license term if there are no substantive future obligations to perform under the arrangement. Revenue for licenses to future technology developed on a when-and-if -available basis is recognized straight-line over the license period as long as customers continue to have access to the future technology. Royalties from the license of IP 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. Software Licenses The Company’s Gemini software license arrangements provide the customer with the right to install and use functional intellectual property (as it exists at the point in time at which the license is granted) for the duration of the contract term (perpetual or term license). Revenue from distinct software licenses is recognized at the point in time when the software is made available to the customer. Maintenance The Company’s Gemini software license arrangements typically include an initial (bundled) post contract customer support (maintenance or “PCS”) term. Those software license arrangements, which include PCS represent a distinct, stand-alone performance obligation. Contract consideration is allocated to the PCS based on its relative SSP and revenue is recognized ratably over the PCS term. Product Warranties The Company provides standard product warranties for a term of typically one to two years to ensure that its products comply with agreed-upon specifications. Standard warranties are considered to be assurance type warranties and are not accounted for as separate performance obligations. The Company also provides service type extended warranties for typically an additional term ranging up to two additional years. For service type extended warranty contracts, the Company allocates revenue to this performance obligation on a relative standalone selling price basis and recognizes the revenue on a ratable basis over time during the effective period of the services as the Company stands ready to provide services as needed. Costs to obtain a contract The Company expenses the incremental costs of obtaining a contract when incurred because the amortization period for these costs would typically be less than one year. These costs primarily relate to sales commissions and are expensed as incurred in sales and marketing expense in the Company’s consolidated statements of operations and comprehensive loss. The incremental cost of obtaining a contract for the years ended December 31, 2025 and 2024 was $ 4.6 million, and $ 4.1 million, respectively. Right of return The Company’s general terms and conditions for its contracts do not contain a right of return that allows the customer to return products and receive a credit, however it has in practice permitted returns of its sensor kits in limited circumstances. Allowances for sales returns, which reduce revenue, are estimated using historical experience and were immaterial as of December 31, 2025 and 2024. Actual returns in subsequent periods have been consistent with estimated amounts. 68 Table of Contents Net loss per common share The Company follows the two-class method when computing net loss per common share. The two-class method determines net loss per common share for common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company has no participating securities outstanding for the periods presented. Basic net loss per common share attributable to common stockholders is computed by dividing the net loss by the weighted average number of common shares outstanding for the period. Diluted net loss attributable to common stockholders is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per common share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of common stock equivalents. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss attributable to common stockholders for the years ended December 31, 2025 and 2024. Comprehensive Loss Comprehensive loss is comprised of net loss and other comprehensive income (loss). The Company’s changes in unrealized loss on available for sale securities and foreign currency translation adjustment are the only components of other comprehensive loss that is excluded from the reported net loss for all periods presented. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity from the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents consist of cash deposited with banks, money market accounts and commercial paper. Restricted Cash 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. Investments The Company considers investments with an original maturity greater than three months and remaining maturities less than one year to be short-term investments. The Company classifies those investments that are not required for use in current operations and that mature in more than 12 months as long-term investments. The Company classifies its investments as available for sale and reports them at fair value, with unrealized gains and losses recorded in accumulated other comprehensive loss. For investments sold prior to maturity, the cost of investments sold is based on the specific identification method. Realized gains and losses on the sale of investments are recorded in other income, net in the consolidated statement of operations and comprehensive loss. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for expected credit losses representing its best estimate of expected credit losses related to its existing accounts receivable and their net realizable value. The allowance is determined using a combination of factors including historical losses adjusted to take into account current market conditions and customers’ financial condition, the amount of receivables in dispute, and the current receivables aging and current payment patterns. The Company writes off accounts receivable against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. 69 Table of Contents Changes in the Company’s allowance for expected credit losses were as follows (in thousands): Year Ended December 31, 2025 2024 Beginning balance $ 753 $ 1,104 Provision (recovery of) for doubtful accounts ( 8 ) ( 587 ) Net write-offs and other ( 275 ) 236 Ending balance $ 470 $ 753 Inventory Inventory consists primarily of raw materials, work-in-process, and finished goods and is stated at the lower of cost or estimated net realizable value. Costs are computed under the standard cost method, which approximates actual costs determined on the first-in, first-out basis. The Company charges cost of revenue for write-downs of inventories which are obsolete or in excess of anticipated demand based on purchase commitments, production needed to fulfil the warranty obligations, consideration of product marketability and product development plans, historical revenue and assumptions about future demand and market conditions. 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. Expenditures for repairs and maintenance are charged to expense as incurred. 