lazr-20210930

Table of Contents

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 September 30, 2021


☐			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)

Delaware

83-1804317

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

2603 Discovery Drive

Suite 100

Orlando

Florida

32826

(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 class

Trading symbol(s)

Name of each exchange on which registered

Class A common stock, par value of $0.0001 per share

LAZR

The 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 filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller 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 November 5, 2021, the registrant had 259,965,800 shares of Class A common stock and 101,588,670 shares of Class B common stock, par value $0.0001 per share, outstanding.

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS


		Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.		3
	Condensed Consolidated Balance Sheets (Unaudited)	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	4
	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		28
	Overview	28
	Industrialization and Customer Update	29
	Basis of Presentation	29
	Components of Results of Operations	29
	Results of Operations	31
	Liquidity and Capital Resources	32
	Off-Balance Sheet Arrangements	34
	Critical Accounting Policies and Estimates	34
	Recent Accounting Pronouncements	35
Item 3. Quantitative and Qualitative Disclosures About Market Risk.		36
Item 4. Controls and Procedures.		36

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.		38
Item 1A. Risk Factors.		38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		38
Item 3. Defaults Upon Senior Securities.		38
Item 4. Mine Safety Disclosures.		38
Item 5. Other Information.		38
Item 6. Exhibits.		39
SIGNATURES		40

Table of Contents

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.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)


	September 30, 2021		December 31, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	129,323	$	208,944
Restricted cash	725		775
Marketable securities	415,544		276,710
Accounts receivable	1,033		5,971
Inventories, net	7,871		3,613
Prepaid expenses and other current assets	23,883		4,797
Total current assets	578,379		500,810
Property and equipment, net	11,128		7,689
Operating lease right-of-use assets	10,165		—
Intangible assets, net	2,488		—
Goodwill	3,110		701
Other non-current assets	2,536		1,151
Total assets	$	607,806	$	510,351

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,682	$	6,039
Accrued and other current liabilities	18,551		10,452
Operating lease liabilities	4,927		—
Debt, current	66		99
Total current liabilities	33,226		16,590
Warrant liabilities	27,753		343,400
Debt, non-current	177		302
Operating lease liabilities, non-current	6,639		—
Other non-current liabilities	911		1,318
Total liabilities	68,706		361,610
Commitments and contingencies (Note 13)
Stockholders’ equity:
Class A common stock	26		22
Class B common stock	10		11
Additional paid-in capital	1,287,558		733,175
Accumulated other comprehensive income	100		34
Accumulated deficit	(748,594)		(584,501)
Total stockholders’ equity	539,100		148,741
Total liabilities and stockholders’ equity	$	607,806	$	510,351

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

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 September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenue	$	7,978	$	4,223	$	19,600	$	11,519
Cost of sales	10,762		6,924		26,254		18,209
Gross loss	(2,784)		(2,701)		(6,654)		(6,690)
Operating expenses:
Research and development	25,890		10,152		59,813		28,268
Sales and marketing	5,868		2,332		12,010		5,407
General and administrative	35,603		6,611		65,113		16,116
Total operating expenses	67,361		19,095		136,936		49,791
Loss from operations	(70,145)		(21,796)		(143,590)		(56,481)
Other income (expense), net:

Change in fair value of warrant liabilities	17,072		(7,988)		(22,649)		(12,562)
Loss on extinguishment of debt	—		—		—		(866)
Interest expense and other	(374)		(1,076)		(860)		(2,097)
Interest income and other	843		(351)		1,744		(221)
Total other income (expense), net	17,541		(9,415)		(21,765)		(15,746)
Loss before benefit from income taxes	(52,604)		(31,211)		(165,355)		(72,227)
Benefit from income taxes	(1,264)		—		(1,262)		—
Net loss	$	(51,340)	$	(31,211)	$	(164,093)	$	(72,227)
Net loss attributable to common stockholders	$	(51,340)	$	(37,458)	$	(164,093)	$	(78,474)
Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.15)	$	(0.29)	$	(0.48)	$	(0.61)
Shares used in computing net loss per share attributable to common stockholders:
Basic and diluted	352,122,485		130,601,660		341,858,435		129,643,774
Comprehensive Loss:
Net loss	$	(51,340)	$	(31,211)	$	(164,093)	$	(72,227)
Net unrealized gains (losses) on available-for-sale debt securities	93		(28)		66		(19)
Comprehensive loss	$	(51,247)	$	(31,239)	$	(164,027)	$	(72,246)

