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What changed in AEye, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AEye, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+459 added−446 removedSource: 10-K (2026-03-18) vs 10-K (2025-02-24)

Top changes in AEye, Inc.'s 2025 10-K

459 paragraphs added · 446 removed · 304 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

46 edited+41 added−34 removed28 unchanged
Biggest changeWe expect that we will receive royalty or other payments from those Tier 1 suppliers for each unit they sell to their OEM customers. The payments may take the form of a fixed amount per unit, a percentage of the average selling price of the sensor, profit-sharing, or some combination of these methods.
Biggest changeUnder this structure, we may receive royalty or other payments for each unit sold by the Tier‑1 supplier, which could take the form of a fixed amount per unit, a percentage of the selling price, profit‑sharing, or a combination of these mechanisms For Non‑Automotive markets, we expect that most engagements will continue to be supported either through direct sales or through system integrators and solution providers, depending on the deployment model.
This improves range, refresh rate, and resolution over conventional coaxial architectures employed by our competitors, by allowing the transmitter to direct energy independently of the receiver’s focus. The lidar system employs time-of-flight based scanning, delivered with extremely low latency. The laser we utilize is a 1550nm fiber laser.
This improves range, refresh rate, and resolution over conventional coaxial architectures employed by many of our competitors, allowing the transmitter to direct energy independently of the receiver’s focus. The lidar system employs time-of-flight based scanning, delivered with extremely low latency. The laser we utilize is a 1550nm fiber laser.
The 4Sight™ Intelligent Sensing platform captures more information with less data, facilitating faster, more accurate, and more reliable perception of the environment. The 4Sight™ Intelligent Sensing Platform leverages a bistatic architecture, allowing for physically separated transmit and receive paths.
The Intelligent Sensing platform captures more information with less data, facilitating faster, more accurate, and more reliable perception of the environment. The Intelligent Sensing Platform leverages a bistatic architecture, allowing for physically separated transmit and receive paths.
Electronic product radiation includes laser technology. Regulations governing these products are intended to protect the public from hazardous or unnecessary exposure. Manufacturers are required to certify in product labeling and reports to the FDA that their products comply with applicable performance standards as well as maintain manufacturing, testing, and distribution records for their products.
Electronic product radiation includes laser technology. Regulations governing these products are intended to protect the public from hazardous or unnecessary exposure. Manufacturers are required to certify in product labeling and report to the FDA that their products comply with applicable performance standards as well as maintain manufacturing, testing, and distribution records for their products.
As a result, our adaptive lidar is designed to enable higher levels of autonomy and functionality — SAE Levels 2 through 5 — with the goal of optimizing performance, power, and reducing cost. Our 4Sight TM Intelligent Sensing Platform is software-definable and network-optimized, and leverages deterministic artificial intelligence at the edge.
As a result, our adaptive lidar is designed to enable higher levels of autonomy and functionality — SAE Levels 2 through 5 — with the goal of optimizing performance, power, and reducing cost. Our Intelligent Sensing Platform is software-definable and network-optimized, and leverages deterministic artificial intelligence at the edge.
While traditional sensing systems passively collect data, our active 4Sight TM Intelligent Sensing Platform leverages principles from automated targeting systems and biomimicry to scan the environment, while intelligently focusing on what matters in order to enable safer, smarter, and faster decisions in complex scenarios.
While traditional sensing systems passively collect data, our active Intelligent Sensing Platform leverages principles from automated targeting systems and biomimicry to scan the environment, while intelligently focusing on what matters in order to enable safer, smarter, and faster decisions in complex scenarios.
Flexible sensor location within the car Our 4Sight™ Flex next-generation design allows for unique flexibility with respect to sensor placement. The unit’s performance level, power requirements, and small form factor makes it easier for OEM designers to integrate our sensors into a variety of locations in a vehicle, such as behind the windshield, on the roof, or in the grille.
Flexible sensor location within the car Our Apollo TM next-generation design allows for unique flexibility with respect to sensor placement. The unit’s performance level, power requirements, and small form factor makes it easier for OEM designers to integrate our sensors into a variety of locations in a vehicle, such as behind the windshield, on the roof, or in the grille.
The information on our website (or any webpages referenced in this Annual Report on Form 10-K) is not part of this or any other report we file with, or furnish to, the SEC. 11 Table of Contents
The information on our website (or any webpages referenced in this Annual Report on Form 10-K) is not part of this or any other report we file with, or furnish to, the SEC.
We have made substantial investments in our R&D processes and deliver value to our customers through our manufacturing partners. We perform the majority of our R&D activities in our 6,522 square foot corporate headquarters located in Pleasanton, California.
We have made substantial investments in our R&D processes and deliver value to our customers through our manufacturing partners. We perform the majority of our R&D activities in our 18,605 square foot corporate headquarters located in Pleasanton, California.
The result mimics how the human visual cortex conceptually focuses on and evaluates the environment around the vehicle, driving conditions, and road hazards, enabling smarter, more accurate decision making — radically improving the probability of detection and the accuracy of classification.
The result is intended to mimic how the human visual cortex conceptually focuses on and evaluates the environment around the vehicle, driving conditions, and road hazards, enabling smarter, more accurate decision making — radically improving the probability of detection and the accuracy of classification.
The sensor captures more intelligent information with less data, enabling faster, more accurate and more reliable perception. 7 Table of Contents 4Sight TM for Automotive Built on this 4Sight™ platform, the Apollo lidar is specifically designed to address system requirements for advanced driver-assistance systems (ADAS) and autonomous vehicles (AV) applications.
The sensor captures more intelligent information with less data, enabling faster, more accurate and more reliable perception. Apollo TM for Automotive Built on our Intelligent Sensing Platform, the Apollo TM lidar is specifically designed to address system requirements for advanced driver-assistance systems (ADAS) and autonomous vehicles (AV) applications.
We believe the unique combination of features of 4Sight™ include: • Active lidar enables user’s choice of deterministic scan patterns catered to specific use cases and applications, such as highway autopilot; • Feature-specific ROIs designed to detect objects from various locations; • Lidar perception made available through a software partner; • Windshield, grille, and other discreet vehicle integration options that are optimized by software configurability; • Size, Weight, and Power (“SWaP”) optimized; and • Designed with Functional Safety (“FuSa” or ISO26262) requirements in mind - providing necessary determinism for testing and validation for wide variety of edge cases. 4Sight TM for Non-Automotive Built on our unique 4Sight™ Intelligent Sensing Platform, 4Sight™ meets the diverse array of performance and functional requirements for the Non-Automotive market with our industry-leading lidar performance, integrated intelligence, advanced vision capabilities, and unmatched reliability and safety.
We believe the unique combination of features of Apollo TM include: • Active lidar enables user’s choice of deterministic scan patterns catered to specific use cases and applications, such as highway autopilot; • Feature-specific ROIs designed to detect objects from various locations; • Lidar perception made available through a software partner; • Windshield, grille, and other discreet vehicle integration options that are optimized by software configurability; • Size, Weight, and Power (“SWaP”) optimized; and • Designed with Functional Safety (“FuSa” or ISO26262) requirements in mind - providing necessary determinism for testing and validation for a wide variety of edge cases. 5 Table of Contents Apollo TM for Non-Automotive Built on our Intelligent Sensing Platform, Apollo TM is designed to support a broad range of Non-Automotive applications requiring long-range, high resolution sensing and flexible system integration.
Like all companies operating in similar industries, we are subject to environmental regulation, including water use; air emissions; use of recycled materials; energy sources; the storage, handling, treatment, transportation, and disposal of hazardous materials; and the remediation of environmental contamination.
Like all companies operating in similar industries, we are subject to environmental regulation, including water use; air emissions; use of recycled materials; energy sources; the storage, handling, treatment, transportation, and disposal of hazardous materials; and the remediation of environmental contamination. Compliance with these rules may include permits, licenses, and inspections of our facilities and products.
We believe that our strategy to partner with Tier 1 automotive suppliers to produce high-quality, long-range lidar at scale will help drive adoption of lidar into series production across major global OEMs. • Passenger vehicle ADAS — highway autonomy in passenger vehicles is a highly relevant use case for our technology, as passenger vehicle OEMs are actively in the process of adding new features that enhance the consumer driving experience.
We believe our strategy of partnering with Tier 1 suppliers to support industrialization, automotive qualification, and high‑volume manufacturing will help enable high‑quality lidar solutions to be produced at scale and adopted in series‑production programs across global OEMs. • Passenger vehicle ADAS — highway autonomy in passenger vehicles is a highly relevant use case for our technology, as passenger vehicle OEMs are actively in the process of adding new features that enhance the consumer driving experience.
Apollo delivers best-in-class range and resolution in a compact, power-efficient, and cost-effective form factor, making it suitable for both automotive and non-automotive applications. Apollo supports integration behind the windshield, on the roof, or in the grille, enabling OEMs to implement critical safety features with minimal impact on vehicle design.
It delivers best-in-class long-range and resolution in a small, power-efficient, low-cost form factor. Apollo’s TM design supports integration behind the windshield, on the roof, or in the grille, enabling automotive OEMs to implement safety features with minimal impact on vehicle design.
We broadly define our two key end markets as Automotive and Non-Automotive. 4 Table of Contents Automotive According to the World Health Organization, the number of fatalities globally on roadways exceeds one million annually, road traffic injuries are the leading cause of death for children and young adults aged 5 to 29 years, and road traffic accidents cost most countries 3% of their gross domestic product on an annual basis.
We broadly define our two key end markets as Automotive and Non-Automotive. 3 Table of Contents Automotive According to the World Health Organization, more than one million people die annually in roadway accidents worldwide, road traffic injuries are the leading cause of death for children and young adults aged 5 to 29, and road traffic incidents cost most countries approximately 3% of their gross domestic product each year.
Our patents and patent applications cover a broad range of system level and component level aspects of our key technology including, among other things, bistatic lidar system architecture, laser, scanner, receiver, and perception technology. Sales and Marketing Historically we have utilized a combination of channel (indirect) sales and direct sales methods.
In addition, we have two registered trademarks and five pending trademark applications. Our patents and patent applications cover a broad range of system level and component level aspects of our key technology including, among other things, bistatic lidar system architecture, laser, scanner, receiver, and perception technology.
Our proprietary 4Sight TM Intelligent Sensing Platform includes a solid-state software definable active lidar sensor, an adaptive sensing SmartScan architecture to scan dynamic scenes/targets, and a sophisticated signal processing capability that provides precise measurements and imaging for various safety-critical applications.
Our proprietary Intelligent Sensing Platform incorporates a solid‑state, software‑definable active lidar sensor; an adaptive SmartScan architecture that dynamically adjusts scan patterns for different scenes and targets; and a signal‑processing pipeline designed to deliver precise measurements and imaging for safety‑critical use cases.
Our technical team still remains in direct contact with these OEMs, which better enables us to understand the OEMs’ specific product requirements and facilitate the implementation of our product design into their vehicles. 9 Table of Contents In the Non-Automotive market, we anticipate using the same supply chain to manufacture through global contract manufacturers, and we will sell our products primarily through system integrator channel partners that may integrate our lidar sensor and software as part of a larger solution for an end customer.
In the Non-Automotive market, we anticipate using the same supply chain to manufacture through global contract manufacturers, and we will sell our products primarily through system integrator channel partners that may integrate our lidar sensor and software as part of a larger solution for an end customer.
We expect to utilize those same components to address the Non-Automotive market, which enables us to leverage our volume in Automotive and drive costs down for the products made by our contract manufacturing partners. In May, 2024, we announced our partnership with Accelight Technologies, Inc. (“ATI”) and LighTekton Co., Ltd. to deliver AEye’s 4Sight™ lidar solutions to the China market.
We utilize those same components to address the Non-Automotive market, which should enable us to leverage expected higher volumes in Automotive to drive down overall costs. In May, 2024, we announced our partnership with Accelight Technologies, Inc. (“ATI”) and LighTekton Co., Ltd. to support delivery of our lidar solutions in the China market.
We believe that this is essential to maintain our position as a provider of one of the most advanced lidar solutions in the market. While our R&D activities occur primarily at our headquarters in Pleasanton, California, we work with technology developers on a worldwide basis. Our engineers located in Pleasanton, California focus on developing sensor hardware, firmware, and software.
While our R&D activities occur primarily at our headquarters in Pleasanton, California, we work with technology developers on a worldwide basis. Our engineers located in Pleasanton, California focus on developing sensor hardware, firmware, and software. Our R&D team is responsible for both developing new technology, as well as enhancing the capabilities and performance of our lidar hardware, firmware, and software.
Facilities Our corporate headquarters is located in Pleasanton, California, where we lease approximately 6,522 square feet pursuant to a lease that initially expires on November 30, 2027 unless we choose to exercise a five-year renewal option. The Pleasanton facility contains engineering, R&D, operations, customer support, marketing, and administrative functions.
Facilities Our corporate headquarters is located in Pleasanton, California, where we lease approximately 18,605 square feet pursuant to a lease, as amended in February 2026, that expires on February 28, 2029, with an option to extend the term for a five year period. The Pleasanton facility contains engineering, R&D, operations, customer support, marketing, and administrative functions.
Competition Lidar-based perception solutions for autonomous applications is an emerging market with a wide variety of possible applications across many different markets. We face competition from numerous companies worldwide that are developing lidar solutions, and some of these solutions may use a similar wavelength or scanning methodology.
Competition Lidar‑based perception solutions for autonomous applications represent an emerging and competitive market, with companies pursuing a wide range of technical approaches across multiple end markets. We face competition from numerous companies worldwide that are developing lidar systems, some of which use similar wavelengths or scanning methodologies.
All of the data collected is processed directly on the system-on-a-chip, where our algorithms continually evaluate the certainty of object detection in order to direct system energy and focus.
All of the data collected is processed directly on the system-on-a-chip, where our algorithms continually evaluate the certainty of object detection in order to direct system energy and focus. We have made substantial progress in our collaboration efforts with NVIDIA, and our lidar systems are now integrated into the NVIDIA DRIVE AGX platform.
Non-Automotive In 2023, we decided to wind down our legacy Non-Automotive product line and we dialed back support for this end market. Since the launch of our new product, Apollo, in 2024, we have seen renewed interest from Non-Automotive customers across a broad range of sectors and are actively engaged on multiple opportunities.
Non-Automotive In 2023, we decided to wind down our legacy non‑automotive product line and reduced our engagement in those end markets. Since the launch of our Apollo TM product in 2024, we have seen renewed and growing interest from non‑automotive customers across a broad range of sectors, and we have entered into multiple customer engagements and development programs.
FOD is crucial in industries such as aviation, aerospace, manufacturing, and perimeter security. • Intelligent Transportation Systems (ITS) — intersection traffic management, highway monitoring, tolling automation, smart mobility infrastructure, autonomous/smart parking, and work zone safety. 5 Table of Contents Commercial Overview We employ two different go-to-market models: one model addresses the traditional Automotive end market and the other model addresses the Non-Automotive end market.
FOD is crucial in industries such as aviation, aerospace, manufacturing, and perimeter security. • Intelligent Transportation Systems (ITS) — intersection traffic management, highway monitoring, tolling automation, smart mobility infrastructure, autonomous/smart parking, and work zone safety. Commercial Overview We generally begin our customer engagements through direct sales, both in Automotive and Non‑Automotive markets.
Compliance with these rules may include permits, licenses, and inspections of our facilities and products. 10 Table of Contents Human Capital Resources We believe that our culture is one of our competitive advantages. We have emphasized a collaborative, team-oriented, performance-based culture with a strong focus on both the development of differentiated technology and the success of our customers.
Human Capital Resources We believe that our culture is one of our competitive advantages. We have emphasized a collaborative, team-oriented, performance-based culture with a strong focus on both the development of differentiated technology and the success of our customers. Our leadership team comes from sectors including automotive, aerospace and defense, semiconductors, software, and computer hardware.
Our lidar products employ a single product platform that is based on components sourced from an established Tier 2 automotive supply chain to drive down costs and increase reliability.
