AEYE(LIDR) - 2024 Q4 - Annual Report

Part I Business AEye develops high-performance, active lidar systems for vehicle autonomy and robotic vision, primarily through Tier 1 automotive partnerships - AEye provides high-performance, active lidar systems for vehicle autonomy, ADAS, and robotic vision applications, utilizing its proprietary 4Sight™ Intelligent Sensing Platform[14] - The company employs a channel model for the Automotive market, partnering with Tier 1 suppliers who manufacture and sell lidar solutions incorporating AEye's technology, from which AEye expects to receive royalty payments[18][30] - In June 2024, AEye launched Apollo, its next-generation lidar sensor, suitable for both automotive and non-automotive applications with a detection range of up to 1 km[39] - The company has partnered with Accelight Technologies, Inc. and LighTekton Co., Ltd. to deliver its lidar solutions to the China market, which is expected to grow to $2.5 billion over the next 3 years[33] - As of February 1, 2025, AEye owned 94 U.S. and foreign issued patents and had 44 pending patent applications[53] - The company is involved in a legal dispute with a former landlord over a terminated lease, with the landlord demanding approximately $4.35 million, net of a retained security deposit[66] Risk Factors AEye faces significant risks from historical losses, reliance on Tier 1 partnerships, uncertain lidar market adoption, and intense competition - The company is an early-stage company with a history of losses, incurring a net loss of approximately $35.5 million in 2024, and expects to continue incurring losses for the next few years[73] - AEye's business model relies heavily on relationships with Tier 1 automotive suppliers. The company's previous Tier 1 partner, Continental, discontinued their joint program in late 2023, and the company is now working with LITEON[79] - The company will need to raise additional capital to execute its business plan. Its ability to do so may be limited by "baby shelf" rules under SEC regulations, as its public float is below $75 million[80][81][83] - Market adoption of lidar is uncertain and may develop more slowly than expected, which would adversely affect the business. The company faces competition from other lidar developers as well as alternative technologies like cameras and radar[109][146][151] - The company relies on third-party suppliers, with some key components coming from limited or single sources, making it susceptible to supply shortages and cost fluctuations[113] - A lawsuit was filed against the company's subsidiary in August 2024 regarding a breach of a former office lease, with the landlord claiming damages could be up to $8.5 million[187] Unresolved Staff Comments The company reports no unresolved staff comments - None[243] Cybersecurity AEye manages cybersecurity risks through established processes, Board oversight, and expert IT management, reporting no material threats to date - The company has established processes to identify, manage, and mitigate material risks from cybersecurity threats, including monitoring IT infrastructure, employing security tools, and engaging external experts[244] - Cybersecurity oversight is handled by the Board of Directors, primarily through delegation to the Audit Committee, which receives periodic reports from management[246] - The day-to-day cybersecurity program is managed by the Director of IT, who reports to the Chief Financial Officer and has over 39 years of IT experience[247] - As of the date of the report, the company is not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect its business, operations, or financial condition[245] Properties AEye's corporate headquarters is a leased 6,522 square foot facility in Pleasanton, California, with its lease expiring in November 2027 - AEye's corporate headquarters is a leased facility of approximately 6,522 square feet in Pleasanton, California[248] - The current lease expires on November 30, 2027, and the company has an option to renew for an additional five years[248] Legal Proceedings AEye's subsidiary faces a lawsuit over a breached office lease, with the landlord demanding $4.35 million, potentially impacting financial condition - AEye's subsidiary is facing a lawsuit filed on August 26, 2024, for an alleged breach of an office lease due to failure to pay rent[249] - The landlord's informal demand for damages is approximately $4.35 million, which is net of a $2.15 million security deposit that the landlord retained[249] - The company warns that if it is found liable for the amounts claimed, it could have a material adverse effect on its liquidity, financial condition, and results of operations[249] Mine Safety Disclosures This item is not applicable to the company - Not