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. Assets, excluding land, are depreciated using the straight-line method over their estimated useful lives. (see Note 4). Impairment of Long-Lived Assets The Company evaluates events and changes in circumstances that could indicate carrying amounts of long-lived assets, including intangible assets, may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future undiscounted cash flows is less than the carrying amount of those assets, the Company records an impairment charge in the period in which such determination is made. 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. Intangible Assets Intangible assets consist of developed technology, vendor relationship and customer relationships. Acquired intangible assets are initially recorded at the acquisition-date fair value. Intangible assets are amortized on a straight-line basis over their estimated useful lives, generally 3 to 8 years. 70 Table of Contents Fair Value of Financial Instruments The Company applies the fair value measurement accounting standard whenever other accounting pronouncements require or permit fair value measurements. Fair value is defined in the accounting standard as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels: • Level 1 - Quoted prices for identical instruments in active markets. • Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 - Instruments whose significant value drivers are unobservable. 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 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. of $ 201.3 million and $ 161.8 million, respectively. As of December 31, 2025 and 2024, the Company also had cash with financial institutions in countries other than the U.S. of approximately $ 9.9 million and $ 12.8 million, respectively, that was not federally insured. The Company generally does not require collateral or other security deposits for accounts receivable. To reduce credit risk, the Company considers customer creditworthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms when determining the collectability of specific customer accounts. Past due balances over 90 days and other higher risk amounts are reviewed individually for collectability. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. Accounts receivable from the Company’s major customers representing 10% or more of total accounts receivable and unbilled receivable was as follows: December 31, 2025 2024 Customer A 42 % 39 % Customer B 14 % * Customer D 13 % * *Customer accounted for less than 10% of total accounts receivable and unbilled receivable. Concentrations of supplier risk Purchases from the Company’s suppliers and vendors representing 10% or more of total purchases were as follows: Year Ended December 31, 2025 2024 Supplier A 10 % 11 % Supplier B 26 % 15 % 71 Table of Contents Accounts payable from the Company’s suppliers and vendors representing 10% or more of total accounts payable were as follows: December 31, 2025 2024 Supplier A 13 % 18 % Supplier B 50 % 55 % Supplier C 10 % * *Supplier accounted for less than 10% of total accounts payable. Amazon Warrant The Amazon Warrant (as defined in Note 6) is accounted for as an equity instrument. To determine the fair value of the Amazon Warrant on its issuance date, the Company used the Black-Scholes option pricing model. For awards granted to a customer, which are not in exchange for distinct goods or services, the fair value of the awards earned based on service or performance conditions is recorded as a reduction of the transaction price. Accordingly, when Amazon purchases goods or services and vesting conditions become probable of being achieved, the Company records a non-cash stock-based reduction to revenue associated with the Amazon Warrant, which is calculated based on the fair value of the Amazon Warrant shares as of the Velodyne Merger date. 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 stock-based award grant date fair value. 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. The Company recognizes stock-based compensation expense over the requisite service period. Forfeitures are accounted for as they occur. 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. Income Taxes 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. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Due to its history of operating losses, the Company has recorded a full valuation allowance against its U.S. deferred tax assets as of December 31, 2025 and 2024. 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 72 Table of Contents 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. The Company classifies any liabilities for unrecognized tax benefits as current to the extent that the Company anticipates payment of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes. Recently Issued and Adopted Accounting Pronouncements 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 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. The guidance is effective for public business entities for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The guidance is to be applied prospectively, with the option for retrospective application. The Company is currently evaluating the impact of the ASU on the disclosures within the consolidated financial statements. 73 Table of Contents Note 3. Fair Value of Financial Instruments The following table provides information by level for the Company’s assets and liabilities that were measured at fair value on a recurring basis (in thousands): December 31, 2025 Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Money market funds $ 54,475 $ — $ — $ 54,475 Short-term investments: Commercial paper — 68,326 — 68,326 Corporate debt — 72,846 — 72,846 Total short-term investments — 141,172 — 141,172 Total financial assets $ 54,475 $ 141,172 $ — $ 195,647 December 31, 2024 Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Money market funds $ 24,740 $ — $ — $ 24,740 Short-term investments: Commercial paper — 56,886 — 56,886 Corporate debt — 69,594 — 69,594 Total short-term investments — 126,480 — 126,480 Total financial assets $ 24,740 $ 126,480 $ — $ 151,220 Liabilities Warrant liabilities $ — $ — $ 126 $ 126 Total financial liabilities $ — $ — $ 126 $ 126 Money market funds are included within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. 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 The Company has certain assets, including intangible assets, which are measured at fair value on a non-recurring basis and are adjusted to fair value only if an impairment charge is recognized. The categorization of the framework used to measure fair value of the assets is considered to be within the Level 3 valuation hierarchy due to the subjective nature of the unobservable inputs used. Disclosure of Fair Values Our financial instruments that are not re-measured at fair value includ e accounts receivable, accounts payable, accrued and other current liabilities and debt. The carrying values of these financial instruments approximate their fair values. 74 Table of Contents Note 4. Balance Sheet Components Cash and Cash Equivalents The Company’s cash and cash equivalents consist of the following (in thousands): December 31, 2025 2024 Cash $ 12,938 $ 20,802 Cash equivalents: Money market funds (1) 54,475 24,740 Total cash and cash equivalents $ 67,413 $ 45,542 (1) The Company maintains a cash sweep account, which is included in money market funds as of December 31, 2025 and 2024, respectively. Cash is invested in short-term money market funds that earn interest. 