These partners often integrate our technology into complete, mission‑specific systems such as autonomous mining haulers, locomotives, industrial automation equipment, security platforms, and intelligent transportation systems. Our lidar products employ a single product platform that is based on components sourced from an established Tier 2 automotive supply chain to drive down costs and increase reliability.
In addition, from time to time, we may become involved in actions, claims, suits, and other legal proceedings arising in the ordinary course of our business, including assertions by third parties relating to intellectual property infringement, breaches of contract or warranties, or employment-related matters.
Under the terms of the agreement, the Company paid $1.4 million in cash in May 2025 and issued warrants to purchase up to 350,000 shares of common stock at an exercise price of $2.22 per share in August 2025. 7 Table of Contents In addition, from time to time, we may become involved in actions, claims, suits, and other legal proceedings arising in the ordinary course of our business, including assertions by third parties relating to intellectual property infringement, breaches of contract or warranties, or employment-related matters.
In addition to companies focused specifically on developing lidar solutions, we also face competition from current or potential partners and customers that may be developing lidar solutions internally. We believe that many of the other companies developing lidar solutions are focused on shorter-range sensors that passively collect data, and most of these sensors utilize 905nm lasers that limit their performance.
In addition to companies focused solely on lidar, we may also face competition from current or potential partners and customers that are developing lidar systems internally. We further believe that many lidar developers are focused on shorter‑range, passively scanning sensors that rely on 905 nm lasers, which limit performance in long‑range or in high‑speed environments.
We believe our existing facility is in good condition and suitable for the conduct of our business. Legal Proceedings In or about July of 2024, AEye, Inc.’s wholly owned subsidiary, AEye Technologies, Inc.
We believe our existing facility is in good condition and suitable for the conduct of our business.
None of our employees are represented by a labor union, and we consider our employee relations to be good. To date, we have not experienced any work stoppages.
As of December 31, 2025, we had 56 employees. The majority of our employees are in the R&D function. We also engage consultants and contractors to supplement our regular full-time workforce. None of our employees are represented by a labor union, and we consider our employee relations to be good. To date, we have not experienced any work stoppages.
We believe that our modular, patented design, our embedded deterministic artificial intelligence, which is inherently enabled by our unique product, and our strong R&D capabilities will enable us to remain a technology leader in the lidar market. 8 Table of Contents Research and Development We have made substantial investments into our R&D efforts historically, but with a reduced workforce and consolidated global footprint, we plan to be more focused on investments that support our strategy and product development goals in the near-term.
We believe that our modular, patented design, our embedded deterministic artificial intelligence, which is inherently enabled by our unique product, and our strong R&D capabilities will enable us to remain a technology leader in the lidar market.
Ultimately, this establishes the 4Sight™ platform as active — allowing it to focus on what matters most in a vehicle’s surroundings.
As each laser pulse is transmitted, the receiver is told where and when to look for its return. Ultimately, this establishes the Apollo TM platform as active — allowing it to focus on what matters most in a vehicle’s surroundings.
Technology AEye's 4Sight™ Intelligent Sensing Platform includes a solid-state software definable active lidar sensor, an adaptive sensing SmartScan architecture to scan dynamic scenes/targets, and a sophisticated signal processing capability that provides precise measurements and imaging for various safety-critical applications.
We expect that these types of partnerships will continue to play an important role in our commercialization strategy, particularly in non‑automotive markets where customers often adopt complete solutions delivered through integrators and domain‑specific software partners. 4 Table of Contents Technology AEye's Intelligent Sensing Platform includes a solid-state software definable active lidar sensor, an adaptive sensing SmartScan architecture to scan dynamic scenes/targets, and a sophisticated signal processing capability that provides precise measurements and imaging for various safety-critical applications.
Our R&D team is responsible for both developing new technology, as well as enhancing the capabilities and performance of our lidar hardware, firmware, and software. Our R&D team also has responsibility for identifying, defining, and prototyping advanced components that we may utilize from key suppliers, as well as for our design-for-manufacturability, or DFM, and other critical capabilities.
Our R&D team also has responsibility for identifying, defining, and prototyping advanced components that we may utilize from key suppliers, as well as for our design-for-manufacturability, or DFM, and other critical capabilities. Additionally, this team works alongside our operations team to assist our Tier 1 and contract manufacturer partners as they develop large-scale manufacturing processes based on our lidar design.
We own a portfolio of intellectual property which includes patents (issued and pending), registered trademarks, copyrights, trade secrets, and know-how in the development of our lidar solutions. We have filed patent and trademark applications in order to further secure these rights and strengthen our ability to defend against third parties who may infringe on our rights.
We have filed patent and trademark applications in order to further secure these rights and strengthen our ability to defend against third parties who may infringe on our rights. We also rely on trade secrets, design and manufacturing know-how, continuing technological innovations, and licensing and exclusivity opportunities to maintain and improve our competitive position.
In 2024, the National Highway Traffic Safety Administration, or NHTSA, adopted a new rule which mandates that passenger vehicles have automatic emergency braking, or AEB, and pedestrian AEB, and the Federal Motor Carrier Safety Administration introduced proposed rulemaking to mandate AEB in heavy trucks. These rules may require additional hardware and software to meet these requirements.
In April 2024, the National Highway Traffic Safety Administration (NHTSA) issued a final rule requiring automatic emergency braking (AEB) and pedestrian AEB on all new passenger vehicles, with phased adoption beginning in model year 2029. In addition, the Federal Motor Carrier Safety Administration (FMCSA) has issued a Notice of Proposed Rulemaking that would require AEB systems on heavy trucks.
We expect the result will be a high-quality, high-performance product at the right price point, which we believe to be a key enabler in accelerating adoption of lidar across various markets in Automotive and beyond. In pursuing this strategy, we have partnered, and will continue seeking partnerships, with leading Tier 1 automotive suppliers.
This positions our platform to enable lidar adoption across a range of markets, both within automotive and in non‑automotive domains where sensing requirements continue to expand. In pursuing this strategy, we have partnered, and will continue seeking partnerships, with leading Tier 1 automotive suppliers.
We also rely on trade secrets, design and manufacturing know-how, continuing technological innovations, and licensing and exclusivity opportunities to maintain and improve our competitive position. Additionally, we protect our proprietary rights through agreements with our commercial partners, vendors, employees, and consultants, as well as close monitoring of the developments, components, products, and competitors in the industry.
Additionally, we protect our proprietary rights through agreements with our commercial partners, vendors, employees, and consultants, as well as close monitoring of the developments, components, products, and competitors in the industry. As of February 24, 2026, we owned 104 U.S. and foreign issued patents and we had 32 pending U.S. and foreign patent applications.
Item 1. Business General We are a provider of high-performance, active lidar systems for vehicle autonomy, advanced driver-assistance systems (ADAS), and robotic vision applications. We have developed an artificial intelligence technology that enables adaptive “intelligent sensing,” differentiating us in the marketplace from our competition.
Item 1. Business General We are a provider of physical AI sensing solutions built on high-performance, active lidar systems for vehicle autonomy, advanced driver-assistance systems (ADAS), robotic vision and a range of Non-Automotive applications. Our physical AI approach combines software‑defined sensing with adaptive perception capabilities that enable machines to interpret and respond to complex physical environments in real time.
Our system is particularly well-suited to reduce the intensive compute (and associated power and latency) requirements of autonomous systems because our platform handles critical data processing at the sensor level, thereby allowing the self-driving system to focus limited compute resources on the vehicle's path planning.
Because our platform performs critical data processing at the sensor level, it is designed to reduce system‑level compute load, power consumption, and latency for ADAS and autonomous driving applications.
For vehicles to achieve greater autonomous functionality and perform those functions at higher speeds, we believe long-range lidar will be necessary. Our sensors were designed to search, detect, acquire, and track small objects at long distances. In the future, we may also introduce other mid- and short-range lidar systems based on the same 4Sight TM Intelligent Sensing Platform.
Our Apollo TM long‑range lidar was designed to detect, classify, and track small objects at extended distances, which we believe will be necessary for vehicles to achieve higher‑speed autonomous functions and improved situational awareness.
This intelligence is enabled by our patented bistatic architecture, which keeps the transmit and receive channels separate, allowing 4Sight™ to optimize for both. As each laser pulse is transmitted, the receiver is told where and when to look for its return.
Like Apollo TM , STRATOS TM leverages our software‑defined sensing approach, enabling performance updates without a hardware redesign. Intelligent Sensing Platform Apollo TM is our proprietary intelligent sensing lidar platform. This intelligence is enabled by our patented bistatic architecture, which keeps the transmit and receive channels separate, allowing Apollo TM to optimize for both.
Our modular design facilitates product hardware updates as technologies evolve, and its small size and modest heat generation enable very flexible placement options on the interior or exterior of a vehicle. 4Sight TM also leverages a common architecture to create application-specific products across different markets. 3 Table of Contents Our systems-based approach encourages partnerships from the well-established automotive supply chain, including original equipment manufacturers (OEMs), as well as Tier 1 and Tier 2 OEM suppliers.
Our modular design facilitates product hardware updates as technologies evolve, and its small size and modest heat generation enable very flexible placement options on the interior or exterior of a vehicle. The platform is also software‑adaptable, enabling adjustments to scan pattern, frame rate, and other performance characteristics without hardware changes.
Market Outlook/Overview We believe that lidar will be a required sensing solution across many end markets.
Since inception, we have incurred net losses and negative cash flows from operations and expect to continue incurring losses and negative operating cash flows as we continue to focus on achieving commercialization of our lidar solutions and execute on our strategic initiatives. Market Outlook/Overview We believe that lidar will be a required sensing solution across many end markets.
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There is strong alignment between us and our partners given what is required to produce high-performance automotive grade products at scale, including quality, reliability, and affordability. We anticipate our Tier 1 partners will add value with OEM customers through industrialization, manufacturing, integration, sales, marketing, product liability, and warranty.
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This platform is designed to support a broad set of markets beyond passenger vehicles, including rail, aerospace and defense, smart infrastructure, and security, where long‑range performance, environmental robustness, and software‑based configurability are key requirements.
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We anticipate our Tier 2 partners will provide automotive-grade sub-components, which are used not only in automotive lidar for ADAS use cases, but could also be used for products we may sell into the Non-Automotive market.
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This software‑defined approach allows us to tailor a common architecture into application‑specific products across multiple markets. Our systems‑based approach supports partnerships not only within the established automotive supply chain, such as OEMs and Tier 1 and Tier 2 suppliers, but also with solution providers in non‑automotive markets.
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Since inception, we have incurred net losses and negative cash flows from operations and expect to continue incurring losses in the near-term. As a result, it remains critical for us to preserve cash and manage spending to extend our liquidity.
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In automotive, we expect Tier 1 partners to add value through industrialization, manufacturing, integration, sales, marketing, product liability management, and warranty support. Tier 2 partners contribute automotive‑grade sub‑components that can also be leveraged in products sold into adjacent markets where similar reliability, environmental robustness, and performance standards are required.
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We also plan to improve our liquidity position through securing additional financing, engaging with partners and OEMs, and executing on our critical milestones. However, successfully raising capital is outside of our control and there can be no assurance that we will be able to obtain additional financing on terms acceptable to us, on a timely basis, or at all.
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Beyond automotive, our OPTIS TM solution enables us to collaborate directly with system integrators, software partners, and domain‑specific solution providers across intelligent transportation systems, rail, aviation, ports, industrial automation, defense, and emerging infrastructure applications. OPTIS TM allows us to combine our software‑defined sensing capabilities with third‑party perception, analytics, and workflow software to deliver application‑specific functionality without requiring new hardware variants.
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Reverse Stock Split On December 27, 2023, we effected a 1-for-30 reverse stock split of our issued and outstanding shares of common stock (the "Reverse Stock Split"). Pursuant to the Reverse Stock Split, every thirty (30) shares of issued and outstanding shares of our common stock were combined into one (1) share of common stock.
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This approach broadens the utility of our technology and allows partners to build turnkey solutions tailored to their end markets. We believe this combined model, leveraging automotive‑grade components, software‑defined configurability, and partnerships with specialized integrators, supports the development of high‑quality, high‑performance products at scalable cost structures.
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We did not issue fractional shares in connection with the Reverse Stock Split. Stockholders who were otherwise entitled to fractional shares of common stock were instead entitled to receive a proportional cash payment. The number of shares of common stock issuable under our equity incentive plans and exercisable under the outstanding warrants were also proportionately adjusted.
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In the United States, pedestrian fatalities have increased by more than 80% since 2009, according to the Insurance Institute for Highway Safety. We believe that existing sensing and safety technologies are insufficient to mitigate these trends and that lidar, when integrated into advanced driver‑assistance systems (ADAS) and autonomous driving systems, may play an increasingly important role in improving road safety.
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In connection with the Reverse Stock Split, there was no change to the number of shares authorized or in the par value per share of common stock of $0.0001.
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If enacted, meeting these requirements may necessitate additional sensing hardware and software beyond the capabilities of current camera‑ or radar‑only systems. As a result, passenger and commercial vehicle OEMs may introduce lidar sensors to augment ADAS functions and improve detection performance across a wider range of operating conditions.
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Accordingly, unless we indicate otherwise, all historical per share data, number of shares issued and outstanding, stock awards, and other common stock equivalents for the periods presented in this Annual Report on Form 10-K have been adjusted retroactively, where applicable, to reflect the Reverse Stock Split.
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In addition to our long‑range, forward‑looking configurations, we also offer an in‑cabin lidar architecture capable of operating behind the windshield, enabling vehicle‑integrated sensing solutions that reduce environmental exposure and improve packaging flexibility. Over time, we may expand our product family to include mid‑range and short‑range systems based on the same software‑defined Intelligent Sensing Platform that underpins Apollo TM .
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According to the Insurance Institute for Highway Safety, in the U.S. pedestrian fatalities have increased by over 80% since 2009.
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We believe there are numerous use cases for lidar outside automotive, including rail, construction, mining, agriculture, aerospace, defense, security, foreign‑object detection, and intelligent transportation systems. Apollo’s TM software‑defined architecture allows key performance parameters, such as scan pattern, frame rate, and region‑of‑interest configuration, to be adapted for specific applications without requiring separate hardware variants.
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We believe the current technology solutions in the market are insufficient for mitigating this issue and that lidar, incorporated as a component of ADAS and fully autonomous driving or self-driving systems, could play a critical role in addressing this issue in the future.
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This flexibility enables us to address diverse non‑automotive markets using a common hardware platform, reducing the cost and lead time traditionally associated with developing and supporting multiple dedicated products.
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With that in mind, passenger and commercial vehicle OEMs are expected to introduce lidar sensors to enhance ADAS features and improve safety for passengers and pedestrians. Applications for the Automotive end market include lidar sensors and software for passenger and commercial vehicles.
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Through our OPTIS TM platform, we also collaborate with system integrators and solution providers to deliver application‑specific functionality, allowing partners to combine our sensing capabilities with their own perception, analytics, or workflow software to broaden the value of the overall solution.
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We believe there is a broad range of use cases for lidar in Non-Automotive markets, including but not limited to rail, construction, mining, agriculture, aerospace, defense, security/foreign object detection, and intelligent transportation systems. We anticipate that our Apollo product will be well-suited to address the Non-Automotive markets without significant additional modifications.
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Sales cycles in non‑automotive markets are generally shorter than in automotive, and we expect these markets to represent a more meaningful component of our near‑term revenue. Our typical engagement model begins with a proof‑of‑concept or an evaluation program, which may evolve into higher‑volume commercial opportunities as customer requirements mature and validation milestones are met.
Removed
We employ a channel model in the traditional Automotive market by working through Tier 1 suppliers that sell products to OEM customers. We anticipate those Tier 1 suppliers will industrialize, manufacture, and sell lidar sensor solution units to OEMs that incorporate our proprietary design and software.
Added
Certain customers in non‑automotive sectors have also shown willingness to fund development initiatives aimed at enabling new features or performance enhancements. We believe Apollo’s TM versatility, combined with our software‑adaptable architecture and partnerships with specialized solution providers, positions us to participate in a wide range of non‑automotive applications without the need for costly new hardware platforms.
