MICROVISION, INC.

(Unaudited)

1. DESCRIPTION OF BUSINESS

MicroVision, Inc. is defining the next generation of lidar-based perception solutions for automotive, industrial, and security & defense markets. The Company delivers integrated hardware and software solutions designed for real-world performance, automotive-grade reliability, and economic scalability. The Company’s diverse portfolio of lidar sensors, with both short- and long-range lidar solutions, feature solid-state sensors with varying wavelengths, advanced sensor architectures, design-to-cost engineering, and open software solutions.

The Company’s solutions enable advanced driver assistance systems, or ADAS, and autonomy features for customers in a wide range of markets, including automotive, industrial, and security & defense. Target industrial sectors include robotics, automated warehouse, agriculture, and mining. The Company’s integrated hardware and software solutions enable intelligent autonomous, active safety, and automation systems which depend on secure, cost-effective, and energy-efficient solutions. Software has been developed in close collaboration with automotive customers and also has broad application in industrial, defense, and commercial vehicle sectors.

With engineering teams in the U.S. and Germany, the Company develops and supplies integrated solutions, incorporating application software and processing data from differentiated sensor systems. The Company’s extensive experience in developing and productizing core lidar hardware and software components, along with expertise in edge computing, positions the Company as a valuable commercial partner capable of delivering high-value, low-power products.

Liquidity

The Company has incurred significant losses since inception. Operations to date have been funded primarily through the sale of common stock, convertible preferred stock, warrants, the issuance of convertible debt and, to a lesser extent, from development contract revenues, product sales, and licensing activities.

As of September 30, 2026, the Company had total liquidity comprised of $28.9 million of cash and cash equivalents, which excludes restricted cash, and approximately $41.1 million availability under its current at-the-market (“ATM”) facility as of September 30, 2026, subject to certain conditions. In October 2024, the Company issued to an institutional investor $45.0 million in senior secured convertible notes due March 2026 for gross proceeds of $41.4 million (the “Prior Note”). In February 2026, the Company entered into a securities purchase and exchange agreement with the same institutional investor, pursuant to which the Company issued two senior secured convertible notes due March 2028 (the “2026 Notes Financing”) – one for approximately $20.6 million in exchange for the Prior Note and the other for approximately $22.4 million. SeeNote 7. Notes Payable and Derivative Liability for additional discussion. Pursuant to terms of the securities purchase and exchange agreement, as amended, the Company must maintain minimum cash liquidity of the lesser of $17.5 million (which was reduced to $10.9 million subsequent to September 30, 2026; seeNote 16. Subsequent Events) or 110% of the then outstanding balance of the senior secured convertible notes for the remaining duration of their term.

During the first quarter of 2026, the Company completed the strategic acquisition of certain assets related to the worldwide lidar business of Luminar Technologies, Inc. (“Luminar”). The purchase price of $33.0 million was funded with cash on hand and, following the closing of the acquisition, the Company completed the 2026 Notes Financing to support the cash funding. The acquisition resulted in a near-term increase in headcount and leased properties, thereby significantly increasing cash usage and decreasing available liquidity. In light of this increase in operating expenses and cash usage, in March 2026 the Company began the implementation of a consolidation plan, which included a workforce reduction and other operational efficiencies, thereby partially offsetting the increase in cash usage that resulted from the Luminar acquisition. SeeNote 4. Business Combinations andNote 15. Restructuring Charges for additional discussion. The operating expense and cash usage improvements resulting from the consolidation plan are expected to continue taking effect during the fourth quarter of 2026. In the meantime, however, the combination of the higher cash burn during the first half of 2026 with historical losses and current liquidity, when analyzed in the aggregate in accordance with Accounting Standards Codification (“ASC”) 205-40, raises substantial doubt about the Company’s ability to continue as a going concern through at least twelve months from the date the condensed consolidated financial statements are issued.

Bolstering its strategic plan driven by revenue generation and achievement of operational efficiencies, with such efficiencies stemming from both the March 2026 consolidation plan and further restructuring activities commencing October 2026 (seeNote 15. Restructuring Charges, the Company intends to increase liquidity through financing activities, which could include utilization of the ATM facility or the issuance of equity, debt, or convertible securities. Notwithstanding such plans, there can be no assurance that financing activities will be successful or timely, or that capital can be raised on commercially acceptable terms, or at all. If the Company is unable to raise additional capital within the expected timeframe, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, streamlining operations and otherwise severely reducing operating expenses. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The unaudited condensed consolidated financial statements and accompanying notes include the accounts of the Company and its wholly owned subsidiaries, after elimination of all intercompany balances and transactions. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2025. The information as of December 31, 2025 included in the condensed consolidated balance sheets was derived from those audited financial statements.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial information for the interim periods presented. The unaudited condensed consolidated results of operations for the interim period are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any other future annual or interim period.

