10-Q

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, 2023

OR

¨ 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 $11.50 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, 2023, 158,244,189 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, potential benefits and the commercial attractiveness to its customers of the Company’s products and services, 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.

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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	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37
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	38
SIGNATURES		40

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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, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	32,605	$	31,953
Short-term investments	37,036		3,703
Accounts receivable, net of allowance for credit losses of $0 and $0, respectively	2,092		1,301
Inventories	4,188		2,985
Prepaid expenses and other current assets	3,327		6,272
Total current assets	79,248		46,214
Property and equipment, net	2,028		982
Restricted cash	1,924		2,565
Other assets	10,891		555
Total assets	$	94,091	$	50,316
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	2,942	$	1,979
Operating lease liabilities, current	1,697		211
Accrued expenses and other current liabilities	3,056		2,265
Short-term debt	—		42,587
Total current liabilities	7,695		47,042
Warrant liability	310		440
Earnout liability	184		920
Operating lease liabilities, non-current	9,696		281
Total liabilities	17,885		48,683
Commitments and contingencies (Note 17)
Convertible preferred stock:
Convertible preferred stock – Par value $0.00001 per share – 5,000,000 shares authorized at June 30, 2023 and December 31, 2022; 100,000 shares issued and outstanding at June 30, 2023 (aggregate liquidation preference of $101.9 million at June 30, 2023); No shares issued and outstanding at December 31, 2022	98,891		—
Stockholders’ equity (deficit):
Common stock – Par value $0.00001 per share – 350,000,000 shares authorized at June 30, 2023 and December 31, 2022; 158,224,189 and 156,747,708 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	2		2
Additional paid-in capital	92,648		88,056
Accumulated other comprehensive loss	(344)		(366)
Accumulated deficit	(114,991)		(86,059)
Total stockholders’ equity (deficit)	(22,685)		1,633
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	94,091	$	50,316

See accompanying notes to the condensed consolidated financial statements

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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,
	2023		2022		2023		2022
Lidar sensor and prototype revenue	$	2,771	$	1,441	$	4,011	$	2,863
Development revenue	16		1,118		261		1,181
Total revenue	$	2,787	$	2,559	$	4,272	$	4,044
Lidar sensor and prototype cost of revenue	2,348		2,520		3,796		3,736
Development cost of revenue	5		562		116		598
Total cost of revenue	$	2,353	$	3,082	$	3,912	$	4,334
Gross profit (loss)	434		(523)		360		(290)
Operating expenses:
Research and development	9,365		8,386		16,603		16,140
Selling, general and administrative	6,185		7,189		12,916		15,232
Total operating expenses	15,550		15,575		29,519		31,372
Operating loss	(15,116)		(16,098)		(29,159)		(31,662)
Other income (expense):
(Loss) gain on change in fair value of earnout liability	(26)		15,630		736		72,308
Gain on change in fair value of warrant liability	36		1,904		130		2,684
Foreign currency transaction loss, net	—		—		(750)		—
Loss on extinguishment of debt	—		—		(1,123)		—
Other income, net	2		4		21		6
Interest income (expense), net	917		(585)		1,216		(1,278)
(Loss) income before income taxes	(14,187)		855		(28,929)		42,058
Provision for income taxes	(3)		(12)		(3)		(16)
Net (loss) income	$	(14,190)	$	843	$	(28,932)	$	42,042
Net (loss) income per share, basic	$	(0.09)	$	0.01	$	(0.18)	$	0.31
Net (loss) income per share, diluted	$	(0.09)	$	0.01	$	(0.18)	$	0.29
Weighted-average common shares, basic	157,379,175		154,108,677		157,081,027		135,160,187
Weighted-average common shares, diluted	157,379,175		161,831,284		157,081,027		145,187,227
Net (loss) income	$	(14,190)	$	843	$	(28,932)	$	42,042
Other comprehensive income (loss), net of tax:
Changes in unrealized (loss) gain on available-for-sale securities	(11)		(37)		6		(48)
Foreign currency translation adjustments	(4)		(8)		16		(12)
Total other comprehensive (loss) income, net of tax	(15)		(45)		22		(60)
Comprehensive (loss) income	$	(14,205)	$	798	$	(28,910)	$	41,982

See accompanying notes to the condensed consolidated financial statements

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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, 2022	—	$	—	156,747,708	$	2	$	88,056	$	(366)	$	(86,059)	$	1,633
Issuance of convertible preferred stock, net of transaction costs	100,000	98,891		—	—		—		—		—		—
Exercise of stock options and release of RSUs	—	—		96,385	—		8		—		—		8
Stock-based compensation expense	—	—		—	—		2,280		—		—		2,280
Unrealized gain on available-for-sale investments	—	—		—	—		—		17		—		17
Cumulative translation adjustment	—	—		—	—		—		20		—		20
Net loss	—	—		—	—		—		—		(14,742)		(14,742)
Balance — March 31, 2023	100,000	$	98,891	156,844,093	$	2	$	90,344	$	(329)	$	(100,801)	$	(10,784)
Exercise of stock options and release of RSUs	—	—		1,570,599	—		5		—		—		5
Stock-based compensation expense	—	—		—	—		2,362		—		—		2,362
Payments of employee taxes related to vested restricted stock units	—	—		(170,503)	—		(63)		—		—		(63)
Unrealized loss on available-for-sale investments	—	—		—	—		—		(11)		—		(11)
Cumulative translation adjustment	—	—		—	—		—		(4)		—		(4)
Net loss	—	—		—	—		—		—		(14,190)		(14,190)
Balance — June 30, 2023	100,000	$	98,891	158,244,189	$	2	$	92,648	$	(344)	$	(114,991)	$	(22,685)

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	Convertible Preferred Stock			Preferred Stock			Common Stock			Class F Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Balance — December 31, 2021	21,671,491	$	99,470	—	$	—	27,618,907	$	—	8,372,143	$	—	$	7,949	$	(43)	$	(95,439)	$	(87,533)
Retroactive application of exchange ratio	31,407,080	—		—	—		40,026,282	—		12,133,201	—		—		—		—		—
Conversion of convertible preferred stock to common stock	(53,078,571)	(99,470)		—	—		53,078,571	1		—	—		99,470		—		1		99,472
Conversion of Class F stock to common stock	—	—		—	—		20,505,344	—		(20,505,344)	—		—		—		—		—
Reverse recapitalization, net of transaction costs	—	—		—	—		11,845,943	1		—	—		(33,051)		—		—		(33,050)
Exercise of Trinity warrants	—	—		—	—		237,571	—		—	—		547		—		—		547
Exercise of SVB warrants	—	—		—	—		146,954	—		—	—		—		—		—		—
Exercise of stock options	—	—		—	—		511,890	—		—	—		273		—		—		273
Stock-based compensation expense	—	—		—	—		—	—		—	—		1,357		—		—		1,357
Unrealized loss on available-for-sale investments	—	—		—	—		—	—		—	—		—		(11)		—		(11)
Cumulative translation adjustment	—	—		—	—		—	—		—	—		—		(4)		—		(4)
Net income	—	—		—	—		—	—		—	—		—		—		41,198		41,198
Balance — March 31, 2022	—	$	—	—	$	—	153,971,462	$	2	—	$	—	$	76,545	$	(58)	$	(54,240)	$	22,249
Exercise of stock options	—	—		—	—		404,167	—		—	—		211		—		—		211
Issuance of common stock to LPC	—	—		—	—		21,186	—		—	—		50		—		—		50
Vesting of early exercised options	—	—		—	—		45,923	—		—	—		38		—		—		38
Stock-based compensation expense	—	—		—	—		—	—		—	—		2,229		—		—		2,229
Incremental direct transaction costs related to reverse recapitalization	—	—		—	—		—	—		—	—		(226)		—		—		(226)
Unrealized loss on available-for-sale investments	—	—		—	—		—	—		—	—				(37)		—		(37)
Cumulative translation adjustment	—	—		—	—		—	—		—	—		—		(8)		—		(8)
Net income	—	—		—	—		—	—		—	—		—		—		843		843
Balance — June 30, 2022	—	$	—	—	$	—	154,442,738	$	2	—	$	—	$	78,847	$	(103)	$	(53,397)	$	25,349

See accompanying notes to the condensed consolidated financial statements

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CEPTON, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)

	Six Months Ended June 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(28,932)	$	42,042
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	235		147
Stock-based compensation	4,654		3,586
Amortization of right-of-use asset	773		642
Amortization (accretion), other	(373)		800
Gain on change in fair value of earnout liability	(736)		(72,308)
Gain on change in fair value of warrant liability	(130)		(2,684)
Foreign currency transaction loss, net	750		—
Loss from extinguishment of debt	1,123		—
Changes in operating assets and liabilities:
Accounts receivable, net	(791)		(1,176)
Inventories	(1,216)		(466)
Prepaid expenses and other current assets	1,958		(670)
Other long-term assets	202		(1,406)
Accounts payable	741		(178)
Accrued expenses and other current liabilities	791		(148)
Operating lease liabilities	(289)		(753)
Other long-term liabilities	—		298
Net cash used in operating activities	(21,240)		(32,274)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(1,186)		(567)
Purchases of short-term investments	(37,806)		(32,368)
Proceeds from sales of short-term investments	—		5,902
Proceeds from maturities of short-term investments	5,200		2,773
Net cash used in investing activities	(33,792)		(24,260)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible preferred stock, net of transaction costs	99,884		—
Repayment of Koito secured term loan	(45,220)		—
Proceeds from Business Combination and private offering	—		76,107
Payments of Business Combination and private offering transaction costs	—		(28,897)
Proceeds from issuance of debt and warrants, net of debt discount	—		9,724
Proceeds from issuance of common stock options	13		447
Payments of employee taxes related to vested restricted stock units	(63)		—
Issuance of common stock	—		50
Net cash provided by financing activities	54,614		57,431
Effect of exchange rate changes on cash	429		(13)
Net increase in cash, cash equivalents and restricted cash	11		884
Cash, cash equivalents and restricted cash, beginning of period	34,518		3,654
Cash, cash equivalents and restricted cash, end of period	$	34,529	$	4,538

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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	63	$	444
Cash paid for income taxes	$	—	$	12
Business Combination transaction costs, accrued but not paid	$	—	$	267
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION
Purchases of property and equipment in accounts payable	$	—	$	120
Vesting of early exercised stock options	$	—	$	76
Right-of-use assets obtained in exchange for new operating lease liabilities	$	11,190	$	1,789

See accompanying notes to the condensed consolidated financial statements

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CEPTON, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited) (

Note 1. Description of Business and Summary of Significant Accounting Policies

Description of Business

Cepton, Inc., and its wholly owned subsidiaries, (collectively, the “Company”) formerly known as Growth Capital Acquisition Corp. (“GCAC”), was originally incorporated in Delaware on January 4, 2010, under the name PinstripesNYS, Inc. GCAC changed its name to Growth Capital Acquisition Corp. on February 14, 2020. GCAC was a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more target businesses. On February 2, 2021, the Company consummated its initial public offering (the “IPO”), following which its shares began trading on the Nasdaq Stock Market (“Nasdaq”). On August 4, 2021, GCAC entered into a Business Combination Agreement (as amended, the “Merger Agreement”) with Cepton Technologies, Inc. (“Legacy Cepton”) and GCAC Merger Sub Inc., a wholly owned subsidiary of GCAC (“Merger Sub”). On February 10, 2022 (the “Closing Date”), the transactions contemplated by the Merger Agreement (the “Business Combination”) were consummated. In connection with the closing of the Business Combination, GCAC changed its name to Cepton, Inc. and its shares and public warrants began trading on Nasdaq under the symbols “CPTN” and “CPTNW”, respectively. As a result of the Business Combination, Cepton, Inc. became the owner, directly or indirectly, of all of the equity interests of Legacy Cepton and its subsidiaries.

The Company provides state-of-the-art, intelligent, lidar-based solutions for a range of markets such as automotive, smart cities, smart spaces, and smart industrial applications. The Company’s patented lidar technology enables reliable, scalable, and cost-effective solutions that deliver long range, high resolution 3D perception for smart applications. The Company is headquartered in San Jose, California, USA, with a presence in Germany, Canada, Japan, China and India.

Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the accounts of the Company's wholly owned subsidiaries in Canada, Germany, Japan, China and the United Kingdom. All intercompany balances and transactions have been eliminated in consolidation.

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. As of June 30, 2023, the Company had cash and cash equivalents of $32.6 million, short-term investments of $37.0 million, and an accumulated deficit of $115.0 million. During the six months ended June 30, 2023, the Company incurred an operating loss of $29.2 million and had negative cash flows from operating activities of $21.2 million. Although much of the negative cash flow resulted from expenses for research and development projects and administrative expenses to support growth of the Company, the Company expects to continue to invest in research and development and generate operating losses in the future.

The Company is subject to risks and uncertainties frequently encountered by early-stage companies including, but not limited to, the uncertainty of successfully developing its products, securing certain contracts, building its customer base, successfully executing its business and marketing strategy and hiring appropriate personnel.

To date, the Company has been funded primarily by equity financings, convertible promissory notes, and the net proceeds received through the Business Combination, PIPE Investment (as defined below), and private placements of the Legacy Cepton convertible preferred stock. Failure to generate sufficient revenues, achieve planned gross margins and operating profitability, control operating costs, or secure additional funding may require the Company to modify, delay, or abandon some of its planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results, financial condition, and ability to achieve its intended business objectives.

Concentration of Risk

Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. The Company maintains a substantial portion of its cash and cash equivalents and short-term investments in money market funds, commercial paper, corporate debt securities, U.S. treasury securities, and U.S. government agency securities. Management believes that the financial institutions that hold its

7

cash, cash equivalents, and short-term investments are financially sound and, accordingly, represent minimal credit risk. Deposits held with banks may exceed the amount of federal insurance limits provided on such deposits.

As of June 30, 2023 and December 31, 2022, three and two customers, respectively, each accounted for more than 10% of accounts receivable.

Customers with revenue equal to or greater than 10% of total revenue for the periods indicated were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Customer A	44	%	50	%	49	%	43	%
Customer B	52	%	—	%	34	%	—	%
Customer C	—	%	25	%	—	%	26	%

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, inventory valuation and reserves, warranty reserves, valuation allowance for deferred tax assets, valuation of earnout and warrant liabilities, stock-based compensation, useful lives of property, plant and equipment, income tax uncertainties, and other loss contingencies. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates, and such differences could be material to the Company’s condensed consolidated financial condition and results of operations.

Product Warranties

The Company typically provides a one-year warranty on its products. Estimated future warranty costs are accrued and charged to cost of goods sold in the period that the related revenue is recognized. These estimates are derived from historical data and trends of product reliability and costs of repairing and replacing defective products. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Through June 30, 2023, there were immaterial changes to the accrued warranty liability which was recorded in accrued expenses and other current liabilities on the condensed consolidated balance sheet.

Reclassifications

Certain reclassifications have been made to prior-period amounts to conform to current-period reporting classifications.

The condensed consolidated statements of convertible preferred stock and stockholders’ equity (deficit) included in this Report for the six months ended June 30, 2022 differ from our previously filed Quarterly Report on Form 10-Q for the six months ended June 30, 2022 by reflecting the immaterial error correction for the misclassification of $1.6 million from prepaid expenses and other current assets to additional paid-in capital for the Lincoln Park Capital Fund, LLC (“Lincoln Park” or “LPC”) commitment fee obligation as of June 30, 2022. The Company corrected the error in the condensed consolidated financial statements for the nine months ended September 30, 2022. The Company believes the correction of the error is immaterial to the previously issued condensed consolidated financial statements for prior periods.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Standards Accounting Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which significantly changes the way entities recognize credit losses and impairment of financial assets recorded at amortized cost. Currently, the credit loss and impairment model for loans and leases is based on incurred losses, and investments are recognized as impaired when there is no longer an assumption that future cash flows will be collected in full under the originally contracted terms. Under the new current expected credit loss (“CECL”) model, the standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of the asset. As the

8

Company is an emerging growth company, the standard will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted this standard on January 1, 2023 utilizing the modified retrospective method, and the adoption did not have a material impact on its condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity’s financial statements, and information about events, conditions, and circumstances that can affect how to assess the amount or timing of an entity’s future cash flows related to those instruments. The guidance is effective for interim and annual periods beginning after December 15, 2023 for smaller reporting companies. The Company is currently evaluating the potential impact on its condensed consolidated financial statements and related disclosures from the adoption of this standard.

Note 2. Business Combination

On February 10, 2022, the Business Combination was consummated and the following disclosure has been retained from our previously filed Form 10-K for the comparative prior period in 2022.

The Business Combination was accounted for as a reverse recapitalization as Legacy Cepton was determined to be the accounting acquirer under FASB ASC Topic 805, Business Combinations (ASC 805). The determination is primarily based on the evaluation of the following facts and circumstances:

•the equity holders of Legacy Cepton hold the majority of voting rights in the Company;

•the board of directors of Legacy Cepton represent a majority of the members of the board of directors of the Company or were appointed by Legacy Cepton;

•the senior management of Legacy Cepton became the senior management of the Company; and

•the operations of Legacy Cepton comprise the ongoing operations of the Company.

In connection with the Business Combination, outstanding capital stock of Legacy Cepton was converted into common stock of Legacy Cepton and then subsequently converted into Class A common stock of the Company, representing a recapitalization, and the net assets of the Company were acquired at historical cost, with no goodwill or intangible assets recorded. Legacy Cepton was deemed to be the predecessor of the Company, and the consolidated assets and liabilities and results of operations prior to the Closing Date are those of Legacy Cepton. The shares and corresponding capital amounts prior to the Business Combination, have been retroactively restated as shares reflecting the Exchange Ratio (defined below). Operations prior to the Business Combination were those of Legacy Cepton in future reports of the combined entity.

Recapitalization

In connection with the Business Combination, the following occurred to recapitalize the Company:

•Shares of Legacy Cepton convertible preferred stock and Class F stock issued and outstanding, were converted into common stock of Legacy Cepton, and thereafter, all shares of Legacy Cepton common stock were subsequently converted into the Company’s Class A common stock, par value $0.0001 per share, at a rate of approximately 2.449 (the “Exchange Ratio”);

•Vested stock options to purchase or receive shares of Legacy Cepton common stock (see Note 12) converted into options to purchase or receive shares of the Company’s Class A common stock, par value $0.0001 per share, in accordance with the Exchange Ratio;

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•Outstanding warrants, whether vested or unvested, to purchase shares of Legacy Cepton common stock (see Note 14) converted into shares of the Company’s Class A common stock, par value $0.0001 per share, in accordance with the Exchange Ratio;

•Outstanding unvested stock options to purchase or receive shares of Legacy Cepton common stock (see Note 12) converted into unvested stock options to purchase or receive shares of the Company’s Class A common stock upon the same terms and conditions that were in effect with respect to such stock options immediately prior to the Business Combination, after giving effect to the Exchange Ratio;

•The Company’s certificate of incorporation was amended and restated to, among other things, increase the total number of authorized shares of capital stock to 355,000,000 shares, of which 350,000,000 shares were designated common stock, $0.00001 par value per share, and of which 5,000,000 shares were designated preferred stock, $0.00001 par value per share and to reclassify each share of Class A common stock and Class B common stock into one share of common stock.

PIPE Investment

Contemporaneously with the execution of the Merger Agreement, GCAC entered into subscription agreements with certain investors (the “PIPE Investors”), pursuant to which the PIPE Investors agreed to purchase an aggregate of 5,950,000 shares of common stock at a purchase price of $10.00 per share, or an aggregate purchase price of $59.5 million (the “PIPE Investment”).

Redemption

Prior to the closing of the Business Combination on February 10, 2022, certain GCAC public shareholders exercised their right to redeem certain of their outstanding shares for cash, resulting in the redemption of 15,589,540 shares of GCAC Class A common stock for an aggregate payment of $155.9 million.

Public and Private Placement Warrants

GCAC warrants issued in connection with the IPO (“Public Warrants”) and in connection with the private placement units held by the Sponsor (“Private Placement Warrants”) remained outstanding after the closing of the Business Combination. The warrants became exercisable to purchase shares of the Company’s common stock at an exercise price of $11.50 per share 30 days after the completion of the Business Combination, subject to other conditions, including with respect to the effectiveness of a registration statement covering the shares of common stock underlying such warrants, and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. The Public Warrants are equity-classified and were valued based on the instruments’ publicly listed trading price as of the Closing Date. The Private Placement Warrants are liability-classified and are valued on a recurring basis with changes in fair value recognized as a gain or loss upon remeasurement (see Note 14).

Transaction Costs

For the six months ended June 30, 2022, the Company incurred direct and incremental costs of approximately $31.7 million in connection with the Business Combination and the related equity issuance, consisting primarily of investment banking, legal, accounting, and other professional fees, which were recorded to additional paid-in capital as a reduction of proceeds. An approximate additional $2.6 million of transaction costs were recorded in general and administrative expense related to the liability classified instruments assumed subsequent to the Business Combination in 2022. There were no transaction costs related to the Business Combination recorded in 2023.

Transaction Proceeds

Upon closing of the Business Combination, the Company received gross proceeds of $76.1 million from the Business Combination and PIPE Investment, offset by total transaction costs of $40.7 million.

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Note 3. Revenue

The Company disaggregates its revenue from contracts with customers by country of domicile based on the shipping location of the customer. Total revenue disaggregated by country of domicile is as follows (dollars in thousands):

	Three Months Ended June 30,
	2023				2022
	Revenue		% of Revenue		Revenue		% of Revenue
Revenue by country of domicile:
Japan	$	1,265	45	%	$	1,462	58	%
United States	1,466		53	%	880		34	%
Other	56		2	%	217		8	%
Total	$	2,787	100	%	$	2,559	100	%

	Six Months Ended June 30,
	2023				2022
	Revenue		% of Revenue		Revenue		% of Revenue
Revenue by country of domicile:
Japan	$	2,312	54	%	$	2,264	56	%
United States	1,570		37	%	1,493		37	%
Other	390		9	%	287		7	%
Total	$	4,272	100	%	$	4,044	100	%

As of June 30, 2023 and December 31, 2022, the Company had $0.5 million and $0.5 million of deferred revenue included in accrued expenses and other current liabilities, respectively, and no contract assets.

Note 4. Fair Value Measurement

The following tables summarize the Company's assets and liabilities measured at fair value on a recurring basis, by level, within the fair value hierarchy (in thousands):

	June 30, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market fund	$	1,502	$	—	$	—	$	1,502
Total cash equivalents	$	1,502	$	—	$	—	$	1,502
Short-term investments:
Commercial paper	$	—	$	21,161	$	—	$	21,161
U.S. treasury securities	—		2,985		—		2,985
U.S. government agency securities	—		9,882		—		9,882
Corporate debt securities	—		3,008		—		3,008
Total short-term investments	$	—	$	37,036	$	—	$	37,036
Total assets measured at fair value	$	1,502	$	37,036	$	—	$	38,538
Liabilities:
Warrant liability	$	—	$	310	$	—	$	310
Earnout liability	—		—		184		184
Total liabilities measured at fair value	$	—	$	310	$	184	$	494

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	December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market fund	$	10,437	$	—	$	—	$	10,437
Total cash equivalents	$	10,437	$	—	$	—	$	10,437
Short-term investments:
U.S. government agency securities	$	—	$	2,493	$	—	$	2,493
Corporate debt securities	—		1,210		—		1,210
Total short-term investments	$	—	$	3,703	$	—	$	3,703
Total assets measured at fair value	$	10,437	$	3,703	$	—	$	14,140
Liabilities:
Warrant liability	$	—	$	440	$	—	$	440
Earnout liability	—		—		920		920
Total liabilities measured at fair value	$	—	$	440	$	920	$	1,360

Cash equivalents consist primarily of money market funds with original maturities of three months or less at the time of purchase, and the carrying amount is a reasonable estimate of fair value. Short-term investments consist of investment securities with original maturities greater than three months but less than twelve months and are included as current assets in the condensed consolidated balance sheets. For short-term investments, the fair value as of June 30, 2023 and December 31, 2022 approximates amortized cost basis.

Because the transfer of Private Placement Warrants to non-permitted transferees would result in the Private Placement Warrants having substantially the same terms as the Public Warrants, the Company determined that the fair value of each Private Placement Warrant is consistent with that of a Public Warrant. Accordingly, the Private Placement Warrants are classified as Level 2 financial instruments under warrant liability.

The value of the earnout liability is classified as Level 3 under the fair value hierarchy because it has been valued based on significant inputs not observable in the market.

Changes in Level 3 liabilities related to earnout liability measured at fair value for the six months ended June 30, 2023 (in thousands):

	Six Months Ended June 30, 2023
Balance as of December 31, 2022	$	920
Gain on change in fair value of earnout liability	(736)
Balance as of June 30, 2023	$	184

The gain on change in the fair value of the earnout liability was shown in the condensed consolidated statement of operations and comprehensive income (loss).

Note 5. Inventories

Inventories consist of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Raw materials	$	2,210	$	1,179
Work-in-process	1,188		1,141
Finished goods	790		665
Total inventories	$	4,188	$	2,985

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Inventories are carried and depicted above at the lower of cost or net realizable value. Write-downs were $0.3 million for the three and six months ended June 30, 2023 and were immaterial for the three and six months ended June 30, 2022.