Removed
For the Non-Automotive market, we may either sell directly to the customer or work through systems integrators. Contract manufacturers with whom we have agreements assemble, test, and deliver these products. Systems integrators will build our technology into mass produced systems, such as autonomous mining haulers, locomotives, or intelligent transportation systems.
Added
In the early phases of adoption, such as prototype builds, pilot programs, and proof‑of‑concept deployments, OEMs and commercial customers typically work directly with us or through system integrators and solution providers. In these situations, we may supply sensors or software directly to the customer or to the integration partner supporting the application.
Removed
China is leading the market in lidar adoption, where the TAM is expected to grow to $2.5 billion over the next 3 years.
Added
As Automotive programs mature and move toward higher‑volume series production, we expect these relationships to transition to a traditional Tier‑1 supply model. In this phase, Tier‑1 suppliers would industrialize, manufacture, and sell lidar systems incorporating our proprietary hardware and software to OEM customers.
Removed
We have made substantial progress in our collaboration efforts with Nvidia, demonstrating significant advances in the high-speed and long range detection performance of our lidar systems, which we believe puts us on track for future integration with their Hyperion platform. In June, 2024, we launched Apollo, the first product in our 4Sight™ Flex family of next-generation lidar sensors.
Added
Since then, we have broadened our network of technology and solution‑provider partnerships to include Flasheye, Blue Band, Black Sesame, and Vueron. These partners integrate our sensing platform into their perception, analytics, and system‑level solutions across a wide range of non‑automotive applications, including industrial automation, security, foreign‑object detection, intelligent transportation systems, and mobility infrastructure.
Removed
This innovative sensor leverages AEye's 4Sight™ Intelligent Sensing Platform, offering a highly programmable and customizable lidar solution that can be reconfigured through software updates. With a horizontal field of view up to 120° and long-range detection capabilities of up to 1 km.
Added
Through these collaborations, we are able to extend the functionality of our products, accelerate deployment cycles, and address diverse customer requirements without developing separate hardware variants.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSuch risks include, but are not limited to: • We are an early stage company with a history of losses and we expect to incur significant expenses and continuing losses for at least the next several years. • We substantially rely on relationships with Tier 1 automotive suppliers and our business could be materially and adversely affected if we cannot establish or maintain relationships with one or more Tier 1 partners, or if we, through our relationship with various Tier 1 partners, are unable to obtain a sufficient number of design wins and successfully enter into definitive agreements or other commercial arrangements with automotive OEMs with respect to such design wins. • We will need to raise additional capital in order to execute our business plan and to respond to changing market conditions, which additional capital may not be available on terms acceptable to us, or at all. • If our deterministic artificial intelligence-driven sensing system is not selected for inclusion in advanced driver-assistance systems, or ADAS, by any automotive OEMs or their suppliers, our business will be materially and adversely affected. • We heavily rely on third-party suppliers and because some of the raw materials and key components in our products come from limited or single source suppliers, our ability to control the costs of such components and raw materials is uncertain; moreover, regardless of cost, we are susceptible to supply shortages, longer than anticipated lead times for components, and supply changes, any of which could disrupt our supply chain, could delay deliveries of our products to customers, and could negatively impact the adoption of our products and accordingly, our financial condition and operating results. 12 Table of Contents • Although we believe that lidar is an essential technology for autonomous vehicles and other emerging applications, market adoption of lidar is uncertain.
Biggest changeSuch risks include, but are not limited to: • We are an early stage company with a history of losses and we expect to incur significant expenses and continuing losses for at least the next several years. • We substantially rely on relationships with Tier 1 automotive suppliers and our business could be materially and adversely affected if we cannot establish or maintain relationships with one or more Tier 1 partners, or if we, through our relationship with various Tier 1 partners, are unable to obtain a sufficient number of design wins and successfully enter into definitive agreements or other commercial arrangements with automotive OEMs with respect to such design wins. • If our deterministic artificial intelligence-driven sensing system is not selected for inclusion in ADAS, by any automotive OEMs or their suppliers, our business will be materially and adversely affected. • We heavily rely on third-party suppliers and because some of the raw materials and key components in our products come from limited or single source suppliers, our ability to control the costs of such components and raw materials is uncertain; moreover, regardless of cost, we are susceptible to supply shortages and longer than anticipated lead times for components, either of which could disrupt our supply chain, could delay deliveries of our products to customers, and could negatively impact the adoption of our products and accordingly, our financial condition and operating results. • We may need to raise additional capital in order to execute our business plan and to respond to changing market conditions, which additional capital may not be available on terms acceptable to us, or at all, and if such additional capital were available to us, existing stockholders would experience dilution, which could be significant. • Our global supply chain and international customer base expose us to risks associated with tariffs, trade restrictions, trade tensions, and evolving international trade policies.
Reliance on third-party manufacturers reduces our control over the manufacturing process, including reduced control over quality, product costs, and product supply, and timing. We may experience delays in shipments or issues concerning product quality from our third-party manufacturers.
Reliance on third-party manufacturers reduces our control over the manufacturing process, including reduced control over quality, product costs, product supply, and timing. We may experience delays in shipments or issues concerning product quality from our third-party manufacturers.
The loss of business from any of our potential customers (whether by lower overall demand for our products, component shortages that impact our customers’ production plans or product development plans, cancellation of existing contracts or product orders, or the failure to design in our products could have a material adverse effect on our business.
The loss of business from any of our existing or potential customers (whether by lower overall demand for our products, component shortages that impact our customers’ production plans or product development plans, cancellation of existing contracts or product orders, or the failure to design in our products) could have a material adverse effect on our business.
We regularly maintain cash balances at third-party financial institutions, including Silicon Valley Bank, or SVB, in excess of the Federal Deposit Insurance Corporation insurance limit. When SVB was seized by regulators in March of 2023, we maintained our operating account at SVB. Shortly after the seizure by regulators, all of our funds were returned to us.
We regularly maintain cash balances at third-party financial institutions, including Silicon Valley Bank, or SVB, in excess of the Federal Deposit Insurance Corporation insurance limit. When SVB was seized by regulators in March 2023, we maintained our operating account at SVB. Shortly after the seizure by regulators, all of our funds were returned to us.
Any failure to implement and maintain effective internal controls also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in the periodic reports we will file with the SEC under Section 404 of the Sarbanes-Oxley Act.
Any failure to implement and maintain effective internal controls also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in the periodic reports we will file with the SEC under Section 404(a) of the Sarbanes-Oxley Act.
If, by the time autonomous vehicle technology achieves mass market adoption, commercialization of lidar products is not successful, or not as successful as we or the market expects, or if other sensing modalities gain acceptance by developers of ADAS products, automotive OEMs, regulators, safety organizations, or other market participants, our business, results of operations, and financial condition will be materially and adversely affected.
If, by the time autonomous vehicle technology achieves mass market adoption, commercialization of lidar products is not successful, or not as successful as we or the market currently expects, or if other sensing modalities gain acceptance by developers of ADAS products, automotive OEMs, regulators, safety organizations, or other market participants, our business, results of operations, and financial condition will be materially and adversely affected.
A significant portion of the components used in our products are manufactured abroad, which subjects us to various international risks and costs, including foreign trade issues, tariffs, trade wars, currency exchange rate fluctuations, shipment delays, supply chain disruptions, and political instability, any of which could adversely affect our business and financial condition.
A significant portion of the components currently used in our products are manufactured abroad, which subjects us to various international risks and costs, including foreign trade issues, tariffs, trade wars, currency exchange rate fluctuations, shipment delays, supply chain disruptions, and political instability, any of which could adversely affect our business and financial condition.
If any of these or other factors, including trade tensions between the U.S. and other nations, including China and Russia, as a result of the war in Ukraine or otherwise, were to cause a disruption of trade from other countries, and in particular, Taiwan, our ability to source products, components, or raw materials could be adversely affected.
If any of these or other factors, including trade tensions between the U.S. and other nations, including China and Russia, as a result of the war in Ukraine, Iran, or otherwise, were to cause a disruption of trade from other countries, and in particular, Taiwan, our ability to source products, components, or raw materials could be adversely affected.
In addition, activist directors may make overly burdensome demands of Company management and materially and unnecessarily increase management’s workload. Furthermore, if customers choose to delay, defer, or reduce transactions with us or do business with our competitors instead of us, then our business, financial condition, and operating results would be adversely affected.
In addition, activist directors may make overly burdensome demands of our management and materially and unnecessarily increase management’s workload. Furthermore, if customers choose to delay, defer, or reduce transactions with us or do business with our competitors instead of us, then our business, financial condition, and operating results would be adversely affected.
Our corporate headquarters and major operations are located in the San Francisco Bay Area of California, which is a region known for significant seismic activity. In addition, natural disasters, acts of terrorism, or war could cause disruptions in our operations, our or our customers’ or channel partners’ businesses, our suppliers’ businesses, or the economy as a whole.
Our corporate headquarters and major operations are located in the San Francisco Bay Area of California, which is a region known for significant seismic activity. In addition, natural disasters, acts of terrorism, or war could cause disruptions in our operations, or the operations of our customers’, channel partners’, or suppliers’, or the economy as a whole.
Since these privacy and data security regimes are evolving, uncertain, and complex, especially for a global business like ours, we may need to update or enhance our compliance measures as our products, markets, and customer demands further develop, and these updates or enhancements may require implementation costs, which may be material.
Since these privacy and data security regimes are evolving and complex, especially for a global business like ours, we may need to update or enhance our compliance measures as our products, markets, and customer demands further develop, and these updates or enhancements may require implementation costs, which may be material.
Each of these markets presents distinct risks and, in many cases, requires that we expend our resources to address the particular requirements of that market. Addressing these requirements can be time-consuming and costly. The market for lidar technology is relatively new, rapidly developing, and unproven in many markets or industries.
Each of these markets presents distinct risks and, in many cases, requires that we expend our resources to address the particular requirements of that market. Addressing these requirements can be time-consuming and costly. The market for lidar technology is relatively new, rapidly developing, and unproven in many markets and industries.
In May 2024, we announced that we have partnered with Accelight Technologies, Inc. and LighTekton Co., Ltd. to deliver our lidar solutions to the China market, specifically focused on autonomous trucking and railway, as the market in China appears to be ahead of the rest of the world in lidar adoption.
In May 2024, we announced that we have partnered with Accelight Technologies, Inc. and LighTekton Co., Ltd. to deliver our lidar solutions to the China market, specifically focused on the autonomous trucking and railway segments, as the market in China appears to be ahead of the rest of the world in lidar adoption.
Additionally, in early 2023, we discovered that there may have been some uncertainty with respect to the validity of our Second Amended and Restated Certificate of Incorporation, which was approved by our stockholders at the special meeting of stockholders held on August 12, 2021.
In early 2023, we discovered that there may have been some uncertainty with respect to the validity of our Second Amended and Restated Certificate of Incorporation, which was approved by our stockholders at the special meeting of stockholders held on August 12, 2021.
For example, we are actively working with our current Tier 1 partner to pursue available RFQ opportunities and if our restructuring actions impede our ability to win these awards, this could materially impact our business.
For example, we are actively working with our current Tier 1 partner to pursue available opportunities and if our restructuring actions impede our ability to win these awards, this could materially impact our business.
We may also experience declines in fees or royalties from licensing our technology as customers reduce the prices of products incorporating our licensed technology in order to achieve market acceptance or due to competitive pressures.
We may also experience declines in fees or royalties from licensing our technology as customers reduce the prices of their products incorporating our licensed technology in order to achieve market acceptance or due to competitive pressures.
We will need to raise additional capital in order to execute our business plan and to respond to changing market conditions, which additional capital may not be available on terms acceptable to us, or at all.
We may need to raise additional capital in order to execute our business plan and to respond to changing market conditions, which additional capital may not be available on terms acceptable to us, or at all.
In addition, we cannot be sure that the cost reduction initiatives will be successful in reducing our overall expenses to the extent anticipated, or that unexpected costs will not offset any such reductions or related initiatives.
In addition, we cannot be sure that these cost reduction initiatives will be successful in reducing our overall expenses to the extent anticipated, or that unexpected costs will not offset any such reductions or related initiatives.
In the past, including in the fourth quarter of 2023, we took inventory write-downs for obsolete and excess components associated with our decision to wind-down our Non-Automotive product line.
In the past, including in the fourth quarter of 2023, we took inventory write-downs for obsolete and excess components associated with our decision to wind-down our legacy Non-Automotive product line.
If we are unable to manage the cost structure of our products, successfully introduce new products with higher gross margins, and develop new technology that we can license at attractive royalty rates, our revenue and overall gross margin would likely decline. 26 Table of Contents Adverse conditions in the automotive industry or downturns in domestic or global economic conditions, or other macroeconomic factors more generally, could have adverse effects on our results of operations.
If we are unable to manage the cost structure of our products, successfully introduce new products with higher gross margins, and develop new technology that we can license at attractive royalty rates, our revenue and overall gross margin would likely decline. 18 Table of Contents Adverse conditions in the automotive industry or downturns in domestic or global economic conditions, or other macroeconomic factors more generally, could have adverse effects on our results of operations.
Even in these emerging markets, we face substantial competition from numerous competitors seeking to prove the value of their technology. 29 Table of Contents Additionally, competition may result in pricing pressure and reduced margins, and may impede our ability to secure design wins, successfully enter into definitive agreements or other commercial arrangements, or successfully commercialize our products at scale, which may prevent us from achieving our projected market share.
Even in these emerging markets, we face substantial competition from numerous competitors seeking to prove the value of their technology. 20 Table of Contents Additionally, competition may result in pricing pressure and reduced margins, and may impede our ability to secure design wins, successfully enter into definitive agreements or other commercial arrangements, or successfully commercialize our products at scale, which may prevent us from achieving our projected market share.
Even if we obtain favorable outcomes in litigation, we may not be able to enforce the remedies, especially in the context of unauthorized parties copying or reverse engineering our solutions.
Even if we obtain favorable outcomes in any litigation, we may not be able to enforce the remedies, especially in the context of unauthorized parties copying or reverse engineering our solutions.
Volatility in the price of our common stock or other reasons has caused, and may continue in the future to cause, us to become the target of securities litigation or stockholder activism.
Volatility in the price of our common stock or other reasons has caused, and may in the future cause, us to become the target of securities litigation or stockholder activism.
The trading market for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our competitors, or our market.
The trading market for our common stock may be influenced by the research and reports that industry or securities analysts may publish about us, our business, our competitors, or our market.
We face competition from a number of sources including camera and radar companies, other developers of lidar products, Tier 1 suppliers, and other technology and automotive supply companies. In the Automotive market, our competitors have commercialized both lidar and non-lidar-based ADAS technology that has achieved market adoption, strong brand recognition, and is expected to improve over time.
We face competition from a number of sources including camera and radar companies, other developers of lidar products, Tier 1 suppliers, and other technology and automotive supply companies. In the Automotive market, our competitors have commercialized both lidar and non-lidar-based ADAS technology, which has achieved market adoption, strong brand recognition, and is expected to improve over time.
We are highly dependent on our executive officers, in particular, Matthew Fisch, our Chief Executive Officer, Andrew S. Hughes, our General Counsel, and Conor Tierney, our Chief Financial Officer.
We are highly dependent on our executive officers, in particular, Matthew Fisch, our Chief Executive Officer, Andrew S. Hughes, our General Counsel, and Conor B. Tierney, our Chief Financial Officer.
Our future financial performance will depend on our ability to make timely investments in emerging market opportunities. If one or more of these markets experience a shift in customer or prospective customer demand, our products may not compete as effectively, if at all, and they may not be designed into commercialized products.
Our future financial performance will depend on our ability to make timely investments in emerging market opportunities. If one or more of these markets experiences a shift in customer or prospective customer demand, our products may not compete as effectively, if at all, and they may not be designed into commercialized products.
Our capital light business model allows us to leverage one or more Tier 1 partners and their manufacturing capabilities, supply chains, OEM relationships, and sales teams to bring our products to market. Our recent restructurings could result in disruptions to our operations and adversely affect our business and our ability to maintain or obtain additional Tier 1 partners.
