lazr-20220331

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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 March 31, 2022


☐			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 April 29, 2022, the registrant had 252,526,777 shares of Class A common stock and 97,088,670 shares of Class B common stock, par value $0.0001 per share, outstanding.

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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.		4
	Condensed Consolidated Balance Sheets (Unaudited)	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	5
	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) (Unaudited)	6
	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.		27
	Overview	27
	Industrialization and Customer Update	27
	Basis of Presentation	28
	Components of Results of Operations	28
	Results of Operations	30
	Liquidity and Capital Resources	31
	Off-Balance Sheet Arrangements	1
	Critical Accounting Policies and Estimates	32
	Recent Accounting Pronouncements	32
Item 3. Quantitative and Qualitative Disclosures About Market Risk.		33
Item 4. Controls and Procedures.		33

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.		35
Item 1A. Risk Factors.		35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		35
Item 3. Defaults Upon Senior Securities.		35
Item 4. Mine Safety Disclosures.		35
Item 5. Other Information.		35
Item 6. Exhibits.		36
SIGNATURES		37

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CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Form 10-Q”) includes 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,” “future,” “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, product plans, future growth, market opportunities, strategic initiatives, industry positioning, customer acquisition and retention, revenue growth 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, including, our history of losses and our expectation that we will continue to incur significant expenses, including substantial R&D costs, and continuing losses for the foreseeable future as well as our limited operating history which makes it difficult to evaluate our future prospects and the risks and challenges we may encounter; our strategic initiatives which may prove more costly than we currently anticipate and potential failure to increase our revenue to offset these initiatives; whether our lidar products are selected for inclusion in autonomous driving or ADAS systems by automotive OEMs or their suppliers, and whether we will be de-selected by any customers; the lengthy period of time from a major commercial win to implementation and the risks of cancellation or postponement of the contract or unsuccessful implementation; potential inaccuracies in our forward looking estimates of certain metrics and our future cost of goods sold (COGS) and bill of materials (BOM) and total addressable market; the discontinuation, lack of success of our customers in developing and commercializing products using our solutions or loss of business with respect to a particular vehicle model or technology package and whether end automotive consumers will demand and be willing to pay for such features; our inability to reduce and control the cost of the inputs on which we rely, which could negatively impact the adoption of our products and our profitability; the effect of continued pricing pressures, competition from other lidar manufacturers, automotive original equipment manufacturers (“OEMs”) cost reduction initiatives and the ability of automotive OEMs to re-source or cancel vehicle or technology programs which may result in lower than anticipated margins, or losses, which may adversely affect our business; general economic uncertainty and the effect of general economic conditions on our industry in particular, including the level of demand and financial performance of the autonomous vehicle industry and market adoption of lidar as well as developments in alternative technology and the increasingly competitive environment in which we operate; our ability to manage our growth and expand our business operations effectively, including into international markets, such as China, which exposes us to operational, financial and regulatory risks; adverse impacts due to limited availability and quality of materials, supplies, and capital equipment, or dependency on third-party service providers whether we will be able to successfully transition our engineering designs into high volume manufacturing, including our ability to transition to an outsourced manufacturing business model and whether we and our outsourcing partners and suppliers can successfully operate complex machinery; whether we can successfully select, execute or integrate our acquisitions; whether the complexity of our products results in undetected defects and reliability issues which could reduce market adoption of our new products, limit our ability to manufacture, damage our reputation and expose us to product liability, warranty and other claims; our ability to maintain and adequately manage our inventory; our ability to remediate the material weakness in our internal controls over financial reporting; our ability to protect and enforce our intellectual property rights; changes in personnel and availability of qualified personnel and dependence on Austin Russell, our Founder, President and Chief Executive Officer; the amount and timing of future sales and whether the average selling prices of our products could decrease rapidly over the life of the product as well as our dependence on a few key customers, who are often large corporations with substantial negotiating power; the effects of the ongoing coronavirus (COVID-19) pandemic or other infectious diseases, health epidemics, pandemics and natural disasters on Luminar’s business; interruption or failure of our information technology and communications systems and cybersecurity risks to our operational systems, security systems, infrastructure, integrated software in our lidar solutions; and those other factors discussed in Part 1, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 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. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. 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.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we

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believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

WEBSITE AND SOCIAL MEDIA DISCLOSURE

We use our website (https://www.luminartech.com/) and various social media channels as a means of disclosing information about the Company and its products to its customers, investors and the public (e.g., @luminartech on Twitter, Luminartech on YouTube, and Luminar Technologies on LinkedIn). The information on our website (or any webpages referenced in this Quarterly Report on Form 10-Q) or posted on social media channels is not part of this or any other report that the Company files with, or furnishes to, the SEC. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)


