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What changed in indie Semiconductor, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of indie Semiconductor, Inc.'s 2023 and 2024 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 2024 report.

+345 added−374 removedSource: 10-K (2025-03-03) vs 10-K (2024-02-29)

Top changes in indie Semiconductor, Inc.'s 2024 10-K

345 paragraphs added · 374 removed · 266 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

58 edited+10 added−31 removed38 unchanged
Biggest changeThis commitment is reflected through our day-to-day activities, including the adoption of socially responsible policies and procedures, our focus on fostering an inclusive workplace, our constant drive toward more efficient use of materials and energy, our careful management of our supply chain, our products which help enhance road safety, and our ethics and compliance program. • We seek to protect the human rights and civil liberties of our employees through policies, procedures, and programs that avoid risks of compulsory and child labor, both within our company and throughout our supply chain. • We foster a workplace of dignity, respect, diversity, and inclusion through our recruiting and advancement practices, internal communications, and employee resource groups. • We educate our employees annually on relevant ethics and compliance topics, publish accessible guidance on ethical issues and related company resources in our global Code of Business Conduct and Ethics , and encourage reporting of ethical concerns through any of several global and local reporting channels. • We innovate to reduce the energy used by our products, the energy used to manufacture them, and the amount of new materials required to manufacture them. 11 Table of Contents Employees As of December 31, 2023, we had approximately 900 full time employees.
Biggest changeOur on-going commitment and progress in this area is documented in our Environmental, Social and Governance (ESG) Report, published annually and available on our website. • We seek to protect the human rights and civil liberties of our employees through policies, procedures, and programs that avoid risks of compulsory and child labor, both within our company and throughout our supply chain. • We foster a workplace of dignity, respect, diversity, and inclusion through our recruiting and advancement practices, internal communications, and employee resource groups. 10 Table of Contents • We educate our employees annually on relevant ethics and compliance topics, publish accessible guidance on ethical issues and related company resources in our global Code of Business Conduct and Ethics , and encourage reporting of ethical concerns through any of several global and local reporting channels. • We innovate to reduce the energy used by our products, the energy used to manufacture them, and the amount of new materials required to manufacture them.
Interior lighting, device power delivery, wireless charging, device-to-IVI interfacing, connected car networking and a multitude of utility and comfort functions enabled by small motors (such as electric seats, seat ventilation, air-conditioning vents, etc.) contribute to the wider in-cabin UX, and all require semiconductor-enabled electronics.
Interior lighting, device power delivery, wireless charging, device-to-IVI interfacing, display and connected car networking and a multitude of utility and comfort functions enabled by small motors (such as electric seats, seat ventilation, air-conditioning vents, etc.) contribute to the wider in-cabin UX, and all require semiconductor-enabled electronics.
Our capabilities include, but are not limited to: • system engineering, optimization and partitioning; • mixed-signal and RF design; • analog and power management; • digital design; • Digital Signal Processors (“DSP”) and Arm ® -based Microcontrollers (“MCU”); and • optical component technology In addition, embedded software is a cornerstone of virtually all of indie’s products.
Our capabilities include, but are not limited to: • system engineering, optimization and partitioning; • mixed-signal and RF design; • analog and power management; • digital design; • Digital Signal Processors (“DSP”) and Arm ® -based Microcontrollers (“MCU”); and • optical component and photonics technology In addition, embedded software is a cornerstone of virtually all of indie’s products.
Through innovative analog, digital and mixed-signal integrated circuits (“ICs”) with software running on the embedded processors, we are developing a differentiated, market-leading portfolio of automotive products. Our technological expertise, including cutting-edge design capabilities and packaging skillsets, together with our deep applications knowledge and strong customer relationships, have enabled us to cumulatively ship over 300 million semiconductor devices since our inception.
Through innovative analog, digital and mixed-signal integrated circuits (“ICs”) with software running on the embedded processors, we are developing a differentiated, market-leading portfolio of automotive products. Our technological expertise, including cutting-edge design capabilities and packaging skillsets, together with our deep applications knowledge and strong customer relationships, have enabled us to cumulatively ship over 400 million semiconductor devices since our inception.
Our research activities are principally conducted at our headquarters in Aliso Viejo, California and we have design centers and sales offices in Austin, TX; Boston, MA; Detroit, MI; San Francisco and San Jose, CA; Córdoba, Argentina; Budapest, Hungary; Dresden, Frankfurt an der Oder, Munich and Nuremberg, Germany; Edinburgh, Scotland; Rabat, Morocco; Haifa and Tel Aviv, Israel; Quebec City and Toronto, Canada; Tokyo, Japan; Seoul, South Korea; Schlieren, Switzerland and several locations throughout China.
Our research activities are principally conducted at our headquarters in Aliso Viejo, California and we have design centers and sales offices in Austin, TX; Detroit, MI; San Jose, CA; Córdoba, Argentina; Budapest, Hungary; Dresden, Frankfurt an der Oder, Munich and Nuremberg, Germany; Edinburgh, Scotland; Rabat, Morocco; Haifa and Tel Aviv, Israel; Quebec City and Toronto, Canada; Tokyo, Japan; Seoul, South Korea; Schlieren, Switzerland and several locations throughout China.
The three megatrends driving the automotive semiconductor market are catalyzed by: (i) the increasing electrification of vehicle drivetrains leading to the rapid proliferation of electric vehicles (“EVs”); (ii) the adoption of advanced driver assistance systems 6 Table of Contents (“ADAS”) and driving automation functionality to improve road safety and strive towards higher levels of vehicle automation; and (iii) consumer demands for engaging, connected and convenient in-cabin user experience (UX).
The three megatrends driving the automotive semiconductor market are catalyzed by: (i) the increasing electrification of vehicle drivetrains leading to the rapid proliferation of electric vehicles (“EVs”); (ii) the adoption of advanced driver assistance systems (“ADAS”) and driving automation functionality to improve road safety and strive towards higher levels of vehicle automation; and (iii) consumer demands for engaging, connected and convenient in-cabin user experience (UX).
We have over 300 issued patents protecting a number of core technologies, and over 200 pending patent applications, but we do not rely on any particular patent or patents for our success and have instead relied on our know-how and trade secrets.
We have over 350 issued patents protecting a number of core technologies, and over 200 pending patent applications, but we do not rely on any particular patent or patents for our success and have instead relied on our know-how and trade secrets.
Toward that end, today indie is approved on multiple Tier 1 AVLs. • Proven management team. indie’s executive management team brings extensive semiconductor experience, with past successes in delivering leading-edge technologies and creating stockholder value. Company Strategy We are dedicated to offering our customers a comprehensive portfolio of automotive technology solutions.
Toward that end, today indie is approved on multiple Tier 1 AVLs. • Proven management team. indie’s executive management team brings extensive semiconductor experience, with past successes in delivering leading-edge technologies and creating stockholder value. 6 Table of Contents Company Strategy We are dedicated to offering our customers a comprehensive portfolio of automotive technology solutions.
ITEM 1. BUSINESS Company Overview indie offers highly innovative automotive semiconductors and software solutions for Advanced Driver Assistance Systems (“ADAS”), driver automation, in-cabin, user experience (including connected car) and electrification applications. The Company focuses on edge sensors across multiple modalities spanning light detection and ranging (“LiDAR”), radar, ultrasound and computer vision.
ITEM 1. BUSINESS Company Overview indie offers highly innovative automotive semiconductors and software solutions for Advanced Driver Assistance Systems (“ADAS”), driver automation, in-cabin, user experience and electrification applications. The Company focuses on edge sensors across multiple modalities spanning light detection and ranging (“LiDAR”), radar, ultrasound and computer vision.
As an Autotech company, we believe that our future success depends on our ability to rapidly develop and introduce differentiated products. Our goal is to continually improve both our existing portfolio, while simultaneously introducing new solutions in order to create value for our customers.
As an automotive-focused company, we believe that our future success depends on our ability to rapidly develop and introduce differentiated products. Our goal is to continually improve both our existing portfolio, while simultaneously introducing new solutions in order to create value for our customers.
By establishing a trusted relationship with the industry’s leading suppliers, indie is well positioned to gain a growing share of new automotive solutions. Revenues for the years ended December 31, 2023, 2022 and 2021 include sales to Aptiv, a leading Tier 1 automotive supplier, which represented approximately 15%, 37%, and 39% of total revenue, respectively.
By establishing a trusted relationship with the industry’s leading suppliers, indie is well positioned to gain a growing share of new automotive solutions. Revenues for the years ended December 31, 2024, 2023 and 2022 include sales to Aptiv, a leading Tier 1 automotive supplier, which represented approximately 9%, 15%, and 37% of total revenue, respectively.
We focus on designing and delivering the technologies that enable three key automotive dynamics: safety systems, enhanced in-cabin user experience (including connected car) and electrification. Core tenets of our strategy include: • Enabling diverse, high growth applications.
We focus on designing and delivering the technologies that enable three key automotive dynamics: safety systems, enhanced in-cabin user experience and electrification. Core tenets of our strategy include: • Enabling diverse, high growth applications.
These forecast volumes are driven in part by increasing global governmental mandates to decarbonize road transportation which contributes around 16% of total greenhouse gases (“GHG”) according to the International Energy Agency, but also by improved consumer awareness and preference for low carbon vehicle options.
These forecast volumes are driven in part by increasing global governmental mandates to decarbonize road transportation which contributes over 15% of total greenhouse gases (“GHG”) according to the International Energy Agency, but also by improved consumer awareness and preference for low carbon vehicle options.
From January 2020 to December 2022, Mr. Bal served as Senior Vice President - Finance and Controller of indie. Prior to joining indie in January 2020, Mr.
From January 2020 to December 2022, Mr. Bal served as indie's Senior Vice President - Finance and Controller. Prior to joining indie in January 2020, Mr.
To that end, we regularly review our investments to ensure alignment with our growth and profitability goals and make necessary changes in the allocation of resources as needed. In 2023, we spent approximately 69% of our revenues on research and development as we expand product development activities in support of pent-up customer demand.
To that end, we regularly review our investments to ensure alignment with our growth and profitability goals and make necessary changes in the allocation of resources as needed. In 2024, we spent approximately 81% of our revenues on research and development as we expand product development activities in support of pent-up customer demand.
Further, our products meet or exceed the quality standards set by the more than 25 global automotive manufacturers who utilize our devices today. With a global footprint, we support leading customers from our design and application centers located in North and South America, Middle East, Asia and Europe, where our local teams work closely on their unique design requirements.
Further, our products meet or exceed the quality standards set by the multitude of global automotive manufacturers who utilize our devices today. With a global footprint, we support leading customers from our design and application centers located in North and South America, Middle East, Asia and Europe, where our local teams work closely on their unique design requirements.
The closing consideration consisted of (i) $4.5 million in cash as the initial cash consideration, subject to adjustments for an adjustment holdback amount of $0.5 million and an indemnity holdback amount of $0.8 million, payable after the 18-month anniversary of the Deal Closing Date in shares of Class A common stock, par value $0.0001 (the “Class A common stock”), (ii) $3.0 million of total contingent considerations, payable in cash or Class A common stock, subject to achievement of certain production based milestones 24 months after the Deal Closing Date, and (iii) $2.5 million of contingent considerations, payable in cash or Class A common stock, subject to achievement of a revenue based milestone 12 months after the Deal Closing Date.
The closing consideration consisted of (i) $3.2 million in cash as the initial cash consideration, net of an adjustment holdback amount of $0.5 million and an indemnity holdback amount of $0.8 million, payable after the 18-month anniversary of the Deal Closing Date in shares of Class A common stock, par value $0.0001 (the “Class A common stock”), (ii) $2.3 million of contingent consideration, payable in cash or Class A common stock, subject to achievement of certain production based milestones 24 months after the Deal Closing Date, and (iii) $2.3 million of contingent consideration, payable in cash or Class A common stock, subject to achievement of a revenue based milestone 12 months after the Deal Closing Date.
For the year ended December 31, 2023, indie incurred total issuance costs of $1.1 million. Reverse Recapitalization with Thunder Bridge Acquisition II On June 10, 2021, we completed a series of transactions (the “Transaction”) with Thunder Bridge Acquisition II, Ltd (“TB2”) pursuant to the Master Transactions Agreement dated December 14, 2020, as amended on May 3, 2021 (the “MTA”).
For the year ended December 31, 2024, indie incurred total issuance costs of $1.1 million. 4 Table of Contents Reverse Recapitalization with Thunder Bridge Acquisition II On June 10, 2021, we completed a series of transactions (the “Transaction”) with Thunder Bridge Acquisition II, Ltd (“TB2”) pursuant to the Master Transactions Agreement dated December 14, 2020, as amended on May 3, 2021 (the “MTA”).
Bal served as Corporate Controller and Treasurer for Skyworks Solutions, where he held finance roles with increasing responsibility. He also has held finance positions with Lucent Technologies and Ernst & Young. Mr.
Bal served as Corporate Controller and Treasurer for Skyworks Solutions, where he held finance roles with increasing responsibility. He previously held finance positions with Lucent Technologies and Ernst & Young. Mr.
We make our U.S. Securities and Exchange Commission (“SEC”) periodic reports (Forms 10-Q and Forms 10-K) and current reports (Forms 8-K) available free of charge through our website as soon as reasonably practicable after they are filed electronically with the SEC.
Securities and Exchange Commission (“SEC”) periodic reports (Forms 10-Q and Forms 10-K) and current reports (Forms 8-K) available free of charge through our website as soon as reasonably practicable after they are filed electronically with the SEC.
Bal served as Operating Partner and Chief Financial Officer for True North Venture Partners and its wholly-owned portfolio companies from October 2017 and December 2019 and as Vice President and Chief Financial Officer for GT Advanced Technologies from January 2014 and October 2017. Previously, Mr.
Bal served as Operating Partner and Chief Financial Officer for True North Venture Partners and its wholly-owned portfolio companies from October 2017 to December 2019 and as Vice President and Chief Financial Officer for GT Advanced Technologies between January 2014 and October 2017. Prior to this, Mr.
We also rely on a combination of non-disclosure agreements and other contractual provisions, as well as our employees’ commitment to confidentiality and loyalty, to protect our technology and processes. The semiconductor industry in general is characterized by frequent claims of infringement and litigation regarding patent and other intellectual property rights.
We also rely on a combination of non-disclosure agreements and other contractual provisions, as well as our employees’ commitment to confidentiality and loyalty, to protect our technology and processes. Our issued patents will expire between 2025 and 2043. The semiconductor industry in general is characterized by frequent claims of infringement and litigation regarding patent and other intellectual property rights.
We utilize automotive grade software solutions and Arm 32-bit processors. Through our proprietary design flow, we also enable algorithm development and co-development with hardware. TeraXion Products and Solutions TeraXion designs and manufactures innovative photonic components on various technology platforms, including fiber Bragg gratings (“FBG”), low-noise lasers, athermal and tunable packaging, photonic integration and low-noise and high-speed electronics.
We utilize automotive grade software solutions and Arm 32-bit processors. Through our proprietary design flow, we also enable algorithm development and co-development with hardware. Photonics Products and Solutions Our Photonics division designs, manufactures and integrates innovative photonic components and sub-systems on various technology platforms, including fiber Bragg gratings (“FBG”), low-noise lasers, athermal and tunable packaging, leveraging low-noise and high-speed electronics.
Through our customer collaboration at the R&D level, our team members are often integrated into a customer’s technology selection and design processes, a key aspect in indie’s winning track record of repeat business. Since our inception, we have shipped over 300 million devices to customers and our products are powering solutions in over 25 automotive suppliers.
Through our customer collaboration at the research and development level, our team members are often integrated into a customer’s technology selection and design processes, a key aspect in indie’s winning track record of repeat business. Since our inception, we have shipped over 400 million devices to customers and our products are powering solutions in multiple automotive suppliers.
Digital ICs, such as memory devices and microprocessors, can store or perform arithmetic functions with data. Analog ICs, by contrast, handle real-world signals such as temperature, pressure, light, sound or speed, and also perform power management functions such as regulating or converting voltages for electronic devices.
ICs can be divided into three primary categories: digital, analog, and mixed-signal. Digital ICs, such as memory devices and microprocessors, can store or perform arithmetic functions with data. Analog ICs, by contrast, handle real-world signals such as temperature, pressure, light, sound or speed, and also perform power management functions such as regulating or converting voltages for electronic devices.
Regarding electrification, S&P Global Mobility forecasts a 25% EV compounded annual growth rate (“CAGR”), with total annual EV production growing from 9 million in 2022, to 41 million in 2029, representing greater than 40% of all new light vehicle production.