Note 6. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Prepaid insurance	$	1,972	$	2,533
Other prepaid expenses	1,186		1,376
Deferred transaction costs	—		993
Payroll tax receivable	—		865
Other current assets	169		505
Total prepaid expenses and other current assets	$	3,327	$	6,272

Note 7. Property and Equipment, Net

Property and equipment, net, consists of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Machinery and equipment	$	2,680	$	1,445
Automobiles	101		101
Leasehold improvements	235		189
Computer and equipment	116		116
Total property and equipment	3,132		1,851
Less: accumulated depreciation and amortization	(1,104)		(869)
Total property and equipment, net	$	2,028	$	982

Depreciation and amortization related to property and equipment was $0.1 million and $0.2 million for the three and six months ended June 30, 2023, respectively. Depreciation and amortization related to property and equipment was immaterial for the three months ended June 30, 2022 and $0.1 million for the six months ended June 30, 2022.

Note 8. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Accrued payroll	$	1,477	$	1,300
Accrued expenses and taxes	1,012		375
Deferred revenue	484		525
Warranty reserve	83		65
Total accrued expenses and other current liabilities	$	3,056	$	2,265

Note 9. Debt

Trinity Loan Agreement

On January 4, 2022, Legacy Cepton entered into a loan and security agreement and subsequent amendments (“Trinity Loan Agreement”) with Trinity Capital Inc. (“Trinity”) to borrow up to $25.0 million through January 1, 2023 at a floating per

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annum rate equal to the greater of (i) 10.75% or (ii) the prime rate plus 7.0%. The loan had a maturity date of February 1, 2026. In connection with the Trinity Loan Agreement, Legacy Cepton issued a warrant to purchase 96,998 shares of common stock with an exercise price of $16.89 per share (see Note 14). The fair value of the warrant was estimated to be $1.3 million on the date of issuance. On January 4, 2022, Legacy Cepton borrowed $10.0 million under the agreement, incurring $0.3 million in transaction costs which were accounted for as a debt discount. Legacy Cepton also recognized a pro rata portion of the warrant fair value as a debt discount related to the $10.0 million loan. Amortization of debt discounts, in accordance with the effective interest method, are recorded as interest expense in the accompanying condensed consolidated statement of operations and comprehensive income (loss) during 2022. Obligations under the Trinity Loan Agreement were secured by interests in substantially all of the Company’s assets. The agreement contained customary affirmative and negative covenants.

For the three and six months ended June 30, 2022, the Company recognized $0.7 million and $1.4 million in interest expense, respectively, in connection with the borrowings under the Trinity Loan Agreement.

On November 7, 2022, the Company repaid all outstanding principal and accrued interest under and terminated the Trinity Loan Agreement including a 1.5% prepayment penalty and 2.5% end of term payment.

Secured Term Loan Agreement with Koito

On October 27, 2022, the Company entered into an Investment Agreement (the “Investment Agreement”) with Koito Manufacturing Co., Ltd. (“Koito”) (See Note 10). Concurrently with the execution of the Investment Agreement, the Company entered into a Secured Term Loan Agreement with Koito to borrow Japanese Yen ¥5.8 billion (approximately $39.4 million) (the “Secured Term Loan Agreement”). The loan accrued interest at a rate equal to 1.0% per annum and was payable at maturity. The Secured Term Loan Agreement entered into with Koito was a related party transaction issued at a below market interest rate. To reflect what a similar debt instrument would be issued at with a market interest rate, the Company recorded a $2.0 million debt discount accounted for as a capital contribution within additional paid-in capital in the condensed consolidated balance sheet as of December 31, 2022. Amortization of the debt discount, in accordance with the effective interest method, was recorded as interest expense in the accompanying condensed consolidated statement of operations and comprehensive income (loss). The loan was set to mature on the earlier of three business days after the closing of the transactions contemplated by the Investment Agreement and the date on which the Investment Agreement is terminated in accordance with its terms. On November 7, 2022, the Company borrowed Japanese Yen ¥5.8 billion (approximately $39.4 million) under the Secured Term Loan Agreement. Obligations under the Secured Term Loan Agreement were secured by interests in substantially all of the Company’s assets, including all patents. The agreement contained customary affirmative and negative covenants. On January 24, 2023, the Company repaid all outstanding principal and accrued interest under the Secured Term Loan Agreement.

For the six months ended June 30, 2023, the Company recognized $0.3 million in interest expense in connection with the borrowings under the Secured Term Loan Agreement. Additionally, the Company recognized a $0.8 million foreign currency transaction loss on repayment using the applicable exchange rate on January 24, 2023 and a $1.1 million loss on extinguishment of debt.

Note 10. Convertible Preferred Stock

Convertible Preferred Stock Prior to Business Combination

As discussed in Note 2, the Company has retroactively adjusted the shares issued and outstanding prior to February 10, 2022 to give effect to the Exchange Ratio to determine the number of shares of common stock into which they were converted.

Prior to the Business Combination, Legacy Cepton had shares of $0.00001 par value Series A, Series B, Series B-1, and Series C preferred stock outstanding, all of which were convertible into shares of common stock of Legacy Cepton on a 1:1 basis, subject to certain anti-dilution protections.

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The authorized, issued, and outstanding shares of Convertible Preferred Stock, and liquidation preferences prior to February 10, 2022 were as follows:

	Issuance Date	Shares Authorized	Shares Issued and Outstanding	Original Issue Price per Share		Aggregate Liquidation Preference
Series A	July 6, 2016	8,000,000	8,000,000	$	1.0000	$	8,000,000
Series B	July 13, 2018	4,069,600	4,069,600	$	6.2500	25,435,000
Series B-1	July 13, 2018	3,272,475	3,272,475	$	3.1250	10,226,484
Series C	February 4, 2020	7,463,934	6,329,416	$	8.3736	52,999,998
		22,806,009	21,671,491			$	96,661,482

Upon the closing of the Business Combination on February 10, 2022, the 21,671,491 shares of convertible preferred stock issued and outstanding were converted into 53,078,571 shares of common stock at the Exchange Ratio.

Convertible Preferred Stock with Koito

On October 27, 2022, the Company entered into the Investment Agreement with Koito pursuant to which, among other things, at the closing of the transactions, and based on the terms and subject to the conditions set forth therein, the Company issued and sold to Koito, 100,000 shares of Series A Convertible Preferred Stock, par value $0.00001 per share (the “Preferred Stock”), for a purchase price of $100.0 million (the “Initial Liquidation Preference”). The issuance and sale of the Preferred Stock and related matters were approved by the Company’s stockholders on January 11, 2023, and the Preferred Stock issued to Koito on January 19, 2023 (the “Closing Date”). In connection with the issuance of the Preferred Stock, the Company incurred direct and incremental expenses of $1.1 million, comprised of transaction fees, and financial advisory and legal expenses, which reduced the carrying value of the Preferred Stock.

As of June 30, 2023, the Company had authorized 5,000,000 shares of preferred stock, each with a par value of $0.00001. As of June 30, 2023, there were 100,000 shares of preferred stock issued and outstanding.

Dividend Provisions

The Preferred Stock ranks senior to the Company’s common stock with respect to payment of dividends and rights on the distribution of assets on any liquidation, dissolution or winding up of the affairs of the Company and ranks junior to all secured and unsecured indebtedness. The Preferred Stock has an Initial Liquidation Preference of $100.0 million, representing an aggregate Liquidation Preference (as defined below) of $100.0 million upon issuance. At the Company’s election, the Preferred Stock carries a 4.250% per annum dividend if paid in kind or a 3.250% per annum dividend if paid in cash, in each case payable quarterly in arrears. Holders of the Preferred Stock are entitled to the dividend regardless of whether declared by the Company’s board of directors. Such dividends shall accrue and compound quarterly in arrears from the date of issuance of the shares. The Preferred Stock is also entitled to fully participate in any dividends paid to the holders of common stock in cash, in stock or otherwise, on an as-converted basis.

Liquidation Rights

In the event of any Liquidation, holders of the Preferred Stock are entitled to receive an amount per share equal to the greater of (1) the Initial Liquidation Preference per share plus any accrued or declared but unpaid dividends on such shares (the “Liquidation Preference”) or (2) the amount payable if the Preferred Stock were converted into common stock. The Preferred Stock will have distribution and liquidation rights senior to all other equity interests of the Company. As of June 30, 2023, the Liquidation Preference of the Preferred Stock was $101.9 million.

Conversion Feature

The Preferred Stock may be converted, at any time in whole or in part at the option of the holder, beginning on January 19, 2024, into shares of the Company’s common stock equal to the quotient obtained by dividing the sum of the Liquidation Preference by the conversion price of $2.585 (the “Conversion Price”).

Anti-Dilution Provisions

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The Conversion Price of the Preferred Stock has customary anti-dilution provisions for stock splits, stock dividends, sales of shares through a tender or exchange offer, including under the Purchase Agreement with Lincoln Park, subject to customary exceptions for issuances pursuant to current or future equity-based incentive plans or arrangements (including upon the exercise of employee stock options).

Optional Redemption

The Company has the option, upon 30 days’ advance notice, to (A) repurchase all (but not less than all) of the outstanding Preferred Stock held by Koito or a Permitted Transferee (as defined in the Investment Agreement) on or after the second anniversary of the closing occurring after the end of the applicable fiscal year for which the Company has recorded positive net income, if the Company has recorded positive net income pursuant to GAAP in its audited financial statements for any fiscal year the end date of which falls after the fifth anniversary of the closing and (B) all or any portion of the outstanding Preferred Stock not held by Koito or a Permitted transferee any time after the seventh anniversary of the closing.

Fundamental Change Put Right

Upon occurrence of a fundamental change event, each holder of outstanding shares of the Preferred Stock has the right to require the Company to repurchase any or all of their Preferred Stock at a purchase price per share equal to the Liquidation Preference or in lieu of a repurchase, elect to convert the Preferred Stock into the Company’s common stock equal to the quotient obtained by dividing 110% of the Liquidation Preference by the Conversion Price.

A fundamental change is defined as either the direct or indirect sale, or other disposition of all or substantially all assets of the Company and its subsidiaries to any third party or the consummation of any transaction, the result of which is that any third party or group of third parties become the beneficial owner of more than 50% of the voting power of the Company. Solely with respect to shares held by Koito, the definition of a fundamental change is expanded to include agreements entered by the Company to issue equity exceeding 10% of the Company’s common stock, or any strategic alliance partnership, or joint venture agreement to a third party deemed to be a competitor with Koito (subject to certain exceptions).

Note 11. Stockholders’ Equity (Deficit)

Common Stock

Holders of common stock were entitled to one vote per share, and to receive dividends when, as and if declared by the board of directors, and, upon liquidation or dissolution, were entitled to receive all assets available for distribution to stockholders. The holders had no preemptive or other subscription rights and there were no redemption or sinking fund provisions with respect to such shares.

Upon the closing of the Business Combination on February 10, 2022, the 27,618,907 shares of Legacy Cepton common stock issued and outstanding were converted into 67,645,189 shares of common stock at the Exchange Ratio.

As of June 30, 2023, the Company had authorized 350,000,000 shares of common stock, each with a par value of $0.00001. As of June 30, 2023, there were 158,224,189 shares of common stock issued and outstanding.

Lincoln Park Transaction

On November 24, 2021, Legacy Cepton entered into a Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park has agreed to purchase up to $100.0 million of common stock (subject to certain limitations contained in the Purchase Agreement) from time to time over a 36-month period (the “Purchase Agreement”) after the consummation of the Business Combination and certain other conditions set forth in the Purchase Agreement. The Company may, from time to time and at its sole discretion, direct Lincoln Park to purchase common stock in accordance with daily dollar thresholds as determined within the Purchase Agreement. The purchase price per share for common stock will be the lower of: (i) the lowest trading price for shares of common stock on the market in which it is listed, on the applicable purchase date and (ii) the average of the three (3) lowest closing sale price for common stock during the ten (10) consecutive business days ending on the business day immediately preceding such purchase date. In consideration for entering into the Purchase Agreement, the Company issued, as a commitment fee, 50,000 shares of common stock to Lincoln Park on the date of the closing of the Business Combination and subsequently an additional 150,000 shares of common stock 180 days after the date of the closing of the Business Combination.

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As of June 30, 2023, 1,142,505 shares of common stock had been sold in aggregate to Lincoln Park under the Purchase Agreement for consideration of $1.7 million. For the three and six months ended June 30, 2023, no shares of common stock were sold to Lincoln Park under the Purchase Agreement. For the three and six months ended June 30, 2022, 21,186 shares of common stock were sold to Lincoln Park under the Purchase Agreement.

Class F Stock

Holders of Legacy Cepton’s Class F stock were entitled to the same voting rights as the equivalent number of common stock on an as-converted basis, and to receive dividends when, as and if declared by the board of directors. The holders had conversion rights for conversion into shares of common stock and preferred stock. The holders were subject to vesting terms wherein each holder acquired a vested interest in the stock over a service period of four years.

Upon the closing of the Business Combination on February 10, 2022, the 8,372,143 shares of Legacy Cepton Class F stock issued and outstanding were converted into 8,372,143 shares of common stock of Legacy Cepton and then subsequently converted into 20,505,344 shares of common stock of the Company at the Exchange Ratio.

Note 12. Stock-Based Compensation

Equity Incentive Plans

On July 5, 2016, Legacy Cepton adopted the 2016 Stock Plan (the “2016 Plan”) under which 4,800,000 shares of Legacy Cepton’s common stock were reserved for issuance to employees, nonemployee directors, consultants, and advisors. As a result of the Business Combination, the Company no longer grants new incentive awards under the 2016 Plan and there were no shares reserved or available for future issuance under the 2016 Plan. Incentive awards existing under the 2016 Plan immediately prior to the Business Combination were converted into options to receive shares of common stock through application of the Exchange Ratio (“Post Conversion Awards”).

On February 10, 2022, the Company adopted the 2022 Stock Plan (the “2022 Plan”) under which 15,123,142 shares of the Company’s common stock were reserved for issuance to employees, nonemployee directors, consultants, and advisors. Per the terms of the 2022 Plan, in the event any Post Conversion Awards issued and outstanding under the 2016 Plan are cancelled, terminated, or expire, said number of shares will be made available for issuance under the 2022 Plan. The share limit shall automatically increase on the first trading day in January of every calendar year during the term of the 2022 Plan, by an amount equal to the lesser of (i) two percent (2%) of the total number of shares of common stock issued and outstanding on December 31 of the immediately preceding calendar year or (ii) such number of shares of common stock as may be established by the board of directors. As of June 30, 2023, there were 10,281,667 shares of common stock reserved for issuance under the 2022 Plan.

Incentive Stock Options and Nonqualified Stock Options

A summary of the Company’s employee and nonemployee stock option activity for the six months ended June 30, 2023 is presented below:

	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contract Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2022	14,261,984	$	2.14	6.5	$	6,486
Granted	45,000	$	0.37
Exercised	(128,923)	$	0.10
Expired/Forfeited	(514,617)	$	3.07
Outstanding as of June 30, 2023	13,663,444	$	2.12	6.1	$	1,454
Exercisable as of June 30, 2023	10,877,597	$	1.62	5.6	$	1,448
Vested and expected to vest as of June 30, 2023	13,663,444	$	2.12	6.1	$	1,454

During the six months ended June 30, 2023, the estimated weighted-average grant date fair value of options granted was $0.17 per share. As of June 30, 2023, there was $6.3 million of unrecognized stock-based compensation expense related to

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unvested stock options expected to be recognized over a weighted-average period of 1.6 years. The total intrinsic value of options exercised during the six months ended June 30, 2023 was $0.1 million. The Company recognizes forfeitures as they occur.

Restricted Stock Units

Each restricted stock unit (“RSU”) granted under the 2022 Plan represents a right to receive one share of the Company’s common stock when the RSU vests. RSUs generally vest over a period of one to four years based on fulfilling a service condition. The fair value of a RSU is equal to the fair value of the Company’s common stock on the date of grant.

A summary of the Company’s RSU activity for the six months ended June 30, 2023 is presented below:

	Shares	Weighted Grant Date Fair Value
Outstanding as of December 31, 2022	4,708,692	$	2.57
Granted	4,383,166	$	1.08
Released	(1,538,061)	$	2.67
Forfeited	(492,959)	$	1.74
Outstanding as of June 30, 2023	7,060,838	$	1.68

As of June 30, 2023, there was $10.6 million of unrecognized stock-based compensation expense related to unvested RSUs expected to be recognized over a weighted-average period of 2.4 years. The total intrinsic value of RSUs outstanding at June 30, 2023 was $3.4 million. The Company recognizes forfeitures as they occur.

Performance-based Stock units

Each performance-based stock unit (“PSU”) granted under the 2022 Plan represents a right to receive one share of the Company’s common stock upon satisfaction of the performance-based conditions applicable to the PSU. There were no PSUs issued during the six months ended June 30, 2023. During the six months ended June 30, 2022, the Company granted 123,000 PSUs under the 2022 Plan, with 66,000 PSUs in the first tranche and 57,000 PSUs in the second tranche. Each grant consisted of two market-based vesting tranches, with the first tranche to vest if, at the close of regular trading for 20 trading days out of any period of 30 consecutive trading days, either (i) the closing price of the Company’s common stock exceeds $15.00 per share or (ii) the Company’s market capitalization exceeds $2.1 billion; and the second tranche to vest if, at the close of regular trading for 20 trading days out of any period of 30 consecutive trading days, either (i) the closing price of the Company's common stock exceeds $17.50 per share or (ii) the Company’s market capitalization exceeds $2.5 billion, provided in each case that the applicable stock price or market capitalization goal must be achieved no later than February 10, 2025 for the applicable tranche to vest, and provided further that the vesting of each tranche is subject to the grantee’s continued employment with the Company through the day on which the applicable goal is achieved.

The fair value of the PSUs at valuation date was determined using a Monte Carlo valuation model that utilizes significant assumptions, including expected volatility, dividend yield, stock price as of the valuation date, market capitalization targets and the corresponding share price targets necessary for each tranche of PSUs to vest, expected life, and risk-free rate.

The fair value of the PSUs at valuation date was $0.1 million with weighted-average grant date fair value of $0.98, amortizing over a derived service period of 21 and 22 months for each tranche, respectively. As of June 30, 2023,

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unrecognized stock-based compensation expense related to PSU's was immaterial, which was expected to be recognized over a weighted-average period of 1.6 years.

Stock-Based Compensation

For the three and six months ended June 30, 2023 and 2022, the Company recorded stock-based compensation expense as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of revenue	$	44	$	60	$	104	$	103
Research and development expense	1,193		1,152		2,370		1,981
Selling, general and administrative expense	1,128		1,027		2,180		1,502
Total stock-based compensation expense	$	2,365	$	2,239	$	4,654	$	3,586

For the three months ended June 30, 2023 and 2022, the Company capitalized $41 thousand and $50 thousand, respectively, of stock-based compensation expense into inventory. For the six months ended June 30, 2023 and 2022, the Company capitalized $92 thousand and $103 thousand, respectively, of stock-based compensation expense into inventory. There were no modifications during the three and six months ended June 30, 2023. During the three and six months ended June 30, 2022, the Company recognized additional stock-based compensation expense of $0.3 million as a result of modification of a cancelled option of a nonemployee.

Note 13. Earnout Liability

In addition to the shares issued upon closing of the Business Combination (see Note 2), additional contingent shares (“Earnout Shares”) are payable to each holder of common stock and/or options receiving consideration in the Business Combination, in the amounts set forth below:

(a) If the closing price of the Company’s common stock equals or exceeds $15.00 per share for any 20 trading days within any consecutive 30-trading day period that occurs after the Closing Date and on or prior to the three-year anniversary of the Closing Date, then, the Company will issue to each holder of common stock that is entitled to Earnout Shares a number of shares of common stock equal to such holder’s pro rata portion of 7,000,000 shares.

(b) If the closing price of the Company’s common stock equals or exceeds $17.50 per share for any 20 trading days within any consecutive 30-trading day period that occurs after the Closing Date and on or prior to the three-year anniversary of the Closing Date, the Company will issue to each holder of common stock that is entitled to Earnout Shares a number of shares of common stock equal to such holder’s pro rata portion of 6,000,000 shares.

The Company concluded the Earnout Shares meet the criteria for liability classification due to the existence of contingent settlement provisions that could result in holders receiving differing amounts of shares depending on the Company’s stock price or the price paid in a change of control. Because the settlement is not solely determined by the share price of the Company (that is, the share price observed in or implied by a qualifying change-in-control event), but also by the occurrence of a qualifying change-in-control event, this causes the Earnout Shares to not be indexed to the Company’s own shares, resulting in liability classification. Upon the closing of the Business Combination, the Company recorded these instruments as liabilities on the condensed consolidated balance sheet at fair value and will recognize subsequent changes in fair value in earnings at each reporting date. The fair value of the earnout liability was determined using a Monte Carlo valuation model that utilizes significant assumptions, including expected volatility, expected term, and risk-free rate, to determine the probability of achieving the common share price milestones.

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The following table summarizes the assumptions used in estimating the fair value of the earnout liability at each of the relevant periods:

	June 30, 2023			December 31, 2022
Current stock price	$	0.49		$	1.27
Expected volatility	106.0		%	79.0		%
Risk-free interest rate	5.10		%	4.42		%
Expected term (in years)	1.6			2.1
Expected dividend yield	0		%	0		%

Current stock price: the stock price was based on the closing price as of the valuation date.

Expected volatility: the volatility rate was determined using the historical volatility of the Company's stock price and a mix of historical and implied volatilities of selected industry peers deemed to be comparable to the Company’s business, corresponding to the expected term of the awards.

Risk-free interest rate: The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of issuance for zero-coupon U.S. Treasury notes with maturities corresponding to the expected three-year term of the earnout period.

Expected term: The expected term is the remaining term of the three-year earnout period.

Expected dividend yield: The expected dividend rate is zero as the Company currently has no history or expectation of declaring dividends in the foreseeable future.

As of June 30, 2023, the balance of the earnout liability was approximately $0.2 million. For the three and six months ended June 30, 2023, the Company recorded an immaterial loss and a gain of $0.7 million, respectively, in the condensed consolidated statement of operations and comprehensive income (loss) for the change in fair value of the earnout liability. For the three and six months ended June 30, 2022, the Company recorded a gain of $15.6 million and $72.3 million, respectively, in the condensed consolidated statement of operations and comprehensive income (loss) for the change in fair value of the earnout liability.

Note 14. Warrants

Common Stock Warrants Assumed in Business Combination

As part of GCAC’s initial public offering, 8,625,000 Public Warrants were sold. Each Public Warrant allows the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustments. The Public Warrants may be exercised only for a whole number of shares of common stock. The Public Warrants will expire five years after the completion of the Business Combination, or earlier upon redemption or liquidation. The Public Warrants are listed on Nasdaq under the symbol “CPTNW”.

The Company may redeem the Public Warrants when exercisable, in whole and not in part, at a price of $0.01 per warrant, so long as the Company provides not less than 30 days’ prior written notice of redemption to each warrant holder, and only if the reported last sale of common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the warrant holders.

Simultaneously with GCAC’s initial public offering, GCAC consummated a private placement of 5,175,000 Private Placement Warrants with the Sponsor. The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of common stock issuable upon exercise will not be transferable, assignable or salable until 30 days after the completion of the Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are non-redeemable so long as they are held by the initial purchasers or such purchaser’s permitted transferees. If the Private Placement Warrants are held by someone other than the initial stockholders or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

The Company concluded the Private Placement Warrants meet the criteria for liability classification due to the existence of a settlement provision that adjusts the settlement amount based on who the holder of the warrant is (i.e., permitted vs. non-

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permitted transferees). This provision causes the Private Placement Warrants to not be indexed to the Company’s own shares, resulting in liability classification. Upon consummation of the Business Combination, the fair value of the Private Placement Warrants was recorded at a value of approximately $2.6 million. The fair value of the Private Placement Warrants was remeasured on June 30, 2023 at $0.3 million. For each of the three and six months ended June 30, 2023, the Company recorded immaterial amounts in the condensed consolidated statement of operations and comprehensive income (loss) for the change in fair value of the liability. For the three and six months ended June 30, 2022, the Company recorded a gain of $1.9 million and $2.0 million, respectively, in the condensed consolidated statement of operations and comprehensive income (loss) for the change in fair value of the liability.

Common Stock Warrants Issued with Borrowings

In August 2019, Legacy Cepton entered into a loan and security agreement (“2019 Loan Agreement”) with Silicon Valley Bank (“SVB”) that allowed for borrowings of up to $5.0 million under a term loan through July 31, 2020. The term loan was repaid in February 2020. In connection with the 2019 Loan Agreement, Legacy Cepton issued detachable warrants to purchase an aggregate of 60,000 shares of common stock. The warrant was recorded to additional paid-in capital at an estimated fair value of $0.1 million as determined by the Black-Scholes valuation model. Immediately prior to the consummation of the Business Combination, the 60,000 warrants were net exercised and subsequently converted into 136,994 shares of common stock.

