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 months ended March 31, 2025, 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 six months ended June 30, 2025, 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

We anticipate growing demand for our 4Sight TM Intelligent Sensing Platform across our two major markets, Automotive and Non-Automotive. We believe this expected growth will enable us to capture market share across both the Automotive and Non-Automotive markets. We plan to pursue opportunities in advanced driver-assistance systems, or ADAS, autonomous driving, and commercial trucking, while also exploring opportunities in the Non-Automotive market, such as in the railway, security, and intelligent transportation systems, or ITS segments. This diversified approach provides us with multiple opportunities for sustained growth by enabling new applications and product features across a broad range of industries and market segments. However, as our customers continue their R&D projects to commercialize solutions that rely on lidar technology, it is difficult to estimate the timing of ultimate end market demand and customer adoption. In the Automotive market for example, our growth and financial performance will be heavily influenced by our ability to successfully integrate into OEM programs that require years of development, testing, and validation. 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 held by our Tier 1 partners. If we fail to remain engaged with one or more Tier 1 automotive suppliers, it may have an adverse effect on our business. The markets for lidar are projected to see significant growth in both the near and long-term.

Current wording

We anticipate growing demand for our Intelligent Sensing Platform across our two major markets, Automotive and Non-Automotive, and we believe this expected growth will enable us to capture market share across both the Automotive and Non-Automotive markets. We plan to pursue opportunities in advanced driver-assistance systems, or ADAS, autonomous driving, and commercial trucking, while also exploring opportunities in the Non-Automotive market, such as in the railway, airport safety and security, perimeter monitoring, transportation logistics, and intelligent transportation systems, or ITS segments. This diversified approach provides us with multiple opportunities for sustained growth by enabling new applications and product features across a broad range of industries and market segments. However, as our customers continue their R&D projects to commercialize solutions that rely on lidar technology, it is difficult to estimate the timing of ultimate end market demand and customer adoption. In the Automotive market for example, our growth and financial performance will be heavily influenced by our ability to successfully integrate into OEM programs that require years of development, testing, and validation. 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 held by our Tier 1 partners. If we fail to remain engaged with one or more Tier 1 automotive suppliers, it may have an adverse effect on our business. The markets for lidar are projected to see significant growth in both the near and long-term.

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 up to commercialization which means we are dependent upon raising additional capital to provide the cash necessary to continue our ongoing operations. As a result, it remains critical for us to preserve cash and manage spending to extend our liquidity. We also plan to improve our liquidity position through securing additional financing, engaging with partners and OEMs, and executing on our critical milestones. However, successfully raising capital is outside of our control and there can be no assurance that we will be able to obtain additional financing on terms acceptable to us, on a timely basis, or at all.

Current wording

We recently raised additional capital that we expect will provide us with an operating runway for at least the next 12 months and allow us to fund our short- and mid-term strategic initiatives. 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 at least commercialization. Accordingly, we expect to remain dependent on raising additional capital to provide the cash necessary to continue our ongoing operations. As a result, it remains critical for us to preserve cash and manage spending to extend our liquidity. We also plan to improve our liquidity position through securing additional financing, engaging with partners and OEMs, and executing on our critical milestones. However, successfully raising capital is outside of our control, and there can be no assurance that we will be able to obtain additional financing on terms acceptable to us, on a timely basis, or at all.

Previous wording

During the three months ended March 31, 2025, we raised $11,055 in gross proceeds through share issuances on our stock purchase agreements and a convertible note. We also have access to additional liquidity through our equity line of credit and ATM facilities.

Current wording

During the six months ended June 30, 2025, we raised $11,637 in gross proceeds through share issuances through our common stock purchase agreements and a convertible note. Subsequent to June 30, 2025, we raised $68,844 in gross proceeds through issuance of shares through our common stock purchase agreements and an exercise of warrants. We also have additional liquidity available through our equity line of credit and ATM facilities.

