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Market Demand and Growth - AEye anticipates significant growth in demand for its Intelligent Sensing Platform across Automotive and Non-Automotive markets, with a focus on advanced driver-assistance systems and autonomous driving [100]. - The partnership with LITEON aims to produce up to 60,000 units annually for the Apollo product, reflecting a strategic move to meet increasing customer demand [102]. - AEye's collaboration with Accelight Technologies and LighTekton provides access to a potential $2.5 billion market opportunity in China [103]. - The integration of AEye's lidar technology into Nvidia's DRIVE AGX Orin platform is expected to enhance engagement with global automotive OEMs and Tier 1 suppliers [105]. - AEye has seen renewed interest in Apollo from Non-Automotive customers, indicating potential for shorter cycle times and gradual revenue contributions [116]. - The company emphasizes the importance of maintaining technology leadership and responding to evolving customer requirements to secure its market position [113]. Financial Performance - Revenue decreased by $54, or 52%, to $50 for the three months ended September 30, 2025, compared to $104 for the same period in 2024 [126]. - Total revenue decreased by $20, or 13%, to $136 for the nine months ended September 30, 2025, from $156 for the same period in 2024 [138]. - Net loss increased by $624, or 7%, to $9,330 for the three months ended September 30, 2025, from $8,706 for the same period in 2024 [136]. - Net loss decreased by $296, or 1%, to $26,616 for the nine months ended September 30, 2025, from $26,912 for the same period in 2024 [147]. Cost and Expenses - Cost of revenue decreased by $203, or 66%, to $103 for the three months ended September 30, 2025, from $306 for the same period in 2024 [128]. - Cost of revenue decreased by $422, or 58%, to $307 for the nine months ended September 30, 2025, from $729 for the same period in 2024 [139]. - Research and development expenses decreased by $706, or 19%, to $3,061 for the three months ended September 30, 2025, from $3,767 for the same period in 2024 [129]. - Sales and marketing expenses increased by $557, to $631 for the three months ended September 30, 2025, from $74 for the same period in 2024 [130]. Capital and Financing - The company has raised up to $200,000 in capital through a Shelf Registration effective September 26, 2023, with limitations under "baby shelf" rules [151]. - On May 29, 2024, the company completed a Registered Direct Offering, issuing 727,706 shares at a price of $3.448, generating gross proceeds of approximately $2,509 [153]. - The company entered into a Stock Purchase Agreement with New Circle, allowing the sale of up to $50,000 of common stock, with 8,980,713 shares issued for gross proceeds of $27,754 as of September 30, 2025 [154]. - The company has raised additional capital of $9,768 through the sale of 3,164,545 shares under the A.G.P. Agreement after September 30, 2025 [155]. Cash Flow and Liquidity - For the nine months ended September 30, 2025, net cash used in operating activities was $20,247, while net cash provided by financing activities was $82,183 [160][165]. - The company had cash, cash equivalents, and marketable securities totaling $84,333 as of September 30, 2025, indicating a focus on capital preservation and liquidity [174]. Risks and Future Outlook - The company has not engaged in foreign currency exchange hedging activities and does not expect to do so in the foreseeable future, exposing it to potential exchange rate risks [177]. - The company expects to continue needing additional capital resources to fund operations, as expenses are anticipated to exceed operating income [159].

Financial Data and Key Metrics Changes - AEye reported a GAAP net loss of $9.3 million, or $0.30 per share, in Q3 2025, which was comparable to the GAAP net loss of $9.3 million, or $0.48 per share, in Q2 2025 [18] - Non-GAAP net loss improved to $5.4 million, or $0.17 per share, beating consensus estimates, compared to a non-GAAP net loss of $6.7 million, or $0.35 per share, in the prior quarter [18] - Cash balance at the end of Q3 was $84.3 million, more than quadrupling compared to the prior quarter-end [18][19] Business Line Data and Key Metrics Changes - The customer base doubled to 12 contracts signed year-to-date, with significant traction in both automotive and non-automotive sectors [6][27] - The commercial pipeline expanded significantly, with active quotes tripling and technical engagements increasing by nearly 50% [15][27] Market Data and Key Metrics Changes - Engagement with the automotive industry remains strong, with active discussions with about two-thirds of major Western OEMs [9] - The non-automotive funnel grew sixfold from fewer than 100 prospects earlier this year to nearly 600 today [15] Company Strategy and Development Direction - AEye is focused on building and converting a strong revenue pipeline, with a capital-light model that allows for efficient scaling without heavy capital investments [5][17] - The company is executing a three-phase growth strategy aimed at unlocking value and building momentum, with the expectation of accelerating revenue growth in the coming years [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the capital-light model, emphasizing its flexibility and resilience in manufacturing [24] - The company anticipates a significant shift towards Level 3 and Level 4 automotive applications based on recent OEM requirements [38] Other Important Information - AEye has secured a partnership with Lite-On to expand manufacturing capacity, aiming to produce up to 60,000 units annually [8] - The company has cleaned up its capital and debt structure, positioning itself in a stronger financial state compared to peers [19] Q&A Session Summary Question: Confidence in the capital-light model - Management highlighted the importance of partnerships for manufacturing flexibility and cost efficiency, allowing for just-in-time delivery and lower upfront costs [24][25] Question: Customer pipeline and mix between auto and non-auto - The customer base has shown significant growth, with a unique value proposition resonating in high-performance sectors like defense and smart infrastructure [27][30] Question: Interest from commercial drone manufacturers - Management confirmed active engagement across UAV and manned aerial vehicles, with a focus on high-performance solutions applicable to various use cases [36][37] Question: Focus of OEMs for mass market - There has been a noticeable shift in OEM requirements towards Level 3 and Level 4 specifications in the last six months [38] Question: Details on institutional investor and investment size - Management indicated that a well-known institutional investor has contributed to the recent capital raise, enhancing the company's financial runway [44][45] Question: Applications and volume opportunity from new wins - New contracts are primarily in high-performance sectors, with proof-of-concept deployments laying the groundwork for future volume ramp [49][50]