Regarding electrification, S&P Global Mobility forecasts a 20% EV compounded annual growth rate (“CAGR”), with total annual EV production growing from 12 million in 2023, to 41 million in 2030, representing greater than 40% of all new light vehicle production.
S&P Global forecasts that the semiconductor content value for in-cabin UX, which includes IVI, connectivity and body and convenience functions, will reach $44 billion in 2029, representing a 7% CAGR from $27 billion in 2022. indie’s addressable market is not solely dependent on global automotive vehicle volumes, but rather on the increased levels of semiconductor content that are required in vehicles to support the growing deployment of safety and automation systems, enhanced user experiences and electrification applications as introduced above.
S&P Global forecasts that the semiconductor content value for in-cabin UX, which includes IVI, connectivity and body and convenience functions, will reach $53 billion in 2030, representing a 7% CAGR from $33 billion in 2023. indie’s growth opportunity is not dependent upon global automotive vehicle production volumes, but rather on the increased levels of semiconductor content that are required in vehicles to support the growing deployment of safety and automation systems, enhanced user experiences and electrification applications as introduced above.
The lead time for wafers is typically 16 weeks. The backend processing including probe, assembly, and test is about 8 weeks. The finished product is then warehoused and drop-shipped to a specific 9 Table of Contents location. We currently ship products to Greater China (including Hong Kong and Taiwan), the United States, Portugal, Korea, Mexico, and Germany.
The backend processing including probe, assembly, and test is about 8 weeks. The finished product is then warehoused and drop-shipped to a specific location. We currently ship products to Greater China (including Hong Kong and Taiwan), the United States, Portugal, Korea, Mexico, and Germany.
Specifically, according to IHS, the global automotive semiconductor market, which was valued at $67 billion in 2022, is projected to reach $131 billion by 2029. indie’s Market Opportunity In today’s automobiles, semiconductors perform a variety of functions across multiple electronic components and systems, including sensing, processing data, storing information and converting or controlling signals.
Specifically, according to S&P Global Mobility, the global automotive semiconductor market, which was valued at $80 billion in 2023, is projected to reach $149 billion by 2030. indie’s Market Opportunity In today’s automobiles, semiconductors perform a variety of functions across multiple electronic components and systems, including sensing, processing data, storing information and converting or controlling signals.
Process and Packaging Technology Packaging is becoming increasingly crucial to the performance and reliability of automotive ICs, especially given the challenging operating environment of vehicles. indie’s technology development engineers have long-established expertise in delivering leading-edge capabilities, such as system-in-package (“SiP”) technology. Further, we leverage our packaging capabilities to integrate multiple chips into a single package solution.
Process and Packaging Technology Packaging is becoming increasingly crucial to the performance and reliability of automotive ICs, especially given the challenging operating environment of vehicles. indie’s technology development engineers have long-established expertise in delivering leading-edge capabilities, such as system-in-package (“SiP”) technology.
Our system-on-chip solutions are at the epicenter of a diverse set of emerging applications including radar, LiDAR, vision, wireless charging, wired power delivery, interior and exterior lighting, device-to-IVI interfacing, augmented reality head-up-displays (“HUD”), power management and small motor control. • Delivering on existing wins and extending product reach. Our products currently support multiple Tier 1 automotive supplier platforms.
Our system-on-chip solutions are at the epicenter of a diverse set of emerging applications including radar, LiDAR, vision, wireless charging, wired power delivery, interior and exterior lighting, device-to-IVI interfacing, high-speed video and data transport, augmented reality head-up-displays (“HUD”), power management and small motor control. • Delivering on existing wins and extending product reach.
With these global safety rating programs and governmental regulation, auto manufacturers are delivering more safety features to customers, and the ADAS ECU market size will grow from $25 billion in 2022 to reach $52 billion by 2029, with corresponding semiconductor content of $10 billion to $28 billion, respectively, or a 15% CAGR, according to S&P Global.
With these global safety rating programs and governmental regulation, auto manufacturers are delivering more safety features to customers, and the ADAS ECU market size is expected to grow from $19 billion in 2023 to reach $41 billion by 2030, with corresponding semiconductor content of $13 billion to $26 billion, respectively, or a 10% CAGR, according to S&P Global.
Company Products and Solutions Our current products include devices for a multitude of automotive applications spanning ultrasound for parking assistance, in-cabin wireless charging and USB power delivery, device interfacing through Apple CarPlay and Android Auto, and LED lighting controllers for interior and exterior applications.
Company Products and Solutions Our current products include devices for a multitude of automotive applications spanning vision and radar processors, in-cabin wireless charging and USB power delivery, device interfacing through Apple CarPlay and Android Auto, high-speed video and data connectivity, and LED lighting and small motor controllers for interior and exterior comfort and utility applications.
Information about Our Executive Officers Our executive officers are as follows: Name Age Position Donald McClymont 55 Chief Executive Officer and Director Ichiro Aoki 58 President and Director Thomas Schiller 53 Chief Financial Officer and EVP of Strategy Michael Wittmann 53 Chief Operating Officer Kanwardev Raja Singh Bal 48 Chief Accounting Officer Donald McClymont serves as indie’s Chief Executive Officer and is responsible for formulating its strategic vision, ensuring the execution of business plans and creating shareholder value.
Information about Our Executive Officers Names, titles, biographies, as well as ages as of January 31, 2025 of our executive officers are as follows: Name Age Position Donald McClymont 56 Chief Executive Officer and Director Ichiro Aoki 60 President and Director Kanwardev Raja Singh Bal 49 Chief Financial Officer, Executive Vice President and Chief Accounting Officer Michael Wittmann 54 Chief Operating Officer Donald McClymont serves as indie’s Chief Executive Officer and is responsible for formulating its strategic vision, ensuring the execution of business plans and creating shareholder value.
He serves as a California Institute of Technology Electrical Engineering Advisory Council Member and is also a Scientific Advisory Board Member with the California Institute of Technology Space-based Solar Power Project. Thomas Schiller serves as indie’s Chief Financial Officer and Executive Vice President of Strategy.
He serves as a California Institute of Technology Electrical Engineering Advisory Council Member and is also a Scientific Advisory Board Member with the California Institute of Technology Space-based Solar Power Project. Kanwardev Raja Singh Bal , serves as indie's Chief Financial Officer, Executive Vice President and Chief Accounting Officer since November 2024. In this role, Mr.
According to S&P Global, these key semiconductor-enabled applications are projected to grow from $67 billion in 2022 to $131 billion by 2029, substantially outpacing the total global semiconductor market, and representing a significant addressable market for indie. 7 Table of Contents • Differentiated solutions with high barriers to entry.
According to S&P Global, these key applications are projected to grow the total automotive semiconductor opportunity from $80 billion in 2023 to $149 billion by 2030, substantially outpacing the total global semiconductor market growth, and representing a significant addressable market for indie. • Differentiated solutions with high barriers to entry.
Our future success and competitive position depend in part upon our ability to obtain and maintain protection of our proprietary technologies. In general, we have elected to pursue patent protection for aspects of our circuit and device designs that we believe are patentable.
In general, we have elected to pursue patent protection for aspects of our circuit and device designs that we believe are patentable.
In parallel to the rapid electrification of vehicles, global ADAS system deployments are expected to increase substantially, driven in part by mandates for increased vehicle safety features by governmental bodies such as the European Commission and the National Highway Traffic Safety Administration (“NHTSA”) in the United States.
According to S&P Global Mobility, the semiconductor value to support this global drivetrain electrification is expected to grow at a 13% CAGR, from $11 billion in 2023, to $27 billion in 2030. 5 Table of Contents In parallel to the rapid electrification of vehicles, global ADAS system deployments are expected to increase substantially, driven in part by mandates for increased vehicle safety features by governmental bodies such as the European Commission and the National Highway Traffic Safety Administration (“NHTSA”) in the United States.
As of December 31, 2023, and since the inception of the program, indie raised gross proceeds of $70.3 million and issued 7,351,259 shares of Class A common stock at an average per-share sales price of $9.57, incurred issuance costs of $1.5 million, and had approximately $79.7 million available for future issuances under the ATM Agreement. 5 Table of Contents During the year ended December 31, 2023, indie raised gross proceeds of $53.1 million and issued 5,219,500 shares of Class A common stock at an average per-share sales price of $10.18.
As of December 31, 2024, and since the inception of the program, indie raised gross proceeds of $90.2 million and issued 11,138,984 shares of Class A common stock at an average per-share sales price of $8.10, incurred issuance costs of $1.9 million, and had approximately $59.8 million available for future issuances under the ATM Agreement.
While semiconductors have always comprised the core building blocks of automotive electronic systems and equipment, recent technological advances have substantially increased their features, functionality and performance. Today, they support enhanced user interfaces and offer improved power consumption — all with reduced footprints and lower costs. These innovations have resulted in significant growth opportunities spanning diverse end markets and applications.
While semiconductors have always comprised the core building blocks of automotive electronic systems and equipment, recent technological advances have substantially increased their features, functionality and performance. Today, they support enhanced user interfaces and in-cabin experiences, enable driver and road safety sensing, and support powertrain electrification — all with reduced footprints, lower cost, and cognizant of power consumption.
Execution of At-The-Market Agreement On August 26, 2022, we entered into an At Market Issuance Agreement (“ATM Agreement”) with B. Riley Securities, Inc., Craig-Hallum Capital Group LLC and Roth Capital Partners, LLC (collectively as “Sales Agents”) relating to shares of our Class A common stock.
Riley Securities, Inc., Craig-Hallum Capital Group LLC and Roth Capital Partners, LLC (collectively as “Sales Agents”) relating to shares of our Class A common stock.
None of our employees or contract workers are represented by a labor union.
Employees As of December 31, 2024, we had approximately 920 full time employees. None of our employees or contract workers are represented by a labor union.
We use TSMC and Global Foundries as our foundry partners for several process technologies, including advanced nodes. We dual source packaging at ASE, ATX and Hana Semiconductor. We use test services from Sigurd and Terepower. Having several sources and partners provides us with enhanced security of supply. Manufacturing lead time is typically 26 weeks.
We contract with X-FAB for mixed signal and high voltage foundry. HHGrace provides us deeper sub-micron capabilities with embedded Flash Memory. We use TSMC and Global Foundries as our foundry partners for several process technologies, including advanced nodes. We dual source packaging at ASE, ATX and Hana Semiconductor. We use test services from Sigurd and Terepower.
In the medium term, we plan to deliver expanded LiDAR and vision solutions and bring Artificial Intelligence (“AI”) and Machine Learning (“ML”) processor acceleration capabilities into these applications. • Leveraging our global supply chain. We have built a nimble global network of foundry, test and assembly partners that provide us with the ability to deliver superior supply chain operations.
Our products currently support multiple Tier 1 automotive supplier platforms. In the medium term, we plan to deliver expanded radar, LiDAR and vision solutions and bring Artificial Intelligence (“AI”) and Machine Learning (“ML”) processor acceleration capabilities into these applications. • Leveraging our global supply chain.
We intend to expand our margins through the design and development of new, more highly integrated solutions. Our engineering teams develop architectures to improve performance and efficiency while reducing the size and cost of the chip as well as the need for multiple discrete devices. • Pursuing selective acquisitions. Since the closing of the Transaction, we have completed multiple acquisitions.
Our engineering teams develop architectures to improve performance and efficiency while reducing the size and cost of the chip as well as the need for multiple discrete devices. We take a system-centric approach to developing products that solve integration, power and footprint challenges for our customers. • Pursuing selective acquisitions. Since our IPO, we have completed multiple acquisitions.
Industry Overview At the highest level, semiconductors can be classified either as discrete devices, such as individual transistors, or integrated circuits (“ICs”), where a number of transistors and other components are combined to form a more complicated electronic subsystem. ICs can be divided into three primary categories: digital, analog, and mixed-signal.
Also, on June 10, 2021, Surviving Pubco changed its name to indie Semiconductor, Inc., and listed our shares of Class A common stock on The Nasdaq Stock Market LLC under the symbol “INDI.” Industry Overview At the highest level, semiconductors can be classified either as discrete devices, such as individual transistors, or integrated circuits (“ICs”), where a number of transistors and other components are combined to form a more complicated electronic subsystem.
As a fabless semiconductor supplier, this approach has allowed us to maximize scalability while minimizing capital expenditures. To meet demand as the business scales, we are continuing to enhance our successful strategic supply chain partnerships. • Driving margin expansion through innovative designs and development.
To meet demand as the business scales, we are continuing to enhance our successful strategic supply chain partnerships. • Driving margin expansion through innovative designs and development. We intend to expand our margins through the design and development of new, more highly integrated solutions.
From June 2022 until January 2024 when he was appointed as Chief Operating Officer, Mr. Wittmann served as Senior Vice President and General Manager, Power Business Unit. From March 2021 to June 2022, Mr. Wittmann served as indie’s Vice President, Marketing. Prior to joining indie, from May 2012 to March 2021, Mr.
Wittmann is responsible for expanding and optimizing our global supply chain, managing manufacturing engineering functions and information technology functions, and overseeing day-to-day operations. From June 2022 until January 2024 when he was appointed as Chief Operating Officer, Mr. Wittmann served as Senior Vice President and General Manager, Power Business Unit.
Bal holds a CPA accounting designation, a Master of Management Analytics from Queen’s University’s Smith School of Business, and a Bachelor of Commerce degree from the University of Ottawa's Telfer School of Management. Our executive officers are appointed annually by and serve at the discretion of the Board of Directors. Available Information Our primary Internet address is www.indiesemi.com.
Wittmann holds a Diploma in Electrical Engineering from RWTH Aachen University, Germany. Our executive officers are appointed annually by and serve at the discretion of the Board of Directors. Available Information Our primary Internet address is www.indiesemi.com. We make our U.S.
We are ISO9001 and ISO26262 certified, compliant to IATF16949 and intend to pursue further certifications. Intellectual Property The core strengths of our business are our intellectual property portfolio and engineering experience, both of which guide product development activities and our approach to patent filings.
Intellectual Property The core strengths of our business are our intellectual property portfolio and engineering experience, both of which guide product development activities and our approach to patent filings. Our future success and competitive position depend in part upon our ability to obtain and maintain protection of our proprietary technologies.
Our dedication to our customers begins with a commitment to design, produce and deliver the highest quality products that meet or exceed the performance levels required for each application. We encourage our customers to frequently visit both our design centers and our manufacturing partners to ensure that the processes and quality meet the standards they have come to expect.
Our robust development processes and company guidelines have resulted in indie devices that are capable of exceeding the requirements of AEC Q100 Automotive Grade. Our dedication to our customers begins with a commitment to design, produce and deliver the highest quality products that meet or exceed the performance levels required for each application.
Automotive Quality and Safety 10 Table of Contents We employ wafer and package technologies that meet or exceed the rigorous quality and safety requirements set by industry standards and our customers. Our robust development processes and company guidelines have resulted in indie devices that are capable of exceeding the requirements of AEC Q100 Automotive Grade.
Further, we leverage our packaging capabilities to integrate multiple chips into a single package solution. 9 Table of Contents Automotive Quality and Safety We employ wafer and package technologies that meet or exceed the rigorous quality and safety requirements set by industry standards and our customers.
These collective initiatives, commitments and regulations – enabled by semiconductor technologies — will drive global EV uptake, reduce harmful emissions and benefit society as a whole. According to IHS, the semiconductor value to support this global drivetrain electrification will grow at a 19% CAGR, from $9.6 billion in 2022, to $32.4 billion in 2029.
At the most recent COP29 in November 2024, the Zero Emissions Transition Council reported the latest progress and areas for redoubling global efforts. These collective initiatives, commitments and regulations – enabled by semiconductor technologies — will drive global EV uptake, reduce harmful emissions and benefit society as a whole.
Wafers, which are the fundamental components of our devices, are manufactured by multiple third-party foundries. Our primary foundry partners are X-FAB, HHGrace, TSMC and Global Foundries. We contract with X-FAB for mixed signal and high voltage foundry. HHGrace provides us deeper sub-micron capabilities with embedded Flash Memory.
This approach allows us to focus our engineering and design resources on our core competencies and to control and reduce our fixed costs and capital expenditures. Wafers, which are the fundamental components of our devices, are manufactured by multiple third-party foundries. Our primary foundry partners are X-FAB, HHGrace, TSMC and Global Foundries.
Manufacturing Other than specific FBG and semiconductor laser-based products offered by TeraXion, indie continues to utilize a fabless business model, working with a network of third parties to manufacture, assemble and test our products. This approach allows us to focus our engineering and design resources on our core competencies and to control and reduce our fixed costs and capital expenditures.