applicable[251] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities AEye's common stock is listed on Nasdaq under "LIDR", with approximately 57 record holders, and the company has never paid cash dividends - The company's common stock is listed on The Nasdaq Global Select Market under the trading symbol "LIDR"[254] - As of February 18, 2025, there were approximately 57 holders of record of the common stock[255] - The company has never paid cash dividends and does not expect to pay any in the foreseeable future[256] Management's Discussion and Analysis of Financial Condition and Results of Operations In FY2024, AEye's revenue decreased by 86% to $0.2 million, while net loss narrowed by 59% to $35.5 million due to significant operating expense reductions Consolidated Results of Operations (in thousands) | | 2024 | 2023 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $202 | $1,464 | $(1,262) | (86)% | | Gross loss | $(576) | $(13,855) | $13,279 | (96)% | | Total operating expenses | $35,252 | $73,921 | $(38,669) | (52)% | | Loss from operations | $(35,828) | $(87,776) | $51,948 | (59)% | | Net loss | $(35,460) | $(87,126) | $51,666 | (59)% | - Revenue from development contracts decreased by 89% to $105 thousand in 2024, primarily due to the fulfillment of obligations under a Tier 1 automotive supplier contract in Q4 2023[302] - Operating expenses decreased significantly due to the implementation of a revised strategic plan in 2023. R&D expenses fell 37%, Sales & Marketing expenses fell 96%, and General & Administrative expenses fell 27%[304][305][306] - The company recorded no impairment of long-lived assets in 2024, compared to a $10.0 million impairment charge in 2023 related to restructuring and the termination of a partnership with a large Tier 1 supplier[307] - As of December 31, 2024, the company's cash, cash equivalents, and marketable securities totaled $22.3 million. Management believes this is sufficient to fund operations for at least the next 12 months[314][326] - The company has engaged in multiple financing activities, including a Common Stock Purchase Agreement with New Circle for up to $50 million, an "at-the-market" agreement with A.G.P., and a convertible note financing in January 2025[267][268][269] Quantitative and Qualitative Disclosures About Market Risk AEye is exposed to market risks including interest rate, concentrated credit, and foreign currency exchange risk, without current hedging - The company's interest rate risk is low due to the short-term nature of its cash, cash equivalents, and marketable securities[346] - As of December 31, 2024, there was a concentration of credit risk with three customers each accounting for 10% or more of accounts receivable[347] - The company is exposed to foreign currency exchange risk from fluctuations in the euro and Japanese yen against the U.S. dollar, but does not currently engage in hedging[349] Financial Statements and Supplementary Data Audited FY2024 financial statements show a net loss reduction to $35.5 million, decreased assets and liabilities, and a net cash use from operations Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $25,171 | $39,754 | | Total Assets | $27,120 | $54,317 | | Total Current Liabilities | $11,307 | $10,027 | | Total Liabilities | $11,996 | $25,294 | | Total Stockholders' Equity | $15,124 | $29,023 | Consolidated Statement of Operations Data (in thousands) | | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Total Revenue | $202 | $1,464 | | Gross Loss | $(576) | $(13,855) | | Loss from Operations | $(35,828) | $(87,776) | | Net Loss | $(35,460) | $(87,126) | | Net Loss Per Share | $(4.89) | $(14.95) | Consolidated Cash Flow Summary (in thousands) | | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(26,620) | $(50,725) | | Net cash provided by investing activities | $7,744 | $55,351 | | Net cash provided by (used in) financing activities | $10,060 | $(6,758) | - In 2023, the company implemented a revised strategic plan focusing on automotive commercialization, which led to restructuring charges of $19.2 million, including a $10.0 million impairment of long-lived assets. In 2024, restructuring resulted in a net gain of $0.4 million, primarily from a lease termination[527][529][530] - As of December 31, 2024, the company had federal and state net operating loss carryforwards of approximately $284 million and $242 million, respectively, to reduce future taxable income, though their use may be limited under Section 382[537][539] Changes in and Disagreements With Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[550] Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024 - Management evaluated disclosure controls and procedures and concluded they were effective as of December 31, 