Our capital light business model allows us to leverage one or more Tier 1 partners and their manufacturing capabilities, supply chains, OEM relationships, and sales teams to bring our products to market. These restructurings could result in disruptions to our operations and adversely affect our business and our ability to maintain or obtain additional Tier 1 partners.
The new legislation had no effect on our 2024 or 2023 provision for income taxes because we generated net tax losses and offset our deferred tax assets on the consolidated balance sheets with a full valuation allowance due to our current loss position and forecasted losses for the near future.
The new legislation had no effect on our 2023 or 2022 provision for income taxes because we generated net tax losses and offset our deferred tax assets on the consolidated balance sheets with a full valuation allowance due to our current loss position and forecasted losses for the near future.
We will need to raise additional capital either by issuing equity, debt, or a combination of the two, in order to respond to market timing delays, technological advancements, competition, competitive technologies, customer demands, business opportunities, other challenges, potential acquisitions, unforeseen circumstances, or other reasons.
We may need to raise additional capital either by issuing equity, debt, or a combination of the two, in order to respond to market timing delays, technological advancements, competition, competitive technologies, customer demands, business opportunities, other challenges, potential acquisitions, unforeseen circumstances, or other reasons.
The implementation, maintenance, segregation, and improvement of these systems requires significant management time, support, and cost. Moreover, there are inherent risks associated with developing, improving, expanding, and updating current systems, including the disruption of our data management, procurement, production execution, finance, supply chain, and sales and service processes.
The implementation, maintenance, segregation, and improvement of these systems require significant management time, support, and cost. Moreover, there are inherent risks associated with developing, improving, expanding, and updating current systems, including the disruption of our data management, procurement, production execution, finance, supply chain, and sales and service processes.
Our efforts to protect and enforce our intellectual property rights and prevent third parties from violating our rights may be costly. The success of our products and our business depends in large part on our ability to obtain patents and other intellectual property rights and maintain adequate legal protection for our products in the United States and other foreign jurisdictions.
Our efforts to protect and enforce our intellectual property rights and prevent third parties from violating our rights may be costly. The success of our products and our business depend in large part on our ability to obtain patents and other intellectual property rights and maintain adequate legal protection for our products in the United States and other foreign jurisdictions.
While we have developed system components designed to prevent our lidar lasers from causing property damage (including to cameras), in the event an unforeseen issue arises that results in property damage, our reputation or brand may be damaged and we could face material legal claims for breach of contract, product liability, tort, or breach of warranty as a result.
While we have developed system components designed to help minimize our lidar lasers from causing property damage (including to cameras), in the event an unforeseen issue arises that results in property damage, our reputation or brand may be damaged, and we could face material legal claims for breach of contract, product liability, tort, or breach of warranty as a result.
The occurrence of one or more of the events or circumstances described in the section titled “ Risk Factors ,” alone or in combination with other events or circumstances may have an adverse effect on our business, financial condition, results of operations, and prospects.
The occurrence of one or more of the events or circumstances described in this “ Risk Factors ” section, alone or in combination with other events or circumstances may have an adverse effect on our business, financial condition, results of operations, and prospects.
Our future success will depend on our ability to achieve a leadership position in our targeted markets by continuing to develop, and protect from infringement, advanced lidar technology in a timely manner and to stay ahead of existing and new competitors.
Our future success will depend on our ability to achieve a leadership position in our target markets by continuing to develop, and protect from infringement, advanced lidar technology in a timely manner and to stay ahead of existing and new competitors.
If we are unable to buy these components in quantities sufficient to meet our requirements on a timely basis, we will not be able to deliver products to our customers, which may result in such customers using competitive products instead of our products. 22 Table of Contents We may face risks associated with our reliance on certain deterministic artificial intelligence and machine learning models.
If we are unable to buy these components in sufficient quantities to meet our requirements on a timely basis, we will not be able to deliver products to our customers, which may result in such customers using competitive products instead of our products. We may face risks associated with our reliance on certain deterministic artificial intelligence and machine learning models.
The scope of these indemnity obligations varies, but may, in some instances, include indemnification for damages and expenses, including attorneys’ fees. Our insurance may not cover all intellectual property infringement claims.
The scope of these indemnity obligations varies, but may, in some instances, include indemnification for damages and expenses, including attorneys’ fees. Our insurance may not cover any or all intellectual property infringement claims.
The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees, or as executive officers. 44 Table of Contents Additionally, there continues to be public interest and increased legislative pressure related to environmental, social, and governance, or ESG, activities of public companies.
The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees, or as executive officers. Additionally, there continues to be public interest and increased legislative pressure related to environmental, social, and governance, or ESG, activities of public companies.
If lidar technology does not achieve commercial success, or if adoption of lidar is deferred or the market otherwise develops at a pace slower than we expect, our business, results of operations, and financial condition will be materially and adversely affected. 21 Table of Contents We may experience difficulties in managing our growth and expanding our operations.
If lidar technology does not achieve commercial success, or if adoption of lidar is deferred or the market otherwise develops at a pace slower than we expect, our business, results of operations, and financial condition will be materially and adversely affected. We may experience difficulties in managing our growth and expanding our operations.
Responding to any actions by activist stockholders, including proxy contests, can be costly and time-consuming, has diverted the attention of management, our Board, and our employees, and may be disruptive to our operations. We may be required to incur significant fees and other expenses related to activist stockholder matters, including for third-party advisors.
Responding to any actions by activist stockholders, including proxy contests, can be costly and time-consuming, divert the attention of management, our Board, and our employees, and may be disruptive to our operations. We may be required to incur significant fees and other expenses related to activist stockholder matters, including for third-party advisors.
In addition, our equity plan is not well funded. We asked stockholders to approve an increase in the number of shares issuable under our equity plan at the 2024 annual meeting of stockholders.
In addition, our equity plan is not well funded. We asked stockholders to approve an increase in the number of shares issuable under our equity plan at the 2024 and 2025 annual meeting of stockholders.
Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced products in the autonomous vehicle industry, which could result in the loss of competitiveness of our lidar solutions, decreased revenue, and a loss of market share to competitors (or a failure to increase revenue and/or market share).
Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced products, which could result in the loss of competitiveness of our lidar solutions, decreased revenue, and a loss of market share to competitors (or a failure to increase revenue and/or market share).
Any of these events could adversely affect our brand, relationships with customers, operating results, or financial condition. 25 Table of Contents Suppliers to automotive OEMs may require that we provide a warranty, either directly or indirectly, on our products, including our embedded software.
Any of these events could adversely affect our brand, relationships with customers, operating results, or financial condition. Suppliers to automotive OEMs may require that we provide a warranty, either directly or indirectly, on our products, including our embedded software.
Factors that may cause these quarterly fluctuations include, without limitation: • the timing and magnitude of orders and shipments of our products in any quarter; • decreases in pricing we may adopt to drive market adoption or in response to competitive pressure; • our ability to retain our existing customers and strategic partners and attract new customers and strategic partners; 15 Table of Contents • our ability to develop, introduce, manufacture, and ship, in a timely manner, products that meet customer requirements; • disruptions in our sales channels or termination of our relationships with important channel partners; • delays in customers’ purchasing cycles or deferments of customers’ purchases in anticipation of new products or updates from us or our competitors; • the timing of charges related to impairments of long-lived assets; • non-routine write-downs of inventory; • one time termination benefits and other restructuring costs; • fluctuations in demand for our products; • the mix of products sold or licensed by us in any given quarter; • the duration or worsening of the military conflicts in Ukraine and the Middle East, and the time it will take for the economic recovery for such impact to occur; • the timing and rate of broader market adoption of ADAS or autonomous systems utilizing our solutions across the Automotive and other market sectors; • the timing and scale of the market acceptance of lidar generally; • further technological advancements by our competitors and other market participants; • the ability of our customers and strategic partners to commercialize systems that incorporate our products; • any change in the competitive dynamics of our markets, including consolidation of competitors, regulatory developments, and new market entrants; • our ability to effectively manage or outsource management of our inventory; • changes in the source, cost, availability of, and regulations pertaining to components and materials we use in our products; • impact of foreign currency fluctuations; • adverse litigation, judgments, settlements, or other litigation-related costs, or claims that may give rise to such costs; and • general economic, industry, and market conditions, including trade disputes.
Factors that may cause these quarterly fluctuations include, without limitation: • the timing and magnitude of orders and shipments of our products in any quarter; • decreases in pricing we may adopt to drive market adoption or in response to competitive pressure; • our ability to retain our existing customers and strategic partners and attract new customers and strategic partners; • our ability to develop, introduce, manufacture, and ship, in a timely manner, products that meet customer requirements, and expectations; • disruptions in our sales channels or termination of our relationships with important channel partners; • delays in customers’ purchasing cycles or deferments of customers’ purchases in anticipation of new products or updates from us or our competitors; • the timing of charges related to impairments of long-lived assets; • non-routine write-downs of inventory; • one time termination benefits and other restructuring costs; • fluctuations in demand for our products; • the mix of products sold or licensed by us in any given quarter; • the duration or worsening of the military conflicts in Ukraine and the Middle East, and the time it will take for the economic recovery for such impact to occur; • changing international trade policies, including the imposition or modification of tariffs, increasing trade tensions, and the implementation of potential trade restrictions; • the timing and rate of broader market adoption of ADAS or autonomous systems utilizing our solutions across the Automotive and other market sectors; 10 Table of Contents • the timing and scale of the market acceptance of lidar generally; • further technological advancements by our competitors and other market participants; • the ability of our customers and strategic partners to commercialize systems that incorporate our products; • any change in the competitive dynamics of our markets, including consolidation of competitors, regulatory developments, and new market entrants; • our ability to effectively manage or outsource management of our inventory; • changes in the source, cost, availability of, and regulations pertaining to components and materials we use in our products; • impact of foreign currency fluctuations; • adverse litigation, judgments, settlements, or other litigation-related costs, or claims that may give rise to such costs; • general economic, industry, and market conditions, including trade disputes.
If any of the analysts who may cover us change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our common stock would likely decline. In the past, analysts that previously covered us, stopped their coverage of us.
If any of the analysts who cover us change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our common stock would likely decline. In the past, analysts that previously covered us discontinued their coverage.
Activist stockholders who disagree with the composition of our Board, our strategy, or the way our Company is managed may seek to effect change through various strategies and channels, such as through commencing a proxy contest, making public statements critical of our performance or business, or engaging in other similar activities.
Activist stockholders who disagree with the composition of our Board, our strategy, or the way we are managed may seek to effect change through various strategies and channels, such as through commencing a proxy contest, making public statements critical of our performance or business, or engaging in other similar activities.
Our products are intended to be used for autonomous driving and ADAS applications, which are subject to complicated and evolving regulatory schemes that vary from jurisdiction to jurisdiction. These are rapidly evolving areas where new regulations could impose limitations on the use of lidar generally or our products specifically.
Our products are intended to be used for autonomous driving and ADAS applications as well as Non-Automotive applications, which are subject to complicated and evolving regulatory schemes that vary from jurisdiction to jurisdiction. These are rapidly evolving areas where new regulations could impose limitations on the use of lidar generally or our products specifically.
We may experience declines in the average selling prices of our products generally as our customers seek to commercialize autonomous systems at prices low enough to achieve market acceptance or due to competitive pressures.
We may experience declines in the average selling prices of our products generally as our customers seek to commercialize lidar-based systems at prices low enough to achieve market acceptance or due to competitive pressures.
Any such litigation, whether initiated by us or a third party, could result in substantial costs and diversion of management resources, either of which could adversely affect our business, operating results, and financial condition.
Any such litigation, whether initiated by us or a third party, could result in substantial costs and divert management, either of which could adversely affect our business, operating results, and financial condition.
Cybersecurity and Infrastructure Security Agency, or CISA, has warned all organizations in the U.S. to be on guard against possible cyber attacks coming from Russia which has the potential to disrupt business operations, limit access to essential services, and threaten public safety.
In addition, the Cybersecurity and Infrastructure Security Agency, or CISA, has in the past warned organizations in the U.S. to be on guard against possible cyber-attacks coming from Russia and Iran which has the potential to disrupt business operations, limit access to essential services, and threaten public safety.
This relatively limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter, which include our ability to: • develop and commercialize our products; 16 Table of Contents • produce and deliver lidar and software products meeting acceptable performance metrics; • forecast our revenue and budget for and manage our expenses; • attract new customers and retain existing customers; • develop, obtain, or progress strategic partnerships; • comply with existing and new or modified laws and regulations applicable to our business; • plan for and manage capital expenditures for our current and future products, and manage our supply chain and supplier relationships related to our current and future products; • anticipate and respond to macroeconomic changes as well as changes in the markets in which we operate; • maintain and enhance the value of our reputation and brand; • effectively manage our growth and business operations, including the lingering impacts of macroeconomic factors on our business, such as the wars in Ukraine and in the Middle East; • develop and protect our intellectual property; • hire, integrate, and retain talented people at all levels of our organization; and • successfully develop new solutions to enhance the experience of customers.
This relatively limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter, which include our ability to: • develop and commercialize our products; • produce and deliver lidar and software products meeting acceptable performance metrics; • forecast our revenue and budget for and manage our expenses; • attract new customers and retain existing customers; • develop, obtain, or progress strategic partnerships; • comply with existing and new or modified laws and regulations applicable to our business; • plan for and manage capital expenditures for our current and future products, and manage our supply chain and supplier relationships related to our current and future products; • anticipate and respond to macroeconomic changes as well as changes in the markets in which we operate; • maintain and enhance the value of our reputation and brand; • effectively manage our growth and business operations, including the lingering impacts of macroeconomic factors on our business, such as the wars in Ukraine and in the Middle East; • effectively manage our supply chain to address changing international trade policies, including tariffs, trade tensions, and potential trade restrictions; • develop and protect our intellectual property; • hire, integrate, and retain talented people at all levels of our organization; and • successfully develop new solutions to enhance the experience of customers.
Ramachandran, who resigned, effective April 5, 2024, as our Chief Operating Officer. 33 Table of Contents Our business depends substantially on the efforts of our executive officers and highly skilled personnel, and our operations may be severely disrupted if we lost their services.
Ramachandran, who resigned, effective April 5, 2024, as our Chief Operating Officer. 22 Table of Contents Our business depends substantially on the efforts of our executive officers and highly skilled personnel, and our operations may be severely disrupted if we lose their services.
Our ability to accurately forecast demand for our products could be affected by many factors, including the accuracy of the forecasts that we receive from our customers, the rapidly changing nature of the autonomous driving and ADAS markets in which we operate, the uncertainty surrounding the market acceptance and commercialization of lidar technology, the emergence of new markets, an increase or decrease in customer demand for our products or for products and services of our competitors, product introductions by competitors, the lingering effects of the COVID-19 pandemic, other epidemics or outbreaks of other contagions, such as “bird flu,” should they materialize, any work stoppages or interruptions, unanticipated changes in general market conditions, and the general weakening of economic conditions or consumer confidence, which may be exacerbated by the on-going military actions in Ukraine and the Middle East.
Our ability to accurately forecast demand for our products could be affected by many factors, including the accuracy of the forecasts that we receive from our customers, the rapidly changing nature of the autonomous driving and ADAS markets in which we operate, the uncertainty surrounding the market acceptance and commercialization of lidar technology, the emergence of new markets, an increase or decrease in customer demand for our products or for products and services of our competitors, product introductions by competitors, epidemics or outbreaks of other contagions, such as “bird flu,” should they materialize, any work stoppages or interruptions, unanticipated changes in general market conditions, and the general weakening of economic conditions or consumer confidence, which may be exacerbated by the on-going military actions in Ukraine and the Middle East, or escalating trade tensions around the globe.
The longer the Russia-Ukraine conflict continues and the more damage to Ukrainian infrastructure that occurs, the greater the impact could be on the supply of such raw materials, and the failure to have access to such raw materials could have an adverse effect on our business and results of operations. In addition, the U.S.
The longer the Russia-Ukraine conflict continues and the more damage to Ukrainian infrastructure that occurs, the greater the impact could be on the supply of such raw materials, and the failure to have access to such raw materials could have an adverse effect on our business and results of operations.
Our R&D efforts may not be sufficient to adapt to changes in technology. As technologies change, we plan to upgrade or adapt our lidar solutions with the latest technology.
