AEYE(US:LIDR)2025-05-09 22:03PART I - FINANCIAL INFORMATION Financial Statements (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 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, 202514 Condensed Consolidated Statements of Operations and Comprehensive Loss 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 activities16 Condensed Consolidated Statements of Stockholders' Equity 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 202518 - 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 loss18 Condensed Consolidated Statements of Cash Flows 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 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 concern293132 - 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 option6266 - 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 2025589091 - 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 sales8283 Management's Discussion and Analysis of Financial Condition and Results of Operations 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 solutions9698 - 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 market100101 - In Q1 2025, the company raised $11.055 million in gross proceeds through stock purchase agreements and a convertible note issuance99 - 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 date145 Results of Operations 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 dispute125 - Interest expense and other increased significantly due to $2.1 million in costs related to new financing arrangements in Q1 2025128 Liquidity and Capital Resources 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 thousand131 - 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, 2025139140 - In January 2025, the company issued a convertible note for an aggregate purchase price of $3.0 million141 - 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 million136183 Quantitative and Qualitative Disclosures About Market Risk 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 investments161 - Credit Risk: As of March 31, 2025, two customers accounted for 10% or more of accounts receivable162 - Foreign Currency Risk: The company has exposure to fluctuations in the euro versus the U.S. dollar but does not currently engage in hedging activities164 Controls and Procedures 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, 2025166 - No material changes to the internal control over financial reporting occurred during the first quarter of 2025169 PART II - OTHER INFORMATION Legal Proceedings 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 million172 - 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 share172285 Risk Factors 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 terms177178180 - 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 LITEON175179 - 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 radar176211246 - 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 suppliers175215 - 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 delisting199 Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the period - None reported for the quarter333 Defaults Upon Senior Securities There were no defaults upon senior securities during the period - None reported334 Mine Safety Disclosures This item is not applicable to the company - Not applicable335 Other Information 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 2025337 Exhibits 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