On January 4, 2022, in connection with the Trinity Loan Agreement, Legacy Cepton issued a warrant to purchase 96,998 shares of common stock with an exercise price of $16.89 per share. The warrant was immediately exercisable and expires on January 4, 2032. The Company concluded the warrant meets the criteria for liability classification due to the existence of contingent settlement provisions that could result in holders receiving differing amounts of shares depending on the Company’s stock price or the price paid in a change of control. Because the settlement is not solely determined by the share price of the Company (that is, the share price observed in or implied by a qualifying change-in-control event), but also by the occurrence of a qualifying change-in-control event, this causes the warrant to not be indexed to the Company’s own shares, resulting in liability classification. The fair value of the warrant was initially estimated to be $1.3 million using the Black-Scholes valuation model. Immediately prior to the consummation of the Business Combination, the 96,998 warrants were net exercised and subsequently converted into 73,741 shares of common stock. For the six months ended June 30, 2022, the Company recorded a gain of $0.7 million in the condensed consolidated statement of operations and comprehensive income (loss) for the exercise of warrants.

Note 15. Income Taxes

The Company conducts its business globally and its operating income is subject to varying rates of tax in the U.S., Canada, Germany, Hong Kong, Japan, China, and the United Kingdom. Consequently, the Company’s effective tax rate is dependent upon the geographic distribution of its earnings or losses and the tax laws and regulations in each geographical region.

The Company’s provision for income taxes was immaterial for each of the three and six months ended June 30, 2023 and 2022. The Company continues to maintain a full valuation allowance against its U.S. federal and state deferred tax assets.

Note 16. Leases

The Company leases office and manufacturing facilities under non-cancelable operating leases expiring at various dates through April 2028. The Company’s lease agreements do not contain any material terms and conditions of residual value guarantees or material restrictive covenants. The Company adopted ASU 2016-02, Leases (Topic 842) using the modified retrospective method on January 1, 2022.

The Company determines if an arrangement is or contains a lease at inception. 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. Variable lease payments are defined as payments made for the right to use an asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time. Any variable

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lease components are expensed as incurred. The operating lease right-of-use assets also include adjustments related to prepaid or deferred lease payments and lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term.

The components of lease expense for the three and six months ended June 30, 2023 and 2022 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating lease cost	$	803	$	377	$	1,468	$	743
Variable lease cost	203		208		408		420
Total operating lease cost	$	1,006	$	585	$	1,876	$	1,163

Supplemental cash flow information for the six months ended June 30, 2023 and 2022 related to leases was as follows (in thousands):

	Six Months Ended June 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Cash paid for operating leases included in operating activities	$	984	$	888
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	11,190	$	1,789

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

	June 30, 2023		December 31, 2022
Operating lease right-of-use assets:
Operating lease right-of-use assets, current	$	—	$	121
Operating lease right-of-use assets, non-current	10,862		324
Total operating lease right-of-use assets	$	10,862	$	445
Operating lease liabilities:
Operating lease liabilities, current	$	1,697	$	211
Operating lease liabilities, non-current	9,696		281
Total operating lease liabilities	$	11,393	$	492

The non-current portion of the operating lease right-of-use assets was recorded in other assets in the condensed consolidated balance sheets.

Weighted-average remaining term and discount rates were as follows (term in years):

	June 30, 2023		December 31, 2022
Weighted-average remaining lease term	4.76		3.06
Weighted-average discount rate	14.48	%	13.78	%

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

Year Ending December 31,
2023	$	1,580
2024	3,250
2025	3,328
2026	3,324
Thereafter	4,215
Total undiscounted lease payments	$	15,697
Present value adjustment for minimum lease commitments	(4,304)
Net lease liabilities	$	11,393

Note 17. Commitments and Contingencies

Legal Proceedings

From time to time, the Company may be involved in various legal claims, litigation and other matters that arise in the normal course of its operations. Although there can be no assurances and the outcome of these matters is currently not determinable, the Company currently believes that none of these claims, actions or proceedings are likely to have a material adverse effect on the Company’s financial position.

The Company records accruals for our outstanding legal proceedings, investigations or claims when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. The Company evaluated developments in legal proceedings, investigations or claims that could affect the amount of any accrual, as well as any developments that would result in a loss contingency to become both probable and reasonably estimable. There were no material accruals for loss contingencies associated with such legal claims, actions or litigation as of June 30, 2023.

Note 18. Related Party Transactions

Investment Agreement and Investor Rights Agreement with Koito

On October 27, 2022, the Company entered into the Investment Agreement with Koito pursuant to which, among other things, at the closing of the transactions, and based on the terms and subject to the conditions set forth therein, the Company issued and sold to Koito 100,000 shares of Preferred Stock for a purchase price of $100.0 million. The issuance and sale of the Preferred Stock and related matters were approved by the Company’s stockholders on January 11, 2023, and the Preferred Stock issued to Koito on January 19, 2023. See Note 10 to the condensed consolidated financial statements in this Report for further information. At the closing of the issuance of the Preferred Stock, the Company and Koito entered into the Investor Rights Agreement (the “Investor Rights Agreement”), pursuant to which, among other things, the Company ensured that two designees of Koito sat on the Company’s board of directors immediately following the closing of the Transaction. The Investor Rights Agreement also provides for certain investor consent, preemptive, registration, and termination rights, which contain certain provisions that limit the Company’s ability to access additional sources of funding without Koito’s consent.

Secured Term Loan Agreement with Koito

Concurrently with the execution of the Investment Agreement, the Company entered into a Secured Term Loan Agreement with Koito to borrow Japanese Yen ¥5.8 billion (approximately $39.4 million). On January 24, 2023, the Company repaid all outstanding principal and accrued interest under the Secured Term Loan Agreement. See Note 9 to the condensed consolidated financial statements in this Report for further information.

Transactions with Koito

Koito is an automotive tier 1 partner and investor of the Company. Sales to Koito were $1.2 million and $1.3 million for the three months ended June 30, 2023 and 2022, respectively. Sales to Koito were $2.1 million and $1.8 million for the six months ended June 30, 2023 and 2022, respectively. Accounts receivable from Koito were $0.8 million as of June 30, 2023 and $1.0 million as of December 31, 2022.

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Note 19. Basic and Diluted Net Income (Loss) Per Share

The Company follows the two-class method when computing net income (loss) per common share when shares are issued that meet the definition of participating securities. The Company was in a net loss position for the three and six months ended June 30, 2023 and a net income position for the three and six months ended June 30, 2022. The Company considers its convertible preferred stock outstanding as of June 30, 2023 to be participating as holders of such securities have non-forfeitable dividend rights in the event of the declaration of a dividend for shares of common stock. When the Company is in a net loss position, the net loss attributable to common stockholders is not allocated to the convertible preferred stock under the two-class method as these securities do not have a contractual obligation to share in losses. Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of the Company’s common stock outstanding. When there is a net loss attributable to common stockholders, potentially dilutive common stock equivalents have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive.

The following table present reconciliations of the denominators of basic and diluted net (loss) income per share:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Denominator:
Weighted-average common shares outstanding – Basic (1)	157,379,175	154,108,677	157,081,027	135,160,187
Stock options to purchase common stock and RSUs (2)	—	7,722,607	—	10,027,040
Weighted-average common shares outstanding – Diluted	157,379,175	161,831,284	157,081,027	145,187,227

(1)	Includes 150,000 shares of common stock issuable to Lincoln Park in connection with the Purchase Agreement as of the three and six months ended June 30, 2022 as the shares are issuable in lieu of a commitment fee and will be issued solely as a result of the passage of time.
(2)	Includes the weighted-average unvested shares subject to repurchase of 16,748 and 23,465 as of the three and six months ended June 30, 2022, respectively.

The following common stock equivalents were excluded from the computation of diluted net (loss) income per share for the periods presented because including them would have been antidilutive:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Stock options to purchase common stock and RSUs	18,322,964	7,600,258	16,595,897	4,067,107
Preferred shares on an as-converted basis	39,423,443	—	39,423,443	—
Total	57,746,407	7,600,258	56,019,340	4,067,107

As of June 30, 2023 and 2022, 13,000,000 Earnout Shares were excluded from the table above because the shares are considered contingently issuable and the required common share price milestones were not achieved as of June 30, 2023 and 2022. As of June 30, 2023 and 2022, 13,800,000 common stock warrants were excluded from the table above as no shares were issuable under the treasury stock method of computing diluted earnings per share.

Note 20. Segments

The Company conducts its business in one operating segment that develops and produces lidar sensors for use in automotive and smart infrastructure industries. The Company’s Chief Executive Officer is the chief operating decision maker (“CODM”). The CODM allocates resources and makes operating decisions based on financial information presented on a consolidated basis, accompanied by disaggregated information about sales and gross margin by product group. The profitability of the Company’s product group is not a determining factor in allocating resources and the CODM does not evaluate profitability below the level of the consolidated company. Long-lived assets of the Company located in its country of domicile, the United States, are approximately 93%.

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Note 21. Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through August 9, 2023, the issuance date of the condensed consolidated financial statements, and determined there are no other transactions that require additional accounting or disclosure.

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

Unless otherwise indicated, references in this section to “we,” “our,” “us,” and “Cepton” generally refer to Cepton Technologies, Inc. and its consolidated subsidiaries prior to the Business Combination and to Cepton, Inc. and its consolidated subsidiaries after giving effect to the Business Combination. The following discussion and analysis of our results of operations and financial condition should be read in conjunction with the condensed consolidated financial statements included in this Report. This discussion contains forward-looking statements based upon our current expectations, estimates and projections that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed under “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” herein.

Certain amounts that appear in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) may not sum due to rounding. Percentage amounts included in this MD&A have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this MD&A may vary from those obtained by performing the same calculations using the figures in our condensed consolidated financial statements included elsewhere in this Report. Terms used but not defined in this MD&A shall have the meanings ascribed to such terms in this Report.

Business Overview

Cepton is focused on the deployment of high performance, mass-market lidar solutions to deliver safety and autonomy across the automotive and smart infrastructure markets. By adopting our solutions, our customers can enable safety and autonomy applications across a broad range of end-markets including our primary market, advanced driver assistance systems (“ADAS”) in consumer and commercial vehicles, which we believe represents not just the largest market opportunity for lidar applications over the next decade, but also the market with the best potential for near term mass-market commercialization.

Since the inception of our company in 2016, building lidars for broad market adoption has been our guiding principle. Mass-market deployment guided not just our end-market focus, but also our product design choices, our areas of technological innovation, and our approach to manufacturing, and our go-to-market strategy and partnerships. To pursue mass-market adoption, our value proposition has focused on developing a lidar that achieves high performance with automotive grade reliability at competitive prices. Our thesis was that lidar would gain broad based adoption only when solutions strike the right balance across three key facets of performance, cost and reliability.

Based on this approach, we have gained acceptance for our technology in the automotive market. In 2019, following approximately three years of rigorous engagement and working alongside our automotive tier 1 partner, Koito, we were awarded a significant ADAS lidar series production award from General Motors (“GM”) through Koito. This award includes multiple platforms and vehicle models, with an estimated production start at the end of 2023.

As a Silicon Valley-based company led by recognized technical experts in the optical field, technology innovation is at the core of our company. We developed a comprehensive lidar platform consisting of proprietary components including our breakthrough imaging technology and our system-on-a-chip lidar engine application-specific integrated circuit, a portfolio of automotive-grade and industrial-grade long-range and near-range lidars, a software layer enabling the integration of automotive functions, and feature rich perception software capabilities.

Business Combination

On February 10, 2022, the Business Combination was consummated and as a result, a subsidiary of Growth Capital Acquisition Corp. (“GCAC”), GCAC Merger Sub Inc., merged with and into Cepton Technologies, Inc. (“Legacy Cepton”). GCAC changed its name to Cepton, Inc., and the Company is now listed on the Nasdaq Stock Market (“Nasdaq”) under the symbol “CPTN”. Legacy Cepton is deemed to be the accounting predecessor and Cepton, Inc. is the successor registrant with the U.S. Securities and Exchange Commission (“SEC”), which means that Legacy Cepton’s financial statements for previous periods will be disclosed in Cepton, Inc.’s future periodic reports filed with the SEC.

The Business Combination was accounted for as a reverse recapitalization. Under this method of accounting, GCAC is treated as the acquired company for financial statement reporting purposes. This determination is primarily based on Legacy Cepton stockholders comprising a majority of the voting power of the combined entity and having the ability to nominate the majority of the governing body of the combined entity, Legacy Cepton’s senior management comprising the senior management of the combined entity, and Legacy Cepton’s operations comprising the ongoing operations of the

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combined entity. For accounting purposes, the combined entity represents a continuation of the financial statements of Legacy Cepton and the Business Combination is treated as the equivalent of Legacy Cepton issuing stock for the net assets of GCAC, accompanied by a recapitalization. See Note 2 to the condensed consolidated financial statements in this Report for further information regarding the Business Combination.

Market Conditions

The global economy, including the financial and credit markets, continues to experience significant volatility and disruptions and has been impacted by increases in inflation rates, the ongoing conflict in Ukraine, rising fuel prices, rising interest rates, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability. The severity and duration of the impact of broader macroeconomic conditions on our business is dynamic and cannot be predicted.

For more information on our operations and risks related to our macroeconomic environment, please see the section titled “Risk Factors”.

Key Factors Affecting Our Operating Results

We believe that our future performance and success depends, to a substantial extent, on our ability to capitalize on the following opportunities, which in turn is subject to significant risks and challenges, including those discussed below and in Part II, Item 1A of this Report under the heading “Risk Factors”.

Series Production Awards in the Automotive Market

An important part of our mission is to deploy high performance, mass-market lidar in the automotive market. Within the automotive market, we believe that passenger car ADAS applications represent the largest opportunity but also have the most stringent requirements for reliability, cost, and performance. Major automotive OEMs typically undergo several years of planning, technology selection, and vehicle integration work before introducing new and important technologies in their vehicle offerings. We anticipate that lidar, as a new sensor that improves safety and enhances autonomy, will undergo the same technology introduction and validation process as similar technologies in the past, such as anti-lock braking systems or stability control systems. The number of vehicle platforms and vehicle models that will be equipped with lidar will depend on OEM product planning, vehicle integration, and marketing schedules. Once a lidar supplier is chosen, the number of awarded vehicle platforms and vehicle models is likely to increase over time. This is because the development efforts of integrating lidar into the OEM’s product offerings is leveraged across multiple vehicle classes and platforms to maximize the OEM’s return on investment.

For example, our series production award through Koito for GM’s ADAS program initially included four vehicle models and was subsequently updated to include nine vehicle models spanning different classes of vehicles from luxury sedans to mid-level passenger cars to SUVs and trucks. These vehicles include traditional internal combustion engine types as well as electric drive train types. We expect additional vehicle models to be added to this series production award over time, with an anticipated start of production at the end of 2023 and significant volume increase anticipated in the following years. However, if the targets of this series production award are not realized, or if GM were to terminate or significantly alter or delay its GM series production award and/or alter its relationship with us or with Koito in a manner that is adverse to us or GM would delay the introduction of the vehicle models that are part of the series production award, our business would be materially adversely affected. Similarly, if we are unable to maintain our relationship with Koito, or the terms of our arrangement with Koito with respect to the GM program differs from our expectations, including with respect to volume, pricing, and timing, then our business and prospects would be materially adversely affected.

Adoption of Lidar Solutions in Automotive and Smart Infrastructure Markets

In an endless pursuit of safety and product differentiation, many leading automotive OEMs have decided to include lidar in their next generation of vehicles for increased safety and higher levels of autonomy. The speed of lidar adoption depends on many factors, including sensor performance, reliability, and cost, as well as the time it takes to win large series production awards. Large automotive series production awards usually take a number of years to secure but once awarded, the production award typically covers the entire duration of a typical vehicle model period of five to seven years for consumer vehicles. In the case of trucking applications, the production period of a typical model may exceed seven years in many cases. We are currently engaged in discussions with all of the top 10 global automotive OEMs based on vehicle production volume rankings for 2019 according to IHS Markit, a leading independent third-party industry analytics and information provider. We believe that our current series production award from GM through Koito is a validation of our

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technology leadership, product maturity, and potential for scalability that favorably positions us for additional series production awards at other large global OEMs.

While lidar adoption in the automotive market may take multiple years to materialize, smart infrastructure end markets could adopt lidar solutions at a more rapid pace. Applications within smart infrastructure vary widely from tolling to security, to delivery and logistics. These applications are typically project based and require certain levels of customization to deliver an end-to-end solution. To address opportunities in the smart infrastructure space, we partner with system integrators who leverage our lidar hardware as well as our Helius® perception software to provide solutions unique to each opportunity. We expect to grow our system integrator partnership network to further drive the adoption of lidar in smart infrastructure applications.

We expect our revenue to increase as lidar adoption increases in the automotive and smart infrastructure markets; however, the rate of adoption may vary due to many factors, including but not limited to competing technologies, time to market, changes in macroeconomic conditions, including rising inflation and interest rates, geopolitical conflicts and tensions, any of which may impact the pace and magnitude of lidar adoption and our revenues.

Product Cost and Margins

To drive mass-market adoption of lidar in automotive applications, product cost must be controlled. As such, cost is one of the primary design criteria that we focused on from the very beginning. Design choices were carefully evaluated to create products with the best overall balance between performance, reliability, and cost. Working with our partners, we expect to continue driving costs down as volumes increase and we achieve higher margin unit economics in the future.

In the case of our series production award from GM through Koito, we are working with our tier 1 partner, Koito, on manufacturing in order to effectively manage supply chain, component costs, and manufacturing costs to meet margin expectations at scale. Pursuant to our arrangement with Koito, we license our technology and sell components to Koito, who can manufacture and sell lidars using our technology. We expect our gross margin to rapidly increase as material costs decrease and fixed manufacturing overhead costs are absorbed over larger production volumes and as other economies of scale are achieved.

In the smart infrastructure space, the average selling price of a lidar solution may be higher than that in the automotive space due to a number of reasons, such as unit volume, level of customization, and additional software content. At the same time, the cost of production is also higher due to lower production volumes and higher levels of system integration requirements.

Due to recent supply chain shortages, lead times for some of our products are increasing, which may lead to a significant mismatch between supply and demand, giving rise to product shortages for both us and our customers, making our demand forecast more uncertain. Further, in preparation for the start of series production at the end of fiscal year 2023, lead time for some of our products may increase as our suppliers increase their manufacturing capabilities to meet the volume and quality requirements for components demanded by us, which may constrain our ability to meet customer demand in the short term. Higher production volume may lead to short term increases in our product costs and decreases in gross margin resulting from additional components and quality control costs required to deliver high-quality, consistent products to our customers at scale volume.

During fiscal year 2023 and 2022, we made continued efforts in broadening our supply base to support our growth and better serve customer demand. Recent market conditions discussed above have strained global supply chains and could result in a shortage of key materials that our suppliers require to satisfy our needs. While we have seen improvements recently, we expect continued supply constraints for some of our products, through the end of fiscal year 2023 and potentially beyond. We have placed orders for certain supply in advance of our historical lead times, paid premiums to secure future supply and capacity, and may need to continue to do so in the future. Placing orders in advance of our historical lead times to secure supply in a constrained environment may result in excess inventory, cancellation penalties, or other charges if there is a partial or complete reduction in long-term demand for our products. These actions may also increase our product costs and decrease gross margin, in addition to increased overall costs as a result of rising inflation. Increased costs for components, logistics and other supply chain expenses, driven in part by inflation and supply chain shortages, have negatively impacted, and may continue to negatively impact, our gross margin.

If we cannot generate our expected revenues, margins or income from operations, we may be required to raise additional debt or equity capital, which may not be available or may only be available on terms that are onerous to our stockholders.

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End Market Concentration

We believe that the automotive market represents a large portion of the total addressable market and large global automotive OEMs represent the majority of unit volume demand as well as leaders in active safety and autonomy. To drive mass-market commercialization of our lidar solutions, we have focused on top automotive OEMs and are currently engaged with all of the top 10 global automotive OEMs based on vehicle production volume rankings for 2019. Series production awards from top OEMs tend to be large and long-term in nature. While we continue to expand our system integrator partnership network to address opportunities in the smart infrastructure markets, program awards tend to be smaller and short-term in nature as compared to those in the automotive end-markets. As such, we expect a large portion of our future revenue to come from the automotive end-market.

Components of Results of Operations

Revenue

We categorize our revenue as (1) lidar sensor and prototype revenue and (2) development revenue.

Lidar sensor and prototype revenue is primarily derived from the sale of components and license of technologies to tier 1 suppliers for mass market ADAS applications in the automotive market and the sale of lidar sensors directly to end-user customers in the smart infrastructure markets. We anticipate strong revenue growth in the foreseeable future as we continue to form strategic partnerships and as the primary source of revenue shifts from prototype sales to sales of commercialized production-ready lidar sensors.

Development revenue represents arrangements with tier 1 suppliers focused on the specific customization of our proprietary lidar capabilities to the customers’ applications, typically involving development of customized software for producing or operating lidar sensor prototypes for those customers. The timing of revenue recognition for development contracts is determined for each performance obligation based on the unique facts and circumstances within each development arrangement, which generally results in recognition at a point in time. This assessment is made at the outset of the arrangement for each performance obligation.

Revenue is primarily derived from the sale of components and license of technologies to tier 1 suppliers for mass market ADAS applications in the automotive market and the sale of lidar sensors directly to end-user customers in the smart infrastructure markets. Our lidar sensors are used in applications such as advanced driver assistance systems, autonomous vehicles, and intelligent transportation systems. Our customers include leading original equipment manufacturers and suppliers within the automotive and smart infrastructure industries.

Cost of Revenue

Cost of revenue includes the manufacturing cost of our lidar sensors and components, which primarily consists of personnel-related costs directly associated with our manufacturing organization, and amounts paid to our third-party contract manufacturers and vendors. Our cost of revenue also includes cost of component inventory, product testing costs, an allocated portion of overhead costs, warranty expense, excess and obsolete inventory, and shipping costs. Development cost of revenue includes personnel-related costs incurred in the completion of the development projects. We expect cost of revenue to increase in absolute dollars in future periods, in particular as we begin series production as part of GM’s ADAS program. Increased costs for components, logistics and other supply chain expenses, driven in part by inflation and supply chain shortages, have negatively impacted, and may continue to negatively impact, our cost of revenue.

Gross Margin

Our gross margin in future periods will depend on a variety of factors including market conditions that may impact our pricing; product mix changes between established products and new products; excess and obsolete inventories; our cost structure for manufacturing operations, including third-party manufacturers, relative to volume. Our gross margin varies by product. We expect our gross margins to fluctuate over time, depending on the factors described above. Increased costs for components, logistics and other supply chain expenses, driven in part by inflation and supply chain shortages, have negatively impacted, and may continue to negatively impact, our gross margin. As we begin series production as part of GM’s ADAS program, we expect gross margin to decrease initially, followed by an increase in gross margin as unit volumes increase.

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Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of personnel-related costs, material expenses, permits, licenses, and professional services costs directly associated with our research and development activities. The remainder primarily relates to the allocated portion of overhead costs. Our research and development efforts are focused on enhancing and developing additional functionality for our existing products and on new product development, including new releases and upgrades to our lidar sensors. We expense research and development costs as incurred. We expect our research and development expenses to increase in absolute dollars as we increase our investment in software development to broaden the capabilities of our solutions and introduce new products and features.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses consist primarily of personnel-related costs, professional services costs, and advertising expenses directly associated with our sales and general and administrative activities. The remainder primarily relates to the allocated portion of overhead costs. We expect our selling expenses will increase in absolute dollars over time as we hire additional sales personnel, increase our marketing activities, grow our domestic and international operations, and build brand awareness. We also expect to increase the size of our general and administrative function to support the foregoing as well as the growth of our business.

(Loss) Gain on Change in Fair Value of Earnout and Warrant Liabilities

The change in fair value of earnout and warrant liabilities consists of the change in fair value of earnout and warrant liabilities assumed in connection with the Business Combination as well as the change in fair value of other warrant liability. We expect continued financial statement volatility from the fair value adjustments at the end of each reporting period or until the Earnout Shares are issued upon the attainment of common share price milestones or through the exercise of the warrants.

Foreign Currency Transaction Loss, Net

We incurred foreign currency transaction losses resulting from the repayment of the Secured Term Loan with Koito (the “Secured Term Loan”), which was denominated in Japanese Yen.

Loss on Extinguishment of Debt

Loss on extinguishment of debt represents the loss associated with the repayment of the Secured Term Loan with Koito to borrow Japanese Yen ¥5.8 billion (approximately $39.4 million on the date of borrowing). See Note 9 to our condensed consolidated financial statements included elsewhere in this Report for further information.

Other Income, Net

Other income, net consists primarily of foreign currency transaction gains and losses related to the impact of transactions denominated in a foreign currency other than the U.S. dollar and issuance of common stock under the Lincoln Park Agreement.

Interest Income (Expense), Net

Interest income (expense), net consists primarily of interest earned on our cash equivalents and short-term investments in commercial paper, corporate debt securities, and other available-for-sale securities. These amounts will vary based on our cash, cash equivalents and short-term investment balances, and also with market rates.

