Document

Filed Pursuant to Rule 424(b)(3)

Registration No. 333-257989

PROSPECTUS SUPPLEMENT NO.2

(to Prospectus dated July 30, 2021)

Luminar Technologies, Inc.

Up to 941,940 Shares of Class A Common Stock

This prospectus supplement supplements the prospectus dated July 30, 2021 (the “Prospectus”), which forms a part of our registration statement on Form S-1 (No. 333-257989). 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 September 30, 2021, filed with the Securities and Exchange Commission (the “SEC”) on November 15, 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 stockholders (which term as used in this prospectus, includes their respective transferees, pledgees, distributees, donees, and successors-in-interest) named herein of up to 941,940 shares of our Class A common stock, par value $0.0001 per share (the "Class A common stock"), which consist of (i) up to 450,000 shares of Class A common stock that will be issued in a private placement in connection with the closing of our acquisition of a certain engineering company pursuant to a Stock Purchase Agreement, dated as of July 9, 2021 by and among us, a certain engineering company, the stockholders of such company and a certain individual, solely in his capacity as the Seller Representative (the "Stock Purchase Agreement,"), (ii) up to 200,000 shares of Class A common stock that may be issued to the stockholders of such engineering company in a private placement contingent upon satisfaction of certain milestones pursuant to the Stock Purchase Agreement, and (iii) up to 291,940 shares of Class A common stock that will be issued in a private placement to pursuant to a certain engineering and manufacturing services arrangement.

The selling stockholders may offer, sell or distribute all or a portion of the securities hereby registered publicly or through private transactions at prevailing market prices or at negotiated prices. We will not receive any of the proceeds from such sales of the shares of Class A common stock. We will bear all costs, expenses and fees in connection with the registration of these securities, including with regard to compliance with state securities or “blue sky” laws. The selling stockholders will bear all commissions and discounts, if any, attributable to their sale of shares of Class A common stock. See “Plan of Distribution” beginning on page 135 of the Prospectus.

Our registration of the securities covered by the Prospectus does not mean that the selling stockholders will offer or sell any of the securities.

Our Class A common stock is listed on the Nasdaq Global Select Market under the symbol “LAZR”. On November 12, 2021, the last reported sales price of our Class A common stock was $19.63 per share.

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 securities involves risks. See “Risk Factors” beginning on page 6 of the Prospectus to read about factors you should consider before buying our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus supplement is November 15, 2021.

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.

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

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.

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.

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.

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.

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.

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.

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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

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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.

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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	%
Total	$	7,978	100	%	$	4,223	100	%
Revenue by segment:
Autonomy Solutions	$	7,550	95	%	$	3,481	82	%
Component Sales	428		5	%	742		18	%
Total	$	7,978	100	%	$	4,223	100	%

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Notes to Condensed Consolidated Financial Statements (Unaudited)


	Nine Months Ended September 30,
	2021				2020
	Revenue		% of Revenue		Revenue		% of Revenue

Revenue by primary geographical market:
North America	$	12,313	63	%	$	3,198	28	%
Asia Pacific	475		2	%	720		6	%
Europe and Middle East	6,812		35	%	7,601		66	%
Total	$	19,600	100	%	$	11,519	100	%
Revenue by timing of recognition:
Recognized at a point in time	$	4,914	25	%	$	2,076	18	%
Recognized over time	14,686		75	%	9,443		82	%
Total	$	19,600	100	%	$	11,519	100	%
Revenue by segment:
Autonomy Solutions	$	17,708	90	%	$	9,587	83	%
Component Sales	1,892		10	%	1,932		17	%
Total	$	19,600	100	%	$	11,519	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. The warrants entitle VCTF to purchase from the Company up to 4,089,280 shares of Class A common stock, at a price of $3.1769 per share from the Company. The warrants vest and become exercisable in two tranches based on satisfaction of certain commercial milestones, upon reaching commercial production and delivering of production units. The grant date fair value of warrants, aggregating $2.9 million, represents consideration payable to VCTF and will be recognized as reduction in revenue consistent with the revenue recognition pattern when these warrants become probable of vesting. The Company’s management determined that the vesting of these warrants was not probable as of September 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 a standard component on one of its vehicle programs as opposed to being only an optional component. While the announcement increased the estimated targeted volume for the Company’s potential business with Volvo, the anticipated start of production and the necessary prototype testing procedures were not modified. This announcement did 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 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 only 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 anticipates reaching commercial production once it substantially completes these industry standard testing procedures, which is expected to be achieved in the fourth quarter 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 September 30, 2021 and December 31, 2020 were $11.8 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

