AEye (LIDR) 2025 Conference Summary Company Overview - **Company**: AEye - **Industry**: LiDAR technology for automotive and adjacent markets Key Points and Arguments Strategic Decisions and Product Development - AEye made a pivotal decision in early 2024 to separate from Continental and focus on developing a new LiDAR product called Apollo, aimed at improving performance, cost, and size [5][6] - Apollo was integrated with NVIDIA DRIVE AGX platform, enhancing performance metrics and providing an objective view of capabilities [7][8] Market Dynamics and Opportunities - There is a growing recognition of LiDAR's essential role in the automotive industry, with significant demand expected in the next twelve months [9][12] - AEye anticipates shipping 2 to 3 million sensors in China this year, indicating a strong market presence [11] - Replacement cycles in adjacent industries, such as tolling applications, are driving demand for LiDAR due to its cost-effectiveness compared to traditional methods [13][14] Financial Position and Growth Potential - AEye has over $80 million in cash, with the lowest burn rate in the industry, providing a strong financial position to capitalize on near-term revenue opportunities [17][18] - The company expects significant returns with lower revenue thresholds due to its efficient cost structure [18] Competitive Advantages - AEye's LiDAR technology can gather 4 to 5 times more photons than competitors, allowing for a detection range of up to one kilometer [22] - The Apollo system is designed for easy integration into vehicles without extensive modifications, enhancing its appeal to OEMs [23] Partnerships and Collaborations - AEye's partnership with NVIDIA has provided substantial support, including outbound marketing and validation of their technology, which has accelerated discussions with OEMs [47][50] - The collaboration with Lite On is crucial for supply chain management and cost efficiency, allowing AEye to maintain a competitive edge [60][68] Revenue Generation and Market Strategy - AEye has secured six contracts and is in deep negotiations for 30 more, indicating a robust pipeline for future revenue [31] - The company is focusing on both automotive and non-automotive markets, with higher margins expected in non-automotive applications [61] Future Outlook and Milestones - AEye aims to ship thousands of units by 2026, with a focus on ramping revenue and customer conversions [71] Additional Important Insights - The integration of Apollo and Optus platforms allows for a comprehensive solution that combines sensing and AI capabilities, expanding AEye's addressable market [44][46] - AEye is addressing supply chain concerns proactively, ensuring resilience through strategic partnerships [66][68] - The company is focused on maintaining financial discipline and resource allocation to convert customer engagements into long-term revenue [41][43]

[CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=4&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section contains forward-looking statements subject to substantial risks and uncertainties, reflecting management's current views on future events and financial performance - This section contains forward-looking statements subject to substantial risks and uncertainties, reflecting management's current views on future events and financial performance[10](index=10&type=chunk) - Actual results may differ materially due to known and unknown risks, uncertainties, and other important factors, including those detailed in the "Risk Factors" sections of this report and the Annual Report on Form 10-K[11](index=11&type=chunk) - The company undertakes no obligation to update forward-looking statements, except as required by law[11](index=11&type=chunk) [PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for AEye, Inc., including the balance sheets, statements of operations and comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, fair value measurements, and other financial details for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (2025 vs 2024) | | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Total current assets | $20,412 | $25,171 | -$4,759 | | Total assets | $22,102 | $27,120 | -$5,018 | | Total current liabilities | $10,587 | $11,307 | -$720 | | Total liabilities | $11,920 | $11,996 | -$76 | | Total stockholders' equity | $10,182 | $15,124 | -$4,942 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) | Metric (Six months ended June 30) | 2025 (in thousands) | 2024 (in thousands) | Change (2025 vs 2024) | | :-------------------------------- | :------------------ | :------------------ | :-------------------- | | Revenue | $86 | $52 | +$34 (65% increase) | | Cost of revenue | $204 | $423 | -$219 (52% decrease) | | Gross loss | $(118) | $(371) | +$253 (68% decrease) | | Total operating expenses | $15,387 | $18,616 | -$3,229 (17% decrease)| | Loss from operations | $(15,505) | $(18,987) | +$3,482 (18% decrease)| | Net loss | $(17,286) | $(18,206) | +$920 (5% decrease) | | Net loss per share (basic & diluted)| $(0.95) | $(2.80) | +$1.85 | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric (Six months ended June 30) | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------------- | :------------------ | :------------------ | | Balance at December 31, 2024/2023 | $15,124 | $29,023 | | Stock-based compensation | $3,661 | $4,754 | | Issuance of common stock under CSPA | $8,397 | $5,560 | | Net loss | $(17,286) | $(18,206) | | Balance at June 30, 2025/2024 | $10,182 | $20,810 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity (Six months ended June 30) | 2025 (in thousands) | 2024 (in thousands) | Change (2025 vs 2024) | | :-------------------------------------------- | :------------------ | :------------------ | :-------------------- | | Net cash used in operating activities | $(14,158) | $(14,241) | +$83 (0.6% decrease in usage) | | Net cash used in investing activities | $(4,686) | $2,993 | -$7,679 (shift from provision to usage) | | Net cash provided by financing activities | $10,952 | $5,531 | +$5,421 (98% increase) | | Net decrease in cash, cash equivalents and restricted cash | $(7,892) | $(5,717) | -$2,175 (38% increase in decrease) | | Cash, cash equivalents and restricted cash—End of period | $2,374 | $13,365 | -$10,991 (82% decrease) | [Notes To Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements) [1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%201.%20ORGANIZATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - AEye, Inc. provides high-performance, active lidar systems for vehicle autonomy, ADAS, and robotic vision applications, featuring an Intelligent Sensing Platform with a solid-state software-definable active lidar sensor and adaptive sensing SmartScan architecture[25](index=25&type=chunk) - The company has incurred net losses and negative cash flows from operations since inception, with an accumulated deficit of **$390,381 thousand** as of June 30, 2025[34](index=34&type=chunk) - Management believes existing liquidity of **$19,210 thousand** (cash, cash equivalents, marketable securities) at June 30, 2025, combined with **$68,844 thousand** raised post-quarter-end, provides sufficient financial resources for the next twelve months[35](index=35&type=chunk) [2. FAIR VALUE MEASUREMENTS](index=12&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%202.%20FAIR%20VALUE%20MEASUREMENTS) - The company measures financial assets and liabilities at fair value using a hierarchy of Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[43](index=43&type=chunk)[44](index=44&type=chunk) - The 2025 Convertible Note and Derivative Warrant Liabilities are measured using Level 3 inputs, with fair value estimates based on binomial-lattice and Black-Scholes models, respectively[50](index=50&type=chunk)[52](index=52&type=chunk) | Metric | Derivative Warrant Liabilities (in thousands) | 2025 Note (in thousands) | Total (in thousands) | | :------------------------------------------ | :------------------------------------ | :----------------------- | :------------------- | | Balance at December 31, 2024 | $26 | $— | $26 | | Additions | $1,046 | $3,266 | $4,312 | | Payments and conversions | $— | $(1,466) | $(1,466) | | Change in fair value included in other income (expense), net | $(284) | $197 | $(87) | | Balance at June 30, 2025 | $788 | $1,997 | $2,785 | [3. INVENTORIES](index=15&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%203.%20INVENTORIES) | Category | June 30, 2025 (unaudited) | December 31, 2024 | | :------------ | :------------------------ | :---------------- | | Raw materials | $214 | $158 | | Finished goods| $18 | $18 | | Total inventory, net | $232 | $176 | - Current and noncurrent inventory was written down by **$4,648 thousand** as of June 30, 2025, and **$4,659 thousand** as of December 31, 2024, to reduce it to the lower of cost or net realizable value[57](index=57&type=chunk) [4. PREPAID AND OTHER CURRENT ASSETS](index=15&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%204.%20PREPAID%20AND%20OTHER%20CURRENT%20ASSETS) | Category | June 30, 2025 (unaudited) | December 31, 2024 | | :----------------------------- | :------------------------ | :---------------- | | Prepaid expenses | $886 | $966 | | Receivable for issuance of common stock | $— | $1,679 | | Other | $57 | $61 | | Total prepaid and other current assets | $943 | $2,706 | - Advances to suppliers were written down by **$1,041 thousand** as of both June 30, 2025, and December 31, 2024, due to the winding down of the legacy Non-Automotive product[58](index=58&type=chunk) [5. LEASES](index=16&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%205.