Provision for Income Taxes

Our provision for income taxes consists of federal, state, and foreign current and deferred income taxes. As we expand the scale and scope of our international business activities, any changes in the United States and foreign taxation of such activities may increase our overall provision for income taxes in the future.

We have a full valuation allowance for net deferred tax assets, including federal and state net operating loss carryforwards and research and development credit carryforwards. We expect to maintain this valuation allowance until it becomes more

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likely than not that the benefit of our federal and state deferred tax assets are realizable by way of expected future taxable income.

We believe that we have adequately reserved for our uncertain tax positions, although we can provide no assurance that the final outcome of these matters will not be materially different. To the extent that the final outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and results of operations.

Results of Operations for the Three and Six Months Ended June 30, 2023 and 2022

The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and notes included elsewhere in this Report. The following table sets forth our condensed consolidated results of operations data for the periods presented:

	Three Months Ended June 30,				Change $		Change %		Six Months Ended June 30,				Change $		Change %
	2023		2022						2023		2022
	(dollars in thousands)
Lidar sensor and prototype revenue	$	2,771	$	1,441	$	1,330	92	%	$	4,011	$	2,863	$	1,148	40	%
Development revenue	16		1,118		(1,102)		(99	%)	261		1,181		(920)		(78	%)
Total revenue	$	2,787	$	2,559	$	228	9	%	$	4,272	$	4,044	$	228	6	%
Lidar sensor and prototype cost of revenue	2,348		2,520		(172)		(7	%)	3,796		3,736		60		2	%
Development cost of revenue	5		562		(557)		(99	%)	116		598		(482)		(81	%)
Total cost of revenue	2,353		3,082		(729)		(24	%)	3,912		4,334		(422)		(10	%)
Gross profit (loss)	434		(523)		957		(183	%)	360		(290)		650		(224	%)
Operating expenses:
Research and development	9,365		8,386		979		12	%	16,603		16,140		463		3	%
Selling, general, and administrative	6,185		7,189		(1,004)		(14	%)	12,916		15,232		(2,316)		(15	%)
Total operating expenses	15,550		15,575		(25)		—	%	29,519		31,372		(1,853)		(6	%)
Operating loss	(15,116)		(16,098)		982		(6	%)	(29,159)		(31,662)		2,503		(8	%)
Other income (expenses):
(Loss) gain on change in fair value of earnout liability	(26)		15,630		(15,656)		NM		736		72,308		(71,572)		(99	%)
Gain on change in fair value of warrant liability	36		1,904		(1,868)		(98	%)	130		2,684		(2,554)		(95	%)
Foreign currency transaction loss, net	—		—		—		NA		(750)		—		(750)		NA
Loss on extinguishment of debt	—		—		—		NA		(1,123)		—		(1,123)		NA
Other income, net	2		4		(2)		(50	%)	21		6		15		250	%
Interest income (expense), net	917		(585)		1,502		NM		1,216		(1,278)		2,494		NM
(Loss) income before income taxes	(14,187)		855		(15,042)		NM		(28,929)		42,058		(70,987)		NM
Provision for income taxes	(3)		(12)		9		NA		(3)		(16)		13		NA
Net (loss) income	$	(14,190)	$	843	$	(15,033)	NM		$	(28,932)	$	42,042	$	(70,974)	NM

NA: Not applicable

NM: Not meaningful

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Comparison of the Three and Six Months Ended June 30, 2023 and 2022

Revenue

Lidar sensor and prototype revenue increased by $1.3 million, or 92%, to $2.8 million for the three months ended June 30, 2023, from $1.4 million for the three months ended June 30, 2022. Approximately $0.5 million of the increase was driven by new products sold, $0.4 million was driven by an increase in lidar sensor average sales price and approximately $0.3 million was driven by an increase in lidar sales volume.

Development revenue was immaterial for the three months ended June 30, 2023, compared to $1.1 million for the three months ended June 30, 2022. During the three months ended June 30, 2022, the Company satisfied the performance obligations defined under active development work order projects and recognized development revenue of $1.1 million.

Lidar sensor and prototype revenue increased by $1.1 million, or 40%, to $4.0 million for the six months ended June 30, 2023, from $2.9 million for the six months ended June 30, 2022. Approximately $0.8 million of the increase was driven by new products sold and $0.4 million was driven by an increase in lidar sensor average sales price.

Development revenue decreased by $0.9 million, or 78%, to $0.3 million for the six months ended June 30, 2023, from $1.2 million for the six months ended June 30, 2022. The decrease was driven by timing of the satisfaction of performance obligations defined under active development work order projects.

Cost of Revenue

Lidar sensor and prototype cost of revenue decreased by $0.2 million, or 7%, to $2.3 million for the three months ended June 30, 2023, from $2.5 million for the three months ended June 30, 2022. The decrease was driven by an approximately $0.9 million decrease in standard costing adjustments due to increased production volume, partially offset by a $0.6 million increase resulting from increased sales volume.

Development cost of revenue was immaterial for the three months ended June 30, 2023, compared to $0.6 million for the three months ended June 30, 2022. The decline in development cost of revenue resulted from the decrease in development revenue described above.

Lidar sensor and prototype cost of revenue increased by $0.1 million, or 2%, to $3.8 million for the six months ended June 30, 2023, from $3.7 million for the six months ended June 30, 2022. The increase was driven by an approximately $0.4 million increase resulting from increased sales volume and a $0.3 million increase in scrap expense, partially offset by a $0.6 million decrease driven by standard costing adjustments.

Development cost of revenue decreased by $0.5 million, or 81%, to $0.1 million for the six months ended June 30, 2023, from $0.6 million for the six months ended June 30, 2022. The decrease in development cost of revenue resulted from the decrease in development revenue described above.

Operating Expenses

Research and development expense increased by $1.0 million, or 12%, to $9.4 million for the three months ended June 30, 2023, from $8.4 million for the three months ended June 30, 2022, resulting primarily from a $1.2 million increase in materials costs, a $0.4 million increase in personnel costs, partially offset by a $0.3 million decrease in permits and licenses fees and a $0.1 million decrease in professional services costs.

Selling, general and administrative expense decreased by $1.0 million, or 14%, to $6.2 million for the three months ended June 30, 2023, from $7.2 million for the three months ended June 30, 2022, resulting primarily from a $0.6 million decrease in professional services fees, a $0.2 million decrease in personnel related costs and a $0.2 million decrease in other general and administrative costs.

Research and development expense increased by $0.5 million, or 3%, to $16.6 million for the six months ended June 30, 2023, from $16.1 million for the six months ended June 30, 2022, resulting primarily from a $1.2 million increase in personnel costs, partially offset by a $0.3 million decrease in materials costs and a $0.3 million decrease in permits and licenses fees.

Selling, general and administrative expense decreased by $2.3 million, or 15%, to $12.9 million for the six months ended June 30, 2023, from $15.2 million for the six months ended June 30, 2022, resulting primarily from $2.7 million in transaction costs related to the Business Combination attributable to liability-classified instruments in the prior year period

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and a $0.8 million decrease in other general and administrative costs, partially offset by a $1.1 million increase in personnel related costs in the current year period,.

(Loss) Gain on Change in Fair Value of Earnout and Warrant Liabilities

The earnout liability was assumed in connection with the Business Combination. The change in fair value of the earnout liability changed into an immaterial loss position for the three months ended June 30, 2023, compared to a gain of $15.6 million for the three months ended June 30, 2022. This is primarily due to an increase in the Company’s common stock price during the three months ended June 30, 2023, compared to a decrease in the Company's common stock price during the three months ended June 30, 2022.

The gain on change in fair value of the warrant liability decreased by $1.9 million for the three months ended June 30, 2023. This is primarily due to a larger decrease in the Company’s common share price during the three months ended June 30, 2022 compared to the three months ended June 30, 2023.

The gain on change in fair value of the earnout liability decreased by $71.6 million for the six months ended June 30, 2023. This is primarily due to a larger decrease in the Company’s common stock price during the six months ended June 30, 2022 compared to the six months ended June 30, 2023.

The gain on change in fair value of the warrant liability decreased by $2.6 million for the six months ended June 30, 2023. This is primarily due to a larger decrease in the Company’s common share price during the six months ended June 30, 2022 compared to the six months ended June 30, 2023.

Foreign Currency Transaction Loss, Net

Foreign currency transaction loss, net of $0.8 million for the six months ended June 30, 2023 resulted from the repayment of the Secured Term Loan with Koito, which was denominated in Japanese Yen.

Loss on Extinguishment of Debt

Loss on extinguishment of debt of $1.1 million for the six months ended June 30, 2023 resulted from repayment of the Secured Term Loan with Koito.

Other Income, Net

Other income, net remained relatively constant for the three and six months ended June 30, 2023 and 2022.

Interest Income (Expense), Net

Interest income (expense), net changed into a net interest income position of $0.9 million for the three months ended June 30, 2023, primarily due to increased interest income from the investment of the cash received from the issuance of Preferred Stock to Koito. Interest income (expense), net was a net interest expense of $0.6 million for the three months ended June 30, 2022, primarily due to interest expense on borrowings under the Trinity Loan Agreement in the prior year.

Interest income (expense), net changed into a net interest income position of $1.2 million for the six months ended June 30, 2023, primarily due to increased interest income from the investment of the cash received from the issuance of Preferred Stock to Koito. Interest income (expense), net was a net interest expense of $1.3 million for the six months ended June 30, 2022, primarily due to interest expense on borrowings under the Trinity Loan Agreement in the prior year.

Provision for Income Taxes

Our provision for income taxes remained consistent for each of the three and six months ended June 30, 2023 and 2022. We provided a full valuation allowance on our net U.S. federal and state deferred tax assets for the three and six months ended June 30, 2023 and 2022. For both reporting periods, we had U.S. federal and state tax-effected net operating loss carryforwards available to reduce future taxable income, of which post-2017 Federal net operating loss will be carried forward indefinitely and pre-2017 Federal net operating loss carryover and state net operating loss carryover and state net operating loss carryover will expire on varying dates.

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Liquidity and Capital Resources

Sources of Liquidity

As of June 30, 2023, we had cash, cash equivalents, and short-term investments totaling $69.6 million, comprised of money market funds, commercial paper, U.S. Treasury and Agency securities, corporate debt securities, and other available-for-sale securities held for working capital purposes. We believe that our current cash position, including our Purchase Agreement with Lincoln Park, will be sufficient to satisfy our foreseeable liquidity needs and capital expenditure requirements, including for at least the next twelve months.

On November 24, 2021, we entered into a Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park has agreed to purchase up to $100.0 million of common stock (subject to certain limitations contained in the Purchase Agreement) from time to time over a 36-month period after the consummation of the Business Combination and certain other conditions set forth in the Purchase Agreement. On May 11, 2022, the registration statement related to the Lincoln Park Purchase Agreement became effective and the other terms and conditions of the Purchase Agreement were satisfied, which enabled us to begin selling common stock to Lincoln Park as a source of funds, subject to specified limitations, including that the closing price of our common stock is not less than $1.00 per share. Following the filing of our Annual Report on From 10-K for the year ended December 31, 2022, we amended the registration statement and it was subsequently declared effective on March 22, 2023.

Following the approval of the Business Combination, on February 10, 2022, we received net cash proceeds of $47.1 million from the Business Combination and PIPE Investment (as defined in Note 2 to the condensed consolidated financial statements in this Report), net of certain transaction costs.

On October 27, 2022, we entered into an Investment Agreement with Koito (the “Investment Agreement”), pursuant to which, among other things, at the closing of the transactions, and based on the terms and subject to the conditions set forth therein, we issued and sold to Koito, 100,000 shares of Series A Convertible Preferred Stock, par value $0.00001 per share (the “Preferred Stock”), for a purchase price of $100.0 million. The issuance and sale of the Preferred Stock and related matters were approved by our stockholders on January 11, 2023, and the Preferred Stock was issued to Koito on January 19, 2023. The Preferred Stock will be convertible, beginning on January 19, 2024, into shares of our common stock at an approximate initial conversion price of $2.585 per share (subject to adjustment).

We have incurred negative cash flows from operating activities and significant operating losses in the past as reflected in our accumulated deficit of $115.0 million as of June 30, 2023. During the six months ended June 30, 2023, we had negative cash flows from operating activities of $21.2 million. Although much of the negative cash flow resulted from continuing expenses related research and development for product development, and continuing administrative expenses related to becoming a publicly traded company, we expect to continue to invest in research and development and generate operating losses in the future. In addition, our future capital requirements will depend on many factors, including our lidar sales volume, the timing and extent of spending to support our research and development efforts in lidar technology, the expansion of sales and marketing activities, market adoption of new and enhanced products and features, and increased spending due to inflation and supply chain shortages. If we are required to raise additional funds by issuing equity securities, dilution to stockholders would result. Any equity securities issued may also provide for rights, preferences, or privileges senior to those of common stockholders. For example, the issuance of the Preferred Stock to Koito involves the issuance of preferred equity securities that rank senior to our common stock in the event of liquidation and include other rights and preferences senior to those of our common stock. In addition, the Preferred Stock is convertible into shares of our common stock and, upon conversion, will result in dilution to our stockholders. If we raise funds by issuing debt securities, these debt securities would have rights, preferences, and privileges senior to those of common stockholders. Our ability to raise additional funds through the issuance of debt or equity securities may be subject to Koito’s consent pursuant to the Investor Rights Agreement. For information regarding our cash requirements from lease obligations, see Notes 16 to the condensed consolidated financial statements included elsewhere in this Report.

We are subject to risks and uncertainties frequently encountered by early-stage companies including, but not limited to, the uncertainty of successfully developing products, securing certain contracts, building a customer base, successfully executing business and marketing strategies, and hiring appropriate personnel.

To date, we have been funded primarily by equity financings, convertible promissory notes, and the net proceeds we received through the Business Combination, PIPE Investment, and private placements of the Legacy Cepton convertible preferred stock. Failure to generate sufficient revenues, achieve planned gross margins and operating profitability, control operating costs, or secure additional funding may require us to modify, delay, or abandon some of our planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a

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material adverse effect on our business, operating results, financial condition, and ability to achieve our intended business objectives.

Cash Flow Summary — Six Months Ended June 30, 2023 and 2022

	Six Months Ended June 30,
	2023		2022
Net cash provided by (used in):	(dollars in thousands)
Operating activities	$	(21,240)	$	(32,274)
Investing activities	(33,792)		(24,260)
Financing activities	54,614		57,431

Operating Activities

During the six months ended June 30, 2023, our operating activities used $21.2 million in cash. We recorded a net loss of $28.9 million; however, this was offset by $6.3 million of non-cash income and expenses consisting primarily of stock-based compensation expense of $4.7 million, loss on extinguishment of debt of $1.1 million, foreign currency transaction loss of $0.8 million, and amortization of right-of-use assets of $0.8 million. These non-cash income items were partially offset by gains from the change in fair value of earnout and warrant liabilities of $0.9 million. During the six months ended June 30, 2023, we generated net cash of $1.4 million from changes in our operating assets and liabilities resulting primarily from a $2.0 million decrease in prepaid expenses and other current assets due to amortization of our director and officers insurance policy, a $0.8 million increase in accrued expenses and other current liabilities and a $0.7 million decrease in accounts payable due to timing of payments. These were offset by a $1.2 million increase in inventory as the Company prepares for the start of series production, and a $0.8 million increase in accounts receivable.

During the six months ended June 30, 2022, our operating activities used $32.3 million in cash. We recorded net income of $42.0 million; however, this was offset by $69.8 million of non-cash income and expenses consisting primarily of gains from the change in fair value of earnout and warrant liabilities of $75.0 million. These non-cash income items were partially offset by stock-based compensation expense of $3.6 million, other amortization of $0.8 million, amortization of right-of-use assets of $0.6 million and depreciation and amortization of $0.1 million. During the six months ended June 30, 2022, we used net cash of $4.5 million from changes in our operating assets and liabilities resulting primarily from a $1.4 million increase in other long-term assets primarily related to prepaid director and officer insurance, a $1.2 million increase in accounts receivable, a $0.8 million decrease in operating lease liabilities, a $0.5 million increase in inventories, a $0.7 million increase in prepaid expenses and other current assets due to increases in prepaid insurance offset by decreases in deferred transaction costs in connection with the closing of the Business Combination, a $0.2 million decrease in accounts payable due to timing of payments and a $0.1 million decrease in accrued expenses and other current liabilities due to timing of payments.

Investing Activities

During the six months ended June 30, 2023, our investing activities used $33.8 million of cash, resulting primarily from purchases of short-term investments of $37.8 million and purchases of property and equipment of $1.2 million, partially offset by proceeds from maturities of short-term investments of $5.2 million.

During the six months ended June 30, 2022, our investing activities used $24.3 million of cash, resulting primarily from purchases of short-term investments of $32.4 million and purchases of property and equipment of $0.6 million, partially offset by proceeds from the sales and maturities of short-term investments of $8.7 million.

Financing Activities

During the six months ended June 30, 2023, our financing activities provided $54.6 million of cash consisting primarily of $99.9 million of net proceeds from the issuance of Preferred Stock to Koito, partially offset by the repayment of $45.2 million of short-term debt to Koito.

During the six months ended June 30, 2022, our financing activities provided $57.4 million of cash consisting primarily of $47.2 million of net proceeds from the Business Combination and PIPE investment, $9.7 million of proceeds from the issuance of debt and warrants, and $0.4 million from proceeds from common stock option exercises.

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Critical Accounting Policies and Estimates

We prepare our condensed consolidated financial statements in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates, assumptions and judgments that can significantly impact the amounts we report as assets, liabilities, revenue, costs and expenses and the related disclosures. We base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances. Our actual results could differ significantly from these estimates under different assumptions and conditions. A discussion of the accounting policies that management considers critical in that they involve significant management judgments and assumptions, require estimates about matters that are inherently uncertain and because they are important for understanding and evaluating our reported financial results is included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to our critical accounting policies.

Emerging Growth Company Status

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable.

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act and have elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. We expect to remain an emerging growth company at least through the end of the 2023 fiscal year and to continue to take advantage of the benefits of the extended transition period, although we may decide to early adopt such new or revised accounting standards to the extent permitted by such standards. This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

Subject to certain conditions set forth in the JOBS Act, if, as an emerging growth company, we intend to rely on such exemptions, we are not required to, among other things: (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis); and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation.

We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) ending December 31, 2026, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.

Recent Accounting Pronouncements

See Note 1 to our condensed consolidated financial statements included elsewhere in this Report for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risk exposures or management of market risk from those disclosed in Quantitative and Qualitative Disclosures About Market Risk included under Part II, Item 7A in our Annual Report on Form 10-K for the year ended December 31, 2022.

36

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Report.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures.

As discussed elsewhere in this Report, we completed the Business Combination on February 10, 2022. Prior to the consummation of the Business Combination, we were a private company with limited accounting personnel and other resources with which to address our internal control over financial reporting. Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this Report, our management concluded that our disclosure controls and procedures were not effective as of such date because of the material weaknesses in our internal control over financial reporting identified as of December 31, 2021 that continued to exist with respect to our internal control over financial reporting as of June 30, 2023:

•We did not maintain a sufficient complement of resources with an appropriate level of accounting knowledge and experience commensurate with the financial reporting requirements for a public company, in particular with respect to technical accounting knowledge regarding the accounting for certain non-standard transactions.

We cannot assure you that additional significant deficiencies or material weaknesses in our internal control over financial reporting will not be identified in the future. Any failure to maintain or implement required new or improved controls, or to implement our remediation plans or any difficulties we encounter in our implementation thereof, could result in additional significant deficiencies or material weaknesses or result in material misstatements in our financial statements. If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting when required, lenders and investors may lose confidence in the accuracy and completeness of our financial reports.

This material weakness, if not remediated, could result in misstatements of accounts or disclosures that would result in a material misstatement to the annual consolidated financial statements or the interim condensed consolidated financial statements that would not be prevented or detected.

Our management anticipates that our internal control over financial reporting will not be effective until the above material weakness is remediated. If our remediation of this material weakness is not effective, or we experience additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial reporting in the future, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to the Nasdaq listing requirements, investors may lose confidence in our financial reporting, and the price of our common stock may decline as a result. In addition, we may be unable to sell shares of common stock to Lincoln Park pursuant to the Purchase Agreement at prices we consider to be reasonable or at all, we may be unable to borrow funds from banking institutions on acceptable terms or at all, and we may face restricted access to various sources of financing in the future.

We hired additional accounting staff and we will continue to evaluate our accounting and financial staffing needs in light of the material weakness described above. While we have made progress to enhance our internal control over financial reporting and will continue to devote effort in control remediation, additional time is required to complete implementation and to assess and ensure the sustainability of these procedures. Accordingly, the material weakness cannot be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control Over Financial Reporting

Other than the remediation steps taken above, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended June 30, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

37

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, the Company may be involved in various legal claims, litigation and other matters that arise in the normal course of its operations. Although there can be no assurances and the outcome of these matters is not determinable, the Company currently believes that none of these claims, actions or proceedings are likely to have a material adverse effect on the Company’s financial position.

Item 1A. Risk Factors

In addition to the other information set forth in this Report, you should carefully consider the risk factors described in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results. There have not been any material changes in the Risk Factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit No.	Description
2.1	Business Combination Agreement, dated as of August 4, 2021, by and among GCAC, Merger Sub and Cepton (incorporated by reference to Exhibit 2.1 to the Registration Statement on Form S-1 filed by the Company on February 11, 2022).
2.2	Amendment to Business Combination Agreement, dated as of January 21, 2022, by and among GCAC, Merger Sub and Cepton (incorporated by reference to Exhibit 2.2 to the Registration Statement on Form S-1 filed by the Company on February 11, 2022).
3.1	Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed by the Company on February 11, 2022).
3.2	Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the to the Current Report on Form 8-K filed by the Company on February 10, 2022).
3.3	Certificate of Designations of Series A Convertible Preferred Stock, par value $0.00001, of Cepton, Inc., dated January 18, 2023 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Company on January 24, 2023).
31.1*	Certification of the Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of the Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

38

32.2*	Certification of the Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance Document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*Filed herewith.

39

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CEPTON, INC.
Date: August 9, 2023		/s/ Jun Pei
	Name:	Jun Pei
	Title:	President and Chief Executive Officer (Principal Executive Officer)
Date: August 9, 2023		/s/ Hull Xu
	Name:	Hull Xu
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

40

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jun Pei, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Cepton, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2023	By:	/s/ Jun Pei
	Name:	Jun Pei
	Title:	President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Hull Xu, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Cepton, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2023	By:	/s/ Hull Xu
	Name:	Hull Xu
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cepton, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jun Pei, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2023	By:	/s/ Jun Pei
	Name:	Jun Pei
	Title:	President and Chief Executive Officer (Principal Executive Officer)

The foregoing certification is being furnished pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and it is not to be incorporated by reference into any filing of the Company, regardless of any general incorporation language in such filing.

EX-32.2

Exhibit 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cepton, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Hull Xu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2023	By:	/s/ Hull Xu
	Name:	Hull Xu
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

The foregoing certification is being furnished pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and it is not to be incorporated by reference into any filing of the Company, regardless of any general incorporation language in such filing.

