AEye Inc

Previous wording

This overview provides a high-level discussion of our operating results and some of the trends that affect our business. We believe that an understanding of these trends is important to understanding our financial results for the three and six months ended June 30, 2024, as well as our future prospects. This summary is not intended to be exhaustive, nor is it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this Quarterly Report, including our condensed consolidated financial statements and accompanying notes.

Current wording

This overview provides a high-level discussion of our operating results and some of the trends that affect our business. We believe that an understanding of these trends is important to understanding our financial results for the three and nine months ended September 30, 2024, as well as our future prospects. This summary is not intended to be exhaustive, nor is it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this Quarterly Report, including our condensed consolidated financial statements and accompanying notes.

Previous wording

On December 27, 2023, we effected a 1-for-30 reverse stock split of its issued and outstanding shares of common stock (the "Reverse Stock Split"). Pursuant to the Reverse Stock Split, every thirty (30) shares of issued and outstanding shares of common stock were combined into one (1) share of common stock. We did not issue fractional shares in connection with the Reverse Stock Split. Stockholders who were otherwise entitled to fractional shares of common stock were instead entitled to receive a proportional cash payment. The number of outstanding warrants was also proportionately adjusted.

Current wording

On December 27, 2023, we effected a 1-for-30 reverse stock split of our issued and outstanding shares of common stock (the “Reverse Stock Split”). Pursuant to the Reverse Stock Split, every thirty (30) shares of issued and outstanding shares of common stock were combined into one (1) share of common stock. We did not issue fractional shares in connection with the Reverse Stock Split. Stockholders who were otherwise entitled to fractional shares of common stock were instead entitled to receive a proportional cash payment. The number of outstanding warrants was also proportionately adjusted.

Previous wording

On May 10, 2024, we entered into a Securities Purchase Agreement with Dowslake Microsystems Corporate, pursuant to which Dowslake has agreed to purchase 330,823 shares of Common Stock for the purchase price of $854, which represents a per share purchase price of $2.58, and an unsecured promissory note with the principal amount of $146 for an aggregate purchase price of $1,000.

Current wording

On May 10, 2024, we entered into a Securities Purchase Agreement with Dowslake Microsystems Corporation, or Dowslake, pursuant to which Dowslake agreed to purchase 330,823 shares of common stock for a purchase price of $854, which represents a per share purchase price of $2.58, and an unsecured promissory note in the principal amount of $146 for an aggregate purchase price of $1,000.

Previous wording

On May 29, 2024, we entered into Securities Purchase Agreement with certain institutional investors pursuant to which we agreed to issue and sell, in a registered direct offering, an aggregate of 727,706 shares of Common Stock at a per share purchase price of $3.448 for gross proceeds of approximately $2,509, before deducting estimated offering expenses payable by the us.

Current wording

On May 29, 2024, we entered into a Securities Purchase Agreement with certain institutional investors pursuant to which we agreed to issue and sell, in a registered direct offering, an aggregate of 727,706 shares of Common Stock at a per share purchase price of $3.448 for gross proceeds of approximately $2,509, before deducting estimated offering expenses payable by us.

Previous wording

On July 25, 2024, we entered into the Purchase Agreement with New Circle Principal Investments LLC ("New Circle") pursuant to which we have the right, but not the obligation, to sell to New Circle, and New Circle is obligated to purchase, up to $50,000 of our Common Stock. Such sales of Common Stock by us, if any, and may occur from time-to-time in our sole discretion, over the period commencing once certain customary conditions are satisfied, including the filing and securing effectiveness of the resale registration statement with the SEC with respect to the shares to be sold to New Circle under the Purchase Agreement.

Current wording

On July 25, 2024, we entered into a Stock Purchase Agreement with New Circle Principal Investments LLC, or New Circle, pursuant to which we have the right, but not the obligation, to sell to New Circle, and New Circle is obligated to purchase, up to $50,000 of our Common Stock. Such sales of common stock by us, if any, and may occur from time to time at our sole discretion, over a 36-month period.