On July 22, 2026, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the “Amendment”) with the Secretary of State of the State of Delaware to effect a 1-for-15 reverse stock split (the “Reverse Stock Split”) of the Company’s shares of common stock, $0.001 par value (the “common stock”). Pursuant to the Reverse Stock Split, every fifteen shares of issued and outstanding shares of common stock were combined into one share of common stock. Simultaneously, the Company reduced the total authorized number of shares of capital stock to 175,000,000 shares consisting of 150,000,000 shares of common stock and 25,000,000 shares of preferred stock, $0.001 par value. There was no change in the par value per share of common stock of $0.001.

On August 1, 2026, the Reverse Stock Split was effectuated. Accordingly, all the current period and historical per share data, number of shares issued and outstanding, stock awards, and other common stock equivalents for the periods presented in this Form 10-Q have been adjusted retroactively, where applicable, to reflect the Reverse Stock Split.

The Reverse Stock Split affected all shareholders uniformly and did not alter any shareholder’s percentage interest in the Company’s equity. No fractional shares were issued in connection with the Reverse Stock Split. Shareholders of record who would otherwise be entitled to receive a fractional share had their fractional share rounded up to the nearest whole share. Proportionate adjustments were made to the number of shares of Common Stock issuable upon the exercise or conversion of the Company’s outstanding stock options, warrants, and convertible notes, as well as the exercise or conversion prices thereof, and to the number of shares reserved for issuance under the Company’s equity plans. SeeNote 7. Notes Payable and Derivative Liability, Note 8. Warrant LiabilityandNote 10. Share-Based Compensation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts therein. The most significant estimates and assumptions relate to valuations of intangibles, derivatives, and warrants, revenue recognition, inventory valuation, valuation of share-based payments, income taxes, depreciable lives assessment and related disclosure of contingent assets and liabilities. Due to the inherent uncertainty involved, actual results reported in future periods could differ from those estimates.

Foreign Currency Translation

Foreign currency transaction gains and losses are a result of the effect of exchange rate changes on transactions denominated in currencies other than the functional currency. Realized gains and losses on those foreign currency transactions are included in determining net loss for the period of exchange and are recorded in other income in the condensed consolidated statements of operations.

***Segment Information ***

The Company determines operating segments based on how the chief operating decision maker (“CODM”) manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance. The CODM is the Chief Executive Officer. The Company has determined that it operates inone operating segment andone reportable segment, relating to the sale and servicing of lidar hardware and software, as the CODM regularly reviews financial information presented on a consolidated basis. Financial information regularly reviewed by the CODM includes revenue, income or loss from operations, and net income or loss.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk are primarily cash, cash equivalents, and investment securities. As of September 30, 2026, cash and cash equivalents are comprised of operating checking accounts and short-term highly rated money market savings accounts. Short-term investments are comprised of highly rated corporate bonds and U.S. Treasury securities.

For the three months ended September 30, 2026,39%,35%, and 10% of total revenue was derived from three customers in the Security & Defense sector, respectively. For the same period in 2025, an automotive manufacturer and an automotive supplier accounted for 80% and 12% of total revenue, respectively.

For the nine months ended September 30, 2026,31% and 20% of total revenue was derived from two customers in the Security & Defense sector, respectively,15% was derived from an industrial customer, and 10% was derived from an automotive manufacturer. For the same period in 2025, an industrial customer, an automotive supplier, and an automotive manufacturer accounted for 51%,20%, and 18% of total revenue, respectively.

As of September 30, 2026, accounts receivable related to these customers accounted for 90% of total accounts receivable, net of allowances on the condensed consolidated balance sheets.

Typically, a significant concentration of components and the products sold are manufactured and obtained from single or limited-source suppliers. The loss of any single or limited-source supplier, the failure of any of these suppliers to perform as expected, or the disruption in the supply chain of components from these suppliers could subject the Company to risks and uncertainties including, but not limited to, increased cost of sales, possible loss of revenues, or significant delays in product development or product deliveries, any of which could adversely affect the Company’s financial condition and operating results.