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2023	Aug. 01, 2023
Entity Listings [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity Registrant Name	Cepton, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-39959
Entity Tax Identification Number	27-2447291
Entity Address, Address Line One	399 West Trimble Road
Entity Address, City or Town	San Jose
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95131
City Area Code	408
Local Phone Number	459-7579
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		158,244,189
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Entity Central Index Key	0001498233
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Common stock, par value $0.00001 per share
Entity Listings [Line Items]
Title of 12(b) Security	Common stock, par value $0.00001 per share
Trading Symbol	CPTN
Security Exchange Name	NASDAQ
Redeemable warrants, exercisable for common stock at an exercise price of $11.50 per share, subject to adjustment
Entity Listings [Line Items]
Title of 12(b) Security	Redeemable warrants, exercisable for common stock at an exercise price of $11.50 per share, subject to adjustment
Trading Symbol	CPTNW
Security Exchange Name	NASDAQ

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 32,605	$ 31,953
Short-term investments	37,036	3,703
Accounts receivable, net of allowance for credit losses of $0 and $0, respectively	2,092	1,301
Inventories	4,188	2,985
Prepaid expenses and other current assets	3,327	6,272
Total current assets	79,248	46,214
Property and equipment, net	2,028	982
Restricted cash	1,924	2,565
Other assets	10,891	555
Total assets	94,091	50,316
Current liabilities:
Accounts payable	2,942	1,979
Operating lease liabilities, current	1,697	211
Accrued expenses and other current liabilities	3,056	2,265
Short-term debt	0	42,587
Total current liabilities	7,695	47,042
Warrant liability	310	440
Earnout liability	184	920
Operating lease liabilities, non-current	9,696	281
Total liabilities	17,885	48,683
Commitments and contingencies (Note 17)
Convertible preferred stock:
Convertible preferred stock – Par value $0.00001 per share – 5,000,000 shares authorized at June 30, 2023 and December 31, 2022; 100,000 shares issued and outstanding at June 30, 2023 (aggregate liquidation preference of $101.9 million at June 30, 2023); No shares issued and outstanding at December 31, 2022	98,891	0
Stockholders’ equity (deficit):
Common stock	2	2
Additional paid-in capital	92,648	88,056
Accumulated other comprehensive loss	(344)	(366)
Accumulated deficit	(114,991)	(86,059)
Total stockholders’ equity (deficit)	(22,685)	1,633
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$ 94,091	$ 50,316

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 0	$ 0
Convertible preferred stock, par value (in Dollars per share)	$ 0.00001	$ 0.00001
Convertible preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Convertible preferred stock, shares issued (in shares)	100,000	0
Convertible preferred stock, shares outstanding (in shares)	100,000	0
Convertible preferred stock, aggregate liquidation preference	$ 101,900,000
Common stock, par value (in Dollars per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized (in shares)	350,000,000
Common stock, shares issued (in shares)	158,224,189	156,747,708
Common stock, outstanding (in shares)	158,224,189	156,747,708

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Total revenue	$ 2,787	$ 2,559	$ 4,272	$ 4,044
Cost of Revenues	2,353	3,082	3,912	4,334
Gross profit (loss)	434	(523)	360	(290)
Operating expenses:
Research and development	9,365	8,386	16,603	16,140
Selling, general and administrative	6,185	7,189	12,916	15,232
Total operating expenses	15,550	15,575	29,519	31,372
Operating loss	(15,116)	(16,098)	(29,159)	(31,662)
Other income (expense):
(Loss) gain on change in fair value of earnout liability	(26)	15,630	736	72,308
Gain on change in fair value of warrant liability	36	1,904	130	2,684
Foreign currency transaction loss, net	0	0	(750)	0
Loss on extinguishment of debt	0	0	(1,123)	0
Other income, net	2	4	21	6
Interest income (expense), net	917	(585)	1,216	(1,278)
(Loss) income before income taxes	(14,187)	855	(28,929)	42,058
Provision for income taxes	(3)	(12)	(3)	(16)
Net (loss) income	$ (14,190)	$ 843	$ (28,932)	$ 42,042
Net income (loss) per share, basic (in Dollars per share)	$ (0.09)	$ 0.01	$ (0.18)	$ 0.31
Net income (loss) per share, diluted (in Dollars per share)	$ (0.09)	$ 0.01	$ (0.18)	$ 0.29
Weighted-average common shares, basic (in shares)	157,379,175	154,108,677	157,081,027	135,160,187
Weighted-average common shares, diluted (in Shares)	157,379,175	161,831,284	157,081,027	145,187,227
Net (loss) income	$ (14,190)	$ 843	$ (28,932)	$ 42,042
Other comprehensive income (loss), net of tax:
Changes in unrealized (loss) gain on available-for-sale securities	(11)	(37)	6	(48)
Foreign currency translation adjustments	(4)	(8)	16	(12)
Total other comprehensive (loss) income, net of tax	(15)	(45)	22	(60)
Comprehensive (loss) income	(14,205)	798	(28,910)	41,982
Lidar sensor and prototype revenue
Revenue	2,771	1,441	4,011	2,863
Cost of Revenues	2,348	2,520	3,796	3,736
Development revenue
Revenue	16	1,118	261	1,181
Cost of Revenues	$ 5	$ 562	$ 116	$ 598

XML

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) (Unaudited) - USD ($)	Total	Trinity Warrants	Preferred Stock	Additional Paid-in Capital	Additional Paid-in Capital Trinity Warrants	Accumulated Other Comprehensive Loss	Accumulated Deficit	Common Stock Common Stock	Common Stock Common Stock Trinity Warrants	Common Stock Common Stock SVB Warrants	Class F Stock Common Stock
Beginning balance (in shares) at Dec. 31, 2021	21,671,491
Beginning balance at Dec. 31, 2021	$ 99,470,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Retroactive application of exchange ratio (in shares)	31,407,080
Conversion of convertible preferred stock to common stock (in shares)	53,078,571
Conversion of convertible preferred stock to common stock	$ (99,470,000)
Ending balance (in shares) at Mar. 31, 2022	0
Ending balance at Mar. 31, 2022	$ 0
Balance (in shares) at Dec. 31, 2021			0					27,618,907			8,372,143
Balance at Dec. 31, 2021	(87,533,000)		$ 0	$ 7,949,000		$ (43,000)	$ (95,439,000)	$ 0			$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Retroactive application of exchange ratio (in shares)								40,026,282			12,133,201
Conversion of convertible preferred stock to common stock (in shares)								53,078,571
Conversion of convertible preferred stock to common stock	99,472,000			99,470,000			1,000	$ 1,000
Conversion of class F stock to common stock (in shares)								(20,505,344)			(20,505,344)
Reverse recapitalization, net of transaction costs (in shares)								11,845,943
Reverse recapitalization, net of transaction costs	(33,050,000)			(33,051,000)				$ 1,000
Exercise of warrants (in shares)									237,571	146,954
Exercise of warrants		$ 547,000			$ 547,000
Exercise of stock options (in shares)								511,890
Exercise of stock options	273,000			273,000
Stock-based compensation expense	1,357,000			1,357,000
Unrealized loss on available-for-sale investments	(11,000)					(11,000)
Cumulative Translation Adjustment, Net of Tax, Period Increase (Decrease)	(4,000)					(4,000)
Net income (loss)	41,198,000						41,198,000
Balance (in shares) at Mar. 31, 2022			0					153,971,462			0
Balance at Mar. 31, 2022	$ 22,249,000		$ 0	76,545,000		(58,000)	(54,240,000)	$ 2,000			$ 0
Ending balance (in shares) at Jun. 30, 2022	0
Ending balance at Jun. 30, 2022	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)								404,167
Exercise of stock options	211,000			211,000
Stock-based compensation expense	2,229,000			2,229,000
Unrealized loss on available-for-sale investments	(37,000)					(37,000)
Cumulative Translation Adjustment, Net of Tax, Period Increase (Decrease)	(8,000)					(8,000)
Net income (loss)	843,000						843,000
Balance (in shares) at Jun. 30, 2022			0					154,442,738			0
Balance at Jun. 30, 2022	25,349,000		$ 0	78,847,000		(103,000)	(53,397,000)	$ 2,000			$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock to LPC (in shares)								21,186
Vesting of early exercised options (in shares)								45,923
Stock Issued During Period, Value, New Issues	50,000			50,000
Stock Issued During Period, Value, Other	38,000			38,000
Consideration to be received on transaction	$ (226,000)			(226,000)
Beginning balance (in shares) at Dec. 31, 2022	0
Beginning balance at Dec. 31, 2022	$ 0
Increase (Decrease) in Temporary Equity [Roll Forward]
Issuance of convertible preferred stock, net of transaction costs (in shares)	100,000
Issuance of convertible preferred stock, net of transaction costs	$ 98,891,000
Ending balance (in shares) at Mar. 31, 2023	100,000
Ending balance at Mar. 31, 2023	$ 98,891,000
Balance (in shares) at Dec. 31, 2022								156,747,708
Balance at Dec. 31, 2022	1,633,000			88,056,000		(366,000)	(86,059,000)	$ 2,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)								96,385
Exercise of stock options	8,000			8,000
Stock-based compensation expense	2,280,000			2,280,000
Unrealized loss on available-for-sale investments	17,000					17,000
Cumulative Translation Adjustment, Net of Tax, Period Increase (Decrease)	20,000					20,000
Net income (loss)	(14,742,000)						(14,742,000)
Balance (in shares) at Mar. 31, 2023								156,844,093
Balance at Mar. 31, 2023	$ (10,784,000)			90,344,000		(329,000)	(100,801,000)	$ 2,000
Beginning balance (in shares) at Dec. 31, 2022	0
Beginning balance at Dec. 31, 2022	$ 0
Ending balance (in shares) at Jun. 30, 2023	100,000
Ending balance at Jun. 30, 2023	$ 98,891,000
Balance (in shares) at Dec. 31, 2022								156,747,708
Balance at Dec. 31, 2022	$ 1,633,000			88,056,000		(366,000)	(86,059,000)	$ 2,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)	128,923
Balance (in shares) at Jun. 30, 2023								158,244,189
Balance at Jun. 30, 2023	$ (22,685,000)			92,648,000		(344,000)	(114,991,000)	$ 2,000
Beginning balance (in shares) at Mar. 31, 2023	100,000
Beginning balance at Mar. 31, 2023	$ 98,891,000
Ending balance (in shares) at Jun. 30, 2023	100,000
Ending balance at Jun. 30, 2023	$ 98,891,000
Balance (in shares) at Mar. 31, 2023								156,844,093
Balance at Mar. 31, 2023	(10,784,000)			90,344,000		(329,000)	(100,801,000)	$ 2,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)								1,570,599
Exercise of stock options	5,000			5,000
Stock-based compensation expense	2,362,000			2,362,000
Share-Based Payment Arrangement, Decrease for Tax Withholding Obligation	(63,000)			(63,000)
Share-Based Payment Arrangement, Shares Withheld for Tax Withholding Obligation								(170,503)
Unrealized loss on available-for-sale investments	(11,000)					(11,000)
Cumulative Translation Adjustment, Net of Tax, Period Increase (Decrease)	(4,000)					(4,000)
Net income (loss)	(14,190,000)						(14,190,000)
Balance (in shares) at Jun. 30, 2023								158,244,189
Balance at Jun. 30, 2023	$ (22,685,000)			$ 92,648,000		$ (344,000)	$ (114,991,000)	$ 2,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$ (28,932)	$ 42,042
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	235	147
Stock-based compensation	4,654	3,586
Amortization of right-of-use asset	773	642
Amortization (accretion), other	(373)	800
(Loss) gain on change in fair value of earnout liability	(736)	(72,308)
Gain on change in fair value of warrant liability	(130)	(2,684)
Foreign currency transaction loss, net	750	0
Loss from extinguishment of debt	1,123	0
Changes in operating assets and liabilities:
Accounts receivable, net	(791)	(1,176)
Inventories	(1,216)	(466)
Prepaid expenses and other current assets	1,958	(670)
Other long-term assets	202	(1,406)
Accounts payable	741	(178)
Accrued expenses and other current liabilities	791	(148)
Operating lease liabilities	(289)	(753)
Other long-term liabilities	0	298
Net cash used in operating activities	(21,240)	(32,274)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(1,186)	(567)
Purchases of short-term investments	(37,806)	(32,368)
Proceeds from maturities of short-term investments	5,200	2,773
Net cash used in investing activities	(33,792)	(24,260)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible preferred stock, net of transaction costs	99,884	0
Repayment of Koito secured term loan	(45,220)	0
Proceeds from Business Combination and private offering	0	76,107
Payments of Business Combination and private offering transaction costs	0	(28,897)
Proceeds from issuance of debt and warrants, net of debt discount	0	9,724
Proceeds from issuance of common stock options	13	447
Net cash provided by financing activities	54,614	57,431
Effect of exchange rate changes on cash	429	(13)
Net increase in cash, cash equivalents and restricted cash	11	884
Cash, cash equivalents and restricted cash, beginning of period	34,518	3,654
Cash, cash equivalents and restricted cash, end of period	34,529	4,538
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	63	444
Cash paid for income taxes	0	12
Business Combination transaction costs, accrued but not paid	0	267
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION
Vesting of early exercised stock options	0	76
Right-of-use assets obtained in exchange for new operating lease liabilities	11,190	1,789
Capital Expenditures Incurred but Not yet Paid	0	120
Proceeds from Sale of Short-Term Investments	0	5,902
Share-Based Payment Arrangement, Decrease for Tax Withholding Obligation	(63)	0
Proceeds from Issuance of Common Stock	$ 0	$ 50

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Description of Business and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Description of Business and Summary of Significant Accounting Policies

Description of Business and Summary of Significant Accounting Policies

Description of Business

Cepton, Inc., and its wholly owned subsidiaries, (collectively, the “Company”) formerly known as Growth Capital Acquisition Corp. (“GCAC”), was originally incorporated in Delaware on January 4, 2010, under the name PinstripesNYS, Inc. GCAC changed its name to Growth Capital Acquisition Corp. on February 14, 2020. GCAC was a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more target businesses. On February 2, 2021, the Company consummated its initial public offering (the “IPO”), following which its shares began trading on the Nasdaq Stock Market (“Nasdaq”). On August 4, 2021, GCAC entered into a Business Combination Agreement (as amended, the “Merger Agreement”) with Cepton Technologies, Inc. (“Legacy Cepton”) and GCAC Merger Sub Inc., a wholly owned subsidiary of GCAC (“Merger Sub”). On February 10, 2022 (the “Closing Date”), the transactions contemplated by the Merger Agreement (the “Business Combination”) were consummated. In connection with the closing of the Business Combination, GCAC changed its name to Cepton, Inc. and its shares and public warrants began trading on Nasdaq under the symbols “CPTN” and “CPTNW”, respectively. As a result of the Business Combination, Cepton, Inc. became the owner, directly or indirectly, of all of the equity interests of Legacy Cepton and its subsidiaries.

The Company provides state-of-the-art, intelligent, lidar-based solutions for a range of markets such as automotive, smart cities, smart spaces, and smart industrial applications. The Company’s patented lidar technology enables reliable, scalable, and cost-effective solutions that deliver long range, high resolution 3D perception for smart applications. The Company is headquartered in San Jose, California, USA, with a presence in Germany, Canada, Japan, China and India.

Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the accounts of the Company's wholly owned subsidiaries in Canada, Germany, Japan, China and the United Kingdom. All intercompany balances and transactions have been eliminated in consolidation.

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. As of June 30, 2023, the Company had cash and cash equivalents of $32.6 million, short-term investments of $37.0 million, and an accumulated deficit of $115.0 million. During the six months ended June 30, 2023, the Company incurred an operating loss of $29.2 million and had negative cash flows from operating activities of $21.2 million. Although much of the negative cash flow resulted from expenses for research and development projects and administrative expenses to support growth of the Company, the Company expects to continue to invest in research and development and generate operating losses in the future.

The Company is subject to risks and uncertainties frequently encountered by early-stage companies including, but not limited to, the uncertainty of successfully developing its products, securing certain contracts, building its customer base, successfully executing its business and marketing strategy and hiring appropriate personnel.

To date, the Company has been funded primarily by equity financings, convertible promissory notes, and the net proceeds received through the Business Combination, PIPE Investment (as defined below), and private placements of the Legacy Cepton convertible preferred stock. Failure to generate sufficient revenues, achieve planned gross margins and operating profitability, control operating costs, or secure additional funding may require the Company to modify, delay, or abandon some of its planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results, financial condition, and ability to achieve its intended business objectives.

Concentration of Risk

Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. The Company maintains a substantial portion of its cash and cash equivalents and short-term investments in money market funds, commercial paper, corporate debt securities, U.S. treasury securities, and U.S. government agency securities. Management believes that the financial institutions that hold its

cash, cash equivalents, and short-term investments are financially sound and, accordingly, represent minimal credit risk. Deposits held with banks may exceed the amount of federal insurance limits provided on such deposits.

As of June 30, 2023 and December 31, 2022, three and two customers, respectively, each accounted for more than 10% of accounts receivable.

Customers with revenue equal to or greater than 10% of total revenue for the periods indicated were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Customer A	44	%	50	%	49	%	43	%
Customer B	52	%	—	%	34	%	—	%
Customer C	—	%	25	%	—	%	26	%

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, inventory valuation and reserves, warranty reserves, valuation allowance for deferred tax assets, valuation of earnout and warrant liabilities, stock-based compensation, useful lives of property, plant and equipment, income tax uncertainties, and other loss contingencies. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates, and such differences could be material to the Company’s condensed consolidated financial condition and results of operations.

Product Warranties

The Company typically provides a one-year warranty on its products. Estimated future warranty costs are accrued and charged to cost of goods sold in the period that the related revenue is recognized. These estimates are derived from historical data and trends of product reliability and costs of repairing and replacing defective products. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Through June 30, 2023, there were immaterial changes to the accrued warranty liability which was recorded in accrued expenses and other current liabilities on the condensed consolidated balance sheet.

Reclassifications

Certain reclassifications have been made to prior-period amounts to conform to current-period reporting classifications.

The condensed consolidated statements of convertible preferred stock and stockholders’ equity (deficit) included in this Report for the six months ended June 30, 2022 differ from our previously filed Quarterly Report on Form 10-Q for the six months ended June 30, 2022 by reflecting the immaterial error correction for the misclassification of $1.6 million from prepaid expenses and other current assets to additional paid-in capital for the Lincoln Park Capital Fund, LLC (“Lincoln Park” or “LPC”) commitment fee obligation as of June 30, 2022. The Company corrected the error in the condensed consolidated financial statements for the nine months ended September 30, 2022. The Company believes the correction of the error is immaterial to the previously issued condensed consolidated financial statements for prior periods.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Standards Accounting Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which significantly changes the way entities recognize credit losses and impairment of financial assets recorded at amortized cost. Currently, the credit loss and impairment model for loans and leases is based on incurred losses, and investments are recognized as impaired when there is no longer an assumption that future cash flows will be collected in full under the originally contracted terms. Under the new current expected credit loss (“CECL”) model, the standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of the asset. As the

Company is an emerging growth company, the standard will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted this standard on January 1, 2023 utilizing the modified retrospective method, and the adoption did not have a material impact on its condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity’s financial statements, and information about events, conditions, and circumstances that can affect how to assess the amount or timing of an entity’s future cash flows related to those instruments. The guidance is effective for interim and annual periods beginning after December 15, 2023 for smaller reporting companies. The Company is currently evaluating the potential impact on its condensed consolidated financial statements and related disclosures from the adoption of this standard.

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Business Combination

6 Months Ended

Jun. 30, 2023

Business Combinations [Abstract]

Business Combination

Business Combination

On February 10, 2022, the Business Combination was consummated and the following disclosure has been retained from our previously filed Form 10-K for the comparative prior period in 2022.

The Business Combination was accounted for as a reverse recapitalization as Legacy Cepton was determined to be the accounting acquirer under FASB ASC Topic 805, Business Combinations (ASC 805). The determination is primarily based on the evaluation of the following facts and circumstances:

•the equity holders of Legacy Cepton hold the majority of voting rights in the Company;

•the board of directors of Legacy Cepton represent a majority of the members of the board of directors of the Company or were appointed by Legacy Cepton;

•the senior management of Legacy Cepton became the senior management of the Company; and

•the operations of Legacy Cepton comprise the ongoing operations of the Company.

In connection with the Business Combination, outstanding capital stock of Legacy Cepton was converted into common stock of Legacy Cepton and then subsequently converted into Class A common stock of the Company, representing a recapitalization, and the net assets of the Company were acquired at historical cost, with no goodwill or intangible assets recorded. Legacy Cepton was deemed to be the predecessor of the Company, and the consolidated assets and liabilities and results of operations prior to the Closing Date are those of Legacy Cepton. The shares and corresponding capital amounts prior to the Business Combination, have been retroactively restated as shares reflecting the Exchange Ratio (defined below). Operations prior to the Business Combination were those of Legacy Cepton in future reports of the combined entity.

Recapitalization

In connection with the Business Combination, the following occurred to recapitalize the Company:

•Shares of Legacy Cepton convertible preferred stock and Class F stock issued and outstanding, were converted into common stock of Legacy Cepton, and thereafter, all shares of Legacy Cepton common stock were subsequently converted into the Company’s Class A common stock, par value $0.0001 per share, at a rate of approximately 2.449 (the “Exchange Ratio”);

•Vested stock options to purchase or receive shares of Legacy Cepton common stock (see Note 12) converted into options to purchase or receive shares of the Company’s Class A common stock, par value $0.0001 per share, in accordance with the Exchange Ratio;

•Outstanding warrants, whether vested or unvested, to purchase shares of Legacy Cepton common stock (see Note 14) converted into shares of the Company’s Class A common stock, par value $0.0001 per share, in accordance with the Exchange Ratio;

•Outstanding unvested stock options to purchase or receive shares of Legacy Cepton common stock (see Note 12) converted into unvested stock options to purchase or receive shares of the Company’s Class A common stock upon the same terms and conditions that were in effect with respect to such stock options immediately prior to the Business Combination, after giving effect to the Exchange Ratio;

•The Company’s certificate of incorporation was amended and restated to, among other things, increase the total number of authorized shares of capital stock to 355,000,000 shares, of which 350,000,000 shares were designated common stock, $0.00001 par value per share, and of which 5,000,000 shares were designated preferred stock, $0.00001 par value per share and to reclassify each share of Class A common stock and Class B common stock into one share of common stock.

PIPE Investment

Contemporaneously with the execution of the Merger Agreement, GCAC entered into subscription agreements with certain investors (the “PIPE Investors”), pursuant to which the PIPE Investors agreed to purchase an aggregate of 5,950,000 shares of common stock at a purchase price of $10.00 per share, or an aggregate purchase price of $59.5 million (the “PIPE Investment”).

Redemption

Prior to the closing of the Business Combination on February 10, 2022, certain GCAC public shareholders exercised their right to redeem certain of their outstanding shares for cash, resulting in the redemption of 15,589,540 shares of GCAC Class A common stock for an aggregate payment of $155.9 million.

Public and Private Placement Warrants

GCAC warrants issued in connection with the IPO (“Public Warrants”) and in connection with the private placement units held by the Sponsor (“Private Placement Warrants”) remained outstanding after the closing of the Business Combination. The warrants became exercisable to purchase shares of the Company’s common stock at an exercise price of $11.50 per share 30 days after the completion of the Business Combination, subject to other conditions, including with respect to the effectiveness of a registration statement covering the shares of common stock underlying such warrants, and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. The Public Warrants are equity-classified and were valued based on the instruments’ publicly listed trading price as of the Closing Date. The Private Placement Warrants are liability-classified and are valued on a recurring basis with changes in fair value recognized as a gain or loss upon remeasurement (see Note 14).

Transaction Costs

For the six months ended June 30, 2022, the Company incurred direct and incremental costs of approximately $31.7 million in connection with the Business Combination and the related equity issuance, consisting primarily of investment banking, legal, accounting, and other professional fees, which were recorded to additional paid-in capital as a reduction of proceeds. An approximate additional $2.6 million of transaction costs were recorded in general and administrative expense related to the liability classified instruments assumed subsequent to the Business Combination in 2022. There were no transaction costs related to the Business Combination recorded in 2023.

Transaction Proceeds

Upon closing of the Business Combination, the Company received gross proceeds of $76.1 million from the Business Combination and PIPE Investment, offset by total transaction costs of $40.7 million.

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Revenue

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

The Company disaggregates its revenue from contracts with customers by country of domicile based on the shipping location of the customer. Total revenue disaggregated by country of domicile is as follows (dollars in thousands):

	Three Months Ended June 30,
	2023				2022
	Revenue		% of Revenue		Revenue		% of Revenue
Revenue by country of domicile:
Japan	$	1,265	45	%	$	1,462	58	%
United States	1,466		53	%	880		34	%
Other	56		2	%	217		8	%
Total	$	2,787	100	%	$	2,559	100	%

	Six Months Ended June 30,
	2023				2022
	Revenue		% of Revenue		Revenue		% of Revenue
Revenue by country of domicile:
Japan	$	2,312	54	%	$	2,264	56	%
United States	1,570		37	%	1,493		37	%
Other	390		9	%	287		7	%
Total	$	4,272	100	%	$	4,044	100	%

As of June 30, 2023 and December 31, 2022, the Company had $0.5 million and $0.5 million of deferred revenue included in accrued expenses and other current liabilities, respectively, and no contract assets.

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Fair Value Measurement

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurement

Fair Value Measurement

The following tables summarize the Company's assets and liabilities measured at fair value on a recurring basis, by level, within the fair value hierarchy (in thousands):

	June 30, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market fund	$	1,502	$	—	$	—	$	1,502
Total cash equivalents	$	1,502	$	—	$	—	$	1,502
Short-term investments:
Commercial paper	$	—	$	21,161	$	—	$	21,161
U.S. treasury securities	—		2,985		—		2,985
U.S. government agency securities	—		9,882		—		9,882
Corporate debt securities	—		3,008		—		3,008
Total short-term investments	$	—	$	37,036	$	—	$	37,036
Total assets measured at fair value	$	1,502	$	37,036	$	—	$	38,538
Liabilities:
Warrant liability	$	—	$	310	$	—	$	310
Earnout liability	—		—		184		184
Total liabilities measured at fair value	$	—	$	310	$	184	$	494

	December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market fund	$	10,437	$	—	$	—	$	10,437
Total cash equivalents	$	10,437	$	—	$	—	$	10,437
Short-term investments:
U.S. government agency securities	$	—	$	2,493	$	—	$	2,493
Corporate debt securities	—		1,210		—		1,210
Total short-term investments	$	—	$	3,703	$	—	$	3,703
Total assets measured at fair value	$	10,437	$	3,703	$	—	$	14,140
Liabilities:
Warrant liability	$	—	$	440	$	—	$	440
Earnout liability	—		—		920		920
Total liabilities measured at fair value	$	—	$	440	$	920	$	1,360

Cash equivalents consist primarily of money market funds with original maturities of three months or less at the time of purchase, and the carrying amount is a reasonable estimate of fair value. Short-term investments consist of investment securities with original maturities greater than three months but less than twelve months and are included as current assets in the condensed consolidated balance sheets. For short-term investments, the fair value as of June 30, 2023 and December 31, 2022 approximates amortized cost basis.