	March 31, 2022		December 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	159,416	$	329,977
Restricted cash	710		725
Marketable securities (including $12,250 and $12,200 with a related party as of March 31, 2022 and December 31, 2021, respectively, see Note 15)	547,440		462,141
Accounts receivable	3,256		13,013
Inventory	10,012		10,342
Prepaid expenses and other current assets	37,545		29,195
Total current assets	758,379		845,393
Property and equipment, net	16,437		11,009
Operating lease right-of-use assets	14,005		9,145
Intangible assets, net	2,361		2,424
Goodwill	2,945		3,110
Other non-current assets	13,673		12,455
Total assets	$	807,800	$	883,536

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	17,293	$	14,419
Accrued and other current liabilities	24,848		19,844
Operating lease liabilities	5,079		4,735

Total current liabilities	47,220		38,998
Warrant liabilities	16,399		31,230

Convertible senior notes	609,766		608,957
Operating lease liabilities, non-current	10,102		5,768
Other non-current liabilities	429		598
Total liabilities	683,916		685,551
Commitments and contingencies (Note 13)
Stockholders’ equity:
Class A common stock	27		27
Class B common stock	10		10
Additional paid-in capital	1,314,742		1,257,214
Accumulated other comprehensive loss	(4,556)		(908)
Treasury stock	(275,519)		(235,871)
Accumulated deficit	(910,820)		(822,487)
Total stockholders’ equity	123,884		197,985
Total liabilities and stockholders’ equity	$	807,800	$	883,536

See accompanying notes to the unaudited condensed consolidated financial statements.

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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 March 31,
	2022		2021
Revenue:
Products	$	1,541	$	2,933
Services	5,314		2,380
Total revenue	6,855		5,313
Cost of sales:
Products	11,818		5,309
Services	4,836		2,330
Total cost of sales	16,654		7,639
Gross loss	(9,799)		(2,326)
Operating expenses:
Research and development	33,109		14,010
Sales and marketing	9,398		2,635
General and administrative	30,025		10,273
Total operating expenses	72,532		26,918
Loss from operations	(82,331)		(29,244)
Other income (expense), net:

Change in fair value of warrant liabilities	(3,857)		(46,649)

Interest expense and other	(3,280)		(200)
Interest income and other	1,539		170
Total other income (expense), net	(5,598)		(46,679)
Loss before provision for income taxes	(87,929)		(75,923)
Provision for income taxes	404		—
Net loss	$	(88,333)	$	(75,923)

Net loss per share:
Basic and diluted	$	(0.25)	$	(0.23)
Shares used in computing net loss per share:
Basic and diluted	348,683,836		332,987,523
Comprehensive Loss:
Net loss	$	(88,333)	$	(75,923)
Net unrealized losses on available-for-sale debt securities	(3,648)		(43)
Comprehensive loss	$	(91,981)	$	(75,966)

See accompanying notes to the unaudited condensed consolidated financial statements.

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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited, in thousands, except share data)


	Class A Common Stock	Class B Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)	Treasury Stock			Accumulated Deficit		Total Stockholders’ Equity (Deficit)
			Shares			Amount				Shares					Amount
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 Public and Private Warrants			15,574,037	1			—	—			492,219		—			—		—		492,220
Issuance of Class A common stock upon exercise of stock options			183,918	—			—	—			322		—			—		—		322
Share-based compensation			—	—			—	—			1,843		—			—		—		1,843
Other comprehensive loss			—	—			—	—			—		(43)			—		—		(43)
Net loss			—	—			—	—			—		—			—		(75,923)		(75,923)
Balance as of March 31, 2021			234,575,992	$	23		105,118,203	$	11		$	1,227,559	$	(9)		$	—	$	(660,424)	$	567,160

Balance as of December 31, 2021			266,076,525	$	27		97,088,670	$	10		$	1,257,214	$	(908)		$	(235,871)	$	(822,487)	$	197,985
Shares repurchased			—	—			—	—			—		—			(39,648)		—		(39,648)
Issuance of Class A common stock upon exercise of Private Warrants			401,365	—			—	—			18,689		—			—		—		18,689
Issuance of Class A common stock upon exercise of stock options and vesting of restricted stock units			2,117,059	—			—	—			1,085		—			—		—		1,085
Retirement of unvested restricted common stock			(40,763)	—			—	—			—		—			—		—		—
Vendor stock-in-lieu of cash program			1,424,350	—			—	—			14,613		—			—		—		14,613



Share-based compensation			—	—			—	—			23,657		—			—		—		23,657
Payments of employee taxes related to vested restricted stock units			—	—			—	—			(516)		—			—		—		(516)

Other comprehensive loss			—	—			—	—			—		(3,648)			—		—		(3,648)
Net loss			—	—			—	—			—		—			—		(88,333)		(88,333)
Balance as of March 31, 2022			269,978,536	$	27		97,088,670	$	10		$	1,314,742	$	(4,556)		$	(275,519)	$	(910,820)	$	123,884

See accompanying notes to the unaudited condensed consolidated financial statements.

