Document

Filed pursuant to Rule 424(b)(3)
Registration No. 333-251657
PROSPECTUS SUPPLEMENT NO. 2
(to Prospectus dated May 27, 2021)

https://cdn.kscope.io/14556c9bd45e8dfa86391d993745c27d-luminar-txtxblackxonxwhite3.jpg
LUMINAR TECHNOLOGIES, INC.
Up to 181,247,830 Shares of Class A Common Stock
Up to 19,999,975 Shares of Class A Common Stock Issuable Upon Exercise of Warrants

This prospectus supplement supplements the prospectus dated May 27, 2021 (the “Prospectus”), which forms a part of our registration statement on Form S-1 (No. 333-251657). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the Securities and Exchange Commission (the “SEC”) on August 13, 2021 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this prospectus supplement.
The Prospectus and this prospectus supplement relates to the offer and sale from time to time by the selling securityholders named in the Prospectus (the “Selling Securityholders”) of up to (A) 181,247,830 shares of our Class A common stock, par value $0.0001 per share (“Class A Stock”), which consists of (i) 10,000,000 shares of Class A Stock (the “Founder Shares”) originally issued in a private placement to Gores Metropoulos Sponsor LLC (the “Sponsor”) in connection with the initial public offering (the “IPO”) of Gores Metropoulos, Inc. (“Gores”), and subsequently distributed to certain equityholders of the Sponsor, (ii) 42,064,871 shares of Class A Stock issued pursuant to the Merger Agreement (as defined in the Prospectus), (iii) 6,666,666 shares of Class A Stock issuable upon the exercise of 6,666,666 warrants (the “Private Warrants”) originally issued in a private placement to the Sponsor in connection with the IPO at an exercise price of $11.50 per share of Class A Stock and subsequently distributed to certain equityholders of the Sponsor, (iv) 105,118,203 Executive Shares (as defined in the Prospectus), (v) up to 3,944,151 Earn-Out Shares (as defined in the Prospectus) that may be issued in the form of Class A Stock pursuant to the earn-out provisions in the Merger Agreement, (vi) up to 10,455,134 shares of Class A Stock that may be issued or issuable upon the conversion of any Earn-Out Shares that may be issued in the form of our Class B common stock, par value $0.0001 per share (“Class B Stock”) pursuant to the earn-out provisions in the Merger Agreement, and (vii) up to 2,998,805 shares of Class A Stock issuable upon the exercise of outstanding Rollover Options (as defined in the Prospectus) to purchase shares of Class A Stock, and (B) up to 6,666,666 Private Warrants.
In addition, the Prospectus relates to the offer and sale of up to 13,333,309 shares of Class A Stock that are issuable by us upon the exercise of 13,333,309 warrants originally issued in connection with the IPO at an exercise price of $11.50 per share of Class A Stock (the “Public Warrants” and, together with the Private Warrants, the “Warrants”). On February 3, 2021, we announced the redemption of the Public Warrants. As a result of the ensuing exercises of the Public Warrants and the redemption of the remaining Public Warrants, no Public Warrants were outstanding as of April 14, 2021.
Our Class A Stock is listed on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “LAZR.” On August 12, 2021, the closing price of our Class A Stock was $17.40 per share.
1


This prospectus supplement should be read in conjunction with the Prospectus, and this prospectus supplement is qualified by reference to the Prospectus, except to the extent that the information provided by this prospectus supplement supersedes the information contained in the Prospectus.
This prospectus supplement is not complete without, and may not be delivered or utilized except in connection with, the Prospectus dated May 27, 2021 with respect to the securities described above, including any amendments or supplements thereto.
We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, and, as such, have elected to comply with certain reduced disclosure and regulatory requirements.
Investing in our Class A Stock is highly speculative and involves a high degree of risk. You should consider carefully the risks and uncertainties in the section entitled “Risk Factors” beginning on page 6 of the Prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this prospectus supplement is August 13, 2021.
    2



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 001-38791
LUMINAR TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware83-1804317
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
2603 Discovery DriveSuite 100OrlandoFlorida32826
(Address of Principal Executive Offices)(Zip Code)
(407) 900-5259
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Class A common stock, par value of $0.0001 per shareLAZRThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.   Yes     No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes     No ☒

As of August 6, 2021, the registrant had 247,595,607 shares of Class A common stock and 94,618,203 shares of Class B common stock, par value $0.0001 per share, outstanding.



LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
Page

1


CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which involve substantial risks and uncertainties. These statements reflect the current views of management with respect to future events and our financial performance. In some cases, you can identify these statements by forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words or phrases, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business.
These statements are only predictions based on our current expectations and projections about future events. These statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. These factors include the information set forth in Part 1, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 under the heading “Risk Factors” and Part II, Item 1A, of this Quarterly Report under the heading “Risk Factors”, which we encourage you to carefully read. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. We undertake no obligation to update any forward-looking statements made in this Form 10-Q to reflect events or circumstances after the date of this Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.
2


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
June 30, 2021December 31, 2020
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$134,689 $208,944 
Restricted cash725 775 
Marketable securities445,755 276,710 
Accounts receivable2,444 5,971 
Inventories, net4,318 3,613 
Prepaid expenses and other current assets13,660 4,797 
Total current assets601,591 500,810 
Property and equipment, net9,258 7,689 
Operating lease right-of-use assets11,976 — 
Goodwill701 701 
Other non-current assets2,641 1,151 
Total assets$626,167 $510,351 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$6,996 $6,039 
Accrued and other current liabilities12,904 10,452 
Operating lease liabilities4,275 — 
Debt, current64 99 
Total current liabilities24,239 16,590 
Warrant liabilities44,825 343,400 
Debt, non-current194 302 
Operating lease liabilities, non-current8,760 — 
Other non-current liabilities1,133 1,318 
Total liabilities79,151 361,610 
Stockholders’ equity:
Class A common stock24 22 
Class B common stock11 11 
Additional paid-in capital1,244,228 733,175 
Accumulated other comprehensive income34 
Accumulated deficit(697,254)(584,501)
Total stockholders’ equity547,016 148,741 
Total liabilities and stockholders’ equity$626,167 $510,351 

See accompanying notes to the unaudited condensed consolidated financial statements.
3


LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited, in thousands, except share and per share data)
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Revenue$6,309 $3,424 $11,622 $7,296 
Cost of sales7,853 7,442 15,492 11,285 
Gross loss(1,544)(4,018)(3,870)(3,989)
Operating expenses:
Research and development19,913 9,708 33,923 18,116 
Sales and marketing3,507 1,232 6,142 3,075 
General and administrative19,237 4,892 29,510 9,505 
Total operating expenses42,657 15,832 69,575 30,696 
Loss from operations(44,201)(19,850)(73,445)(34,685)
Other income (expense), net:
Change in fair value of warrant liabilities6,928 (4,265)(39,721)(4,574)
Loss on extinguishment of debt— (866)— (866)
Interest expense and other(288)(489)(488)(1,021)
Interest income and other731 35 901 130 
Total other income (expense), net7,371 (5,585)(39,308)(6,331)
Net loss$(36,830)$(25,435)$(112,753)$(41,016)
Net loss attributable to common stockholders$(36,830)$(25,435)$(112,753)$(41,016)
Net loss per share attributable to common stockholders:
Basic and diluted$(0.11)$(0.20)$(0.33)$(0.32)
Shares used in computing net loss per share attributable to common stockholders:
Basic and diluted340,255,023 129,650,239 336,641,349 128,780,581 
Comprehensive Loss:
Net loss$(36,830)$(25,435)$(112,753)$(41,016)
Net unrealized gains (losses) on available-for-sale debt securities16 16 (27)
Comprehensive loss$(36,814)$(25,419)$(112,780)$(41,007)