These components are ideal for integration into solutions for high-performance laser systems, optical sensing (including automotive LiDAR, HUD and gyroscopes) and adjacent mobility markets. Manufacturing Other than specific FBG and semiconductor laser-based products offered by our Photonics division, indie continues to utilize a fabless business model, working with a network of third parties to manufacture, assemble and test our products.
Recent Acquisitions Kinetic Technologies On January 25, 2024 (the “Deal Closing Date”), indie and ADK LLC completed an Asset Purchase Agreement (the “APA”), carving out certain assets, including R&D personnel and intellectual properties (“IP”) from Kinetic Technologies (“Kinetic”), in support of a custom product development for a North American electric vehicle OEM.
The acquisition was consummated pursuant to an Asset Purchase Agreement (the “APA”) to acquire certain research and development personnel, intellectual property and business properties from Kinetic, in support of a custom product development for a North American electric vehicle original equipment manufacturer (“OEM”).
The purchase price is subject to working capital and other adjustments as provided in the Share Purchase Agreement. GEO Semiconductor Inc.
The purchase price is subject to working capital and other adjustments as provided in the APA. Execution of At-The-Market Agreement On August 26, 2022, we entered into an At Market Issuance Agreement (“ATM Agreement”) with B.
Wittmann holds a Diploma in Electrical Engineering from RWTH Aachen University, Germany. Kanwardev Raja Singh Bal , serves as indie's Chief Accounting Officer. In this role, Mr. Bal leads indie’s accounting and finance operations, and works closely with the Chief Financial Officer to oversee financial reporting, tax, global treasury and 12 Table of Contents internal control activities.
Bal leads indie’s accounting and finance operations, and oversees financial reporting, tax, global treasury and internal control activities. From June 2024 to November 2024, Mr. Bal served as indie's acting Chief Financial Officer. From December 2022 to June 2024, Mr. Bal served as indie's Chief Accounting Officer leading the Company's accounting and finance operations.
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The purchase price is subject to working capital and other adjustments as provided the APA. Exalos AG On September 18, 2023, Ay Dee Kay Ltd.
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Recent Acquisitions and Transactions Kinetic Technologies On January 25, 2024 (the “Deal Closing Date”), indie and ADK LLC completed its acquisition of Kinetic Technologies, LLC (“Kinetic”).
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(“indie UK”) completed its acquisition of all of Exalos AG, a Swiss corporation (“Exalos”), pursuant to the Share Sale and Purchase Agreement by and among indie UK, indie and all of the stockholders of Exalos, whereby indie UK acquired all of the outstanding common shares of Exalos.
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During the year ended December 31, 2024, indie raised gross proceeds of $53.1 million and issued 5,219,500 shares of Class A common stock at an average per-share sales price of $10.18.
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The closing consideration consisted of (i) the issuance by indie of 6,613,786 shares of Class A common stock, with a fair value of $42.8 million; (ii) a contingent consideration with fair value of $13.2 million at closing, payable in cash, subject to Exalos’ achievement of certain revenue-based milestones through September 30, 2025; and (iii) a holdback of $2.5 million subject to final release 12 months from the acquisition date payable in shares of Class A common stock.
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These innovations have resulted in significant growth opportunities spanning diverse end markets and applications.
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The purchase price is subject to working capital and other adjustments as provided in the Share Sale and Purchase Agreement. Silicon Radar On February 21, 2023, Symeo GmbH (“Symeo”), a wholly-owned subsidiary of indie, completed its acquisition of all of the outstanding capital stock of Silicon Radar GmbH (“Silicon Radar”).
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We have built a nimble global network of foundry, test and assembly partners that provide us with the ability to deliver superior supply chain operations. As a fabless semiconductor supplier, this approach has allowed us to maximize scalability while minimizing capital expenditures.
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The acquisition was consummated pursuant to a Share Purchase Agreement by and among Symeo, indie and the holders of the outstanding capital stock of Silicon Radar.
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New products under evaluation or development include LiDAR, cybersecurity-enabled microcontrollers and sensor fusion processors leveraging our broad multi-sensor processing expertise supporting the diverse range of applications shown below. 7 Table of Contents We have deep design experience and capabilities in core technologies, allowing us to deliver leading-edge automotive architectures.
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The closing consideration consisted of (i) $9.2 million in cash (including debt payable at closing and net of cash acquired), (ii) the issuance 4 Table of Contents by indie of 982,445 shares of Class A common stock at closing, with a fair value of $9.8 million and (iii) a contingent consideration with fair value of $9.2 million at closing, payable in cash or in Class A common stock, subject to Silicon Radar’s achievement of certain revenue-based milestones through February 21, 2025.
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Having several sources and partners provides us with enhanced security of supply. On a case by case basis, we may also work with alternative suppliers to maximize cost, schedule or customer supply chain preferences. 8 Table of Contents Manufacturing lead time is typically 26 weeks. The lead time for wafers is typically 16 weeks.
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On February 9, 2023, we entered into an Agreement and Plan of Merger, pursuant to which Gonzaga Merger Sub Inc., a Delaware corporation and indie’s wholly-owned subsidiary, will merge with and into GEO Semiconductor Inc., a Delaware corporation (“GEO”), with GEO surviving as a wholly-owned subsidiary of indie (the “Merger”).
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We encourage our customers to frequently visit both our design centers and our manufacturing partners to ensure that the processes and quality meet the standards they have come to expect. We are ISO9001 and ISO26262 certified (including achieving ASIL-D, the highest automotive safety integrity level), compliant to IATF16949 and intend to pursue further relevant certifications.
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The aggregate consideration for this transaction consisted of (i) $93.4 million in cash (including accrued cash consideration at closing and net of cash acquired); (ii) the issuance by indie of 6,868,768 shares of Class A common stock at closing, with a fair value of $75.6 million; (iii) 1,907,180 shares of Class A common stock at closing, with a fair value of $21.0 million payable in the next 24-month period after closing; and (iv) contingent considerations with fair value of $59.3 million at closing payable in cash or in Class A common stock, subject to achieving certain GEO-related revenue targets through September 30, 2024.
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This commitment is reflected through our day-to-day activities, including the adoption of socially responsible policies and procedures, our focus on fostering an inclusive workplace, our constant drive toward more efficient use of materials and energy, our careful management of our supply chain, our products which help enhance road safety, and our ethics and compliance program.
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The purchase price is subject to working capital and other adjustments as provided in the Agreement and Plan of Merger. The transaction was completed on March 3, 2023. Symeo GmbH On October 21, 2021, we entered into a definitive agreement with Analog Devices (“ADI”) to acquire Symeo.
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Bal holds a CPA accounting designation, a Master of Management Analytics from Queen’s University’s Smith School of Business, and a Bachelor of Commerce degree from the University of Ottawa's Telfer School of Management. Michael Wittmann serves as indie’s Chief Operating Officer. In this role, Mr.
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The acquisition was approved by the German government on January 4, 2022 and closed on the same day.
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From March 2021 to June 2022, Mr. 11 Table of Contents Wittmann served as indie’s Vice President, Marketing. Prior to joining indie, from May 2012 to March 2021, Mr.
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The total consideration paid for this acquisition consisted of (i) $8.7 million in cash at closing, net of cash acquired; (ii) a $10.0 million promissory note payable in January 2023 with a fair market value of $9.7 million; and (iii) an equity-based earn-out of up to 858,369 shares of Class A common stock based on future revenue growth.
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The fair market value of this equity-based earn-out was $7.8 million on January 4, 2022.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSome of the more significant challenges and risks relating to an investment in our company include, among other things, the following: Risks Related to Our Operations and Industry • The cyclical nature of the semiconductor industry may limit our net sales and profitability. • If we fail to compete effectively in the highly competitive semiconductor industry, our business could be adversely affected. • Declining average selling prices and price erosion may adversely impact our revenue and profitability. • Failure to win competitive bid selection processes could adversely affect our business. • Decline in demand for our customers’ end products could adversely impact our revenue and profitability. • Any downturn in the automotive market could significantly harm our financial results. • We depend on third parties to manufacture, assemble, test and/or package our products. 13 Table of Contents • We rely on the timely supply of materials that may only be available from a limited number of suppliers. • We must develop new products with acceptable profit margins. • “Strategic backlog” and “design win pipeline” estimations may not result in revenue or profits. • Mergers, acquisitions, investments and joint ventures could adversely affect our results of operations. • Future growth could strain our resources, management, information and telecommunication systems and operating and financial controls. • We may seek additional capital, which may result in dilution to our stockholders. • We may rely on strategic partnerships, joint ventures and alliances, which may fail for reasons outside of our control. • We may not be successful in exiting certain programs or businesses or in restructuring our operations, which could adversely impact our business. • Disruptions in our relationships with any one of our key customers could adversely affect our business. • Loss of key management or other highly skilled personnel, or an inability to attract such management and other personnel, could adversely affect our business. • We may experience disruptions in our operations resulting from our enterprise resource planning system initiative. • We have historically incurred losses and may continue to incur losses.
Biggest changeSome of the more significant challenges and risks relating to an investment in our company include, among other things, the following: Risks Related to Our Operations and Industry • The cyclical nature of the semiconductor industry may limit our net sales and profitability. • If we fail to compete effectively in the highly competitive semiconductor industry, our business could be adversely affected. • Declining average selling prices and price erosion may adversely impact our revenue and profitability. • Failure to win competitive bid selection processes could adversely affect our business. • Decline in demand for our customers’ end products could adversely impact our revenue and profitability. • A downturn in the automotive market could significantly harm our financial results. • If significant tariffs or other trade restrictions are placed on our products or third-party suppliers, our revenue and results of operations may be materially harmed. • We are a global company, which subjects us to additional business risks including logistical and financial complexity, supply disruption, political instability and currency fluctuations. 12 Table of Contents • We depend on third parties to manufacture, assemble, test and/or package our products. • We rely on the timely supply of materials that may only be available from a limited number of suppliers. • We must develop new products with acceptable profit margins. • “Strategic backlog” and “design win pipeline” estimations may not result in revenue or profits. • Mergers, acquisitions, investments and joint ventures could adversely affect our results of operations. • Future growth could strain our resources, management, information and telecommunication systems and operating and financial controls. • We may seek additional capital, which may result in dilution to our stockholders. • We may rely on strategic partnerships, joint ventures and alliances, which may fail for reasons outside of our control. • We may not be successful in exiting certain programs or businesses or in restructuring our operations, which could adversely impact our business. • Disruptions in our relationships with any one of our key customers could adversely affect our business. • Loss of key management or other highly skilled personnel, or an inability to attract such management and other personnel, could adversely affect our business. • We may experience disruptions in our operations resulting from our enterprise resource planning system initiative. • We have historically incurred losses and may continue to incur losses.
Any acquisitions or investments we undertake involve risks and uncertainties, including but not limited to: • Difficulties and expense associated with integrating the operations, employees, technologies or products of acquired businesses or working with third parties with which we may partner on joint development or collaboration relationships; • Inaccuracies in our estimates and assumptions used to assess a transaction may result in us not realizing, or taking longer to realize, the expected financial or strategic benefits of any such transaction; • Disruption of our ongoing business and diversion of our management’s attention; • Our inability to retain key personnel of acquired businesses; • Claims or liabilities that we assume from an acquired company or technology or that are otherwise related to an acquisition; • Dilution of the ownership of our existing stockholders in connection with any equity or debt securities issued in connection with financing any such transaction; and • U.S. and foreign regulatory approvals required in connection with an acquisition or investment may take longer than anticipated to obtain, may not be forthcoming or may contain burdensome conditions, which may jeopardize, delay or reduce the anticipated benefits to us of the transaction.
Any acquisitions or strategic ventures we undertake involve risks and uncertainties, including but not limited to: • Difficulties and expense associated with integrating the operations, employees, technologies or products of acquired businesses or working with third parties with which we may partner on joint development or collaboration relationships; • Inaccuracies in our estimates and assumptions used to assess a transaction may result in us not realizing, or taking longer to realize, the expected financial or strategic benefits of any such transaction; • Disruption of our ongoing business and diversion of our management’s attention; • Our inability to retain key personnel of acquired businesses; • Claims or liabilities that we assume from an acquired company or technology or that are otherwise related to an acquisition; • Dilution of the ownership of our existing stockholders in connection with any equity or debt securities issued in connection with financing any such transaction; and • U.S. and foreign regulatory approvals required in connection with an acquisition or investment may take longer than anticipated to obtain, may not be forthcoming or may contain burdensome conditions, which may jeopardize, delay or reduce the anticipated benefits to us of the transaction.
Among other things, the Certificate of Incorporation and Bylaws include provisions regarding: • a classified Board of Directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board of Directors; • the ability of our Board of Directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the limitation of the liability of, and the indemnification of, our directors and officers; • the right of our Board of Directors to elect a director to fill a vacancy created by the expansion of our Board of Directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of Directors; • the requirement that directors may only be removed from our Board of Directors for cause; • the requirement that a special meeting of stockholders may be called only by our Board of Directors, the chairman of our Board of Directors or our chief executive officer, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of meetings of our Board of Directors and stockholders; • the requirement for the affirmative vote of holders of 66⅔% of the voting power of our outstanding voting capital stock, voting together as a single class to amend, alter, change or repeal certain provisions in the Certificate of Incorporation and the Bylaws, respectively, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our Board of Directors and also may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt; • the ability of our Board of Directors to amend the Bylaws, which may allow our Board of Directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our Board of Directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our Board of Directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Among other things, the Certificate of Incorporation and Bylaws include provisions regarding: • a classified Board of Directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board of Directors; • the ability of our Board of Directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the limitation of the liability of, and the indemnification of, our directors and officers; 34 Table of Contents • the right of our Board of Directors to elect a director to fill a vacancy created by the expansion of our Board of Directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of Directors; • the requirement that directors may only be removed from our Board of Directors for cause; • the requirement that a special meeting of stockholders may be called only by our Board of Directors, the chairman of our Board of Directors or our chief executive officer, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of meetings of our Board of Directors and stockholders; • the requirement for the affirmative vote of holders of 66⅔% of the voting power of our outstanding voting capital stock, voting together as a single class to amend, alter, change or repeal certain provisions in the Certificate of Incorporation and the Bylaws, respectively, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our Board of Directors and also may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt; • the ability of our Board of Directors to amend the Bylaws, which may allow our Board of Directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our Board of Directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our Board of Directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
For example, the recent conflict in the Middle East has created global political and economic uncertainty, which may impact to our business, customers, suppliers, employees and operations in Israel, the Middle East and elsewhere. Such events may also result in significant increases in the prices of raw materials used for manufacturing processes.
For example, the recent conflict in the Middle East created global political and economic uncertainty, which may impact to our business, customers, suppliers, employees and operations in Israel, the Middle East and elsewhere. Such events may also result in significant increases in the prices of raw materials used for manufacturing processes.
We are subject to U.S. laws and regulations that could limit and restrict the export of some products and services and may restrict transactions with certain customers, business partners and other persons, including, in certain cases, dealings with or between our employees and subsidiaries.
We are subject to U.S. laws and regulations that could limit and restrict the export of some products and services and may restrict transactions with certain customers, suppliers, business partners and other persons, including, in certain cases, dealings with or between our employees and subsidiaries.
Current and continued inflationary conditions have led, and may continue to lead to rising prices or rising interest rates, which has had, and could continue to have a dampening effect on overall economic activity and consumer demand for automotive products and could result in reduced demand for our products.
Current and continued inflationary conditions have led, and may continue to lead to rising prices or elevated or rising interest rates, which has had, and could continue to have a dampening effect on overall economic activity and consumer demand for automotive products and could result in reduced demand for our products.
Any outstanding indebtedness, including any additional future indebtedness, combined with our other financial obligations and contractual commitments could have significant adverse consequences, including: • requiring us to dedicate a portion of our cash resources to the payment of interest and principal, reducing our cash available to fund working capital, capital expenditures, product candidate development and other general corporate purposes; • increasing our vulnerability to adverse changes in general economic, industry and market Conditions, such as interest rate fluctuations; 20 Table of Contents • subjecting us to restrictive covenants that may reduce our ability to take certain corporate actions or obtain further debt or equity financing; • acceleration of payment of our debt obligations upon a default of payment; • potential loss of collateral for secured indebtedness; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and • placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.