Because the transfer of Private Placement Warrants to non-permitted transferees would result in the Private Placement Warrants having substantially the same terms as the Public Warrants, the Company determined that the fair value of each Private Placement Warrant is consistent with that of a Public Warrant. Accordingly, the Private Placement Warrants are classified as Level 2 financial instruments under warrant liability.

The value of the earnout liability is classified as Level 3 under the fair value hierarchy because it has been valued based on significant inputs not observable in the market.

Changes in Level 3 liabilities related to earnout liability measured at fair value for the six months ended June 30, 2023 (in thousands):

	Six Months Ended June 30, 2023
Balance as of December 31, 2022	$	920
Gain on change in fair value of earnout liability	(736)
Balance as of June 30, 2023	$	184

The gain on change in the fair value of the earnout liability was shown in the condensed consolidated statement of operations and comprehensive income (loss).

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Inventories

6 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consist of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Raw materials	$	2,210	$	1,179
Work-in-process	1,188		1,141
Finished goods	790		665
Total inventories	$	4,188	$	2,985

Inventories are carried and depicted above at the lower of cost or net realizable value. Write-downs were $0.3 million for the three and six months ended June 30, 2023 and were immaterial for the three and six months ended June 30, 2022.

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Prepaid Expenses and Other Current Assets

6 Months Ended

Jun. 30, 2023

Prepaid Expense and Other Assets, Current [Abstract]

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Prepaid insurance	$	1,972	$	2,533
Other prepaid expenses	1,186		1,376
Deferred transaction costs	—		993
Payroll tax receivable	—		865
Other current assets	169		505
Total prepaid expenses and other current assets	$	3,327	$	6,272

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Property and Equipment, Net

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and Equipment, Net

Property and equipment, net, consists of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Machinery and equipment	$	2,680	$	1,445
Automobiles	101		101
Leasehold improvements	235		189
Computer and equipment	116		116
Total property and equipment	3,132		1,851
Less: accumulated depreciation and amortization	(1,104)		(869)
Total property and equipment, net	$	2,028	$	982

Depreciation and amortization related to property and equipment was $0.1 million and $0.2 million for the three and six months ended June 30, 2023, respectively. Depreciation and amortization related to property and equipment was immaterial for the three months ended June 30, 2022 and $0.1 million for the six months ended June 30, 2022.

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Accrued Expenses and Other Current Liabilities

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Accrued payroll	$	1,477	$	1,300
Accrued expenses and taxes	1,012		375
Deferred revenue	484		525
Warranty reserve	83		65
Total accrued expenses and other current liabilities	$	3,056	$	2,265

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Debt

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Debt

Debt

Trinity Loan Agreement

On January 4, 2022, Legacy Cepton entered into a loan and security agreement and subsequent amendments (“Trinity Loan Agreement”) with Trinity Capital Inc. (“Trinity”) to borrow up to $25.0 million through January 1, 2023 at a floating per

annum rate equal to the greater of (i) 10.75% or (ii) the prime rate plus 7.0%. The loan had a maturity date of February 1, 2026. In connection with the Trinity Loan Agreement, Legacy Cepton issued a warrant to purchase 96,998 shares of common stock with an exercise price of $16.89 per share (see Note 14). The fair value of the warrant was estimated to be $1.3 million on the date of issuance. On January 4, 2022, Legacy Cepton borrowed $10.0 million under the agreement, incurring $0.3 million in transaction costs which were accounted for as a debt discount. Legacy Cepton also recognized a pro rata portion of the warrant fair value as a debt discount related to the $10.0 million loan. Amortization of debt discounts, in accordance with the effective interest method, are recorded as interest expense in the accompanying condensed consolidated statement of operations and comprehensive income (loss) during 2022. Obligations under the Trinity Loan Agreement were secured by interests in substantially all of the Company’s assets. The agreement contained customary affirmative and negative covenants.

For the three and six months ended June 30, 2022, the Company recognized $0.7 million and $1.4 million in interest expense, respectively, in connection with the borrowings under the Trinity Loan Agreement.

On November 7, 2022, the Company repaid all outstanding principal and accrued interest under and terminated the Trinity Loan Agreement including a 1.5% prepayment penalty and 2.5% end of term payment.

Secured Term Loan Agreement with Koito

On October 27, 2022, the Company entered into an Investment Agreement (the “Investment Agreement”) with Koito Manufacturing Co., Ltd. (“Koito”) (See Note 10). Concurrently with the execution of the Investment Agreement, the Company entered into a Secured Term Loan Agreement with Koito to borrow Japanese Yen ¥5.8 billion (approximately $39.4 million) (the “Secured Term Loan Agreement”). The loan accrued interest at a rate equal to 1.0% per annum and was payable at maturity. The Secured Term Loan Agreement entered into with Koito was a related party transaction issued at a below market interest rate. To reflect what a similar debt instrument would be issued at with a market interest rate, the Company recorded a $2.0 million debt discount accounted for as a capital contribution within additional paid-in capital in the condensed consolidated balance sheet as of December 31, 2022. Amortization of the debt discount, in accordance with the effective interest method, was recorded as interest expense in the accompanying condensed consolidated statement of operations and comprehensive income (loss). The loan was set to mature on the earlier of three business days after the closing of the transactions contemplated by the Investment Agreement and the date on which the Investment Agreement is terminated in accordance with its terms. On November 7, 2022, the Company borrowed Japanese Yen ¥5.8 billion (approximately $39.4 million) under the Secured Term Loan Agreement. Obligations under the Secured Term Loan Agreement were secured by interests in substantially all of the Company’s assets, including all patents. The agreement contained customary affirmative and negative covenants. On January 24, 2023, the Company repaid all outstanding principal and accrued interest under the Secured Term Loan Agreement.

For the six months ended June 30, 2023, the Company recognized $0.3 million in interest expense in connection with the borrowings under the Secured Term Loan Agreement. Additionally, the Company recognized a $0.8 million foreign currency transaction loss on repayment using the applicable exchange rate on January 24, 2023 and a $1.1 million loss on extinguishment of debt.

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Convertible Preferred Stock

6 Months Ended

Jun. 30, 2023

Temporary Equity [Abstract]

Convertible Preferred Stock

Convertible Preferred Stock

Convertible Preferred Stock Prior to Business Combination

As discussed in Note 2, the Company has retroactively adjusted the shares issued and outstanding prior to February 10, 2022 to give effect to the Exchange Ratio to determine the number of shares of common stock into which they were converted.

Prior to the Business Combination, Legacy Cepton had shares of $0.00001 par value Series A, Series B, Series B-1, and Series C preferred stock outstanding, all of which were convertible into shares of common stock of Legacy Cepton on a 1:1 basis, subject to certain anti-dilution protections.

The authorized, issued, and outstanding shares of Convertible Preferred Stock, and liquidation preferences prior to February 10, 2022 were as follows:

	Issuance Date	Shares Authorized	Shares Issued and Outstanding	Original Issue Price per Share		Aggregate Liquidation Preference
Series A	July 6, 2016	8,000,000	8,000,000	$	1.0000	$	8,000,000
Series B	July 13, 2018	4,069,600	4,069,600	$	6.2500	25,435,000
Series B-1	July 13, 2018	3,272,475	3,272,475	$	3.1250	10,226,484
Series C	February 4, 2020	7,463,934	6,329,416	$	8.3736	52,999,998
		22,806,009	21,671,491			$	96,661,482

Upon the closing of the Business Combination on February 10, 2022, the 21,671,491 shares of convertible preferred stock issued and outstanding were converted into 53,078,571 shares of common stock at the Exchange Ratio.

Convertible Preferred Stock with Koito

On October 27, 2022, the Company entered into the Investment Agreement with Koito pursuant to which, among other things, at the closing of the transactions, and based on the terms and subject to the conditions set forth therein, the Company issued and sold to Koito, 100,000 shares of Series A Convertible Preferred Stock, par value $0.00001 per share (the “Preferred Stock”), for a purchase price of $100.0 million (the “Initial Liquidation Preference”). The issuance and sale of the Preferred Stock and related matters were approved by the Company’s stockholders on January 11, 2023, and the Preferred Stock issued to Koito on January 19, 2023 (the “Closing Date”). In connection with the issuance of the Preferred Stock, the Company incurred direct and incremental expenses of $1.1 million, comprised of transaction fees, and financial advisory and legal expenses, which reduced the carrying value of the Preferred Stock.

As of June 30, 2023, the Company had authorized 5,000,000 shares of preferred stock, each with a par value of $0.00001. As of June 30, 2023, there were 100,000 shares of preferred stock issued and outstanding.

Dividend Provisions

The Preferred Stock ranks senior to the Company’s common stock with respect to payment of dividends and rights on the distribution of assets on any liquidation, dissolution or winding up of the affairs of the Company and ranks junior to all secured and unsecured indebtedness. The Preferred Stock has an Initial Liquidation Preference of $100.0 million, representing an aggregate Liquidation Preference (as defined below) of $100.0 million upon issuance. At the Company’s election, the Preferred Stock carries a 4.250% per annum dividend if paid in kind or a 3.250% per annum dividend if paid in cash, in each case payable quarterly in arrears. Holders of the Preferred Stock are entitled to the dividend regardless of whether declared by the Company’s board of directors. Such dividends shall accrue and compound quarterly in arrears from the date of issuance of the shares. The Preferred Stock is also entitled to fully participate in any dividends paid to the holders of common stock in cash, in stock or otherwise, on an as-converted basis.

Liquidation Rights

In the event of any Liquidation, holders of the Preferred Stock are entitled to receive an amount per share equal to the greater of (1) the Initial Liquidation Preference per share plus any accrued or declared but unpaid dividends on such shares (the “Liquidation Preference”) or (2) the amount payable if the Preferred Stock were converted into common stock. The Preferred Stock will have distribution and liquidation rights senior to all other equity interests of the Company. As of June 30, 2023, the Liquidation Preference of the Preferred Stock was $101.9 million.

Conversion Feature

The Preferred Stock may be converted, at any time in whole or in part at the option of the holder, beginning on January 19, 2024, into shares of the Company’s common stock equal to the quotient obtained by dividing the sum of the Liquidation Preference by the conversion price of $2.585 (the “Conversion Price”).

Anti-Dilution Provisions

The Conversion Price of the Preferred Stock has customary anti-dilution provisions for stock splits, stock dividends, sales of shares through a tender or exchange offer, including under the Purchase Agreement with Lincoln Park, subject to customary exceptions for issuances pursuant to current or future equity-based incentive plans or arrangements (including upon the exercise of employee stock options).

Optional Redemption

The Company has the option, upon 30 days’ advance notice, to (A) repurchase all (but not less than all) of the outstanding Preferred Stock held by Koito or a Permitted Transferee (as defined in the Investment Agreement) on or after the second anniversary of the closing occurring after the end of the applicable fiscal year for which the Company has recorded positive net income, if the Company has recorded positive net income pursuant to GAAP in its audited financial statements for any fiscal year the end date of which falls after the fifth anniversary of the closing and (B) all or any portion of the outstanding Preferred Stock not held by Koito or a Permitted transferee any time after the seventh anniversary of the closing.

Fundamental Change Put Right

Upon occurrence of a fundamental change event, each holder of outstanding shares of the Preferred Stock has the right to require the Company to repurchase any or all of their Preferred Stock at a purchase price per share equal to the Liquidation Preference or in lieu of a repurchase, elect to convert the Preferred Stock into the Company’s common stock equal to the quotient obtained by dividing 110% of the Liquidation Preference by the Conversion Price.

A fundamental change is defined as either the direct or indirect sale, or other disposition of all or substantially all assets of the Company and its subsidiaries to any third party or the consummation of any transaction, the result of which is that any third party or group of third parties become the beneficial owner of more than 50% of the voting power of the Company. Solely with respect to shares held by Koito, the definition of a fundamental change is expanded to include agreements entered by the Company to issue equity exceeding 10% of the Company’s common stock, or any strategic alliance partnership, or joint venture agreement to a third party deemed to be a competitor with Koito (subject to certain exceptions).

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Stockholders’ Equity (Deficit)

6 Months Ended

Jun. 30, 2023

Stockholders' Equity Note [Abstract]

Stockholders’ Equity (Deficit)

Stockholders’ Equity (Deficit)

Common Stock

Holders of common stock were entitled to one vote per share, and to receive dividends when, as and if declared by the board of directors, and, upon liquidation or dissolution, were entitled to receive all assets available for distribution to stockholders. The holders had no preemptive or other subscription rights and there were no redemption or sinking fund provisions with respect to such shares.

Upon the closing of the Business Combination on February 10, 2022, the 27,618,907 shares of Legacy Cepton common stock issued and outstanding were converted into 67,645,189 shares of common stock at the Exchange Ratio.

As of June 30, 2023, the Company had authorized 350,000,000 shares of common stock, each with a par value of $0.00001. As of June 30, 2023, there were 158,224,189 shares of common stock issued and outstanding.

Lincoln Park Transaction

On November 24, 2021, Legacy Cepton entered into a Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park has agreed to purchase up to $100.0 million of common stock (subject to certain limitations contained in the Purchase Agreement) from time to time over a 36-month period (the “Purchase Agreement”) after the consummation of the Business Combination and certain other conditions set forth in the Purchase Agreement. The Company may, from time to time and at its sole discretion, direct Lincoln Park to purchase common stock in accordance with daily dollar thresholds as determined within the Purchase Agreement. The purchase price per share for common stock will be the lower of: (i) the lowest trading price for shares of common stock on the market in which it is listed, on the applicable purchase date and (ii) the average of the three (3) lowest closing sale price for common stock during the ten (10) consecutive business days ending on the business day immediately preceding such purchase date. In consideration for entering into the Purchase Agreement, the Company issued, as a commitment fee, 50,000 shares of common stock to Lincoln Park on the date of the closing of the Business Combination and subsequently an additional 150,000 shares of common stock 180 days after the date of the closing of the Business Combination.

As of June 30, 2023, 1,142,505 shares of common stock had been sold in aggregate to Lincoln Park under the Purchase Agreement for consideration of $1.7 million. For the three and six months ended June 30, 2023, no shares of common stock were sold to Lincoln Park under the Purchase Agreement. For the three and six months ended June 30, 2022, 21,186 shares of common stock were sold to Lincoln Park under the Purchase Agreement.

Class F Stock

Holders of Legacy Cepton’s Class F stock were entitled to the same voting rights as the equivalent number of common stock on an as-converted basis, and to receive dividends when, as and if declared by the board of directors. The holders had conversion rights for conversion into shares of common stock and preferred stock. The holders were subject to vesting terms wherein each holder acquired a vested interest in the stock over a service period of four years.

Upon the closing of the Business Combination on February 10, 2022, the 8,372,143 shares of Legacy Cepton Class F stock issued and outstanding were converted into 8,372,143 shares of common stock of Legacy Cepton and then subsequently converted into 20,505,344 shares of common stock of the Company at the Exchange Ratio.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Equity Incentive Plans

On July 5, 2016, Legacy Cepton adopted the 2016 Stock Plan (the “2016 Plan”) under which 4,800,000 shares of Legacy Cepton’s common stock were reserved for issuance to employees, nonemployee directors, consultants, and advisors. As a result of the Business Combination, the Company no longer grants new incentive awards under the 2016 Plan and there were no shares reserved or available for future issuance under the 2016 Plan. Incentive awards existing under the 2016 Plan immediately prior to the Business Combination were converted into options to receive shares of common stock through application of the Exchange Ratio (“Post Conversion Awards”).

On February 10, 2022, the Company adopted the 2022 Stock Plan (the “2022 Plan”) under which 15,123,142 shares of the Company’s common stock were reserved for issuance to employees, nonemployee directors, consultants, and advisors. Per the terms of the 2022 Plan, in the event any Post Conversion Awards issued and outstanding under the 2016 Plan are cancelled, terminated, or expire, said number of shares will be made available for issuance under the 2022 Plan. The share limit shall automatically increase on the first trading day in January of every calendar year during the term of the 2022 Plan, by an amount equal to the lesser of (i) two percent (2%) of the total number of shares of common stock issued and outstanding on December 31 of the immediately preceding calendar year or (ii) such number of shares of common stock as may be established by the board of directors. As of June 30, 2023, there were 10,281,667 shares of common stock reserved for issuance under the 2022 Plan.

Incentive Stock Options and Nonqualified Stock Options

A summary of the Company’s employee and nonemployee stock option activity for the six months ended June 30, 2023 is presented below:

	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contract Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2022	14,261,984	$	2.14	6.5	$	6,486
Granted	45,000	$	0.37
Exercised	(128,923)	$	0.10
Expired/Forfeited	(514,617)	$	3.07
Outstanding as of June 30, 2023	13,663,444	$	2.12	6.1	$	1,454
Exercisable as of June 30, 2023	10,877,597	$	1.62	5.6	$	1,448
Vested and expected to vest as of June 30, 2023	13,663,444	$	2.12	6.1	$	1,454

During the six months ended June 30, 2023, the estimated weighted-average grant date fair value of options granted was $0.17 per share. As of June 30, 2023, there was $6.3 million of unrecognized stock-based compensation expense related to

unvested stock options expected to be recognized over a weighted-average period of 1.6 years. The total intrinsic value of options exercised during the six months ended June 30, 2023 was $0.1 million. The Company recognizes forfeitures as they occur.

Restricted Stock Units

Each restricted stock unit (“RSU”) granted under the 2022 Plan represents a right to receive one share of the Company’s common stock when the RSU vests. RSUs generally vest over a period of one to four years based on fulfilling a service condition. The fair value of a RSU is equal to the fair value of the Company’s common stock on the date of grant.

A summary of the Company’s RSU activity for the six months ended June 30, 2023 is presented below:

	Shares	Weighted Grant Date Fair Value
Outstanding as of December 31, 2022	4,708,692	$	2.57
Granted	4,383,166	$	1.08
Released	(1,538,061)	$	2.67
Forfeited	(492,959)	$	1.74
Outstanding as of June 30, 2023	7,060,838	$	1.68

As of June 30, 2023, there was $10.6 million of unrecognized stock-based compensation expense related to unvested RSUs expected to be recognized over a weighted-average period of 2.4 years. The total intrinsic value of RSUs outstanding at June 30, 2023 was $3.4 million. The Company recognizes forfeitures as they occur.

Performance-based Stock units

Each performance-based stock unit (“PSU”) granted under the 2022 Plan represents a right to receive one share of the Company’s common stock upon satisfaction of the performance-based conditions applicable to the PSU. There were no PSUs issued during the six months ended June 30, 2023. During the six months ended June 30, 2022, the Company granted 123,000 PSUs under the 2022 Plan, with 66,000 PSUs in the first tranche and 57,000 PSUs in the second tranche. Each grant consisted of two market-based vesting tranches, with the first tranche to vest if, at the close of regular trading for 20 trading days out of any period of 30 consecutive trading days, either (i) the closing price of the Company’s common stock exceeds $15.00 per share or (ii) the Company’s market capitalization exceeds $2.1 billion; and the second tranche to vest if, at the close of regular trading for 20 trading days out of any period of 30 consecutive trading days, either (i) the closing price of the Company's common stock exceeds $17.50 per share or (ii) the Company’s market capitalization exceeds $2.5 billion, provided in each case that the applicable stock price or market capitalization goal must be achieved no later than February 10, 2025 for the applicable tranche to vest, and provided further that the vesting of each tranche is subject to the grantee’s continued employment with the Company through the day on which the applicable goal is achieved.

The fair value of the PSUs at valuation date was determined using a Monte Carlo valuation model that utilizes significant assumptions, including expected volatility, dividend yield, stock price as of the valuation date, market capitalization targets and the corresponding share price targets necessary for each tranche of PSUs to vest, expected life, and risk-free rate.

The fair value of the PSUs at valuation date was $0.1 million with weighted-average grant date fair value of $0.98, amortizing over a derived service period of 21 and 22 months for each tranche, respectively. As of June 30, 2023,

unrecognized stock-based compensation expense related to PSU's was immaterial, which was expected to be recognized over a weighted-average period of 1.6 years.

Stock-Based Compensation

For the three and six months ended June 30, 2023 and 2022, the Company recorded stock-based compensation expense as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of revenue	$	44	$	60	$	104	$	103
Research and development expense	1,193		1,152		2,370		1,981
Selling, general and administrative expense	1,128		1,027		2,180		1,502
Total stock-based compensation expense	$	2,365	$	2,239	$	4,654	$	3,586

For the three months ended June 30, 2023 and 2022, the Company capitalized $41 thousand and $50 thousand, respectively, of stock-based compensation expense into inventory. For the six months ended June 30, 2023 and 2022, the Company capitalized $92 thousand and $103 thousand, respectively, of stock-based compensation expense into inventory. There were no modifications during the three and six months ended June 30, 2023. During the three and six months ended June 30, 2022, the Company recognized additional stock-based compensation expense of $0.3 million as a result of modification of a cancelled option of a nonemployee.

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Earnout Liability

6 Months Ended

Jun. 30, 2023

Disclosure Of Earnout Liability [Abstract]

Earnout Liability

Earnout Liability

In addition to the shares issued upon closing of the Business Combination (see Note 2), additional contingent shares (“Earnout Shares”) are payable to each holder of common stock and/or options receiving consideration in the Business Combination, in the amounts set forth below:

(a) If the closing price of the Company’s common stock equals or exceeds $15.00 per share for any 20 trading days within any consecutive 30-trading day period that occurs after the Closing Date and on or prior to the three-year anniversary of the Closing Date, then, the Company will issue to each holder of common stock that is entitled to Earnout Shares a number of shares of common stock equal to such holder’s pro rata portion of 7,000,000 shares.

(b) If the closing price of the Company’s common stock equals or exceeds $17.50 per share for any 20 trading days within any consecutive 30-trading day period that occurs after the Closing Date and on or prior to the three-year anniversary of the Closing Date, the Company will issue to each holder of common stock that is entitled to Earnout Shares a number of shares of common stock equal to such holder’s pro rata portion of 6,000,000 shares.

The Company concluded the Earnout Shares meet the criteria for liability classification due to the existence of contingent settlement provisions that could result in holders receiving differing amounts of shares depending on the Company’s stock price or the price paid in a change of control. Because the settlement is not solely determined by the share price of the Company (that is, the share price observed in or implied by a qualifying change-in-control event), but also by the occurrence of a qualifying change-in-control event, this causes the Earnout Shares to not be indexed to the Company’s own shares, resulting in liability classification. Upon the closing of the Business Combination, the Company recorded these instruments as liabilities on the condensed consolidated balance sheet at fair value and will recognize subsequent changes in fair value in earnings at each reporting date. The fair value of the earnout liability was determined using a Monte Carlo valuation model that utilizes significant assumptions, including expected volatility, expected term, and risk-free rate, to determine the probability of achieving the common share price milestones.

The following table summarizes the assumptions used in estimating the fair value of the earnout liability at each of the relevant periods:

	June 30, 2023			December 31, 2022
Current stock price	$	0.49		$	1.27
Expected volatility	106.0		%	79.0		%
Risk-free interest rate	5.10		%	4.42		%
Expected term (in years)	1.6			2.1
Expected dividend yield	0		%	0		%

Current stock price: the stock price was based on the closing price as of the valuation date.

Expected volatility: the volatility rate was determined using the historical volatility of the Company's stock price and a mix of historical and implied volatilities of selected industry peers deemed to be comparable to the Company’s business, corresponding to the expected term of the awards.

Risk-free interest rate: The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of issuance for zero-coupon U.S. Treasury notes with maturities corresponding to the expected three-year term of the earnout period.

Expected term: The expected term is the remaining term of the three-year earnout period.

Expected dividend yield: The expected dividend rate is zero as the Company currently has no history or expectation of declaring dividends in the foreseeable future.

As of June 30, 2023, the balance of the earnout liability was approximately $0.2 million. For the three and six months ended June 30, 2023, the Company recorded an immaterial loss and a gain of $0.7 million, respectively, in the condensed consolidated statement of operations and comprehensive income (loss) for the change in fair value of the earnout liability. For the three and six months ended June 30, 2022, the Company recorded a gain of $15.6 million and $72.3 million, respectively, in the condensed consolidated statement of operations and comprehensive income (loss) for the change in fair value of the earnout liability.

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Warrants

6 Months Ended

Jun. 30, 2023

Warrants [Abstract]

Warrants

Warrants

Common Stock Warrants Assumed in Business Combination

As part of GCAC’s initial public offering, 8,625,000 Public Warrants were sold. Each Public Warrant allows the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustments. The Public Warrants may be exercised only for a whole number of shares of common stock. The Public Warrants will expire five years after the completion of the Business Combination, or earlier upon redemption or liquidation. The Public Warrants are listed on Nasdaq under the symbol “CPTNW”.

The Company may redeem the Public Warrants when exercisable, in whole and not in part, at a price of $0.01 per warrant, so long as the Company provides not less than 30 days’ prior written notice of redemption to each warrant holder, and only if the reported last sale of common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the warrant holders.