Recently Adopted Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20). The amendments in this ASU clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The Company prospectively adopted ASU 2024-04 beginning January 1, 2026. The ASU did not have a material impact on the Company’s financial statements or disclosures.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this ASU require additional disclosure of specified information about certain costs and expenses in the notes to the financial statements. ASU 2024-03 is effective for annual periods for the Company beginning January 1, 2027, with early adoption permitted. The Company is currently evaluating the impact this ASU may have on its financial statement disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which provides clarity about current interim disclosure requirements and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 will be effective for interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of ASU 2025-11 will have on the consolidated financial statements, but does not expect a material impact upon adoption.

3. NET LOSS PER SHARE

Basic net loss per share is calculated using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is calculated using the weighted-average number of common shares outstanding and the dilutive effect of all potentially dilutive securities, including common stock equivalents and convertible securities. As the effect of dilutive securities outstanding during the period is anti-dilutive, diluted net loss per share is equal to basic net loss per share.

The components of basic and diluted net loss per share are as follows (in thousands, except loss per share data):

For the three and nine months ended September 30, 2026 and 2025, the following securities from net loss per share have been excluded as the effect of including them would have been anti-dilutive (in thousands):

4. BUSINESS COMBINATIONS

Scantinel

On January 1, 2026, the Company completed the acquisition of certain assets from Scantinel Photonics GmbH (“Scantinel”) related to Scantinel’s 1550nm FMCW ultra-long-range lidar sensor business. Total purchase consideration related to the transaction, comprised primarily of the purchase price and funding of operations during the period between signing and closing, was $2.2 million, which was paid prior to the closing of the transaction during the three months ended December 31, 2025.

Additionally, the Company incurred $0.1 million of acquisition-related costs associated with the acquisition during the nine months ended September 30, 2026, which are included in sales, marketing, general and administrative expense on the condensed consolidated statements of operations.

The transaction has been accounted for as a business combination. The results of operations for the acquisition are included in the condensed consolidated financial statements from the date of acquisition onwards.

The following table summarizes the preliminary purchase price allocation to assets acquired (in thousands):

The estimated fair value of acquired technology was calculated through the income approach using the multi-period excess earnings method.

The initial allocation of the purchase price was based on preliminary valuations and assumptions and is subject to change within the measurement period, pending final asset valuations related to property and equipment, net and intangible assets. The Company expects to finalize the allocation of the purchase price as soon as practicable and no later than one year from the acquisition date.

Revenue and net loss from the acquisition included in the condensed consolidated statements of operations for the three months ended September 30, 2026 is $0.0 million and $0.9 million, respectively, and for the nine months ended September 30, 2026 is $0.0 and $3.3 million, respectively.

Luminar

On January 26, 2026, the Company entered into an agreement with Luminar, pursuant to which MicroVision agreed to acquire from Luminar certain assets related to Luminar’s worldwide lidar sensor business, including intellectual property and inventory related to its IRIS and HALO 1550nm time-of-flight solid-state long-range sensors. The acquisition was approved by the U.S. Bankruptcy Court on January 27, 2026. On February 3, 2026, the acquisition closed and MicroVision paid Luminar the purchase price of $33.0 million (less the previously paid 10% deposit) plus cure costs of $0.2 million, funded through cash on hand.

In addition to total purchase consideration of $33.2 million, the Company incurred $2.8 million of acquisition-related costs associated with the acquisition during the nine months ended September 30, 2026, which are included in sales, marketing, general and administrative expense on the condensed consolidated statements of operations.

The transaction has been accounted for as a business combination. The results of operations for the acquisition are included in the condensed consolidated financial statements from the date of acquisition onwards.

The following table summarizes the preliminary purchase price allocation to assets acquired (in thousands):

The estimated fair value of developed technology was calculated through the income approach using the multi-period excess earnings method. The estimated fair value of customer relationships was calculated through the income approach using the distributor method.

The initial allocation of the purchase price was based on preliminary valuations and assumptions and is subject to change within the measurement period, pending final asset valuations related to inventory, property and equipment, net, and intangible assets. The Company expects to finalize the allocation of the purchase price as soon as practicable and no later than one year from the acquisition date.

Revenue and net loss from acquired operations, excluding nonrecurring acquisition-related costs incurred directly by the Company and not by the acquired operations, included in the condensed consolidated statements of operations for the three months ended September 30, 2026 is approximately $0.5 million and $3.7 million, respectively, and for the nine months ended September 30, 2026 is $2.1 million and $9.7 million, respectively.