%20LEASES) - The Company leases office facilities and terminated an existing lease early in August 2024, recording a net gain of **$491 thousand** on termination for the year ended December 31, 2024[59](index=59&type=chunk)[60](index=60&type=chunk) - On April 28, 2025, the Company settled disputes related to the early lease termination by paying **$1,400 thousand** in cash and issuing a warrant for **350,000 shares**, resulting in a net gain of **$1,612 thousand** for the six months ended June 30, 2025[61](index=61&type=chunk) | Period | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $70 | $582 | $141 | $1,171 | | Variable lease cost | $4 | $85 | $8 | $169 | | Total operating lease cost | $74 | $667 | $149 | $1,340 | [6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES](index=17&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%206.%20ACCRUED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) | Category | June 30, 2025 (unaudited) | December 31, 2024 | | :----------------------------- | :------------------------ | :---------------- | | Lease termination liability | $301 | $3,313 | | Accrued payroll | $342 | $347 | | Operating lease liabilities | $253 | $267 | | Accrued bonuses | $1,248 | $2,875 | | Total accrued expenses and other current liabilities | $3,117 | $7,709 | [7. CONVERTIBLE NOTES](index=17&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%207.%20CONVERTIBLE%20NOTES) - In January 2025, the Company issued a senior unsecured convertible promissory note (2025 Note) for **$3,240 thousand** principal amount (**$3,000 thousand** purchase price) and warrants to purchase up to **805,263 shares** of common stock[65](index=65&type=chunk) - The 2025 Note has an eighteen-month term, accrues **7% annual interest**, and is convertible into common stock at **$2.22 per share**, subject to adjustments and beneficial ownership limitations[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - As of June 30, 2025, the 2025 Note had an outstanding principal balance and accrued interest of **$1,958 thousand**, recorded at a fair value of **$1,997 thousand** as a current liability[70](index=70&type=chunk) [8. INTEREST EXPENSE AND OTHER](index=18&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%208.%20INTEREST%20EXPENSE%20AND%20OTHER) | Category | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Common stock purchase agreements costs | $195 | $— | $306 | $— | | Debt issuance costs | $36 | $— | $2,020 | $— | | Amortization of premiums (accretion of discounts) on marketable securities, net | $(90) | $(170) | $(181) | $(441) | | Interest expense and other | $365 | $(56) | $2,473 | $(373) | [9. STOCKHOLDERS' EQUITY](index=19&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%209.%20STOCKHOLDERS'%20EQUITY) - On July 25, 2024, the Company entered into a Common Stock Purchase Agreement (CSPA) with New Circle, granting the right to sell up to **$50,000 thousand** of common stock over 36 months, with **3,480,713 shares** issued for **$6,480 thousand** gross proceeds through June 30, 2025[72](index=72&type=chunk)[75](index=75&type=chunk) - In connection with the CSPA, the Company issued **225,563 commitment shares** with a fair value of **$282 thousand** and recorded a **$200 thousand** cash commitment fee to Interest expense and other[74](index=74&type=chunk) - Through June 30, 2025, the Company sold **6,395,643 shares** under the ATM Agreement with A.G.P. for gross proceeds of **$8,825 thousand**, increasing the aggregate offering value to **$15,292 thousand** in January 2025[77](index=77&type=chunk) [10. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)](index=20&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%2010.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) | Category | Balance at Dec 31, 2024 | Balance at Mar 31, 2025 | Balance at June 30, 2025 | | :------------------------------------------ | :---------------------- | :---------------------- | :----------------------- | | Unrealized gains on available-for-sale securities | $5 | $6 | $— | [11. NET LOSS PER SHARE](index=20&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%2011.%20NET%20LOSS%20PER%20SHARE) | Metric (Six months ended June 30) | 2025 | 2024 | | :-------------------------------- | :---------- | :---------- | | Net loss attributable to common stockholders (in thousands) | $(17,286) | $(18,206) | | Weighted average common shares outstanding (basic and diluted) | 18,137,050 | 6,499,089 | | Net loss per share (basic and diluted) | $(0.95) | $(2.80) | - Basic and diluted net loss per share were the same due to net losses, making all potentially dilutive securities anti-dilutive[80](index=80&type=chunk) [12. STOCK-BASED COMPENSATION](index=21&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%2012.%20STOCK-BASED%20COMPENSATION) | Expense Category | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :------------------------ | :----------------------------- | :----------------------------- | | Research and development | $1,011 | $1,708 | | Sales and marketing | $255 | $185 | | General and administrative| $2,395 | $2,861 | | Total stock-based compensation | $3,661 | $4,754 | [13. SEGMENT INFORMATION](index=21&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%2013.%20SEGMENT%20INFORMATION) - The Company operates as one reportable segment, managed on a consolidated basis by the Chief Executive Officer, focusing on the design and development of high-performance, active lidar systems and applications[82](index=82&type=chunk) [14. REVENUE](index=21&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%2014.%20REVENUE) | Category (Six months ended June 30) | 2025 (in thousands) | 2024 (in thousands) | | :---------------------------------- | :--- | :--- | | Revenue by primary geographical market: | | | | United States | $5 | $41 | | Europe | $65 | $11 | | Asia-Pacific | $16 | $— | | Total | $86 | $52 | | Revenue by timing of recognition: | | | | Recognized at a point in time | $22 | $26 | | Recognized over time | $64 | $26 | | Total | $86 | $52 | - Revenue from prototype sales for the six months ended June 30, 2025, was **$22 thousand**, compared to **$26 thousand** in the prior year[84](index=84&type=chunk) - Development contract revenue for the six months ended June 30, 2025, was **$64 thousand**, compared to **$26 thousand** in the prior year[85](index=85&type=chunk) [15. RESTRUCTURING](index=22&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%2015.%20RESTRUCTURING) - In 2023, the Company implemented a revised strategic plan to reduce fixed operating costs by simplifying business operations and focusing on a single unifying product, Apollo, for both Automotive and Non-Automotive markets[89](index=89&type=chunk) - As part of restructuring, the Company wound down support for its legacy Non-Automotive product and terminated its headquarters lease in August 2024, settling the lease termination liability in 2025[89](index=89&type=chunk) | Category | Balance as of Dec 31, 2024 (in thousands) | Adjustments (in thousands) | Cash payments (in thousands) | Balance as of June 30, 2025 (in thousands) | | :------------------------- | :---------- | :------------ | :-------------------------- | | Losses on purchase commitments | $297 | $— | $(30) | $267 | | Lease Termination Liability | $3,313 | $(1,612) | $(1,400) | $301 | | Other | $5 | $— | $— | $5 | | Total | $3,615 | $(1,612) | $(1,430) | $573 | [16. INCOME TAXES](index=23&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%2016.%20INCOME%20TAXES) - The Company recognized a **$2 thousand** provision for income taxes for both the six months ended June 30, 2025, and 2024[91](index=91&type=chunk) - Income tax rates vary from statutory rates due to valuation allowances on net operating losses and foreign tax rate differences[91](index=91&type=chunk) [17. COMMITMENTS AND CONTINGENCIES](index=23&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%2017.%20COMMITMENTS%20AND%20CONTINGENCIES) - On April 28, 2025, the Company settled a legal dispute with its former landlord regarding an early lease termination, paying **$1,400 thousand** in cash and agreeing to issue warrants for up to **350,000 shares** of common stock[93](index=93&type=chunk) - The landlord had initially claimed up to **$8,500 thousand** and drew down a **$2,150 thousand** standby letter of credit in August 2024[93](index=93&type=chunk) [18. SUBSEQUENT EVENTS](index=23&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements%20-%2018.