Previous wording

In early 2024, we engaged LITEON as our Tier 1 automotive supplier and are actively working with them to bring our product to market. We recently announced the successful production of the first Apollo units by LITEON, which we believe demonstrates an ability to produce units at scale. This partnership has enabled us to leverage LITEON’s manufacturing expertise to produce high-quality samples that meet stringent performance standards, which is a critical step towards scaling production and delivering our advanced lidar solutions to the market. In May 2024, we announced a strategic partnership with ATI and LighTekton Co., Ltd to manufacture and distribute our products in China. This collaboration provides us with access to a potential $2.5 billion market opportunity. By leveraging ATI's and LighTekton's extensive networks and manufacturing capabilities, we aim to accelerate our market penetration and deliver our advanced lidar solutions to a broader audience. We have also made substantial progress in our collaboration efforts with Nvidia, demonstrating significant advances in the high-speed and long-range detection performance of our lidar systems, which we believe puts us on track for future integration with their Hyperion platform, with Apollo having entered Nvidia’s independent testing phase. Given these engagements are relatively recent, there is no guarantee that these endeavors will be successful.

Current wording

In early 2024, we engaged LITEON as our Tier 1 automotive supplier and are actively working with them to bring our product to market. We recently announced the successful production of the first Apollo units by LITEON, which we believe demonstrates an ability to produce units at scale. This partnership has enabled us to leverage LITEON’s manufacturing expertise to produce high-quality samples that meet stringent performance standards, which is a critical step towards scaling production and delivering our advanced lidar solutions to the market. In May 2024, we announced a strategic partnership with ATI and LighTekton Co., Ltd to manufacture and distribute our products in China. This collaboration provides us with access to a potential $2.5 billion market opportunity. By leveraging ATI's and LighTekton's extensive networks and manufacturing capabilities, we aim to accelerate our market penetration and deliver our advanced lidar solutions to a broader audience.

Previous wording

To date, our revenue has primarily been generated through development contracts with OEMs and Tier 1 suppliers, as well as unit sales of our products to Non-Automotive market customers. These development contracts primarily focus on customization of our proprietary 4Sight TM product capabilities to our customers’ applications, typically involving software implementation to assist with sensor connection and control, customization of scan patterns, and enhancement of particular perception capabilities to meet specific customer needs. In general, development contracts that require more complex configurations have higher prices. We expect development contracts to remain a significant part of our business in the near term, but represent a smaller share of our total revenue over time as we increase our focus on technology licensing in the Automotive market and leverage these economies of scale to expand into the Non-Automotive market.

Current wording

To date, our revenue has primarily been generated through development contracts with OEMs and Tier 1 suppliers, as well as unit sales of our products to Non-Automotive customers. These development contracts primarily focus on customization of our product's capabilities to our customers’ applications, typically involving software implementation to assist with sensor connection and control, customization of scan patterns, and enhancement of particular perception capabilities to meet specific customer needs. In general, development contracts that require more complex configurations have higher prices. We expect development contracts to remain a significant part of our business in the near term, but represent a smaller share of our total revenue over time as we increase our focus on technology licensing in the Automotive market and leverage these economies of scale to expand into the Non-Automotive market.

Previous wording

Our proprietary adaptive intelligent lidar technology delivers industry-leading performance, addressing the toughest challenges in achieving partial or full autonomy. Unlike traditional sensing systems that passively collect data, our active 4Sight TM Intelligent Sensing Platform employs principles from automated targeting systems and biomimicry to actively scan the environment, intelligently focusing on critical elements to enable safer, smarter, and faster decisions in complex scenarios.

Current wording

Our proprietary adaptive intelligent lidar technology delivers industry-leading performance, addressing the toughest challenges in achieving partial or full autonomy. Unlike traditional sensing systems that passively collect data, our active Intelligent Sensing Platform employs principles from automated targeting systems and biomimicry to actively scan the environment, intelligently focusing on critical elements to enable safer, smarter, and faster decisions in complex scenarios.

Previous wording

In June 2024, we introduced Apollo, the first product in our 4Sight™ Flex family of next-generation lidar sensors. Apollo offers best-in-class range and resolution in a compact, power-efficient, and cost-effective form factor, making it ideal for both automotive and non-automotive applications. Apollo can be integrated behind the windshield, on the roof, or in the grille, allowing OEMs to implement essential safety features with minimal impact on vehicle design. This innovative sensor leverages our 4Sight™ Intelligent Sensing Platform, providing a highly programmable and customizable lidar solution that can be continually enhanced via software updates. With a horizontal field of view up to 120° and long-range detection capabilities of up to 1 km, Apollo is poised to be a key player in advancing vehicle safety and autonomy, as well as smart infrastructure and logistics applications.