Simultaneously with GCAC’s initial public offering, GCAC consummated a private placement of 5,175,000 Private Placement Warrants with the Sponsor. The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of common stock issuable upon exercise will not be transferable, assignable or salable until 30 days after the completion of the Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are non-redeemable so long as they are held by the initial purchasers or such purchaser’s permitted transferees. If the Private Placement Warrants are held by someone other than the initial stockholders or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

The Company concluded the Private Placement Warrants meet the criteria for liability classification due to the existence of a settlement provision that adjusts the settlement amount based on who the holder of the warrant is (i.e., permitted vs. non-

permitted transferees). This provision causes the Private Placement Warrants to not be indexed to the Company’s own shares, resulting in liability classification. Upon consummation of the Business Combination, the fair value of the Private Placement Warrants was recorded at a value of approximately $2.6 million. The fair value of the Private Placement Warrants was remeasured on June 30, 2023 at $0.3 million. For each of the three and six months ended June 30, 2023, the Company recorded immaterial amounts in the condensed consolidated statement of operations and comprehensive income (loss) for the change in fair value of the liability. For the three and six months ended June 30, 2022, the Company recorded a gain of $1.9 million and $2.0 million, respectively, in the condensed consolidated statement of operations and comprehensive income (loss) for the change in fair value of the liability.

Common Stock Warrants Issued with Borrowings

In August 2019, Legacy Cepton entered into a loan and security agreement (“2019 Loan Agreement”) with Silicon Valley Bank (“SVB”) that allowed for borrowings of up to $5.0 million under a term loan through July 31, 2020. The term loan was repaid in February 2020. In connection with the 2019 Loan Agreement, Legacy Cepton issued detachable warrants to purchase an aggregate of 60,000 shares of common stock. The warrant was recorded to additional paid-in capital at an estimated fair value of $0.1 million as determined by the Black-Scholes valuation model. Immediately prior to the consummation of the Business Combination, the 60,000 warrants were net exercised and subsequently converted into 136,994 shares of common stock.

On January 4, 2022, in connection with the Trinity Loan Agreement, Legacy Cepton issued a warrant to purchase 96,998 shares of common stock with an exercise price of $16.89 per share. The warrant was immediately exercisable and expires on January 4, 2032. The Company concluded the warrant meets the criteria for liability classification due to the existence of contingent settlement provisions that could result in holders receiving differing amounts of shares depending on the Company’s stock price or the price paid in a change of control. Because the settlement is not solely determined by the share price of the Company (that is, the share price observed in or implied by a qualifying change-in-control event), but also by the occurrence of a qualifying change-in-control event, this causes the warrant to not be indexed to the Company’s own shares, resulting in liability classification. The fair value of the warrant was initially estimated to be $1.3 million using the Black-Scholes valuation model. Immediately prior to the consummation of the Business Combination, the 96,998 warrants were net exercised and subsequently converted into 73,741 shares of common stock. For the six months ended June 30, 2022, the Company recorded a gain of $0.7 million in the condensed consolidated statement of operations and comprehensive income (loss) for the exercise of warrants.

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Income Taxes

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company conducts its business globally and its operating income is subject to varying rates of tax in the U.S., Canada, Germany, Hong Kong, Japan, China, and the United Kingdom. Consequently, the Company’s effective tax rate is dependent upon the geographic distribution of its earnings or losses and the tax laws and regulations in each geographical region.

The Company’s provision for income taxes was immaterial for each of the three and six months ended June 30, 2023 and 2022. The Company continues to maintain a full valuation allowance against its U.S. federal and state deferred tax assets.

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Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

Leases

The Company leases office and manufacturing facilities under non-cancelable operating leases expiring at various dates through April 2028. The Company’s lease agreements do not contain any material terms and conditions of residual value guarantees or material restrictive covenants. The Company adopted ASU 2016-02, Leases (Topic 842) using the modified retrospective method on January 1, 2022.

The Company determines if an arrangement is or contains a lease at inception. 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. Variable lease payments are defined as payments made for the right to use an asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time. Any variable

lease components are expensed as incurred. The operating lease right-of-use assets also include adjustments related to prepaid or deferred lease payments and lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term.

The components of lease expense for the three and six months ended June 30, 2023 and 2022 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating lease cost	$	803	$	377	$	1,468	$	743
Variable lease cost	203		208		408		420
Total operating lease cost	$	1,006	$	585	$	1,876	$	1,163

Supplemental cash flow information for the six months ended June 30, 2023 and 2022 related to leases was as follows (in thousands):

	Six Months Ended June 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Cash paid for operating leases included in operating activities	$	984	$	888
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	11,190	$	1,789

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

	June 30, 2023		December 31, 2022
Operating lease right-of-use assets:
Operating lease right-of-use assets, current	$	—	$	121
Operating lease right-of-use assets, non-current	10,862		324
Total operating lease right-of-use assets	$	10,862	$	445
Operating lease liabilities:
Operating lease liabilities, current	$	1,697	$	211
Operating lease liabilities, non-current	9,696		281
Total operating lease liabilities	$	11,393	$	492

The non-current portion of the operating lease right-of-use assets was recorded in other assets in the condensed consolidated balance sheets.

Weighted-average remaining term and discount rates were as follows (term in years):

	June 30, 2023		December 31, 2022
Weighted-average remaining lease term	4.76		3.06
Weighted-average discount rate	14.48	%	13.78	%

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

Year Ending December 31,
2023	$	1,580
2024	3,250
2025	3,328
2026	3,324
Thereafter	4,215
Total undiscounted lease payments	$	15,697
Present value adjustment for minimum lease commitments	(4,304)
Net lease liabilities	$	11,393

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

From time to time, the Company may be involved in various legal claims, litigation and other matters that arise in the normal course of its operations. Although there can be no assurances and the outcome of these matters is currently not determinable, the Company currently believes that none of these claims, actions or proceedings are likely to have a material adverse effect on the Company’s financial position.

The Company records accruals for our outstanding legal proceedings, investigations or claims when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. The Company evaluated developments in legal proceedings, investigations or claims that could affect the amount of any accrual, as well as any developments that would result in a loss contingency to become both probable and reasonably estimable. There were no material accruals for loss contingencies associated with such legal claims, actions or litigation as of June 30, 2023.

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Related Party Transactions

6 Months Ended

Jun. 30, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Investment Agreement and Investor Rights Agreement with Koito

On October 27, 2022, the Company entered into the Investment Agreement with Koito pursuant to which, among other things, at the closing of the transactions, and based on the terms and subject to the conditions set forth therein, the Company issued and sold to Koito 100,000 shares of Preferred Stock for a purchase price of $100.0 million. The issuance and sale of the Preferred Stock and related matters were approved by the Company’s stockholders on January 11, 2023, and the Preferred Stock issued to Koito on January 19, 2023. See Note 10 to the condensed consolidated financial statements in this Report for further information. At the closing of the issuance of the Preferred Stock, the Company and Koito entered into the Investor Rights Agreement (the “Investor Rights Agreement”), pursuant to which, among other things, the Company ensured that two designees of Koito sat on the Company’s board of directors immediately following the closing of the Transaction. The Investor Rights Agreement also provides for certain investor consent, preemptive, registration, and termination rights, which contain certain provisions that limit the Company’s ability to access additional sources of funding without Koito’s consent.

Secured Term Loan Agreement with Koito

Concurrently with the execution of the Investment Agreement, the Company entered into a Secured Term Loan Agreement with Koito to borrow Japanese Yen ¥5.8 billion (approximately $39.4 million). On January 24, 2023, the Company repaid all outstanding principal and accrued interest under the Secured Term Loan Agreement. See Note 9 to the condensed consolidated financial statements in this Report for further information.

Transactions with Koito

Koito is an automotive tier 1 partner and investor of the Company. Sales to Koito were $1.2 million and $1.3 million for the three months ended June 30, 2023 and 2022, respectively. Sales to Koito were $2.1 million and $1.8 million for the six months ended June 30, 2023 and 2022, respectively. Accounts receivable from Koito were $0.8 million as of June 30, 2023 and $1.0 million as of December 31, 2022.

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Basic and Diluted Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Basic and Diluted Net Income (Loss) Per Share

Basic and Diluted Net Income (Loss) Per Share

The Company follows the two-class method when computing net income (loss) per common share when shares are issued that meet the definition of participating securities. The Company was in a net loss position for the three and six months ended June 30, 2023 and a net income position for the three and six months ended June 30, 2022. The Company considers its convertible preferred stock outstanding as of June 30, 2023 to be participating as holders of such securities have non-forfeitable dividend rights in the event of the declaration of a dividend for shares of common stock. When the Company is in a net loss position, the net loss attributable to common stockholders is not allocated to the convertible preferred stock under the two-class method as these securities do not have a contractual obligation to share in losses. Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of the Company’s common stock outstanding. When there is a net loss attributable to common stockholders, potentially dilutive common stock equivalents have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive.

The following table present reconciliations of the denominators of basic and diluted net (loss) income per share:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Denominator:
Weighted-average common shares outstanding – Basic (1)	157,379,175	154,108,677	157,081,027	135,160,187
Stock options to purchase common stock and RSUs (2)	—	7,722,607	—	10,027,040
Weighted-average common shares outstanding – Diluted	157,379,175	161,831,284	157,081,027	145,187,227

(1)	Includes 150,000 shares of common stock issuable to Lincoln Park in connection with the Purchase Agreement as of the three and six months ended June 30, 2022 as the shares are issuable in lieu of a commitment fee and will be issued solely as a result of the passage of time.
(2)	Includes the weighted-average unvested shares subject to repurchase of 16,748 and 23,465 as of the three and six months ended June 30, 2022, respectively.

The following common stock equivalents were excluded from the computation of diluted net (loss) income per share for the periods presented because including them would have been antidilutive:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Stock options to purchase common stock and RSUs	18,322,964	7,600,258	16,595,897	4,067,107
Preferred shares on an as-converted basis	39,423,443	—	39,423,443	—
Total	57,746,407	7,600,258	56,019,340	4,067,107

As of June 30, 2023 and 2022, 13,000,000 Earnout Shares were excluded from the table above because the shares are considered contingently issuable and the required common share price milestones were not achieved as of June 30, 2023 and 2022. As of June 30, 2023 and 2022, 13,800,000 common stock warrants were excluded from the table above as no shares were issuable under the treasury stock method of computing diluted earnings per share.

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Segments	6 Months Ended
	Jun. 30, 2023
Segment Reporting [Abstract]
Segments	SegmentsThe Company conducts its business in one operating segment that develops and produces lidar sensors for use in automotive and smart infrastructure industries. The Company’s Chief Executive Officer is the chief operating decision maker (“CODM”). The CODM allocates resources and makes operating decisions based on financial information presented on a consolidated basis, accompanied by disaggregated information about sales and gross margin by product group. The profitability of the Company’s product group is not a determining factor in allocating resources and the CODM does not evaluate profitability below the level of the consolidated company. Long-lived assets of the Company located in its country of domicile, the United States, are approximately 93%.

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Subsequent Events	6 Months Ended
	Jun. 30, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsThe Company has evaluated subsequent events from the balance sheet date through August 9, 2023, the issuance date of the condensed consolidated financial statements, and determined there are no other transactions that require additional accounting or disclosure.

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Description of Business and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Description of Business

Description of Business

Cepton, Inc., and its wholly owned subsidiaries, (collectively, the “Company”) formerly known as Growth Capital Acquisition Corp. (“GCAC”), was originally incorporated in Delaware on January 4, 2010, under the name PinstripesNYS, Inc. GCAC changed its name to Growth Capital Acquisition Corp. on February 14, 2020. GCAC was a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more target businesses. On February 2, 2021, the Company consummated its initial public offering (the “IPO”), following which its shares began trading on the Nasdaq Stock Market (“Nasdaq”). On August 4, 2021, GCAC entered into a Business Combination Agreement (as amended, the “Merger Agreement”) with Cepton Technologies, Inc. (“Legacy Cepton”) and GCAC Merger Sub Inc., a wholly owned subsidiary of GCAC (“Merger Sub”). On February 10, 2022 (the “Closing Date”), the transactions contemplated by the Merger Agreement (the “Business Combination”) were consummated. In connection with the closing of the Business Combination, GCAC changed its name to Cepton, Inc. and its shares and public warrants began trading on Nasdaq under the symbols “CPTN” and “CPTNW”, respectively. As a result of the Business Combination, Cepton, Inc. became the owner, directly or indirectly, of all of the equity interests of Legacy Cepton and its subsidiaries.

The Company provides state-of-the-art, intelligent, lidar-based solutions for a range of markets such as automotive, smart cities, smart spaces, and smart industrial applications. The Company’s patented lidar technology enables reliable, scalable, and cost-effective solutions that deliver long range, high resolution 3D perception for smart applications. The Company is headquartered in San Jose, California, USA, with a presence in Germany, Canada, Japan, China and India.

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the accounts of the Company's wholly owned subsidiaries in Canada, Germany, Japan, China and the United Kingdom. All intercompany balances and transactions have been eliminated in consolidation.

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. As of June 30, 2023, the Company had cash and cash equivalents of $32.6 million, short-term investments of $37.0 million, and an accumulated deficit of $115.0 million. During the six months ended June 30, 2023, the Company incurred an operating loss of $29.2 million and had negative cash flows from operating activities of $21.2 million. Although much of the negative cash flow resulted from expenses for research and development projects and administrative expenses to support growth of the Company, the Company expects to continue to invest in research and development and generate operating losses in the future.

The Company is subject to risks and uncertainties frequently encountered by early-stage companies including, but not limited to, the uncertainty of successfully developing its products, securing certain contracts, building its customer base, successfully executing its business and marketing strategy and hiring appropriate personnel.

To date, the Company has been funded primarily by equity financings, convertible promissory notes, and the net proceeds received through the Business Combination, PIPE Investment (as defined below), and private placements of the Legacy Cepton convertible preferred stock. Failure to generate sufficient revenues, achieve planned gross margins and operating profitability, control operating costs, or secure additional funding may require the Company to modify, delay, or abandon some of its planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results, financial condition, and ability to achieve its intended business objectives.

Concentration of Risk

Concentration of Risk

Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. The Company maintains a substantial portion of its cash and cash equivalents and short-term investments in money market funds, commercial paper, corporate debt securities, U.S. treasury securities, and U.S. government agency securities. Management believes that the financial institutions that hold its

cash, cash equivalents, and short-term investments are financially sound and, accordingly, represent minimal credit risk. Deposits held with banks may exceed the amount of federal insurance limits provided on such deposits.

Use of Estimates

Use of EstimatesThe preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, inventory valuation and reserves, warranty reserves, valuation allowance for deferred tax assets, valuation of earnout and warrant liabilities, stock-based compensation, useful lives of property, plant and equipment, income tax uncertainties, and other loss contingencies. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates, and such differences could be material to the Company’s condensed consolidated financial condition and results of operations.

Product Warranties

Product Warranties The Company typically provides a one-year warranty on its products. Estimated future warranty costs are accrued and charged to cost of goods sold in the period that the related revenue is recognized. These estimates are derived from historical data and trends of product reliability and costs of repairing and replacing defective products. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Through June 30, 2023, there were immaterial changes to the accrued warranty liability which was recorded in accrued expenses and other current liabilities on the condensed consolidated balance sheet.

Reclassifications

Reclassifications

Certain reclassifications have been made to prior-period amounts to conform to current-period reporting classifications.

The condensed consolidated statements of convertible preferred stock and stockholders’ equity (deficit) included in this Report for the six months ended June 30, 2022 differ from our previously filed Quarterly Report on Form 10-Q for the six months ended June 30, 2022 by reflecting the immaterial error correction for the misclassification of $1.6 million from prepaid expenses and other current assets to additional paid-in capital for the Lincoln Park Capital Fund, LLC (“Lincoln Park” or “LPC”) commitment fee obligation as of June 30, 2022. The Company corrected the error in the condensed consolidated financial statements for the nine months ended September 30, 2022. The Company believes the correction of the error is immaterial to the previously issued condensed consolidated financial statements for prior periods.

Recently Adopted and Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Standards Accounting Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which significantly changes the way entities recognize credit losses and impairment of financial assets recorded at amortized cost. Currently, the credit loss and impairment model for loans and leases is based on incurred losses, and investments are recognized as impaired when there is no longer an assumption that future cash flows will be collected in full under the originally contracted terms. Under the new current expected credit loss (“CECL”) model, the standard requires immediate recognition of estimated credit losses expected to occur over the remaining life of the asset. As the

Company is an emerging growth company, the standard will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted this standard on January 1, 2023 utilizing the modified retrospective method, and the adoption did not have a material impact on its condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity’s financial statements, and information about events, conditions, and circumstances that can affect how to assess the amount or timing of an entity’s future cash flows related to those instruments. The guidance is effective for interim and annual periods beginning after December 15, 2023 for smaller reporting companies. The Company is currently evaluating the potential impact on its condensed consolidated financial statements and related disclosures from the adoption of this standard.

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Description of Business and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Schedule of total revenue

Customers with revenue equal to or greater than 10% of total revenue for the periods indicated were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Customer A	44	%	50	%	49	%	43	%
Customer B	52	%	—	%	34	%	—	%
Customer C	—	%	25	%	—	%	26	%

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Revenue (Tables)

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of total revenue disaggregated by geographic region

The Company disaggregates its revenue from contracts with customers by country of domicile based on the shipping location of the customer. Total revenue disaggregated by country of domicile is as follows (dollars in thousands):

	Three Months Ended June 30,
	2023				2022
	Revenue		% of Revenue		Revenue		% of Revenue
Revenue by country of domicile:
Japan	$	1,265	45	%	$	1,462	58	%
United States	1,466		53	%	880		34	%
Other	56		2	%	217		8	%
Total	$	2,787	100	%	$	2,559	100	%

	Six Months Ended June 30,
	2023				2022
	Revenue		% of Revenue		Revenue		% of Revenue
Revenue by country of domicile:
Japan	$	2,312	54	%	$	2,264	56	%
United States	1,570		37	%	1,493		37	%
Other	390		9	%	287		7	%
Total	$	4,272	100	%	$	4,044	100	%

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Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of assets measured at fair value on a recurring basis

The following tables summarize the Company's assets and liabilities measured at fair value on a recurring basis, by level, within the fair value hierarchy (in thousands):

	June 30, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market fund	$	1,502	$	—	$	—	$	1,502
Total cash equivalents	$	1,502	$	—	$	—	$	1,502
Short-term investments:
Commercial paper	$	—	$	21,161	$	—	$	21,161
U.S. treasury securities	—		2,985		—		2,985
U.S. government agency securities	—		9,882		—		9,882
Corporate debt securities	—		3,008		—		3,008
Total short-term investments	$	—	$	37,036	$	—	$	37,036
Total assets measured at fair value	$	1,502	$	37,036	$	—	$	38,538
Liabilities:
Warrant liability	$	—	$	310	$	—	$	310
Earnout liability	—		—		184		184
Total liabilities measured at fair value	$	—	$	310	$	184	$	494

	December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market fund	$	10,437	$	—	$	—	$	10,437
Total cash equivalents	$	10,437	$	—	$	—	$	10,437
Short-term investments:
U.S. government agency securities	$	—	$	2,493	$	—	$	2,493
Corporate debt securities	—		1,210		—		1,210
Total short-term investments	$	—	$	3,703	$	—	$	3,703
Total assets measured at fair value	$	10,437	$	3,703	$	—	$	14,140
Liabilities:
Warrant liability	$	—	$	440	$	—	$	440
Earnout liability	—		—		920		920
Total liabilities measured at fair value	$	—	$	440	$	920	$	1,360

Fair Value, Liabilities Measured on Recurring Basis

Changes in Level 3 liabilities related to earnout liability measured at fair value for the six months ended June 30, 2023 (in thousands):

	Six Months Ended June 30, 2023
Balance as of December 31, 2022	$	920
Gain on change in fair value of earnout liability	(736)
Balance as of June 30, 2023	$	184

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Inventories (Tables)

6 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

Schedule of inventories

Inventories consist of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Raw materials	$	2,210	$	1,179
Work-in-process	1,188		1,141
Finished goods	790		665
Total inventories	$	4,188	$	2,985

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Prepaid Expenses and Other Current Assets (Tables)

6 Months Ended

Jun. 30, 2023

Prepaid Expense and Other Assets, Current [Abstract]

Schedule of prepaid expense and other current assets

Prepaid expenses and other current assets consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Prepaid insurance	$	1,972	$	2,533
Other prepaid expenses	1,186		1,376
Deferred transaction costs	—		993
Payroll tax receivable	—		865
Other current assets	169		505
Total prepaid expenses and other current assets	$	3,327	$	6,272

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Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Property and equipment, net, consists of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Machinery and equipment	$	2,680	$	1,445
Automobiles	101		101
Leasehold improvements	235		189
Computer and equipment	116		116
Total property and equipment	3,132		1,851
Less: accumulated depreciation and amortization	(1,104)		(869)
Total property and equipment, net	$	2,028	$	982

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Accrued Expenses and Other Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Schedule of accrued expenses

Accrued expenses and other current liabilities consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Accrued payroll	$	1,477	$	1,300
Accrued expenses and taxes	1,012		375
Deferred revenue	484		525
Warranty reserve	83		65
Total accrued expenses and other current liabilities	$	3,056	$	2,265

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Convertible Preferred Stock (Tables)

6 Months Ended

Jun. 30, 2023

Temporary Equity [Abstract]

Schedule of Convertible Preferred Stock

The authorized, issued, and outstanding shares of Convertible Preferred Stock, and liquidation preferences prior to February 10, 2022 were as follows:

	Issuance Date	Shares Authorized	Shares Issued and Outstanding	Original Issue Price per Share		Aggregate Liquidation Preference
Series A	July 6, 2016	8,000,000	8,000,000	$	1.0000	$	8,000,000
Series B	July 13, 2018	4,069,600	4,069,600	$	6.2500	25,435,000
Series B-1	July 13, 2018	3,272,475	3,272,475	$	3.1250	10,226,484
Series C	February 4, 2020	7,463,934	6,329,416	$	8.3736	52,999,998
		22,806,009	21,671,491			$	96,661,482

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of employee and nonemployee stock option activity

A summary of the Company’s employee and nonemployee stock option activity for the six months ended June 30, 2023 is presented below:

	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contract Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2022	14,261,984	$	2.14	6.5	$	6,486
Granted	45,000	$	0.37
Exercised	(128,923)	$	0.10
Expired/Forfeited	(514,617)	$	3.07
Outstanding as of June 30, 2023	13,663,444	$	2.12	6.1	$	1,454
Exercisable as of June 30, 2023	10,877,597	$	1.62	5.6	$	1,448
Vested and expected to vest as of June 30, 2023	13,663,444	$	2.12	6.1	$	1,454

Schedule of stock based compensation expense related to options granted to employees and non employees

For the three and six months ended June 30, 2023 and 2022, the Company recorded stock-based compensation expense as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of revenue	$	44	$	60	$	104	$	103
Research and development expense	1,193		1,152		2,370		1,981
Selling, general and administrative expense	1,128		1,027		2,180		1,502
Total stock-based compensation expense	$	2,365	$	2,239	$	4,654	$	3,586

Share-Based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity

A summary of the Company’s RSU activity for the six months ended June 30, 2023 is presented below:

	Shares	Weighted Grant Date Fair Value
Outstanding as of December 31, 2022	4,708,692	$	2.57
Granted	4,383,166	$	1.08
Released	(1,538,061)	$	2.67
Forfeited	(492,959)	$	1.74
Outstanding as of June 30, 2023	7,060,838	$	1.68

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Earnout Liability (Tables)

6 Months Ended

Jun. 30, 2023

Disclosure Of Earnout Liability [Abstract]

Schedule of assumptions used in estimating the fair value of the earnout liability

The following table summarizes the assumptions used in estimating the fair value of the earnout liability at each of the relevant periods:

	June 30, 2023			December 31, 2022
Current stock price	$	0.49		$	1.27
Expected volatility	106.0		%	79.0		%
Risk-free interest rate	5.10		%	4.42		%
Expected term (in years)	1.6			2.1
Expected dividend yield	0		%	0		%

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Leases (Tables)

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Schedule of components of lease expense

The components of lease expense for the three and six months ended June 30, 2023 and 2022 were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating lease cost	$	803	$	377	$	1,468	$	743
Variable lease cost	203		208		408		420
Total operating lease cost	$	1,006	$	585	$	1,876	$	1,163

Schedule of supplemental cash flow information

Supplemental cash flow information for the six months ended June 30, 2023 and 2022 related to leases was as follows (in thousands):

	Six Months Ended June 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Cash paid for operating leases included in operating activities	$	984	$	888
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	11,190	$	1,789

Schedule of supplemental balance sheet information related to leases

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

	June 30, 2023		December 31, 2022
Operating lease right-of-use assets:
Operating lease right-of-use assets, current	$	—	$	121
Operating lease right-of-use assets, non-current	10,862		324
Total operating lease right-of-use assets	$	10,862	$	445
Operating lease liabilities:
Operating lease liabilities, current	$	1,697	$	211
Operating lease liabilities, non-current	9,696		281
Total operating lease liabilities	$	11,393	$	492

Schedule of weighted average remaining term and discount rates

Weighted-average remaining term and discount rates were as follows (term in years):

	June 30, 2023		December 31, 2022
Weighted-average remaining lease term	4.76		3.06
Weighted-average discount rate	14.48	%	13.78	%

Schedule of maturities of lease liabilities

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

Year Ending December 31,
2023	$	1,580
2024	3,250
2025	3,328
2026	3,324
Thereafter	4,215
Total undiscounted lease payments	$	15,697
Present value adjustment for minimum lease commitments	(4,304)
Net lease liabilities	$	11,393

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Basic and Diluted Net Income (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of denominators of basic and diluted net income (loss) per share

The following table present reconciliations of the denominators of basic and diluted net (loss) income per share:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Denominator:
Weighted-average common shares outstanding – Basic (1)	157,379,175	154,108,677	157,081,027	135,160,187
Stock options to purchase common stock and RSUs (2)	—	7,722,607	—	10,027,040
Weighted-average common shares outstanding – Diluted	157,379,175	161,831,284	157,081,027	145,187,227

(1)	Includes 150,000 shares of common stock issuable to Lincoln Park in connection with the Purchase Agreement as of the three and six months ended June 30, 2022 as the shares are issuable in lieu of a commitment fee and will be issued solely as a result of the passage of time.
(2)	Includes the weighted-average unvested shares subject to repurchase of 16,748 and 23,465 as of the three and six months ended June 30, 2022, respectively.

