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Basis of Presentation and Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2025
Accounting Policies [Abstract]  
Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”) filed with the SEC on March 28, 2025. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. All intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, equity, revenues and expenses, and related disclosures. The significant estimates made by management include inventory reserves, useful life of long-lived assets, valuation allowance for deferred tax assets, impairment of goodwill and IPR&D, assets acquired in mergers and acquisitions, including intangible assets, forecasted costs associated with non-recurring engineering (“NRE”) services, restructuring costs, valuation of convertible and senior notes and derivatives associated with them, valuation of distinct goods and services in the purchase contract with customers, and stock-based compensation expense. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. Actual results could differ from those estimates.
Liquidity and Going Concern
Since inception, the Company has not generated positive cash flows from operating activities and has incurred significant losses from operations. As of September 30, 2025, the Company had an accumulated deficit of $2.3 billion. The Company expects to continue to incur operating losses for at least the foreseeable future due to continued investments in product and software development, efforts to build customer relations, expansion into additional markets, and investments in developing advanced manufacturing capabilities, including at contract manufacturing partners.
The Company’s principal sources of liquidity have been proceeds received from issuances of debt and equity. To execute on its strategic initiatives, the Company will continue to require additional capital resources. The Company continues to assess its liquidity position and opportunities for additional capital through issuances of equity securities, including convertible preferred securities, or the incurrence of additional debt. However, the Company may not be able to obtain funding on acceptable terms, or at all. If the Company is unable to raise additional capital when desired, its business, financial condition, and results of operations would be adversely affected.
The Company has historically funded its operations, product and business development initiatives and associated capital expenditures through cash, cash equivalents and marketable securities, issuance of shares of Class A common stock to vendors and third parties for services provided under its stock in lieu of cash program, issuance of Class A common stock under the Equity Financing Program (as defined in Note 13 below) or the issuance of convertible preferred stock under its Series A Preferred Stock Financing Program (see Note 12 below), or any combination of the foregoing.
As a result of the failure to make the October 15 Interest Payments (as defined in Note 19, Subsequent Events) an event of default occurred under the indenture governing the 2030 Convertible Notes (as defined in Note 9, Debt below), which caused an event of default under the indenture governing the Senior Notes (as defined in Note 9, Debt below). As a result of such events of default, the holders have the ability to declare the principal amount of such indebtedness, including accrued and unpaid interest and redemption premiums, immediately due and payable.
On October 30, 2025, the Company entered into forbearance agreements, effective on the same day (each, a “First Forbearance Agreement” and together, the “First Forbearance Agreements”), with an ad hoc group of holders (the “Initial Forbearing Noteholders”) of the Senior Notes and 2030 Convertible Notes beneficially owning, collectively, approximately 94.5% of the Senior Notes and approximately 89% of the 2030 Convertible Notes. Pursuant to each First Forbearance Agreement, subject to the terms and conditions set forth therein, the Initial Forbearing Noteholders agreed to forbear from exercising any of their rights and remedies under the applicable indentures governing the Senior Notes and the 2030 Convertible Notes and applicable law originally until November 6, 2025 (the “First Forbearance Period”) as a result of the Company’s failure to make the October 15 Interest Payments (as defined in Note 19, Subsequent Events). On November 6, 2025, the Company and certain of the Initial Forbearing Noteholders (the “Extending Forbearing Noteholders”), which Extending Forbearing Noteholders beneficially owned, collectively, approximately 91.3% of the Senior Notes and approximately 85.8% of the 2030 Convertible Notes, entered into new forbearance agreements, effective as of November 6, 2025 (each, a “Second Forbearance Agreement” and together, the “Second Forbearance Agreements”), in connection with which the Extending Noteholders agreed to extend the First Forbearance Period with respect to the Senior Notes and 2030 Convertible Notes through November 12, 2025 (the “Second Forbearance Period”) in exchange for agreeing to pay the fees of advisors to the Initial Forbearing Noteholders and continued good-faith negotiations related to certain other fees and expenses payable to the Extending Noteholders in connection with future forbearance agreements. On November 12, 2025, the Company and the Extending Forbearing Noteholders entered into new forbearance agreements, effective as of November 12, 2025 (each, a “Third Forbearance Agreement” and together, the “Third Forbearance Agreements”; and, together with the First Forbearance Agreements and Second Forbearance Agreements, each a “Forbearance Agreement” and together, the “Forbearance Agreements”), in connection with which the Extending Forbearing Noteholders agreed to extend the Second Forbearance Period with respect to the Senior Notes and 2030 Convertible Notes through November 24, 2025 (the “Extended Forbearance Period”) in exchange for certain ongoing reporting obligations and the Company’s entry into confidentiality agreements with the Extending Forbearing Noteholders.
The Company, its advisors and the advisors to the Extending Forbearing Noteholders continue to negotiate longer-term forbearance agreements with respect to the defaults under the indentures, and although there can be no assurances an agreement will be reached on acceptable terms or at all, the Company expects to enter into longer-term forbearance agreements prior to the expiration of the Extended Forbearance Period. See Note 19, Subsequent Events, for more information.