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Notes to Condensed Consolidated Financial Statements (Unaudited)

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 September 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):



	September 30, 2021		December 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 period	579		2,284
Ending balance	$	579	$	2,284

Note 5. Investments

Debt Securities

The Company’s investments in debt securities consisted of the following as of September 30, 2021 and December 31, 2020 (in thousands):


	September 30, 2021
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasury	$	120,260	$	13	$	(63)	$	120,210
U.S. agency and government sponsored securities	4,994		—		—		4,994
Commercial paper	132,991		5		(2)		132,994
Corporate bonds	138,832		147		(9)		138,970
Asset-backed securities	20,814		9		(1)		20,822
Total debt securities	$	417,891	$	174	$	(75)	$	417,990
Included in cash and cash equivalents	$	47,193	$	1	$	—	$	47,194
Included in marketable securities	$	370,698	$	173	$	(75)	$	370,796


	December 31, 2020
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasury	$	155,339	$	14	$	(6)	$	155,347
U.S. agency and government sponsored securities	19,996		—		—		19,996
Commercial paper	182,218		6		(4)		182,220
Corporate bonds	45,431		21		(2)		45,450
Asset-backed securities	7,012		6		—		7,018
Total debt securities	$	409,996	$	47	$	(12)	$	410,031
Included in cash and cash equivalents	$	133,319	$	4	$	(2)	$	133,321
Included in marketable securities	$	276,677	$	43	$	(10)	$	276,710

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Notes to Condensed Consolidated Financial Statements (Unaudited)

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 September 30, 2021 and December 31, 2020 (in thousands):


	September 30, 2021				December 31, 2020
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
U.S. Treasury	$	(63)	$	19,972	$	(6)	$	65,298
U.S. agency and government sponsored securities	—		4,994		—		—
Commercial paper	(2)		35,934		(4)		47,629
Corporate bonds	(9)		22,641		(2)		15,575
Asset-backed securities	(1)		1,270		—		—
Total	$	(75)	$	84,811	$	(12)	$	128,502

Equity Investments

The Company’s equity investments included in marketable securities as of September 30, 2021 and December 31, 2020 were as follows (in thousands):


	September 30, 2021		December 31, 2020
Equity investments included in marketable securities	$	44,748	$	—

Total realized and unrealized gains and losses associated with the Company’s equity investments consisted of the following (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net realized gains (losses) recognized on equity investments sold	$	236	$	—	$	317	$	—
Net unrealized gains (losses) recognized on equity investments held	70		—		45		—
Total net gains (losses) recognized in other income (expense), net	$	306	$	—	$	362	$	—

Note 6. Financial Statement Components

Cash and Cash Equivalents

Cash and cash equivalents consisted of the following (in thousands):



	September 30, 2021		December 31, 2020
Cash	$	17,097	$	10,652
Money market funds	65,032		64,971
U.S. Treasury	—		24,999

Commercial paper	47,194		108,322

Total cash and cash equivalents	$	129,323	$	208,944

Inventories, net

Inventories consisted of the following (in thousands):



	September 30, 2021		December 31, 2020
Raw materials	$	4,858	$	625
Work-in-process	1,672		52
Finished goods	1,341		2,936
Total inventories, net	$	7,871	$	3,613