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

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			Series X 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)
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Balance as of June 30, 2020	94,818,151	$	244,743	—	$	—	26,206,837	$	3	139,635,890	$	14	—	$	—	$	13,889	$	8	$	(263,219)	$	(249,305)
Issuance of Series X convertible preferred stock for cash, net of issuance costs of $5,889	—	—		17,065,536	164,111		—	—		—	—		—	—		—		—		—		—
Share-based compensation	—	—		—	—		—	—		—	—		—	—		1,306		—		—		1,306
Other comprehensive income	—	—		—	—		—	—		—	—		—	—		—		(28)		—		(28)
Net loss	—	—		—	—		—	—		—	—		—	—		—		—		(31,211)		(31,211)
Balance as of September 30, 2020	94,818,151	$	244,743	17,065,536	$	164,111	26,206,837	$	3	139,635,890	$	14	—	$	—	$	15,195	$	(20)	$	(294,430)	$	(279,238)

Balance as of June 30, 2021	—	$	—	—	$	—	—	$	—	236,483,687	$	24	105,118,203	$	11	$	1,244,228	$	7	$	(697,254)	$	547,016
Issuance of Class A common stock upon exercise of stock options and vesting of restricted stock units	—	—		—	—		—	—		1,920,137	—		—	—		1,547		—		—		1,547
Vendor payments in shares in lieu of cash	—	—		—	—		—	—		291,940	—		—	—		4,848		—		—		4,848
Acquisition of Optogration, Inc.	—	—		—	—		—	—		370,034	—		—	—		6,527		—		—		6,527
Issuance of earn-out shares	—	—		—	—		—	—		10,242,703	1		6,970,467	—		(2)		—		—		(1)
Conversion of Class B common stock into Class A common stock	—	—		—	—		—	—		10,500,000	1		(10,500,000)	(1)		—		—		—
Share-based compensation	—	—		—	—		—	—		—	—		—	—		30,410		—		—		30,410


Other comprehensive income	—	—		—	—		—	—		—	—		—	—		—		93		—		93
Net loss	—	—		—	—		—	—		—	—		—	—		—		—		(51,340)		(51,340)
Balance as of September 30, 2021	—	$	—	—	$	—	—	$	—	259,808,501	$	26	101,588,670	$	10	$	1,287,558	$	100	$	(748,594)	$	539,100

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

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			Series X 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)
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Balance as of December 31, 2019	94,818,151	$	244,743	—	$	—	26,206,837	$	3	139,635,890	$	14	—	$	—	$	10,457	$	(1)	$	(222,203)	$	(211,730)
Issuance of Series X convertible preferred stock for cash, net of issuance costs of $5,889	—	—		17,065,536	164,111		—	—		—	—		—	—		—		—		—		—
Share-based compensation	—	—		—	—		—	—		—	—		—	—		4,738		—		—		4,738
Other comprehensive income	—	—		—	—		—	—		—	—		—	—		—		(19)		—		(19)
Net loss	—	—		—	—		—	—		—	—		—	—		—		—		(72,227)		(72,227)
Balance as of September 30, 2020	94,818,151	$	244,743	17,065,536	$	164,111	26,206,837	$	3	139,635,890	$	14	—	$	—	$	15,195	$	(20)	$	(294,430)	$	(279,238)

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	—	—		—	—		—	—		19,585,787	2		—	—		496,972		—		—		496,974



Vendor payments in shares in lieu of cash	—	—		—	—		—	—		291,940	—		—	—		4,848		—		—		4,848
Acquisition of Optogration, Inc.	—	—		—	—		—	—		370,034	—		—	—		6,527		—		—		6,527
Issuance of earn-out shares	—	—		—	—		—	—		10,242,703	1		6,970,467	—		(2)		—		—		(1)
Conversion of Class B common stock into Class A common stock	—	—		—	—		—	—		10,500,000	1		(10,500,000)	(1)		—		—				—
Share-based compensation	—	—		—	—		—	—		—	—		—	—		46,168		—		—		46,168
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	—	—		—	—		—	—		—	—		—	—		—		66		—		66
Net loss	—	—		—	—		—	—		—	—		—	—		—		—		(164,093)		(164,093)
Balance as of September 30, 2021	—	$	—	—	$	—	—	$	—	259,808,501	$	26	101,588,670	$	10	$	1,287,558	$	100	$	(748,594)	$	539,100

See accompanying notes to the unaudited condensed consolidated financial statements.