Previous wording

We anticipate future demand for our 4Sight TM Intelligent Sensing Platform will come from two major markets, Automotive and Industrial. In the near term, we anticipate concentrating on the Automotive market by more effectively leveraging our business model, focusing on advanced driver-assistance systems, or ADAS, autonomous driving, and commercial trucking. In the longer term, we will look for opportunities in the Industrial market, such as in the railway and intelligent transportation systems, or ITS segments, when it becomes cost-effective to do so based on higher volume production in the Automotive market. This strategy provides us with multiple opportunities for sustained growth by enabling new applications and product features across these market segments. However, as our customers continue their R&D projects to commercialize solutions that rely on lidar technology, it is difficult to estimate the timing of ultimate end market demand and customer adoption. In the Automotive market for example, which accounted for 0% and 71% of revenue in the six months ended June 30, 2024 and 2023, respectively, our growth and financial performance will be heavily influenced by our ability to successfully integrate into OEM programs that require years of development, testing, and validation. Because of the size and complexity of these OEM programs, having Tier 1 partnerships should provide a substantial competitive advantage over our competitors given their large scale, mass-production capabilities, and existing OEM relationships. The decision by our former Tier 1 partner, Continental, to discontinue our joint lidar development program was a setback to our business, however, we were able to able engage LITEON as a replacement Tier 1 automotive supplier. If we are unable to establish and maintain our relationship with LITEON or find other Tier 1 automotive suppliers in the future, this could have a material and adverse effect on our business, as our business model is predicated on licensing our lidar designs and other intellectual property to Tier 1 automotive suppliers. Our primary focus in the Automotive market is on ADAS for passenger and commercial vehicle autonomy, particularly highway autonomy applications. We believe that growth in that market is driven by both more stringent safety regulations and consumer demand for vehicles offering increased safety and advanced driver assist features. We will need to anticipate and adapt to any changes in the regulatory environment, as well as changes in consumer demand, in order to take advantage of this opportunity.

Current wording

We anticipate future demand for our 4Sight TM Intelligent Sensing Platform will come from two major markets, Automotive and Industrial. In the near term, we anticipate concentrating on the Automotive market by more effectively leveraging our business model, focusing on advanced driver-assistance systems, or ADAS, autonomous driving, and commercial trucking. In the longer term, we will look for opportunities in the Industrial market, such as in the railway and intelligent transportation systems, or ITS segments, when it becomes cost-effective to do so based on higher volume production in the Automotive market. This strategy provides us with multiple opportunities for sustained growth by enabling new applications and product features across these market segments. However, as our customers continue their R&D projects to commercialize solutions that rely on lidar technology, it is difficult to estimate the timing of ultimate end market demand and customer adoption. In the Automotive market for example, which accounted for 0% and 71% of revenue in the nine months ended September 30, 2024 and 2023, respectively, our growth and financial performance will be heavily influenced by our ability to successfully integrate into OEM programs that require years of development, testing, and validation. Because of the size and complexity of these OEM programs, having Tier 1 partnerships should provide a substantial competitive advantage over our competitors given their large scale, mass-production capabilities, and existing OEM relationships. The decision by our former Tier 1 partner, Continental, to discontinue our joint lidar development program was a setback to our business, however, we were able to able engage LITEON as a replacement Tier 1 automotive supplier. If we are unable to establish and maintain our relationship with LITEON or find other Tier 1 automotive suppliers in the future, this could have a material and adverse effect on our business, as our business model is predicated on licensing our lidar designs and other intellectual property to Tier 1 automotive suppliers. Our primary focus in the Automotive market is on ADAS for passenger and commercial vehicle autonomy, particularly highway autonomy applications. We believe that growth in that market is driven by both more stringent safety regulations and consumer demand for vehicles offering increased safety and advanced driver assist features. We will need to anticipate and adapt to any changes in the regulatory environment, as well as changes in consumer demand, in order to take advantage of this opportunity.

Previous wording

As is common in early-stage companies with limited operating histories, we are subject to risks and uncertainties such as those described in Part II, Item 1A of this Quarterly Report on Form 10-Q. Since inception, we have incurred net losses and negative cash flows from operations and expect to continue incurring losses until after we reach commercialization. We are dependent upon raising additional capital to provide the cash necessary to continue our ongoing operations. We have been able to do so in the past, for example during the second quarter of 2024, we were able to raise approximately $5,541 in gross proceeds from financing activities. Should we not be successful in raising additional capital we will require alternative sources of liquidity to continue our operations for the next twelve months. In those circumstances, we would also plan to adjust spending in order to preserve and extend liquidity, and we have plans to further reduce operating expenses and cash outlays should we need to. We believe that these plans can be successfully implemented, which would likely result in adequate cash flows to support our ongoing operations for at least one year from the date of this Quarterly Report on Form 10-Q.