Supplemental Unaudited Pro Forma Information

The below unaudited pro forma financial information summarizes the combined results of operations for the Company and the Luminar lidar business as if the acquisition had been completed on January 1, 2025. The unaudited pro forma information presented below is for informational purposes only and is not necessarily indicative of the consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2025, nor is it necessarily indicative of the results of future operations of the combined businesses. Nonrecurring pro forma adjustments include acquisition-related costs of $1.7 million that are assumed to have been incurred on January 1, 2025.

The following table summarizes the unaudited pro forma results (in thousands):

5. REVENUE RECOGNITION

Disaggregation of Revenue

The following table provides information about disaggregated revenue by timing of revenue recognition (in thousands):

Contract Acquisition Costs

The Company is required to capitalize certain contract acquisition costs consisting primarily of commissions paid when contracts are signed. As the Company currently does not pay any commissions upon the signing of a contract, no commission cost has been incurred as of September 30, 2026 and 2025.

6. INVESTMENT SECURITIES, AVAILABLE-FOR-SALE AND FAIR VALUE MEASUREMENTS

Investment securities, available-for-sale is comprised of corporate and government debt securities. The principal markets for the debt securities are dealer markets which have a high level of price transparency. The market participants for debt securities are typically large money center banks and regional banks, brokers, dealers, pension funds, and other entities with debt investment portfolios.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the authoritative guidance establishes a three level fair value inputs hierarchy and requires an entity to maximize the use of observable valuation inputs and minimize the use of unobservable inputs. The Company uses market data, assumptions, and risks that market participants would use in measuring the fair value of the asset or liability, including the risks inherent in the inputs and the valuation techniques. The hierarchy is summarized below.

Level 1 - Quoted prices in active markets for identical assets and liabilities at the measurement date that the reporting entity has the ability to access.

Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 - Unobservable inputs for which there is little or no market data, which requires the reporting entity to develop assumptions, which are significant to the measurement of the fair values.

The valuation inputs hierarchy classification for assets measured at fair value on a recurring basis are summarized below as of December 31, 2025 (in thousands). These tables do not include cash held in money market savings accounts.

Short-term investments are summarized below as of December 31, 2025 (in thousands).

The maturities of the investment securities, available-for-sale as of December 31, 2025 are shown below (in thousands):

The following table summarizes investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for more than 12 months as of December 31, 2025 (in thousands):

7. NOTES PAYABLE AND DERIVATIVE LIABILITY

Background

On October 14, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) for the purchase of senior secured convertible notes (the “Note” or the “Prior Note”) with an institutional investor (the “Holder”). The principal amount for the initial note is $45.0 million (the “Initial Principal Amount”) of convertible notes to the Holder, subject to certain limitations. On October 23, 2024, the Purchase Agreement closed and the Note was issued for net proceeds of approximately $38.1 million, inclusive of all discounts, fees, and expenses related to the transaction.

On February 3, 2025, the Company entered into a Letter Agreement with the Holder related to the Note. As a result of the Letter Agreement, the Holder elected to early convert $8.8 million of outstanding principal into 781,690 shares of the Company’s common stock. Additionally, as a result of the Letter Agreement, the Holder agreed to defer $11.6 million of principal repayments toseven monthly payments of $1.7 million beginning on September 1, 2025 and concluding on March 1, 2026. The Letter Agreement represented a modification requiring extinguishment accounting in accordance with ASC 470,Debt. As a result of the modification, a realized loss on debt modification of $4.7 million and interest expense of $2.1 million were recorded on the condensed consolidated statement of operations during the three months ended March 31, 2025.

On February 23, 2026, the Company entered into a Securities Purchase and Exchange Agreement (the “2026 Purchase Agreement & Exchange Agreement”) with the Holder, pursuant to which the Company issued two senior secured convertible notes – one for approximately $20.6 million in exchange for the Prior Note due March 2026 and the other for approximately $22.4 million (combined, the “2026 Convertible Notes”). Net cash proceeds from the issuance, after allowing for the exchange of the Prior Note, were approximately $20.6 million, inclusive of initial discounts, fees, and expenses related to the transaction.

The exchange of the Prior Note qualifies for extinguishment accounting in accordance with ASC 470. As a result of the exchange, a realized loss on debt extinguishment of $3.1 million was recorded on the condensed consolidated statement of operations during the three months ended March 31, 2026.