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)


	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities:
Net loss	$	(164,093)	$	(72,227)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,240		1,929
Noncash lease expense related to operating lease right-of-use assets	2,682		—


Change in fair value of warrants	22,649		12,562
Share-based compensation—vendor payments	2,744		—
Impairment of inventories	1,601		4,393

Loss on extinguishment of debt	—		866
Share-based compensation	49,887		4,710

Warranty related to sensors	1,239		—
Deferred taxes	(1,264)		—
Other	883		389
Changes in operating assets and liabilities:
Accounts receivable	5,748		723
Inventories	(6,658)		(3,206)
Prepaid expenses and other current assets	(16,971)		(3,571)
Other non-current assets	(88)		544
Accounts payable	3,330		2,462
Accrued and other current liabilities	5,910		2,885
Other non-current liabilities	(4,095)		(190)
Net cash used in operating activities	(94,256)		(47,731)
Cash flows from investing activities:
Cash received from acquisition of Optogration, Inc.	358		—
Purchases of marketable securities	(530,179)		(123,403)
Proceeds from maturities of marketable securities	306,907		8,465
Proceeds from sales of marketable securities	83,493		4,448

Purchases of property and equipment	(4,155)		(1,963)

Net cash used in investing activities	(143,576)		(112,453)
Cash flows from financing activities:


Proceeds from issuance of Series X convertible preferred stock	—		170,000
Issuance cost paid for Series X convertible preferred stock	—		(5,662)
Proceeds from the issuance of debt	—		31,910
Repayment of debt	(159)		(11,206)






Proceeds from exercise of warrants	153,927		—
Proceeds from exercise of stock options	4,738		—




Other financing activities	(345)		(1,238)
Net cash provided by financing activities	158,161		183,804
Net increase (decrease) in cash, cash equivalents and restricted cash	(79,671)		23,620
Beginning cash, cash equivalents and restricted cash	209,719		27,305
Ending cash, cash equivalents and restricted cash	$	130,048	$	50,925
Supplemental disclosures of cash flow information:
Cash paid for interest	$	53	$	2,013

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 842	10,849		—
Operating lease right-of-use assets obtained in exchange for lease obligations	2,876		—


Assets acquired under finance leases (capital lease prior to adoption of ASC 842)	—		43
Purchases of property and equipment recorded in accounts payable and accrued liabilities	543		313

Merger related expense recorded in accounts payable and accrued liabilities	—		3,669
Issuance cost for Series X preferred stock recorded in accounts payable	—		227

See accompanying notes to the unaudited condensed consolidated financial statements.

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”). Legacy Luminar was incorporated in Delaware on March 31, 2015. 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 and software for the autonomous vehicle industry, encompassing Laser Imaging, Detection and Ranging (lidar) technology. The Company manufactures and distributes commercial lidar sensors and certain components for the autonomous vehicle industry. The Company has facilities located in Palo Alto, California, Detroit, Michigan, Boston, Massachusetts, Colorado Springs, Colorado, Munich, Germany 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 which are its operating segments:

(i) “Autonomous Solutions” for automotive mobility applications, which includes manufacturing and distribution of lidar sensors that measure distance using laser light to generate a 3D map, non-recurring engineering services related to the Company’s lidar products, and development of software products that enable autonomy capabilities; and

(ii) “Component Sales” which includes development of ultra-sensitive pixel-based sensors as well as designing, testing and providing consulting services for non-standard integrated circuits. In August 2021, the Company acquired Optogration, Inc.

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(“Optogration”) to secure supply for a key enabling component as the Company advances towards series production and scale of its lidar sensor offering.

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.

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 $1.6 million and $0.6 million as of September 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 generally does not require collateral.

Three customers accounted for 35%, 17% and 12%, respectively, of the Company’s accounts receivable at September 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 12 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 nine months ended September 30, 2021.