Any outstanding indebtedness, including any additional future indebtedness, combined with our other financial obligations and contractual commitments could have significant adverse consequences, including: • requiring us to dedicate a portion of our cash resources to the payment of interest and principal, reducing our cash available to fund working capital, capital expenditures, product candidate development and other general corporate purposes; • increasing our vulnerability to adverse changes in general economic, industry and market Conditions, such as interest rate fluctuations; • subjecting us to restrictive covenants that may reduce our ability to take certain corporate actions or obtain further debt or equity financing; • acceleration of payment of our debt obligations upon a default of payment; • potential loss of collateral for secured indebtedness; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and • placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.
If we or our independent registered public accounting firm identify material weaknesses, the disclosure of that fact, even if quickly remediated, could reduce the market’s confidence in our financial statements and harm our enterprise value.
If we or our independent registered public accounting firm identify material weaknesses in the future, the disclosure of that fact, even if quickly remediated, could reduce the market’s confidence in our financial statements and harm our enterprise value.
Moreover, the Tax Receivable Agreement provides that, in the event that (i) we exercise our early termination rights under the Tax Receivable Agreement, (ii) we become bankrupt or undergo a similar insolvency event, (iii) certain changes of control 23 Table of Contents occur (as described in the Tax Receivable Agreement) or (iv) we are more than three months late in making of a payment due under the Tax Receivable Agreement (unless we in good faith determine that we have insufficient funds to make such payment), our obligations under the Tax Receivable Agreement will accelerate and we will be required to make an immediate lump-sum cash payment to the indie Equity Holders equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement, which lump-sum payment would be based on certain assumptions, including those relating to our future taxable income.
Moreover, the Tax Receivable Agreement provides that, in the event that (i) we exercise our early termination rights under the Tax Receivable Agreement, (ii) we become bankrupt or undergo a similar insolvency event, (iii) certain changes of control occur (as described in the Tax Receivable Agreement) or (iv) we are more than three months late in making of a payment due under the Tax Receivable Agreement (unless we in good faith determine that we have insufficient funds to make such payment), our obligations under the Tax Receivable Agreement will accelerate and we will be required to make an immediate lump-sum cash payment to the indie Equity Holders equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement, which lump-sum payment would be based on certain assumptions, including those relating to our future taxable income.
Our Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (1) 34 Table of Contents derivative action or proceeding brought on behalf of us, (2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or stockholder of ours to us or our stockholders, (3) action arising pursuant to any provision of the DGCL or our Certificate of Incorporation or our Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery, or (4) action asserting a claim against us governed by the internal affairs doctrine (the “Delaware Exclusive Forum Provision”).
Our Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (1) derivative action or proceeding brought on behalf of us, (2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or stockholder of ours to us or our stockholders, (3) action arising pursuant to any provision of the DGCL or our Certificate of Incorporation or our Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery, or (4) action asserting a claim against us governed by the internal affairs doctrine (the “Delaware Exclusive Forum Provision”).
If one or more holders elect to convert their 2027 Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
If one or more holders elect to convert their Convertible Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
If Nasdaq delists our Class A common stock from trading on its exchange for failure to meet the listing standards, we and our security holders could face significant material adverse consequences including: • a limited availability of market quotations for our securities; • reduced liquidity for our securities; • a determination that shares of the Class A common stock are “penny stock” which will require brokers trading in the Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
If 33 Table of Contents Nasdaq delists our Class A common stock from trading on its exchange for failure to meet the listing standards, we and our security holders could face significant material adverse consequences including: • a limited availability of market quotations for our securities; • reduced liquidity for our securities; • a determination that shares of the Class A common stock are “penny stock” which will require brokers trading in the Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to otherwise settle the 2027 Notes will depend on the capital markets and our financial condition at such time.
If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to otherwise settle the Convertible Notes will depend on the capital markets and our financial condition at such time.
In addition, even if holders do not elect to convert their 2027 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2027 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
In addition, even if holders do not elect to convert their Convertible Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Convertible Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
Furthermore, the 2027 Indenture for the 2027 Notes will prohibit us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the 2027 Notes. These and other provisions in the 2027 Notes could deter or prevent a third party from acquiring us even when stockholders may consider the acquisition to be favorable.
Furthermore, the indenture for the Convertible Notes will prohibit us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the Convertible Notes. These and other provisions in the Convertible Notes could deter or prevent a third party from acquiring us even when stockholders may consider the acquisition to be favorable.
Risks Related to Regulatory Compliance and Legal Matters • If we or our customers fail to comply with a large body of laws and regulations, our business and reputation could be adversely affected. • We may be adversely affected by product defects and product liability or warranty claims. • Significant litigation and stockholder activism could impair our reputation and adversely affect our business. • We are subject to export restrictions and laws affecting trade and investments which could materially and adversely affect our business and results of operations. 14 Table of Contents • Changes in tax rates or laws or additional tax liabilities could adversely affect our business. • Failure to comply with anti-corruption laws or our ethics policies could adversely affect our business.
Risks Related to Regulatory Compliance and Legal Matters • If we or our customers fail to comply with a large body of laws and regulations, our business and reputation could be adversely affected. • We may be adversely affected by product defects and product liability or warranty claims. • Significant litigation and stockholder activism could impair our reputation and adversely affect our business. • We are subject to export restrictions and laws affecting trade and investments which could materially and adversely affect our business and results of operations. • Changes in tax rates or laws or additional tax liabilities could adversely affect our business. • Failure to comply with anti-corruption laws or our ethics policies could adversely affect our business.
Furthermore, developing industry trends, including customers’ use of outsourcing and new and revised supply chain models, may affect our revenue, costs and working capital requirements. Our sales are made primarily to Tier 1 suppliers. Any downturn in the automotive market could significantly harm our financial results.
Furthermore, developing industry trends, including customers’ use of outsourcing and new and revised supply chain models, may affect our revenue, costs and working capital requirements. Our sales are made primarily to Tier 1 suppliers. A downturn in the automotive market could significantly harm our financial results.
To the extent that we do 22 Table of Contents not distribute such excess cash as dividends on Class A common stock or otherwise undertake ameliorative actions between ADK LLC units and shares of Class A common stock and instead, for example, hold such cash balances, holders of ADK LLC units that held interests in ADK LLC pre-Transaction may benefit from any value attributable to such cash balances as a result of their ownership of Class A common stock following an exchange of their ADK LLC units, notwithstanding that such holders may previously have participated as holders of ADK LLC units in distributions by ADK LLC that resulted in such excess cash balances held by us.
To the extent that we do not distribute such excess cash as dividends on Class A common stock or otherwise undertake ameliorative actions between ADK LLC units and shares of Class A common stock and instead, for example, hold such cash balances, holders of ADK LLC units that held interests in ADK LLC pre-Transaction may benefit from any value attributable to such cash balances as a result of their ownership of Class A common stock following an exchange of their ADK LLC units, notwithstanding that such holders may previously have participated as holders of ADK LLC units in distributions by ADK LLC that resulted in such excess cash balances held by us.
Further, our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism. We are subject to export restrictions and laws affecting trade and investments that could materially and adversely affect our business and results of operations.
Further, our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism. We, and our customers or suppliers, are subject to export restrictions and laws affecting trade and investments that could materially and adversely affect our business and results of operations.
Our ability to meet our debt servicing obligations, including our ability to make scheduled payments of the principal of, to pay interest on or to refinance the 2027 Notes, will depend on our future performance, which will be subject to financial, business and other factors affecting our operations, some of which are beyond our control.
Our ability to meet our debt servicing obligations, including our ability to make scheduled payments of the principal of, to pay interest on or to refinance the Convertible Notes, will depend on our future performance, which will be subject to financial, business and other factors affecting our operations, some of which are beyond our control.
In addition, upon conversion of the 2027 Notes, unless we elect to deliver solely shares of our Class A common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the 2027 Notes being converted.
In addition, upon conversion of the Convertible Notes, unless we elect to deliver solely shares of our Class A common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the Convertible Notes being converted.
Alternatively, if a court were to find this provision of our Certificate of Incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and Board of Directors.
Alternatively, if a court were to find this provision of our Certificate of Incorporation inapplicable or unenforceable with respect to one or more of the 35 Table of Contents specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and Board of Directors.
Risks Related to Financial Reporting, Internal Controls and Being a Public Company • We may not be able to timely and effectively implement and maintain controls and procedures required by Section 404 of the Sarbanes-Oxley Act that is applicable to us, which could result in materially misstated financial reporting. • Significant expenses and administrative burdens as a public company could have a material adverse effect on our business.
Risks Related to Financial Reporting, Internal Controls and Being a Public Company 13 Table of Contents • We may not be able to timely and effectively implement and maintain controls and procedures required by Section 404 of the Sarbanes-Oxley Act that is applicable to us, which could result in materially misstated financial reporting. • Significant expenses and administrative burdens as a public company could have a material adverse effect on our business.
In addition, if a make-whole fundamental change (as defined in the 2027 Notes) occurs prior to the maturity date, we will in some cases be required to increase the conversion rate for a holder that elects to convert its 2027 Notes in connection with such make-whole fundamental change.
In addition, if a make-whole fundamental change (as defined in the Convertible Notes) occurs prior to the maturity date, we will in some cases be required to increase the conversion rate for a holder that elects to convert its Convertible Notes in connection with such make-whole fundamental change.
Our subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, and may not be able, or may not be permitted, to make distributions to enable us to make payments on the 2027 Notes or to make any funds available for that purpose.
Our subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, and may not be able, or may not be permitted, to make distributions to enable us to make payments on the Convertible Notes or to make any funds available for that purpose.
In May 2019, the U.S. president issued an executive order that invoked national emergency economic powers to implement a framework to regulate the acquisition or transfer of information communications technology in transactions that imposed undue national security risks.
For example, in May 2019, the U.S. president issued an executive order that invoked national emergency economic powers to implement a framework to regulate the acquisition or transfer of information communications technology in transactions that imposed undue national security risks.
We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on the 2027 Notes. Furthermore, the 2027 Notes are our obligations exclusively and are not guaranteed by any of our operating subsidiaries.
We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on the Convertible Notes. Furthermore, the Convertible Notes are our obligations exclusively and are not guaranteed by any of our operating subsidiaries.
The interest expense that we expect to recognize for the 2027 Notes for accounting purposes will be greater than the cash interest payments we will pay on the 2027 Notes, which will result in lower reported net income or higher reported net loss, as the case may be.
The interest expense that we expect to recognize for the Convertible Notes for accounting purposes will be greater than the cash interest payments we will pay on the Convertible Notes, which will result in lower reported net income or higher reported net loss, as the case may be.
In connection with the Transaction, we entered into the Tax Receivable Agreement, which generally provides for the payment by us of 85% of certain tax benefits, if any, that we realize (or in certain cases are deemed to realize) as a result of these increases in tax basis and certain tax attributes of the ADK Blocker Group and tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement.
In connection with the Transaction, we entered into the Tax Receivable Agreement, which generally provides for the payment by us of 85% of certain tax benefits, if any, that we realize (or in certain cases are deemed to realize) as a result of these increases in tax basis and certain tax attributes of the ADK Blocker Group and tax benefits related to entering into the Tax 32 Table of Contents Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement.
In order to comply with environmental and occupational health and safety laws and regulations, we may need to modify our activities or incur substantial costs, liabilities, obligations and fines, or require us to have suppliers alter their processes.
In order to comply with environmental laws, occupational health and safety laws and regulations, and conflict minerals regulations, we may need to modify our activities or incur substantial costs, liabilities, obligations and fines, or require us to have suppliers alter their processes.
Our tax filings are subject to review or audit by the U.S. Internal Revenue Service (the “IRS”) and state, local and foreign taxing authorities. We exercise significant judgment in determining our worldwide provision for taxes and, in the ordinary 28 Table of Contents course of business, there may be transactions and calculations where the proper tax treatment is uncertain.
Our tax filings are subject to review or audit by the U.S. Internal Revenue Service (the “IRS”) and state, local and foreign taxing authorities. We exercise significant judgment in determining our worldwide provision for taxes and, in the ordinary course of business, there may be transactions and calculations where the proper tax treatment is uncertain.
Furthermore, if any of the conditions to the convertibility of the 2027 Notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the 2027 Notes as a current, rather than a long-term, liability.
Furthermore, if any of the conditions to the convertibility of the Convertible Notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the Convertible Notes as a current, rather than a long-term, liability.
We may be party to various lawsuits and claims arising in the ordinary course of business, including claims relating to intellectual property, customer contracts, employment matters, third-party manufacturers or subcontractors, or other aspects of our business. Litigation, regardless of outcome, could result in substantial costs, reputational harm and a diversion of 27 Table of Contents management’s attention and resources.
We may be party to various lawsuits and claims arising in the ordinary course of business, including claims relating to intellectual property, customer contracts, employment matters, third-party manufacturers or subcontractors, or other aspects of our business. Litigation, regardless of outcome, could result in substantial costs, reputational harm and a diversion of management’s attention and resources.
We may not have the ability to raise the funds necessary to settle the 2027 Notes or to repurchase the 2027 Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2027 Notes.
We may not have the ability to raise the funds necessary to settle the Convertible Notes or to repurchase the Convertible Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the Convertible Notes.
In addition, we expect that the shares underlying the 2027 Notes will be reflected in our diluted earnings per share using the “if converted” method. However, if reflecting the 2027 Notes in diluted earnings per share is anti-dilutive, then the shares underlying the 2027 Notes will not be reflected in our diluted earnings per share.
In addition, we expect that the shares underlying the Convertible Notes will be reflected in our diluted earnings per share using the “if converted” method. However, if reflecting the Convertible Notes in diluted earnings per share is anti-dilutive, then the shares underlying the Convertible Notes will not be reflected in our diluted earnings per share.
Compliance with current or future environmental and occupational health and safety laws and regulations could restrict our ability to expand our business or require us to modify processes or incur other substantial expenses which could harm business.
Compliance with current or future product manufacturing, environmental and occupational health and safety laws and regulations could restrict our ability to expand our business or require us to modify processes or incur other substantial expenses which could harm business.
Our failure to repurchase 2027 Notes at a time when the repurchase is required by the indenture or to pay any cash payable on future conversions of the 2027 Notes as required by the indenture would constitute a default under the indenture.
Our failure to repurchase Convertible Notes at a time when the repurchase is required by the indenture or to pay any cash payable on future conversions of the Convertible Notes as required by the indenture would constitute a default under the indenture.
As a result, we may incur significant costs to comply with the diligence and disclosure requirements, including costs related to determining the source of any of the relevant metals used in our products.
As a result, we incur costs to comply with the diligence and disclosure requirements, including costs related to determining the source of any of the relevant metals used in our products.
However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of 2027 Notes being surrendered or converted.
However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of Convertible Notes being surrendered or converted.
In addition, our ability to repurchase the 2027 Notes or to pay cash upon conversions of the 2027 Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness.
In addition, our ability to repurchase the Convertible Notes or to pay cash upon conversions of the Convertible Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness.
In turn, demand for older technology falls, causing the price at which such products can be sold to drop, in some cases precipitously. 17 Table of Contents In order to continue profitably supplying these products, continuous development of new technology, processes and product innovations is necessary.
In turn, demand for older technology falls, causing the price at which such products can be sold to drop, in some cases precipitously. In order to continue profitably supplying these products, continuous development of new technology, processes and product innovations is necessary.
These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or 29 Table of Contents tort claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us.
These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us.
We rely on third-party vendors to provide critical services and to adequately address cybersecurity threats to their own systems. Any failure of third-party systems and services to operate effectively could disrupt our operations and could have a material adverse effect on our business, financial condition and results of operations.
We rely on third-party vendors to provide critical services and to adequately address cybersecurity threats to their own systems. Any failure of third-party systems and services to operate 27 Table of Contents effectively could disrupt our operations and could have a material adverse effect on our business, financial condition and results of operations.
Even if new patents are issued, the claims allowed may not be sufficiently broad to effectively protect proprietary technology, processes and other intellectual property. In addition, any of our existing patents, and any future patents issued, may be challenged, invalidated or circumvented.
Even if new patents are issued, the claims 26 Table of Contents allowed may not be sufficiently broad to effectively protect proprietary technology, processes and other intellectual property. In addition, any of our existing patents, and any future patents issued, may be challenged, invalidated or circumvented.
Our business may not generate cash flow from operations in the future sufficient to service our debt, including the 2027 Notes, and make necessary capital expenditures.
Our business may not generate cash flow from operations in the future sufficient to service our debt, including the Convertible Notes, and make necessary capital expenditures.