The 2026 Convertible Notes will rank senior to all outstanding and future indebtedness of the Company. Immediately upon closing and monthly beginning on April 1, 2026, the Holder may elect to require the Company to partially redeem the Notes. The Company has the right to optionally convert any partial redemption of the Notes to shares of the Company’s common stock, subject to certain conditions. If conversion is elected by the Company, the partial repayment amount is the greater of $3.0 million monthly, plus a 10% premium, or 110% of 7% of the aggregate daily volume of common stock for all volume-weighted average price (“VWAP”) trading days over a specified period. If cash settlement is elected by the Company, the partial repayment amount is $3.0 million monthly, plus a 10% premium. The end of term maturity balance is the outstanding principal balance of the Notes multiplied by 110% and matures on March 1, 2028. The Notes bear zero coupon.

During the three months ended March 31, 2026, pursuant to terms of the Notes, the Holder elected to convert $7.2 million of outstanding principal, inclusive of the 10% repayment premium, into 955,128 shares of the Company’s common stock.

During the three months ended June 30, 2026, pursuant to terms of the Notes, the Holder elected to convert $13.1 million of outstanding principal, inclusive of the 10% repayment premium, into 1,664,411 shares of the Company’s common stock.

During the three months ended September 30, 2026, pursuant to terms of the Notes, the Holder elected to convert $3.9 million of outstanding principal, inclusive of the 10% repayment premium, into 1,984,131 shares of the Company’s common stock.

As of September 30, 2026, there was $23.2 million outstanding principal, inclusive of the 10% repayment premium, on the Notes. Refer toNote 16. Subsequent Events for discussion of conversions and repayments occurring subsequent to September 30, 2026.

Components

The Notes are convertible debt instruments with multiple redemption, conversion, and put features. Certain features qualify as embedded derivatives requiring bifurcation. Therefore, the bifurcated features are accounted for separately as compound embedded derivatives in accordance with ASC 815,Derivatives and Hedging, and are included in derivative liability on the condensed consolidated balance sheets. The host contracts, which represent the Notes excluding the derivative liability, are accounted for as non-convertible debt under ASC 470 and are included in notes payable, current on the condensed consolidated balance sheets.

Notes Payable

The host contracts are recorded at the total aggregate amount repayable at maturity of $23.2 million as of September 30, 2026, less any unamortized debt discount and debt issuance costs. The debt discount is equal to the amount repayable at maturity, net of the initial fair value of the bifurcated derivative liability. Debt issuance costs are comprised of qualifying expenses resulting directly from the transaction.

Supplemental balance sheet information is as follows:

Interest expense related to the amortization of the debt discount and issuance costs was $1.9 million and $2.2 million for the three months ended September 30, 2026 and 2025, respectively, and $10.1 million and $7.9 million for the nine months ended September 30, 2026 and 2025, respectively. Total interest expense for the three and nine months ended September 30, 2026 and 2025 is comprised of the following components:

The monthly effective interest rate implicit in the Note as of September 30, 2026 under the interest method was 1.4%.

Maturities of partial repayments, if elected by the Holder, are as follows as of September 30, 2026:

Derivative Liability

The derivative liability was initially recorded at its fair value of $6.3 million as of the issuance date of February 23, 2026. The derivative liability is subsequently remeasured and reported at fair value each reporting period, with the changes in fair value recorded as an unrealized gain or loss and recognized in earnings.

The fair value of derivatives not designated as hedging instruments as of September 30, 2026 and December 31, 2025 are as follows:

Unrealized gains and losses associated with derivatives not designated as hedging instruments for the three and nine months ended September 30, 2026 and 2025 are as follows:

Fair Value Measurements

The fair value of the derivative liability is determined utilizing a “with and without” method, in which the fair value is calculated as the difference in the fair value of the entire hybrid instrument and the fair value of the instrument excluding the bifurcated derivative features.

The valuation inputs hierarchy classification for liabilities measured at fair value on a recurring basis are summarized below as of September 30, 2026 and December 31, 2025 (in thousands). SeeNote 6. Investment Securities, Available-For-Sale and Fair Value Measurements, for discussion of the fair value level hierarchy.

Activity related to the derivative liability during the three and nine months ended September 30, 2026 and 2025 is as follows:

The table below lists the inputs and assumptions for the Company’s valuations of the 2026 Convertible Notes as of September 30, 2026 and February 23, 2026 and of the Prior Note as of December 31, 2025:

8. WARRANT LIABILITY

2025 Warrants

On February 3, 2025, the Company entered into a Securities Purchase Agreement (the “2025 Purchase Agreement”) with an institutional investor. In exchange for $8.0 million, the Holder agreed to purchase 383,349 shares of common stock (the “2025 closing shares”) and warrants to purchase up to 383,349 shares of common stock at an exercise price of $23.55 per share (the “2025 warrants”). On February 4, 2025, the 2025 Purchase Agreement closed for net proceeds of approximately $7.8 million, inclusive of all fees and expenses related to the transaction. The 2025 warrants are exercisable beginning August 4, 2025 and expire on August 4, 2030. There have been no exercises of 2025 warrants as of September 30, 2026.