See accompanying notes to the unaudited condensed consolidated financial statements.
4


LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)
(Unaudited, in thousands, except share data)
Series A Convertible
Preferred Stock
Founders Convertible
Preferred Stock
Class A
Common Stock
Class B
Common Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders’
Equity (Deficit)
SharesAmountSharesAmountSharesAmountSharesAmount
Balance as of March 31, 202094,818,151 $244,743 26,206,837 $139,635,890 $14 — $— $11,598 $(8)$(237,784)$(226,177)
Share-based compensation— — — — — — — — 2,291 — — 2,291 
Other comprehensive income— — — — — — — — — 16 — 16 
Net loss— — — — — — — — — — (25,435)(25,435)
Balance as of June 30, 202094,818,151 $244,743 26,206,837 $139,635,890 $14 — $— $13,889 $$(263,219)$(249,305)
Balance as of March 31, 2021— $— — $— 234,575,992 $23 105,118,203 $11 $1,227,559 $(9)$(660,424)$567,160 
Issuance of Class A common stock upon exercise of stock options and vesting of restricted stock units— — — — 1,907,695 — — 2,884 — — 2,885 
Share-based compensation— — — — — — — — 13,915 — — 13,915 
Payments of employee taxes related to vested restricted stock units— — — — — — — — (140)(140)
Cash received from Gores on settlement of recapitalization of escrow— — — — — — — — 10 — — 10 
Other comprehensive income— — — — — — — — — 16 — 16 
Net loss— — — — — — — — — — (36,830)(36,830)
Balance as of June 30, 2021— $— — $— 236,483,687 $24 105,118,203 $11 $1,244,228 $$(697,254)$547,016 
See accompanying notes to the unaudited condensed consolidated financial statements.
5


LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)
(Unaudited, in thousands, except share data)
Series A Convertible
Preferred Stock
Founders Convertible
Preferred Stock
Class A
Common Stock
Class B
Common Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders’
Equity (Deficit)
SharesAmountSharesAmountSharesAmountSharesAmount
Balance as of December 31, 201994,818,151 $244,743 26,206,837 $139,635,890 $14 — $— $10,457 $(1)$(222,203)$(211,730)
Share-based compensation— — — — — — — — 3,432 — — 3,432 
Other comprehensive income— — — — — — — — — — 
Net loss— — — — — — — — — — (41,016)(41,016)
Balance as of June 30, 202094,818,151 $244,743 26,206,837 $139,635,890 $14 — $— $13,889 $$(263,219)$(249,305)
Balance as of December 31, 2020— $— — $— 218,818,037 $22 105,118,203 $11 $733,175 $34 $(584,501)$148,741 
Issuance of Class A common stock upon exercise of warrants, stock options and vesting of restricted stock units— — — — 17,665,650 — — 495,425 — — 495,427 
Share-based compensation— — — — — — — — 15,758 — — 15,758 
Payments of employee taxes related to vested restricted stock units— — — — — — — — (140)— — (140)
Cash received from Gores on settlement of recapitalization of escrow— — — — — — — — 10 — — 10 
Other comprehensive loss— — — — — — — — — (27)— (27)
Net loss— — — — — — — — — — (112,753)(112,753)
Balance as of June 30, 2021— $— — $— 236,483,687 $24 105,118,203 $11 $1,244,228 $$(697,254)$547,016 
See accompanying notes to the unaudited condensed consolidated financial statements.
6


LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Six Months Ended June 30,
20212020
Cash flows from operating activities:
Net loss$(112,753)$(41,016)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization1,332 1,241 
Noncash lease expense related to operating right-of-use assets1,748 — 
Amortization of premium on marketable securities602 — 
Unrealized loss on marketable securities60 — 
Change in fair value of warrants39,721 4,574 
Impairment of inventories1,453 2,481 
Loss on extinguishment of debt— 866 
Share-based compensation16,367 3,413 
Other512 — 
Changes in operating assets and liabilities:
Accounts receivable3,527 (3,940)
Inventories(2,640)(3,440)
Prepaid expenses and other current assets(8,469)(1,049)
Other non-current assets(1,490)638 
Accounts payable854 92 
Accrued and other current liabilities2,652 2,531 
Other non-current liabilities(1,659)(369)
Net cash used in operating activities(58,183)(33,978)
Cash flows from investing activities:
Purchases of marketable securities(376,289)— 
Proceeds from maturities of marketable securities169,619 — 
Proceeds from sales of marketable securities36,937 285 
Purchases of property and equipment(2,710)(708)
Net cash used in investing activities(172,443)(423)
Cash flows from financing activities:
Cash received from Gores on settlement of recapitalization of escrow10 — 
Proceeds from the issuance of debt— 31,910 
Repayment of debt(143)(3,843)
Principal payments on finance leases (capital lease prior to adoption of ASC 842)(143)(108)
Proceeds from exercise of warrants153,927 — 
Proceeds from exercise of stock options2,812 — 
Proceeds from issuance of restricted common stock— 
Payments of employee taxes related to vested restricted stock units(140)— 
Repurchase of common stock and redemption of warrants(2)(4)
Net cash provided by financing activities156,321 27,964 
Net decrease in cash, cash equivalents and restricted cash(74,305)(6,437)
Beginning cash, cash equivalents and restricted cash209,719 27,305 
Ending cash, cash equivalents and restricted cash$135,414 $20,868 
Supplemental disclosures of cash flow information:
Cash paid for interest$37 $1,328 
Supplemental disclosures of noncash investing and financing activities:
Issuance of Class A common stock upon exercise of warrants$338,293 $— 
Operating lease right-of-use assets obtained in exchange for lease obligations upon adoption of ASC 84210,849 — 
Operating lease right-of-use assets obtained in exchange for lease obligations2,876 — 
Assets acquired under finance leases (capital lease prior to adoption of ASC 842)— 123 
Purchases of property and equipment recorded in accounts payable and accrued liabilities222 65 
Receivable from stock option exercises394 — 
See accompanying notes to the unaudited condensed consolidated financial statements.
7