Current wording

As is common in early-stage companies with limited operating histories, we are subject to risks and uncertainties such as those described in Part II, Item 1A of this Quarterly Report on Form 10-Q. Since inception, we have incurred net losses and negative cash flows from operations and expect to continue incurring losses until after we reach commercialization. We are dependent upon raising additional capital to provide the cash necessary to continue our ongoing operations. We have been able to do so in the past, for example, through the nine months ended September 30, 2024, we were able to raise approximately $6,000 in gross proceeds from financing activities. Should we not be successful in raising additional capital, we will require alternative sources of liquidity to continue our operations for the next twelve months. In those circumstances, we would also plan to adjust spending in order to preserve and extend liquidity, and we have plans to further reduce operating expenses and cash outlays should we need to. We believe that these plans can be successfully implemented, which would likely result in adequate cash flows to support our ongoing operations for at least one year from the date of this Quarterly Report on Form 10-Q.

Previous wording

Recently, we have engaged with LITEON as our new Tier 1 automotive supplier and are actively working with LITEON to bring our products to market. We have also recently engaged with new partners in an effort to penetrate the lidar market in China, initially focused on the autonomous trucking and railway segments. Given both our engagement with LITEON and our partners in the China market are recent, there is no guarantee that either or both endeavors will be successful.

Current wording

We have engaged with LITEON as our Tier 1 automotive supplier and are actively working with LITEON to bring our products to market. We have also recently with partners in an effort to penetrate the lidar market in China. Given both our engagement with LITEON and our partners in the China market are relatively recent, there is no guarantee that either or both endeavors will be successful.

Previous wording

We believe our revenue and profitability will also be dependent upon our success in licensing our technology to Tier 1 automotive suppliers, such as our new Tier 1 partner, LITEON, or our previous partner, Continental, which represented 0% and 71% of revenue in the six months ended June 30, 2024 and 2023, respectively, that intend to use our technology in volume production of lidar sensors for OEMs. Delays in autonomy programs by OEMs that we are currently or plan to be working with through our Tier 1 partners could result in us being unable to achieve our revenue and profitability targets in the timeframe we anticipate, or at all.

Current wording

We believe our revenue and profitability will also be dependent upon our success in licensing our technology to Tier 1 automotive suppliers, such as our Tier 1 partner, LITEON, or our previous partner, Continental, which represented 0% and 71% of revenue in the nine months ended September 30, 2024 and 2023, respectively, that intend to use our technology in volume production of lidar sensors for OEMs. Delays in autonomy programs by OEMs that we are currently or plan to be working with through our Tier 1 partners could result in us being unable to achieve our revenue and profitability targets in the time frame we anticipate, or at all.

Previous wording

Interest income and other consists primarily of interest earned on our cash, cash equivalents, and marketable securities. These amounts will vary based on our cash and cash equivalents balances and market rates. Interest income and other also includes gains on sale of property and equipment. Interest expense and other consists primarily of convertible note issuance costs and amortization of premiums and accretion of discounts on marketable securities, net.

Current wording

Interest income and other consists primarily of interest earned on our cash, cash equivalents, and marketable securities. These amounts will vary based on our cash and cash equivalents balances and market rates. Interest income and other also includes gains on sale of property and equipment. Interest expense and other consists primarily of financing costs and amortization of premiums and accretion of discounts on marketable securities, net.

Previous wording

Prototype sales decreased by $344, or 93%, to $26 for the six months ended June 30, 2024, from $370 for the six months ended June 30, 2023. This was primarily due to a decrease in units sold of our 4Sight™-based industrial product due to our focus on executing key milestones in the Automotive market.

Current wording

Prototype sales increased by $9, or 16%, to $65 for the three months ended September 30, 2024, from $56 for the three months ended September 30, 2023. This was primarily due to an increase in units sold of our 4Sight™-based industrial product, partially offset by lower average sales prices.

Previous wording

Development contracts decreased by $300, or 92%, to $26 for the three months ended June 30, 2024, from $326 for the three months ended June 30, 2023. The decrease was primarily due to lower development contract costs as we fulfilled our obligations on a Tier 1 automotive supplier contract in the fourth quarter of 2023.

Current wording

Development contracts decreased by $93, or 70%, to $39 for the three months ended September 30, 2024, from $132 for the three months ended September 30, 2023. The decrease was primarily due to lower revenues as we fulfilled our obligations on a Tier 1 automotive supplier contract in the fourth quarter of 2023.

Previous wording

Research and development expenses decreased by $2,059, or 35%, to $3,838 for the three months ended June 30, 2024, from $5,897 for the three months ended June 30, 2023. This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in stock-based compensation expense of $1,031, personnel costs of $795, and engineering parts and lab equipment expense of $124.