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Notes to Condensed Consolidated Financial Statements (Unaudited)

The Company’s inventory write-down (primarily due to obsolescence, lower of cost or market assessment, and other adjustments) was $0.1 million and $1.6 million for the three and nine months ended September 30, 2021, respectively, and $1.9 million and $4.4 million for the three and nine months ended September 30, 2020, respectively.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):



	September 30, 2021		December 31, 2020
Prepaid expenses	$	4,723	$	1,073
Contract assets	11,788		—
Advance payments to vendors	3,443		961
Prepaid rent and other receivables	3,929		2,763

Total prepaid expenses and other current assets	$	23,883	$	4,797

Property and Equipment

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



	September 30, 2021		December 31, 2020
Machinery and equipment	$	10,265	$	5,940
Computer hardware and software	3,263		2,450
Demonstration fleet and demonstration units	1,709		1,821
Leasehold improvements	990		791
Vehicles	795		835
Furniture and fixtures	571		293

Construction in progress	3,127		1,410
Total property and equipment	20,720		13,540
Accumulated depreciation and amortization	(9,592)		(5,851)
Total property and equipment, net	$	11,128	$	7,689

Property and equipment capitalized under finance lease (capital lease prior to adoption of ASC 842) consisted of the following (in thousands):



	September 30, 2021		December 31, 2020
Computer hardware and software	$	88	$	88
Machinery and equipment	838		838
Total property and equipment, gross	926		926
Less: accumulated depreciation	(321)		(219)
Total property and equipment, net	$	605	$	707

Depreciation and amortization expense associated with property and equipment was $0.7 million and $2.1 million for the three and nine months ended September 30, 2021, respectively, and $0.7 million and $1.9 million for the three and nine months ended September 30, 2020, respectively.

Other Non-Current Assets

Other non-current assets consisted of the following (in thousands):



	September 30, 2021		December 31, 2020
Security deposits	$	1,101	$	1,106

Other non-current assets	1,435		45
Total other non-current assets	$	2,536	$	1,151

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Notes to Condensed Consolidated Financial Statements (Unaudited)

Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following (in thousands):



	September 30, 2021		December 31, 2020
Accrued expenses	$	6,152	$	3,998
Warranty liabilities	1,721		259
Contract liabilities	579		2,284
Accrued compensation and benefits	7,045		3,071
Contract losses	9		558
Finance lease (capital lease prior to adoption of ASC 842) liabilities, current	257		282
Employee tax withholding	2,788		—
Total accrued and other current liabilities	$	18,551	$	10,452

Other Non-Current Liabilities

Other non-current liabilities consisted of the following (in thousands):



	September 30, 2021		December 31, 2020
Deferred rent	$	—	$	826
Finance lease (capital lease prior to adoption of ASC 842) liabilities, non-current	145		331

Other non-current liabilities	766		161
Total other non-current liabilities	$	911	$	1,318

Note 7. Fair Value Measurements

As of September 30, 2021, the Company carried cash equivalents, marketable investments and Private Warrants. The Company had previously carried Public Warrants which were exercised and redeemed in March 2021.

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.

Given that 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 September 30, 2021, management

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Notes to Condensed Consolidated Financial Statements (Unaudited)

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 4.18 years, volatility of 65.1% and a risk-free rate of 0.79%. 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 September 30, 2021 (in thousands):


	Private Warrants
Balance as of December 31, 2020	$	—
Private warrants transferred from Level 2	52,832

Measurement adjustments	(25,079)
Balance as of September 30, 2021	$	27,753

The decrease in fair value of private warrants for the three and nine months ended September 30, 2021 was $17.1 million and $25.1 million, respectively, which was included in the change in fair value of warrant liabilities in the condensed consolidated statement of operations and comprehensive loss. The decrease in Private Warrant liability as of September 30, 2021 is predominantly attributable to the decrease in per share price of the Company’s Class A common stock.