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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)


	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities:
Net loss	$	(88,333)	$	(75,923)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	805		657
Noncash lease expense related to operating lease right-of-use assets	885		890
Amortization of premium on marketable securities	444		262

Change in fair value of warrants	3,857		46,649
Vendor stock-in-lieu of cash program	7,848		—
Amortization of debt discount and issuance costs	809		—
Impairment of inventories	1,356		257


Share-based compensation	26,698		1,837



Product warranty and other	107		853
Changes in operating assets and liabilities:
Accounts receivable	9,757		3,828
Inventories	(768)		(442)
Prepaid expenses and other current assets	(3,300)		(5,797)
Other non-current assets	158		(1,318)
Accounts payable	5,983		1,766
Accrued and other current liabilities	1,200		(813)
Other non-current liabilities	(343)		(720)
Net cash used in operating activities	(32,837)		(28,014)
Cash flows from investing activities:

Purchases of marketable securities	(193,687)		(226,245)
Proceeds from maturities of marketable securities	91,454		69,275
Proceeds from sales of marketable securities	12,842		29,505

Purchases of property and equipment	(5,004)		(889)

Net cash used in investing activities	(94,395)		(128,354)
Cash flows from financing activities:












Proceeds from exercise of warrants	—		153,927
Proceeds from exercise of stock options	1,092		321

Payments of employee taxes related to vested restricted stock units	(516)		—

Repurchase of common stock and redemption of warrants	(43,920)		(2)
Other financing activities	—		(142)
Net cash provided by (used in) financing activities	(43,344)		154,104
Net decrease in cash, cash equivalents and restricted cash	(170,576)		(2,264)
Beginning cash, cash equivalents and restricted cash	330,702		209,719
Ending cash, cash equivalents and restricted cash	$	160,126	$	207,455
Supplemental disclosures of cash flow information:
Cash paid for interest	$	—	$	19

Supplemental disclosures of noncash investing and financing activities:




Issuance of Class A common stock upon exercise of warrants	$	18,689	$	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	5,746		2,876
Deferred financing costs recorded in accrued liabilities	—		223


Purchases of property and equipment recorded in accounts payable and accrued liabilities	1,950		504

See accompanying notes to the unaudited condensed consolidated financial statements.

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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 Reverse Merger with Gores in Note 3 to the financial statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 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 is headquartered in Orlando, Florida and has various facilities located in the United States and internationally in Munich, Germany.

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, 2021. 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, forecasted costs associated with non-recurring (“NRE”) services, product warranty reserves, 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 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) “Components” which includes development of application-specific integrated circuits, 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. (“Optogration”), which has been included in the Components segment.

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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents, marketable investments and accounts receivable. A significant portion of the Company’s cash and cash equivalents is held at high-quality domestic financial institutions. Deposits held with the financial institutions may, at times, exceed the amount of insurance provided on such deposits. Cash held by the Company in foreign entities as of March 31, 2022 and December 31, 2021 was not material.

The Company’s revenue is derived from customers located in the United States and international markets. Four customers accounted for 39%, 20%, 11% and 10%, respectively, of the Company’s accounts receivable at March 31, 2022. Two customers accounted for 39% and 31% of the Company’s accounts receivable at December 31, 2021.

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, 2021. There has been no material change to the Company’s significant accounting policies during the three months ended March 31, 2022.

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. No. 2021-08 (“ASU 2021-08”), Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, it requires an acquirer to account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts, which should generally result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements. The Company elected to early adopt ASU 2021-08 as of January 1, 2022. The adoption of ASU 2021-08 did not have a material impact on the Company’s consolidated financial position, operating results or cash flows.

Note 3. Revenue

The Company’s revenue is comprised of sales of lidar sensors hardware, components and NRE services.