Current wording

Research and development expenses decreased by $1,887, or 33%, to $3,767 for the three months ended September 30, 2024, from $5,654 for the three months ended September 30, 2023. This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in personnel costs of $844, stock-based compensation expense of $794, and information technology and facilities expense of $222.

Previous wording

Sales and marketing expenses decreased by $2,537, or 97%, to $67 for the three months ended June 30, 2024, from $2,604 for the three months ended June 30, 2023. This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in personnel costs of $1,274, stock-based compensation of $671, trade show, marketing, and consultant spend of $285, and information technology and facilities expense of $180.

Current wording

Sales and marketing expenses decreased by $1,836, or 96%, to $74 for the three months ended September 30, 2024, from $1,910 for the three months ended September 30, 2023. This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in personnel costs of $863, stock-based compensation of $615, trade show, marketing, and consultant spend of $138, and information technology and facilities expense of $121.

Previous wording

General and administrative expenses decreased by $2,122, or 33%, to $4,223 for the three months ended June 30, 2024, from $6,345 for the three months ended June 30, 2023. This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in stock-based compensation of $633, accounting, legal, and consulting fees of $590, personnel costs of $365, and insurance of $357.

Current wording

General and administrative expenses decreased by $1,577, or 29%, to $3,803 for the three months ended September 30, 2024, from $5,380 for the three months ended September 30, 2023. This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in stock-based compensation of $394, accounting, legal, and consulting fees of $203, operating lease costs of $(321), and insurance of $127. The decrease was also due to a net gain on termination of an operating lease of $680 in the current period.

Previous wording

Change in fair value of convertible note and warrant liabilities decreased by $101, or 87%, to a loss of $15 for the three months ended June 30, 2024, from a loss of $116 for the three months ended June 30, 2023. This decrease was primarily due to settlement of the 2022 Note in the third quarter of 2023.

Current wording

Change in fair value of convertible note and warrant liabilities decreased by $3, or 25%, to a loss of $9 for the three months ended September 30, 2024, from a loss of $12 for the three months ended September 30, 2023. This decrease was primarily due to settlement of the 2022 Note in the third quarter of 2023.

Previous wording

Interest income and other decreased by $73, or 24%, to $228 for the three months ended June 30, 2024, from $301 for the three months ended June 30, 2023. This decrease was primarily due to less interest earned on our marketable securities in the current period.

Current wording

Interest income and other decreased by $121, or 34%, to $233 for the three months ended September 30, 2024, from $354 for the three months ended September 30, 2023. This decrease was primarily due to less interest earned on our marketable securities in the current period.

Previous wording

Interest expense and other decreased by $67, or 609%, to a gain of $56 for the three months ended June 30, 2024, from a loss of $11 for the three months ended June 30, 2023. This decrease was primarily due to a favorable increase in accretion of discounts on marketable securities of $129, offset by an unfavorable increase in foreign exchange loss of $89.

Current wording

Interest expense and other increased by $928, or 533%, to $1,102 for the three months ended September 30, 2024, from $174 for the three months ended September 30, 2023. This increase was primarily due to costs of $1,136 related to financing arrangements executed in the quarter and an increase in foreign exchange loss of $88, partially offset with a favorable increase in accretion of discounts on marketable securities, net, of $148

Previous wording

Provision for income tax expenses decreased to $0 for the three months ended June 30, 2024, from $19 for the three months ended June 30, 2023. This change is due to changes in pretax income (loss) in the U.S. and certain foreign entities and changes in tax rates.

Current wording

Provision for income tax expenses decreased to $0 for the three months ended September 30, 2024, from $5 for the three months ended September 30, 2023. This change is due to changes in pretax income (loss) in the U.S. and certain foreign entities and changes in tax rates.

Previous wording

Net loss decreased by $8,044, or 50%, to $7,987 for the three months ended June 30, 2024, from $16,031 for the three months ended June 30, 2023. This decrease was primarily due to decreases in operating expenses following restructuring and cost reduction efforts in connection with our revised strategic plan as announced during 2023.

Current wording

Net loss decreased by $8,342, or 49%, to $8,706 for the three months ended September 30, 2024, from $17,048 for the three months ended September 30, 2023. This decrease was primarily due to decreases in operating expenses following restructuring and cost reduction efforts in connection with our revised strategic plan as announced during 2023 and decreases in cost of revenues as we had fulfilled our obligations on a Tier 1 automotive supplier contract in the fourth quarter of 2023.