Our R&D efforts may not be sufficient to adapt to changes in technology. As technologies change, we plan to upgrade or adapt our lidar solutions with the latest, yet cost effective, technology.
In general, international operations are subject to a number of other risks, including: • the impact of tariffs and any escalation of a trade war between the U.S. and its trading partners; • exchange rate fluctuations; • political and economic instability, international terrorism, and anti-American sentiment, particularly in emerging markets; • global or regional health crises, such as the lingering effects of the COVID-19 pandemic or other epidemics or outbreaks of other contagions; • military conflicts in Ukraine and the Middle East; • potential for violations of anti-corruption laws and regulations, such as those related to bribery and fraud; • preference for locally branded products, and laws and business practices favoring local competition; • potential consequences of, and uncertainty related to, the “Brexit” process in the United Kingdom, which could lead to additional expense and complexity in doing business there; • increased difficulty in managing inventory; • delayed revenue recognition; • the potential for less effective protection of intellectual property; • stringent regulation of autonomous driving or other systems or products using our products and stringent consumer protection and product compliance regulations, including, but not limited, to the General Data Protection Regulation, or GDPR in the European Union, European competition law, the Restriction of Hazardous Substances Directive, or RoHS, the Waste Electrical and Electronic Equipment Directive, or WEEE, and the European Ecodesign Directive, all of which are costly to comply with and may vary from country to country; • difficulties and costs of staffing and managing foreign operations; • import and export laws and associated regulations; • changes in local tax and customs duty laws or changes in the enforcement, application, or interpretation of such laws; and • the U.S. government’s restrictions on technology transfers to certain countries.
We can provide no assurances that we will be successful in the China lidar market. 16 Table of Contents In general, international operations are subject to a number of other risks, including: • the impact of tariffs and any escalation of a trade war between the U.S. and its trading partners; • exchange rate fluctuations; • political and economic instability, international terrorism, and anti-American sentiment, particularly in emerging markets; • global or regional health crises, such as epidemics or outbreaks of other contagions; • military conflicts in Ukraine and the Middle East; • potential for violations of anti-corruption laws and regulations, such as those related to bribery and fraud; • preference for locally branded products, and laws and business practices favoring local competition; • potential consequences of, and uncertainty related to, the “Brexit” process in the United Kingdom, which could lead to additional expense and complexity in doing business there; • increased difficulty in managing inventory; • delayed revenue recognition; • the potential for less effective protection of intellectual property; • stringent regulation of autonomous driving or other systems or products using our products and stringent consumer protection and product compliance regulations, including, but not limited, to the General Data Protection Regulation, or GDPR in the European Union, European competition law, the Restriction of Hazardous Substances Directive, or RoHS, the Waste Electrical and Electronic Equipment Directive, or WEEE, and the European Ecodesign Directive, all of which are costly to comply with and may vary from country to country; • difficulties and costs of staffing and managing foreign operations; • import and export laws and associated regulations; • changes in local tax and customs duty laws or changes in the enforcement, application, or interpretation of such laws; and • the U.S. government’s restrictions on technology transfers to certain countries.
Litigation may be necessary to defend against these claims. If we fail to adequately defend such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability to commercialize our products, which could severely harm our business.
If we fail to adequately defend such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability to commercialize our products, which could severely harm our business.
Adoption of lidar products, including our products, will depend on numerous factors, including whether the technological capabilities of lidar and lidar-based products meet users’ current or anticipated needs, whether the benefits associated with designing lidar into larger sensing systems outweighs the costs, complexity, and time needed to deploy such technology or replace or modify existing systems that may have used other modalities, such as cameras and radar, whether users in other applications can move beyond the testing and development phases and proceed to commercializing systems supported by lidar technology and whether lidar developers such as us can keep pace with the expected rapid technological change in certain developing markets, and the global response to the lingering effects of the COVID-19 pandemic, and other macroeconomic factors, and the length of any associated economic recovery.
Adoption of lidar products, including our products, will depend on numerous factors, including whether the technological capabilities of lidar and lidar-based products meet users’ current or anticipated needs, whether the benefits associated with designing lidar into larger sensing systems outweighs the costs, complexity, and time needed to deploy such technology or replace or modify existing systems that may have used other modalities, such as cameras and radar, whether users in other applications can move beyond the testing and development phases and proceed to commercializing systems supported by lidar technology and whether lidar developers such as us can keep pace with the expected rapid technological change in certain developing markets, and the global response to unresolved global conflicts and increasing trade tensions, as well as other macroeconomic factors, and the length of any associated economic recovery.
In 2023, for example, we shifted our strategic focus to the Automotive market. We cannot guarantee that the implementation of any revised strategic plan will achieve or sustain the anticipated benefits, or that the benefits, even if achieved, will be adequate to meet long-term expectations.
In 2023, for example, we shifted our strategic focus away from our legacy product for the Non-Automotive market. We cannot guarantee that the implementation of any revised strategic plan will achieve or sustain the anticipated benefits, or that the benefits, even if achieved, will be adequate to meet long-term expectations.
Any shortage in the availability of these lasers could materially and adversely affect our ability to manufacture our solutions. In addition, the lead times associated with certain components are lengthy and preclude rapid changes in quantities and delivery schedules.
For example, our products depend on lasers. Any shortage in the availability of these lasers could materially and adversely affect our ability to manufacture our solutions. In addition, the lead times associated with certain components are lengthy and preclude rapid changes in quantities and delivery schedules.
We expect to incur significant legal, accounting, and other expenses that we did not incur as a private company, and these expenses will likely increase after we are no longer an emerging growth company, as defined in Section 2(a) of the Securities Act.
We incur significant legal, accounting, and other expenses that we did not incur as a private company, and these expenses will likely increase in 2026 now that we are no longer an emerging growth company, as defined in Section 2(a) of the Securities Act.
These factors include, without limitation: • the extent to which we meet contractual terms and conditions; • the extent to which our technology is successfully integrated into our customers’ vehicles; • the timing of when our customers adopt our technology into their vehicles on a commercial basis which could be delayed for regulatory, safety, or reliability issues unrelated to our technology; • undetected or unknown errors, defects, or reliability issues in our hardware or software which could reduce the market adoption of our existing or new products; • loss of business with respect to, the failure or lack of commercial success of a vehicle model for which we are a significant supplier for reasons unrelated to our technology; • a decline, for any reason, in the production levels of our customers, particularly with respect to models which incorporate our technology; • customer cancellations of their contracts; • if our products are included as part of a vehicle option package, the extent to which end customers select it; and • other risk factors set forth in this Part I, Item 1A of this Annual Report on Form 10-K. 19 Table of Contents The period of time from a design win to implementation is long and we are subject to the risks of cancellation or postponement of the contract or unsuccessful implementation.
These factors include, without limitation: • the extent to which we meet contractual terms and conditions; • the extent to which our technology is successfully integrated into our customers’ vehicles; • the timing of when our customers adopt our technology into their vehicles on a commercial basis which could be delayed for regulatory, safety, or reliability issues unrelated to our technology; • undetected or unknown errors, defects, or reliability issues in our hardware or software which could reduce the market adoption of our existing or new products; • loss of business with respect to, the failure or lack of commercial success of a vehicle model for which we are a significant supplier for reasons unrelated to our technology; • a decline, for any reason, in the production levels of our customers, particularly with respect to models which incorporate our technology; • customer cancellations of their contracts; • if our products are included as part of a vehicle option package, the extent to which end customers select it; and • other risk factors set forth in this Part I, Item 1A of this Annual Report on Form 10-K.
Our R&D expenses were approximately $16.4 million and $26.2 million during the years ended December 31, 2024 and 2023, respectively, and may increase in the future. Because we account for R&D as an operating expense, these expenditures will adversely affect our results of operations in the future.
Our R&D expenses were approximately $13.9 million and $16.4 million during the years ended December 31, 2025 and 2024, respectively, and may increase in the future. Because we account for R&D as an operating expense, these expenditures will adversely affect our results of operations in the future.
On August 28, 2024, we were purported to be served with a complaint that alleges we are in breach of a lease for office space in Dublin, California, entered into by our subsidiary, AEye Technologies, Inc. in 2019, because of an alleged failure to pay rent. The landlord claimed that the amount owed could be up to $8.5 million.
In 2024, we were purportedly served with a complaint that alleged we were in breach of a lease for office space in Dublin, California, entered into by our subsidiary, AEye Technologies, Inc. in 2019, because of an alleged failure to pay rent. The landlord claimed that the amount owed could be up to $8.5 million.
We are subject to U.S. and foreign anti-corruption and anti-money laundering laws and regulations. We can face criminal liability and other serious consequences for violations, which can harm our business. We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S.
We can face criminal liability and other serious consequences for violations, which can harm our business. We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S.
Our outsourced manufacturing business model for the Non-Automotive market may not be successful, which could harm our ability to deliver products and recognize revenue in the Non-Automotive market. In the fourth quarter of 2023, we made the decision to wind down our legacy Non-Automotive product.
Our outsourced manufacturing business model for the Non-Automotive market may not be successful, which could harm our ability to deliver products and recognize revenue in the Non-Automotive market. In the fourth quarter of 2023, we made the decision to wind down our legacy Non-Automotive product. Our new product, OPTIS TM , is intended to address the Non-Automotive market.
If another party has filed a patent application regarding the same subject matter as we have, we may not be entitled to the protection sought by the patent application. We also cannot be certain whether the claims included in a patent application will ultimately be allowed in the applicable issued patent.
If another party has filed a patent application regarding the same subject matter as we have, we may not be entitled to the protection sought by the patent application. Nor can we be certain that the claims included in a patent application will ultimately be allowed in the applicable issued patent.
If we do not prevail in any such disagreements, our profitability may be affected. Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As of December 31, 2024, we had approximately $284 million of U.S. federal, and approximately $242 million of state net operating loss carryforwards available to reduce future taxable income.
If we do not prevail in any such disagreements, our profitability may be affected. Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As of December 31, 2025, we had approximately $362.2 million of U.S. federal, and approximately $268.7 million of state net operating loss carryforwards available to reduce future taxable income.
In addition, the ongoing hostilities between Russia and Ukraine, the war in the Middle East, and global reactions thereto have increased U.S. domestic and global energy prices.
In addition, the ongoing hostilities between Russia and Ukraine, the war in the Middle East, and global reactions thereto have caused significant fluctuations in U.S. domestic and global energy prices.
Alternatively, if a court were to find the choice of forum provision contained in our Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in another jurisdiction, which could harm our business, financial condition, and results of operations.
Alternatively, if a court were to find the choice of forum provision contained in our Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in another jurisdiction, which could harm our business, financial condition, and results of operations. We do not expect to declare any dividends in the foreseeable future.
We expect that we will continue to incur significant losses through at least the next few years as we: • continue to utilize our third-party partners for design, testing, and commercialization; • expand our operations and supply chain capabilities to produce our lidar components and systems, including costs associated with outsourcing the production which, in some instances, requires significant upfront payments by us; • expand our design, development, and commercialization; • build up inventories of parts and components for our lidar solutions; and • maintain a level of general and administrative spending to meet the requirements of operating as a public company. 13 Table of Contents As of December 31, 2024, we had an accumulated deficit of approximately $373.1 million.
We expect that we will continue to incur significant losses through at least the next few years as we: • continue to utilize our third-party partners for design, testing, and commercialization; • expand our operations and supply chain capabilities to produce our lidar components and systems, including costs associated with outsourcing the production which, in some instances, requires significant upfront payments by us; • expand our design, development, and commercialization; • build up inventories of parts and components for our lidar solutions; and • maintain a level of general and administrative spending to meet the requirements of operating as a public company.
Relying on foreign-produced products subjects us to risks relating to changes in import duties, quotas, the potential for introduction of U.S. taxes on imported goods, the potential loss of “most favored nation” status with the U.S., and freight cost increases, as well as economic and political uncertainties, that could result in a trade war causing ever-increasing tariffs.
Relying on foreign-produced components subjects us to risks relating to changes in import duties, quotas, the potential for introduction of U.S. taxes on imported goods, the potential loss of “most favored nation” status with the U.S., and freight cost increases, as well as economic and political uncertainties, that could result in a trade war causing ever-increasing tariffs, although we have not seen a significant impact yet.
If our revenue does not grow over the long term, our ability to achieve and maintain profitability may be adversely affected, and the value of our business may significantly decrease. The market price and trading volume of our common stock may be volatile and could decline significantly.
If our revenue does not grow over the long term, our ability to achieve and maintain profitability may be adversely affected, and the value of our business may significantly decrease. The market price and trading volume of our common stock may be volatile and could decline significantly, including for matters related to Nasdaq listing standards.
We continue to implement strategic initiatives designed to grow our business. These initiatives may prove more costly than we currently anticipate and we may not succeed in increasing our revenue in an amount sufficient to offset the costs of these initiatives or to achieve and maintain profitability.
These initiatives may prove more costly than we currently anticipate and we may not succeed in increasing our revenue in an amount sufficient to offset the costs of these initiatives or to achieve and maintain profitability.
If we fail to become profitable, or if we are unable to fund our continuing losses, we may be unable to continue our business operations. There can be no assurance that we will ever achieve or sustain profitability.
If our products do not achieve sufficient market acceptance, we will not become profitable. If we fail to become profitable, or if we are unable to fund our continuing losses, we may be unable to continue our business operations. There can be no assurance that we will ever achieve or sustain profitability.
Interest in our common stock from retail and other individual investors could result in increased volatility in the market price of our common stock, which could have a material adverse impact on the market price of our common stock and your investment.
Risks Related to Being a Public Company Interest in our common stock from retail and other individual investors could result in increased volatility in the market price of our common stock, which could have a material adverse impact on the market price of our common stock and your investment.
Automotive production and sales can also be affected by our automotive OEM and Tier 1 supplier customers’ ability to continue operating in response to challenging economic conditions and in response to labor relations issues, regulatory requirements, trade agreements, and other factors, such as the unavailability of unrelated components in the assembly of automobiles, an example of which is the shortage of semiconductors necessary for automobile production.
Automotive production and sales can also be significantly affected by our automotive OEM and Tier 1 supplier customers’ ability to operate effectively in the face of challenging economic conditions and in response to labor relations issues, regulatory requirements, and other factors, such as the unavailability of unrelated components in the assembly of automobiles, an example of which was the shortage of semiconductors necessary for automobile production.
Our future success will depend upon our ability to develop and introduce a variety of new capabilities and innovations to our existing product offerings, as well as introduce a variety of new product offerings, to address the changing needs of the markets in which we offer our products.
Our future success will depend upon our ability to develop and introduce a variety of new capabilities and innovations to our existing products, as well as our ability to introduce new product offerings to address the changing needs of our customers.
Of the approximately $284 million in U.S. federal operating loss carryforwards, approximately $272 million will be carried forward indefinitely for U.S. federal tax purposes and approximately $12 million will begin to expire in 2033. All of our U.S. state net operating loss carryforwards will begin to expire in 2029.
Of the approximately $362.1 million in U.S. federal operating loss carryforwards, approximately $349.9 million will be carried forward indefinitely for U.S. federal tax purposes and approximately $12.2 million will begin to expire in 2033. All of our U.S. state net operating loss carryforwards will begin to expire in 2029.
Additionally, under current SEC regulations, if at the time we file this Annual Report on Form 10-K our public float is less than $75 million, and for so long as our public float remains less than $75 million, the amount we can raise through primary public offerings of securities in any twelve-month period using shelf registration statements on Form S-3 is limited to an aggregate of one-third of our public float, which is referred to as the “baby shelf” rules. 14 Table of Contents As of the date of this Annual Report on Form 10-K, our public float is below $75 million.
Additionally, under current SEC regulations, if our public float is less than $75 million at the time we file our Annual Report on Form 10-K, and for so long as our public float remains less than $75 million thereafter, the amount we can raise through primary public offerings of securities in any twelve-month period after such filing using a shelf registration statement on Form S-3 will be limited to an aggregate of one-third of our public float, which is referred to as the “baby shelf” rules.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese cybersecurity reviews by the Audit Committee or Board of Directors generally occur at least once annually, or more frequently as determined to be necessary. The day to day operations of our cybersecurity risk management program are overseen by our Director of IT, who reports to our Chief Financial Officer.