%20SUBSEQUENT%20EVENTS) - Subsequent to June 30, 2025, the Company issued **17,889,400 shares** of common stock under purchase agreements, raising **$67,057 thousand** in gross proceeds[94](index=94&type=chunk) - A noteholder exercised warrants to purchase **805,263 shares** of common stock for **$1,788 thousand** after June 30, 2025[94](index=94&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations for the three and six months ended June 30, 2025, compared to 2024, highlighting key factors, market trends, strategic initiatives, and liquidity [Overview](index=24&type=section&id=MD%26A%20-%20Overview) - The overview provides a high-level discussion of operating results and trends affecting the business, important for understanding financial results for the six months ended June 30, 2025, and future prospects[96](index=96&type=chunk) [Key Factors Affecting Our Operating Results](index=24&type=section&id=MD%26A%20-%20Key%20Factors%20Affecting%20Our%20Operating%20Results) - Future performance depends on successful product development and commercialization, securing additional capital, establishing Tier 1 automotive supplier relationships, protecting intellectual property, and adapting to changing market conditions and regulations[98](index=98&type=chunk)[99](index=99&type=chunk) - The company faces risks common to early-stage technology companies, including the possibility of not successfully developing or commercializing products and challenges in securing favorable additional capital[99](index=99&type=chunk) [Market Trends and Uncertainties](index=25&type=section&id=MD%26A%20-%20Market%20Trends%20and%20Uncertainties) - The Company anticipates growing demand for its Intelligent Sensing Platform in Automotive (ADAS, autonomous driving, commercial trucking) and Non-Automotive (railway, airport safety, perimeter monitoring, transportation logistics) markets[100](index=100&type=chunk) - Growth in the Automotive market is heavily influenced by successful integration into OEM programs and Tier 1 partnerships, which provide competitive advantages due to scale and existing relationships[100](index=100&type=chunk) - The Company expects to continue incurring net losses and negative cash flows until commercialization, remaining dependent on raising additional capital, but recently secured funds for at least the next 12 months[101](index=101&type=chunk)[102](index=102&type=chunk) [Partnerships and Commercialization](index=25&type=section&id=MD%26A%20-%20Partnerships%20and%20Commercialization) - Design wins with customers are critical for future success, with development cycles varying from months to several years depending on the market and application[103](index=103&type=chunk) - The Company engaged LITEON as its Tier 1 automotive supplier in early 2024, successfully producing the first Apollo units, and partnered with ATI and LighTekton Co., Ltd to manufacture and distribute products in China[104](index=104&type=chunk) - Significant progress has been made in collaboration with Nvidia, integrating lidar technology into Nvidia's DRIVE AGX Orin platform, which is expected to open new opportunities with global automotive OEMs and Tier 1 suppliers[105](index=105&type=chunk) - In July 2025, the Company launched OPTIS™, a physical AI solution combining Apollo lidar with advanced computing to enhance legacy infrastructure and create an ecosystem for third-party partners beyond automotive applications[107](index=107&type=chunk) [Gross Margin](index=26&type=section&id=MD%26A%20-%20Gross%20Margin) - Gross margins are influenced by selling price, development contract pricing, royalty rates, unit volumes, product mix, component costs, and overhead, and have been negatively impacted by inventory write-downs[108](index=108&type=chunk) - The Company expects attractive gross margins from licensing lidar technology to Tier 1 partners in the Automotive market and leveraging this foundation to expand into Non-Automotive markets[108](index=108&type=chunk) - Development contracts, focusing on product customization, are expected to remain significant in the near term but will represent a smaller share of total revenue over time as technology licensing in the Automotive market increases[109](index=109&type=chunk) [Investment and Innovation](index=26&type=section&id=MD%26A%20-%20Investment%20and%20Innovation) - The Company's proprietary adaptive intelligent lidar technology, the Intelligent Sensing Platform, actively scans environments to enable faster, more accurate decisions in complex scenarios[110](index=110&type=chunk) - In June 2024, Apollo, the next-generation lidar sensor, was introduced, offering best-in-class range and resolution in a compact, cost-effective form factor for automotive and non-automotive applications, with a horizontal field of view up to **120°** and long-range detection up to **1 kilometer**[111](index=111&type=chunk) - Financial performance is highly dependent on maintaining technology leadership through R&D investments and commercialization, with price becoming a critical differentiator for OEMs favoring lower-cost, higher-volume products[113](index=113&type=chunk) [Basis of Presentation](index=27&type=section&id=MD%26A%20-%20Basis%20of%20Presentation) - The Company conducts its business through one operating segment[114](index=114&type=chunk) [Components of Results of Operations](index=27&type=section&id=MD%26A%20-%20Components%20of%20Results%20of%20Operations) - Prototype sales revenue is recognized at a point in time upon transfer of goods, while development contract revenue is recognized when performance obligations are satisfied, either at a point in time or over time[115](index=115&type=chunk) - Cost of revenue includes direct materials, labor, inventory write-downs, and overhead for prototypes, and direct costs and overhead for development contracts[116](index=116&type=chunk) - R&D expenses, primarily for hardware, software, and system engineering, are expected to increase as the company invests in product development and commercialization[117](index=117&type=chunk) - Sales and marketing expenses are expected to increase as the company pursues Non-Automotive opportunities and leverages Tier 1 partners for Automotive market commercialization[120](index=120&type=chunk) - General and administrative expenses are expected to decrease slightly due to reduced facility costs, while still supporting other departments[121](index=121&type=chunk) - Changes in the fair value of the 2025 Note and warrant liabilities are recognized in other income (expense), net, and are expected to decrease given subsequent cancellations and exercises[122](index=122&type=chunk) - Interest income and other primarily consists of interest on cash, cash equivalents, and marketable securities, and is expected to increase due to funds raised post-June 30, 2025[125](index=125&type=chunk) [Results of Operations](index=29&type=section&id=MD%26A%20-%20Results%20of%20Operations) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($ in thousands) | Change (%) | | :-------------------------- | :------ | :------ | :--------- | :--------- | | Revenue | $22 | $32 | $(10) | (31)% | | Cost of revenue | $108 | $160 | $(52) | (33)% | | Gross loss | $(86) | $(128) | $42 | (33)% | | Research and development | $3,670 | $3,838 | $(168) | (4)% | | Sales and marketing | $601 | $67 | $534 | 797% | | General and administrative | $4,348 | $4,223 | $125 | 3% | | Total operating expenses | $8,619 | $8,128 | $491 | 6% | | Loss from operations | $(8,705)| $(8,256)| $(449) | 5% | | Net loss | $(9,270)| $(7,987)| $(1,283) | 16% | | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($ in thousands) | Change (%) | | :-------------------------- | :------ | :------ | :--------- | :--------- | | Total revenue | $86 | $52 | $34 | 65% | | Cost of revenue | $204 | $423 | $(219) | (52)% | | Gross loss | $(118) | $(371) | $253 | (68)% | | Research and development | $7,160 | $8,370 | $(1,210) | (14)% | | Sales and marketing | $984 | $408 | $576 | 141% | | General and administrative | $7,243 | $9,838 | $(2,595) | (26)% | | Total operating expenses | $15,387 | $18,616 | $(3,229) | (17)% | | Loss from operations | $(15,505)| $(18,987)| $3,482 | (18)% | | Net loss | $(17,286)| $(18,206)| $920 | (5)% | - Net loss for the three months ended June 30, 2025, increased by **16%** to **$9,270 thousand**, primarily due to increased personnel costs, Apollo development investments, and changes in fair value of convertible notes and warrants[136](index=136&type=chunk) - Net loss for the six months ended June 30, 2025, decreased by **5%** to **$17,286 thousand**, driven by decreases in stock-based compensation, personnel, and facilities expenses, partially offset by changes in fair value of convertible notes and warrants and Apollo development investments[147](index=147&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=MD%26A%20-%20Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, cash, cash equivalents, and marketable securities totaled **$19,210 thousand**[148](index=148&type=chunk) - Subsequent to June 30, 2025, the Company raised an additional **$68,844 thousand** through common stock purchase agreements and warrant exercises, providing sufficient financial resources for at least the next twelve months[148](index=148&type=chunk)[149](index=149&type=chunk) - The Company expects to continue incurring losses for several years and remains dependent on issuing equity for liquidity, with potential dilution for existing stockholders[148](index=148&type=chunk)[159](index=159&type=chunk) - The Company is no longer subject to "baby shelf" rules as of July 28, 2025, which previously limited capital raising through Form S-3 shelf registration[152](index=152&type=chunk) [Cash Flow Summary](index=34&type=section&id=MD%26A%20-%20Cash%20Flow%20Summary) | Activity | 2025 (in thousands) | 2024 (in thousands) | | :------------------ | :---------- | :---------- | | Operating activities| $(14,158) | $(14,241) | | Investing activities| $(4,686) | $2,993 | | Financing activities| $10,952 | $5,531 | - Net cash used in operating activities was **$14,158 thousand** for the six months ended June 30, 2025, primarily due to net loss, partially offset by non-cash adjustments like stock-based compensation and debt issuance costs[162](index=162&type=chunk) - Net cash used in investing activities was **$4,686 thousand** for the six months ended June 30, 2025, driven by marketable securities purchases, partially offset by redemptions[164](index=164&type=chunk) - Net cash provided by financing activities was **$10,952 thousand** for the six months ended June 30, 2025, mainly from common stock purchase agreements and convertible note issuance[166](index=166&type=chunk) [Critical Accounting Estimates](index=35&type=section&id=MD%26A%20-%20Critical%20Accounting%20Estimates) - No significant changes occurred in critical accounting estimates during the six months ended June 30, 2025, compared to those disclosed in the 2024 Annual Report on Form 10-K[169](index=169&type=chunk) [Emerging