Previous wording

The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and notes included elsewhere in this report. The following table sets forth our consolidated results of operations data for the six months ended June 30, 2024 and 2023 (in thousands, except for percentages):

Current wording

The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and notes included elsewhere in this report. The following table sets forth our consolidated results of operations data for the nine months ended September 30, 2024 and 2023 (in thousands, except for percentages):

Previous wording

Prototype sales decreased by $239, or 98%, to $6 for the three months ended June 30, 2024, from $245 for the three months ended June 30, 2023. This was primarily due to a decrease in units sold of our 4Sight™-based industrial product due to our focus on executing key milestones in the Automotive market.

Current wording

Prototype sales decreased by $335, or 79%, to $91 for the nine months ended September 30, 2024, from $426 for the nine months ended September 30, 2023. This was primarily due to a decrease in units sold of our 4Sight™-based industrial product due to our focus on executing key milestones in the Automotive market.

Previous wording

Development contracts decreased by $811, or 97%, to $26 for the six months ended June 30, 2024, from $837 for the six months ended June 30, 2023. The decrease was primarily due to lower development contract costs as we fulfilled our obligations on a Tier 1 automotive supplier contract in the fourth quarter of 2023.

Current wording

Development contracts decreased by $904, or 93%, to $65 for the nine months ended September 30, 2024, from $969 for the nine months ended September 30, 2023. The decrease was primarily due to lower development contract revenues as we fulfilled our obligations on a Tier 1 automotive supplier contract in the fourth quarter of 2023.

Previous wording

Cost of revenue decreased by $1,751, or 92%, to $160 for the three months ended June 30, 2024, from $1,911 for the three months ended June 30, 2023. This decrease was primarily due to fewer units sold in the current period due to the wind-down of our existing industrial product and also lower development contract costs as we fulfilled our obligations on a Tier 1 automotive supplier contract in the fourth quarter of 2023.

Current wording

Cost of revenue decreased by $7,922, or 92%, to $729 for the nine months ended September 30, 2024, from $8,651 for the nine months ended September 30, 2023. This decrease was primarily due to fewer units sold in the current year to date due to the wind-down of our existing industrial product and also lower development contract costs as we had fulfilled our obligations on a Tier 1 automotive supplier contract in the fourth quarter of 2023.

Previous wording

Research and development expenses decreased by $6,969, or 45%, to $8,370 for the six months ended June 30, 2024, from $15,339 for the six months ended June 30, 2023. This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in personnel costs of $3,186, stock-based compensation expense of $2,100, third party research and development work of $732, engineering parts and lab equipment expense of $570, and information technology and facilities expense of $175.

Current wording

Research and development expenses decreased by $8,856, or 42%, to $12,137 for the nine months ended September 30, 2024, from $20,993 for the nine months ended September 30, 2023. This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in personnel costs of $4,030, stock-based compensation expense of $2,894, engineering parts and lab equipment expense of $685, third party research and development work of $627, and information technology and facilities expense of $397.

Previous wording

Sales and marketing expenses decreased by $8,464, or 95%, to $408 for the six months ended June 30, 2024, from $8,872 for the six months ended June 30, 2023. This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in personnel costs of $3,837, trade show, marketing, and consultant spend of $1,864, stock-based compensation of $1,857, information technology and facilities expense of $434, and travel and entertainment expense of $381.

Current wording

Sales and marketing expenses decreased by $10,300, or 96%, to $482 for the nine months ended September 30, 2024, from $10,782 for the nine months ended September 30, 2023. This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in personnel costs of $4,700, trade show, marketing, and consultant spend of $2,002, stock-based compensation of $2,472, information technology and facilities expense of $555, and travel and entertainment expense of $426.

Previous wording

General and administrative expenses decreased by $5,061, or 34%, to $9,838 for the six months ended June 30, 2024, from $14,899 for the six months ended June 30, 2023. This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in stock-based compensation of $1,817, personnel costs of $1,131, accounting, legal, and consulting fees of $1,101, insurance of $749, and travel and entertainment expense of $114.

Current wording

General and administrative expenses decreased by $6,638, or 33%, to $13,641 for the nine months ended September 30, 2024, from $20,279 for the nine months ended September 30, 2023. This decrease was primarily driven by the implementation of our revised strategic plan, with decreases in personnel costs of $968, stock-based compensation of $2,211, accounting, legal, and consulting fees of $1,304, insurance of $876, operating lease costs of $318, and travel and entertainment expense of $121. The decrease was also due to a net gain on termination of an operating lease of $680 in the current period.