Third Quarter 2025 Earnings CEO Matt Fisch CFO Conor Tierney November 6, 2025 Disclaimer Forward-Looking Statements This presentation of AEye, Inc. ("AEye" or the "Company") includes statements that are not historical facts, but rather are forward- looking statements within the meaning of the federal securities laws, including safe harbor provisions under the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are sometimes accompanied by words such as "believe," "continue," "p ...

Customer Growth and Partnerships - AEye doubled its customer base to 12 and secured six new business wins since the end of Q2 2025, with a total of 12 customer contracts signed year-to-date[5] - AEye's partnerships with Black Sesame Technologies, Blue-Band, and Flasheye are accelerating commercial traction for its products[5] - The number of active quotes in AEye's pipeline tripled, indicating strong commercial traction and market confidence[3] Financial Performance - The company achieved a GAAP net loss of $(9.3) million, or $(0.30) per share, for Q3 2025, while the non-GAAP net loss was $(5.4) million, or $(0.17) per share[6] - Revenue for Q3 2025 was $50,000, compared to $104,000 in Q3 2024, representing a decrease of 52%[16] - Gross loss for Q3 2025 was $(53,000), an improvement from $(202,000) in Q3 2024[16] - Net loss for the nine months ended September 30, 2025, was $(26,616,000), slightly better than $(26,912,000) in 2024[18] - Non-GAAP net loss for Q3 2025 was $(5,432,000), compared to $(6,011,000) in Q3 2024[18] - Adjusted EBITDA for the nine months ended September 30, 2025, was $(18,660,000), an improvement from $(20,431,000) in 2024[18] Cash and Assets - Cash, cash equivalents, and marketable securities reached $84.3 million as of September 30, 2025, which is more than quadruple the prior quarter balance[7] - Cash and cash equivalents at the end of the period were $43,035,000, up from $5,851,000 at the end of September 2024[17] - AEye's total assets increased to $87.5 million as of September 30, 2025, compared to $27.1 million at the end of 2024[15] - The company maintained a virtually debt-free balance sheet, with total liabilities of $9.4 million as of September 30, 2025[15] Operating Expenses - Total operating expenses for the nine months ended September 30, 2025, were $23,159,000, down from $26,260,000 in the same period of 2024[16] - Cash used in operating activities for the nine months ended September 30, 2025, was $(20,247,000), compared to $(21,814,000) in 2024[17] - Research and development expenses for the nine months ended September 30, 2025, were $10,221,000, down from $12,137,000 in 2024[16] Future Expectations - AEye expects full-year 2025 cash burn to be within the range of $27 million to $29 million[8] - The company secured a strategic investment to expand Tier-1 manufacturing partnership, enabling annual production capacity of up to 60,000 Apollo units[5] Shareholder Information - The weighted average common shares outstanding for Q3 2025 were 31,262,997, compared to 8,629,683 in Q3 2024[18] - AEye's accumulated deficit increased to $(399.7) million as of September 30, 2025, compared to $(373.1) million at the end of 2024[15]

Core Insights - The article emphasizes the importance of momentum in navigating the technology landscape, particularly in the context of past market events such as the dot com bubble, the credit default crisis of 2008, and the recent AI boom [1] Group 1: Market Context - The author has over two decades of experience in the market, focusing on technology, media, and telecommunications (TMT) sectors [1] - The article highlights the significance of risk mitigation strategies employed during various market crises [1] Group 2: Investment Focus - The primary focus of the service is on momentum, suggesting that it plays a crucial role in investment decisions within the technology sector [1]

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].