Growth Company Status](index=35&type=section&id=MD%26A%20-%20Emerging%20Growth%20Company%20Status) - The Company is an "emerging growth company" and has elected to take advantage of the extended transition period for new or revised financial accounting standards, which may affect comparability with other public companies[170](index=170&type=chunk)[171](index=171&type=chunk) - The Company will remain an emerging growth company until the earliest of specific criteria, including market value of common stock exceeding **$700 million**, total annual gross revenue of **$1.07 billion**, issuing over **$1.0 billion** in non-convertible debt, or December 31, 2025[171](index=171&type=chunk) [Recent Accounting Pronouncements](index=35&type=section&id=MD%26A%20-%20Recent%20Accounting%20Pronouncements) - The Company is assessing the impact of ASU 2023-09 (Income Taxes) effective for fiscal years after December 15, 2024, and ASU 2024-03 (Disaggregation of Income Statement Expenses) effective for fiscal years after December 15, 2026[41](index=41&type=chunk)[42](index=42&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the Company's exposure to market risks, including interest rate risk, credit risk, and foreign currency exchange risk, and outlines how these risks are managed [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Market%20Risk%20-%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) - The Company is exposed to market risks from adverse changes in financial market prices and rates, but does not believe inflation has had a material effect on its business[173](index=173&type=chunk)[174](index=174&type=chunk) [Interest Rate Risk](index=36&type=section&id=Market%20Risk%20-%20Interest%20Rate%20Risk) - As of June 30, 2025, the Company held **$19,210 thousand** in cash, cash equivalents, and marketable securities, primarily in money market funds and marketable securities[175](index=175&type=chunk) - A hypothetical **10%** change in interest rates would not materially impact the Company's financial condition or results of operations due to the short-term nature of its cash, cash equivalents, and marketable securities[175](index=175&type=chunk) [Credit Risk](index=36&type=section&id=Market%20Risk%20-%20Credit%20Risk) - Credit risk is concentrated with four customers accounting for **10%** or more of accounts receivable and one vendor for accounts payable as of June 30, 2025[176](index=176&type=chunk) - The Company mitigates credit risk through ongoing credit evaluations and generally does not require collateral[177](index=177&type=chunk) - For the six months ended June 30, 2025, write-offs were **$2 thousand** and provision for expected credit losses was **$2 thousand**[177](index=177&type=chunk) [Foreign Currency Exchange Risk](index=36&type=section&id=Market%20Risk%20-%20Foreign%20Currency%20Exchange%20Risk) - Foreign currency exchange gains and losses primarily result from fluctuations in the euro versus the U.S. dollar, recognized in other income (expense), net[178](index=178&type=chunk) - The Company has not engaged in exchange rate hedging activities and does not expect to in the foreseeable future[178](index=178&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures as of June 30, 2025, and reiterates the effectiveness of internal control over financial reporting as of December 31, 2024 [Evaluation of Disclosure Controls and Procedures](index=37&type=section&id=Controls%20and%20Procedures%20-%20Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, including the principal executive and financial officers, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[180](index=180&type=chunk) [Management's Report on Internal Controls Over Financial Reporting](index=37&type=section&id=Controls%20and%20Procedures%20-%20Management's%20Report%20on%20Internal%20Controls%20Over%20Financial%20Reporting) - The Company's internal control over financial reporting was effective as of December 31, 2024, as discussed in its 2024 Annual Report on Form 10-K[181](index=181&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=37&type=section&id=Controls%20and%20Procedures%20-%20Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) - All control systems have inherent limitations, meaning no evaluation can provide absolute assurance against misstatements due to error or fraud, and effectiveness may deteriorate over time[182](index=182&type=chunk) [Changes in Internal Control Over Financial Reporting](index=37&type=section&id=Controls%20and%20Procedures%20-%20Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[183](index=183&type=chunk) [PART II - OTHER INFORMATION](index=38&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section details legal proceedings, comprehensive risk factors, and other required disclosures for the reporting period [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not currently a party to any legal proceedings that would materially affect its business, financial condition, or results of operations - The Company is not currently involved in legal proceedings that would have a material adverse effect on its business, financial condition, or results of operations[186](index=186&type=chunk) - On April 28, 2025, the Company settled a lease dispute for its former headquarters, paying **$1,400 thousand** in cash and agreeing to issue warrants for up to **350,000 shares** of common stock[187](index=187&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section outlines numerous risks and uncertainties that could materially and adversely affect the Company's business, financial condition, results of operations, and cash flows [Summary of Risk Factors](index=38&type=section&id=Risk%20Factors%20-%20Summary%20of%20Risk%20Factors) - The Company is an early-stage company with a history of losses and expects to incur significant expenses and continuing losses for at least the next several years[190](index=190&type=chunk)[192](index=192&type=chunk) - Substantial reliance on Tier 1 automotive suppliers means business could be adversely affected if relationships are not maintained or if design wins with OEMs are not secured[190](index=190&type=chunk)[196](index=196&type=chunk) - The Company may need to raise additional capital, which may not be available on acceptable terms, and market adoption of lidar technology is uncertain, posing risks to business[190](index=190&type=chunk)[198](index=198&type=chunk)[234](index=234&type=chunk) [Risk Factors Relating to Our Business and Industry](index=39&type=section&id=Risk%20Factors%20-%20Risk%20Factors%20Relating%20to%20Our%20Business%20and%20Industry) - The Company has incurred net losses since inception (**$17.3 million** in H1 2025) and expects significant losses for several more years due to investments in design, testing, commercialization, and public company operations[192](index=192&type=chunk)[195](index=195&type=chunk) - The business model for the Automotive market relies heavily on maintaining relationships with Tier 1 suppliers (e.g., LITEON) to secure OEM design wins; failure to do so could materially affect the business[196](index=196&type=chunk)[197](index=197&type=chunk) - Quarterly financial results are difficult to predict and can fluctuate significantly due to factors like order timing, pricing, customer retention, product development, supply chain disruptions, and macroeconomic conditions[202](index=202&type=chunk)[204](index=204&type=chunk) - The Company's limited operating history makes it difficult to evaluate future prospects and risks, including the ability to develop and commercialize products, manage growth, and respond to market changes[206](index=206&type=chunk)[209](index=209&type=chunk) - The Company relies on third-party suppliers for most components, leading to susceptibility to shortages, long lead times, and price fluctuations, which could disrupt the supply chain and delay product deliveries[238](index=238&type=chunk) - International sales (**95%** of revenue in H1 2025) expose the Company to risks like tariffs, exchange rate fluctuations, political instability, and global health crises, particularly in new markets like China[243](index=243&type=chunk)[244](index=244&type=chunk) - The complexity of products can lead to unforeseen delays or expenses from undetected defects, errors, or reliability issues, potentially damaging reputation and exposing the company to product liability claims[246](index=246&type=chunk) - The average selling prices of products or licensing fees may decrease rapidly, requiring continuous cost reduction and new product introductions to maintain gross margins[254](index=254&type=chunk) - Adverse conditions in the automotive industry, global economic downturns, or geopolitical conflicts (e.g., Ukraine, Middle East) could reduce demand for products and licenses, negatively impacting results[255](index=255&type=chunk)[256](index=256&type=chunk) - The New Circle Purchase Agreement has contractual limitations that may prevent the Company from drawing the full **$50 million** commitment, and any draws will dilute existing stockholders, especially at low stock prices[273](index=273&type=chunk) [Legal and Regulatory Risks Related to Our Business](index=64&type=section&id=Risk%20Factors%20-%20Legal%20and%20Regulatory%20Risks%20Related%20to%20Our%20Business) - The Company is subject to U.S. and foreign import/export control laws and regulations; non-compliance could lead to substantial civil or criminal penalties and loss of privileges[300](index=300&type=chunk) - Changes in trade policy, tariffs, and import/export regulations could materially affect the business by increasing costs, disrupting supply chains, or limiting sales[301](index=301&type=chunk) - The Company is subject to various