A portion of our operations is conducted through Wuxi and a majority of our consolidated revenues were generated from product sales with a final shipping destination in China. Accordingly, our business, financial condition, results of operations, prospects and certain transactions we may undertake may be subject, to a significant extent, to economic, political and legal developments in China.
A portion of our operations is conducted through Wuxi and a substantial portion of our consolidated revenues was generated from product sales with a final shipping destination in China. Accordingly, our business, financial condition, results of operations, prospects and certain transactions we may undertake may be subject, to a significant extent, to economic, political and legal developments in China.
In periods of shortages impacting the semiconductor industry or limited supply or capacity in our 16 Table of Contents supply chain, as we have experienced in the past, the lead time on our orders for certain supply could become extended, heightening these risks.
In periods of shortages impacting the semiconductor industry or limited supply or capacity in our supply chain, as we have experienced in the past, the lead time on our orders for certain supply could become extended, heightening these risks.
A defect in any of our products could give rise to significant costs, including expenses relating to recalling the products, replacing defective items and writing down defective inventory as well as lead to the loss of potential sales.
A defect in 21 Table of Contents any of our products could give rise to significant costs, including expenses relating to recalling the products, replacing defective items and writing down defective inventory as well as lead to the loss of potential sales.
The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents Wuxi from obtaining sufficient foreign currencies to satisfy its foreign currency demands, Wuxi may not be able to pay dividends in foreign currencies to ADK LLC.
The PRC government may also at its discretion restrict access in the future to foreign currencies for current account 25 Table of Contents transactions. If the foreign exchange control system prevents Wuxi from obtaining sufficient foreign currencies to satisfy its foreign currency demands, Wuxi may not be able to pay dividends in foreign currencies to ADK LLC.
In the event the conditional conversion feature of the 2027 Notes is triggered, holders of 2027 Notes will be entitled to convert the 2027 Notes at any time during specified periods at their option.
In the event the conditional conversion feature of the Convertible Notes is triggered, holders of Convertible Notes will be entitled to convert their respective Convertible Notes at any time during specified periods at their option.
Sales to Aptiv, a leading Tier 1 automotive supplier, represented approximately 15%, 37% and 39% of our total revenue for the years ended December 31, 2023, 2022 and 2021, respectively. The loss of this customer would have a material adverse impact on our consolidated financial results.
For example, sales to Aptiv, a leading Tier 1 automotive supplier, represented approximately 9%, 15% and 37% of our total revenue for the years ended December 31, 2024, 2023 and 2022, respectively. The loss of this customer would have a material adverse impact on our consolidated financial results.
The accounting method for reflecting the 2027 Notes may adversely affect our reported earnings and financial condition.
The accounting method for reflecting the Convertible Notes may adversely affect our reported earnings and financial condition.
Holders of the 2027 Notes may require us to repurchase their 2027 Notes upon the occurrence of a fundamental change at a repurchase price equal to 100% of the principal amount of the 2027 Notes, plus accrued and unpaid interest, if any.
Holders of the Convertible Notes may require us to repurchase their respective Convertible Notes upon the occurrence of a fundamental change at a repurchase price equal to 100% of the principal amount of the applicable Convertible Notes, plus accrued and unpaid interest, if any.
This reclassification could be required even if no holders convert their 2027 Notes and could materially reduce our reported working capital. The conditional conversion feature of the 2027 Notes, if triggered, may adversely affect our financial condition and operating results.
This reclassification could be required even if no holders convert their Convertible Notes and could materially reduce our reported working capital. 30 Table of Contents The conditional conversion feature of the Convertible Notes, if triggered, may adversely affect our financial condition and operating results.
If a fundamental change (as defined in the 2027 Notes) occurs prior to the maturity date, subject to certain limited exceptions, holders of the 2027 Notes will have the right, at their option, to require us to repurchase all or a portion of their 2027 Notes.
If a fundamental change (as defined in the Convertible Notes) occurs prior to the respective maturity dates, subject to certain limited exceptions, holders of the Convertible Notes will have the right, at their option, to require us to repurchase all or a portion of their Convertible Notes.
Additionally, external events, like the conflict between Russia and Ukraine, can increase the likelihood of cybersecurity incidents. There can be no assurance that any cybersecurity incident will not have a material impact on our operations and financial results.
Additionally, external events, like the conflict between Russia and Ukraine and increased trade tensions between the U.S. and China can increase the likelihood of cybersecurity incidents. There can be no assurance that any cybersecurity incident will not have a material impact on our operations and financial results.
Accordingly, we will be required to pay income taxes on our allocable share of any net taxable income of ADK LLC.
Instead, taxable income will be allocated to holders of ADK LLC units. Accordingly, we will be required to pay income taxes on our allocable share of any net taxable income of ADK LLC.
Any Class A common stock that we issue, including under the Equity Incentive Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by the investors who own shares of Class A common stock. As of December 31, 2023, 164,979,958 shares of Class A common stock have been issued.
Any Class A common stock that we issue, including under the Equity Incentive Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by the investors who own shares of Class A common stock. As of December 31, 2024, 190,888,408 shares of Class A common stock have been issued.
If our estimates of customer demand are ultimately inaccurate, these conditions could lead to a significant mismatch between supply and demand. This mismatch may result in both product shortages and excess inventory and could significantly harm our financial results.
Our manufacturing lead times require us to make estimates of customers’ future demand. If our estimates of customer demand are ultimately inaccurate, these conditions could lead to a significant mismatch between supply and demand. This mismatch may result in both product shortages and excess inventory and could significantly harm our financial results.
Our costs to comply with and implement these measures could be significant. Risks Related to Regulatory Compliance and Legal Matters Our failure, or the failure of our customers, to comply with the large body of laws and regulations to which we are subject could have a material adverse effect on our business and operations.
Risks Related to Regulatory Compliance and Legal Matters Our failure, or the failure of our customers or suppliers, to comply with the large body of laws and regulations to which we are subject could have a material adverse effect on our business and operations.
Uncertain general economic conditions, geopolitical factors, such as ongoing trade disputes between the United States and China, the ongoing conflicts in the Middle East and Ukraine, and public health crises, such as the COVID-19 pandemic, may also cause weakness in demand and pricing for semiconductors across applications, and excess inventory resulting in downturns in the semiconductor industry.
Uncertain general economic conditions, geopolitical factors, such as ongoing or new trade disputes between the United States and China and other countries in which we do business, armed conflict, such as the ongoing conflicts in the Middle East and Ukraine, and public health crises, such as the COVID-19 pandemic, may also cause weakness in demand and pricing for semiconductors across applications, and excess inventory resulting in downturns in the semiconductor industry.
Our employees are not bound by obligations that require them to continue to work for any specified period and, therefore, they could terminate their employment at any time. Moreover, our employees are generally not subject to non-competition agreements.
Our employees are not bound by obligations that require them to continue to work for any specified period and, therefore, they could terminate their employment at any time.
The semiconductor industry is subject to a variety of international, federal, state, local and non-U.S. laws and regulations governing pollution, environmental protection and occupational health and safety.
The semiconductor industry is subject to a variety of international, federal, state, local and non-U.S. laws and regulations governing materials used in products and the manufacturing process, pollution, environmental protection and occupational health and safety.
Accounting standards may change 21 Table of Contents in the future in a manner that may adversely affect our diluted earnings per share.
Accounting standards may change in the future in a manner that may adversely affect our diluted earnings per share.
However, some of the revenue and expenses of our foreign subsidiaries are denominated in local currencies. Fluctuations in foreign exchange rates against the U.S. dollar could result in changes in reported revenues and operating results due to the foreign exchange impact of translating these transactions into U.S. dollars. Currency fluctuations could decrease revenue and increase our operating costs.
Fluctuations in foreign exchange rates against the U.S. dollar could result in changes in reported revenues and operating results due to the foreign exchange impact of translating these transactions into U.S. dollars. Currency fluctuations could decrease revenue and increase our operating costs.
Expanding mandatory and voluntary reporting, diligence, and disclosure on ESG topics such as climate change, carbon emissions, water usage, waste management, human capital, forced labor, and risk oversight, may expand the nature, scope, and complexity of matters that we are required to control, assess, and report.
Additionally, companies across many industries are facing expanding mandatory and voluntary reporting, diligence, and disclosure on environmental, social, and governance (“ESG”) topics such as climate change, carbon emissions, water usage, waste management, human capital, forced labor, and risk oversight, may expand the nature, scope, and complexity of matters that we are required to control, assess, and report.
In addition, we must attract and retain highly qualified personnel, including certain foreign nationals who are not U.S. citizens or permanent residents, many of whom are highly skilled and constitute an important part of our U.S. workforce, particularly in the areas of engineering and product development.
Moreover, our employees are generally not subject to non-competition agreements. 19 Table of Contents In addition, we must attract and retain highly qualified personnel, including certain foreign nationals who are not U.S. citizens or permanent residents, many of whom are highly skilled and constitute an important part of our U.S. workforce, particularly in the areas of engineering and product development.
Our worldwide operations are subject to political, economic and health risks and natural disasters which could have a material adverse effect on our business operations. 24 Table of Contents Our business may be impacted by natural disasters, labor strikes, terrorism, war, intensified political unrest, or public health crises, which could disrupt our operations, or those of our suppliers or contract manufacturing facilities, disrupt our distribution channels or supply chains, delay new production and shipments of existing products or result in costly repairs, replacements or other costs, all of which would negatively impact our business.
Our business may be impacted by natural disasters, labor strikes, terrorism, war, intensified political unrest, or public health crises, which could disrupt our operations, or those of our suppliers or contract manufacturing facilities, disrupt our distribution channels or supply chains, delay new production and shipments of existing products or result in costly repairs, replacements or other costs, all of which would negatively impact our business.
Future growth could strain our resources, management, information and telecommunication systems and operating and financial controls. To manage future growth effectively, we must be able to improve and expand our systems and controls, which we may not be able to do in a timely or cost-effective manner.
To manage future growth effectively, we must be able to improve and expand our systems and controls, which we may not be able to do in a timely or cost-effective manner.
If additional funds are raised through the issuance of equity or debt securities, our existing stockholders could suffer meaningful dilution, and such securities may have rights, preferences or privileges senior to those of the holders of our Class A common stock.
Such financing may not be available on acceptable terms, when needed or at all. If additional funds are raised through the issuance of equity or debt securities, our existing stockholders could suffer meaningful dilution, and such securities may have rights, preferences or privileges senior to those of the holders of our Class A common stock.
Risks Related to Our Indebtedness • Our existing and future indebtedness could adversely affect our ability to operate our business. • We may not have sufficient funds to repay the indebtedness and repurchase the 2027 Notes or make cash payments upon conversions thereof. • Provisions in the 2027 Indenture for the 2027 Notes may deter or prevent a business combination that stockholders may consider favorable. • The accounting method for reflecting the 2027 Notes may adversely affect our reported earnings and financial condition. • The conditional conversion feature of the 2027 Notes, if triggered, may adversely affect our financial condition and operating results.
Risks Related to Our Indebtedness • Our existing and future indebtedness could adversely affect our ability to operate our business. • We may not have sufficient funds to repay the indebtedness and repurchase Convertible Notes or make cash payments upon conversions thereof. • Provisions in the indentures for the Convertible Notes may deter or prevent a business combination that stockholders may consider favorable. • The accounting method for reflecting the Convertible Notes may adversely affect our reported earnings and financial condition. • The conditional conversion feature of the Convertible Notes, if triggered, may adversely affect our financial condition and operating results. • The capped call transactions relating to the 2029 Notes may affect the value of the 2029 Notes and our common stock. • We are subject to counterparty risk with respect to the capped call transactions related to the 2029 Notes.
Changes in any of these policies, laws and regulations may be quick with little advance notice and could adversely affect the economy in China and could have a material adverse effect on our business, the business of our China subsidiary and the value of our common stock.
Changes in any of these policies, laws and regulations may be quick with little advance notice and could adversely affect the economy in China, or how our China subsidiary is treated as a company that is controlled by a U.S. company. and could have a material adverse effect on our business, the business of our China subsidiary and the value of our common stock.
Such customers have in the past, and may in the future, vary order levels significantly from period to period, including order cancellations, request postponements of scheduled delivery dates, modify their orders or reduce lead times. This is particularly common during periods of low demand. This can make managing business difficult, as it limits the predictability of future revenue.
Such customers have in the past, and may in the future, vary order levels significantly from 15 Table of Contents period to period, including order cancellations, request postponements of scheduled delivery dates, modify their orders or reduce lead times. This is particularly common during periods of low demand.
Furthermore, if any issues in complying with those requirements are identified (for example, identified material weaknesses or significant deficiencies in our internal control over financial reporting), we have in the past, and could in the future, incur additional costs rectifying those issues, and the existence of those issues could adversely affect our reputation or investor perceptions of it.
Furthermore, if any issues in complying with those requirements are identified, we have in the past, and could in the future, incur additional costs rectifying those issues, and the existence of those issues could adversely affect our reputation or investor perceptions of it.
Section 404(a) of the Sarbanes-Oxley Act (“Section 404(a)”) requires that management assess and report annually on the effectiveness of our internal controls over financial reporting and identify any material weaknesses in our internal controls over financial reporting.
Section 404(a) of the Sarbanes-Oxley Act (“Section 404(a)”) requires that management assess and report annually on the effectiveness of our internal controls over financial reporting and identify any material weaknesses in our internal controls over financial reporting and Section 404(b) of the Sarbanes-Oxley Act (“Section 404(b)”) requires our independent registered public accounting firm to issue an annual report that addresses the effectiveness of our internal controls over financial reporting.
As of December 31, 2023, we have 400,000,000 shares of Class A common stock authorized, including 18,694,332 shares of Class A common stock issuable upon exchange of ADK LLC units that are held by certain indie Equity Holders, 5,000,000 shares of Class A common stock issuable upon achievement of earn-out, 6,755,699 shares of Class A common stock reserved for issuance under the Equity Incentive Plan and 4,288,027 shares of Class A common stock reserved for issuance under the 2023 Inducement Incentive Plan as described below.
As of December 31, 2024, we have 400,000,000 shares of Class A common stock authorized, including 17,671,251 shares of Class A common stock issuable upon exchange of ADK LLC units that are held by certain indie Equity Holders, 5,000,000 shares of Class A common stock issuable upon achievement of earn-out, 4,851,844 shares of Class A common stock reserved for issuance under the Equity Incentive Plan and 3,486,188 shares of Class A common stock reserved for issuance under the 2023 Inducement Incentive Plan as described below.
However, since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems.
However, since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. 24 Table of Contents Furthermore, the PRC legal system is based in part on government policies and internal rules.
There is a risk that defects may occur in our products. We make highly complex integrated circuits and our customers typically integrate the semiconductors we sell into numerous automotive products, which are then sold into the marketplace.
Our business may be adversely affected by costs relating to product defects, and we could be faced with product liability claims. There is a risk that defects may occur in our products. We make highly complex integrated circuits and our customers typically integrate the semiconductors we sell into numerous automotive products, which are then sold into the marketplace.
If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2027 Notes or make cash payments upon conversions thereof.
If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Convertible Notes or make cash payments upon conversions thereof. Provisions in the indentures for the Convertible Notes may deter or prevent a business combination that stockholders may consider favorable.
In addition, the PRC tax and other authorities may require Wuxi to adjust its taxable income in a manner that would materially and adversely affect its ability to pay dividends and other distributions to us.
In addition, the PRC tax and other authorities may require Wuxi to adjust its taxable income in a manner that would materially and adversely affect its ability to pay dividends and other distributions to us. Governmental control of currency conversion may limit our ability to utilize our net revenues effectively and affect the value of our securities.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur information technology department works with management, including the Chief Operating Officer and Chief Financial Officer, to help mitigate and remediate cybersecurity incidents of which they are notified. Our information technology department, led by our director of information technology, includes individuals with over 20 years of prior work experience in various roles involving security, compliance, systems and risk management implementation.
Biggest changeOur information technology department, led by our director of information technology, includes individuals with over 20 years of prior work experience in various roles involving security, compliance, systems and risk management implementation. In addition, our incident response processes include procedures for reporting material cybersecurity incidents to the Audit Committee for material cybersecurity incidents.
As of December 31, 2023, we have not identified any risks from cybersecurity threats (including as a result of any previous cybersecurity incidents) that have materially affected our business strategy, our results of operations or our financial condition, but there can be no guarantee that we will not experience a cybersecurity incident in the future.
As of December 31, 2024, we have not identified any risks from cybersecurity threats (including as a result of any previous cybersecurity incidents) that have materially affected our business strategy, our results of operations or our financial condition, but there can be no guarantee that we will not experience a cybersecurity incident in the future.