The warrants are accounted for as a liability under ASC 480,Distinguishing Liabilities from Equity,**as they may require settlement in cash upon the occurrence of certain events. Both the closing shares and the warrants are initially recorded on February 4, 2025 at their fair values of $9.0 million and $6.3 million, respectively. Interest expense of $7.3 million representing the discount on the 2025 Purchase Agreement transaction was recorded on the condensed consolidated financial statements for the nine months ended September 30, 2025. The warrant liability is subsequently remeasured and reported at fair value each reporting period, with the changes in fair value recorded as an unrealized gain or loss and recognized in earnings.

2026 Warrants

On August 14, 2026, the Company entered into a Securities Purchase Agreement (the “2026 Purchase Agreement”) with certain institutional investors. In exchange for $17.0 million, the Holders agreed to purchase 6.8 million shares of common stock (the “2026 closing shares”) and warrants to purchase up to 6.8 million shares of common stock at an exercise price of $2.50 per share (the “2026 warrants”). On August 17, 2026, the 2026 Purchase Agreement closed for net proceeds of approximately $15.6 million, inclusive of all fees and expenses related to the transaction. The warrants are exercisable immediately and expire on August 17, 2031. There have been no exercises of warrants as of September 30, 2026.

The warrants are accounted for as a liability under ASC 480,Distinguishing Liabilities from Equity, as they may require settlement in cash upon the occurrence of certain events. The warrants are initially recorded on August 17, 2026 at their fair value of $8.1 million, with the residual value allocated to the closing shares. The warrant liability is subsequently remeasured and reported at fair value each reporting period, with the changes in fair value recorded as an unrealized gain or loss and recognized in earnings.

The fair value of warrants is as follows:

Unrealized gains and losses associated with warrants are as follows:

The valuation inputs hierarchy classification for liabilities measured at fair value on a recurring basis are summarized below as of September 30, 2026 and December 31, 2025 (in thousands). SeeNote 6. Investment Securities, Available-For-Sale and Fair Value Measurements, for discussion of the fair value level hierarchy.

Activity related to the warrant liability during the three and nine months ended September 30, 2026 and 2025 is as follows:

The fair value of warrants is measured using the Black-Scholes option pricing model as of the measurement dates, and is further weighted based on the probability of occurrence of certain events requiring cash settlement. The table below lists the inputs and assumptions for the Company’s valuations of the 2025 warrants as of September 30, 2026 and December 31, 2025:

The table below lists the inputs and assumptions for the Company’s valuations of the 2026 warrants as of September 30, 2026 and as of initial measurement on August 17, 2026:

9. FINANCIAL STATEMENT COMPONENTS

Inventory

Inventory consists of the following (in thousands):

Inventory is computed using the first-in, first-out (FIFO) method and is stated at the lower of cost and net realizable value. Management periodically assesses the need to account for obsolescence of inventory and adjusts the carrying value of inventory to its net realizable value when required.

Inventory includes assets acquired from Luminar, the fair value of which is based on preliminary valuations and assumptions and is subject to change within the measurement period, pending final asset valuations.

Property and Equipment

Property and equipment consists of the following (in thousands):

Property and equipment, as well as related depreciation expense, includes assets acquired from Luminar, the fair value of which is based on preliminary valuations and assumptions and is subject to change within the measurement period, pending final asset valuations.

Depreciation expense was $1.4 million and $0.4 million for the three months ended September 30, 2026 and 2025, respectively, and $4.0 million and $1.1 million for the nine months ended September 30, 2026 and 2025, respectively.

Intangible Assets

The components of intangible assets were as follows as of September 30, 2026 and December 31, 2025:

Intangible assets, as well as related amortization expense, includes assets acquired from Luminar, the fair value of which is based on preliminary valuations and assumptions and is subject to change within the measurement period, pending final asset valuations.

Amortization expense was $0.4 million and $0.2 million for the three months ended September 30, 2026 and 2025, and $0.9 million and $0.7 million for the nine months ended September 30, 2026 and 2025, respectively.