Previous wording

Change in fair value of convertible note and warrant liabilities decreased by $913, or 99%, to a loss of $13 for the six months ended June 30, 2024, from a loss of $926 for the six months ended June 30, 2023. This decrease was primarily due to settlement of the 2022 Note in the third quarter of 2023.

Current wording

Change in fair value of convertible note and warrant liabilities decreased by $910, or 100%, to $4 for the nine months ended September 30, 2024, from $914 for the nine months ended September 30, 2023. This decrease was primarily due to settlement of the 2022 Note in the third quarter of 2023.

Previous wording

Interest income and other decreased by $155, or 27%, to $423 for the six months ended June 30, 2024, from $578 for the six months ended June 30, 2023. This decrease was primarily due to less interest earned on our marketable securities in the current period.

Current wording

Interest income and other decreased by $276, or 30%, to $656 for the nine months ended September 30, 2024, from $932 for the nine months ended September 30, 2023. This decrease was primarily due to less interest earned on our marketable securities in the current period.

Previous wording

Interest expense and other decreased by $208, or 126%, to a gain of $373 for the six months ended June 30, 2024, from a gain of $165 for the six months ended June 30, 2023. This decrease was primarily due to a favorable increase in accretion of discounts on marketable securities of $212

Current wording

Interest expense and other increased by $720, or 8000%, to $729 for the nine months ended September 30, 2024, from $9 for the nine months ended September 30, 2023. This increase was primarily due to costs of $1,136 related to financing arrangements executed in the period, partially offset with a favorable increase in accretion of discounts on marketable securities, net of $360.

Previous wording

Provision for income tax expenses decreased to $2 for the six months ended June 30, 2024, from $38 for the six months ended June 30, 2023. This change is due to changes in pretax income (loss) in the U.S. and certain foreign entities and changes in tax rates.

Current wording

Provision for income tax expenses decreased to $2 for the nine months ended September 30, 2024, from $43 for the nine months ended September 30, 2023. This change is due to changes in pretax income (loss) in the U.S. and certain foreign entities and changes in tax rates.

Previous wording

Net loss decreased by $24,090, or 57%, to $18,206 for the six months ended June 30, 2024, from $42,296 for the six months ended June 30, 2023. This decrease was primarily due to decreases in operating expenses following restructuring and cost reduction efforts in connection with our revised strategic plan as announced during 2023.

Current wording

Net loss decreased by $32,432, or 55%, to $26,912 for the nine months ended September 30, 2024, from $59,344 for the nine months ended September 30, 2023. This decrease was primarily due to decreases in operating expenses following restructuring and cost reduction efforts in connection with our revised strategic plan as announced during 2023 and decreases in cost of revenues as we had fulfilled our obligations on a Tier 1 automotive supplier contract in the fourth quarter of 2023.

Previous wording

Our capital requirements will depend on many factors, including, but not exclusively, sales volume and timing of revenue, our efforts to establish and maintain relationships with one or more Tier 1 automotive suppliers and the timing of an OEM design win, our ability to extend our cash runway based on the restructuring initiatives announced in the previous year, the timing and extent of spending to support R&D efforts, how quickly we can commercialize our products, and market adoption of new and enhanced products and features. As of June 30, 2024, our cash, cash equivalents, and marketable securities totaled $27,989. For the six months ended June 30, 2024 and 2023, we had a net loss of $18,206 and $42,258, respectively. We anticipate that we will continue to incur losses for at least the next several years.

Current wording

Our capital requirements will depend on many factors, including, but not exclusively, sales volume and timing of revenue, our efforts to establish and maintain relationships with one or more Tier 1 automotive suppliers and the timing of an OEM design win, our ability to extend our cash runway based on the restructuring initiatives announced in the previous year, the timing and extent of spending to support R&D efforts, how quickly we can commercialize our products, and market adoption of new and enhanced products and features. As of September 30, 2024, our cash, cash equivalents, and marketable securities totaled $22,435. For the nine months ended September 30, 2024 and 2023, we had a net loss of $26,912 and $59,344, respectively. We anticipate that we will continue to incur losses for at least the next several years.