environmental laws and regulations, which could impose substantial costs, cause delays in production facility construction, and increase raw material costs[310](index=310&type=chunk)[311](index=311&type=chunk) - Compliance with U.S. and foreign anti-corruption and anti-money laundering laws is critical; violations can lead to criminal liability, fines, and reputational harm[312](index=312&type=chunk) - Regulations concerning automobiles and lasers, including product safety and emissions requirements, can impact product adoption and development timelines, potentially delaying sales[313](index=313&type=chunk)[314](index=314&type=chunk)[316](index=316&type=chunk) - Failures to comply with evolving privacy, data protection (e.g., GDPR, CCPA), and information security requirements could result in significant liability, costs, and reputational damage[318](index=318&type=chunk)[320](index=320&type=chunk) [Risks Related to Our Intellectual Property](index=68&type=section&id=Risk%20Factors%20-%20Risks%20Related%20to%20Our%20Intellectual%20Property) - The Company's success depends on its ability to obtain and enforce patents, trademarks, copyrights, and trade secrets; however, these protections may be challenged, invalidated, or circumvented[322](index=322&type=chunk)[323](index=323&type=chunk) - Protecting intellectual property is expensive and difficult, especially outside the U.S., and litigation may be necessary to enforce rights, potentially leading to substantial costs and diversion of management resources[324](index=324&type=chunk)[325](index=325&type=chunk) - Third-party claims of intellectual property infringement could lead to costly litigation, expensive licenses, damage customer relationships, and adversely affect the business[327](index=327&type=chunk)[328](index=328&type=chunk) - Patent applications may not issue as anticipated, or at all, and competitors may design around issued patents, affecting the ability to prevent commercial exploitation of similar products[330](index=330&type=chunk) - Reliance on unpatented proprietary technology, trade secrets, and know-how carries risks of unauthorized disclosure, independent development by competitors, or inadequate protection from confidentiality agreements[331](index=331&type=chunk)[332](index=332&type=chunk) - The Company uses third-party licensed software, including open-source, and inability to maintain licenses, errors, or non-compliance with open-source terms could increase costs or reduce service levels[333](index=333&type=chunk)[334](index=334&type=chunk) [Risks Related to Being a Public Company](index=71&type=section&id=Risk%20Factors%20-%20Risks%20Related%20to%20Being%20a%20Public%20Company) - Operating as a public company incurs significant legal, accounting, and compliance costs, and management must devote substantial time to these initiatives, increasing net loss[336](index=336&type=chunk) - Most of the management team has limited experience managing a public company, which could divert attention from day-to-day business operations[338](index=338&type=chunk) - Stockholder activism can lead to significant expenses, business disruption, proxy contests, litigation, and stock price volatility, as experienced in the 2025 annual meeting[339](index=339&type=chunk)[340](index=340&type=chunk) - The Company's Charter designates the Court of Chancery of Delaware and federal district courts as exclusive forums for certain disputes, potentially limiting stockholders' ability to choose a favorable judicial forum[342](index=342&type=chunk)[344](index=344&type=chunk) - The Board's authority to issue preferred stock may delay, defer, or prevent tender offers or takeover attempts[345](index=345&type=chunk) - Lack of analyst coverage or adverse changes in recommendations could cause the stock price and trading volume to decline[346](index=346&type=chunk) - Interest from retail and individual investors can lead to increased stock price volatility, potentially unrelated to operating performance, and may expose the stock to "short squeezes"[347](index=347&type=chunk)[349](index=349&type=chunk) - The Company does not anticipate declaring cash dividends in the foreseeable future, requiring stockholders to rely on stock price appreciation for gains[350](index=350&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=74&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report for the period - There were no unregistered sales of equity securities or use of proceeds to report for the period[351](index=351&type=chunk) [Item 3. Defaults Upon Senior Securities](index=74&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities to report for the period - There were no defaults upon senior securities to report for the period[352](index=352&type=chunk) [Item 4. Mine Safety Disclosures](index=74&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that the disclosure requirements for mine safety are not applicable to the Company - This item is not applicable to the Company[353](index=353&type=chunk) [Item 5. Other Information](index=74&type=section&id=Item%205.%20Other%20Information) This section reports that no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025 - No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the three months ended June 30, 2025[354](index=354&type=chunk) [Item 6. Exhibits](index=75&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including various certificates of incorporation, bylaws, and certifications from executive officers - This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including various certificates of incorporation, bylaws, and certifications from executive officers[355](index=355&type=chunk) [Signatures](index=76&type=section&id=Signatures) This section provides the official signatures of the Chief Executive Officer and Chief Financial Officer, certifying the report's submission - The report was duly signed on August 8, 2025, by Matthew Fisch, Chief Executive Officer and Chairman of the Board, and Conor Tierney, Chief Financial Officer and Treasurer[357](index=357&type=chunk)

Core Viewpoint - AEye is a technology company focused on lidar sensor solutions for advanced driver assistance and autonomous vehicle systems, facing challenges in revenue despite commercial progress [1][5]. Company Overview and Strategic Focus - AEye develops lidar-based sensing platforms for automotive, transportation, and smart infrastructure markets, with its 4Sight™ Intelligent Sensing Platform enabling adaptive sensing capabilities [3][10]. - The company emphasizes technological differentiation, strategic partnerships, and capital-light operations, with recent product milestones and contract wins [4][11]. Financial Performance - In Q2 2025, AEye reported a revenue of $22 thousand, down 31.3% from $32 thousand in Q2 2024, despite a potential $30 million contract opportunity [2][5]. - The company experienced a gross loss of $86 thousand, with operating expenses increasing to $8.6 million from $8.1 million in Q2 2024 [6][5]. - AEye's GAAP net loss was $9.3 million, up from $8.0 million in Q1 2025, indicating ongoing financial challenges [6]. Product Development and Partnerships - AEye's Apollo lidar platform has been fully integrated into the NVIDIA DRIVE AGX Orin system, enhancing access to new OEM opportunities [7]. - The company signed six new contracts in 2025, expanding its presence in both automotive and non-automotive sectors [8]. - AEye introduced OPTIS™, a sensing solution for airport security and logistics, further diversifying its product offerings [7][11]. Outlook and Future Considerations - Management expects cash burn to remain in the $27–$29 million range for the full year 2025, with no revenue or margin guidance provided [12]. - Key areas to monitor include the conversion of commercial wins into recognizable revenue and the management of operating expenses as commercialization ramps up [13].

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $9,300,000 or $0.48 per share in Q2 2025, an increase from a net loss of $8,000,000 or $0.46 per share in Q2 2024 [22] - Non-GAAP net loss was $6,700,000 or $0.35 per share in Q2 2025, compared to a non-GAAP net loss of $5,500,000 or $0.31 per share in the prior quarter [22] - Cash burn decreased to $7,100,000 in Q2 2025 from $8,100,000 in Q1 2025, despite one-time expenses [20][22] - The company ended the quarter with cash, cash equivalents, and marketable securities of $19,200,000, which has since more than tripled [22][23] Business Line Data and Key Metrics Changes - The company has signed six revenue-generating contracts in Q2 2025, tripling the number of contract wins from two in the previous quarter [19][40] - The sales funnel has grown significantly, leading to 30 new potentially high-value customer engagements [7][19] - The launch of Optus, a next-generation platform, has been deployed to multiple customers, enhancing the company's ability to scale efficiently [7][12] Market Data and Key Metrics Changes - The company is seeing strong traction in various sectors including defense, smart infrastructure, rail, trucking, aviation, and security, indicating a diverse market presence [16][40] - The integration with NVIDIA's DRIVE AGX ecosystem is expected to accelerate OEM collaborations and expand market reach [17][30] Company Strategy and Development Direction - The company aims to transition from product development to active sales and deployment, focusing on delivering differentiated products that gain market traction [25] - The capital light financial strategy allows the company to maintain low operating costs while driving significant scale [13][20] - The focus on physical AI and the integration of third-party software solutions through Optus is expected