Current wording

In June 2024, we introduced Apollo, our next-generation lidar sensor. Apollo offers best-in-class range and resolution in a compact, power-efficient, and cost-effective form factor, making it ideal for both automotive and non-automotive applications. Apollo can be integrated behind the windshield, on the roof, or in the grille, allowing OEMs to implement essential safety features with minimal impact on vehicle design. This innovative sensor leverages our Intelligent Sensing Platform, providing a highly programmable and customizable lidar solution that can be continually enhanced via software updates. With a horizontal field of view up to 120° and long-range detection capabilities of up to 1 kilometer, Apollo is poised to be a key player in advancing vehicle safety and autonomy, as well as smart infrastructure and logistics applications.

Previous wording

Our prototype sales revenue primarily related to unit sales of our 4Sight TM product. Revenue from prototype sales is typically recognized at a point in time when the control of goods is transferred to the customer, generally upon delivery or shipment to the customer. Revenue from development and/or collaboration arrangement contracts are earned from R&D activities and collaboration with OEMs and Tier 1 suppliers. These contracts primarily focus on customization of our proprietary 4Sight TM capabilities to our customers’ applications, typically involving software implementation to assist with sensor connection and control, customization of scan patterns, and enhancement of perception capabilities to meet specific customer needs. Revenue from development contracts is recognized when we satisfy performance obligations in the contract, which can result in recognition at either a point in time or over time. This assessment is made at the outset of the arrangement for each performance obligation.

Current wording

Our prototype sales revenue primarily related to unit sales of our lidar products. Revenue from prototype sales is typically recognized at a point in time when the control of goods is transferred to the customer, generally upon delivery or shipment to the customer. Revenue from development and/or collaboration arrangement contracts are earned from R&D activities and collaboration with OEMs and Tier 1 suppliers. These contracts primarily focus on customization of our product's capabilities to our customers’ applications, typically involving software implementation to assist with sensor connection and control, customization of scan patterns, and enhancement of perception capabilities to meet specific customer needs. Revenue from development contracts is recognized when we satisfy performance obligations in the contract, which can result in recognition at either a point in time or over time. This assessment is made at the outset of the arrangement for each performance obligation.

Previous wording

R&D costs are expensed as they are incurred. We expect our R&D costs to increase slightly from 2024 as we continue to invest in the development of our Apollo product.

Current wording

R&D costs are expensed as they are incurred. We expect our R&D costs to increase from 2024 as we continue to invest in the development and commercialization of our products.

Previous wording

We expect our S&M expenses to increase as we pursue Non-Automotive opportunities to accelerate profitability while continuing to leverage our Tier 1 partners to commercialize our products and manage relationships with the OEMs in the Automotive market.

Current wording

We expect our S&M expenses to increase from 2024 as we pursue Non-Automotive opportunities to accelerate profitability while continuing to leverage our Tier 1 partners to commercialize our products and manage relationships with the OEMs in the Automotive market.

Previous wording

We expect our G&A expenses to decrease slightly with reduced facility costs and professional fees, while continuing to incur expenses to support other departments as we continue to develop and commercialize our Apollo product.

Current wording

We expect our G&A expenses to decrease slightly from 2024 with reduced facility costs, while continuing to incur expenses to support other departments as we continue to develop and commercialize our products.

Previous wording

The changes in fair value of the 2025 Note and warrant liabilities are the result of the change in fair value at each reporting date. The 2025 Note and warrant liabilities are recorded at fair value for each reporting period, and the changes in fair value are reported within other income (expense), net during the period. We also elected to record interest expense on the 2025 Note as changes in fair value.

Current wording

The changes in fair value of the 2025 Note and warrant liabilities are the result of the change in fair value at each reporting date. The 2025 Note and warrant liabilities are recorded at fair value for each reporting period, and the changes in fair value are reported within other income (expense), net during the period. We also elected to record interest expense on the 2025 Note as changes in fair value. We expect the change in fair value of warrant liability to decrease given that subsequent to June 30, 2025, the warrants associated with the 2022 convertible note were cancelled and the warrants associated with the 2025 convertible note were exercised in full.