The following table outlines estimated future amortization expense related to intangible assets held as of September 30, 2026 by line item on the condensed consolidated statement of operations (in thousands):

Accounts Payable

Accounts payable consists of the following (in thousands):

**10. SHARE-BASED COMPENSATION **

The Company issues share-based compensation to employees in the form of restricted stock units (RSUs), performance stock units (PSUs), and stock options. Share-based awards are accounted for by recognizing the fair value of share-based compensation expense on a straight-line basis over the service period of the award, net of estimated forfeitures. The fair value of RSUs and PSUs is determined by the closing price of common stock on the date of grant. The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model. Changes in estimated inputs or using other option valuation methods may result in materially different option values and share-based compensation expense.

The following table summarizes the amount of share-based compensation expense by line item on the condensed consolidated statements of operations:

Options Activity and Positions

The following table summarizes shares, weighted-average exercise price, weighted-average remaining contractual term, and aggregate intrinsic value of options outstanding and options exercisable as of September 30, 2026 (in thousands, except per share data):

As of September 30, 2026, there isno unrecognized share-based employee compensation related to stock options.

Restricted Stock Activity and Positions

The following table summarizes activity and positions with respect to RSUs and PSUs for the nine months ended September 30, 2026 (in thousands, except per share data):

During the nine months ended September 30, 2026, the Company granted 25,000 shares to non-executive employees and 1,330,000 shares to executive employees and directors for annual and short-term incentive awards. These shares are valued based on the closing price of common stock on the dates of grant and vest immediately or over three or four years.

During the nine months ended September 30, 2026, the Company granted 24,000 shares to non-employees as compensation for services. These shares are valued based on the closing price of common stock on the dates of grant and vest immediately.

As of September 30, 2026, unrecognized share-based compensation related to RSUs was $4.8 million, which will be expensed over the next 2.6 years.

11. LEASES

The Company leases office space and certain equipment under operating and finance leases. All leases have remaining lease terms of less than seven years. Office lease agreements include both lease and non-lease components, which are accounted for separately. Finance leases contain options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless the Company is reasonably certain to exercise the purchase option.

In September 2021, the Company entered into a lease agreement for product testing and lab space in Redmond, Washington which commenced in November 2021. In addition to base rent, the Company pays additional rent comprised of a proportionate share of any operating expenses, real estate taxes, and management fees. The lease, which expires in July 2032, includes anoption to extend the term for one ten-year renewal period.

In September 2021, the Company entered into a lease agreement for office space in Redmond, Washington which commenced in December 2022. In addition to base rent, the Company will pay additional rent comprised of a proportionate share of any operating expenses, real estate taxes, and management fees. The lease, which expires in December 2032, contains an option to extend the term for one ten-year renewal period. On April 21, 2025, the Company signed an agreement with a third party to sublease a portion of this office space. The sublease commenced on July 15, 2025 and provides monthly rent of $0.1 million. The sublease expires on April 1, 2030 and containsone 32-month extension option.

In December 2023, the Company entered into a lease agreement for office space in Hamburg, Germany which commenced in November 2024. The lease, which expires in October 2029, includes anoption to extend the term for two three-year renewal periods.

In September 2025, the Company entered into a lease agreement for an airplane runway strip in Warrenton, Virginia which commenced in October 2025. In addition to base rent, the Company pays additional rent comprised of a proportionate share of any operating expenses and real estate taxes. The lease, which expires in September 2026, includes anoption to extend the term for two one-year renewal periods.

In November 2025, the Company entered into a lease agreement for office space in Chantilly, Virginia which commenced in January 2026. In addition to base rent, the Company pays additional rent comprised of a proportionate share of any operating expenses. The lease, which expires in February 2028, includes anoption to extend the term for one five-year renewal period.

In February 2026, the Company assumed a lease agreement for office space in Colorado Springs, Colorado from Luminar (see Note 4. Business Combinations). In addition to base rent, the Company pays additional rent comprised of a proportionate share of operating expenses. The lease, which expires on May 31, 2028, includes anoption to extend the term for one three-year renewal period.

Also in February 2026, the Company assumed a lease agreement on office and lab space in Orlando, Florida from Luminar. On April 8, 2026, the Company extended the lease. The lease extension is scheduled to commence on July 1, 2026. In addition to base rent, the Company pays additional rent comprised of a proportionate share of operating expenses. The lease, which expires on July 30, 2029, includes anoption to extend the term for one three-year renewal period.