Table of Contents
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1. Organization and Description of Business
Luminar Technologies, Inc. and its wholly-owned subsidiaries (the “Company” or “Luminar”) was originally incorporated in Delaware on August 28, 2018 under the name Gores Metropoulos, Inc (“Gores”). The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On December 2, 2020 (the “Closing Date”), the Company (at such time named Gores Metropoulos, Inc.) consummated the business combination (the “Business Combination”) pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated August 24, 2020 with the pre-Business Combination Luminar Technologies, Inc. (“Legacy Luminar”). In connection with the consummation of the Business Combination, the Company changed its name from Gores Metropoulos, Inc. to Luminar Technologies, Inc. The Company’s common stock is listed on the NASDAQ under the symbol “LAZR.” The Company’s public warrants to purchase shares of Class A common stock were listed on the NASDAQ under the symbol “LAZRW,” until they were delisted on March 5, 2021 upon exercise and redemption.
Unless the context otherwise requires, the “Company” refers to the combined company and its subsidiaries following the Business Combination, “Gores” refers to the Company prior to the Business Combination and “Legacy Luminar” refers to Luminar Technologies, Inc., prior to the Business Combination. Refer to Note 3 to the financial statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 for additional information relating to the Business Combination.
The Company is a developer of advanced sensor technologies for the autonomous vehicle industry, encompassing the latest in Laser Imaging, Detection and Ranging (lidar) technology. The Company manufactures and distributes commercial lidar sensors. In addition, the Company develops ultra-sensitive pixel-based sensors and designs, tests and provides consulting services for non-standard integrated circuits that are essential for systems to meet the requirement of customers. Legacy Luminar was incorporated in Delaware on March 31, 2015. The Company has research and manufacturing facilities located in Palo Alto, California and Orlando, Florida, which is also the Company’s headquarters.
Note 2. 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 (“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, 2020. 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 condensed 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, valuation allowance for deferred tax assets, valuation of warrants, revenue, stock-based compensation expense and other loss contingencies. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. Actual results could differ from those estimates.
Segment Information
The Company has determined its operating segments using the same indicators which are used to evaluate its performance internally. The Company has two business activities: (i) manufacturing and distribution of lidar sensors that measure distance using laser light to generate a highly accurate 3D map for automotive mobility applications and (ii) development of ultra-sensitive pixel-based sensors and designing, testing and providing consulting services for non-standard integrated circuits that are essential for systems to meet the requirement of customers. The Company’s operating segments are (i) Autonomy Solutions and (ii) Component Sales. The Company’s chief operating decision maker (“CODM”), its Chief Executive Officer, reviews the operating results of these segments for the purpose of allocating resources and evaluating financial performance.
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Table of Contents
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
Concentration of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents, marketable investments and accounts receivable. A significant portion of the Company’s cash and cash equivalents is held at high-quality domestic financial institutions. Deposits held with the financial institutions may, at times, exceed the amount of insurance provided on such deposits. The Company held cash in foreign entities of $0.7 million and $0.6 million as of June 30, 2021 and December 31, 2020, respectively.
The Company’s revenue is derived from customers located in the United States and international markets. The Company mitigates its credit risks by performing ongoing credit evaluations of its customers’ financial conditions and requires advance payment from customers in certain circumstances. The Company generally does not require collateral.
Two customers accounted for 67% and 10%, respectively, of the Company’s accounts receivable at June 30, 2021 and one customer accounted for 86% of the Company’s accounts receivable at December 31, 2020.
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, 2020. Other than the accounting policies discussed below related to equity investments and in Note 11 related to the adoption of Accounting Standards Codification (“ASC”) 842, Leases, there has been no material change to the Company’s significant accounting policies during the six months ended June 30, 2021.
Equity Investments
The Company’s holds marketable equity investments, over which the Company does not have a controlling interest or significant influence. Marketable equity investments are measured using the quoted prices in active markets with changes recorded in other income (expense), net on the condensed consolidated statement of operations.
Recently Adopted Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-02, Leases (Topic 842) and issued subsequent amendments to the initial guidance in 2017, 2018 and 2019 (collectively “ASC 842”). Under the new guidance, a lessee is required to recognize assets and liabilities for both finance, previously known as capital, and operating leases with lease terms of more than 12 months. The ASU also requires disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. In transition, the Company recognized and measured leases at the beginning of the period of adoption, January 1, 2021, using a modified retrospective approach that included a number of optional practical expedients that the Company elected to apply. See Note 11 for disclosure on the impact of adopting this standard.
Recent Accounting Pronouncements Not Yet Effective
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (ASC 326): Measurement of Credit Losses of Financial Instruments, which, together with subsequent amendments, amends the requirement on the measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 will be effective for the Company beginning January 1, 2023, 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 consolidated financial statements.
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Table of Contents
LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 3. Revenue
Disaggregation of Revenues
The Company disaggregates its revenue from contracts with customers by geographic region based on the primary locations where the customer is situated, type of good or service and timing of transfer of goods or services to customers (point-in-time or over time), as it believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. Total revenue based on the disaggregation criteria described above are as follows (in thousands):
Three Months Ended June 30,
20212020
Revenue% of RevenueRevenue% of Revenue
Revenue by primary geographical market:
North America$4,061 64 %$640 19 %
Asia Pacific154 %205 %
Europe and Middle East2,094 33 %2,579 75 %
Total$6,309 100 %$3,424 100 %
Revenue by timing of recognition:
Recognized at a point in time$1,988 32 %$182 %
Recognized over time4,321 68 %3,242 95 %
Total$6,309 100 %$3,424 100 %
Revenue by segment:
Autonomy Solutions$5,822 92 %$2,809 82 %
Component Sales487 %615 18 %
Total$6,309 100 %$3,424 100 %
Six Months Ended June 30,
20212020
Revenue% of RevenueRevenue% of Revenue
Revenue by primary geographical market:
North America$6,600 57 %$1,725 24 %
Asia Pacific475 %213 %
Europe and Middle East4,547 39 %5,358 73 %
Total$11,622 100 %$7,296 100 %
Revenue by timing of recognition:
Recognized at a point in time$4,041 35 %$790 11 %
Recognized over time7,581 65 %6,506 89 %
Total$11,622 100 %$7,296 100 %
Revenue by segment:
Autonomy Solutions$10,158 87 %$6,106 84 %
Component Sales1,464 13 %1,190 16 %
Total$11,622 100 %$7,296 100 %
Volvo Stock Purchase Warrant
In March 2020, the Company issued a stock purchase warrant to Volvo Car Technology Fund AB (“VCTF”) in connection with an engineering services contract. VCTF is entitled to purchase from the Company up to 4,089,280 shares of Class A common stock, at a price of $3.1769 per share. The warrants vest and become exercisable in two tranches based on satisfaction of certain commercial milestones and the probability of reaching commercial production and delivering production units. The fair value of warrants, aggregating $2.9 million, represents consideration payable to a customer and would be recognized as reduction in revenue consistent with the revenue recognition pattern when these warrants become probable of
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Notes to Condensed Consolidated Financial Statements (Unaudited)
vesting. The Company’s management determined that the vesting of these warrants was not probable as of June 30, 2021. The following factors were considered in this determination:
During the second quarter of 2021, the Company issued a joint press release stating that Volvo intends to include Luminar’s Iris unit, the Company’s latest generation lidar sensor which meets the size, weight, cost, power and reliability requirements of automotive qualified series production, as standard on one of its vehicle programs as opposed to being only an option. While the announcement increased the targeted volume for the Company’s expected business with Volvo, the anticipated start of production and the necessary prototype testing procedures were not modified. As a result, this announcement does not impact the probability or likelihood of reaching commercial production.
The Company is in the process of transitioning from currently producing B-sample prototype Iris units at its advanced manufacturing operations in Orlando, Florida to producing C-sample prototype Iris units at its contract manufacturing partner. This transition is expected to occur by the end of this calendar year.
The Company recently completed its initial design freeze for the prototype C-sample Iris units. This design includes modifications from the Company’s B-sample Iris units as well as modifications to the production process for its contract manufacturing partner. The prototype units produced with this design and production process will need to undergo certain industry standard testing procedures. The Company’s management anticipates reaching the probability threshold for the initial tranche tied to reaching commercial production once it substantially completes these industry standard testing procedures, which is expected to be achieved in the second half of 2021.
Contract assets and liabilities
Contract assets primarily represent revenues recognized for performance obligations that have been satisfied but have not been billed. The Company’s contract assets as of June 30, 2021 and December 31, 2020 were $5.0 million and $0, respectively. Contract liabilities consist of deferred revenue and customer advanced payments. Deferred revenue includes billings in excess of revenue recognized related to product sales and other services revenue and is recognized as revenue when the Company performs under the contract. Customer advanced payments represent required customer payments in advance of product shipments according to customer’s payment term. Customer advance payments are recognized in revenue as or when control of the performance obligation is transferred to the customer. The Company’s contract liabilities were $0.6 million and $2.3 million as of June 30, 2021 and December 31, 2020, respectively, and were included in accrued and other current liabilities in the condensed consolidated balance sheets.
The significant changes in contract liabilities balances consisted of the following (in thousands): 
 June 30, 2021December 31, 2020
Beginning balance$2,284 $225 
Revenue recognized that was included in the contract liabilities beginning balance(2,284)(225)
Net increase due to cash received and not recognized as revenue and billings in excess of revenue recognized during the period586 2,284 
Ending balance$586 $2,284 
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 4. Investments
Debt Securities
The Company’s investments in debt securities consisted of the following as of June 30, 2021 and December 31, 2020 (in thousands):
June 30, 2021
 CostGross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
U.S. Treasury$185,504 $12 $(81)$185,435 
U.S. agency and government sponsored securities4,994 — (3)4,991 
Commercial paper226,610 18 (8)226,620 
Corporate bonds84,672 71 (14)84,729 
Asset-backed securities14,019 12 — 14,031 
Total debt securities$515,799 $113 $(106)$515,806 
Included in cash and cash equivalents$86,520 $$(1)$86,523 
Included in marketable securities$429,279 $109 $(105)$429,283 
December 31, 2020
 CostGross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
U.S. Treasury$155,339 $14 $(6)$155,347 
U.S. agency and government sponsored securities19,996 — — 19,996 
Commercial paper182,218 (4)182,220 
Corporate bonds45,431 21 (2)45,450 
Asset-backed securities7,012 — 7,018 
Total debt securities$409,996 $47 $(12)$410,031 
Included in cash and cash equivalents$133,319 $$(2)$133,321 
Included in marketable securities$276,677 $43 $(10)$276,710 
The following table presents the gross unrealized losses and the fair value for those debt securities that were in an unrealized loss position for less than 12 months as of June 30, 2021 and December 31, 2020 (in thousands):
June 30, 2021December 31, 2020
Gross
Unrealized
Losses
Fair ValueGross
Unrealized
Losses
Fair Value
U.S. Treasury$(81)$54,963 $(6)$65,298 
U.S. agency and government sponsored securities(3)4,991 — — 
Commercial paper(8)60,957 (4)47,629 
Corporate bonds(14)23,387 (2)15,575 
Total$(106)$144,298 $(12)$128,502 
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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
Equity Investments
The Company’s equity investments included in marketable securities as of June 30, 2021 and December 31, 2020 were as follows (in thousands):
June 30, 2021December 31, 2020
Equity investments included in marketable securities$16,472 $— 
Total realized and unrealized gains and losses associated with the Company’s equity investments consisted of the following (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Net realized gains (losses) recognized on equity investments sold$(33)$— $81 $— 
Net unrealized gains (losses) recognized on equity investments held253 — (25)— 
Total net gains (losses) recognized in other income (expense), net$220 $— $56 $— 
Note 5. Financial Statement Components
Cash and Cash Equivalents
Cash and cash equivalents consisted of the following (in thousands):
 June 30, 2021December 31, 2020
Cash$16,299 $10,652 
Money market funds31,867 64,971 
U.S. Treasury— 24,999 
Commercial paper86,523 108,322 
Total cash and cash equivalents$134,689 $208,944 
Inventories, net
Inventories consisted of the following (in thousands):
 June 30, 2021December 31, 2020
Raw materials$2,419 $625 
Work-in-process1,618 52 
Finished goods281 2,936 
Total inventories, net$4,318 $3,613 
The Company’s inventory write-down was $1.2 million and $1.5 million for the three and six months ended June 30, 2021, respectively, and $2.3 million and $2.5 million for the three and six months ended June 30, 2020, respectively.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
 June 30, 2021December 31, 2020
Prepaid expenses$6,307 $1,073 
Contract assets5,026 — 
Advance payments to vendors539 961 
Prepaid rent and other503 
Other receivables1,787 2,260 
Total prepaid expenses and other current assets$13,660 $4,797 
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Property and Equipment
Property and equipment consisted of the following (in thousands):
 June 30, 2021December 31, 2020
Computer hardware and software$2,978 $2,450 
Demonstration fleet and demonstration units1,973 1,821 
Machinery and equipment6,803 5,940 
Furniture and fixtures293 293 
Vehicles856 835 
Leasehold improvements960 791 
Construction in progress2,463 1,410 
Total property and equipment16,326 13,540 
Accumulated depreciation and amortization(7,068)(5,851)
Total property and equipment, net$9,258 $7,689 
Depreciation and amortization expense associated with property and equipment was $0.7 million and $1.3 million for the three and six months ended June 30, 2021, respectively, and $0.6 million and $1.2 million for the three and six months ended June 30, 2020, respectively.
Property and equipment capitalized under finance lease (capital lease prior to adoption of ASC 842) consisted of the following (in thousands):
June 30, 2021December 31, 2020
Computer hardware and software$88 $88 
Machinery and equipment838838
Total property and equipment, gross926926
Less: accumulated depreciation(285)(219)
Total property and equipment, net$641 $707 
Other Non-Current Assets
Other non-current assets consisted of the following (in thousands):
 June 30, 2021December 31, 2020
Security deposits$1,038 $1,106 
Other non-current assets1,603 45 
Total other non-current assets$2,641 $1,151 
Accrued and Other Current Liabilities
Accrued and other current liabilities consisted of the following (in thousands): 
 June 30, 2021December 31, 2020
Accrued expenses$4,959 $3,998 
Warranty liabilities331 259 
Contract liabilities586 2,284 
Accrued compensation and benefits3,788 3,071 
Contract losses220 558 
Finance lease (capital lease prior to adoption of ASC 842) liabilities, current273 282 
Employee tax withholding2,747 — 
Total accrued and other current liabilities$12,904 $10,452 
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Other Non-Current Liabilities
Other non-current liabilities consisted of the following (in thousands): 
 June 30, 2021December 31, 2020
Deferred rent$— $826 
Finance lease (capital lease prior to adoption of ASC 842) liabilities, non-current198 331 
Other non-current liabilities935 161 
Total other non-current liabilities$1,133 $1,318 
Note 6. Fair Value Measurements
The Company carries cash equivalents, marketable investments, and Public and Private Warrants. Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 — Observable inputs, which include unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than Level 1 inputs, such as quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are based on management’s assumptions, including fair value measurements determined by using pricing models, discounted cash flow methodologies or similar techniques.
The Company determined the fair value of its Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments.