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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 September 30, 2021 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	65,032	$	—	$	—	$	65,032

Commercial paper	—		47,194		—		47,194
Total cash equivalents	$	65,032	$	47,194	$	—	$	112,226
Marketable investments:
U.S. Treasury	$	120,210	$	—	$	—	$	120,210
U.S. agency and government sponsored securities	—		4,994		—		4,994
Commercial paper	—		85,800		—		85,800
Corporate bonds	—		138,970		—		138,970
Asset-backed securities	—		20,822		—		20,822
Equity investments	44,748		—		—		44,748
Total marketable investments	$	164,958	$	250,586	$	—	$	415,544
Liabilities:

Private Warrants	$	—	$	—	$	27,753	$	27,753
Total warrant liabilities	$	—	$	—	$	27,753	$	27,753


	Fair Value (in thousands) Measured as of December 31, 2020 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	64,971	$	—	$	—	$	64,971
U.S. Treasury	24,999		—		—		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 8. 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 September 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 September 30, 2021, the Company had 259,808,501 and 101,588,670 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

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Notes to Condensed Consolidated Financial Statements (Unaudited)

the Class B common 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.

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 September 30, 2021 and such Private Warrants are set to expire on December 2, 2025. Each Private Warrant allows the sponsor to purchase one share of Class A common stock at $11.50 per share. During the three and nine months ended September 30, 2021, the fair value gain (loss) of Warrants was $17.1 million and $(22.6) million, respectively.

Stock-in-lieu of Cash Program

The Company has entered into arrangements with certain vendors wherein the Company at its discretion may elect to compensate the respective vendors for services provided in either cash or by issuing shares of the Company’s Class A common stock (“Stock-in-lieu of Cash Program”). During the three and nine months ended September 30, 2021, the Company issued 291,940 shares of Class A common stock, as part of the Stock-in-lieu of Cash Program. The Company considers the shares issuable under the Stock-in-lieu of Cash Program as liability classified awards when the arrangement with the vendors require the Company to issue a variable number of registered shares to settle amounts owed. As of September 30, 2021, the Company did not have any outstanding liabilities related to its Stock-in-lieu of Cash Program.

Note 9. 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 nine months ended September 30, 2021 and 2020: (in thousands, except for share and per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator:
Net loss	$	(51,340)	$	(31,211)	$	(164,093)	$	(72,227)
Deemed dividend attributable to BCF accretion	—		(6,247)		—		(6,247)
Net loss attributable to common shareholders	$	(51,340)	$	(37,458)	$	(164,093)	$	(78,474)
Denominator:
Weighted average common shares outstanding- Basic	352,122,485		130,601,660		341,858,435		129,643,774

Weighted average common shares outstanding- Diluted	352,122,485		130,601,660		341,858,435		129,643,774
Net loss per shares attributable to common shareholders- Basic and Diluted	$	(0.15)	$	(0.29)	$	(0.48)	$	(0.61)

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Notes to Condensed Consolidated Financial Statements (Unaudited)

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:



															September 30, 2021
Warrants															7,166,301
Stock options															12,700,104
Restricted stock awards and restricted stock units															10,966,176



Earn-out shares															8,606,717
Total															39,439,298

Note 10. 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 discontinued 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 September 30, 2021, the Company was authorized to issue a maximum number of 36,588,278 shares of Class A common stock. The Company granted 11,465,582 restricted stock units in the nine months ended September 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 nine months ended September 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, 2020	16,188,071	$	1.67

Exercised	(2,822,956)	1.68
Cancelled/Forfeited	(665,011)	1.67
Outstanding as of September 30, 2021	12,700,104	1.71		8.33	$	176,413

The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2021 was $55.1 million. 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 $4.5 million during the nine months ended September 30, 2021.