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 financing 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. We expect interest income will increase due to funds raised subsequent to June 30, 2025.

Previous wording

Research and development expenses decreased by $1,042, or 23%, to $3,490 for the three months ended March 31, 2025, from $4,532 for the three months ended March 31, 2024. This decrease was primarily driven by decreases in personnel costs of $323, stock-based compensation expense of $477, and information technology and facilities expense of $463. The decrease was offset by a $350 increase in fees paid to third parties for development work.

Current wording

Research and development expenses decreased by $168, or 4%, to $3,670 for the three months ended June 30, 2025, from $3,838 for the three months ended June 30, 2024. This decrease was primarily driven by decreases in stock-based compensation expense of $189 and information technology and facilities expense of $431. The decreases were offset by a $361 increase in fees paid to third parties for development work and personnel costs, net of allocations, of $120.

Previous wording

Sales and marketing expenses increased by $42, or 12%, to $383 for the three months ended March 31, 2025, from $341 for the three months ended March 31, 2024. This increase was primarily driven by increases in allocated personnel costs of $294 as we pursue Non-Automotive opportunities. The increase is partially offset by decreases in stock-based compensation of $181 and facilities and information technology allocations of $90.

Current wording

Sales and marketing expenses increased by $534, or 797%, to $601 for the three months ended June 30, 2025, from $67 for the three months ended June 30, 2024. This increase was primarily driven by increases in allocated personnel costs and stock-based compensation of $484 and marketing and consulting costs of $60 as we pursue Non-Automotive opportunities.

Previous wording

Change in fair value of convertible note and warrant liabilities increased by $678 to a gain of $680 for the three months ended March 31, 2025, from a gain of $2 for the three months ended March 31, 2024. This increase was primarily due to the change in fair value of the the 2025 Note and related warrants in January 2025.

Current wording

Change in fair value of convertible note and warrant liabilities increased by $578 to $593 for the three months ended June 30, 2025, from $15 for the three months ended June 30, 2024. This increase was primarily due to the change in fair value of the 2025 Note and related warrants, which were newly issued in 2025.

Previous wording

Interest income and other increased by $19, or 10%, to $214 for the three months ended March 31, 2025, from $195 for the three months ended March 31, 2024. This increase was primarily due to higher interest earned on our cash equivalents and marketable securities in the current period.

Current wording

Interest income and other increased by $165, or 72%, to $393 for the three months ended June 30, 2025, from $228 for the three months ended June 30, 2024. This increase was primarily due to insurance proceeds received of $250, partially offset by lower interest earned on our cash equivalents and marketable securities in the current period.

Previous wording

Provision for income tax expenses remained constant at $2 for the three months ended March 31, 2025 and March 31, 2024.

Current wording

Provision for income tax expenses remained constant at $0 for the three months ended June 30, 2025 and June 30, 2024.

Previous wording

Revenues increased by $44, or 220%, to $64 for the three months ended March 31, 2025, from $20 for the three months ended March 31, 2024. This increase is primarily due to contract development revenues, partially offset by lower prototype unit sales in the current quarter.

Current wording

Revenues increased by $34, or 65%, to $86 for the six months ended June 30, 2025, from $52 for the six months ended June 30, 2024. This increase is primarily due to higher contract development revenues, partially offset by lower prototype unit sales in the current quarter.

Previous wording

Cost of revenue decreased by $167, or 63%, to $96 for the three months ended March 31, 2025, from $263 for the three months ended March 31, 2024. This decrease was primarily due to fewer units sold in the current quarter to Non-Automotive customers. The decrease was also due to inventory write-downs and losses on purchase commitments recorded in the three months ended March 31, 2024, which was primarily associated with transitioning to certain higher-grade components in our products for the Automotive market as a result of our revised strategic plan.