Marketable investments classified within Level 2 of the fair value hierarchy are valued based on other observable inputs, including broker or dealer quotations, alternative pricing sources or U.S. Government Treasury yield of appropriate term. When quoted prices in active markets for identical assets or liabilities are not available, the Company relies on non-binding quotes from its investment managers, which are based on proprietary valuation models of independent pricing services. These models generally use inputs such as observable market data, quoted market prices for similar instruments, historical pricing trends of a security as relative to its peers. To validate the fair value determination provided by its investment managers, the Company reviews the pricing movement in the context of overall market trends and trading information from its investment managers. The Company performs routine procedures such as comparing prices obtained from independent source to ensure that appropriate fair values are recorded. Because the transfer of Private Warrants to anyone outside of a small group of individuals constituting the sponsors of Gores Metropoulos, Inc. would result in the Private Warrants having substantially the same terms as the Public Warrants, management determined that the fair value of each Private Warrant is the same as that of a Public Warrant, with an insignificant adjustment for short-term marketability restrictions, as of December 31, 2020. As of June 30, 2021, management determined the fair value of the Private Warrants using observable inputs in the Black-Scholes valuation model, which used the remaining term of warrants of 4.43 years, volatility of 64.6% and a risk-free rate of 0.75%. Accordingly, the Private Warrants are classified as Level 3 financial instruments.
The following table presents changes in Level 3 liabilities relating to Private Warrants measured at fair value as of June 30, 2021 (in thousands):
Private Warrants
Balance as of December 31, 2020$— 
Additions51,753 
Exercise— 
Measurement adjustments(6,928)
Balance as of June 30, 2021$44,825 
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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows (in thousands):
Fair Value (in thousands) Measured as of
June 30, 2021 Using:
Level 1Level 2Level 3Total
Assets:
Cash equivalents:
Money market funds$31,867 $— $— $31,867 
Commercial paper— 86,523 — 86,523 
Total cash equivalents$31,867 $86,523 $— $118,390 
Marketable investments:
U.S. Treasury$185,435 $— $— $185,435 
U.S. agency and government sponsored securities— 4,991 — 4,991 
Commercial paper— 140,097 — 140,097 
Corporate bonds— 84,729 — 84,729 
Asset-backed securities— 14,031 — 14,031 
Equity investments16,472 — — 16,472 
Total marketable investments$201,907 $243,848 $— $445,755 
Liabilities:
Private Warrants$— $— $44,825 $44,825 
Total warrant liabilities$— $— $44,825 $44,825 
Fair Value (in thousands) Measured as of
December 31, 2020 Using:
Level 1Level 2Level 3Total
Assets:
Cash equivalents:
Money market funds$64,971 $— $— $64,971 
U.S. Treasury24,999 — — 24,999 
Commercial paper— 108,322 — 108,322 
Total cash equivalents$89,970 $108,322 $— $198,292 
Marketable investments:
U.S. Treasury$130,348 $— $— $130,348 
U.S. agency and government sponsored securities— 19,996 — 19,996 
Commercial paper— 73,898 — 73,898 
Corporate bonds— 45,450 — 45,450 
Asset-backed securities— 7,018 — 7,018 
Total marketable investments$130,348 $146,362 $— $276,710 
Liabilities:
Public Warrants$228,933 $— $— $228,933 
Private Warrants— 114,467 — 114,467 
Total warrant liabilities$228,933 $114,467 $— $343,400 
Note 7. Stockholders’ Equity
Class A and Class B Common Stock
The Company’s Board of Directors has authorized two classes of common stock, Class A and Class B. As of June 30, 2021, the Company had authorized 715,000,000 and 121,000,000 shares of Class A and Class B common stock with a par value of $0.0001 per share for each class. As of June 30, 2021, the Company had 236,483,687 and 105,118,203 shares of Class A and Class B common stock issued and outstanding, respectively. Holders of the Class A and Class B common stock have identical rights, except that holders of the Class A common stock are entitled to one vote per share and the holder of the Class B common
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Notes to Condensed Consolidated Financial Statements (Unaudited)
stock is entitled to ten votes per share. On July 1, 2021, 10,500,000 shares of Class B common stock were converted into Class A common stock on a one-for-one basis.
Public and Private Warrants
As of December 31, 2020, the Company had 13,333,309 Public Warrants and 6,666,666 Private Warrants outstanding. On February 3, 2021, the Company announced that holders of its 13,333,309 outstanding public warrants had until March 5, 2021 to exercise their Public Warrants. The Public Warrants were exercisable for an aggregate of 13,333,309 shares of Class A common stock at a price of $11.50 per share. On March 10, 2021, the Company changed the previously announced redemption date of March 5, 2021 to a new redemption date of March 16, 2021 for the redemption of its outstanding Public Warrants. As of March 16, 2021, 3,589,645 Private Warrants and 13,128,671 Public Warrants were exercised, and the Company received $153.9 million in cash proceeds from the exercise of these warrants. Pursuant to the terms of the agreements governing the rights of the holders of the Public Warrants, the Company redeemed the remaining unexercised and outstanding 204,638 Public Warrants after March 16, 2021 for a redemption price of $0.01 per Public Warrant. The Company had 3,077,021 Private Warrants and no Public Warrants, outstanding as of June 30, 2021.
Note 8. Earnings (Loss) Per Share
Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock during the period plus, common stock equivalents, as calculated under the treasury stock method, outstanding during the period. If the Company reports a net loss, the computation of diluted loss per share excludes the effect of dilutive common stock equivalents, as their effect would be antidilutive. The Company computes earnings (loss) per share using the two-class method for its Class A and Class B common stock. Earnings (loss) per share is same for both Class A and Class B common stock since they are entitled to the same liquidation and dividend rights. Earnings (loss) per share calculations for all periods prior to the Business Combination have been retrospectively restated to the equivalent number of shares reflecting the exchange ratio established in the reverse capitalization.
The following table sets forth the computation of basic and diluted loss per share for the three and six months ended June 30, 2021 and 2020: (in thousands, except for share and per share amounts):
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Numerator:
Net loss$(36,830)$(25,435)$(112,753)$(41,016)
Net loss attributable to common shareholders$(36,830)$(25,435)$(112,753)$(41,016)
Denominator:
Weighted average common shares outstanding- Basic340,255,023 129,650,239 336,641,349 128,780,581 
Dilutive effect of potential common shares— — — — 
Weighted average common shares outstanding- Diluted340,255,023 129,650,239 336,641,349 128,780,581 
Net loss per shares attributable to common shareholders- Basic and Diluted$(0.11)$(0.20)$(0.33)$(0.32)
The following table presents the potential shares of Common Stock outstanding that were excluded from the computation of diluted net loss per share of common stock as of the periods presented because including them would have been antidilutive:
June 30, 2021June 30, 2020
Warrants7,166,301 6,009,961 
Stock options13,642,433 16,556,734 
Restricted stock awards and restricted stock units6,869,178 2,730,208 
Series A Convertible Preferred Stock— 94,818,151 
Founders Preferred Stock— 26,206,837 
Earn-out shares25,818,744 — 
Total53,496,656 146,321,891 
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 9. Stock-based Compensation
The Company maintained the 2015 Stock Plan (the “2015 Plan”) under which incentive stock options, non-qualified stock options, and restricted stock were granted to employees and non-employee consultants. In connection with the Business Combination, the Company assumed the 2015 Plan upon the Closing. The Company terminated the 2015 Plan, provided that the outstanding awards previously granted under the 2015 Plan continue to remain outstanding under the 2015 Plan. In December 2020, the Company’s Board adopted and the Company’s stockholders approved the 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan became effective upon the closing of the Business Combination. Under the 2020 Plan, as of June 30, 2021, the Company was authorized to issue a maximum number of 36,588,278 shares of Class A common stock. The Company granted 5,992,091 restricted stock units in the six months ended June 30, 2021.
Stock Options
Under the terms of the 2015 Plan, incentive stock options had an exercise price at or above the fair market value of the stock on the date of the grant, while non-qualified stock options were permitted to be granted below fair market value of the stock on the date of grant. Stock options granted have service-based vesting conditions only. The service-based vesting conditions vary, though typically, stock options vest over four years with 25% of stock options vesting on the first anniversary of the grant and the remaining 75% vesting monthly over the remaining 36 months. Option holders have a 10-year period to exercise their options before they expire. Forfeitures are recognized in the period of occurrence.