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 material as of December 31, 2025 and therefore, the amortized cost of the Company’s short-term investments approximated their fair value. Restricted Cash Restricted cash consists of our collateral to merchant credit card, deposit account to secure foreign entity closure costs, issuances of deposit performance guarantee issued in favor of a customer, and certificates of deposit held by a bank as security for outstanding letters of credit. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets to the total of the amounts reported in the consolidated statements of cash flows (in thousands): December 31, 2025 2024 Cash and cash equivalents $ 67,413 $ 45,542 Restricted cash, current 1,467 722 Restricted cash, non-current 1,100 1,835 Total cash, cash equivalents and restricted cash $ 69,980 $ 48,099 Inventory Inventory, consisting of material, direct and indirect labor, and manufacturing overhead, consists of the following (in thousands): December 31, 2025 2024 Raw materials $ 3,866 $ 3,610 Work in process 93 307 Finished goods 19,607 12,500 Total inventory $ 23,566 $ 16,417 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. 75 Table of Contents Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): December 31, 2025 2024 Prepaid expenses $ 6,416 $ 5,703 Prepaid insurance 967 893 Receivable from contract manufacturers 3,497 2,882 IRS Income tax refund receivable 2,993 — Insurance receivable — 2,000 Other current assets 3,644 1,272 Total prepaid and other current assets $ 17,517 $ 12,750 Property and Equipment, net Property and equipment consists of the following (in thousands): Estimated Useful Life (in years) December 31, 2025 2024 Land Not depreciated $ 7,798 $ — Building 25 9,453 — Machinery and equipment 3 16,640 12,146 Computer equipment 3 1,140 689 Automotive and vehicle hardware 5 93 93 Software 3 160 601 Furniture and fixtures 7 863 845 Construction in progress 7,326 6,349 Leasehold improvements Shorter of useful life or lease term 5,097 9,459 48,570 30,182 Less: Accumulated depreciation ( 16,679 ) ( 20,018 ) Property and equipment, net $ 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. Leases). 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. The following table summarizes the Company's property and equipment, net by geography (in thousands): December 31, 2025 2024 United States $ 20,944 $ 3,668 Thailand 4,838 1,766 France 4,050 3,208 Taiwan 1,819 1,180 Others 240 342 Total $ 31,891 $ 10,164 76 Table of Contents Acquired Intangible Assets, Net The following tables present acquired intangible assets, net as of December 31, 2025 and 2024 (in thousands): December 31, 2025 Estimated Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Book Value Developed technology 3 - 8 $ 23,500 $ ( 13,634 ) $ 9,866 Vendor relationship 3 6,600 ( 6,600 ) — Customer relationships 3 - 8 6,300 ( 2,850 ) 3,450 Intangible assets, net $ 36,400 $ ( 23,084 ) $ 13,316 December 31, 2024 Estimated Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Book Value Developed technology 3 - 8 $ 23,500 $ ( 9,795 ) $ 13,705 Vendor relationship 3 6,600 ( 6,600 ) — Customer relationships 3 - 8 6,300 ( 2,175 ) 4,125 Intangible assets, net $ 36,400 $ ( 18,570 ) $ 17,830 Amortization expense was $ 4.5 million, and $ 6.6 million in the years ended December 31, 2025, and 2024, respectively. The following table summarizes estimated future amortization expense of finite-lived intangible assets, net (in thousands): Years: Amount 2026 $ 3,774 2027 3,682 2028 2,779 2029 2,331 2030 675 Thereafter 75 Total $ 13,316 Product Warranties The following table reflects the activity in accrued warranty cost (in thousands): December 31, 2025 2024 Beginning balance $ 3,049 $ 3,661 Warranty expenditures ( 927 ) ( 901 ) Change to warranty accrual ( 122 ) 289 Ending balance $ 2,000 $ 3,049 Accrued and Other Current Liabilities Accrued and other current liabilities consist of the following (in thousands): December 31, 2025 2024 Accrued legal fees and contingencies $ 2,124 $ 8,493 Uninvoiced receipts 7,910 4,368 Accrued compensation 7,415 6,115 Sales and use tax 2,462 2,215 Other 6,289 9,400 Total accrued and other current liabilities $ 26,200 $ 30,591 77 Table of Contents Note 5. Debt 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. Loans under the UBS Agreement bore interest at a rate equal to (x) for variable rate loans, the sum of (i) the applicable SOFR average plus 0.110 %, plus (ii) 1.20 %, and (y) for fixed rate loans, the sum of either (1) CME Term Rate or (2) the U.S. Treasury Rate, as applicable and as defined in the UBS Agreement, as determined based on the duration of the advance, plus the applicable liquidity premium with a range of 0.15 % to 0.50 %, as set forth in the UBS Agreement. Interest payments were due (x) for variable rate loans, on the last day of each calendar month, and on each date that any portion of the principal amount is due, including on the Maturity Date, and (y) for fixed rate loans, on the last day of the applicable interest period, and on each date that any portion of the principal amount is due, including on the Maturity Date. The Company was able to repay any variable rate loans at any time in whole or in part, without penalty. The Company could repay any fixed rate loans in whole, but not in part, subject to certain breakage costs. Interest expense was recognized over the life of the respective debt, which approximates the effective interest rate method. 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. Note 6. Warrants 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 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. As adjusted for the Reverse Stock Split, each 10 Public warrants is exercisable for one share of Ouster common stock at an exercise price of $ 115.00 per share with no fractional shares issuable upon exercise of a warrant. 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. 78 Table of Contents Amazon Warrant On February 10, 2023, as part of the Velodyne Merger, the Company assumed a warrant agreement and a transaction agreement, pursuant to which Velodyne agreed to issue to Amazon.com NV Investment Holdings LLC, a wholly-owned subsidiary of Amazon.com Inc. (“Amazon”), a warrant to acquire, following customary antidilution adjustments, up to an aggregate of 3,263,898 shares of the Company’s common stock at an exercise price of $ 50.71 per share (the “Amazon Warrant”). The exercise price and the warrant shares issuable upon exercise of the Amazon Warrant are subject to further antidilution adjustments, including in the event the Company makes certain sales of common stock (or securities exercisable or convertible into or exchangeable for shares of the Company’s common stock) at a price less than the exercise price of the Amazon Warrant. As a result of the issuance and sale by the Company of an additional 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 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 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 Velodyne 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. Note 7. Leases 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. On February 10, 2023, the Company assumed long-term non-cancellable lease agreements stemming from the Velodyne Merger: (i) approximately 204,000 square feet of office and manufacturing space in San Jose, California and (ii) additional space pursuant to the assumed leases for offices located in Alameda, California; and Bengaluru, India. Supplemental balance sheet information related to leases was as follows: December 31, 2025 2024 Weighted-average remaining lease term 5.67 2.84 Weighted-average discount rate 7.74 % 7.09 % 79 Table of Contents 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. 