gcac-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Cepton, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-39959

27-2447291

(State or other jurisdiction of
incorporation or organization)

(Commission File Number)

(I.R.S. Employer
Identification Number)


399 West Trimble Road San Jose, California						95131
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code: 408-459-7579

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.00001 per share

CPTN

The Nasdaq Stock Market LLC

Redeemable warrants, exercisable for common stock at an exercise price of $115.00 per share, subject to adjustment

CPTNW

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 x 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	x	Smaller reporting company	x
		Emerging growth company	x

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 Exchange Act). Yes o No x

As of August 1, 2024, 16,043,207 shares of common stock, par value $0.00001, of the registrant were issued and outstanding.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (the “Report”) includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical or current fact included in this Report are forward-looking statements. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target,” “designed to” or other similar expressions that predict or imply future events or trends or that are not statements of historical matters. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The Company cautions readers of this Report that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control, that could cause the actual results to differ materially from the expected results. These factors include the information set forth in Part II, Item 1A, of this Report under the heading “Risk Factors”, which we encourage you to carefully read. Forward-looking statements include, but are not limited to, statements regarding estimates and forecasts of financial and performance metrics, projections of market opportunity and market share, expectations regarding our pending transaction with Koito Manufacturing Co., LTD (“Koito”), including our ability to close such transaction in a timely manner or at all, anticipated recoveries related to our cancelled General Motors (“GM”) series production award with Koito, potential benefits and the commercial attractiveness to its customers of the Company’s products and services, expectations regarding our new series production award, including potential payments relating to the new series production award, the potential success of the Company’s marketing and expansion strategies, and the potential for the Company to achieve design awards. These statements are based on various assumptions, whether or not identified in this Report, and on the current expectations of the Company’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. You are therefore cautioned not to place undue reliance on such statements. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by law.

Cepton, Inc.

Quarterly Report on Form 10-Q

Table of Contents


		Page No.

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	1

	Condensed Consolidated Balance Sheets	1

	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	2

	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)	3

	Condensed Consolidated Statements of Cash Flows	5

	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4.	Controls and Procedures	34

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

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	38

SIGNATURES		40

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

CEPTON, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(unaudited)


	June 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	56,021	$	50,406
Short-term investments	—		5,969
Accounts receivable, net of allowance for credit losses of $0 and $0 (including $0 and $2,121 from a related party)	333		3,625
Inventories	1,235		2,396
Prepaid expenses and other current assets	3,393		1,253
Total current assets	60,982		63,649
Property and equipment, net	1,249		1,450
Restricted cash	1,283		1,283
Other assets	9,167		10,067
Total assets	$	72,681	$	76,449
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	2,877	$	1,128
Operating lease liabilities, current	2,045		1,875
Accrued expenses and other current liabilities (including $2,200 and $385 with a related party)	3,833		4,066
Total current liabilities	8,755		7,069
Warrant liability	61		43
Earnout liability	34		93
Operating lease liabilities, non-current	7,635		8,720
Total liabilities	16,485		15,925
Commitments and contingencies (Note 17)
Convertible preferred stock with a related party:
Convertible preferred stock – Par value $0.00001 per share – 5,000,000 shares authorized; 100,000 shares issued and outstanding (aggregate liquidation preference of $106.3 million and $104.1 million)	98,891		98,891
Stockholders’ equity (deficit):
Common stock – Par value $0.00001 per share – 35,000,000 shares authorized; 16,043,207 and 15,861,494 shares issued and outstanding	—		—
Additional paid-in capital	98,913		96,583
Accumulated other comprehensive loss	(351)		(345)
Accumulated deficit	(141,257)		(134,605)
Total stockholders’ equity (deficit)	(42,695)		(38,367)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	72,681	$	76,449

See accompanying notes to the condensed consolidated financial statements

CEPTON, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(In thousands, except share and per share data)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Lidar sensor and prototype revenue (including revenue of $137, $1,214, $694 and $1,859 from a related party)	$	374	$	2,771	$	1,515	$	4,011
Development revenue (including revenue of $10,000, $6, $10,750 and $234 from a related party)	10,054		16		10,859		261
Total revenue	10,428		2,787		12,374		4,272

Lidar sensor and prototype cost of revenue	976		2,348		2,188		3,796
Development cost of revenue	3,098		5		3,409		116
Total cost of revenue	4,074		2,353		5,597		3,912
Gross profit	6,354		434		6,777		360

Operating expenses:
Research and development	3,234		9,365		8,888		16,603
Selling, general and administrative	3,709		6,185		9,973		12,916
Total operating expenses	6,943		15,550		18,861		29,519
Operating loss	(589)		(15,116)		(12,084)		(29,159)
Other income (expense):
Gain (loss) on change in fair value of earnout liability	59		(26)		59		736
(Loss) gain on change in fair value of warrant liability	(11)		36		(18)		130
Other income, net	88		2		4,110		21
Loss on extinguishment of debt	—		—		—		(1,123)
Foreign currency transaction loss, net	—		—		—		(750)
Interest income, net	613		917		1,267		1,216
Income (loss) before income taxes	160		(14,187)		(6,666)		(28,929)
Benefit (provision) for income taxes	21		(3)		14		(3)

Net income (loss)	$	181	$	(14,190)	$	(6,652)	$	(28,932)
Less: cumulative preferred stock dividends	(1,118)		(1,071)		(2,224)		(1,909)
Net loss attributable to common stockholders	$	(937)	$	(15,261)	$	(8,876)	$	(30,841)

Net loss per share attributable to common stockholders, basic	$	(0.06)	$	(0.97)	$	(0.56)	$	(1.96)
Net loss per share attributable to common stockholders, diluted	$	(0.06)	$	(0.97)	$	(0.56)	$	(1.96)
Weighted-average common shares, basic	15,978,032		15,737,917		15,933,150		15,708,102
Weighted-average common shares, diluted	15,978,032		15,737,917		15,933,150		15,708,102

Net income (loss)	$	181	$	(14,190)	$	(6,652)	$	(28,932)
Other comprehensive (loss) income, net of tax:
Changes in unrealized (loss) gain on available-for-sale securities	—		(11)		6		6
Foreign currency translation adjustments	(2)		(4)		(12)		16
Total other comprehensive (loss) income, net of tax	(2)		(15)		(6)		22
Comprehensive income (loss)	$	179	$	(14,205)	$	(6,658)	$	(28,910)

See accompanying notes to the condensed consolidated financial statements

CEPTON, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands, except share and per share data)

(unaudited)


	Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount
Balance — December 31, 2023	100,000	$	98,891	15,861,494	$	—	$	96,583	$	(345)	$	(134,605)	$	(38,367)
Exercise of stock options and release of RSUs	—	—		82,951	—		—		—		—		—
Stock-based compensation expense	—	—		—	—		926		—		—		926
Payments of employee taxes related to vested restricted stock units	—	—		(23,528)	—		(63)		—

SEC Form 10-Q filed by Cepton Inc.