A summary of the Company’s stock option activity for the six months ended June 30, 2021 was as follows:
Number of
Common
Stock Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Life (Years)
Aggregate
Intrinsic Value
(In Thousands)
Outstanding as of December 31, 202016,188,071 $1.67 
Granted— — 
Exercised(1,911,041)1.67 
Forfeited(634,597)1.67 
Outstanding as of June 30, 202113,642,433 1.71 8.54$276,084 
The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2021 and 2020 was $41.3 million and $0, respectively. The intrinsic value is calculated as the difference between the exercise price and the fair value of the common stock on the exercise date. The total grant-date fair value of the options vested was $3.6 million and $0.4 million, respectively, during the six months ended June 30, 2021 and 2020, respectively.
Restricted Stock Awards
Prior to June 30, 2019, the Company granted restricted stock awards to employees. Recipients purchased the restricted stock on the grant date and the Company has the right to repurchase the restricted shares at the same price recipients paid to obtain those shares. The restrictions lapse solely based on continued service, and generally lapse over 4 years —25% on the first anniversary of the date of issuance, and the remaining 75% monthly over the remaining 36 months. At the grant date of the award, recipients of restricted stock are granted voting rights and receive dividends on unvested shares. No restricted stock awards have been granted after June 30, 2019.
Restricted stock awards activity for the six months ended June 30, 2021 was as follows:
SharesWeighted Average
Grant Date Fair Value
per Share
Outstanding as of December 31, 20201,815,891 $1.15 
Granted— — 
Forfeited(89,063)1.14 
Vested(595,799)0.96 
Outstanding as of June 30, 20211,131,029 1.16 
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Restricted Stock units
To date, the Company has granted restricted stock units (“RSUs”) under the 2020 Plan. Each RSU granted under the 2020 Plan represents a right to receive one share of the Company’s Class A common stock when the RSU vests. RSUs generally vest over one to four years. The fair value of RSU is equal to the fair value of the Company’s common stock on the date of grant.
A summary of the Company’s restricted stock units activity for the six months ended June 30, 2021 was as follows:
SharesWeighted Average
Grant Date Fair
Value per Share
Outstanding as of December 31, 2020— $— 
Granted6,015,840 21.64 
Forfeited(66,717)22.14 
Vested(187,225)23.76 
Outstanding as of June 30, 20215,761,898 22.46 
Compensation expense
Stock-based compensation expense by function was as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Cost of sales$1,127 $82 $1,210 $154 
Research and development5,663 632 6,425 1,067 
Sales and marketing934 102 1,120 184 
General and administrative6,806 1,468 7,612 2,008 
Total$14,530 $2,284 $16,367 $3,413 
Note 10. Income Taxes
The effective tax rate was 0% and 0% for the three and six months ended June 30, 2021, respectively, and 0% and 0% for the three and six months ended June 30, 2020, respectively. The effective tax rates differ significantly from the statutory tax rate of 21%, primarily due to the Company’s valuation allowance movement in each period presented.
The realization of tax benefits of deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available objective evidence, the Company does not believe it is more likely than not that the net deferred tax assets will be realizable. Accordingly, the Company has provided a full valuation allowance against the domestic net deferred tax assets as of June 30, 2021 and December 31, 2020. The Company intends to maintain the remaining valuation allowance until sufficient positive evidence exists to support a reversal of, or decrease in, the valuation allowance.
The Company reports income tax related interest and penalties within its provision for income tax in its condensed consolidated statements of operations. Similarly, the Company reports the reversal of income tax-related interest and penalties within its provision for income tax line item to the extent the Company resolves its liabilities for uncertain tax positions in a manner favorable to its accruals therefor. During the three and six months ended June 30, 2021, there were no material changes to the total amount of unrecognized tax benefits.
Note 11. Leases
The Company leases manufacturing equipment under non-cancelable finance leases expiring at various dates through December 2025. The Company also leases office and manufacturing facilities under non-cancelable operating leases expiring at various dates through June 2026. Some of the Company’s leases include one or more options to renew, with renewal terms that if exercised by the Company, extend the lease term from one to six years. The exercise of these renewal options is at the Company’s discretion. The Company’s lease agreements do not contain any material terms and conditions of residual value guarantees or material restrictive covenants. The Company’s short-term leases and sublease income were not material.
The Company adopted ASC 842 using the modified retrospective method on January 1, 2021. The Company elected the available package of practical expedients and implemented internal controls to enable the preparation of financial information upon adoption. The most significant impact of the adoption of ASC 842 was the recognition of right-of-use, or ROU, assets and
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Notes to Condensed Consolidated Financial Statements (Unaudited)
lease liabilities for operating leases of $10.8 million and $12.0 million, respectively, and a reversal of deferred rent of $1.2 million on January 1, 2021. The Company’s accounting for finance leases remained substantially unchanged. The adoption of ASC 842 did not have any impact on the Company’s operating results or cash flows.
The Company determines if an arrangement is or contains a lease at inception. Operating leases are included in operating lease right-of use assets and operating lease liabilities in the Company’s condensed consolidated balance sheets. Finance leases are included in property and equipment, and finance lease liabilities in the Company’s condensed consolidated balance sheets.
Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the commencement date based on an amount equal to the present value of lease payments over the lease term. The Company’s leases do not provide an implicit rate, therefore the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company uses the implicit rate when it is readily determinable. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed it to carry forward existing lease classification and to exclude leases with original terms of one year or less. Further, the Company elected to combine lease and non-lease components for all asset classes. Any variable lease components are expensed as incurred. The operating lease right-of-use asset also include adjustments related to prepaid or deferred lease payments and lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term.
The components of lease expenses for the three and six months ended June 30, 2021 were as follows (in thousands):
Three Months EndedSix Months Ended
June 30, 2021June 30, 2021
Operating lease cost$1,184 $2,358 
Variable lease cost445 904 
Total operating lease cost$1,629 $3,262 
Finance lease cost:
Amortization of right-of-use assets$42 $84 
Interest on finance lease liabilities13 28 
Total finance lease cost$55 $112 
Supplemental cash flow information for the six months ended June 30, 2021 related to leases was as follows (in thousands):
Amount
Cash paid for amounts included in the measurement of lease liabilities:
Cash paid for operating leases included in operating activities$(2,459)
Cash paid for finance leases included in financing activities(172)
Right of use assets obtained in exchange for lease obligations:
Operating leases2,876 
Finance leases— 
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Notes to Condensed Consolidated Financial Statements (Unaudited)
Supplemental balance sheet information related to leases was as follows (in thousands):
June 30, 2021
Operating leases:
Operating lease right-of-use assets$11,976 
Operating lease liabilities:
Operating lease liabilities, current$4,275 
Operating lease liabilities, non-current8,760 
Total operating lease liabilities$13,035 
Finance leases:
Property and equipment, gross$926 
Less: accumulated depreciation(285)
Property and equipment, net$641 
Finance lease liabilities, current$273 
Finance lease liabilities, non-current198 
Total finance lease liabilities$471 
Weighted average remaining terms were as follows (in years):
June 30, 2021
Weighted average remaining lease term
Operating leases3.37
Finance leases2.17
Weighted average discount rates were as follows:
June 30, 2021
Weighted average discount rate
Operating leases2.80 %
Finance leases10.06 %
Maturities of lease liabilities were as follows (in thousands):
Operating LeasesFinance Leases
Year Ending December 31,
2021 (remaining six months)$2,075 $158 
20224,998 240 
20234,095 71 
20241,699 28 
20251,187 26 
2026602 — 
Total lease payments14,656 523 
Less: imputed interest(1,621)(52)
Total leases liabilities$13,035 $471 