Disaggregation of Revenues

The Company disaggregates its revenue from contracts with customers by (1) geographic region based on customer’s billed to location, and (2) 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, as well as revenue by segment, are as follows (in thousands):


	Three Months Ended March 31,
	2022				2021
	Revenue		% of Revenue		Revenue		% of Revenue

Revenue by primary geographical market:
North America	$	4,968	73	%	$	2,539	48	%
Asia Pacific	1,860		27	%	321		6	%
Europe and Middle East	27		—	%	2,453		46	%
Total	$	6,855	100	%	$	5,313	100	%
Revenue by timing of recognition:
Recognized at a point in time	$	1,541	22	%	$	2,053	39	%
Recognized over time	5,314		78	%	3,260		61	%
Total	$	6,855	100	%	$	5,313	100	%
Revenue by segment:
Autonomy Solutions	$	5,898	86	%	$	4,336	82	%
Components	957		14	%	977		18	%
Total	$	6,855	100	%	$	5,313	100	%

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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Volvo Stock Purchase Warrant

In March 2020, the Company issued a stock purchase warrant (“Volvo Warrants”) to Volvo Car Technology Fund AB (“VCTF”) in connection with an engineering services contract. The Volvo Warrants entitle VCTF to purchase up to 4,089,280 shares of Class A common stock, at a price of $3.1769 per share from the Company and were determined to be an equity classified award to VCTF. The Volvo 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 the first of the two tranches of Volvo Warrants was probable as of December 31, 2021. As such, the Company had recognized a reduction in revenue in the amount of $1.0 million related to the said first tranche of the Volvo Warrants in the year ended December 31, 2021. The Company’s management determined that the vesting of the second tranche of Volvo Warrants was not probable as of March 31, 2022.

Contract assets and liabilities

Contract assets primarily represent revenues recognized for performance obligations that have been satisfied but for which amounts have not been billed. The Company’s contract assets as of March 31, 2022 and December 31, 2021 were $14.8 million and $9.9 million, respectively. Contract liabilities consist of deferred revenue and customer advanced payments. Deferred revenue includes billings in excess of revenue recognized related to product sales and other services revenue and is recognized as revenue when the Company performs under the contract. Customer advanced payments represent required customer payments in advance of product shipments according to customer’s payment term. Customer advance payments are recognized in revenue as or when control of the performance obligation is transferred to the customer. The Company’s contract liabilities were $0.9 million as of March 31, 2022 and December 31, 2021, and were included in accrued and other current liabilities in the condensed consolidated balance sheets.

The significant changes in contract assets balances consisted of the following (in thousands):



	March 31, 2022		December 31, 2021
Beginning balance	$	9,907	$	—
Revenue recognized for performance obligations that have been satisfied but for which amounts have not been billed	4,865		9,907
Ending balance	$	14,772	$	9,907

The significant changes in contract liabilities balances consisted of the following (in thousands):



	March 31, 2022		December 31, 2021
Beginning balance	$	898	$	2,284

Revenue recognized that was included in the contract liabilities beginning balance	(250)		(1,792)
Net increase due to cash received and not recognized as revenue and billings in excess of revenue recognized during the period	259		406
Ending balance	$	907	$	898

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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 4. Investments

Debt Securities

The Company’s investments in debt securities consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands):


	March 31, 2022
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. treasury securities	$	251,673	$	1	$	(2,685)	$	248,989
U.S. agency and government sponsored securities	4,996		—		(89)		4,907
Commercial paper	130,103		1		(126)		129,978
Corporate bonds	158,595		1		(1,348)		157,248
Asset-backed securities	41,185		—		(311)		40,874
Total debt securities	$	586,552	$	3	$	(4,559)	$	581,996
Included in cash and cash equivalents	$	80,201	$	2	$	(28)	$	80,175
Included in marketable securities	506,351		1		(4,531)		501,821


	December 31, 2021
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. treasury securities	$	161,938	$	1	$	(474)	$	161,465
U.S. agency and government sponsored securities	4,995		—		(25)		4,970
Commercial paper	40,788		—		(4)		40,784
Corporate bonds	165,522		13		(345)		165,190
Asset-backed securities	46,540		—		(74)		46,466
Total debt securities	$	419,783	$	14	$	(922)	$	418,875
Included in cash and cash equivalents	$	950	$	—	$	—	$	950
Included in marketable securities	418,833		14		(922)		417,925

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 March 31, 2022 and December 31, 2021 (in thousands):


	March 31, 2022				December 31, 2021
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
U.S. treasury securities	$	(2,685)	$	228,993	$	(474)	$	146,454
U.S. agency and government sponsored securities	(89)		4,907		(25)		4,970
Commercial paper	(126)		114,980		(4)		30,285
Corporate bonds	(1,348)		156,246		(345)		145,522
Asset-backed securities	(311)		40,874		(74)		45,251
Total	$	(4,559)	$	546,000	$	(922)	$	372,482

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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Equity Investments

The Company’s equity investments consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands):


	Condensed Consolidated Balance Sheets Location	March 31, 2022		December 31, 2021
Money market funds(1)	Cash and cash equivalents	$	47,497	$	25,654
Marketable equity investments(1)	Marketable securities	45,619		$	44,216
Non-marketable equity investment measured using the measurement alternative(2)	Other non-current assets	$	10,002	$	10,002
Total		$	103,118	$	79,872

(1) Investments with readily determinable fair values.