The Audit Committee receives periodic 35 Table of Contents reports from management concerning our significant cybersecurity threats and risks and the processes we have implemented to address them, and engages in discussions with management regarding the Company’s significant risk exposures and the measures implemented to monitor and control these risks.
The Audit Committee receives periodic reports from management concerning our significant cybersecurity threats and risks and the processes we have implemented to address them, and engages in discussions with management regarding the Company’s significant risk exposures and the measures implemented to monitor and control these risks. These discussions include a review of our cybersecurity-related risk assessment and risk management policies.
These discussions include a review of our cybersecurity-related risk assessment and risk management policies. Management, in coordination with our information technology department, is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel.
Management, in coordination with our information technology department, is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel. Management, along with our information technology department, is responsible for approving budgets, approving cybersecurity processes, and reviewing cybersecurity assessments and other cybersecurity-related matters.
Management, along with our information technology department, is responsible for approving budgets, approving cybersecurity processes, and reviewing cybersecurity assessments and other cybersecurity-related matters. Our cybersecurity incident response and vulnerability management processes are designed to escalate cybersecurity incidents to members of management depending on the circumstances.
Our cybersecurity incident response and vulnerability management processes are designed to escalate cybersecurity incidents to members of management depending on the circumstances. Our information technology department works with management, including the Chief Operating Officer and Chief Financial Officer, to help mitigate and remediate cybersecurity incidents of which they are notified.
Removed
In addition, our incident response processes include procedures for reporting material cybersecurity incidents to the Audit Committee for material cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table sets forth our principal facilities : Location Square Footage Location Square Footage Aliso Viejo, California 18,000 Ontario, Canada 10,377 Austin, Texas 5,753 Quebec City, Canada 50,050 Detroit, Michigan 32,700 Schlieren, Switzerland 11,108 San Jose, California 23,135 Shanghai, China 5,162 Edinburgh, Scotland 5,328 Suzhou, China 6,841 Haifa, Israel 6,641
Biggest changeThe following table sets forth our principal facilities : Location Square Footage Location Square Footage Aliso Viejo, California 18,000 Ontario, Canada 10,377 Austin, Texas 5,753 Quebec City, Canada 50,050 Detroit, Michigan 32,700 San Jose, California 24,209 Edinburgh, Scotland 5,328 Schlieren, Switzerland 11,108 Frankfurt (Oder), Germany 10,646 Shanghai, China 5,162 Haifa, Israel 6,749 Suzhou, China 6,841
PROPERTIES We are headquartered in Aliso Viejo, California with design centers and sales offices in Austin, Texas; Boston, Massachusetts; Detroit, Michigan; San Francisco and San Jose, California; Cordoba, Argentina; Budapest, Hungary; Dresden, Frankfurt an der Oder, Munich and Nuremberg, Germany; Edinburgh, Scotland; Schlieren, Switzerland; Rabat, Morocco; Haifa, Israel; Quebec City and Toronto, Canada; Seoul, South Korea; Tokyo, Japan, and several locations throughout China.
PROPERTIES We are headquartered in Aliso Viejo, California with design centers and sales offices in Austin, Texas; Detroit, Michigan; San Jose, California; Cordoba, Argentina; Budapest, Hungary; Dresden, Frankfurt an der Oder, Munich and Nuremberg, Germany; 36 Table of Contents Edinburgh, Scotland; Schlieren, Switzerland; Rabat, Morocco; Haifa, Israel; Quebec City and Toronto, Canada; Seoul, South Korea; Tokyo, Japan, and several locations throughout China.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFurther, regardless of the outcome, such proceedings or claims can have an adverse impact on us, which may be material because of defense and settlement costs, diversion of resources and other factors. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 36 Table of Contents PART II
Biggest changeFurther, regardless of the outcome, such proceedings or claims can have an adverse impact on us, which may be material because of defense and settlement costs, diversion of resources and other factors. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 37 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(f) Performance Graph The following graph and table compare our stock performance to three stock indices since June 10, 2021, our first trading day, assuming $100 investment was made: 37 Table of Contents 6/11/2021 12/31/2021 12/31/2022 12/31/2023 indie Semiconductor, Inc. $ 100 $ 111 $ 54 $ 75 Nasdaq Capital Market Composite $ 100 $ 82 $ 46 $ 41 PHLX Semiconductor Sector $ 100 $ 123 $ 79 $ 130 Past stock price performance is not necessarily indicative of future stock price performance.
Biggest change(f) Performance Graph The following graph and table compare our stock performance to three stock indices since June 10, 2021, our first trading day, assuming $100 investment was made: 38 Table of Contents 6/11/2021 12/31/2021 12/31/2022 12/31/2023 12/31/2024 indie Semiconductor, Inc. $ 100 $ 111 $ 54 $ 75 $ 37 Nasdaq Capital Market Composite $ 100 $ 82 $ 46 $ 41 $ 40 PHLX Semiconductor Sector $ 100 $ 123 $ 79 $ 130 $ 155 Past stock price performance is not necessarily indicative of future stock price performance.
As of December 31, 2023, $42.6 million of the approved balance remains available for future repurchases.
As of December 31, 2024, $42.6 million of the approved balance remains available for future repurchases.
(b) Holders of Common Stock As of February 26, 2024, there were approximately 169 holders of record of our Class A common stock, which include the number of shareholders that hold shares in “street name” through banks or broker-dealers. (c) Dividends We have not paid any cash dividends on our ordinary shares to date.
(b) Holders of Common Stock As of February 24, 2025, there were approximately 176 holders of record of our Class A common stock, which include the number of stockholders that hold shares in “street name” through banks or broker-dealers. (c) Dividends We have not paid any cash dividends on our ordinary shares to date.
(d) Issuer Purchases of Equity Securities We announced on November 16, 2022 that our Board of Directors had authorized the repurchase, from time to time, of up to $50.0 million of Class A common stock and/or warrants to purchase common stock. There were no repurchases of common stock made during the three months ended December 31, 2023.
(d) Issuer Purchases of Equity Securities In November 2022, our Board of Directors authorized the repurchase, from time to time, of up to $50.0 million of Class A common stock and/or warrants to purchase common stock. There were no repurchases of common stock made during the three months ended December 31, 2024.
(e) Unregistered Sales of Equity Securities and Use of Proceeds On various dates between October 2, 2023 and December 15, 2023, the Company issued an aggregate of 346,946 shares of its Class A common stock to three ADK Minority Holders in exchange for an equal number of their ADK LLC units.
(e) Unregistered Sales of Equity Securities and Use of Proceeds On various dates between October 12, 2024 and December 16, 2024, the Company issued an aggregate of 433,278 shares of its Class A common stock to three ADK Minority Holders in exchange for an equal number of their ADK LLC units.
In connection with such exchange, 300,000 shares of Class V common stock held by the ADK Minority Holders were cancelled and 46,946 shares of ADK LLC units were exchanged for Class A common stock.
In connection with such exchange, 373,081 shares of Class V common stock held by the ADK Minority Holders were cancelled and 60,197 shares of ADK LLC units were exchanged for Class A common stock.
Added
On November 6, 2024 in connection with the acquisition of Exalos AG, we issued 2,845,243 shares of our Class A common stock as payment for a portion of contingent consideration due upon achievement of certain Exalos AG revenue-based targets. The securities were issued by the Company in reliance upon Section 4(a)(2) of the Securities Act of 1933, as amended.
Added
On December 17, 2024 in connection with the acquisition of Geo Semiconductor, Inc., we issued 1,015,621 shares of our Class A common stock as payment for a portion of contingent consideration due upon achievement of certain Geo Semiconductors, Inc. revenue-based targets.
Added
The securities were issued by the Company in reliance upon Section 4(a)(2) of the Securities Act of 1933, as amended.

Item 7. Management's Discussion & Analysis

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

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Biggest changeOperating Expenses Fiscal Years Ended 2023 2022 (in thousands) $ % of Revenue $ % of Revenue $ Change % Change Operating expenses: Cost of goods sold $ 133,606 60 % $ 60,491 55 % $ 73,115 121 % Research and development 154,507 69 % 121,197 109 % 33,310 27 % Selling, general, and administrative 70,479 32 % 48,237 44 % 22,242 46 % Total operating expenses $ 358,592 161 % $ 229,925 208 % $ 128,667 56 % Cost of goods sold for the year ended December 31, 2023 was $133.6 million, compared to $60.5 million for the year ended December 31, 2022.
Biggest changeThe decrease in contract revenue of $13.6 million or 49% was primarily due to a large multi-year non-recurring engineering project that commenced in early 2022 that is winding down in the current year towards its completion stage. 43 Table of Contents Operating Expenses Fiscal Years Ended 2024 2023 (in thousands) $ % of Revenue $ % of Revenue $ Change % Change Operating expenses: Cost of goods sold $ 126,373 58 % $ 133,606 60 % $ (7,233) (5) % Research and development 175,112 81 % 154,507 69 % 20,605 13 % Selling, general, and administrative 80,945 37 % 70,479 32 % 10,466 15 % Restructuring costs $ 4,332 2 % $ — — % $ 4,332 100 % Total operating expenses $ 386,762 178 % $ 358,592 161 % $ 28,170 8 % Cost of goods sold for the year ended December 31, 2024 was $126.4 million, compared to $133.6 million for the year ended December 31, 2023.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2023 was $43.6 million, which was primarily attributed to $52.0 million of net proceeds from the issuance of common stock through the ATM and $12.3 million of proceeds related to the Wuxi EIP capital contribution, partially offset by $12.8 million payments on debt obligations and $9.1 million of payments on financed software.
Net cash provided by financing activities for the year ended December 31, 2023 was $43.6 million, which was primarily attributed to $52.0 million of net proceeds from the issuance of common stock through the ATM and $12.3 million of proceeds related to the Wuxi EIP capital contribution, partially offset by $12.8 million payments on debt obligations and $9.1 million of payments on financed software.
The net decrease in fair value was primarily a result of the decrease of the closing price of our Class A common stock listed on the Nasdaq to $4.94 per share on November 9, 2023 from $5.83 per share on December 31, 2022.
The net increase in fair value was primarily a result of the decrease of the closing price of our Class A common stock listed on the Nasdaq to $4.94 per share on November 9, 2023 from $5.83 per share on December 31, 2022.
For the year ended December 31, 2023, net cash used in operating activities was $104.4 million, which included net loss of $128.8 million and reflected adjustments for certain non-cash items and changes in operating assets and liabilities.
Cash used in operating activities during the year ended December 31, 2023 was $104.4 million, which included net loss of $128.8 million and reflected adjustments for certain non-cash items and changes in operating assets and liabilities.
The closing consideration consisted of (i) the issuance by indie of 6,613,786 shares of Class A common stock, with a fair value of $42.8 million; (ii) a contingent consideration with fair value of $13.2 million at closing, payable in cash, subject to Exalos’ achievement of certain revenue-based milestones through September 30, 2025; and (iii) a holdback of $2.5 million subject to final release 12 months from the acquisition date payable in shares of Class A common stock.
The closing consideration consisted of (i) the issuance by indie of 6,613,786 shares of Class A common stock at closing, with a fair value of $42.8 million; (ii) a contingent consideration with fair value of $9.8 million at closing, payable in cash, subject to Exalos’ achievement of certain revenue-based milestones through September 30, 2025; and (iii) a holdback of $2.5 million subject to final release 12 months from the acquisition date payable in shares of Class A common stock.
The gains (losses) recorded represent the following: i) Warrants: During the year ended December 31, 2023, we recognized a net gain from change in fair value of our warrants of $7.1 million, which reflected the net decrease in fair value of our warrant liability since December 31, 2022 until immediately prior to the completion of our warrant exchange to Class A common stock on November 9, 2023.
The gains (losses) recorded represent the following: i) Warrants: During the year ended December 31, 2023, we recognized a net gain from change in fair value of our warrants of $7.1 million, which reflected the net increase in fair value of our warrant liability since December 31, 2022 until immediately prior to the completion of our warrant exchange to Class A common stock on November 9, 2023.
Our revenues fluctuate in response to a combination of factors, including the following: • our overall product mix and sales volumes; • gains and losses in market share and design win traction; • semiconductor content per vehicle; • pace at which technology is adopted in our end markets; • fluctuations in currency exchange rates that affect our prices; • the stage of our products in their respective life cycles; • the effects of competition and competitive pricing strategies; • governmental regulations influencing our markets; and 41 Table of Contents • the global and regional economic cycles.
Our revenues fluctuate in response to a combination of factors, including the following: • our overall product mix and sales volumes; • gains and losses in market share and design win traction; • semiconductor content per vehicle; • pace at which technology is adopted in our end markets; • fluctuations in currency exchange rates that affect our prices; • the stage of our products in their respective life cycles; • the effects of competition and competitive pricing strategies; • governmental regulations influencing our markets; and • the global and regional economic cycles.
The closing consideration consisted of (i) $4.5 million in cash as the initial cash consideration, subject to adjustments for an adjustment holdback amount of $0.5 million and an indemnity holdback amount of $0.8 million, (ii) $3.0 million of total contingent considerations, payable in cash or Class A common stock, subject to achievement of certain production based milestone for the next 24 months, or through January 25, 2026, and (iii) $2.5 million of contingent considerations, payable in cash or Class A common stock, subject to achievement of certain revenue based milestones 12 months after January 25, 2024.
The closing consideration consisted of (i) $3.2 million in cash as the initial cash consideration, net of an adjustment holdback amount of $0.5 million and an indemnity holdback amount of $0.8 million, (ii) $2.3 million of total contingent considerations, payable in cash or Class A common stock, subject to achievement of certain production based milestone for the next 24 months, or through January 25, 2026, and (iii) $2.3 million of contingent considerations, payable in cash or Class A common stock, subject to achievement of certain revenue based milestones 12 months after January 25, 2024.
In particular, we enter into engineering services contracts with customers that generally contain only one distinct performance obligation, which is design services for ICs based on agreed-upon specifications. Engineering services contracts typically also 49 Table of Contents include the purchase, at the customer’s option, of ICs at agreed upon prices subsequent to completion of IC design services.
In particular, we enter into engineering services contracts with customers that generally contain only one distinct performance obligation, which is design services for ICs based on agreed-upon specifications. Engineering services contracts typically also include the purchase, at the customer’s option, of ICs at agreed upon prices subsequent to completion of IC design services.
Cost of goods sold also includes compensation related to personnel associated with manufacturing and amortization of certain intangible assets acquired through the business combinations. Cost of goods sold generally does not include development costs incurred related to servicing our NRE services contracts, which are recorded to research and development and expensed as incurred.
Cost of goods sold also includes compensation related to personnel associated with manufacturing and amortization of certain intangible assets acquired through the business combinations. Cost of goods sold generally does not include 41 Table of Contents development costs incurred related to servicing our NRE services contracts, which are recorded to research and development and expensed as incurred.
Throughout this section, unless otherwise noted, “indie” refers to indie Semiconductor, Inc. and its consolidated subsidiaries. The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF INDIE Throughout this section, unless otherwise noted, “indie” refers to indie Semiconductor, Inc. and its consolidated subsidiaries. The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition.
Our future capital requirements may vary from those currently planned and will depend on many factors, including our rate of sales growth, the timing and extent of spending on various business initiatives, including potential merger and acquisition activities, our international expansion, the timing of new product introductions, market acceptance of our solutions, and overall economic conditions including the potential impact of global supply imbalances, rising interest rates, inflationary pressures, the impact of the ongoing conflicts in Ukraine and the Middle East, and volatility in the global financial markets.
Our future capital requirements may vary from those currently planned and will depend on many factors, including our rate of sales growth, the timing and extent of spending on various business initiatives, including potential merger and acquisition activities, our international expansion, the timing of new product introductions, market acceptance of our solutions, and overall economic conditions including the potential impact of global supply imbalances, rising interest rates, inflationary pressures, and volatility in the global financial markets.
Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate on the acquisition date and each reporting period and the amount paid will be recognized in earnings within Other Income (Expense), net on the consolidated statements of operations.
Ultimately, the liability will be equivalent to the amount paid, and the difference between 49 Table of Contents the fair value estimate on the acquisition date and each reporting period and the amount paid will be recognized in earnings within Other Income (Expense), net on the consolidated statements of operations.
To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. We have cash deposits with large financial institutions that have stable outlooks and credit ratings as of February 29, 2024.
To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. We have cash deposits with large financial institutions that have stable outlooks and credit ratings as of February 28, 2025.