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. 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 $ 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. In addition to minimum lease payments, the lease requires the Company to pay associated taxes and operating costs. The 350 Treat Building Lease is considered to be an operating lease as it does not meet the criteria of a finance lease. 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. 2741 16 th Street Lease In September 2017 the Company entered into a lease agreement (the “2741 16 th Street Lease”) to lease approximately 20,032 square feet of office space and 25,000 square feet of parking space located in San Francisco, California. In May 2020, the Company entered into an amendment to the 2741 16 th Street Lease agreement, whereby the parties agreed to extend the term of the lease for an additional four years , restructure the monthly rent payable under the lease and provide for an additional tenant improvement allowance. The total base lease payments for the extended period of 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. 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 As part of the Velodyne Merger, the Company assumed a long-term non-cancellable lease agreement of 5521 Hellyer Avenue (the “5521 Hellyer Avenue Lease”), which was entered into in January 2017, to lease approximately 204,000 square feet of space in San Jose, California. These leased premises are no longer used for any essential manufacturing or research and development functions. In October 2019, as part of the second amendment to the 5521 Hellyer Avenue Lease, the lease term was extended for an additional five years ending in December 31, 2027. The total base lease payments for the extended period of 5.0 years equals $ 17.6 million. As of December 31, 2025, the operating lease right-of-use asset and operating lease liability were $ 4.2 million and $ 6.8 million, respectively. As of December 31, 2024, the operating lease right-of-use asset and operating lease liability were $ 6.3 million and $ 9.6 million, respectively. The discount rate used to determine the operating lease liability was 9.75 %. 80 Table of Contents Other operating real estate leases The Company has executed or assumed as lessee operating leases for rental of office space. 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. Total operating lease cost for the years ended December 31, 2025 and 2024 was $ 6.7 million and $ 6.9 million, which consisted of $ 5.2 million and $ 5.6 million of fixed lease expense and $ 1.5 million and $ 1.3 million of variable lease expense, respectively. Cash paid for amounts included in the measurement of lease liabilities was $ 7.6 million and $ 7.3 million for the years ended December 31, 2025 and 2024, respectively. The maturities of the operating lease liabilities as of December 31, 2025 were as follows (in thousands): Year ending December 31, 2026 $ 4,991 2027 5,510 2028 1,629 2029 1,479 2030 1,470 2031 and thereafter 5,784 Total undiscounted lease payments 20,863 Less: imputed interest ( 3,783 ) Total operating lease liabilities $ 17,080 Note 8. Commitments and Contingencies 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. 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 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. Non-cancelable purchase commitments As of December 31, 2025, the Company had non-cancelable purchase commitments to third-party contract manufacturers for approximately $ 19.2 million and other vendors for approximately $ 11.3 million. Contingencies From time to time, the Company may be involved in legal and administrative proceedings arising in the ordinary course of business. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. Management reviews these estimates in each accounting period as additional information becomes known and adjusts the loss provision when appropriate. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in the consolidated financial statements. If a loss is probable but the amount of loss cannot be reasonably estimated, the Company discloses the loss contingency and an estimate of possible loss or range of loss (unless such an estimate cannot be made). Legal costs incurred in connection with loss contingencies are expensed as incurred. 81 Table of Contents Litigation The Company is involved in various legal proceedings arising in the ordinary course of business. Significant judgment is required in both the determination of probability and the determination as to whether any exposure is reasonably estimable. Actual outcomes of these legal and regulatory proceedings may materially differ from our current estimates. Velodyne Legacy Litigation On March 3, 2021, a purported shareholder of Velodyne filed a complaint for a putative class action against Velodyne, Anand Gopalan and Andrew Hamer in the United States District Court, Northern District of California, entitled Moradpour v. Velodyne Lidar, Inc., et al. , No. 3:21-cv01486-SI. The complaint alleged purported violations of the federal securities laws and that, among other things, the defendants made materially false and/or misleading statements and failed to disclose material facts about Velodyne’s business, operations and prospects, including with respect to David Hall’s role with Velodyne and removal as Chairman of Velodyne’s Board of Directors. The complaint alleged that purported class members have suffered losses 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 November 9, 2020 and February 19, 2021. On March 12, 2021, a putative class action entitled Reese v. Velodyne Lidar, Inc., et al. , No. 3:21-cv-01736-VC, was filed against Velodyne, Mr. Gopalan and Mr. Hamer in the United States District Court for the Northern District of California, based on allegations similar to those in the earlier class action and seeking recovery on behalf of the same putative class. On March 19, 2021, another putative class action entitled Nick v. Velodyne Lidar, Inc., et al. , No. 4:21-cv-01950-JST, was filed in the United States District Court for the Northern District of California, against Velodyne, Mr. Gopalan, Mr. Hamer, two current or former directors, and three other entities. 