to enhance market opportunities [12][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the pipeline, with over 100 potential customers actively engaged and 30 in advanced negotiations [19][60] - The company anticipates modest top-line revenue growth for the remainder of the year but emphasizes the importance of accelerating customer engagements [19] - Management highlighted the importance of maintaining a disciplined approach to capital allocation while scaling operations [23][86] Other Important Information - The company has secured a $30,000,000 opportunity with a top global transportation OEM, expected to contribute to revenue this year [6][48] - The total potential liquidity, including cash and credit facilities, is approximately $126,000,000, providing a strong foundation for future growth [23][84] Q&A Session Summary Question: Can you provide more details on the Navidion integration? - The integration with NVIDIA has positioned the company at the top of performance benchmarks, simplifying conversations with OEMs and enhancing credibility [29][30] Question: Can you elaborate on Optus and its role in the broader strategy? - Optus combines sensing and analytics, allowing for tailored AI solutions and rapid deployment across various markets, filling the gap while automotive ramps up [34][35] Question: What is the status of the customer pipeline? - The company has over 100 engaged customers, with 30 in advanced negotiations, and is seeing traction across diverse industries [40][60] Question: Are there additional deliverables for the $30,000,000 opportunity? - The company is on the customer's timeline for integration and deployment, actively working on the project [48][49] Question: Can you provide insight into the sales and marketing expenses? - The increase in sales and marketing expenses is primarily due to reallocating funds from G&A and R&D, rather than new incremental spending [53] Question: What does "physical AI" mean in the context of the company's strategy? - Physical AI refers to the interaction of AI and sensing with the real world, extending beyond automotive applications [70] Question: Is the company looking to partner with defense contractors? - The company is open to partnerships with defense contractors and is actively pursuing opportunities in that sector [76][81]

Business Highlights - AEye tripled new business wins from 2 to 6, with visibility to additional non-automotive orders totaling thousands of units[18] - A leading transportation OEM selected AEye for a potential $30 million revenue opportunity[18] - AEye launched OPTIS™ powered by NVIDIA Jetson Orin, securing multiple deployments in airport safety and security, perimeter monitoring, and transportation logistics[18] - AEye is fully integrated into NVIDIA DRIVE AGX Orin platform, potentially driving expanded engagement with leading OEMs and paving the way for Hyperion integration[14] - AEye was chosen for GM-sponsored WinTOR initiative, creating the potential for a significant sourcing advantage for future OEM programs[16] Financial Performance - GAAP Net Loss for Q2 2025 was $(9.3) million, with a GAAP EPS of $(0.48)[29] - Non-GAAP Net Loss for Q2 2025 was $(6.7) million, with a Non-GAAP EPS of $(0.35)[29] - Net Cash Used in Operating Activities for Q2 2025 was $(6.4) million[29] - Cash, Cash Equivalents, and Marketable Securities totaled $19.2 million[29] Financial Outlook - The company expects FY 2025 cash burn to be within the previously communicated range of $27 million to $29 million[31]

[Second Quarter 2025 Results Overview](index=1&type=section&id=Second%20Quarter%202025%20Results%20Overview) AEye achieved significant commercial traction with new business wins and a potential $30 million OEM contract, ending Q2 2025 with $19.2 million cash and $7.1 million cash burn [Recent Business Highlights](index=1&type=section&id=Recent%20Business%20Highlights) AEye achieved significant commercial traction in Q2 2025, tripling new business wins and securing a potential $30 million OEM contract - Tripled new business wins from 2 to **6 in 2025**, with visibility to additional non-automotive orders potentially totaling thousands of units[1](index=1&type=chunk)[5](index=5&type=chunk) - Secured selection by a leading global transportation OEM for a potential **$30 million revenue opportunity**, expected to begin generating revenue this year[4](index=4&type=chunk)[5](index=5&type=chunk) - Fully integrated into NVIDIA DRIVE AGX Orin platform, driving expanded engagement opportunities with leading OEMs[4](index=4&type=chunk)[5](index=5&type=chunk) - Launched OPTIS™, powered by NVIDIA Jetson Orin, and secured multiple deployments in airport safety and security, perimeter monitoring, and transportation logistics[4](index=4&type=chunk)[5](index=5&type=chunk) - Chosen for GM-sponsored WinTOR initiative, creating the potential for a significant sourcing advantage for future OEM programs[4](index=4&type=chunk)[5](index=5&type=chunk) [Recent Financial Highlights](index=2&type=section&id=Recent%20Financial%20Highlights) The company ended Q2 2025 with **$19.2 million** in cash and equivalents, with a **$7.1 million** cash burn - Cash, cash equivalents, and marketable securities were **$19.2 million** as of June 30, 2025[7](index=7&type=chunk)[12](index=12&type=chunk) - Cash burn excluding net financing proceeds in Q2 2025 was **$7.1 million**[12](index=12&type=chunk) - GAAP net loss in Q2 2025 was **$(9.3) million**, or **$(0.48) per share**, based on **19.1 million** weighted average common shares outstanding[12](index=12&type=chunk) - Non-GAAP net loss in Q2 2025 was **$(6.7) million**, or **$(0.35) per share**, based on **19.1 million** weighted average common shares outstanding[12](index=12&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted the transition to sustained growth, driven by an expanding sales funnel, strategic partnerships, and strong financial discipline [Management Commentary Details](index=1&type=section&id=Management%20Commentary%20Details) Management highlighted the transition to sustained growth, driven by an expanding sales funnel, strategic partnerships, and strong financial discipline - AEye reached a critical inflection point in Q2 2025, moving beyond the development phase to deliver sustained growth[4](index=4&type=chunk) - The sales funnel has grown exponentially, with active engagement with more than **100 potential customers** and **six new contracts** signed in 2025[4](index=4&type=chunk) - Apollo's selection by a leading global transportation OEM represents a potential **$30 million opportunity**, expected to contribute to revenue this year[4](index=4&type=chunk) - Apollo is certified as part of NVIDIA's DRIVE AGX Orin platform and selected for the GM-sponsored WinTOR program, underscoring AEye's leading position in automotive markets[4](index=4&type=chunk) - The launch of OPTIS™ unlocks expansion into high-value applications like intelligent transportation systems, airport safety and security, perimeter security, defense, and transportation logistics, with multiple deployments already secured[4](index=4&type=chunk) - The company ended Q2 with **$19.2 million** in cash, cash equivalents, and marketable securities, which has more than tripled since then, positioning AEye to capitalize on growing customer demand[7](index=7&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) This section provides an overview of AEye's lidar technology and details for the Q2 2025 investor conference call [About AEye](index=2&type=section&id=About%20AEye) AEye is a pioneer in software-defined lidar technology, offering solutions for autonomy, infrastructure, and security - AEye offers unique software-defined lidar solutions that enable advanced driver-assistance, vehicle autonomy, smart infrastructure, security, and logistics applications[10](index=10&type=chunk) - AEye's flagship product, Apollo, is recognized for its small form factor and ability to detect objects at up to **one kilometer**[10](index=10&type=chunk) - AEye also offers a full-stack solution through its OPTIS™ platform, which captures high-resolution 3D images, interprets them, and provides real-time direction[10](index=10&type=chunk) [Conference Call and Webcast Details](index=2&type=section&id=Conference%20Call%20and%20Webcast%20Details) AEye management hosted an investor conference call on July 31, 2025, to discuss Q2 2025 results - AEye management webcast its investor conference call on July 31, 2025, at **2:00 p.m. Pacific Time (5:00 p.m. Eastern Time)** to discuss Q2 2025 results[9](index=9&type=chunk) - The call was hosted by AEye CEO Matt Fisch and CFO Conor Tierney[9](index=9&type=chunk) - The webcast and accompanying slides were accessible via the company's website at https://investors.aeye.ai/ and https://aeye.pub/4nGHVGn[9](index=9&type=chunk)[10](index=10&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) The company provides its financial outlook for 2025, including expected cash burn [2025 Financial Outlook](index=2&type=section&id=2025%20Financial%20Outlook) AEye expects full-year 2025 cash burn to be between **$27 million** and **$29 million** - AEye expects cash burn for full year 2025 to be within the previously communicated range of **$27 million to $29 million**[8](index=8&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) This section explains and reconciles non-GAAP financial measures used to assess the company's performance [Non-GAAP Measures Explanation and Definitions](index=2&type=section&id=Non-GAAP%20Measures%20Explanation%20and%20Definitions) Non-GAAP measures provide additional insight into performance, with definitions for non-GAAP net loss and Adjusted EBITDA - Non-GAAP measures provide additional