The preparation of these financial statements requires us to make estimates and judgments in applying our most critical accounting policies that can have a significant impact on the results we report in our financial statements.
The preparation 48 Table of Contents of these financial statements requires us to make estimates and judgments in applying our most critical accounting policies that can have a significant impact on the results we report in our financial statements.
The closing consideration consisted of (i) $4.5 million in cash as the initial cash consideration, subject to adjustments for an adjustment holdback amount of $0.5 million and an indemnity holdback amount of $0.8 million, payable after the 18-month anniversary of the Deal Closing Date in shares of Class A common stock, par value $0.0001 (the “Class A common stock”), (ii) $3.0 million of total contingent considerations, payable in cash or Class A common stock, subject to achievement of certain production based milestones 24 months after the Deal Closing Date, and (iii) $2.5 million of contingent considerations, payable in cash or Class A common stock, subject to achievement of a revenue based milestone 12 months after the Deal Closing Date.
The closing consideration consisted of (i) $3.2 million in cash as the initial cash consideration, net of an adjustment holdback amount of $0.5 million and an indemnity holdback amount of $0.8 million, payable after the 18-month anniversary of the Deal Closing Date in shares of Class A common stock, par value $0.0001 (the “Class A common stock”), (ii) $2.3 million of contingent consideration, payable in cash or Class A common stock, subject to achievement of certain production based milestones 24 months after the Deal Closing Date, and (iii) $2.3 million of contingent consideration, payable in cash or Class A common stock, subject to achievement of a revenue based milestone 12 months after the Deal Closing Date.
Income Tax Benefit Income tax benefits for the year ended December 31, 2023 are primarily related to the tax effects of our acquisition structure of GEO and release of valuation allowance in China. Income tax benefits for the year ended December 31, 2022 are primarily related to our operations in Canada and Europe.
Income tax benefits for the year ended December 31, 2024 are primarily related to our foreign operations. Income tax benefits for the year ended December 31, 2023 are primarily related to the tax effects of our acquisition structure of GEO and release of our valuation allowance in China.
Income tax benefits for the year ended December 31, 2023 are primarily related to the tax effects of our acquisition of GEO and subsequent tax reorganizations. Income tax benefits for the year ended December 31, 2022 are primarily related to our operations in Canada and Europe.
Income tax benefits for the year ended December 31, 2023 are primarily related to the tax effects of our acquisition of GEO and subsequent tax reorganizations.
We expect that we will make additional capital expenditures in the future, including licenses to various intangible assets, in order to support the future growth of our business. 48 Table of Contents Net cash used in investing activities for the year ended December 31, 2022 was $16.3 million.
We expect that we will make additional capital expenditures in the future, including licenses to various intangible assets, in order to support the future growth of our business. Net cash used in investing activities for the year ended December 31, 2023 was $107.7 million.
The following table summarizes our consolidated cash flows for the years ended December 31, 2023 and 2022: Fiscal Years Ended 2023 2022 Net cash used in operating activities $ (104,385) $ (76,746) Net cash used in investing activities (107,742) (16,273) Net cash provided by financing activities 43,567 192,659 A discussion of our cash flows for the year ended December 31, 2021 is included under “Liquidity and Capital Resources” in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission on March 28, 2023.
The following table summarizes our consolidated cash flows for the years ended December 31, 2024 and 2023: Fiscal Years Ended 2024 2023 Net cash used in operating activities $ (58,601) $ (104,385) Net cash used in investing activities (19,259) (107,742) Net cash provided by financing activities 209,334 43,567 A discussion of our cash flows for the year ended December 31, 2023 is included under “Liquidity and Capital Resources” in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on February 29, 2024.
Research and development (“R&D”) expense for the year ended December 31, 2023 was $154.5 million, compared to $121.2 million for the year ended December 31, 2022.
Research and development (“R&D”) expense for the year ended December 31, 2024 was $175.1 million, compared to $154.5 million for the year ended December 31, 2023.
The total liability as of November 9, 2023 was reclassified to Additional Paid in Capital in our consolidated balance sheet. As of December 31, 2023, there was no liability remaining on the balance sheet.
The total liability as of November 9, 2023 was reclassified to Additional Paid in Capital in our consolidated balance sheet.
Headquartered in Aliso Viejo, California, indie has design centers and sales offices in Austin, Texas; Boston, Massachusetts; Detroit, Michigan; San Francisco and San Jose, California; Cordoba, Argentina; Budapest, Hungary; Dresden, Frankfurt an der Oder, Munich and Nuremberg, Germany; Edinburgh, Scotland; Schlieren, Switzerland; Rabat, Morocco; Haifa, Israel; Quebec City and Toronto, Canada; Seoul, South Korea; Tokyo, Japan and several locations throughout China. 38 Table of Contents We maintain design centers for our semiconductor engineers and designers in the United States, Argentina, Canada, Hungary, Germany, Scotland, Morocco, Israel, Switzerland and China.
Headquartered in Aliso Viejo, California, indie has design centers and sales offices in Austin, Texas; Detroit, Michigan; San Jose, California; Cordoba, Argentina; Budapest, Hungary; Dresden, Frankfurt an der Oder, Munich and Nuremberg, Germany; Edinburgh, Scotland; Schlieren, Switzerland; Rabat, Morocco; Haifa, Israel; Quebec City and Toronto, Canada; Seoul, South Korea; Tokyo, Japan and several locations throughout China.
In addition, it includes marketing and advertising, outside legal, tax and accounting services, insurance, occupancy costs and related overhead based on headcount and amortization expenses for certain intangible assets acquired from the business combinations. Selling, general, and administrative costs are expensed as incurred.
In addition, it includes marketing and advertising, outside legal, tax and accounting services, insurance, occupancy costs and related overhead based on headcount and amortization expenses for certain intangible assets acquired from the business combinations. Selling, general, and administrative costs are expensed as incurred. Restructuring Costs In August 2024, we initiated a plan intended to improve our operating performance (the “Plan”).
We implemented this program for the flexibility that it provides to the capital markets and to best time our equity capital needs. As of December 31, 2023, we had raised gross proceeds of $70.3 million and issued 7,351,259 shares of Class A common stock at an average per-share sales price of $9.57 through this program.
We implemented this program for the flexibility that it provides to the capital markets and to best time our equity capital needs. As of December 31, 2024, we had raised gross proceeds of $90.2 million and issued 11,138,984 shares of Class A common stock at an average per-share sales price of $8.10 through this program.
During the year ended December 31, 2022, the decrease in cash was primarily due to the acquisition of Symeo for $8.7 million, net of cash acquired, as well as cash used of $7.6 million for the purchase of capital expenditures.
During the year ended December 31, 2024, the decrease in cash was primarily due to the acquisition of Kinetic for $3.2 million, net of cash acquired, as well as cash used of $14.3 million for the purchase of capital expenditures.
Other expense for the year ended December 31, 2023 was $1.2 million, compared to $0.1 million for the year ended December 31, 2022. Other expense relates primarily to the realized and unrealized foreign currency gains and losses during the year.
Other expense for the year ended December 31, 2024 was $0.4 million, compared to $1.2 million for the year ended December 31, 2023. Other expense relates primarily to the realized and unrealized foreign currency gains and losses during the year. Income Taxes Income tax benefits for the year ended December 31, 2024 are primarily related to our foreign operations.
Changes in operating assets and liabilities from operations used $58.1 million of cash, primarily driven by an increase in accounts receivable, prepaid and other current assets and inventory.
Changes in operating assets and liabilities from operations provided $1.1 million of cash, primarily driven by an increase in inventory and a decrease in other liabilities, offset by a decrease in accounts receivable and an increase in accounts payable.
Results of Operations A discussion of our results of operations for the year ended December 31, 2021, including a comparison to our results of operations for the year ended December 31, 2022, is included under “Results of Operations” in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission on March 28, 2023.
At this time, the impact to indie is subject to change given the volatile nature of the situation. 40 Table of Contents Results of Operations A discussion of our results of operations for the year ended December 31, 2022, including a comparison to our results of operations for the year ended December 31, 2023, is included under “Results of Operations” in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on February 29, 2024.
The decrease in fair value of our warrant liability was primarily a result of the decrease of the closing price of our Class A common stock listed on the Nasdaq to $5.83 per share on December 31, 2022 from $11.99 per share on December 31, 2021. ii) Contingent considerations and acquisition-related holdbacks: During the year ended December 31, 2023, we recognized a net unrealized loss from change in fair value of our contingent considerations and acquisition-related holdbacks of $3.0 million, which is primarily contributed by unrealized gains (losses) for the contingent considerations and acquisition related holdbacks of $3.2 million, $(5.7) million and $(0.4) million for Silicon Radar, GEO and Exalos, respectively.
During the year ended December 31, 2023, we recognized a net unrealized loss from change in fair value of our contingent considerations of $3.0 million, which is primarily contributed by unrealized gains (losses) for the contingent considerations and acquisition related holdbacks of $3.2 million, $(5.7) million and $(0.4) million for Silicon Radar, GEO and Exalos, respectively.
As of December 31, 2023, and since the inception of the program we have raised gross proceeds of $70.3 million and issued 7,351,259 shares of Class A common stock at an average per-share sales price of $9.57 and had approximately $79.7 million available for future issuances under the ATM Agreement.
As of December 31, 2024, and since the inception of the program we have raised gross proceeds of $90.2 million and issued 11,138,984 shares of Class A common stock at an average per-share sales price of $8.10 and had approximately $59.8 million available for future issuances under the ATM Agreement.
Recent Acquisitions Kinetic Technologies On January 25, 2024 (the “Deal Closing Date”), indie and ADK LLC completed an Asset Purchase Agreement (the “APA”), carving out certain assets, including R&D personnel and intellectual properties (“IP”) from Kinetic Technologies (“Kinetic”), in support of a custom product development for a North American electric vehicle OEM.
The acquisition was consummated pursuant to an Asset Purchase Agreement (the “APA”), carving out certain assets, including R&D personnel and intellectual properties (“IP”) from Kinetic Technologies (“Kinetic”), in support of a custom product development for a North American electric vehicle OEM.
Execution of At-The-Market Agreement On August 26, 2022, we entered into an At Market Issuance Agreement (“ATM Agreement”) with B. Riley Securities, Inc., Craig-Hallum Capital Group LLC and Roth Capital Partners, LLC (collectively as “Sales Agents”) relating to shares of our Class A common stock, par value $0.0001 per share (the “Class A common stock”).
Riley Securities, Inc., Craig-Hallum Capital Group LLC and Roth Capital Partners, LLC (collectively as “Sales Agents”) relating to shares of our Class A common stock, par value $0.0001 per share (the “Class A common stock”).
During the year 46 Table of Contents ended December 31, 2023, we raised gross proceeds of $53.1 million and issued 5,219,500 shares of Class A common stock at an averaged per-share sales price of $10.18 through this program. For the year ended December 31, 2023, we incurred total issuance costs of $1.1 million.
During the year ended December 31, 2024, we raised gross proceeds of $19.8 million and issued $3,787,725 shares of Class A common stock at an averaged per-share sales price of $5.24 through this program. For the year ended December 31, 2024, we incurred total issuance costs of $0.4 million.
We are closely monitoring developments, including potential impact to our business, customers, suppliers, our employees and operations in Israel, the Middle East and elsewhere. At this time, the impact to indie is subject to change given the volatile nature of the situation.
We are closely monitoring developments, including potential impact to our business, customers, suppliers, our employees and operations in Israel, the Middle East and elsewhere.
Total cost of goods sold for the year ended December 31, 2023 also included an additional $8.7 million increase due to amortization for inventory step-up value and a $6.9 million in amortization related to acquired intangible assets, both in connection with the recent business combinations.
Total cost of goods sold for the year ended December 31, 2024 also included a decrease of $5.7 million in amortization related to acquired intangible assets and inventory step-up value both in connection with finalizing the opening net assets acquired from the recent acquisitions.
The funds raised are intended to promote Wuxi’s business development and strengthen its capabilities. In December 2023, employees in Wuxi exercised options granted to them through the Wuxi Employee Equity Incentive Plan (the “Wuxi EIP”) and contributed total capital of CNY88.0 million (approximately $12.3 million) from option proceeds in preparation for a potential IPO in China.
As of December 31, 2024, we have incurred total issuance costs of $1.9 million since inception. In December 2023, employees in Wuxi exercised options granted to them through the Wuxi Employee Equity Incentive Plan (the “Wuxi EIP”) and contributed total capital of CNY88.0 million (or approximately $12.3 million) from option proceeds in preparation for a potential IPO in China.
Impact of Macroeconomic Conditions Current and continued inflationary conditions have led, and may continue to lead to, rising prices or rising interest rates, which has had a dampening effect on overall economic activity and consumer demand for automotive products. Additionally, The recent conflict in the Middle East and the implications of these events has created global political and economic uncertainty.
The purchase price is subject to working capital and other adjustments as provided in the APA. Impact of Macroeconomic Conditions Current and continued inflationary conditions have led, and may continue to lead to, rising prices or rising interest rates, which has had a dampening effect on overall economic activity and consumer demand for automotive products.
We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for public companies. Liquidity and Capital Resources Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, working capital requirements related to inventory, accounts payable and general and administrative expenditures.
Liquidity and Capital Resources Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, working capital requirements related to inventory, accounts payable and general and administrative expenditures.
For the years ended December 31, 2023 and December 31, 2022, we incurred total issuance costs of $1.1 million and $0.4 million, respectively, in connection with the ATM Agreement.
For the years ended December 31, 2024, 2023 and 2022, we incurred total issuance costs of $0.4 million, $1.1 million and $0.4 million, respectively, in connection with the ATM Agreement. Recent Acquisition Kinetic Technologies On January 25, 2024 (the “Deal Closing Date”), indie and ADK LLC completed its acquisition of Kinetic Technologies, LLC (“Kinetic”).
In addition, from time to time, we use cash to fund our mergers and acquisitions, purchases of various capital, intellectual property and software assets and scheduled repayments for outstanding debt obligations. Our immediate sources of liquidity are cash, cash equivalents and funds anticipated to be generated from our operations and available borrowings under our revolving credit facility.
In addition, 45 Table of Contents from time to time, we use cash to fund our mergers and acquisitions, purchases of various capital, intellectual property and software assets and scheduled repayments for outstanding debt obligations.
The increase of $73.1 million or 121% was primarily due to a $27.4 million increase in product shipments in connection with the increase in products sold as described above, a $21.5 million increase due to change in product mix, and a $8.2 million increase in product cost.
The decrease of $7.2 million or 5% was primarily due to a $9.3 million decrease in product cost, offset by $2.6 million increase due to change in product shipments in connection with the increase in products sold as well as $4.5 million increase due to change in product mix.
The increase was primarily driven by recognizing 12 months of interest expenses in 2023 compared to a partial year in 2022 related to the 2027 Notes. For the years ended December 31, 2023 and 2022, we recognized gains (losses) from change from change in fair value for warrants, contingent considerations and acquisition-related holdbacks.
The increase of $0.6 million was primarily as a result of the addition of the 2029 Notes in December 2024. For the years ended December 31, 2024 and 2023, we recognized gains (losses) from change from change in fair value for warrants, contingent considerations and acquisition-related holdbacks.
Interest Expense Interest expense primarily consists of cash and non-cash interest under our term loan facilities, convertible notes and line of credit. 42 Table of Contents Other Income (Expense) Other income (expense) primarily comprises the change in the fair value of the warrants and earn-out liabilities issued as a result of the Transaction and contingent considerations and holdbacks issued as a result of the recent business combinations.
Other Income (Expense) Other income (expense) primarily comprises the change in the fair value of the warrants and earn-out liabilities issued as a result of the Transaction and contingent considerations and holdbacks issued as a result of the recent business combinations. 42 Table of Contents Income Taxes Benefits We utilize the asset and liability method in accounting for income taxes.
We also expect our research and development expenses, general and administrative expenses and capital expenditures will increase over time as we continue to expand our operations, product offerings and customer base.
We also expect our research and development expenses, general and administrative expenses and capital expenditures to stabilize over time.
The funds will be used by Wuxi for general corporate purposes. Wuxi does not have an obligation to repay the collected capital to its employees in the case of an unsuccessful IPO. As of December 31, 2023, our balance of cash and cash equivalents was $151.7 million. Acquisitions Since the closing of the Transaction, we have completed multiple acquisitions.
The funds will be used by Wuxi for general corporate purposes. Wuxi does not have an obligation to repay the collected capital to its employees in the case of an unsuccessful IPO.