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

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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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 nine months ended September 30, 2021 was as follows:


	Shares	Weighted Average Grant Date Fair Value per Share




Outstanding as of December 31, 2020	1,815,891	$	1.15

Forfeited	(99,780)	1.12
Vested	(831,819)	0.93
Outstanding as of September 30, 2021	884,292	1.19

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 a period up to six 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 nine months ended September 30, 2021 was as follows:


	Shares	Weighted Average Grant Date Fair Value per Share




Outstanding as of December 31, 2020	—	$	—
Granted	11,465,582	20.13
Forfeited	(188,251)	23.00
Vested	(1,195,447)	19.20
Outstanding as of September 30, 2021	10,081,884	20.18

Compensation expense

Stock-based compensation expense by function was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of sales	$	1,619	$	83	$	2,829	$	237
Research and development	6,318		541		12,743		1,608
Sales and marketing	1,859		150		2,979		334
General and administrative	23,724		523		31,336		2,531
Total	$	33,520	$	1,297	$	49,887	$	4,710

The Company issues fixed value equity awards to certain employees as a part of their compensation package. These awards are issued as RSUs out of the 2020 Plan and are accounted for as liability classified awards under ASC 718 — Stock Compensation. Fixed value equity awards granted have service-based conditions only and vest quarterly over a period of four years. These awards represent a fixed dollar amount settled in a variable number of shares determined at each vesting period. For the three and nine months ended September 30, 2021, the Company recorded $1.2 million and $1.8 million in stock-based compensation expense related to these awards.

As discussed in Note 3 as part of the Optogration acquisition, the Company owes up to $22.0 million of post combination compensation related to certain service and performance conditions. As of September 30, 2021, it is probable that the conditions will be met and as a result, the Company recorded $2.1 million in stock-based compensation expense.

Stock-based compensation expense related to the liability classified awards (fixed value equity awards and compensation related to Optogration acquisition) was $0.6 million in each of the three and six months ended June 30, 2021, $3.3 million and $3.9 million, respectively, in the three and nine months ended September 30, 2021, which was recorded in current and non-current accrued liabilities, as appropriate.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 11. Income Taxes

The Company had benefit from income taxes of $1.3 million and $1.3 million, respectively for the three and nine months ended September 30, 2021, respectively. The effective tax rate was 0% for the three and nine months ended September 30, 2020. 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.

As of September 30, 2021, the Company is in the process of evaluating the deferred tax balances associated with the Optogration acquisition. Preliminary estimate of the acquired deferred tax liability balances necessitated a partial release of the Company’s valuation allowance in the amount of $1.3 million. The completion of this analysis when the tax returns for the current period are filed may result in changes to the Company’s allocation of the consideration value to assets acquired and liabilities assumed. In accordance with ASC 805, Business Combinations, the preliminary calculation of the deferred tax balances 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 and file its tax returns.

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 September 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 nine months ended September 30, 2021, there were no material changes to the total amount of unrecognized tax benefits.

Note 12. 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. In October 2021, the Company entered into a lease agreement commencing on April 1, 2022 for a term of 65 months through August 31, 2027. In September 2021, the Company gave a notice to the landlord to terminate the lease of certain office space in Orlando, Florida. The amounts of operating lease right-of-use assets and liabilities associated with the termination were not material. 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 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

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Notes to Condensed Consolidated Financial Statements (Unaudited)

right-of-use asset also includes 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 nine months ended September 30, 2021 were as follows (in thousands):



	Three Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2021
Operating lease cost	$	1,202	$	3,560
Variable lease cost	420		1,324
Total operating lease cost	$	1,622	$	4,884
Finance lease cost:
Amortization of right-of-use assets	$	42	$	126
Interest on finance lease liabilities	14		42
Total finance lease cost	$	56	$	168

Supplemental cash flow information for the nine months ended September 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	$	(3,723)
Cash paid for finance leases included in financing activities	(258)
Right of use assets obtained in exchange for lease obligations:
Operating leases	2,876
Finance leases	—