insight into the Company's on-going performance and enable more meaningful and consistent period-to-period comparisons[11](index=11&type=chunk) - Non-GAAP net loss is defined as GAAP net loss plus stock-based compensation, stock issuance and debt issuance costs, change in fair value of convertible note and warrant liabilities, expenses related to contested proxy, and loss (gain) on termination of operating lease, net[14](index=14&type=chunk) - Adjusted EBITDA is defined as non-GAAP net loss plus depreciation and amortization expense, less interest income and other, plus interest expense and other, plus provision for income tax[14](index=14&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This table reconciles GAAP net loss to non-GAAP net loss and Adjusted EBITDA for Q2 2025 and 2024 Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share data) | Metric | Q2 2025 (3 months) | Q2 2024 (3 months) | YTD 2025 (6 months) | YTD 2024 (6 months) | | :------------------------------------------------ | :------------------ | :------------------ | :------------------- | :------------------- | | GAAP net loss | $(9,270) | $(7,987) | $(17,286) | $(18,206) | | Non-GAAP net loss | $(6,670) | $(6,232) | $(12,159) | $(13,439) | | Adjusted EBITDA | $(6,891) | $(6,489) | $(12,542) | $(14,177) | | GAAP net loss per share (basic and diluted) | $(0.48) | $(1.16) | $(0.95) | $(2.80) | | Non-GAAP net loss per share (basic and diluted) | $(0.35) | $(0.91) | $(0.67) | $(2.07) | | Shares used in computing GAAP net loss per share | 19,125,970 | 6,874,454 | 18,137,050 | 6,499,089 | | Shares used in computing Non-GAAP net loss per share | 19,125,970 | 6,874,454 | 18,137,050 | 6,499,089 | [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding future events and trends, subject to risks and uncertainties [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This disclaimer outlines forward-looking statements, their inherent risks, and the company's policy on updates - Forward-looking statements are predictions about future events based on current expectations and assumptions, subject to risks and uncertainties[13](index=13&type=chunk) - Specific forward-looking statements include potential benefits from NVIDIA DRIVE AGX Orin platform integration, potential **$30 million** revenue from a leading transportation OEM, visibility to additional non-automotive orders, market opportunities for Apollo and OPTIS™ products, and the Company's expected cash burn for full year 2025[13](index=13&type=chunk) - Many factors could cause actual future events to differ from forward-looking statements, including program delays, market conditions, and regulatory changes[13](index=13&type=chunk)[15](index=15&type=chunk) - Readers are cautioned not to put undue reliance on forward-looking statements; AEye assumes no obligation and does not intend to update or revise these statements[16](index=16&type=chunk) [Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, and cash flows [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The balance sheets show AEye's financial position, with total assets decreasing from **$27.12 million** to **$22.10 million** Consolidated Balance Sheet Highlights (in thousands) | ASSETS | As of June 30, 2025 | As of Dec 31, 2024 | Change | | :------------------------ | :------------------ | :----------------- | :----- | | Cash and cash equivalents | $2,374 | $10,266 | $(7,892) | | Marketable securities | $16,836 | $12,012 | $4,824 | | Total current assets | $20,412 | $25,171 | $(4,759) | | Total assets | $22,102 | $27,120 | $(5,018) | | LIABILITIES | | | | | Total current liabilities | $10,587 | $11,307 | $(720) | | Total liabilities | $11,920 | $11,996 | $(76) | | STOCKHOLDERS' EQUITY | | | | | Total stockholders' equity | $10,182 | $15,124 | $(4,942) | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) The statements of operations detail revenue, gross loss, and net loss for Q2 and YTD 2025 compared to 2024 Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 (3 months) | Q2 2024 (3 months) | YTD 2025 (6 months) | YTD 2024 (6 months) | | :-------------------------------------- | :------------------ | :------------------ | :------------------- | :------------------- | | Revenue | $22 | $32 | $86 | $52 | | Cost of revenue | $108 | $160 | $204 | $423 | | Gross loss | $(86) | $(128) | $(118) | $(371) | | Total operating expenses | $8,619 | $8,128 | $15,387 | $18,616 | | Loss from operations | $(8,705) | $(8,256) | $(15,505) | $(18,987) | | Net loss | $(9,270) | $(7,987) | $(17,286) | $(18,206) | | Net loss per common share (basic and diluted) | $(0.48) | $(1.16) | $(0.95) | $(2.80) | | Weighted average common shares outstanding | 19,125,970 | 6,874,454 | 18,137,050 | 6,499,089 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The cash flow statements detail operating, investing, and financing activities for the six months ended June 30, 2025 Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | YTD 2025 (6 months) | YTD 2024 (6 months) | Change | | :------------------------------------ | :------------------ | :------------------ | :----- | | Net cash used in operating activities | $(14,158) | $(14,241) | $83 | | Net cash (used in) provided by investing activities | $(4,686) | $2,993 | $(7,679) | | Net cash provided by financing activities | $10,952 | $5,531 | $5,421 | | Net decrease in cash, cash equivalents and restricted cash | $(7,892) | $(5,717) | $(2,175) | | Cash, cash equivalents and restricted cash at end of period | $2,374 | $13,365 | $(10,991) | [Investor Relations Contacts](index=9&type=section&id=Investor%20Relations%20Contacts) This section provides contact information for investor relations inquiries [Investor Relations Contact Information](index=9&type=section&id=Investor%20Relations%20Contact%20Information) Contact details for investor relations, including agency and company representatives, are provided - Agency Contact: Evan Niu, CFA, Financial Profiles, Inc. (eniu@finprofiles.com, 310-622-8243)[21](index=21&type=chunk) - Company Contact: AEye, Inc. Investor Relations (info@aeye.ai, 925-400-4366)[21](index=21&type=chunk)

Company Overview - AEye stock (NASDAQ: LIDR) experienced a significant increase of nearly 240% in July, although it has since retraced by approximately 12% in the last five trading days [1] - AEye specializes in developing adaptive LiDAR systems for advanced driver-assistance systems (ADAS) and autonomous driving capabilities [1] Compliance and Investor Confidence - The company regained compliance with Nasdaq's minimum bid price requirement in late July 2025, closing at or above $1.00 for 10 consecutive trading days, which likely boosted investor confidence [3] - Increased trading volume has been observed over the past month, indicating heightened investor interest [3] Strategic Collaborations - AEye's Apollo lidar sensor has been integrated into Nvidia's DRIVE AGX platform, which is widely used for enabling autonomous and semi-autonomous driving capabilities [4] - This collaboration provides AEye access to a growing ecosystem of OEMs and Tier 1 suppliers, enhancing technical validation and reducing customer acquisition costs [5] Financial Performance - AEye generated only $64,000 in revenue last quarter, with total sales over the last 12 months declining by 71% to $240,000, resulting in a high price-to-sales ratio of 314x compared to the S&P 500's 3.1x [6] - The company reported a trailing operating loss of $32 million, indicating significant cash burn and a lack of near-term profitability [6] Market Position and Risks - While the partnership with Nvidia is promising, it does not guarantee commercial orders or long-term adoption, as the deal is not exclusive and Nvidia collaborates with other lidar partners [7] - AEye is characterized as a highly volatile microcap stock with a market capitalization of approximately $70 million, suggesting potential risks for investors [7]

Core Insights - AEye's stock surged nearly 50% on October 25, 2023, and has increased over 3x in a week due to a collaboration with Nvidia [2] - AEye specializes in adaptive LiDAR technology for advanced driver-assistance systems (ADAS) and autonomous vehicles [2] Company Developments - AEye's Apollo lidar sensor has been integrated into Nvidia's DRIVE AGX platform, which supports autonomous and semi-autonomous driving functionalities [3] - This integration provides AEye access to a significant ecosystem of OEMs and Tier 1 suppliers in the autonomous vehicle sector [4] Financial Performance - AEye reported trailing twelve-month revenue of only $246,000, with a significant decline in sales of 71% over the past year [5] - The company generated just $64,000 in revenue last quarter, leading to a high price-to-sales ratio of 314x compared to the S&P 500's 3.1x [5] Operational Challenges - AEye faces substantial operating losses, with a trailing operating loss of $32 million and no immediate path to profitability [5] - The partnership with Nvidia, while promising, does not guarantee commercial orders or long-term adoption, as it is not exclusive [5]

Core Viewpoint - AEye, Inc. (NASDAQ: LIDR) has experienced a significant stock surge of 240% at market open, which has since moderated to 149%, indicating strong market momentum for the company [1]. Company Summary - AEye, Inc. is a technology company that specializes in manufacturing lidar sensors, which are critical for various applications including autonomous vehicles and advanced driver-assistance systems [1]. Market Context - The surge in AEye's stock price reflects broader trends in the technology sector, particularly in the lidar and AI markets, which have been gaining traction due to increased demand for advanced sensing technologies [1].