(2) Investment in privately held company without readily determinable fair value.

In December 2021, the Company made an investment in 1,495 Class A Preferred Units of Robotic Research OpCo, LLC (“Robotic Research”) for consideration of $10.0 million, which was settled by issuing 618,924 shares of Class A common stock of the Company. The Company’s investment in Robotic Research represents less than 5% of Robotic Research’s capitalization. The Company neither has a significant influence over Robotic Research nor does its investment amount to a controlling financial interest in Robotic Research. As such, the Company measured the investment in Robotic Research at cost as provided under the guidance for measurement of equity investment using the measurement alternative.

Total realized and unrealized gains and losses associated with the Company’s equity investments was not material in the three months ended March 31, 2022 and 2021.

Note 5. Financial Statement Components

Cash and Cash Equivalents

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



	March 31, 2022		December 31, 2021
Cash	$	31,744	$	303,373
Money market funds	47,497		25,654
U.S. treasury securities	19,997		—

Commercial paper	60,178		950

Total cash and cash equivalents	$	159,416	$	329,977

Inventories, net

Inventories consisted of the following (in thousands):



	March 31, 2022		December 31, 2021
Raw materials	$	6,535	$	5,866
Work-in-process	2,265		1,171
Finished goods	1,212		3,305
Total inventories, net	$	10,012	$	10,342

The Company’s inventory write-down (primarily due to obsolescence, lower of cost or market assessment, and other adjustments) was $1.4 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively.

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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Prepaid Expenses and Other Current Assets

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



	March 31, 2022		December 31, 2021
Prepaid expenses	$	15,893	$	14,651
Contract assets	14,772		9,907
Advance payments to vendors	4,417		1,810

Other receivables	2,463		2,827
Total prepaid expenses and other current assets	$	37,545	$	29,195

Property and Equipment

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



	March 31, 2022		December 31, 2021
Machinery and equipment	$	8,286	$	7,694
Computer hardware and software	2,871		2,854

Leasehold improvements	885		869
Vehicles, including demonstration fleet	2,631		2,421

Furniture and fixtures	829		272

Construction in progress	8,454		3,677
Total property and equipment	23,956		17,787
Accumulated depreciation and amortization	(7,519)		(6,778)
Total property and equipment, net	$	16,437	$	11,009

Property and equipment capitalized under finance lease (capital lease prior to adoption of ASC 842) were not material.

Depreciation and amortization expense associated with property and equipment was $0.7 million and $0.7 million for the three months ended March 31, 2022 and 2021, respectively.

Intangible Assets

The following table summarizes the activity in the Company’s intangible assets during the three months ended March 31, 2022 (in thousands):


	Three Months Ended March 31, 2022
Beginning of the period	$	2,424
Amortization	(63)
End of the period	$	2,361

The components of intangible assets were as follows (in thousands):


	March 31, 2022							December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Period (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Period (Years)
Customer relationships	$	780	$	(52)	$	728	9.3	$	780	$	(33)	$	747	9.6
Tradename	120		(120)		—		—	120		(120)		—		—
Developed technology	1,750		(117)		1,633		9.3	1,750		(73)		1,677		9.6
Total intangible assets	$	2,650	$	(289)	$	2,361	9.3	$	2,650	$	(226)	$	2,424	9.6

Amortization expense related to intangible assets was $0.1 million and $0.0 million for the three months ended March 31, 2022 and 2021, respectively.

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LUMINAR TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of March 31, 2022, the expected future amortization expense for intangible assets was as follows (in thousands):


Period	Expected Future Amortization Expense
Remaining 2022	$	190
2023	253
2024	253
2025	253
2026	253
Thereafter	1,159
Total	$	2,361

Goodwill

The carrying amount of goodwill allocated to the Company’s reportable segments was as follows (in thousands):


	Autonomy Solutions		Components		Total
As of March 31, 2022	$	687	$	2,258	$	2,945
As of December 31, 2021	$	687	$	2,423	$	3,110

Other Non-Current Assets

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



	March 31, 2022		December 31, 2021
Security deposits	$	2,574	$	1,187
Non-marketable equity investment	10,002		10,002

Other non-current assets	1,097		1,266
Total other non-current assets	$	13,673