As a result, based on our current forecast and liquidity assessment, our unrestricted cash and cash equivalents, cash flows from operating activities, availability under existing financing agreements, and factors that arose subsequent to the third quarter of 2025, we have concluded that substantial doubt exists about the Company’s ability to continue as a going concern for a period of at least twelve months from the date our condensed consolidated financial statements are issued. Our condensed consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. While the Company is actively exploring a capital restructuring plan among other strategic alternatives, including without limitation, capital raises and/or a potential sale of all or part of the Company’s business or assets, there can be no assurance that, once determined, any such plan will be successfully implemented or that it will be sufficient to mitigate the conditions raising substantial doubt. See Note 9, Debt and Note 19, Subsequent Events for more information.
Goodwill
The Company records goodwill when the consideration paid in a business combination exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but instead is required to be tested for impairment annually and whenever events or changes in circumstances indicate that the carrying value of goodwill may exceed its fair value at the reporting unit level. A reporting unit is the same as, or one level below, an operating segment.
The Company reviews goodwill for impairment annually in its third quarter, and more frequently whenever events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill, as a basis for determining whether it is necessary to perform a quantitative analysis. If it is determined that it is more likely than not that the fair value of reporting unit is less than its carrying amount, a quantitative analysis is performed to identify goodwill impairment. If the carrying amount of a reporting unit exceeds its estimated fair value, the Company records an impairment based on the difference between fair value and carrying amount of the reporting unit as a reduction to goodwill. The fair value of a reporting unit refers to the price that would be received to sell the reporting unit in an orderly transaction between market participants. The Company estimates the fair values of its reporting units using a discounted cash flow model, which utilizes Level 3 unobservable inputs.
Due to significant financial and commercial hurdles and decline in sensor shipment because of slower automotive production ramps and the end of legacy contracts, and a sustained decrease in share price of the Company, the earnings forecast for the next several years was revised. The Company tested impairment for its goodwill in the quarter ending September 30, 2025. During the three and nine months ended September 30, 2025, the Company recorded a $2.2 million goodwill impairment of the Optogration reporting unit.
Impairment of Long-Lived Assets
The Company reviews tangible long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the estimated undiscounted future net cash flows to the related asset group’s carrying value. If an asset is considered impaired, the asset is written down to fair value. The Company uses market participant perspective when determining fair value of an asset group based on estimated future cash flows.
Due to significant financial and commercial hurdles and decline in sensor shipment because of slower automotive production ramps and the end of legacy contracts, and a sustained decrease in share price of the Company, the earnings forecast for the next several years was revised. The Company tested impairment for its tangible long-lived assets in the quarter ending September 30, 2025 The Company recorded $6.0 million impairment loss for long-lived tangible assets of Optogration and NRE asset groups during the three and nine months ended September 30, 2025.
Intangible Asset
Intangible assets, consisting of acquired developed technology, customer relationships, customer backlog, assembled workforce, in-process research and development (“IPR&D”) and tradename are carried at cost less accumulated amortization. All intangible assets have been determined to have definite lives and are amortized on a straight-line basis over their estimated remaining economic lives, ranging from one to ten years. Amortization expense related to developed technology is included in cost of sales. Amortization expense related to customer relationships is included in sales and marketing expense. Amortization expense related to tradename is included in general and administrative expense. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate an asset’s carrying value may not be recoverable. IPR&D is tested for impairment annually or more frequently if events or changes in circumstances indicate that the IPR&D intangible asset might be impaired.
Due to significant financial and commercial hurdles and decline in sensor shipment because of slower automotive production ramps and the end of legacy contracts, and a sustained decrease in share price of the Company, the earnings forecast for the next several years was revised. The Company tested impairment for its intangible long-lived assets in the quarter ending September 30, 2025. During the three and nine months ended September 30, 2025, the Company recorded $1.5 million intangible asst impairment of Optogration and NRE asset groups.
Segment Information
The Company has determined its operating segments using the same indicators that were used to evaluate its performance internally. The Company’s business activities are organized in two operating segments:
(i) “Autonomy Solutions”, which includes manufacturing and sale of LiDAR sensors that measure distance using pulsed laser light to generate a 3D environmental model (a.k.a. “point cloud”), non-recurring engineering services related to the Company’s LiDAR products, development of software products that enable autonomy capabilities for automotive applications, and licensing of certain data and information. In June 2022, the Company acquired certain assets from Solfice Research, Inc. (“Solfice” or “Civil Maps”). In January 2023, the Company acquired certain assets from Seagate Technology LLC and Seagate Singapore International Headquarters Pte. Ltd. (individually and collectively, “Seagate”). Assets purchased from both Civil Maps and Seagate have been included in the Autonomy Solutions segment.