PART I - FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) For the first quarter ended March 31, 2025, AEye, Inc. reported a net loss of **$8.0 million**, an improvement from the **$10.2 million** net loss in the same period of 2024, with total assets of **$28.8 million** and total liabilities of **$11.8 million** [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, the company's total assets increased to **$28.8 million** from **$27.1 million** at year-end 2024, primarily due to an increase in marketable securities, while cash and cash equivalents decreased significantly to **$5.3 million** from **$10.3 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $5,267 | $10,266 | | Marketable securities | $20,659 | $12,012 | | Total current assets | $26,962 | $25,171 | | **Total assets** | **$28,796** | **$27,120** | | **Liabilities & Equity** | | | | Total current liabilities | $10,769 | $11,307 | | **Total liabilities** | **$11,798** | **$11,996** | | **Total stockholders' equity** | **$16,998** | **$15,124** | - A new current liability for a convertible note of **$3.2 million** was recorded as of March 31, 2025[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended March 31, 2025, revenue was minimal at **$64 thousand**, up from **$20 thousand** year-over-year, with the company significantly reducing its net loss to **$8.0 million** from **$10.2 million** in Q1 2024, driven by a **35% reduction** in total operating expenses Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $64 | $20 | | Gross loss | $(32) | $(243) | | Research and development | $3,490 | $4,532 | | General and administrative | $2,895 | $5,615 | | Total operating expenses | $6,768 | $10,488 | | Loss from operations | $(6,800) | $(10,731) | | **Net loss** | **$(8,016)** | **$(10,219)** | | **Net loss per share** | **$(0.46)** | **$(1.61)** | - Weighted average shares outstanding increased significantly to **17.4 million** from **6.4 million** year-over-year, reflecting share issuances from financing activities[16](index=16&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) During the first quarter of 2025, stockholders' equity increased by **$1.9 million** to **$17.0 million**, primarily due to the issuance of **4.5 million shares** for **$7.8 million** and **$2.5 million** in stock-based compensation, offset by the **$8.0 million** net loss for the quarter - The company issued **4,514,023 shares** under its Common Stock Purchase Agreements for proceeds of **$7.8 million** in Q1 2025[18](index=18&type=chunk) - The accumulated deficit grew from **$373.1 million** at the end of 2024 to **$381.1 million** as of March 31, 2025, due to the quarterly net loss[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$7.8 million**, consistent with the prior year, while investing activities used **$8.6 million** due to increased purchases of marketable securities, and financing activities provided a substantial inflow of **$11.4 million** from a convertible note and common stock issuances, resulting in a net decrease in cash of **$5.0 million** Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,803) | $(7,885) | | Net cash (used in) provided by investing activities | $(8,578) | $368 | | Net cash provided by financing activities | $11,382 | $120 | | **Net decrease in cash** | **$(4,999)** | **$(7,397)** | | **Cash at end of period** | **$5,267** | **$11,685** | [Notes To Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20To%20Condensed%20Consolidated%20Financial%20Statements) Key notes highlight the company's early-stage nature, its reliance on raising capital to fund operations, and its assessment of sufficient liquidity for at least one year, with Q1 2025 activities including a **$3.24 million** convertible note issuance, a **$1.4 million** cash settlement of a lease dispute (resulting in a **$1.7 million** gain), and continued capital raising through stock purchase agreements - The company has a history of net losses and negative cash flows, with an accumulated deficit of **$381.1 million** as of March 31, 2025, but management believes its plans to raise capital and manage spending alleviate substantial doubt about its ability to continue as a going concern[29](index=29&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - In January 2025, the company issued a senior unsecured convertible promissory note with a principal amount of **$3.24 million** and a warrant to purchase **805,263 shares**, for which the company elected the fair value option[62](index=62&type=chunk)[66](index=66&type=chunk) - The company settled a lease termination dispute in April 2025, involving a **$1.4 million** cash payment and a warrant for **350,000 shares**, which was treated as a subsequent event resulting in a **$1.685 million** gain recorded in Q1 2025[58](index=58&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - Revenue in Q1 2025 was **$64 thousand**, entirely from development contracts with a European customer, recognized over time, compared to **$20 thousand** in Q1 2024 from prototype sales[82](index=82&type=chunk)[83](index=83&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's early-stage nature, its reliance on Tier 1 automotive suppliers like LITEON for commercialization, and the critical need to raise additional capital to fund operations, having raised **$11.1 million** in gross proceeds in Q1 2025, which contributed to a reduced net loss of **$8.0 million** for the quarter - The company is an early-stage entity with a history of losses and is dependent on raising additional capital to fund operations and achieve commercialization of its lidar solutions[96](index=96&type=chunk)[98](index=98&type=chunk) - Key strategic initiatives include leveraging its Tier 1 partner, LITEON, for automotive market entry and pursuing non-automotive opportunities, with recent partnerships announced to enter the Chinese market[100](index=100&type=chunk)[101](index=101&type=chunk) - In Q1 2025, the company raised **$11.055 million** in gross proceeds through stock purchase agreements and a convertible note issuance[99](index=99&type=chunk) - Management believes its plans to manage spending and raise capital alleviate substantial doubt about its ability to continue as a going concern for at least 12 months from the report's issuance date[145](index=145&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Comparing Q1 2025 to Q1 2024, revenue increased by **$44 thousand** due to development contracts, cost of revenue decreased by **63%**, and total operating expenses fell by **35%** (**$3.7 million**), driven by lower R&D costs and a **$1.7 million** gain from a lease settlement, leading to a reduced operating loss of **$6.8 million** and a net loss of **$8.0 million** Comparison of Operations for the three months ended March 31 (in thousands) | | 2025 | 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenue | $64 | $20 | $44 | 220% | | Gross loss | $(32) | $(243) | $211 | (87)% | | Research and development | $3,490 | $4,532 | $(1,042) | (23)% | | General and administrative | $2,895 | $5,615 | $(2,720) | (48)% | | Loss from operations | $(6,800) | $(10,731) | $3,931 | (37)% | | Net loss | $(8,016) | $(10,219) | $2,203 | (22)% | - The decrease in General and Administrative expenses was primarily driven by a favorable adjustment of **$1.685 million** upon the settlement of a lease dispute[125](index=125&type=chunk) - Interest expense and other increased significantly due to **$2.1 million** in costs related to new financing arrangements in Q1 2025[128](index=128&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company had **$25.9 million** in cash, cash equivalents, and marketable securities, with primary liquidity sources from equity issuances, including **$11.4 million** provided by financing activities in Q1 2025, and despite ongoing losses, management believes its capital-raising plans and spending management will provide sufficient liquidity for at least the next year, though subject to "baby shelf" rules limiting capital raises - As of March 31, 2025, cash, cash equivalents, and marketable securities totaled **$25,926 thousand**[131](index=131&type=chunk) - The company has several financing facilities in place, including a Common Stock Purchase Agreement (CSPA) with New Circle and an At-The-Market (ATM) agreement with A.G.P., which provided gross proceeds of **$6.5 million** and **$8.2 million** respectively through March 31, 2025[139](index=139&type=chunk)[140](index=140&type=chunk) - In January 2025, the company issued a convertible note for an aggregate purchase price of **$3.0 million**[141](index=141&type=chunk) - The company is limited by the SEC's "baby shelf" rules, which restricts the amount it can raise through its Form S-3 shelf registration to one-third of its public float in any 12-month period, as its public float is below **$75 million**[136](index=136&type=chunk)[183](index=183&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, primarily interest rate risk, credit risk, and foreign currency exchange risk, with interest rate risk on its cash and marketable securities considered low due to their short-term nature, credit risk concentrated with two customers, and foreign currency risk arising from euro-denominated transactions not currently hedged - **Interest Rate Risk:** A hypothetical **10% change** in interest rates is not expected to have a material impact on the company's financials due to the short-term nature of its cash and investments[161](index=161&type=chunk) - **Credit Risk:** As of March 31, 2025, two customers accounted for **10% or more** of accounts receivable[162](index=162&type=chunk) - **Foreign Currency Risk:** The company has exposure to fluctuations in the euro versus the U.S. dollar but does not currently engage in hedging activities[164](index=164&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[166](index=166&type=chunk) - No material changes to the internal control over financial reporting occurred during the first quarter of 2025[169](index=169&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company was involved in a legal dispute with the landlord of its former headquarters over an alleged breach of lease, which was settled on April 28, 2025, involving a payment of **$1.4 million** in cash and the issuance of a warrant to purchase **350,000 shares** of common stock - A complaint was filed against the company in August 2024 regarding a breach of lease for its former headquarters, with the landlord initially claiming up to **$8.5 million**[172](index=172&type=chunk) - On April 28, 2025, the dispute was settled, with the company agreeing to pay **$1,400** in cash and issue a warrant to purchase **350,000 shares** of common stock at an exercise price of **$2.22 per share**[172](index=172&type=chunk)[285](index=285&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) The company faces numerous significant risks, including a history of losses and the expectation of continued losses, substantial reliance on Tier 1 automotive suppliers for market entry, and the critical need to raise additional capital, alongside uncertainties in market adoption of lidar technology, intense competition, potential supply chain disruptions, and the risk of stock price volatility and potential delisting from Nasdaq - **Financial Viability:** The company is an early-stage company with a history of losses (**$381.1 million** accumulated deficit) and expects to incur significant losses for the next few years, necessitating additional capital which may not be available on acceptable terms[177](index=177&type=chunk)[178](index=178&type=chunk)[180](index=180&type=chunk) - **Business Model Reliance:** The business substantially relies on relationships with Tier 1 automotive suppliers to secure design wins with OEMs, as highlighted by the recent termination of its program with Continental and new engagement with LITEON[175](index=175&type=chunk)[179](index=179&type=chunk) - **Market and Technology Risk:** Market adoption of lidar is uncertain and may develop more slowly than expected, with the company facing intense competition from other lidar developers and alternative technologies like cameras and radar[176](index=176&type=chunk)[211](index=211&type=chunk)[246](index=246&type=chunk) - **Supply Chain Risk:** The company relies on third-party, and sometimes single-source, suppliers for key components, making it susceptible to shortages, price fluctuations, and disruptions, particularly from international suppliers[175](index=175&type=chunk)[215](index=215&type=chunk) - **Stock and Listing Risk:** The company received a notice from Nasdaq on March 11, 2025, for non-compliance with the **$1.00** minimum bid price requirement and has until September 8, 2025, to regain compliance or face potential delisting[199](index=199&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - None reported for the quarter[333](index=333&type=chunk) [Defaults Upon Senior Securities](index=82&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - None reported[334](index=334&type=chunk) [Mine Safety Disclosures](index=82&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[335](index=335&type=chunk) [Other Information](index=83&type=section&id=Item%205.%20Other%20Information) For the three months ended March 31, 2025, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading plan during the first quarter of 2025[337](index=337&type=chunk) [Exhibits](index=83&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the company's articles of incorporation, bylaws, and certifications from the CEO and CFO as required by the Sarbanes-Oxley Act