Previous wording

To date, our principal sources of liquidity have been proceeds received from the issuance of equity. In December 2021, we entered into a Common Stock Purchase Agreement with Tumim Stone Capital LLC, or Tumim Stone, pursuant to which we have the right, but not the obligation, to issue and sell to Tumim Stone over a 36-month period, up to $125,000 of our common stock. On May 6, 2022, we filed a Registration Statement on Form S-1, which related to the offer and resale of up to 1,028,847 shares of our common stock to be purchased by Tumim Stone, pursuant to the Common Stock Purchase Agreement. As of July 25, 2024, 996,866 shares have been issued under this Common Stock Purchase Agreement. On July 24, 2024, this agreement was terminated in conjunction with us entering into the Purchase Agreement with New Circle Principal Investments LLC.

Current wording

To date, our principal sources of liquidity have been proceeds received from the issuance of equity. In December 2021, we entered into a Common Stock Purchase Agreement with Tumim Stone Capital LLC, or Tumim Stone, pursuant to which we had the right, but not the obligation, to issue and sell to Tumim Stone over a 36-month period, up to $125,000 of our common stock. On May 6, 2022, we filed a Registration Statement on Form S-1, which related to the offer and resale of up to 1,028,847 shares of our common stock to be purchased by Tumim Stone, pursuant to the Common Stock Purchase Agreement. On July 24, 2024, this Common Stock Purchase Agreement was terminated in conjunction with us entering into the CSPA with New Circle. In total, 996,866 shares were issued under this Common Stock Purchase Agreement.

Previous wording

On May 10, 2024, we entered into a Securities Purchase Agreement with Dowslake, pursuant to which Dowslake agreed to purchase 330,823 shares of Common Stock for the purchase price of approximately $854, which represents a per share purchase price of $2.58, and an unsecured convertible promissory note with the principal amount of $146 for an aggregate purchase price of $1,000.

Current wording

On May 10, 2024, we entered into a Securities Purchase Agreement with Dowslake, pursuant to which Dowslake agreed to purchase 330,823 shares of common stock for a purchase price of approximately $854, which represents a per share purchase price of $2.58, and an unsecured convertible promissory note with a principal amount of $146 for an aggregate purchase price of $1,000.

Previous wording

On May 29, 2024, we entered into a Securities Purchase Agreement with certain institutional investors pursuant to which we agreed to issue and sell, in a registered direct offering using the Shelf Registration, an aggregate of 727,706 shares of Common Stock at a per share purchase price of $3.448 for gross proceeds of approximately $2,509, before deducting estimated offering expenses payable by us.

Current wording

On May 29, 2024, we entered into a Securities Purchase Agreement with certain institutional investors pursuant to which we agreed to issue and sell, in a registered direct offering using our shelf registration statement on Form S-3, an aggregate of 727,706 shares of common stock at a per share purchase price of $3.448 for gross proceeds of approximately $2,509, before deducting estimated offering expenses payable by us.

Previous wording

On July 25, 2024, we entered into the Purchase Agreement with New Circle, pursuant to which we agreed to issue and sell up to $50.0 million of Common Stock, at our discretion from time to time, subject to the satisfaction of the conditions in the Purchase Agreement.

Current wording

On July 25, 2024, we entered into the CSPA with New Circle, pursuant to which we agreed to issue and sell up to $50,000 of common stock, at our discretion from time to time, subject to the satisfaction of the conditions in the Purchase Agreement.

Previous wording

Accounting Standards Codification, or ASC, Subtopic 205-40,Presentation of Financial Statements - Going Concern, requires us to assess our ability to meet our future financial obligations as they become due within one year after the date that the financial statements are issued. Despite the recent restructuring initiatives, we expect that our expenses will continue to exceed our operating income and, as a result, we may need additional capital resources to fund our operations. We believe that the net proceeds from the transactions described above together with our existing cash, cash equivalents, and marketable securities and the implementation of our plans should we be unable to secure additional financing will sufficiently alleviate the risk of substantial doubt about our ability to continue as a going concern and will enable us to fund our operating expenses, working capital, and capital expenditure requirements for a period of at least twelve months from the date of this Quarterly Report on Form 10-Q. For additional discussion of our plans, see Note 1 in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q. If our cash needs are greater than we anticipate, we may be required to reduce our operating expenses further or raise additional capital sooner. Given the current macroeconomic environment, OEMs appear to be more cautious about their capital spending and investments into new technologies and as a result we have seen the timelines for certain opportunities delayed, which may negatively impact the time for us to reach positive cash flows from operations. Our plans for the use of cash in the long term (beyond twelve months from this Quarterly Report on Form 10-Q) are primarily related to funding operating expenses to support the commercialization of our products. For additional information regarding our cash requirements from lease obligations and contractual obligations, see Notes 6 and 15 to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Current wording