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 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. On April 19, 2024, the court preliminarily approved the settlement that provides for a payment of $ 27.5 million of which $ 23.4 million was funded by insurance proceeds. The Company had accrued for and recorded the entire amount of this $ 27.5 million settlement liability and had recorded the expense within general and administrative expenses in 2023 after concluding that such settlement amount is probable and reasonably estimable. As of December 31, 2023, the Company recorded an insurance receivable of $ 23.4 million in prepaid expenses and other current assets to be funded by insurance proceeds based on the terms of the settlement. The $ 23.4 million insurance receivable allows the Company to recover the majority of the settlement expense, resulting in a net charge of $ 4.1 million in its consolidated statement of operations. The settlement charge of $ 4.1 million was paid in June 2024. As a result of the court approving the settlement, issuing final judgment, and dismissing the lawsuit on August 19, 2024, the Company unrecognized the related liability and receivable in the amount of $ 23.4 million. On January 18, 2022, David and Marta Hall filed a lawsuit in the Superior Court of California, County of Alameda, against current and former officers and directors of Velodyne, as well as 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. On May 3, 2022, certain defendants filed motions to compel arbitration and other defendants filed motions to quash service of process for lack of personal jurisdiction. The court conducted a hearing on the motions on July 20, 2022. On August 30, 2022, the court granted the motion to quash service with respect to the out of state defendants. On October 3, 2022, the court granted the motion to compel Mr. Hall to arbitrate his claims, and stayed proceedings on Ms. Hall’s claims pending arbitration of Mr. Hall’s claims. On October 20, 2022, Mr. and Ms. Hall voluntarily dismissed the action without prejudice. On January 3, 2023, Mr. and Ms. Hall filed an arbitration demand with substantially the same allegations as the prior lawsuit. 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. and Ms. Hall dismissed certain claims against the three remaining respondents Messrs. 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. 82 Table of Contents 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 named Velodyne as a nominal defendant, captioned In Re Velodyne Lidar, Inc. Derivative Action , Case No. 1:21-cv-00369-TMH (D. Del.) (dismissed on November 7, 2023). On November 21, 2023, Velodyne denied all allegations. The 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. Graf Acquisition, LLC, et al., No. C.A. 2023 0873 LWW. 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 in the District of Delaware alleging patent infringement of certain claims of the Company’s U.S. Patent Nos. 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. On May 30 , 2023, the Court granted to stay the case pending the resolution, including all appeals, of In the Matter of Certain LiDAR (Light Detection and Ranging) Systems and Components Thereof, 337-TA-1363. On February 10, 2025, the parties filed a joint request to maintain the stay. 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. Ltd. 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 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. The Company provided preliminary responses to those petitions in late December 2023 and early January 2024. On March 19, 2024, March 28, 2024, and April 1, 2024, the PTAB issued decisions to institute inter partes review for four patents: IPR2023-01421 (Patent No. 11,175,405), hearing date of December 17, 2024; IPR2023-01422 (Patent No. 11,287,515), hearing date of December 17, 2024; IPR2023-01456 (Patent No. 11,178,381), hearing date of January 13, 2025; and IPR2023-01457 (Patent No. 11,190,750), hearing date of January 13, 2025. On March 13, 2025, the PTAB issued final written decisions upholding the patentability of all challenged claims in IPR2023-01422, and finding unpatentable all challenged claims in IPR2023-01421 and IPR2023-01457. On March 17, 2025, the PTAB issued a final written decision finding unpatentable all challenged 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. 11,422,236), the PTAB declined to institute on March 28, 2024, (see IPR2023-01458). Hesai requested review to the Director of the United States Patent and Trademark Office (“Director Review”), who remanded to the PTAB for further review of its decision not to institute. On January 21, 2025, the PTAB again denied institution, to which Hesai again requested Director Review, and the Company objected. On March 20, 2025, the Director again denied review. 83 Table of Contents 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 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. The terms of the indemnification provisions vary depending upon negotiations between the Company and its counterpart; however, typically, these indemnification obligations survive the term of the contract and the maximum potential amount of future payments the Company could be required to make pursuant to these provisions are uncapped. The Company has also entered into indemnity agreements pursuant to which it has indemnified its directors and officers, to the extent legally permissible, against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or executive officer, other than liabilities arising from willful misconduct of the individual. To date, the Company is indemnifying and has incurred costs to defend lawsuits or settle claims described above under the heading “Litigation” pursuant to the indemnity agreements of former directors and officers. Note 9. Common Stock Pursuant to the terms of the Second Amended and Restated Certificate of Incorporation, the Company is authorized to issue the following shares and classes of capital stock, each with a par value of $ 0.0001 per share: (i) 100,000,000 shares of common stock; (ii) 100,000,000 shares of preferred stock. The holder of each share of common stock is entitled to one vote. On April 29, 2022, we entered into an open market sale agreement with B. Riley Securities, Inc., Cantor Fitzgerald & Co. and Oppenheimer & Co. Inc. (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 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. 333-264600). 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. Note 10. Stock-based Compensation As of December 31, 2025, the Company maintains five equity incentive plans: its Amended and Restated 2015 Stock Plan (the “2015 Plan”), the Sense Photonics, Inc. 2017 Equity Incentive Plan (the “Sense Plan”), the Velodyne Lidar, Inc. 2020 Equity Incentive Plan (the “Velodyne Plan”), its 2021 Incentive Award Plan (the “2021 Plan”) and its Amended and Restated 2022 Employee Stock Purchase Plan (the “2022 ESPP” and, collectively with the 2015 Plan, the Sense Plan, the Velodyne Plan and the 2021 Plan, the “Plans”). 