(ii) “Advanced Technologies and Services (“ATS”)”, which includes the design, development, manufacturing, packaging, and development services of photonic components and sub-systems (including semiconductor lasers and photodetectors), application-specific integrated circuits, and pixel-based sensors. The Company acquired Optogration, Inc. (“Optogration”) in August 2021, Freedom Photonics LLC (“Freedom Photonics”) in April 2022, and EM4, LLC (“EM4”) in March 2024. Operations of Optogration, Freedom Photonics and EM4 have been included in the ATS segment since their respective acquisition dates.
Concentration of Credit Risk
The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, debt securities, and accounts receivable. The Company’s deposits exceed federally insured limits. Cash held by foreign subsidiaries of the Company as of September 30, 2025 and December 31, 2024 was not material.
The Company’s revenue is derived from customers located in the United States and international markets. Two customers, customer B and customer A, accounted for 40% and 33% of the Company’s accounts receivable as of September 30, 2025, respectively. Two customers, customer B and customer A, accounted for 32% and 22% of the Company’s accounts receivable as of December 31, 2024, respectively.
Significant Accounting Policies
The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024. There has been no material change to the Company’s significant accounting policies except as noted below related to issuance of preferred stock and allowance for credit loss during the nine months ended September 30, 2025.
Preferred Stock
The preferred stock is recorded outside of permanent equity when its contingently redeemable at the option of the holders upon events that are not solely within the Company’s control, in accordance with ASC 480, Distinguishing Liabilities from Equity. The preferred stock is recorded at proceeds received, net of issuance costs, discount and commitment fee. The carrying amount is accreted to the redemption value over the period from issuance to the earliest redemption date. The resulting accretion is treated as a deemed dividend and recorded as a reduction to retained earnings (or an increase in accumulated deficit), impacting the calculation of net income/(loss) available to common stockholders. The deemed dividend from accretion reduces earnings available to holders of the Company’s common stock in calculating basic and diluted EPS.
Current Expected Credit Loss
The Company applies ASC 326, Financial Instruments – Credit Losses (“CECL”), to financial assets measured at amortized cost, including promissory notes receivable. Under CECL, the Company estimates lifetime expected credit losses based on relevant historical experience, current conditions, and reasonable and supportable forecasts. Expected credit losses are recognized through an allowance for credit losses, which is adjusted each reporting period as new information becomes available. Provisions for credit losses are recorded in the condensed consolidated statements of operations within other income (expense), net to reflect current period changes in the allowance. Financial assets that are determined to be uncollectible are written off against the allowance for credit losses.
Recent Accounting Pronouncements Adopted
In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. ASU 2024-04 will be effective for the Company for the fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company prospectively early adopted ASU 2024-04 as of January 1, 2025. The Company recorded a gain on extinguishment of $21.5 million as a result of Troubled Debt Restructuring (“TDR”) related to the Exchange Transactions (as defined in Note 9) for the 2026 Convertible Senior Notes (as defined in Note 9), and the extinguishment gain was recorded in the other income (expense), net in the condensed consolidated statements of operations. See Note 9 for additional information.
Recent Accounting Pronouncements Not Yet Effective
In September 2025, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2025-06 Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40). The ASU was updated to consider different methods of software development and requires internal use software costs to be capitalized when management has authorized and committed to funding the software project and when significant uncertainty associated with the development of
the software has been resolved. The ASU is effective for annual reporting period beginning after December 15, 2027, and interim reporting within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of ASU 2025-06 on the Company’s condensed consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU introduces a practical expedient for all entities when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606 Revenue from Contracts with Customers. Under the practical expedient, when developing reasonable and supportable forecast as part of estimating expected credit losses, an entity may assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The ASU is effective for annual reporting period beginning after December 15, 2025, and interim reporting within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods. The Company is currently evaluating the impact of ASU 2025-05 on the Company’s condensed consolidated financial statements.
In May 2025, the FASB issued ASU No. 2025-04, Compensation-Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer (“ASU 2025-04”) to reduce diversity in practice and improve the decision usefulness and operability of the guidance for share-based consideration payable to a customer in conjunction with selling goods or services. The ASU is effective for fiscal years beginning after December 15, 2026 with updates to be applied on a retrospective or modified retrospective basis. Early adoption is permitted. The Company is evaluating the impact that this new standard will have on the Company’s condensed consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public business entities to disclose qualitative and quantitative information about certain costs and expenses in the notes to the financial statements on an interim and annual basis. ASU 2024-03 will be effective for the Company for the fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the Company’s financial statements and does not expect it to have a material impact on the Company’s condensed consolidated financial statements.
In December 2023, the FASB issued ASU No. ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires a public company to enhance the transparency and decision usefulness of income tax disclosures to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. ASU 2023-09 is effective for the Company for the annual period beginning January 1, 2025 with early adoption permitted. The Company is currently evaluating the new disclosure requirements and while the ASU will expand the income tax footnote disclosures, it is not expected to have a material impact on the Company’s consolidated financial statements.