Accounting Standards Codification, or ASC, Subtopic 205-40,Presentation of Financial Statements - Going Concern, requires us to assess our ability to meet our future financial obligations as they become due within one year after the date that the financial statements are issued. Despite the recent restructuring initiatives, we expect that our expenses will continue to exceed our operating income and, as a result, we may need additional capital resources to fund our operations. We believe that our potential liquidity and the implementation of our plans should we be unable to secure additional financing will sufficiently alleviate the risk of substantial doubt about our ability to continue as a going concern and will enable us to fund our operating expenses, working capital, and capital expenditure requirements for a period of at least twelve months from the date of this Quarterly Report on Form 10-Q. For additional discussion of our plans, see Note 1 in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q. If our cash needs are greater than we anticipate, we may be required to reduce our operating expenses further or raise additional capital sooner. Given the current macroeconomic environment, OEMs appear to be more cautious about their capital spending and investments into new technologies and as a result we have seen the timelines for certain opportunities delayed, which may negatively impact the time for us to reach positive cash flows from operations. Our plans for the use of cash in the long term (beyond twelve months from this Quarterly Report on Form 10-Q) are primarily related to funding operating expenses to support the commercialization of our products. For additional information regarding our cash requirements from lease obligations, lease termination liability and contractual obligations, see Notes 6 and 17 to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Previous wording

For the six months ended June 30, 2024, net cash used in operating activities was $14,241. Factors affecting our operating cash flows during this period were net loss of $18,206, amortization of premiums and accretion of discounts on marketable securities, net of $428, offset by stock-based compensation of $4,754, and noncash lease expense of $727. Within operating activities, the net changes in operating assets and liabilities were cash used of $1,303, primarily driven by decreases in accrued expenses and other liabilities, operating lease liabilities, and other noncurrent liabilities of $1,402, $799 and $358, respectively. Cash used was offset by cash provided by decreases in prepaid and other current assets, and other noncurrent assets of $724 and $171, respectively, and an increase in accounts payable of $108.

Current wording

For the nine months ended September 30, 2024, net cash used in operating activities was $21,814. Factors affecting our operating cash flows during this period were net loss of $26,912, gain on termination of operating lease, net, of $680, amortization of premiums and accretion of discounts on marketable securities, net of $491, offset by stock-based compensation of $7,002, common stock purchase agreement costs of $1,136, and noncash lease expense of $905. Within operating activities, the net changes in operating assets and liabilities were cash used of $3,048, primarily driven by decreases in accrued expenses and other liabilities, operating lease liabilities and other noncurrent liabilities of $3,411, $936 and $346, respectively. Cash used was offset by cash provided by decreases in prepaid and other current assets, inventories, and other noncurrent assets of $1,035, $157 and $123, respectively, and an increase in accounts payable of $275.

Previous wording

For the six months ended June 30, 2023, net cash used in operating activities was $32,445. Factors affecting our operating cash flows during this period were a net loss of $42,296, offset by stock-based compensation of $10,623, change in fair value of convertible note and warrant liabilities of $926, noncash lease expense of $706, depreciation and amortization of $666, and inventory write-downs of $544. Within operating activities, the net change in operating assets and liabilities was cash used of $3,544, primarily driven by decreases in contract liabilities, accrued expenses and other liabilities, and operating lease liabilities of $837, $785, and $749, respectively, and increases in inventories and other noncurrent assets of $2,502 and $2,164, respectively. Cash used was partially offset by cash provided by decreases in prepaid and other current assets and accounts receivable of $2,884 and $327, respectively, and an increase in accounts payable of $282.

Current wording

For the nine months ended September 30, 2023, net cash used in operating activities was $41,508. Factors affecting our operating cash flows during this period were a net loss of $59,344, offset by stock-based compensation of $14,707, inventory write-downs of $3,666, noncash lease expense of $1,058, depreciation and amortization of $998, and change in fair value of convertible note and warrant liabilities of $914. Within operating activities, the net change in operating assets and liabilities was cash used of $3,686, primarily driven by decreases in accrued expenses and other liabilities, operating lease liabilities, and contract liabilities of $2,571, $1,143, and $969, respectively, and increases in inventories of $2,681. Cash used was partially offset by cash provided by decreases in prepaid and other current assets, accounts receivable, and other noncurrent assets of $1,672, $379, and $133, respectively, and an increase in accounts payable of $1,494.