84 Table of Contents The Plans, other than the 2022 ESPP, provide for the grant of stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance stock unit awards and other forms of equity compensation (collectively, “equity awards”). In addition, the 2021 Plan provides for the grant of performance bonus awards. New equity awards may only be granted under the 2021 Plan and Velodyne Plan. Awards under the 2021 Plan and Velodyne Plan can be granted to employees, including officers, directors and consultants of the Company and its subsidiaries, in each case, within the limits provided in the 2021 Plan and Velodyne Plan, respectively. Options under the Plans will be exercisable at such times and as specified in the Award Agreement (as defined in the Plans) provided that the term of an option or stock appreciation will not exceed ten years . Options granted under the Plans may be Incentive Stock Options (ISOs) or Non-statutory Stock Options, as determined by the Administrator (as defined in the Plans) at the time of grant of an option and subject to the applicable provisions of Section 422 of the Internal Revenue Code and the regulations promulgated thereunder. The exercise price of an option will be no less than 100 % of the fair market value of the shares of common stock on the date of grant. The exercise price of an ISO granted to a 10 % shareholder will be no less than 110 % of the fair market value of the shares on the date of grant and the term of the ISO will not exceed five years . Options granted generally vest over four years and vest at a rate of 25 % upon the first anniversary of the issuance date and 1/36th per month thereafter. The Company accounts for forfeitures as they occur. Restricted stock and restricted stock units granted to employees generally vest as to 25 % of the shares on the first anniversary service date of the grant, and quarterly thereafter so as to be 100 % vested on the fourth anniversary of the vesting commencement date. All participants holding shares of restricted stock will be entitled to all the rights of a stockholder with respect to such shares and have voting power and other rights with respect to such shares, provided, however, that such shares are held in escrow and subject to forfeiture until the shares vested. Certain employees have the right to early exercise unvested stock options, subject to rights held by the Company to repurchase unvested shares in the event of voluntary or involuntary termination. The Company accounts for cash received in consideration for the early exercise of unvested stock options as a non-current liability, included as a component of other liabilities in the Company’s consolidated balance sheets. 2021 Incentive Award Plan On March 11, 2021, the board of directors approved the 2021 Plan. 18,558,576 shares of the Company’s common stock were initially reserved for issuance under the 2021 Plan. The 2021 Plan includes an evergreen provision that provides for an annual increase in the number of shares of common stock available for issuance thereunder beginning on January 1, 2022 and ending on January 1, 2031, equal to 5 % of the shares of Company common stock outstanding on the last day of the immediately preceding fiscal year and such smaller number of shares as determined by the board of directors or a committee thereof. 2015 Stock Plan In 2015, the Company established its 2015 Stock Plan. As of March 11, 2021, the effective time of the Colonnade Merger, the Company no longer grants equity awards pursuant to the 2015 Plan, but it continues to govern the terms of outstanding stock options that were granted prior to that date. 2022 Employee Stock Purchase Plan The Company’s 2022 ESPP has been offered to all eligible employees since August 2022 and generally permits certain employees to purchase shares of our common stock through payroll deductions of up to 15 % of their compensation of each offering period, subject to certain limitations. The 2022 ESPP provides offering periods that have a duration of 24 months in length and are comprised of purchase periods of six months in length. The offering periods are scheduled to start on the first trading day on or after May 16 and November 16 of each year. Under the 2022 ESPP, the purchase price of a share equals 85 % of the lesser of the fair market value of a share of common stock on either the first or last day of the applicable offering period of the last day of the applicable purchase period. 85 Table of Contents In May of 2023, the Company increased the share purchase limit under the 2022 ESPP to 3,000 shares of the Company’s common stock per offering period and added Velodyne Lidar, Inc. as a participating employer in the 2022 ESPP. The stock-based compensation expense for the 2022 ESPP is based on the estimated grant date fair value utilizing the Black-Scholes option valuation model of the 2022 ESPP shares and the number of shares that can be purchased as of the grant date, which is recognized as expense on a straight-line expense attribution method over the length of an offering period. During fiscal 2025 employees purchased 394,755 shares of common stock under the 2022 ESPP at a weighted-average purchase price of $ 4.95 , with proceeds of $ 2.0 million. 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 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”). Pursuant to the Sense Agreement, upon the completion of the transaction, the Company assumed the Sense 2017 Equity Incentive Plan (the “Sense Plan”). In addition, pursuant to the Sense Agreement, at the Effective Time, each outstanding option to purchase Sense common stock and each award of time-based RSUs in respect of shares of Sense common stock held by Sense employees, in each case, that was outstanding as of immediately prior to the Effective Time was automatically adjusted by the Exchange Ratio (as defined in the Sense Agreement) and converted into an equity award of the same type covering shares of the Company’s common stock, on the same terms and conditions, (including, if applicable, any continuing vesting requirements) under the applicable Sense plan and award agreement in effect immediately prior to the Effective Time (the “Assumed Awards”). In connection with the closing of the acquisition, 82,311 stock options and 449,098 RSUs were assumed. On February 10, 2023, the Company consummated the Velodyne Merger. Pursuant to the Velodyne Merger, the Company assumed the Velodyne Lidar, Inc. 2020 Equity Incentive Plan (the “Velodyne Plan”), and all restricted stock units granted thereunder that were outstanding immediately prior to the consummation of the Velodyne Merger and converted into restricted stock units covering shares of the Company’s common stock (such assumed awards, the “Assumed RSUs”) and all shares of Velodyne Lidar, Inc. restricted stock were converted into shares of Company restricted stock. Each Assumed RSU and award of restricted stock is subject to substantially the same terms and conditions as applied to the related Velodyne restricted stock unit award or restricted stock award immediately prior to the consummation of the Velodyne Merger, except that the number of shares of common stock subject to each Assumed RSU or constituting restricted stock was adjusted in accordance with the terms of the Velodyne Merger Agreement. In connection with the consummation of the Velodyne Merger, 961,012 Assumed RSUs and 728,646 shares of restricted stock were assumed. 