Current wording

Cost of revenue decreased by $219, or 52%, to $204 for the six months ended June 30, 2025, from $423 for the six months ended June 30, 2024. This decrease was primarily due to inventory write-downs and losses on purchase commitments recorded in the six months ended June 30, 2024, resulting from implementation of our strategic plan to wind down support for our legacy Non-Automotive product.

Previous wording

General and administrative expenses decreased by $2,720, or 48%, to $2,895 for the three months ended March 31, 2025, from $5,615 for the three months ended March 31, 2024. This decrease was primarily driven by a favorable adjustment of $1,685 upon settlement of a lease dispute, decreases in personnel cost of $803 and insurance of $106. These decreases were partially offset by an increase in stock-based compensation of $146.

Current wording

General and administrative expenses decreased by $2,595, or 26%, to $7,243 for the six months ended June 30, 2025, from $9,838 for the six months ended June 30, 2024. This decrease was primarily driven by a favorable adjustment of $1,612 upon settlement of a lease dispute, decreases in stock-based compensation and personnel cost, net of allocations, of $1,202. These decreases were partially offset by an increase in accounting, legal, and professional fees of $579.

Previous wording

Interest expense and other increased by $2,425, or 765%, to a net expense of $2,108 for the three months ended March 31, 2025, from a net income of $317 for the three months ended March 31, 2024. This increase was primarily due to an increase in costs related to financing arrangements of $2,095 and a decrease in amortization of premiums on marketable securities, net, of $180.

Current wording

Interest expense and other increased by $2,846, or 763%, to a net expense of $2,473 for the six months ended June 30, 2025, from a net income of $373 for the six months ended June 30, 2024. This increase was primarily due to an increase in costs related to financing arrangements in the current period and a decrease in amortization of premiums on marketable securities, net.

Previous wording

Net loss decreased by $2,203, or 22%, to $8,016 for the three months ended March 31, 2025, from $10,219 for the three months ended March 31, 2024. This decrease was primarily due to decreases in personnel and facilities expenses, partially offset by increased investments in the development of Apollo.

Current wording

Net loss decreased by $920, or 5% to $17,286 for the six months ended June 30, 2025, from $18,206 for the six months ended June 30, 2024. This decrease was primarily due to decreases in stock-based compensation, personnel and facilities expenses, partially offset by the increase in the change in fair value of convertible note and warrants, and investments in the development of Apollo.

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 a relationship with one or more Tier 1 automotive suppliers and the timing of any OEM design wins, our ability to extend our cash runway based on the restructuring initiatives announced in prior years, the timing and extent of spending to support R&D efforts, how quickly we can commercialize our products, and the market adoption of new and enhanced products and features. As of March 31, 2025, our cash, cash equivalents, and marketable securities totaled $25,926. For the three months ended March 31, 2025 and 2024, we had a net loss of $8,016 and $10,219, 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 a relationship with one or more Tier 1 automotive suppliers and the timing of any OEM design wins, our ability to effectively and efficiently manage our expenses, the timing and extent of spending to support R&D efforts, how quickly we can commercialize our products, and the market adoption of new and enhanced products and features. As of June 30, 2025, our cash, cash equivalents, and marketable securities totaled $19,210. Subsequent to June 30, 2025, we successfully raised additional capital of $68,844 on the issuance of shares from our common stock purchase agreements and the exercise of certain warrants. For the six months ended June 30, 2025 and 2024, we had a net loss of $17,286 and $18,206, respectively. We anticipate that we will continue to incur losses for at least the next several years.

Previous wording

On September 26, 2023, the U.S. Securities and Exchange Commission declared our registration statement on Form S-3 to be effective, which allows us to raise up to $200,000 in capital over the next three years subject to a limitation of one-third of our public float over a rolling twelve-month period, when our public float is below $75 million (which it is as of the date of this Quarterly Report on Form 10-Q is filed), which is referred to as the “baby shelf" rules.

Current wording

On September 26, 2023, the U.S. Securities and Exchange Commission declared our registration statement on Form S-3 to be effective, which allows us to raise up to $200,000 in capital over the next three years subject to a limitation of one-third of our public float over a rolling twelve-month period, when our public float is below $75 million, which is referred to as the “baby shelf" rules. As of July 28, 2025, we were no longer subject to the "baby shelf" rules.