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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
Disclosures under ASC 840, Leases
Rent expense was $1.5 million and $2.9 million for the three and six months ended June 30, 2020, respectively.
As of December 31, 2020, future minimum lease payments under all noncancelable capital and operating leases with an initial lease term in excess of one year were as follows (in thousands):
Capital LeasesOperating Leases
2021$331 $5,834 
2022240 6,172 
202370 4,544 
202428 746 
202525 — 
Thereafter— — 
Total minimum lease payments694 $17,296 
Less: amount representing interest80 
Capital lease obligations$614 
Note 12. Commitments and Contingencies
Purchase Obligations
The Company purchases goods and services from a variety of suppliers in the ordinary course of business. Purchase obligations are defined as agreements that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum, or variable price provisions, and the approximate timing of the transaction. The Company had purchase obligations primarily for purchases of inventory, R&D, and general and administrative activities totaling $36.8 million as of June 30, 2021, which are expected to be received within a year.
Legal Matters
From time to time, the Company is involved in actions, claims, suits and other proceedings in the ordinary course of business, including assertions by third parties relating to intellectual property infringement, breaches of contract or warranties or employment-related matters. When it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated, the Company records a liability for such loss contingencies. The Company’s estimates regarding potential losses and materiality are based on the Company’s judgment and assessment of the claims utilizing currently available information. Although the Company will continue to reassess its reserves and estimates based on future developments, the Company’s objective assessment of the legal merits of such claims may not always be predictive of the outcome and actual results may vary from the Company’s current estimates.
Note 13. Segment and Customer Concentration Information
Reportable segments are (i) Autonomy Solutions and (ii) Component Sales. These segments reflect the way the CODM evaluates the Company’s business performance and manages its operations. Each segment has distinct product offerings, customers, and market penetration. The Chief Executive Officer is the CODM of the Company.
Autonomy Solutions
This segment manufactures and distributes commercial lidar sensors that measures distance using laser light to generate a highly accurate 3D map for automotive mobility applications. This segment is impacted by trends in and the strength of the autonomous vehicles and associated infrastructure/technology sector.
Component Sales
This segment is in the business of development of ultra-sensitive pixel-based sensors. This segment also designs, tests and provides consulting services for non-standard integrated circuits that are essential for systems to meet the requirement of customers. This segment is impacted by trends in and the strength of automobile and aeronautics sector as well as government spending in military and defense activities.
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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
The accounting policies of the operating segments are the same as those described in Note 2. Segment operating results and reconciliations to the Company’s consolidated balances are as follows (in thousands):
Three Months Ended June 30, 2021
Autonomy
Solutions
Component
Sales
Total
reportable
segments
Eliminations (1)Total
Consolidated
Revenue:
Revenues from external customers$5,822 $487 $6,309 $— $6,309 
Revenues from internal customer1,846 1,207 3,053 (3,053)— 
Total revenue$7,668 $1,694 $9,362 $(3,053)$6,309 
Depreciation and amortization$652 $23 $675 $— $675 
Operating loss(44,169)(76)(44,245)44 (44,201)
Other significant items:
Segment assets625,386 3,483 628,869 (2,702)626,167 
Inventories, net4,288 30 4,318 — 4,318 
Three Months Ended June 30, 2020
Autonomy
Solutions
Component
Sales
Total
reportable
segments
Eliminations (1)Total
Consolidated
Revenue:
Revenues from external customers$2,809 $615 $3,424 $— $3,424 
Revenues from internal customer— 889 889 (889)— 
Total revenue$2,809 $1,504 $4,313 $(889)$3,424 
Depreciation and amortization$569 $44 $613 $— $613 
Operating income (loss)(19,927)77 (19,850)— (19,850)
Other significant items:
Segment assets50,231 2,672 52,903 (2,687)50,216 
Inventories, net4,961 — 4,961 — 4,961 
Six Months Ended June 30, 2021
Autonomy
Solutions
Component
Sales
Total
reportable
segments
Eliminations (1)Total
Consolidated
Revenue:
Revenues from external customers$10,158 $1,464 $11,622 $— $11,622 
Revenues from internal customer3,121 2,349 5,470 (5,470)— 
Total revenue$13,279 $3,813 $17,092 $(5,470)$11,622 
Depreciation and amortization$1,290 $43 $1,333 $(1)$1,332 
Operating loss(73,037)(313)(73,350)(95)(73,445)
Other significant items:
Segment assets625,386 3,483 628,869 (2,702)626,167 
Inventories, net4,288 30 4,318 — 4,318 
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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
Six Months Ended June 30, 2020
Autonomy
Solutions
Component
Sales
Total
reportable
segments
Eliminations (1)Total
Consolidated
Revenue:
Revenues from external customers$6,106 $1,190 $7,296 $— $7,296 
Revenues from internal customer— 1,731 1,731 (1,731)— 
Total revenue$6,106 $2,921 $9,027 $(1,731)$7,296 
Depreciation and amortization$1,160 $81 $1,241 $— $1,241 
Operating income (loss)(34,873)188 (34,685)— (34,685)
Other significant items:
Segment assets50,231 2,672 52,903 (2,687)50,216 
Inventories, net4,961 — 4,961 — 4,961 
(1) Represent the eliminations of all intercompany balances and transactions during the period presented.
Three customers accounted for 30%, 30% and 25% of the Company’s revenue for the three months ended June 30, 2021. Three customers accounted for 21%, 37% and 18% of the Company’s revenue for the six months ended June 30, 2021, One customer accounted for 75% and 73% of the Company’s revenue for the three and six months ended June 30, 2020.
Note 14. Subsequent Event
On July 9, 2021, the Company entered into a stock purchase agreement to acquire all issued and outstanding shares of capital stock of OptoGration, Inc. (“OptoGration”) for stock consideration of $8.0 million of the Company’s shares of Class A common stock at closing and up to $22.0 million of additional stock consideration if certain post-closing conditions and milestones are met. The transaction closed on August 3, 2021. At the closing of the transaction, all issued and outstanding shares of capital stock of OptoGration were cancelled for the merger consideration. The Company is currently finalizing the allocation of the purchase price which is expected to be allocated primarily to goodwill and intangible assets. The acquisition of OptoGration secures supply for a key enabling component as the Company advances towards series production and scale of its lidar sensor offering.
On August 11, 2021, the Company issued a total of 17,213,170 earn-out shares towards additional consideration in the form of common stock, consisting of 10,242,703 shares of Class A common stock and 6,970,467 shares of Class B common stock, upon meeting four of six triggering events pursuant to the Merger Agreement associated with its merger with Gores in December 2020. The shares issued were based upon the Class A common stock exceeding $13.00, $16.00, $19.00 and $22.00 per share for a certain period of time. There are 5,121,484 shares of Class A common stock and 3,485,233 shares of Class B common stock remaining in the Merger Agreement, which will be issued in equal parts when the Class A common stock exceeds $25.00 and $28.00 per share for a certain period of time.
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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on April 14, 2021. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, and in Part II, Item 1A - “Risk Factors” and elsewhere in this report. See also “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this report.
Overview
Our vision is to make autonomous transportation safe and ubiquitous. As a global leader in lidar autonomous driving technology, we are enabling the world’s first autonomous solutions for automotive series production in passenger cars and commercial trucks.
Founded in 2012 by President and Chief Executive Officer Austin Russell, we built a new type of lidar from the chip-level up, with technological breakthroughs across all core components. As a result, we have created what we believe is the only lidar sensor that meets the demanding performance, safety, and cost requirements for Level 3 through Level 5 autonomous vehicles in production, bypassing the traditional limitations of legacy lidar technology, while also enabling Level 0 through Level 2 Advanced Driving Assistance Systems (“ADAS”) with our Proactive Safety solution. Integrating this advanced hardware with our custom developed software stack enables a turn-key autonomous solution to accelerate widespread adoption across automakers at series production scale.
Our lidar hardware and software products help set the standard for safety in the industry, and are designed to enable accurate and reliable detection of some of the most challenging “edge cases” that autonomous vehicles can encounter on a regular basis. This is achieved by advancing existing lidar range and resolution to new levels, ensuring hard-to-see objects like a tire on the road ahead or a child that runs into the street are more likely to be detected. Our software is also critical to interpreting the data and informing autonomous and assisted driving decisions.