Equity Investments

The Company 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 12 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.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The new guidance in this update affects all entities that enter into a business combination within the scope of ASC 805-10. ASU 2021-08 will be effective for the Company beginning January 1, 2023. 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.

Note 3. Business Combination

On August 3, 2021, (the “Acquisition Date”) the Company completed its acquisition of OptoGration. The OptoGration acquisition helps the Company secure intellectual property and supply of Indium Gallium Arsenide (“InGaAs”) photodetector

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(used to convert optical power into an electrical current) semiconductor chips. The acquisition of OptoGration is part of the Company’s vertical integration strategy, which will secure supply of a key component of its sensor technology.

Pursuant to the terms of the Stock Purchase Agreement between the Company and OptoGration, the Company acquired all of the issued and outstanding capital stock of OptoGration for an aggregate purchase price of approximately $6.3 million payable in Class A common stock of the Company. Subsequent to the Acquisition Date, up to $22.0 million of post combination compensation may be payable to the shareholders of OptoGration subject to certain service and performance conditions. The results of operations related to OptoGration are included in our consolidated statements of operations beginning from the Acquisition Date. The impact of the acquisition on the consolidated financial results of the Company for the three months ended September 30, 2021 was not material.

Recording of Assets Acquired and Liabilities Assumed

Preliminary estimates of fair value included in the consolidated financial statements, in conformity with ASC 820, Fair Value Measurement, represent the Company’s best preliminary estimates and preliminary valuations. In accordance with ASC 805, Business Combinations, the preliminary allocation of the consideration value is subject to adjustment until the Company has completed its analysis, but not to exceed one year after the Acquisition Date to provide the Company with the time to complete the valuation of its assets and liabilities. As of September 30, 2021, the Company has completed a preliminary estimate of deferred tax balances but the process of finalizing deferred tax balances will take place after the current period tax returns are filed. As of September 30, 2021, the Company was still in the process of finalizing assessment of working capital accounts. The completion of this analysis could result in changes to the Company’s allocation of the consideration value to assets acquired and liabilities assumed.

Settlement of a pre-existing agreement with OptoGration

Prior to the acquisition, the Company had contracted with OptoGration as a supplier. In assessing whether said pre-existing supply contract was at market, favorable or unfavorable from the Company’s perspective, the Company assessed whether the terms of the supply contract, including pricing, were consistent with what the Company would have required from another company that would have contracted for similar products and production volumes. The Company concluded that the supply agreement was at market, and thus no gain or loss was recognized upon effective settlement of the said pre-existing supply agreement.

The following table summarizes the preliminary purchase price allocation to assets acquired and liabilities assumed, including identification of measurement period adjustments:


	Preliminary Recorded Value
Cash and cash equivalents	$	358
Accounts receivable	810
Other current assets	482
Property and equipment	1,248
Other non-current assets	384
Intangible assets (1)	2,650
Goodwill (2)	2,409
Total assets acquired	8,341
Current Liabilities	(488)
Non-current liabilities	(1,511)
Total liabilities assumed	(1,999)
Net assets acquired	$	6,342

(1) Identifiable intangible assets were measured using the income approach.

(2) Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected future economic benefits as a result of other assets acquired that could not be individually identified and separately recognized. Goodwill is not amortized. The factors that made up the goodwill recognized included assembled workforce and component cost savings. Goodwill is not expected to be deductible for tax purposes.

Table of Contents

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Identifiable intangible assets recognized:


	Useful Life	Preliminary Recorded Value
Customer relationships	10 years	$	780
Tradename	≤ 1 year	120
Developed technology	10 years	1,750
Total intangible assets		$	2,650

Note 4. Revenue

The Company’s revenue till date has comprised of sales of lidar sensors hardware, components, and engineering services.

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 September 30,
	2021				2020
	Revenue		% of Revenue		Revenue		% of Revenue

Revenue by primary geographical market:
North America	$	5,713	72	%	$	1,473	35	%
Asia Pacific	—		—	%	507		12	%
Europe and Middle East	2,265		28	%	2,243		53	%
Total	$	7,978	100	%	$	4,223	100	%
Revenue by timing of recognition:
Recognized at a point in time	$	873	11	%	$	1,286	30	%
Recognized over time	7,105		89	%	2,937		70	%