Previous 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. As of March 31, 2025, we have issued 3,255,150 shares of our common stock to New Circle under the CSPA for gross proceeds totaling $6,480.

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. As of June 30, 2025, we have issued 3,480,713 shares of our common stock to New Circle under the CSPA for gross proceeds totaling $6,480.

Previous wording

On September 12, 2024, we entered into an At Market Issuance Sales Agreement with Alliance Global Partners, or A.G.P., pursuant to which we may issue and sell through A.G.P., up to $15,292 of our common stock from time to time through an "at-the-market" equity offering program. Such sales of common stock by us, if any, may occur from time to time at our sole discretion, over a 36-month period. As of March 31, 2025, we have sold 5,887,640 shares under the ATM Agreement for gross proceeds totaling $8,244.

Current wording

On September 12, 2024, we entered into an At Market Issuance Sales Agreement with Alliance Global Partners, or A.G.P., pursuant to which we may issue and sell through A.G.P., up to $15,292 of our common stock from time to time through an "at-the-market" equity offering program. Such sales of common stock by us, if any, may occur from time to time at our sole discretion, over a 36-month period. As of June 30, 2025, we have sold 6,395,643 shares under the ATM Agreement for gross proceeds totaling $8,825.

Previous wording

Until we are able to generate sufficient revenue from the sale of our products to cover operating expenses, working capital, and capital expenditures, we expect the funds raised in the transactions described earlier, and other potential sources of capital, to fund our near-term cash needs.

Current wording

Until we are able to generate sufficient revenue from the sale of our products to cover operating expenses, working capital, and capital expenditures, we expect the funds raised in the transactions described earlier, and other potential sources of capital, is sufficient to fund our near-term cash needs.

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. 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 5 and 17 to the Condensed Consolidated Financial Statements in Item 1of 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. 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 cash, cash equivalents and marketable securities at June 30, 2025, together with the additional proceeds raised subsequent to quarter-end of $68,844, we currently have sufficient financial resources to fund our operating expenses, working capital, and capital expenditure requirements for a period of at least twelve months from the date of this Quarterly Report on Form 10-Q. 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 contractual obligations, see Note 17 to the Condensed Consolidated Financial Statements in Item 1of Part I of this Quarterly Report on Form 10-Q.

Previous wording

For the three months ended March 31, 2025, net cash used in operating activities was $7,803. Factors affecting our operating cash flows during this period were net loss of $8,016, a gain on termination of an operating lease of $1,685, and change in fair value of convertible notes and warrant liabilities of $680, partially offset by stock-based compensation of $2,501, debt issuance costs of $1,984, and common stock purchase agreement costs of $111. Within operating activities, the net changes in operating assets and liabilities were cash used of $2,056, primarily driven by decreases in accrued expenses and other liabilities and operating lease liabilities of $2,408 and $57, respectively. Cash used was offset by cash provided by decreases in prepaid and other current assets and other noncurrent assets of $98 and $80, respectively, and an increase in accounts payable of $222.

Current wording

For the six months ended June 30, 2025, net cash used in operating activities was $14,158. Factors affecting our operating cash flows during this period were net loss of $17,286, a gain on termination of an operating lease of $1,612, and change in fair value of convertible notes and warrant liabilities of $87, partially offset by stock-based compensation of $3,661, debt issuance costs of $2,020, and common stock purchase agreement costs of $306. Within operating activities, the net changes in operating assets and liabilities were cash used of $1,207, primarily driven by decreases in accrued expenses and other liabilities and operating lease liabilities of $1,522 and $1,532, respectively. Cash used was offset by cash provided by decreases in prepaid and other current assets and other noncurrent assets of $84 and $134, respectively, and an increase in accounts payable of $1,761.

Previous wording

For the three months ended March 31, 2024, net cash used in operating activities was $7,885. Factors affecting our operating cash flows during this period were a net loss of $10,219, amortization of premiums and accretion of discounts on marketable securities, net of $252, offset by stock-based compensation of $3,014, and noncash lease expense of $364. Within operating activities, the net changes in operating assets and liabilities were cash used of $852, primarily driven by decreases in accrued expenses and other liabilities, operating lease liabilities, and other noncurrent liabilities of $1,343, $397, and $358, respectively. Cash used was offset by cash provided by a decrease in prepaid and other current assets of $772 and an increase in accounts payable of $309.