Biggest changeThese cybersecurity reviews by the Audit Committee or Board of Directors generally occur at least once annually, or more frequently as determined to be necessary. The day to day operations of our cybersecurity risk management program are overseen by our IT Operations Manager, who has over 5 years of IT experience, and reports to our Chief Financial Officer.
For more information about these risks, see the risk factor within Item 1A "Risk Factors" in this Annual Report on Form 10-K, entitled "We, as well as our suppliers and partners, are subject to cybersecurity risks to operational systems, infrastructure, integrated software in our lidar solutions, and the data processed by those solutions, and any material failure, weakness, interruption, cyber event, incident, or breach of security could adversely affect our business by causing a disruption of our operations, a compromise or corruption of our confidential or other business-critical information, and/or damage our business relationships, all of which could negatively impact our business financial condition, and operating results." 48 Table of Contents Cybersecurity Governance Cybersecurity risks are among the enterprise risks that our Board of Directors oversees, primarily through delegation to the Audit Committee of the Board.
For more information about these risks, see the risk factor within Item 1A "Risk Factors" in this Annual Report on Form 10 -K, entitled "We, as well as our suppliers and partners, are subject to cybersecurity risks to operational systems, infrastructure, integrated software in our lidar solutions, and the data processed by those solutions, and any material failure, weakness, interruption, cyber event, incident, or breach of security could adversely affect our business by causing a disruption of our operations, a compromise or corruption of our confidential or other business-critical information, and/or damage our business relationships, all of which could negatively impact our business financial condition, and operating results." Cybersecurity Governance Cybersecurity risks are among the enterprise risks that our Board of Directors oversees, primarily through delegation to the Audit Committee of the Board.
The Audit Committee assists the Board in overseeing our privacy and information policies and reviewing our cybersecurity program. The Audit Committee engages with our management team, including our Director of IT and our Chief Financial Officer, and receives periodic reports on cybersecurity.
The Audit Committee assists the Board in overseeing our privacy and information policies and reviewing our cybersecurity program. The Audit Committee engages with our management team, including our IT Operations Manager and our Chief Financial Officer, and receives periodic reports on cybersecurity.
Our Director of IT supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal personnel, threat intelligence, alerts, or reports produced by security tools deployed in the IT environment.
Our IT Operations Manager, in conjunction with a full-service IT consultant, supervise efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal personnel, threat intelligence, alerts, or reports produced by security tools deployed in the IT environment.
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Our Director of IT has served in this position for 6 years. He has over 39 years of IT experience, including over 10 years of experience in security compliance.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters is located in Pleasanton, California, where we lease 6,522 square feet pursuant to a lease that initially expires on November 30, 2027, unless we choose to exercise a five-year renewal option. The Pleasanton facility contains engineering, R&D, operations, customer support, marketing, and administrative functions.
Biggest changeItem 2. Properties Our corporate headquarters is located in Pleasanton, California, where we lease 18,605 square feet pursuant to a lease, as amended in February 2026, that expires on February 28, 2029, with an option to extend for five years. The Pleasanton facility contains engineering, R&D, operations, customer support, marketing, and administrative functions.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn addition, from time to time, we may become involved in actions, claims, suits, and other legal proceedings arising in the ordinary course of our business, including assertions by third parties relating to intellectual property infringement, breaches of contract or warranties, or employment-related matters.
Biggest changeUnder the terms of the agreement, the Company paid $1.4 million in cash in May 2025 and issued warrants to purchase up to 350,000 shares of common stock at an exercise price of $2.22 per share in August 2025. 32 Table of Contents In addition, from time to time, we may become involved in actions, claims, suits, and other legal proceedings arising in the ordinary course of our business, including assertions by third parties relating to intellectual property infringement, breaches of contract or warranties, or employment-related matters.
Other than as stated above, we are not currently a party to any actions, claims, suits or other legal proceedings the outcome of which, if determined adversely to us, would individually or in the aggregate have a material effect on our business, financial condition, and results of operations.
Other than as stated above, we are not currently a party to any actions, claims, suits or other legal proceedings the outcome of which, if determined adversely to us, would individually or in the aggregate have a material effect on our business, financial condition, and results of operations. Item 4. Mine Safety Disclosures Not applicable. PART II
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Item 3. Legal Proceedings In or about July of 2024, AEye, Inc.’s wholly owned subsidiary, AEye Technologies, Inc.
Added
Legal Proceedings In 2025, the Company was notified by a former vendor that it intended to pursue a claim against the Company’s wholly owned subsidiary, AEye Technologies, Inc., arising out of an agreement entered into in May 2020, in which the former vendor alleges that AEye Technologies, Inc. failed to pay approximately $3,300 plus interest from the date the former vendor alleges such payments were due.
Removed
A copy of the Lease was filed as Exhibit 10.8 to the Registration Statement on Form S-4 filed with the U.S. Securities and Exchange Commission on May 13, 2021.
Added
In February 2026, the former vendor initiated a binding arbitration proceeding against AEye Technologies, Inc. pursuant to the underlying purchase agreement.
Removed
The Complaint does not quantify the damages sought thereunder, however, as discovery in the litigation has only recently commenced, the only quantification of damages is the Landlord’s informal demand at the outset of the litigation of approximately $4.35 million, which is net of the $2.15 million security deposit retained by the Landlord.
Added
AEye Technologies, Inc. has, and continues to dispute the total amount owed based, in part, on the claim that the products supplied by the former vendor were largely defective and such former vendor was repeatedly made aware of the existence of such defects.
Removed
If we are unable to resolve the purported default under the Lease and AEye, Inc. is subsequently found liable for the amounts claimed by the Landlord that are allegedly owed to it by AEye Tech, it could have a material adverse effect on AEye, Inc.’s liquidity, financial condition, and results of operations.
Added
While it is reasonably possible that a loss may be incurred, we are unable to estimate the possible loss or range of loss that could result from an unfavorable outcome in this legal proceeding. In or about July of 2024, AEye, Inc.’s wholly owned subsidiary, AEye Technologies, Inc.
Added
The Landlord claimed that the amount owed could be up to $8.5 million. Thereafter, in August 2024, the Landlord fully drew down the standby letter of credit of $2.15 million, which was held as security for the payment of rent, due to the alleged default of the lease.
Added
On April 28, 2025, the Company and the former landlord entered into a settlement agreement to resolve all outstanding disputes related to the early termination of the lease.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStockholders As of February 18, 2025, we had approximately 57 holders of record of our common stock and thousands of additional beneficial holders. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Biggest changeStockholders As of March 13, 2026, we had approximately 49 holders of record of our common stock and thousands of additional beneficial holders. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Recent Sales of Unregistered Securities None, other than as previously disclosed by the Company. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
Recent Sales of Unregistered Securities None, other than as previously disclosed by the Company. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table sets forth our consolidated results of operations data for the years ended December 31, 2024 and 2023 (in thousands, except for percentages): Year ended December 31, Change Change 2024 2023 $ % Prototype sales $ 97 $ 477 $ (380 ) (80 )% Development contracts 105 987 (882 ) (89 )% Total revenue 202 1,464 (1,262 ) (86 )% Cost of revenue 778 15,319 (14,541 ) (95 )% Gross loss (576 ) (13,855 ) 13,279 (96 )% Research and development 16,389 26,171 (9,782 ) (37 )% Sales and marketing 551 12,528 (11,977 ) (96 )% General and administrative 18,312 25,234 (6,922 ) (27 )% Impairment of long-lived assets — 9,988 (9,988 ) (100 )% Total operating expenses 35,252 73,921 (38,669 ) (52 )% Loss from operations (35,828 ) (87,776 ) 51,948 (59 )% Change in fair value of convertible note and warrant liabilities — (858 ) 858 (100 )% Interest income and other 799 1,317 (518 ) (39 )% Interest expense and other (433 ) 248 (681 ) (275 )% Total other income (expense), net 366 707 (341 ) (48 )% Loss before income tax (35,462 ) (87,069 ) 51,607 (59 )% (Benefit) provision for income tax (2 ) 57 (59 ) (104 )% Net loss $ (35,460 ) $ (87,126 ) $ 51,666 (59 )% Revenue Prototype Sales Prototype sales decreased by $380, or 80%, to $97 for the year ended December 31, 2024 from $477 for the year ended December 31, 2023.
Biggest changeThe following table sets forth our consolidated results of operations data for the years ended December 31, 2025 and 2024 (in thousands, except for percentages): Year ended December 31, Change Change 2025 2024 $ % Revenue $ 233 $ 202 $ 31 15 % Cost of revenue 554 778 (224 ) (29 )% Gross loss (321 ) (576 ) 255 (44 )% Research and development 13,937 16,389 (2,452 ) (15 )% Sales and marketing 2,546 551 1,995 362 % General and administrative 14,927 18,312 (3,385 ) (18 )% Total operating expenses 31,410 35,252 (3,842 ) (11 )% Loss from operations (31,731 ) (35,828 ) 4,097 (11 )% Change in fair value of convertible note and warrant liabilities (1,895 ) — (1,895 ) 0 % Interest income and other 1,991 799 1,192 149 % Interest expense and other (2,312 ) (433 ) (1,879 ) 434 % Total other income (expense), net (2,216 ) 366 (2,582 ) (705 )% Loss before income tax (33,947 ) (35,462 ) 1,515 (4 )% Provision (benefit) for income tax 11 (2 ) 13 (650 )% Net loss $ (33,958 ) $ (35,460 ) $ 1,502 (4 )% Revenue Revenues increased by $31 or 15%, to $233 for the year ended December 31, 2025 from $202 for the year ended December 31, 2024.
New Circle Transaction On July 25, 2024, we entered into a Stock Purchase Agreement with New Circle Principal Investments LLC, or New Circle, pursuant to which we have the right, but not the obligation, to sell to New Circle, and New Circle is obligated to purchase, up to $50,000 of our Common Stock.
New Circle Transaction On July 25, 2024, we entered into a common stock purchase agreement with New Circle Principal Investments LLC, or New Circle, pursuant to which we have the right, but not the obligation, to sell to New Circle, and New Circle is obligated to purchase, up to $50,000 of our common stock.
Registered Direct Offering On May 29, 2024, we entered into a Securities Purchase Agreement with certain institutional investors pursuant to which we agreed to issue and sell, in a registered direct offering, an aggregate of 727,706 shares of Common Stock at a per share purchase price of $3.448 for gross proceeds of approximately $2,509, before deducting estimated offering expenses payable by us.
Registered Direct Offering On May 29, 2024, we entered into a Securities Purchase Agreement with certain institutional investors pursuant to which we agreed to issue and sell, in a registered direct offering, an aggregate of 727,706 shares of common stock at a per share purchase price of $3.448 for gross proceeds of $2,509, before deducting estimated offering expenses payable by us.
Factors affecting our operating cash flows during this period were a net loss of $35,460, amortization of premiums and accretion of discounts on marketable securities, net of change in accrued interest of $611, and gain on termination of operating lease, net, of $491, offset by stock-based compensation of $9,047, common stock purchase agreement costs of $1,124, noncash lease expense of $956, and depreciation and amortization of $129.
Factors affecting our operating cash flows during this period were net loss of $35,460, amortization of premiums and accretion of discounts on marketable securities, net of change in accrued interest of $611, and gain on termination of operating lease, net, of $491, offset by stock-based compensation of $9,047, common stock purchase agreement costs of $1,124, noncash lease expense of $956, and depreciation and amortization of $129.
We believe our critical accounting policies involve the greatest degree of judgement and complexity and have the greatest potential impact on our consolidated financial statements. Revenue We recognize revenues from R&D and development arrangements with OEMs and suppliers to the OEMs and from the sale of prototype products.
We believe our critical accounting policies involve the greatest degree of judgement and complexity and have the greatest potential impact on our consolidated financial statements. Revenue We recognize revenues from R&D and development arrangements with OEMs and suppliers to the OEMs and from the sale of products.
Overview This overview provides a high-level discussion of our operating results and some of the trends that affect our business. We believe that an understanding of these trends is important to understanding our financial results for fiscal year 2024, as well as our future prospects.
Overview This overview provides a high-level discussion of our operating results and some of the trends that affect our business. We believe that an understanding of these trends is important to understanding our financial results for fiscal year 2025, as well as our future prospects.
Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this report.
Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this report.
Apollo offers best-in-class range and resolution in a compact, power-efficient, and cost-effective form factor, making it ideal for both automotive and non-automotive applications. Apollo can be integrated behind the windshield, on the roof, or in the grille, allowing original equipment manufacturers (OEMs) to implement essential safety features with minimal impact on vehicle design.
Apollo TM offers best-in-class range and resolution in a compact, power-efficient, and cost-effective form factor, making it ideal for both automotive and non-automotive applications. Apollo TM can be integrated behind the windshield, on the roof, or in the grille, allowing OEMs to implement essential safety features with minimal impact on vehicle design.
For performance obligations satisfied over time, we recognize revenue over time by measuring the progress toward complete satisfaction of a performance obligation. The application of various accounting principles related to the measurement and recognition of revenue requires us to make judgments and estimates.
For performance obligations satisfied over time, we recognize revenue over time by measuring the progress toward complete satisfaction of a performance obligation. 40 Table of Contents The application of various accounting principles related to the measurement and recognition of revenue requires us to make judgments and estimates.
Recent Accounting Pronouncements See Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Annual Report on Form 10-K. 61 Table of Contents
Recent Accounting Pronouncements See Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Annual Report on Form 10-K.
Costs associated with development contracts include the direct costs and allocation of overhead costs involved in the execution of the contracts. 54 Table of Contents Operating Expenses Research and Development Our research and development, or R&D, efforts are focused primarily on hardware, software, and system engineering related to the design and development of our advanced lidar solutions.
Costs associated with development contracts include the direct costs and allocation of overhead costs involved in the execution of the contracts. Operating Expenses Research and Development Our research and development ("R&D"), efforts are focused primarily on hardware, software, and system engineering related to the design and development of our advanced lidar solutions.
Our plans for the use of cash in the long-term (beyond twelve months from this Annual Report) are primarily related to funding operating expenses to support the commercialization of our products.
Our plans for the use of cash in the long-term (beyond twelve months from this Annual Report) are primarily related to funding operating expenses to support the continued development and commercialization of our products.
These contracts primarily focus on customization of our proprietary 4Sight TM capabilities to our customers’ applications, typically involving software implementation to assist with sensor connection and control, customization of scan patterns, and enhancement of perception capabilities to meet specific customer needs.
These contracts primarily focus on customization of our product's capabilities to our customers’ applications, typically involving software implementation to assist with sensor connection and control, customization of scan patterns, and enhancement of perception capabilities to meet specific customer needs.
G&A expenses include: • personnel-related costs, including salaries, benefits, bonuses, one-time termination benefits, and stock-based compensation expense for executive, finance, legal, operations, human resources, technical support, and other administrative personnel; • consulting, accounting, audit, legal, and other professional fees; • insurance premiums, software and computer equipment costs, general office expenses; and • allocated overhead expenses.
G&A expenses include: • personnel-related costs, including salaries, benefits, bonuses, and stock-based compensation expense for executive, finance, legal, operations, human resources, technical support, and other administrative personnel; • consulting, accounting, audit, legal, investor relations and other professional fees; • insurance premiums, software and computer equipment costs, general office expenses; and • allocated personnel and overhead expenses, net.
Sales and Marketing Historically, our sales and marketing, or S&M, efforts were focused primarily on sales, business development, and marketing programs in pursuit of revenue contracts from potential and existing customers.
Sales and Marketing Our sales and marketing ("S&M") efforts are focused primarily on sales, business development, and marketing programs in pursuit of revenue contracts from potential and existing customers.
The primary factors affecting net cash provided by investing activities during this period were proceeds from redemptions and maturities of marketable securities of $32,426, partially offset by the purchases of marketable securities of $24,241 and purchases of property and equipment of $486. For the year ended December 31, 2023, net cash provided by investing activities was $55,351.