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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Supplemental balance sheet information related to leases was as follows (in thousands):



	September 30, 2021
Operating leases:
Operating lease right-of-use assets	$	10,165
Operating lease liabilities:
Operating lease liabilities, current	$	4,927
Operating lease liabilities, non-current	6,639
Total operating lease liabilities	$	11,566
Finance leases:
Property and equipment, gross	$	926
Less: accumulated depreciation	(321)
Property and equipment, net	$	605

Finance lease liabilities, current	$	257
Finance lease liabilities, non-current	145
Total finance lease liabilities	$	402

Weighted average remaining terms were as follows (in years):



			September 30, 2021
Weighted average remaining lease term
Operating leases			3.13
Finance leases			2.03

Weighted average discount rates were as follows:



	September 30, 2021
Weighted average discount rate
Operating leases	2.76	%
Finance leases	9.92	%

Maturities of lease liabilities were as follows (in thousands):


	Operating Leases		Finance Leases
Year Ending December 31,
2021 (remaining three months)	$	1,286	$	78
2022	4,963		240
2023	3,515		71
2024	1,283		28
2025	1,205		26
2026	602		—

Total lease payments	12,854		443
Less: imputed interest	(1,288)		(41)
Total leases liabilities	$	11,566	$	402

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Notes to Condensed Consolidated Financial Statements (Unaudited)

Disclosures under ASC 840, Leases

Rent expense was $1.3 million and $4.2 million for the three and nine months ended September 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 Leases		Operating Leases
2021	$	331	$	5,834
2022	240		6,172
2023	70		4,544
2024	28		746
2025	25		—
Thereafter	—		—
Total minimum lease payments	694		$	17,296
Less: amount representing interest	80
Capital lease obligations	$	614

Note 13. 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 $54.1 million as of September 30, 2021, which are expected to be received within a year. In October 2021, the Company entered into an office space lease commencing April 1, 2022. This will commit the Company to total rent payments of $5.0 million and variable costs of $1.4 million through the end of the lease ending August 31, 2027.

In June 2021, the Company entered into an agreement with P3 USA, Inc. (“P3”) to provide engineering, and general and administrative services. Under the said agreement, the Company issued 291,940 shares of Class A common stock to P3 in the third quarter of 2021. In September 2021, the Company entered into an amendment to modify the existing agreement with P3 and among other things, extended the term of the agreement until December 2025. The Company expects that the expenses to be incurred with P3 will be at least $30.0 million over the extended term under the amended agreement.

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 14. 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 measure 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.

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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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.

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 September 30, 2021
	Autonomy Solutions		Component Sales		Total reportable segments		Eliminations (1)		Total Consolidated
Revenue:
Revenues from external customers	$	7,550	$	428	$	7,978	$	—	$	7,978
Revenues from internal customer	2,379		1,516		3,895		(3,895)		—
Total revenue	$	9,929	$	1,944	$	11,873	$	(3,895)	$	7,978
Depreciation and amortization	$	673	$	235	$	908	$	—	$	908
Operating loss	(69,614)		(787)		(70,401)		256		(70,145)
Other significant items:
Segment assets	606,431		11,064		617,495		(9,689)		607,806
Inventories, net	7,531		340		7,871		—		7,871


	Three Months Ended September 30, 2020
	Autonomy Solutions		Component Sales		Total reportable segments		Eliminations (1)		Total Consolidated
Revenue:
Revenues from external customers	$	3,481	$	742	$	4,223	$	—	$	4,223
Revenues from internal customer	639		813		1,452		(1,452)		—
Total revenue	$	4,120	$	1,555	$	5,675	$	(1,452)	$	4,223
Depreciation and amortization	$	665	$	23	$	688	$	—	$	688
Operating income (loss)	(21,800)		4		(21,796)		—		(21,796)
Other significant items:
Segment assets	191,778		2,979		194,757		(3,304)		191,453