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 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, 2025 2024 Cost of revenue $ 5,455 $ 4,608 Research and development 19,020 18,260 Sales and marketing 4,978 5,347 General and administrative 11,371 12,244 Total stock-based compensation $ 40,824 $ 40,459 The following table summarizes stock-based compensation expense by award type (in thousands): Year Ended December 31, 2025 2024 RSUs $ 37,051 $ 29,929 Stock options — 4,480 Employee stock purchase plan 1,207 1,956 RSAs 2,566 4,094 Total stock-based compensation $ 40,824 $ 40,459 Stock-based compensation expense is based on awards which vest. The Company. accounts for forfeitures as they occur, rather than estimating expected forfeitures. 86 Table of Contents Stock option activity for the years ended December 31, 2025 and 2024 is as follows: Number of Shares Underlying Outstanding Options Weighted- Average Exercise Price per Share Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding—January 1, 2024 1,871,649 $ 7.36 6.72 $ 6,191 Options exercised ( 105,581 ) 1.93 610 Options cancelled ( 11,044 ) 29.39 21 Outstanding—December 31, 2024 1,755,024 $ 7.55 5.72 $ 10,076 Options exercised ( 43,904 ) $ 1.95 723 Options cancelled ( 498 ) $ 1.95 3 Outstanding—December 31, 2025 1,710,622 7.69 4.72 $ 24,142 Vested and expected to vest—December 31, 2025 1,710,622 $ 7.69 4.72 $ 24,142 Exercisable—December 31, 2025 1,710,622 $ 7.69 4.72 $ 24,142 The following table summarizes information about stock options outstanding and exercisable at December 31, 2025: Options Outstanding Exercise Price Options Outstanding Weighted Average Remaining Contractual Life (Years) Options Exercisable $ 1.85 167,863 4.54 167,863 $ 2.13 781,142 4.75 781,142 $ 14.22 752,408 4.75 752,408 $ 52.40 9,209 3.74 9,209 1,710,622 1,710,622 No options were granted during the years ended December 31, 2025 and December 31, 2024. 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 for the years ended December 31, 2025 and, 2024 is as follows: Number of Shares Weighted Average Grant Date Fair Value (per share) Unvested—January 1, 2024 3,074,939 $ 13.19 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 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 As of December 31, 2025, total compensation expense related to unvested RSUs granted to employees, but not yet recognized, was $ 39.5 million, with a weighted-average remaining vesting period of 1.7 years. 87 Table of Contents Restricted Stock Awards A summary of RSA activity for the years ended December 31, 2025 and 2024 is as follows: Number of Shares Weighted Average Grant Date Fair Value (per share) Unvested—January 01, 2024 376,919 $ 15.30 Granted 533,601 7.94 Vested ( 453,822 ) 10.69 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, 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. Note 11. Employee Benefit Plan In 2018, the Company adopted a defined contribution retirement savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company at its discretion offers matching contributions of up to 4 % of each employee’s annual compensation. The Company provided matching contributions of $ 1.6 million and $ 1.7 million to the plan during the years ended December 31, 2025 and 2024, respectively. Note 12. Net Loss Per Common Share The following table sets forth the computation of basic and diluted net loss per common share attributable to common stockholders (in thousands, except share and per share data): Year Ended December 31, 2025 2024 Numerator: Net loss $ ( 60,377 ) $ ( 97,045 ) Denominator: Weighted average shares used to compute basic and diluted net loss per share 56,334,911 46,584,479 Net loss per common share-basic and diluted $ ( 1.07 ) $ ( 2.08 ) The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive: December 31, 2025 2024 Options to purchase common stock 1,710,622 1,755,024 Public and private common stock warrants 4,871,960 5,235,409 Restricted Stock Units 4,085,075 3,464,764 Share purchase rights under the ESPP 290,918 569,048 Unvested RSAs — 456,698 Total 10,958,575 11,480,943 88 Table of Contents Note 13. Income Taxes Loss before income taxes for the years ended December 31, 2025, and 2024 are as follows (in thousands): Year Ended December 31, 2025 2024 Domestic $ ( 64,550 ) $ ( 98,413 ) Foreign 1,238 1,905 Total $ ( 63,312 ) $ ( 96,508 ) The components of income tax expense are as follows (in thousands): Year Ended December 31, 2025 2024 Current: Federal $ ( 3,457 ) $ — State 70 34 Foreign 187 314 Total current (benefit) expense ( 3,200 ) 348 Deferred: Federal — 135 State — — Foreign 265 54 Total deferred expense 265 189 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, 2025 Tax at U.S. 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 — % Tax credits 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 % Other 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. 89 Table of Contents 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, 2024 Tax at U.S. federal statutory rate $ ( 20,267 ) 21.0 % State income taxes, net of federal benefit 23 — % Stock-based compensation 7,213 ( 7.5 ) % Foreign rate differential 10 — % Fair value changes - warrants ( 22 ) — % Valuation allowance 13,174 ( 13.7 ) % Non-deductible expenses 39 — % Other 367 ( 0.4 ) % Total tax provision $ 537 ( 0.6 ) % Significant components of the Company’s deferred tax assets and liabilities for federal, state and foreign income taxes are as follows (in thousands): Year Ended December 31, 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 242,635 $ 200,050 Credits 7,637 9,863 Stock-based compensation 601 2,118 Accruals and reserves 4,121 4,296 Deferred revenue 4,284 5,163 Fixed assets — 1,689 Operating lease liability 3,947 5,086 Capitalized research and development expenditures 8,092 37,291 Gross deferred tax assets 271,317 265,556 Valuation allowance ( 266,186 ) ( 259,698 ) Net deferred tax assets 5,131 5,858 Deferred tax liabilities: Fixed assets ( 227 ) — Intangible property ( 1,823 ) ( 3,022 ) Operating lease, right of use assets ( 3,081 ) ( 2,571 ) Gross deferred tax liabilities ( 5,131 ) ( 5,593 ) 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. 90 Table of Contents 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, 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, 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, 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. As of December 31, 2025 the federal credits will expire starting in 2035, if not utilized and state credits carryforward indefinitely. The Tax Reform Act of 1986 and similar state legislation impose substantial restrictions on the utilization of the net operating losses and tax credit carryforwards in the event there is a change in ownership as provided by Section 382 and Section 383 of the Internal Revenue Code and similar state provisions. We have completed an analysis of Section 382 ownership changes in our stock through February 10, 2023 and have concluded that we have experienced ownership changes that will result in limitations in our ability to use certain of our tax credit carryforwards. The Company may experience ownership changes in the future as a result of future transactions in our stock. If it is determined that we undergo one or more ownership changes in the future, then our ability to utilize our U.S. 