Current 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 a 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 a decrease in prepaid and other current assets of $724 and an increase in accounts payable of $108.

Previous wording

For the three months ended March 31, 2025, net cash used in investing activities was $8,578. The primary factors affecting net cash used in investing activities during this period were the purchases of marketable securities of $14,303, partially offset by redemptions and maturities of marketable securities of $5,731.

Current wording

For the six months ended June 30, 2025, net cash used in investing activities was $4,686. The primary factors affecting net cash used in investing activities during this period were the purchases of marketable securities of $14,303, partially offset by redemptions and maturities of marketable securities of $9,631.

Previous wording

For the three months ended March 31, 2024, net cash provided by investing activities was $368. The primary factors affecting net cash provided by investing activities during this period were the proceeds from redemptions and maturities of marketable securities of $6,500, partially offset by the purchases of marketable securities of $6,045 and purchases of property and equipment of $87.

Current wording

For the six months ended June 30, 2024, net cash provided by investing activities was $2,993. The primary factors affecting net cash provided by investing activities during this period were the proceeds from redemptions and maturities of marketable securities of $18,400, partially offset by the purchases of marketable securities of $15,173 and purchases of property and equipment of $234.

Previous wording

For the three months ended March 31, 2025, net cash provided by financing activities was $11,382. The primary factors affecting our financing cash flows during this period were proceeds from common stock purchase agreements of $9,495 and from the issuance of a convertible note of $2,950, partially offset by debt issuance costs of $578, taxes paid on net settlement of equity awards of $333 and stock issuance costs related to common stock purchase agreements of $152.

Current wording

For the six months ended June 30, 2025, net cash provided by financing activities was $10,952. The primary factors affecting our financing cash flows during this period were proceeds from common stock purchase agreements of $10,076 and from the issuance of a convertible note of $2,950, partially offset by payments on convertible note of $750, payments of debt issuance costs of $608, taxes paid on net settlement of equity awards of $364 and payments of stock issuance costs related to common stock purchase agreements of $404.

Previous wording

For the three months ended March 31, 2024, net cash used in financing activities was $120. The primary factors affecting our financing cash flows during this period were proceeds from the exercise of the CSPA of $165, partially offset by payments for taxes related to net settlement of equity awards of $45.

Current wording

For the six months ended June 30, 2024, net cash used in financing activities was $5,531. The primary factors affecting our financing cash flows during this period were proceeds from the exercise of the common stock purchase agreement of $5,560, partially offset by payments for taxes related to net settlement of equity awards of $47.

Previous wording

Our condensed consolidated financial statements are in accordance with GAAP. We are required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements, the reported amounts of revenues and expenses during the reporting periods, fair value measures, and the related disclosures in the condensed consolidated financial statements. Our actual results may differ significantly from these estimates due to changes in judgments, assumptions and conditions as a result of unforeseen events or otherwise, which could have a material impact on our financial position and results of operations. We believe our critical accounting policies involve the greatest degree of judgment and complexity and have the greatest potential impact on our condensed consolidated financial statements.

Current wording

Our condensed consolidated financial statements are in accordance with GAAP. We are required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements, the reported amounts of revenues and expenses during the reporting periods, fair value measures, and the related disclosures in the condensed consolidated financial statements. Our actual results may differ significantly from these estimates due to changes in judgments, assumptions and conditions as a result of unforeseen events or otherwise, which could have a material impact on our financial position and results of operations. We believe our critical accounting estimates involve the greatest degree of judgment and complexity and have the greatest potential impact on our condensed consolidated financial statements.

Previous wording

During the three months ended March 31, 2025, there were no significant changes in our critical accounting policies and estimates as compared to those previously disclosed in “Critical Accounting Policies and Estimates” in “Management's Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Annual Report on Form 10-K.

Current wording

During the six months ended June 30, 2025, there were no significant changes in our critical accounting estimates as compared to those previously disclosed in “Critical Accounting Policies and Estimates” in “Management's Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Annual Report on Form 10-K.