2024[552] - Management assessed internal control over financial reporting based on the 2013 COSO framework and concluded it was effective as of December 31, 2024[553] - The company is an emerging growth company and is not required to provide an attestation report from its independent registered public accounting firm on internal controls[554] Other Information No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the fourth quarter of fiscal year 2024 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the fourth quarter of fiscal year 2024[557] Part III Directors, Executive Officers and Corporate Governance AEye's Board of Directors comprises six members, with four independent, overseeing four committees, and non-employee director compensation was modified - The Board of Directors consists of six members: Timothy J. Dunn, Sue E. Zeifman, Luis C. Dussan, Matthew Fisch, Prof. Dr. Bernd Gottschalk, and Jonathon B. Husby[561] - The Board is divided into three classes, with four of the six directors determined to be independent. Matthew Fisch serves as Chairman and CEO[573][608][609] - The Board has an Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and a Strategic Financing and M&A Committee[576] - In May 2024, the Board eliminated initial and annual equity grants for non-employee directors. In August 2024, to compensate for this, the annual cash retainer was increased by $175,000 per non-employee director[600] Executive Compensation AEye's 2024 Named Executive Officers received total compensation of $1.47 million for CEO Matthew Fisch, $1.02 million for General Counsel Andrew S. Hughes, and $0.89 million for CFO Conor B. Tierney 2024 Summary Compensation Table | Name | Position | Salary ($) | Stock Awards ($) | Non-Equity Incentive Plan Comp ($) | All Other Comp ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Matthew Fisch | CEO | 500,000 | 344,470 | 109,375 | 517,592 | 1,471,437 | | Andrew S. Hughes | General Counsel | 385,000 | 63,983 | 164,227 | 402,250 | 1,015,460 | | Conor B. Tierney | CFO | 330,000 | 164,372 | 46,922 | 347,586 | 888,880 | - Each NEO received a retention bonus, included in 'All other compensation', equal to their respective annual base salary for remaining employed through December 31, 2024[633][638] - NEOs have Change in Control Severance Agreements providing for 1.5x base pay and target bonus, prorated bonus, full equity acceleration, and 18 months of paid health insurance upon a qualifying termination following a change in control[638] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of February 18, 2025, directors and executive officers beneficially owned 4.90% of common stock, with no beneficial owners exceeding 5% - As of February 18, 2025, all directors and executive officers as a group beneficially owned 914,878 shares, representing 4.90% of the outstanding common stock[647] - The company has no known beneficial owners of more than 5% of its common stock[650] Equity Compensation Plan Information (as of Dec 31, 2024) | Plan Category | Securities to be issued upon exercise | Securities remaining available for future issuance | | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 524,041 | 718,581 | | Equity compensation plans not approved by security holders | 0 | 0 | | Total | 524,041 | 718,581 | Certain Relationships and Related Transactions, and Director Independence The company disclosed one related party transaction involving a director's sibling and maintains a formal policy for reviewing such transactions - The company employed Miguel Dussan, a sibling of director Luis C. Dussan, until December 15, 2023. In 2023, his total cash compensation was $149,000 and he was granted 2,000 RSUs[657] - The Board has adopted a written policy for the review and approval of related party transactions exceeding $120,000, which is managed by the Audit Committee[660] - The company has entered into indemnification agreements with each of its executive officers and directors[659] Principal Accounting Fees and Services Information on principal accounting fees and services is incorporated by reference from the company's 2025 Proxy Statement - Information required by this item is incorporated by reference from the company's 2025 Proxy Statement[661] Part IV Exhibits, Financial Statement Schedules This section lists all exhibits filed as part of the Annual Report on Form 10-K, including key agreements and certifications - The report includes a list of exhibits filed or incorporated by reference, such as the Merger Agreement, Certificate of Incorporation, various stock purchase and registration rights agreements, and executive certifications[663] - No financial statement schedules are filed with this report[662] Form 10-K Summary The company reports no Form 10-K summary - None[668]