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, 2025 U.S. Federal $ ( 857 ) U.S. state and local jurisdictions 22 Foreign United Kingdom ( 282 ) China 263 Netherlands 180 Canada ( 61 ) Other 50 Net cash paid (refunds received) for income taxes $ ( 685 ) 91 Table of Contents 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. Out of the total unrecognized tax benefits, $ 0.5 million at December 31, 2025, if recognized, would impact our effective tax rate in the period of recognition. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of December 31, 2025 and 2024, the Company has accrued immaterial interest and penalties related to uncertain tax positions. The following table sets forth the change in the uncertain tax positions for the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Balance at the beginning of the year $ 24,755 $ 24,755 Decreases: For prior years’ tax positions ( 1,355 ) — 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 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. 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. 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. Note 14. Revenue The majority of the Company’s revenue is recognized at the point in time when the customer obtains control of the respective lidar sensor kits. Revenue recognized over time is immaterial to total revenue recognized for any given period. The following table presents total revenues by geographic area based on the location products were shipped to and services provided (in thousands): Year Ended December 31, 2025 2024 Americas $ 92,103 $ 58,430 Asia and Pacific 54,187 20,158 Europe, Middle East and Africa 23,094 32,513 Total $ 169,384 $ 111,101 Customers that accounted for more than 10% of revenue during the years ended December 31, 2025 and 2024 were as follows: Year Ended December 31, 2025 2024 Customer A 11 % * Customer E 21 % 12 % *Customer accounted for less than 10% of total revenue in the period. 92 Table of Contents Countries that accounted for more than 10% of revenue was as follows: Year Ended December 31, 2025 2024 United States 53 % 49 % China 15 % * Sweden * 10 % *Country accounted for less than 10% of total revenue in the period. Revenue Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. An unbilled receivable is recorded in instances when revenue is recognized prior to invoicing, and amounts collected in advance of services being provided are recorded as deferred revenue. Contract assets are generated when contractual billing schedules differ from revenue recognition timing. Unbilled receivables A receivable for multi-year licensing services is generally recorded upon invoicing. A receivable for multi-year license contracts is recorded upon delivery, whether or not invoiced, to the extent the Company has an unconditional right to receive payment in the future related to those licenses. 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 Contract assets primarily relate to the Company’s rights to consideration under license arrangements when the licenses have been transferred to the customers, but payment is contingent upon a future event, other than the passage of time (i.e. type of unbilled receivable) and for which the Company does not have an unconditional right at the reporting date. 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 Contract liabilities consist of deferred revenue, advanced payments and deposits from customers for goods and services that are yet to be provided. Deferred revenue includes billings in excess of revenue recognized related to product sales, licenses, extended warranty and other services revenue, and is recognized as revenue when the Company performs under the contract. The long-term portion of deferred revenue, mostly related to obligations under license arrangements and extended warranty, is classified as non-current contract liabilities and is included in other non-current liabilities in the Company’s consolidated balance sheets. Customer advanced payments represent required customer payments in advance of product shipments according to customer’s payment term. Customer advance payments are recognized as revenue when control of the performance obligation is transferred to the customer. Customer deposits represent consideration received from a customer which can be applied to future product or service purchases, or refunded. 93 Table of Contents 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). December 31, 2025 December 31, 2024 Contract assets, current $ 937 $ — Contract assets, non-current portion 281 — Total contract assets $ 1,218 $ — Contract liabilities, current Deferred revenues from multi-year licensing contracts $ 133 $ 10,922 Other contract liabilities 20,572 23,429 Contract liabilities, non-current portion Deferred revenues from multi-year licensing contracts $ 429 $ 627 Other contract liabilities 2,677 1,911 Total contract liabilities $ 23,811 $ 36,889 Deferred revenues from multi-year licensing contracts mainly represent minimum royalty payments received from licensees relating to long-term IP license contracts for which the Company has future obligations under the license agreements. 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 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 during the year ended December 31, 2024. Modifications were accounted for in accordance with the contract modification framework. As of December 31, 2025, $ 12.5 million remained deferred under the contract until a future product and service delivery date. The following table provides information about contract liabilities (remaining performance obligations) and the significant changes in the balances during the years ended December 31, 2025 and 2024 (in thousands). Contract Liabilities 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 ) 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 94 Table of Contents Note 15. Segment 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 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): Year Ended December 31, 2025 2024 Total revenue $ 169,384 $ 111,101 Less (1) : Product manufacturing costs 68,024 57,951 Stock based compensation and amortization expense 7,307 6,377 Other costs (2) 10,617 6,313 Research and development 65,170 58,084 Sales and marketing 27,624 27,852 General and administrative 64,641 58,701 Total other (income) expense, net ( 10,687 ) ( 7,669 ) 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, tariffs and other cost of revenue items. Note 16. 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. 95 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures None.