The components of lease expense are as follows:

Supplemental cash flow information related to leases is as follows:

Supplemental balance sheet information related to leases is as follows:

As of September 30, 2026, maturities of lease liabilities are as follows (in thousands):

12. COMMITMENTS AND CONTINGENCIES

Purchase Commitments

During the quarter ended September 30, 2023, the Company entered into a $9.3 million purchase commitment with a contract manufacturing partner for the production of MOVIA L sensor inventory to support direct sales to both automotive and non-automotive customers. During the quarter ended December 31, 2024, the Company entered into an additional purchase commitment with the existing contract manufacturing partner of $1.8 million. During the quarter ended September 30, 2026, the Company entered into a settlement agreement with the partner, whereby the Company agreed to pay $0.6 million to settle open purchase commitments to the partner of approximately $2.3 million. The open purchase commitments were previously recorded as an adverse purchase commitment within accrued liabilities on the consolidated balance sheets for the year ended December 31, 2025. The corresponding settlement gain of $1.7 million is included within other income on the condensed consolidated statement of operations for the three and nine months ended September 30, 2026.

Litigation

The Company is subject to various claims and pending or threatened lawsuits in the normal course of business. The Company is not currently party to any legal proceedings that management believes are reasonably possible to have a material adverse effect on financial position, results of operations, or cash flows.

13. COMMON STOCK

In March 2024, the Company entered into a $150 million ATM equity offering agreement with Deutsche Bank Securities, Inc., Mizuho Securities USA LLC, and Craig-Hallum Capital Group LLC (collectively, the “Agents”). Under the agreement, the Company is able, with discretion, to offer and sell shares of common stock having an aggregate value of up to $150.0 million through or directly to the Agents. As of September 30, 2026, the sale of 5.5 million shares for net proceeds of $104.8 million had been completed. As of September 30, 2026, approximately $41.1 million was available under this sales agreement.

In August 2026, the Company entered into the 2026 Purchase Agreement, whereby, in exchange for $17.0 million, the Company sold 6.8 million shares of common stock and warrants to purchase up to 6.8 million shares of common stock at an exercise price of $2.50 per share. SeeNote 6. Warrant Liability for additional discussion of the issued warrants.

14. INCOME TAXES

The Company recognized income tax expense of $0.1 million and $0.2 million during the three months ended September 30, 2026 and 2025, respectively, and $0.4 million and $0.3 million during the nine months ended September 30, 2026 and 2025, respectively.

As of September 30, 2026, the Company continues to haveno unrecognized tax positions.

15. RESTRUCTURING CHARGES

On February 27, 2026, the Company committed to a plan to consolidate its Redmond, Washington-based engineering, manufacturing, supply chain, and quality activities into the Company’s new Orlando, Florida facility (the “Consolidation Plan”). The decision is part of the Company’s ongoing efforts to reduce operating expenses and cash usage, improve organizational efficiency, and align resources to support strategic priorities.

In connection with the Consolidation Plan, in order to reduce operating expenses, during the first quarter of 2026 the Company commenced plans to reduce its Redmond-based workforce resulting in an approximately 13% reduction in the Company’s total global workforce. The reduction was substantially completed prior to September 30, 2026.

As a result, during the first quarter of 2026, the Company recognized approximately $1.1 million in charges associated with employee severance and related employee costs, as well as non-cash share-based compensation expense, which is recorded within research and development expense and sales, marketing, general and administrative expense on the condensed consolidated statements of operations. Accrued restructuring charges are included within accrued liabilities as of September 30, 2026 as follows (in thousands):

Subsequent to the date of these financial statements, on October 26, 2026, the Company began implementation of a separate, incremental plan to reduce operating expenses and cash usage, which included an approximate 28% reduction in the Company’s global workforce, predominantly impacting its office in Hamburg, Germany. The global reduction is expected to be largely effectuated by the end of the first quarter of 2027. The Company expects to incur approximately $4.0 million in charges associated with employee severance and related employee costs, as well as non-cash share-based compensation expense.

16. SUBSEQUENT EVENTS

Subsequent to the dates of these financial statements, pursuant to terms of the Notes, the Holder elected to convert $1.5 million of outstanding principal, inclusive of the 10% repayment premium, into 1,329,385 shares of the Company’s common stock on various dates. On October 5, 2026, the Company repaid from cash on hand $6.6 million of outstanding principal, inclusive of the 10% repayment premium. Immediately after the conversions and cash repayment, outstanding principal on the Notes was $15.0 million, inclusive of the 10% repayment premium. In connection with the cash repayment, the terms of the securities purchase and exchange agreement were amended so as to decrease the minimum cash liquidity amount (as discussed inNote 7. Notes Payable and Derivative Liability) from the lesser of $17.5 million to the lesser of $10.9 million, or 110% of the then outstanding balance of the Notes for so long as the Notes remain outstanding.