The primary factors affecting net cash provided by investing activities during this period were proceeds from redemptions and maturities of marketable securities of $32,426, partially offset by the purchases of marketable securities of $24,241 and purchases of property and equipment of $486. Financing Activities For the year ended December 31, 2025, net cash provided by financing activities was $91,665.
This partnership has enabled us to leverage their manufacturing expertise to produce high-quality samples that meet stringent performance standards, which is a critical step towards scaling production and delivering our advanced lidar solutions to the market. In May 2024, we announced a strategic partnership with ATI and LighTekton Co., Ltd to manufacture and distribute our products in China.
This partnership enables us to leverage LITEON’s manufacturing expertise to produce high-quality products that meet stringent performance standards, which is a critical step towards scaling production and delivering our advanced lidar solutions to the market. In May 2024, we announced a strategic partnership with Accelight Technologies, Inc. ("ATI") and LighTekton Co., Ltd to manufacture and distribute our products in China.
The Note, subject to an original issue discount of 7.4%, has a term of eighteen months and accrues interest at the rate of 7.0% per annum. The Note is convertible into Common Stock, at a per share conversion price equal to $2.22, subject to adjustments noted in the Note.
The 2025 Note, subject to an original issue discount of 7.4%, had a term of eighteen months and accrued interest at the rate of 7.0% per annum. The 2025 Note was convertible into Common Stock, at a per share conversion price equal to $2.22, subject to adjustments noted in the 2025 Note.
Since the launch of our new product, Apollo, in 2024, we have seen renewed interest from Non-Automotive customers across a broad range of sectors and are actively engaged on multiple opportunities. In early 2024, we engaged LITEON as our Tier 1 automotive supplier and are actively working with them to bring our products to market.
Since launching Apollo TM in 2024, we have seen renewed interest from Non‑Automotive customers across a broad range of sectors and are now actively engaged on multiple opportunities. In early 2024, we engaged LITEON as our Tier 1 automotive supplier and are actively working with LITEON to bring our product to market.
Securities and Exchange Commission declared our registration statement on Form S-3 to be effective which allows us to raise up to $200,000 in capital over the next three years subject to baby shelf limitations.
Securities and Exchange Commission declared our Registration Statement on Form S-3 effective (the "Shelf"), which allows us to raise up to $200,000 in capital over the following three years.
Cash used was offset by cash provided by decreases in prepaid and other current assets, inventories, and other noncurrent assets of $1,490, $245 and $215, respectively, and an increase in accounts payable of $156. For the year ended December 31, 2023, net cash used in operating activities was $50,725.
Cash used was offset by cash provided by decreases in prepaid and other current assets, inventories, and other noncurrent assets of $1,490, $245, and $215, respectively, and an increase in accounts payable of $156. Investing Activities For the year ended December 31, 2025, net cash used in investing activities was $30,798.
In the Automotive market for example, which accounted for an insignificant portion of our revenues in 2024 and 70% of our revenues in 2023, our growth and financial performance will be heavily influenced by our ability to successfully integrate into OEM programs that require years of development, testing, and validation.
In the Automotive market for example, our growth and financial performance will be heavily influenced by our ability to successfully integrate into OEM programs that require years of development, testing, and validation.
Partnerships and Commercialization Our technology is designed to be a key enabler in certain Automotive and Non-Automotive market applications. Because our technology must be integrated into a broader solution by our customers, it is critical that we achieve design wins with these customers. The time to achieve a design win varies based on the market and application.
Because our technology must be integrated into a broader solution by our customers, it is critical that we achieve design wins with these customers. The time to achieve a design win varies based on the market and application.
This innovative sensor leverages our 4Sight™ Intelligent Sensing Platform, providing a highly programmable and customizable lidar solution that can be updated through software.
This innovative sensor leverages our Intelligent Sensing Platform, providing a highly programmable and customizable lidar solution that can be continually enhanced via software updates.
We believe that our potential liquidity will enable us to fund our operating expenses, working capital, and capital expenditure requirements for a period of at least twelve months from the date of this Annual Report on Form 10-K.
We believe we currently have sufficient financial resources to fund our operating expenses, working capital, and capital expenditure requirements for a period of at least twelve months from the date of this Annual Report on Form 10-K.
Liquidity and Capital Resources Sources of Liquidity Our capital requirements will depend on many factors, including, but not exclusively, sales volume and timing of revenue, our efforts to establish and maintain relationship with one or more Tier 1 automotive suppliers and the timing of an OEM design win, our ability to extend our cash runway based on the restructuring initiatives announced in the previous year, the timing and extent of spending to support R&D efforts, how quickly we can commercialize our products, and market adoption of new and enhanced products and features.
Liquidity and Capital Resources Sources of Liquidity; Liquidity Outlook Our capital requirements will depend on many factors, including, but not exclusively, sales volume and timing of revenue, our efforts to establish and maintain a relationship with one or more Tier 1 automotive suppliers and the timing of any OEM design wins, our ability to effectively and efficiently manage our expenses, the timing and extent of spending to support R&D efforts, how quickly we can commercialize our products, and the market adoption of new and enhanced products and features.
In December 2021, we entered into a Purchase Agreement, with Tumim Stone Capital LLC, or Tumim Stone, pursuant to which we had the right, but not the obligation, to issue and sell to Tumim Stone over a 36-month period up to $125,000 of our common stock.
To date, our principal sources of liquidity have been the proceeds received from the issuance of equity. 38 Table of Contents Tumim Stone Transaction In December 2021, we entered into a Purchase Agreement, with Tumim Stone Capital LLC, or Tumim Stone, pursuant to which we had the right, but not the obligation, to issue and sell to Tumim Stone over a 36-month period up to $125,000 of our common stock.
Unlike traditional sensing systems that passively collect data, our active 4Sight™ Intelligent Sensing Platform employs principles from automated targeting systems and biomimicry to actively scan the environment, intelligently focusing on critical elements to enable safer, smarter, and faster decisions in complex scenarios. In June 2024, we introduced Apollo, the first product in our 4Sight™ Flex family of next-generation lidar sensors.
Unlike traditional sensing systems that passively collect data, our active Intelligent Sensing Platform employs principles from automated targeting systems and biomimicry to actively scan the environment, intelligently focusing on critical elements to enable safer, smarter, and faster decisions in complex scenarios.
On July 24, 2024, this Purchase Agreement was terminated in conjunction with us entering into a Common Stock Purchase Agreement, or CSPA, with New Circle. In total, 996,866 shares were issued under the Tumim Stone CSPA.
On July 24, 2024, this Purchase Agreement was terminated in conjunction with us entering into a Common Stock Purchase Agreement, or CSPA, with New Circle. In total, 996,866 shares were issued under the Tumim Stone Purchase Agreement for gross proceeds totaling $5,516. Shelf Registration On September 26, 2023, the U.S.
Convertible Note Transaction On January 2, 2025, we entered into a Securities Purchase Agreement to finance an aggregate principal amount of up to $3,240 with a certain institutional investor and issued (i) a senior unsecured convertible promissory note (the "Note") in the aggregate principal amount of $3,240 for an aggregate purchase price of $3,000 and (ii) a warrant to purchase up to 805,263 shares of our common stock.
As of December 31, 2025, we have sold 23,220,784 shares under the ATM Agreement for gross proceeds totaling $68,436 and have remaining availability of $56,564. 2025 Convertible Note On January 2, 2025, we entered into a Securities Purchase Agreement to finance an aggregate principal amount of up to $3,240 with a certain institutional investor and issued (i) a senior unsecured convertible promissory note (the "2025 Note") for an aggregate purchase price of $3,000 and (ii) a warrant to purchase up to 805,263 shares of our common stock.
Until we can generate sufficient revenue from the sale of our products to cover operating expenses, working capital, and capital expenditures, we expect the funds raised in the transactions described above, and other potential sources of capital, to fund our near-term cash needs. If we are required to raise additional funds by issuing equity securities, dilution of stockholders will result.
Until we are able to generate sufficient revenue from the sale of our products to cover operating expenses, working capital, and capital expenditures, we expect the funds raised in the transactions described earlier, and other potential sources of capital, are sufficient to fund our near-term cash needs.
Any debt securities issued may also have rights, preferences, and privileges senior to those of holders of our common stock. The terms of debt securities or borrowings could impose significant restrictions on our operations.
If we are required to raise additional funds by issuing equity securities, dilution of stockholders will result. Any debt securities issued may also have rights, preferences, and privileges senior to those of holders of our common stock. The terms of debt securities or borrowings could impose significant restrictions on our operations.
Such sales of common stock by us, if any, may occur from time to time at our sole discretion, over a 36-month period. A.G.P.
Such sales of common stock by us, if any, may occur from time to time at our sole discretion, over a 36-month period. In December 2025, we terminated the agreement with New Circle.
The 2022 Note and warrant liabilities are recorded at fair value for each reporting period, and the changes in fair value are reported within other income (expense), net during the period.
The convertible note and warrant liabilities were recorded at fair value for each reporting period, and the changes in fair value were reported within other income (expense), net during the period. We also elected to record interest expense on the convertible note as changes in fair value.
This collaboration opens access to a potential $2.5 billion market opportunity. By leveraging ATI's and LighTekton's extensive networks and manufacturing capabilities, we aim to accelerate our market penetration and deliver our advanced lidar solutions to a broader audience.
This collaboration provides us with access to a potential $2.5 billion market opportunity. By leveraging ATI's and LighTekton's extensive networks and manufacturing capabilities, we aim to accelerate our market penetration and deliver our advanced lidar solutions to a broader audience. In July 2025, we announced the validation of our lidar technology on the NVIDIA DRIVE AGX platform.
Given these engagements are relatively recent, there is no guarantee that these endeavors will be successful. 52 Table of Contents We believe our revenue and profitability will also be dependent upon our success in licensing our technology to Tier 1 automotive suppliers, such as our current Tier 1 partner, LITEON, or our previous partner Continental, which represented 70% of 2023 revenue, and these partners securing program awards from OEMS and scaling to high volume production of our lidar sensors.
We believe our revenue and profitability will also be dependent upon our success in licensing our technology to Tier 1 automotive suppliers, such as our current Tier 1 partner, LITEON, and these partners securing program awards from OEMs and scaling to high volume production of our lidar sensors.
With a horizontal field of view up to 120° and long-range detection capabilities of up to 1 km, Apollo is poised to be a key player in advancing vehicle safety and autonomy, as well as smart infrastructure and logistics applications. We believe our financial performance is significantly dependent on our ability to maintain a technology leadership position.
With a horizontal field of view up to 120° and long-range detection capabilities of up to one kilometer, Apollo TM is poised to be a key player in advancing vehicle safety and autonomy, as well as smart infrastructure and logistics applications.
The primary factors affecting net cash provided by investing activities during this period were proceeds from redemptions and maturities of marketable securities of $76,350, partially offset by the purchases of marketable securities of $19,331 and purchases of property and equipment of $1,951. Financing Activities For the year ended December 31, 2024, net cash provided by financing activities was $10,060.
The primary factors affecting net cash used in investing activities during this period were purchases of marketable securities of $53,768, partially offset by proceeds from redemptions and maturities of marketable securities of $23,079. For the year ended December 31, 2024, net cash provided by investing activities was $7,744.
Change in Fair Value of Convertible Note and Warrant Liabilities Change in fair value of convertible note and warrant liabilities decreased by $858, or 100%, to zero for the year ended December 31, 2024, from a loss of $858 for the year ended December 31, 2023.
Change in Fair Value of Convertible Note and Warrant Liabilities Change in fair value of convertible note and warrant liabilities increased to $1,895 for the year ended December 31, 2025, from zero for the year ended December 31, 2024.
(Benefit) Provision for Income Tax (Benefit) provision for income tax decreased to a benefit of $2 for the year ended December 31, 2024, from a provision of $57 for the year ended December 31, 2023. This change is due to changes in pretax income (loss) in the U.S. and certain foreign entities and changes in tax rates.
Provision (benefit) for Income Tax Provision (benefit) for income tax increased to $11 for the year ended December 31, 2025, from a benefit of $2 for the year ended December 31, 2024. This change is primarily due to changes in foreign taxes.
However, as our customers continue their R&D projects to commercialize solutions that rely on lidar technology, it is difficult to estimate the timing of ultimate end market demand and customer adoption.
This diversified approach provides us with multiple opportunities for sustained growth by enabling new applications and product features across a broad range of industries and market segments. However, as our customers continue their R&D projects to commercialize solutions that rely on lidar technology, it is difficult to estimate the timing of ultimate end market demand and customer adoption.
Net Loss Net loss decreased by $51,666, or 59%, to $35,460 for the year ended December 31, 2024, from $87,126 for the year ended December 31, 2023.
Net Loss Net loss decreased by $1,502, or 4%, to $33,958 for the year ended December 31, 2025, from $35,460 for the year ended December 31, 2024.
The primary factors affecting our financing cash flows during this period were proceeds from common stock purchase agreements of $11,080, partially offset by stock issuance costs related to common stock purchase agreements of $1,232. 60 Table of Contents For the year ended December 31, 2023, net cash used in financing activities was $6,758.
The primary factors affecting our financing cash flows during this period were proceeds from common stock purchase agreements of $11,080, partially offset by stock issuance costs related to common stock purchase agreements of $1,232. Critical Accounting Policies and Estimates Our consolidated financial statements are in accordance with GAAP.
We also elected to record interest expense on the 2022 Note as changes in fair value. 55 Table of Contents Interest Income, Interest Expense and Other Interest income and other consists primarily of interest earned on our cash, cash equivalents, and marketable securities. These amounts will vary based on our cash and cash equivalents balances and market rates.
Interest Income, Interest Expense and Other Interest income and other consists primarily of interest and investment income earned on our cash, cash equivalents, and marketable securities. These amounts will vary based on our cash, cash equivalents, and marketable securities balances and market rates. Interest income and other also includes gains on sale of property and equipment.
The Warrant has an initial exercise price of $2.22, and is exercisable after the six month and one day anniversary of its issuance (the “Initial Exercisability Date”) until for four years following the Initial Exercisability Date.
The Warrant had an exercise price of $2.22, and was exercisable after the six month and one day anniversary of its issuance (the “Initial Exercisability Date”) until for four years following the Initial Exercisability Date. These warrants were exercised in full on July 28, 2025. During the year ended December 31, 2025, the Company made total cash payments of $989.
This increase was primarily due to costs of $1,124 related to financing arrangements executed in the period, partially offset by an increase in accretion of discounts on marketable securities, net of $220.
This increase was primarily due to an increase in costs related to financing arrangements of $1,232, higher foreign exchange losses of $377, and a decrease in accretion of discounts on marketable securities, net of $300.
In the future, we expect to generate attractive gross margins from licensing our lidar technology and software to our Tier 1 partners in the Automotive market. We also anticipate being able to leverage on our foundation in the Automotive market to move to other markets.
Our gross margins have and may continue to be negatively impacted by inventory write-downs. In the future, we expect to generate attractive gross margins from licensing our lidar technology and software to our Tier 1 partners in the Automotive market.
We may also be unable to raise additional capital through the sale of securities and debt financing, or to do so on terms that are favorable to us, particularly given current capital market and overall macroeconomic conditions. We are dependent upon raising additional capital to provide the cash necessary to continue our ongoing operations and execute against our strategic objectives.
We may also be unable to raise additional capital through the sale of securities and debt financing, or to do so on terms that are favorable to us, particularly given current capital market and overall macroeconomic conditions. For the years ended December 31, 2025 and 2024, we had a net loss of $33,958 and $35,460, respectively.
We expect our S&M expenses to continue to be relatively low as we expect to leverage our Tier 1 partners to commercialize our products and manage relationships with the OEMs in the Automotive market.
We expect our S&M expenses to increase as we pursue Non-Automotive opportunities to accelerate profitability while continuing to leverage our Tier 1 partners to commercialize our products and manage relationships with the OEMs in the Automotive market. General and Administrative Our general and administrative ("G&A") spending supports all business functions.
Within operating activities, the net changes in operating assets and liabilities were cash used of $4,460, primarily driven by increases in inventories of $2,459, and decreases in accrued expenses and other current liabilities, and operating lease liabilities of $3,135 and $1,528, respectively.