Our acquired intangible assets with definite lives are amortized from the date of acquisition over periods ranging from two to seven years.
Our acquired intangible assets with definite lives are amortized from the date of acquisition over periods ranging from two to twelve years. Interest Income Interest income represents cash or income earned on our cash balances and investments with certain banking institutions.
In connection with our acquisitions, we may from time to time be required to make future payments or issue additional shares of our common stock to satisfy our obligations under the acquisition agreements, including to satisfy certain earn-out requirements.
Acquisitions We have completed multiple acquisitions in the last couple of years and we plan to selectively pursue and assess inorganic growth opportunities that are complementary to our existing technologies and portfolio of products and/or accelerate our growth initiatives. 46 Table of Contents In connection with our acquisitions, we may from time to time be required to make future payments or issue additional shares of our common stock to satisfy our obligations under the acquisition agreements, including to satisfy certain earn-out requirements.
During the year ended December 31, 2022, we recognized a net gain from change in fair value of our contingent considerations of $9.5 million, which is primarily contributed by an unrealized gain of $5.8 million and a realized gain of $4.0 million for the contingent considerations related to the Symeo and OnDesign acquisition, respectively.
As of December 31, 2023, there was no liability remaining on the balance sheet. ii) Contingent considerations and acquisition-related holdbacks: During the year ended December 31, 2024, we recognized a net gain from change in fair value of our contingent considerations and acquisition-related holdbacks of $29.0 million, which is primarily contributed by an net gain of $31.9 million for the contingent considerations and acquisition-related holdback related to the GEO acquisition, partially offset by a loss of $3.0 million for the contingent considerations related to Exalos.
Comparison of the Years Ended December 31, 2023 and 2022 Revenue Fiscal Years Ended 2023 2022 (in thousands) $ % of Revenue $ % of Revenue $ Change % Change Revenue: Product revenue $ 195,624 88 % $ 89,457 81 % $ 106,167 119 % Contract revenue 27,545 12 % 21,340 19 % 6,205 29 % Total revenue $ 223,169 100 % $ 110,797 100 % $ 112,372 101 % Revenue for the year ended December 31, 2023 was $223.2 million, compared to $110.8 million for the year ended December 31, 2022, an increase of $112.4 million or 101%, which was driven by a $106.2 million increase in product revenue and a $6.2 million increase in contract revenue.
Comparison of the Years Ended December 31, 2024 and 2023 Revenue Fiscal Years Ended 2024 2023 (in thousands) $ % of Revenue $ % of Revenue $ Change % Change Revenue: Product revenue $ 202,698 94 % $ 195,624 88 % $ 7,074 4 % Contract revenue 13,984 6 % 27,545 12 % (13,561) (49) % Total revenue $ 216,682 100 % $ 223,169 100 % $ (6,487) (3) % Revenue for the year ended December 31, 2024 was $216.7 million, compared to $223.2 million for the year ended December 31, 2023, a decrease of $6.5 million or 3%, which was primarily driven by a $13.6 million decrease in contract revenue and offset by a $7.1 million increase in product revenue.
The increase of $22.2 million or 46% was primarily due to a $8.6 million increase in personnel costs due to increase in headcount, a $4.2 million increase in share-based compensation expense, and a $3.9 million increase in professional and outside services expenses. Both the increase in personnel costs and share-based compensation expense are primarily driven by increase in headcounts.
The increase of $10.5 million or 15% was primarily due to a $1.8 million increase in personnel costs due to increase in headcount, a $2.0 million increase in various office and business related expenses and a $4.8 million increase in share-based compensation expense.
Cash used in operating activities during the year ended December 31, 2022 was $76.7 million, which included net loss of $52.8 million and was adjusted for certain non-cash items and changes in operating assets and liabilities. Non-cash decreases primarily consisted of $64.7 million of net gains resulting from a change in fair value for warrants and contingent considerations.
For the year ended December 31, 2024, net cash used in operating activities was $58.6 million, which included net loss of $144.2 million and reflected adjustments for certain non-cash items and changes in operating assets and liabilities.
We expect research and development expense to continue to increase as we continue to grow our headcount organically to support expanded product development activities. Selling, general and administrative expense for the year ended December 31, 2023 was $70.5 million, compared to $48.2 million for the year ended December 31, 2022.
Selling, general and administrative expense for the year ended December 31, 2024 was $80.9 million, compared to $70.5 million for the year ended December 31, 2023.
Net cash provided by financing activities for the year ended December 31, 2022 was $192.7 million, which was primarily attributed to $160.0 million of proceeds from the issuance of the 2027 Notes, $41.9 million of proceeds related to the Wuxi capital raise and $16.8 million of net proceeds from the issuance of common stock through the ATM.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was $209.3 million, which was primarily attributed to $195.1 million net proceeds from the 2029 Notes, which included $218.5 million gross proceeds, $9.0 million issuance cost and $23.4 million cost of capped call.
The increase in product revenue was due primarily to change in product mix as well as higher product volume (units sold) given the continued growth in demand from our customers globally as well as the recent acquisitions. Increases in average selling price (“ASP”) also contributed to the increase in product revenue year-over-year.
The increase in product revenue was due primarily to change in product mix as well as the recent acquisitions, offset by a decrease in average selling price.
We believe these sources of liquidity will be sufficient to meet our working capital needs for at least the next 12 months.
Our immediate sources of liquidity are cash, cash equivalents and funds anticipated to be generated from our operations and available borrowings under our revolving credit facility and the issuance of Class A common stock under the ATM Agreement. We believe these sources of liquidity will be sufficient to meet our liquidity needs for at least the next 12 months.
We engage subcontractors to manufacture our products. These subcontractors, as well as the majority of our customers’ locations, are primarily in Asia. For the years ended December 31, 2023, 2022 and 2021 approximately 63%, 54% and 62%, respectively, of our product revenues were recognized for shipments to customer locations in Asia.
For the years ended December 31, 39 Table of Contents 2024, 2023 and 2022 approximately 66%, 63% and 54%, respectively, of our product revenues were recognized for shipments to customer locations in Asia. Execution of At-The-Market Agreement On August 26, 2022, we entered into an At Market Issuance Agreement (“ATM Agreement”) with B.
We expect selling, general, and administrative expense to continue to increase as we grow our headcount to support our global expansion and to fulfill our obligations as a publicly traded company. 44 Table of Contents Other income (expense), net Fiscal Years Ended 2023 2022 (in thousands) $ $ $ Change % Change Other income (expense), net: Interest income $ 7,801 $ 2,567 $ 5,234 204 % Interest expense (8,650) (1,692) (6,958) 411 % Gain (loss) from change in fair value of warrants 7,066 55,069 (48,003) (87) % Gain (loss) from change in fair value of contingent considerations and acquisition related holdbacks (2,985) 9,468 (12,453) (132) % Other expense (1,175) (107) (1,068) 998 % Total other income (expense), net $ 2,057 $ 65,305 $ (63,248) (97) % Interest income for the year ended December 31, 2023 was $7.8 million, compared to $2.6 million for the year ended December 31, 2022.
The restructuring plan was substantively completed as of December 31, 2024. 44 Table of Contents Other income (expense), net Fiscal Years Ended 2024 2023 (in thousands) $ $ $ Change % Change Other income (expense), net: Interest income $ 4,588 $ 7,801 $ (3,213) (41) % Interest expense (9,258) (8,650) (608) 7 % Gain from change in fair value of warrants — 7,066 (7,066) (100) % Gain (loss) from change in fair value of contingent considerations and acquisition related holdbacks 29,041 (2,985) 32,026 (1073) % Other expense (400) (1,175) 775 (66) % Total other income (expense), net $ 23,971 $ 2,057 $ 21,914 1065 % Interest income for the year ended December 31, 2024 was $4.6 million, compared to $7.8 million for the year ended December 31, 2023.
These non-cash decreases were partially offset by $41.9 million in share-based compensation expense and $14.8 million in depreciation and amortization. Changes in operating assets and liabilities from operations used $18.1 million of cash primarily driven by an increase in accounts receivable, prepaid and other current assets, and inventory offset by an increase in accounts payable and accrued expenses.
Changes in operating assets and liabilities from operations used $58.1 million of cash, primarily driven by an increase in accounts receivable, prepaid and other current assets and inventory. Investing Activities Net cash used in investing activities for the year ended December 31, 2024 was $19.3 million.
The increase in R&D expense year-over-year also included a $1.9 million increase in amortization expense related to R&D project licenses and acquired intangible assets from business combinations and offset by a $2.6 million decrease in share-based compensation expense.
The increase in share-based compensation expense is due to both increase in headcount and additional equity awards granted since the same period in prior year. Total selling, general and administrative expense also included an increase of $2.1 million in amortization related to acquired intangible assets from the recent acquisitions. We expect selling, general, and administrative expense to stabilize over time.
Future Estimated Cash Payments Due by Period Contractual Obligations Less than 1 year 1 - 3 years 3-5 years >5 years Total Debt obligations $ 5,142 $ — $ 160,000 $ — $ 165,142 Interest on debt obligations 7,200 14,400 6,300 — 27,900 Operating leases 3,357 5,076 4,048 3,560 16,041 Total contractual obligations $ 15,699 $ 19,476 $ 170,348 $ 3,560 $ 209,083 Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles (“GAAP”).
Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles (“GAAP”).
Interest expense for the year ended December 31, 2023 was $8.7 million, compared to $1.7 million for the year ended December 31, 2022. Interest expense relates to the routine cash and non-cash interest expenses on outstanding debt obligations.
The decrease of $3.2 million from the year ended December 31, 2023 was primarily as a result of lower cash balances due to multiple acquisitions in 2023 and the first quarter of 2024. Interest expense for the year ended December 31, 2024 was $9.3 million, compared to $8.7 million for the year ended December 31, 2023.
Removed
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF INDIE Unless the context otherwise requires, all references in this section to the “Company,” “we,” “us, or “our” refer to the business of indie and its subsidiaries prior to the consummation of the Transaction.
Added
We maintain design centers for our semiconductor engineers and designers in the United States, Argentina, Canada, Hungary, Germany, Scotland, Morocco, Israel, Switzerland and China. We engage subcontractors to manufacture our products. These subcontractors, as well as the majority of our customers’ locations, are primarily in Asia.
Removed
Warrant Exchange On September 22, 2023, indie announced the commencement of an exchange offer (the “Offer”) and consent solicitation (the “Consent Solicitation”) relating to our outstanding (i) Public Warrants to purchase shares of Class A common stock and (ii) Private Warrants to purchase shares of Class A common stock (together with the Public Warrants, the “Warrants”).
Added
There continues to be uncertainty regarding overall macroeconomic conditions, including increased geopolitical tensions, risk of recessions, and the effects of potential trade policies including tariffs.
Removed
The Offer and the Consent Solicitation expired at 11:59 p.m., Eastern Time on October 20, 2023. Upon expiration of the Offer and the Consent Solicitation, 24,658,461 Warrants, or approximately 90.0% of the outstanding Warrants, were tendered.
Added
For example, on February 1, 2025, the U.S. government announced a 10% tariff on imports from China and a 25% tariff on imports from Mexico and Canada, with immediate effect and a 10% tariff on steel and aluminum imports effective March 2025.
Removed
Subsequently, we issued 7,027,517 shares of Class A common stock, or an exchange ratio of 0.285, for the Warrants tendered in the Offer on October 25, 2023.
Added
Although the tariffs on Mexico and Canada have been temporarily delayed pending further negotiations between these countries, there is no assurance that the governments will be able to reach long-term agreements.
Removed
Additionally, we received the approval of approximately 89.8% of the outstanding Warrants to amend the warrant agreement governing the Warrants (the “Amendment No. 2”), which exceeded the majority of the outstanding warrants required to effect the Amendment No. 2.
Added
The U.S. government has also threatened tariffs against Taiwan that could specifically target imports of semiconductor products, which, if imposed, could seriously and negatively affect our business and the U.S. economy overall The tariff actions could lead to further potential retaliatory tariffs on U.S. goods and escalate trade disputes in China and in other countries in which we do business.
Removed
This amendment permitted us to require that each Warrant that remained outstanding upon settlement of the Exchange Offer to be converted into 0.2565 shares of Class A common stock, which was a ratio 10.0% less than the exchange ratio applicable to the Exchange Offer.
Added
For example, China has responded with tariffs on certain U.S. goods. While we are still evaluating the potential impacts of these proposed tariffs, as well as our ability to mitigate their related impacts, these tariffs may adversely impact our revenue and cost of goods sold in the United States.
Removed
We completed the exchange of the remaining 2,741,426 untendered Warrants on November 9, 2023 through issuance of 703,175 shares of Class A common stock.
Added
The institution of trade tariffs both globally and between the United States and China specifically carries the risk of negatively affecting China’s overall economic condition, which could have a negative impact on us as we have significant operations in China.
Removed
As a result of the completion of the Exchange Offer and the exchange for the remaining untendered Warrants, the Warrants were suspended from trading on the Nasdaq Capital Market as of the close of business on November 8, 2023, and delisted.
Added
Furthermore, the imposition of tariffs could cause a decrease in the sales of products to customers located in China, other customers selling to Chinese end users, or other global customers which could materially and adversely affect our business, financial condition and results of operations.
Removed
The purchase price is subject to working capital and other adjustments as provided the APA. 39 Table of Contents Exalos AG On September 18, 2023, Ay Dee Kay Ltd.
Added
The ultimate impact of any tariffs will depend on various factors, including if any tariffs are ultimately implemented, the timing of implementation, and the amount, scope and nature of the tariffs. For additional information, see “Item 1A.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−1 removed6 unchanged
Biggest changeThe year-over-year change was primarily related to the change in fair value of our currency forward contracts entered into during 2023.
Biggest changeThe year-over-year change was primarily related to the change in fair value of our currency forward contracts entered into during 2023 and 2024. We also have intercompany loans with certain of our foreign subsidiaries that are long-term in nature.
Given the objectives of our investment activities, and the relatively low interest income generated from our cash, cash equivalents, and other investments, we do not believe that investment or interest rate risks currently pose material exposures to our business or results of operations even in the current environment of rising interest rates. 51 Table of Contents
Given the objectives of our investment activities, and the relatively low interest income generated from our cash, cash equivalents, and other investments, we do not believe that investment or interest rate risks currently pose material exposures to our business or results of operations even in the current environment of rising interest rates. 50 Table of Contents
Foreign exchange gains and losses that resulted from our international operations are included in the determination of Net income (loss) . The foreign currency translation exchange loss included in determining loss before income taxes was $1.2 million and $0.1 million for the years ended December 31, 2023 and 2022, respectively.
Foreign exchange gains and losses that resulted from our international operations are included in the determination of Net income (loss) . The foreign currency translation exchange loss included in determining loss before income taxes was $0.4 million, $1.2 million, and $0.1 million for the years ended December 31, 2024, 2023, and 2022, respectively.
The year-over-year change was primarily driven by the cumulative foreign currency translation loss recorded in relation to permanently invested intercompany loans as of December 31, 2023 as the exchange rate for U.S. dollar fluctuates against foreign currencies.
The year-over-year change was primarily driven by the cumulative foreign currency translation loss recorded in relation to permanently invested intercompany loans as of December 31, 2024 as the exchange rate for the U.S. dollar fluctuates against foreign currencies.
A cumulative foreign currency translation loss of $6.2 million and $12.0 million related to our foreign subsidiaries is included in “ Accumulated other comprehensive loss ” within the Stockholders' Equity section of the consolidated balance sheet at December 31, 2023 and 2022, respectively.
A cumulative foreign currency translation loss of $24.7 million and $6.2 million related to our foreign subsidiaries is included in “ Accumulated other comprehensive loss ” within the Stockholders' Equity section of the consolidated balance sheet at December 31, 2024 and 2023, respectively.
Investment and Interest Rate Risk Our exposure to interest rate and general market risks relates principally to our investment portfolio, which consists of cash and cash equivalents (money market funds and marketable securities purchased with less than ninety days until maturity) that totals approximately $151.7 million as of December 31, 2023.
Investment and Interest Rate Risk Our exposure to interest rate and general market risks relates principally to our investment portfolio, which consists of cash and cash equivalents and restricted cash (money market funds and marketable securities purchased with less than ninety days until maturity) and restricted cash that totals approximately $284.5 million as of December 31, 2024.
Removed
The aggregate foreign currency translation exchange rate loss included in determining loss before income taxes for the year ended December 31, 2021 was de minimis. 50 Table of Contents We also have intercompany loans with certain of our foreign subsidiaries that are long-term in nature.

Other INDI 10-K year-over-year comparisons