Our full-stack hardware and software autonomy solution for cars and trucks as well as our standalone lidar technology offerings have made us one of the leading partners for the world’s top OEMs. We are currently partnering with eight of the top-ten global automakers, by sales, and have the goal of being the first lidar company to produce highway self-driving and next-generation Proactive Safety systems for series production. With over 500 employees across eight global locations, we have scaled to over 50 partners in the last two years, including the first industry-wide automotive series production award in the autonomous space, awarded by Volvo Cars in May 2020, with series production expected to commence in 2022. We subsequently entered into a strategic partnership with Daimler Truck AG in October 2020 and with Mobileye Vision Technologies Ltd (“Mobileye”) in November 2020. In March 2021, we announced a partnership with Zenseact to deliver autonomous software for series production vehicles and entered into a relationship with SAIC Motor Corporation, the largest automaker in China. Since that time we have announced partnerships with Pony.AI, a leading autonomous vehicle company, and have announced a partnership with Airbus UpNext, as we work to make not only automotive, but also air transportation safer. In June 2021, we saw a watershed moment when Volvo announced that our Proactive Safety will be standard on Volvo’s upcoming fully electric flagship vehicle, which we believe will help the automaker to save even more lives as it sets a new benchmark for automotive safety.
The automotive industry is among the largest in the world and features an estimated total addressable market opportunity (“TAM”) for ADAS and autonomous solutions (Level 0 through Level 5) expected to exceed $150 billion by 2030. Our model to capture this opportunity is to directly partner with top established automotive companies to power their autonomous future. Correspondingly, we have successfully established customer partnerships with over 50 companies across three primary application verticals: passenger vehicles, commercial trucks, and robo-taxis. We have multiple levers for sustained growth, including significant industry tailwinds, a strong five-year product roadmap in production and development, a robust series production and standardization pipeline with anticipated long-term contracts and substantial new, adjacent market opportunities. Powered by breakthrough technology, our solutions are ready to enable autonomous vehicles to be safe and ubiquitous.
COVID-19 Impact
The coronavirus (COVID-19) pandemic has adversely affected some of our customers’ business operations, which has impacted our revenue in 2020 and 2021 as well as resulted in the impairment of inventory in 2020. The extent of the continued impact of the coronavirus pandemic on our operational and financial performance will depend on various future developments, including the duration and spread of the outbreak and impact on our customers, suppliers, and employees, all of which is uncertain at this time. The coronavirus (COVID-19) pandemic may potentially adversely impact our revenue and results of operations, but we are unable to predict at this time the size and duration of this adverse impact.
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Industrialization and Customer Update
Industrialization Update
On May 13, 2021, Luminar announced its series manufacturing partnerships with Celestica and Fabrinet. We also announced our achievement of the critical milestone of bringing online the initial production line at Celestica’s automotive-certified facility in Monterrey, Mexico with the first unit coming off of the line. We continue to ramp our production supply base and progress our design validation (DV) testing so that we can begin the C sample production by the end of 2021, as planned.
We also continue to advance validation of Iris and development of our Sentinel software as we move up and beyond the foundation of lidar, reinforcing our transition to a system-level autonomous vehicle company. Following the introduction of Sentinel last quarter, we kicked off the next phase of the software development through our partnership with Zenseact. Iris lidar data has been collected to train and optimize the performance of our perception software, and we received the approval from German authorities to proceed with Sentinel full-stack solution development and testing on public German roads. We continue to make progress in our development and testing and recently showcased Sentinel functionality on the test track. This included emergency braking for pedestrians as well as high-velocity braking for other vehicles. We believe we are well positioned to meet our objective for the year.
Customer Update
Luminar recently announced two new major customers and one standardization program:
Airbus UpNext: Airbus SE’s subsidiary UpNext – which was created to give future flight technologies a development fast-track by building, evaluating, maturing and validating new products and services that encompass radical technological breakthroughs – is integrating our lidar technology into its Vertex platform to enable safe, autonomous flight. This partnership marks our first foray into the nearly $1 trillion aviation industry and is aimed at increasing air safety and enabling autonomous operation with automatic obstacle detection.
Pony.ai: We plan for our Iris to be seamlessly integrated into Pony.ai’s next-generation autonomous driving platform, featuring a multi-sensor 360-degree configuration and enabling the vehicles to operate safely and reliably in complex urban environments. Pony.ai is set to start deployment of a 200-vehicle robo-taxi fleet in urban settings across five cities in China and the U.S. The partnership is developing a new integrated sensor design that signals a shift from vehicle testing to advanced development and production scale.
Volvo Standardization: Luminar sensors are expected to be standard on Volvo Cars’ forthcoming fully electric flagship vehicle, which we believe would help the automaker to save even more lives as it sets a new benchmark for automotive safety. The fully electric successor to Volvo Cars’ XC90, to be unveiled in 2022, is anticipated to come with state-of-the-art lidar hardware with Luminar’s Iris and perception from its Sentinel solution, in addition to an autonomous driving computer powered by NVIDIA DRIVE Orin™ and Zenseact and Volvo software. Volvo Cars aims to reduce fatalities and accidents with this new safety package.
OptoGration Acquisition
On July 19, 2021, Luminar announced it is acquiring its exclusive InGaAs chip design partner and manufacturer, OptoGration Inc., bringing specialized core IP and securing supply chain as Luminar scales Iris into series production with its OEM customers. The acquisition secures a key part of Luminar’s supply chain and enables deeper integration with its existing chip design subsidiary Black Forest Engineering (BFE), which Luminar acquired in 2017.
Luminar combines its InGaAs photodetector chips from Optogration with silicon ASICs, produced by BFE, to create its lidar receiver and processing chip, which is the most sensitive, highest dynamic range InGaAs receiver of its kind in the world. It is able to acquire and process gigabits of precise data per second to produce optimal lidar data. The fifth-generation proprietary chip is now powering Luminar’s Iris sensor, which we believe is the only system to meet the stringent performance, safety, scalability, and economic requirements to enable autonomous driving in series production vehicles.
Basis of Presentation
We currently conduct our business through two operating segments: (i) Autonomy Solutions and (ii) Component Sales.
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Components of Results of Operations
Revenue
Our revenue producing activities can be viewed as two separate and distinct operating segments: (i) Autonomy Solutions and (ii) Component Sales.
The Autonomy Solutions segment is engaged in design, manufacturing and sale of lidar sensors as well as related perception and autonomy enabling software solutions catering mainly to the original equipment manufacturers in the automobile, commercial vehicle, robo-taxi and adjacent industries. The Autonomy Solutions segment has historically entered into Strategic Partner Programs (“SPP”) with leading automotive partners and other customers. An SPP is a contract under which we deliver our product to a specified customer at a fixed price under customary terms and conditions, usually in collaboration on an autonomous vehicle development program. With many major automakers having signed SPP contracts, we are shifting our focus from entering into SPPs with new partners to converting existing SPPs and relationships with our partners into series production programs. Once we achieve series production, the primary sources of revenue are expected to shift from prototype sales and services revenue to sales of lidar hardware, perception software and autonomy enabling software for series production vehicles.
The Component Sales segment provides designing, testing and consulting services for non-standard integrated circuits to U.S. customers, including government agencies and defense contractors generally for purposes unrelated to autonomous vehicles. Fixed fee arrangements are satisfied over time and utilize the input method based on costs incurred. Accordingly, revenue is recognized on a percentage of completion basis. Contracts are also structured as time and materials and billed at cost of time incurred plus a markup. We anticipate more closely aligning and integrating our Component Sales segment operations with portions of our Autonomy Solutions segment, specifically in relation to lidar solutions for the defense and other adjacent markets.
Cost of sales and gross profit (loss)
Cost of sales of the Autonomy Solutions segment includes the fixed and variable manufacturing cost of our lidar sensors, which primarily consists of personnel-related costs (including certain engineering personnel), including stock-based compensation, directly associated with our manufacturing organization, and cost of material purchased from third-party contract manufacturers and suppliers. Cost of sales also includes depreciation and amortization for manufacturing fixed assets or equipment, cost of component