Within operating activities, the net changes in operating assets and liabilities were cash used of $2,553, primarily driven by increases in accounts receivable, inventories, and prepaid and other current assets of $68, $678, and $1,054, respectively, partially offset by a decrease in other noncurrent assets of $241.
Interest income and other also includes gains on sale of property and equipment. Interest expense and other consists primarily of financing costs, and amortization of premiums and accretion of discounts on marketable securities, net.
Interest expense and other consists primarily of financing costs, amortization of premiums and accretion of discounts on marketable securities, net and foreign exchange gains and losses. We expect interest income will increase due to higher average cash, cash equivalents, and marketable securities balances.
This decrease was primarily due to less interest earned on our marketable securities in the current period. Interest Expense and Other Interest expense and other increased by $681, or 275%, to a loss of $433 for the year ended December 31, 2024, from a gain of $248 for the year ended December 31, 2023.
Interest Income and Other Interest income and other increased by $1,192, or 149%, to $1,991 for the year ended December 31, 2025, from $799 for the year ended December 31, 2024. This increase was primarily due to insurance proceeds received of $250 and higher interest earned on cash, cash equivalents, and marketable securities in the current period.
Such sales of common stock by us, if any, may occur from time to time at our sole discretion, over a 36-month period. In December 2024 and January 2025, we increased the amount of our common stock that we may issue and sell through AGP, up to $5,230 and $15,293, respectively.
In December 2025, we increased the aggregate amount available under the ATM program to $125,000, following multiple prior increases since the original agreement was entered into. Such sales of common stock by us, if any, may occur from time to time at our sole discretion, over a 36-month period.
If we fail to do this, our market position and revenue may be adversely affected, and our investments in that area will not be recovered. Basis of Presentation We currently conduct our business through one operating segment. Components of Results of Operations Total Revenues We categorize our revenue as (1) prototype sales and (2) development contracts.
If we fail to do this, our market position and revenue may be adversely affected, and our investments in that area will not be recovered.
To date, our revenue has primarily been generated through development contracts with OEMs and Tier 1 suppliers, as well as unit sales of our products to Non-Automotive customers.
We also anticipate being able to leverage on our foundation in the Automotive market to be more cost competitive in other markets. To date, we have primarily generated revenue through sales of our products to Non‑Automotive customers and through development contracts with OEMs and Tier 1 suppliers.
R&D expenses include: • personnel-related expenses, including salaries, benefits, bonuses, one-time termination benefits, and stock-based compensation expense; • third-party engineering and contractor costs; • lab equipment; • engineering parts and test units; • new hardware and software expenses; and • allocated overhead expenses. R&D costs are expensed as they are incurred.
R&D expenses include: • personnel-related expenses, including salaries, benefits, bonuses, and stock-based compensation expense; • field application engineering and software development costs associated with customer‑driven bug fixes, feature enhancements, and improvements to reduce deployment complexity as we incorporate insights gained from customer evaluations into our product roadmap; • third-party engineering and contractor costs; • lab equipment; • engineering parts and test units; • new hardware and software expenses; and • allocated personnel and overhead expenses, net.
In 2024 and 2023, our prototype sales revenue primarily related to unit sales of our 4Sight TM product. Revenue from prototype sales is typically recognized at a point in time when the control of goods is transferred to the customer, generally upon delivery or shipment to the customer.
Revenue from these sales is typically recognized at a point in time when the control of the goods is transferred to the customer, generally upon delivery of or shipment to the customer, and when services have been provided. Revenue from development and/or collaboration contracts are earned from R&D activities and collaboration with OEMs and Tier 1 suppliers.
Change in Fair Value of Convertible Note and Warrant Liabilities The changes in fair value of the 2022 Note and warrant liabilities are the result of the change in fair value at each reporting date.
We expect our G&A expenses to increase to support growth as we pursue Non-Automotive opportunities and as we continue to develop and commercialize our products. 36 Table of Contents Change in Fair Value of Convertible Note and Warrant Liabilities The changes in fair value of the convertible note and warrant liabilities are the result of the change in fair value at each reporting date.
Cost of Revenue Cost of revenue includes the costs directly associated with the production of prototypes and certain costs associated with development contracts. Such costs for prototypes include direct materials, direct labor, indirect labor, inventory write downs, losses on purchase commitments, warranty expense, and allocation of overhead.
Such costs for product include direct materials, direct labor, indirect labor, inventory write downs, losses on purchase commitments, warranty expense, and allocation of overhead. As we increase the volume of Apollo TM units that are manufactured, we expect the bill of material costs to decrease over time.
For additional information regarding our cash requirements from lease obligations, lease termination liability, and contractual obligations, see Notes 6 and 21 in the Notes to the Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
For additional information regarding our cash requirements from contractual obligations, see Note 20 in the Notes to the Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K. 39 Table of Contents Cash Flow Summary Year ended December 31, 2025 2024 (in thousands) Net cash provided by (used in): Operating activities $ (27,777 ) $ (26,620 ) Investing activities $ (30,798 ) $ 7,744 Financing activities $ 91,665 $ 10,060 Operating Activities For the year ended December 31, 2025, net cash used in operating activities was $27,777.
The primary factors affecting our financing cash flows during this period were payments for convertible note redemptions of $6,235 and payments for taxes related to net settlement of equity awards of $1,445, partially offset by proceeds from the exercise of stock options and from issuance of common stock through the Employee Stock Purchase Plan of $455 and $334, respectively.
The primary factors affecting our financing cash flows during this period were from proceeds from issuance of common stock under our common stock purchase agreements, proceeds from the issuance of convertible notes, and proceeds from the exercise of warrants of $90,961, $2,950 and $1,788, respectively.
This decrease was primarily driven by the implementation of our revised strategic plan in 2023, with decreases in personnel costs of $4,055, stock-based compensation expense of $3,388, information technology and facilities expense of $778, engineering parts and lab equipment expense of $639, depreciation expense of $567, and third party research and development work of $534.
This decrease was primarily driven by decreases in stock-based compensation expense of $2,018, allocated information technology and facilities expense of $1,117, and decreased personnel, net of allocations of $330. The decreases were partially offset by an $840 increase in fees to third parties for development work and engineering parts and lab equipment expenses.
Factors affecting our operating cash flows during this period were net loss of $87,126, offset by stock-based compensation of $18,071, impairment of long-lived assets of $9,988, inventory write-downs of $7,712, depreciation and amortization of $1,547, noncash lease expense of $1,406, loss on advances to suppliers of $1,385, and change in fair value of convertible note and warrant liabilities of $858.
Factors affecting our operating cash flows during this period were a net loss of $33,958, a gain on termination of operating lease, net, of $1,014, partially offset by stock-based compensation of $5,522, change in fair value of convertible note and warrant liabilities of $1,895, debt issuance costs of $2,020, and common stock purchase agreement costs of $337.
S&M expenses include: • personnel-related expenses, including salaries, benefits, bonuses, one time termination benefits, and stock-based compensation expense; • demonstration equipment; • trade shows expenses, advertising, and promotions expenses for press releases and other public relations services; and • allocated overhead expenses.
S&M expenses include: • personnel-related expenses, including salaries, benefits, bonuses, and stock-based compensation expense; • third party contractor costs; • demonstration equipment; • system and tooling costs to support our sales and marketing organization, including CRM systems, marketing‑automation and lead‑generation tools, data‑analytics platforms, and other software required to manage customer pipelines and enable our go‑to‑market strategy; • trade shows expenses, advertising, promotion costs, website development, branding, and other public relations services; and • allocated personnel and overhead expenses, net.
General and Administrative Total general and administrative expenses decreased by $6,922, or 27%, to $18,312 for the year ended December 31, 2024, from $25,234 for the year ended December 31, 2023.
Interest Expense and Other Interest expense and other increased by $1,879, or 434%, to $2,312 for the year ended December 31, 2025, from $433 for the year ended December 31, 2024.
Operating Expenses Research and Development Research and development expenses decreased by $9,782, or 37%, to $16,389 for the year ended December 31, 2024, from $26,171 for the year ended December 31, 2023.
This decrease was primarily due to losses on purchase commitments recorded in 2024 along with lower provision adjustments and lower cost of professional services in 2025 compared to 2024. 37 Table of Contents Operating Expenses Research and Development Research and development expenses decreased by $2,452, or 15%, to $13,937 for the year ended December 31, 2025, from $16,389 for the year ended December 31, 2024.
Cash used was offset by cash provided by decreases in prepaid and other current assets, accounts receivable, and other noncurrent assets of $2,279, $451, and $284, respectively, and an increase in accounts payable of $252. Investing Activities For the year ended December 31, 2024, net cash provided by investing activities was $7,744.
Further, cash used was also due to decreases in accrued expenses and other current liabilities of $767 and operating lease liabilities of $236. For the year ended December 31, 2024, net cash used in operating activities was $26,620.
Removed
All dollar amounts expressed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are in thousands of dollars, except for per share amounts and unless otherwise specified. Reverse Stock Split On December 27, 2023, we effected a 1-for-30 reverse stock split of our issued and outstanding shares of common stock (the "Reverse Stock Split").
Added
We are subject to those risks common in the technology industry and also those risks common to early stage companies including, but not limited to: • Developing, commercializing, and scaling our products and technology, including meeting performance, reliability, and cost objectives; • Maintaining and expanding our relationships with Tier 1 automotive suppliers to facilitate design wins with automotive OEMs; • Maintaining and protecting our intellectual property, including patents, trade secrets, and proprietary software; 33 Table of Contents • Navigating changes in international trade policies, including the imposition or modification of tariffs, increasing trade tensions, and the introduction of new trade restrictions; • Complying with existing and new laws and regulations applicable to our operations, products, and markets; • Maintaining and enhancing our reputation and brand in competitive and emerging markets; • Hiring, integrating, and retaining qualified personnel at all levels of the organization as we grow; • Developing and delivering new products and solutions successfully, and ensuring our products meet customer expectations and provide value; and • Significant competition from companies, including several based in China, that manufacture lower‑cost lidar solutions and may be able to offer aggressive pricing, faster volume production, or vertically integrated supply chains that could place downward pressure on market pricing or reduce our ability to compete in certain segments.
Removed
Pursuant to the Reverse Stock Split, every thirty (30) shares of issued and outstanding shares of common stock were combined into one (1) share of common stock. We did not issue fractional shares in connection with the Reverse Stock Split. Stockholders who were otherwise entitled to fractional shares of common stock were instead entitled to receive a proportional cash payment.
Added
Market Trends and Uncertainties We anticipate growing demand for our Apollo TM platform across our two major markets, Automotive and Non-Automotive, and we believe this expected growth will enable us to capture market share across both the Automotive and Non-Automotive markets.
Removed
The number of outstanding warrants was also proportionately adjusted. In connection with the Reverse Stock Split, there was no change to the number of shares authorized or in the par value per share of $0.0001.
Added
We plan to pursue opportunities in advanced driver-assistance systems, or ADAS, autonomous driving, and commercial trucking, while also exploring opportunities in the Non-Automotive market, such as in the railway, airport safety and security, perimeter monitoring, aerospace and defense, transportation logistics, and intelligent transportation systems, or ITS segments.
Removed
Accordingly, unless we indicate otherwise, all historical per share data, number of shares issued and outstanding, stock awards, and other common stock equivalents for the periods presented in this Annual Report on Form 10-K have been adjusted retroactively, where applicable, to reflect the Reverse Stock Split.
Added
We anticipate that Non‑Automotive applications will be a more significant driver of our near‑term revenue given the generally shorter sales cycles and development timelines in these markets. We are beginning to see adoption across a diverse group of sectors.
Removed
We are subject to those risks common in the technology industry and also those risks common to early stage companies including, but not limited to: • the possibility of not being able to successfully develop or commercialize our products; • securing additional capital in a timely manner in order to meet operating cash flow needs; doing so on terms that are favorable to us, or at all, which may be challenging given the current capital markets and overall macroeconomic conditions; • maintain and establish relationships with one or more Tier 1 automotive suppliers to facilitate "design wins" with potential end customers, which in our case are automotive OEMs; • develop and protect our intellectual property; • comply with existing and new or modified laws and regulations applicable to our business; • maintain and enhance the value of our reputation and brand; • hire, integrate, and retain talented people at all levels of our organization; and • successfully develop new solutions to enhance the experience of, and deliver value to, our customers. 51 Table of Contents Market Trends and Uncertainties We anticipate growing demand for our 4Sight TM Intelligent Sensing Platform across two major markets, Automotive and Non-Automotive.
Added
Our typical engagement model begins with proof‑of‑concept evaluations, which allow customers to validate performance in their operational environments; however, there is no guarantee that these evaluations will ultimately result in a commercial deployment, and timelines may extend sometimes significantly, due to competing customer priorities or broader program changes.
Removed
We believe this expected growth will allow us to capture market share as well as pursue specialized opportunities like highway autonomous driving applications that benefit from our products. We anticipate concentrating on the Automotive market by more effectively leveraging our business model, focusing on advanced driver-assistance systems, or ADAS, autonomous driving, and commercial trucking.
Added
In many Non‑Automotive opportunities, we work through third‑party systems integrators or solution providers who deliver complete solutions to the end customer, and in those situations our visibility into, and ability to influence, the final customer decision process may be limited. Partnerships and Commercialization Our technology is designed to be a key enabler in certain Automotive and Non-Automotive market applications.
Removed
In addition, we will look for opportunities in the Non-Automotive market, such as in the railway, security, and intelligent transportation systems, or ITS segments. This strategy provides us with multiple opportunities for sustained growth by enabling new applications and product features across these market segments.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign Currency Exchange Risk Our foreign currency exchange gains and losses have been generated primarily from fluctuations in the euro versus the U.S. dollar, and the Japanese yen versus the U.S. dollar. The functional currency of all our entities is the U.S. dollar.
Biggest changeForeign Currency Exchange Risk Our foreign currency exchange gains and losses have been generated primarily from fluctuations in the euro versus the U.S. dollar. The functional currency of all our entities is the U.S. dollar.
Foreign currency exchange gains and losses could have a material adverse effect on our business, operating results and financial condition. To date, we have not engaged in exchange rate hedging activities, and we do not expect to do so in the foreseeable future. 62 Table of Contents
Foreign currency exchange gains and losses could have a material adverse effect on our business, operating results and financial condition. To date, we have not engaged in exchange rate hedging activities, and we do not expect to do so in the foreseeable future. 41 Table of Contents
As of December 31, 2024, there were three customers each accounting for 10% or more of our accounts receivable and one vendor accounting for 10% or more of our accounts payable. We perform credit evaluations as needed and generally do not require collateral for our customers.
As of December 31, 2025, there were three customers each accounting for 10% or more of our accounts receivable and one vendor accounting for 10% or more of our accounts payable. We perform credit evaluations as needed and generally do not require collateral for our customers.
Interest Rate Risk As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $22,278, which consisted primarily of deposits in our bank accounts, money market funds, and marketable securities. Such interest-earning instruments carry a degree of interest rate risk. Our investment policy is focused on the preservation of capital and supporting our liquidity needs.
Interest Rate Risk As of December 31, 2025, we had cash, cash equivalents, and marketable securities of $86,460, which consisted primarily of deposits in our bank accounts, money market funds, and marketable securities. Such interest-earning instruments carry a degree of interest rate risk. Our investment policy is focused on the preservation of capital and supporting our liquidity needs.
We analyze accounts receivable, historical percentages of uncollectible accounts, and changes in payment history when evaluating the adequacy of the allowance for doubtful accounts for potential credit losses on customers’ accounts. For the years ended December 31, 2024 and 2023, we wrote off $70 and $0, respectively, and recorded a $35 and $35 provision for expected credit losses, respectively.
We analyze accounts receivable, historical percentages of uncollectible accounts, and changes in payment history when evaluating the adequacy of the allowance for doubtful accounts for potential credit losses on customers’ accounts. For the years ended December 31, 2025 and 2024, we had write-offs of $2 and $70, respectively, and recorded a $2 and $35 provision for expected credit losses, respectively.

Other LIDR 10-K year-over-year comparisons