Schedule of diluted net income (loss) per share

The following common stock equivalents were excluded from the computation of diluted net (loss) income per share for the periods presented because including them would have been antidilutive:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Stock options to purchase common stock and RSUs	18,322,964	7,600,258	16,595,897	4,067,107
Preferred shares on an as-converted basis	39,423,443	—	39,423,443	—
Total	57,746,407	7,600,258	56,019,340	4,067,107

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Description of Business and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items]
Cash and cash equivalents	$ 32,605			$ 32,605		$ 31,953
Short-term investment	37,000			37,000
Accumulated deficit	114,991			114,991		86,059
Operating loss	15,116		$ 16,098	29,159	$ 31,662
Cash flow used in operating activities				$ 21,240	32,274
Product warranty, term				1 year
Prepaid expenses and other current assets	(3,327)			$ (3,327)		(6,272)
Additional paid-in capital	$ 92,648			$ 92,648		$ 88,056
Adjustment
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items]
Prepaid expenses and other current assets			1,600		1,600
Additional paid-in capital			$ 1,600		$ 1,600
Accounts Receivable | Customer Concentration Risk | Two Customers
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items]
Concentration risk		10.00%
Accounts Receivable | Customer Concentration Risk | Three Customers
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items]
Concentration risk	10.00%

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Description of Business and Summary of Significant Accounting Policies - Schedule of total revenue (Details) - Revenue Benchmark - Customer Concentration Risk	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Customer A
Revenue, Major Customer [Line Items]
Concentration risk	44.00%	50.00%	49.00%	43.00%
Customer B
Revenue, Major Customer [Line Items]
Concentration risk	52.00%	0.00%	34.00%	0.00%
Customer C
Revenue, Major Customer [Line Items]
Concentration risk	0.00%	25.00%	0.00%	26.00%

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Business Combination (Details) $ / shares in Units, $ in Millions			6 Months Ended
	Feb. 10, 2022 USD ($) $ / shares shares	Feb. 02, 2021 $ / shares	Jun. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2022 USD ($)	Dec. 31, 2022 $ / shares	Feb. 09, 2022 USD ($) shares
Business Acquisition [Line Items]
Common stock, par value (in Dollars per share) | $ / shares	$ 0.00001		$ 0.00001		$ 0.00001
Exchange ratio	2.449
Capital stock, authorized (in shares) | shares	355,000,000
Common stock, shares authorized (in shares) | shares	350,000,000		350,000,000
Preferred stock, shares authorized (in shares) | shares	5,000,000
Preferred stock, par value (in Dollars per share) | $ / shares					$ 0.00001
Common stock, conversion (in shares) | shares	1
Common stock, shares subscription (in shares) | shares	5,950,000
Purchase price per share (in Dollars per share) | $ / shares	$ 10.00
Common stock | $	$ 59.5
Common stock shares outstanding (in shares) | shares						15,589,540
Exercise price per share (in Dollars per share) | $ / shares	$ 1.27		$ 0.49
Warrant, non-transferable or assignable period		30 days	30 days
Expire term		5 years
Direct and incremental cost | $				$ 31.7
Transaction costs | $	$ 2.6		$ 0.0
Proceeds from divestiture of businesses | $	76.1
Transaction costs | $	$ 40.7
Warrant
Business Acquisition [Line Items]
Exercise price per share (in Dollars per share) | $ / shares		$ 11.50
Class A Stock
Business Acquisition [Line Items]
Common stock, par value (in Dollars per share) | $ / shares	$ 0.0001
Common stock, shares outstanding value | $						$ 155.9

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Revenue - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Contract liabilities	$ 0.5	$ 0.5

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Revenue - Schedule of total revenue disaggregated by geographic region (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenue by country of domicile:
Revenue	$ 2,787	$ 2,559	$ 4,272	$ 4,044
% of Revenue	100.00%	100.00%	100.00%	100.00%
Japan
Revenue by country of domicile:
Revenue	$ 1,265	$ 1,462	$ 2,312	$ 2,264
% of Revenue	45.00%	58.00%	54.00%	56.00%
United States
Revenue by country of domicile:
Revenue	$ 1,466	$ 880	$ 1,570	$ 1,493
% of Revenue	53.00%	34.00%	37.00%	37.00%
Other
Revenue by country of domicile:
Revenue	$ 56	$ 217	$ 390	$ 287
% of Revenue	2.00%	8.00%	9.00%	7.00%

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Fair Value Measurement - Schedule of assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jan. 04, 2022
Cash equivalents:
Total cash equivalents	$ 1,502	$ 10,437
Short-term investments:
Total short-term investments	37,036	3,703
Total assets measured at fair value	38,538	14,140
Liabilities:
Warrant liability	310	440	$ 1,300
Earnout liability	184	920
Total liabilities measured at fair value	494	1,360
Commercial paper
Short-term investments:
Total short-term investments	21,161
U.S. treasury securities
Short-term investments:
Total short-term investments	2,985
U.S. government agency securities
Short-term investments:
Total short-term investments	9,882	2,493
Corporate debt securities
Short-term investments:
Total short-term investments	3,008	1,210
Money market fund
Cash equivalents:
Total cash equivalents	1,502	10,437
Level 1
Cash equivalents:
Total cash equivalents	1,502	10,437
Short-term investments:
Total short-term investments	0	0
Total assets measured at fair value	1,502	10,437
Liabilities:
Warrant liability	0	0
Earnout liability	0	0
Total liabilities measured at fair value	0	0
Level 1 | Commercial paper
Short-term investments:
Total short-term investments	0
Level 1 | U.S. treasury securities
Short-term investments:
Total short-term investments	0
Level 1 | U.S. government agency securities
Short-term investments:
Total short-term investments	0	0
Level 1 | Corporate debt securities
Short-term investments:
Total short-term investments	0	0
Level 1 | Money market fund
Cash equivalents:
Total cash equivalents	1,502	10,437
Level 2
Cash equivalents:
Total cash equivalents	0	0
Short-term investments:
Total short-term investments	37,036	3,703
Total assets measured at fair value	37,036	3,703
Liabilities:
Warrant liability	310	440
Earnout liability	0	0
Total liabilities measured at fair value	310	440
Level 2 | Commercial paper
Short-term investments:
Total short-term investments	21,161
Level 2 | U.S. treasury securities
Short-term investments:
Total short-term investments	2,985
Level 2 | U.S. government agency securities
Short-term investments:
Total short-term investments	9,882	2,493
Level 2 | Corporate debt securities
Short-term investments:
Total short-term investments	3,008	1,210
Level 2 | Money market fund
Cash equivalents:
Total cash equivalents	0	0
Level 3
Cash equivalents:
Total cash equivalents	0	0
Short-term investments:
Total short-term investments	0	0
Total assets measured at fair value	0	0
Liabilities:
Warrant liability	0	0
Earnout liability	184	920
Total liabilities measured at fair value	184	920
Level 3 | Commercial paper
Short-term investments:
Total short-term investments	0
Level 3 | U.S. treasury securities
Short-term investments:
Total short-term investments	0
Level 3 | U.S. government agency securities
Short-term investments:
Total short-term investments	0	0
Level 3 | Corporate debt securities
Short-term investments:
Total short-term investments	0	0
Level 3 | Money market fund
Cash equivalents:
Total cash equivalents	$ 0	$ 0

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Fair Value Measurement - Schedule of changes in Fair Value of Earnout Liability (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain on change in fair value of earnout liability	$ (15,600)	$ (700)	$ (72,300)
Earnout Liability
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance as of December 31, 2022		920
Gain on change in fair value of earnout liability		(736)
Balance as of June 30, 2023		$ 184

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Inventories - Schedule of inventories (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 2,210	$ 1,179
Work-in-process	1,188	1,141
Finished goods	790	665
Total inventories	4,188	$ 2,985
Inventory write-down	$ 300

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Prepaid Expenses and Other Current Assets (Details) - Schedule of prepaid expense and other current assets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Prepaid Expense and Other Assets, Current [Abstract]
Other prepaid expenses	$ 1,186	$ 1,376
Prepaid insurance	0	993
Deferred transaction costs	0	865
Payroll tax receivable	1,972	2,533
Other current assets	169	505
Total prepaid expenses and other current assets	$ 3,327	$ 6,272

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Property and Equipment, Net (Details) - Schedule of property and equipment - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property, and equipment	$ 3,132	$ 1,851
Less: accumulated depreciation and amortization	(1,104)	(869)
Total property and equipment, net	2,028	982
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, and equipment	2,680	1,445
Automobiles
Property, Plant and Equipment [Line Items]
Property, and equipment	101	101
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, and equipment	235	189
Computer and equipment
Property, Plant and Equipment [Line Items]
Property, and equipment	$ 116	$ 116

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Property and Equipment, Net - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation	$ 0.1	$ 0.2	$ 0.1

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Accrued Expenses and Other Current Liabilities - Schedule of accrued expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Deferred revenue	$ 484	$ 525
Warranty reserve	83	65
Total accrued expenses and other current liabilities	3,056	2,265
Employee-related Liabilities	1,477	1,300
Accrued payroll	$ 1,012	$ 375

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Debt (Details) $ / shares in Units, $ in Thousands, ¥ in Millions					3 Months Ended		6 Months Ended
	Jan. 24, 2023 USD ($)	Nov. 07, 2022	Oct. 27, 2022 USD ($) businessDay	Jan. 04, 2022 USD ($) $ / shares shares	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Oct. 27, 2022 JPY (¥)
Short-Term Debt [Line Items]
Aggregate warrants to purchase of shares (in shares) | shares				96,998
Exercise price (in dollars per share) | $ / shares				$ 16.89
Warrants fair value				$ 1,300	$ 310		$ 310		$ 440
Interest expense						$ 700		$ 1,400
Loss from extinguishment of debt	$ 1,100				$ 0	$ 0	1,123	$ 0
Koito
Short-Term Debt [Line Items]
Foreign currency transaction loss	$ 800
Secured Debt | Koito
Short-Term Debt [Line Items]
Interest expense							$ 300
Secured Debt | Secured Debt | Koito
Short-Term Debt [Line Items]
Debt instrument, face amount			$ 39,400							¥ 5,800
Interest rate			1.00%							1.00%
Debt discount			$ 2,000
Trinity Loan Agreement | Loans Payable
Short-Term Debt [Line Items]
Interest rate				10.75%
Prepayment penalty		1.50%
End of term payment		2.50%
Trinity Loan Agreement | Prime Rate | Loans Payable
Short-Term Debt [Line Items]
Variable interest rate				7.00%
Trinity Loan Agreement | Loans Payable
Short-Term Debt [Line Items]
Debt instrument, face amount				$ 25,000
Borrowings				10,000
Debt discount				$ 300
Secured Term Loan Agreement | Secured Debt
Short-Term Debt [Line Items]
Loan maturity, after investment agreement close | businessDay			3

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Convertible Preferred Stock - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands					3 Months Ended			6 Months Ended		19 Months Ended
	Jan. 19, 2023	Oct. 27, 2022	Aug. 09, 2022	Nov. 24, 2021	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Dec. 31, 2022	Mar. 31, 2022	Feb. 10, 2022	Feb. 09, 2022	Dec. 31, 2021
Temporary Equity [Line Items]
Convertible preferred stock, par value (in Dollars per share)		$ 0.00001			$ 0.00001			$ 0.00001		$ 0.00001	$ 0.00001			$ 0.00001
Convertible preferred stock, shares outstanding (in shares)					100,000	100,000	0	100,000	0	100,000	0	0	21,671,491	21,671,491	21,671,491
Convertible preferred stock, shares issued (in shares)					100,000			100,000		100,000	0		21,671,491	21,671,491
Issuance of convertible preferred stock, net of transaction costs (in shares)						100,000
Consideration to be received on transaction							$ 226
Incremental expenses	$ 1,100
Convertible preferred stock, shares authorized (in shares)					5,000,000			5,000,000		5,000,000	5,000,000			22,806,009
Convertible preferred stock, liquidation preference					$ 101,900			$ 101,900		$ 101,900
Conversion price (in Dollars per share)		$ 2.585
Optional redemption, advanced notification period		30 days
Optional redemption, period to repurchase		2 years
Optional redemption, net income requirement period		5 years
Optional redemption, related party redemption period		7 years
Preferred stock, put right, conversion		110.00%
Preferred stock, fundamental change, voting power		50.00%
Preferred stock, fundamental change, agreements exceeding		10.00%
Class A Stock
Temporary Equity [Line Items]
Common stock issued upon conversion (in shares)													53,078,571
Class A Stock | Purchase Agreement
Temporary Equity [Line Items]
Shares issued in transaction (in shares)			150,000	50,000	0		21,186	0	21,186	1,142,505
Warrants | Purchase Agreement
Temporary Equity [Line Items]
Issuance of convertible preferred stock, net of transaction costs (in shares)		100,000
Consideration to be received on transaction		$ 100,000
Preferred stock, paid-in-kind, dividend rate	4.25%
Preferred stock, dividend rate	3.25%

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Convertible Preferred Stock (Details) - Schedule of convertible preferred stock - USD ($)	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Feb. 10, 2022	Feb. 09, 2022	Dec. 31, 2021
Conversion of Stock [Line Items]
Convertible preferred stock, shares authorized (in shares)	5,000,000		5,000,000				22,806,009
Convertible preferred stock, shares outstanding (in shares)	100,000	100,000	0	0	0	21,671,491	21,671,491	21,671,491
Convertible preferred stock, shares issued (in shares)	100,000		0			21,671,491	21,671,491
Convertible preferred stock, aggregate liquidation preference	$ 101,900,000						$ 96,661,482
Series A
Conversion of Stock [Line Items]
Convertible preferred stock, shares authorized (in shares)							8,000,000
Convertible preferred stock, shares outstanding (in shares)							8,000,000
Convertible preferred stock, shares issued (in shares)							8,000,000
Original Issue Price per Share (in Dollars per share)							$ 1.0000
Convertible preferred stock, aggregate liquidation preference							$ 8,000,000
Series B
Conversion of Stock [Line Items]
Convertible preferred stock, shares authorized (in shares)							4,069,600
Convertible preferred stock, shares outstanding (in shares)							4,069,600
Convertible preferred stock, shares issued (in shares)							4,069,600
Original Issue Price per Share (in Dollars per share)							$ 6.2500
Convertible preferred stock, aggregate liquidation preference							$ 25,435,000
Series B-1
Conversion of Stock [Line Items]
Convertible preferred stock, shares authorized (in shares)							3,272,475
Convertible preferred stock, shares outstanding (in shares)							3,272,475
Convertible preferred stock, shares issued (in shares)							3,272,475
Original Issue Price per Share (in Dollars per share)							$ 3.1250
Convertible preferred stock, aggregate liquidation preference							$ 10,226,484
Series C
Conversion of Stock [Line Items]
Convertible preferred stock, shares authorized (in shares)							7,463,934
Convertible preferred stock, shares outstanding (in shares)							6,329,416
Convertible preferred stock, shares issued (in shares)							6,329,416
Original Issue Price per Share (in Dollars per share)							$ 8.3736
Convertible preferred stock, aggregate liquidation preference							$ 52,999,998

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Stockholders’ Equity (Deficit) (Details) $ / shares in Units, $ in Millions					3 Months Ended		6 Months Ended		19 Months Ended
	Aug. 09, 2022 shares	Feb. 10, 2022 $ / shares shares	Feb. 09, 2022 shares	Nov. 24, 2021 USD ($) salesPriceDay salesPrice shares	Jun. 30, 2023 USD ($) vote $ / shares shares	Jun. 30, 2022 shares	Jun. 30, 2023 USD ($) vote $ / shares shares	Jun. 30, 2022 shares	Jun. 30, 2023 USD ($) vote $ / shares shares	Dec. 31, 2022 $ / shares shares
Stockholders’ Equity (Deficit) (Details) [Line Items]
Common stock vote per share | vote					1		1		1
Common stock, outstanding (in shares)					158,224,189		158,224,189		158,224,189	156,747,708
Common stock, shares issued (in shares)					158,224,189		158,224,189		158,224,189	156,747,708
Conversion of stock, shares issued (in shares)			8,372,143
Common stock, shares authorized (in shares)		350,000,000			350,000,000		350,000,000		350,000,000
Common stock, par value (in Dollars per share) | $ / shares		$ 0.00001			$ 0.00001		$ 0.00001		$ 0.00001	$ 0.00001
Number of lowest closing common stock sales price | salesPrice				3
Average sales price, consecutive days | salesPriceDay				10
Commitment fee obligation period	180 days
Purchase Agreement
Stockholders’ Equity (Deficit) (Details) [Line Items]
Purchase agreement | $				$ 100.0	$ 1.7		$ 1.7		$ 1.7
Transaction period				36 months
Class A Stock
Stockholders’ Equity (Deficit) (Details) [Line Items]
Common stock, outstanding (in shares)			27,618,907
Common stock, shares issued (in shares)			27,618,907
Conversion of stock, shares issued (in shares)		67,645,189
Common stock, par value (in Dollars per share) | $ / shares		$ 0.0001
Class A Stock | Purchase Agreement
Stockholders’ Equity (Deficit) (Details) [Line Items]
Shares issued in transaction (in shares)	150,000			50,000	0	21,186	0	21,186	1,142,505
Class F Stock
Stockholders’ Equity (Deficit) (Details) [Line Items]
Common stock, outstanding (in shares)			8,372,143
Common stock, shares issued (in shares)			8,372,143
Conversion of stock, shares issued (in shares)		20,505,344
Vesting interest period							4 years

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Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended
	Feb. 10, 2022 shares	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) tradingDay tranche $ / shares shares	Jun. 30, 2022 USD ($) shares	Jul. 05, 2016 shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options, exercised, intrinsic value				$ 100
Capitalized share-based compensation		$ 41	$ 50	$ 92	$ 103
Weighted-average grant-date fair value (in Dollars per share) | $ / shares				$ 0.17
Share-Based Goods and Nonemployee Services Transaction, Modification of Terms, Incremental Compensation Cost					$ 300
2016 Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock reserved for future issuance (in shares) | shares						4,800,000
2022 Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock reserved for future issuance (in shares) | shares	15,123,142	10,281,667		10,281,667
Purchase price percent of common stock	2.00%
Restricted Stock Units (RSUs)
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unrecognized stock based compensation		$ 10,600		$ 10,600
Compensation expense recognition period				2 years 4 months 24 days
Intrinsic value		3,400		$ 3,400
Granted (in shares) | shares				4,383,166
Restricted Stock Units (RSUs) | 2022 Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Conversion of RSUs to common stock (in shares) | shares				1
Restricted Stock Units (RSUs) | Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting period				1 year
Restricted Stock Units (RSUs) | Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting period				4 years
Performance Shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Compensation expense recognition period				1 year 7 months 6 days
Granted (in shares) | shares				0	123,000
Number of tranches | tranche				2
Fair value				$ 100
Weighted average grant date fair value (in Dollars per share) | $ / shares				$ 0.98
Performance Shares | 2022 Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Conversion of RSUs to common stock (in shares) | shares				1
Performance Shares | Share-Based Payment Arrangement, Tranche One
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Granted (in shares) | shares					66,000
Threshold trading days | tradingDay				20
Consecutive trading days | tradingDay				30
Intrinsic value (in Dollars per share) | $ / shares				$ 15.00
Market capitalization		2,100,000		$ 2,100,000
Service period				21 months
Performance Shares | Share-Based Payment Arrangement, Tranche Two
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Granted (in shares) | shares					57,000
Threshold trading days | tradingDay				20
Consecutive trading days | tradingDay				30
Intrinsic value (in Dollars per share) | $ / shares				$ 17.50
Market capitalization		2,500,000		$ 2,500,000
Service period				22 months
Stock options to purchase common stock and RSUs
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unrecognized stock based compensation		$ 6,300		$ 6,300
Compensation expense recognition period				1 year 7 months 6 days

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Stock-Based Compensation - Schedule of employee and nonemployee stock option activity (Details) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares
Shares
Beginning balance (in shares) | shares	14,261,984
Granted (in shares) | shares	45,000
Exercised (in shares) | shares	(128,923)
Expired/Forfeited (in shares) | shares	(514,617)
Ending balance (in shares) | shares	13,663,444	14,261,984
Shares, Exercisable (in shares) | shares	10,877,597
Shares, Vested and expected to vest (in shares) | shares	13,663,444
Weighted Average Exercise Price
Beginning balance (in Dollars per share) | $ / shares	$ 2.14
Granted (in Dollars per share) | $ / shares	0.37
Exercised (in Dollars per share) | $ / shares	0.10
Expired/Forfeited (in Dollars per share) | $ / shares	3.07
Ending balance (in Dollars per share) | $ / shares	2.12	$ 2.14
Weighted Average Exercise Price, Exercisable (in Dollars per share) | $ / shares	1.62
Vested and expected to vest (in Dollars per share) | $ / shares	$ 2.12
Weighted Average Remaining Contract Term (in years)
Outstanding	6 years 1 month 6 days	6 years 6 months
Exercisable	5 years 7 months 6 days
Vested and expected to vest	6 years 1 month 6 days
Aggregate Intrinsic Value (in thousands)
Outstanding | $	$ 1,454	$ 6,486
Exercisable | $	1,448
Vested and expected to vest | $	$ 1,454

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Stock-Based Compensation - Schedule of Restricted Stock (Details) - $ / shares	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Weighted Grant Date Fair Value
Released (in Dollars per share)	$ 2.67
Restricted Stock Units (RSUs)
Shares
Outstanding, beginning balance (in shares)	4,708,692
Granted (in shares)	4,383,166
Released (in shares)	(1,538,061)
Forfeited (in shares)	(492,959)
Outstanding, ending balance (in shares)	7,060,838
Weighted Grant Date Fair Value
Outstanding (in Dollars per share)	$ 1.68	$ 2.57
Granted (in Dollars per share)	1.08
Forfeited (in Dollars per share)	$ 1.74

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Stock-Based Compensation (Details) - Schedule of stock based compensation expense related to options granted to employees and non employees - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	$ 2,365	$ 2,239	$ 4,654	$ 3,586
Cost of revenue
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	44	60	104	103
Research and development expense
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	1,193	1,152	2,370	1,981
Selling, general and administrative expense
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	$ 1,128	$ 1,027	$ 2,180	$ 1,502

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Earnout Liability - Narrative (Details) $ / shares in Units, $ in Thousands		3 Months Ended	6 Months Ended		8 Months Ended
	Feb. 10, 2022	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) tradingDay $ / shares shares	Jun. 30, 2022 USD ($)	Sep. 30, 2022	Dec. 31, 2022 USD ($)
Earnout Liability (Details) [Line Items]
Period of contingency			3 years
Expected dividend yield	0.00%		0.00%		0.00%
Earnout liability | $			$ 184			$ 920
Gain (loss) on earnout liability | $		$ 15,600	$ 700	$ 72,300
Class A Stock | Share Price Two
Earnout Liability (Details) [Line Items]
Trading days threshold			20
Consecutive trading days threshold			30
Period of contingency			3 years
Number of shares (in shares) | shares			6,000,000
Class A Stock | Business Combination | Share Price One
Earnout Liability (Details) [Line Items]
Exceeds price per share (in Dollars per share) | $ / shares			$ 15.00
Trading days threshold			20
Consecutive trading days threshold			30
Period of contingency			3 years
Number of shares (in shares) | shares			7,000,000
Class A Stock | Business Combination | Share Price Two
Earnout Liability (Details) [Line Items]
Exceeds price per share (in Dollars per share) | $ / shares			$ 17.50

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Earnout Liability - Schedule of assumptions used in estimating the fair value of the earnout liability (Details) - $ / shares		6 Months Ended	8 Months Ended
	Feb. 10, 2022	Jun. 30, 2023	Sep. 30, 2022
Disclosure Of Earnout Liability [Abstract]
Current stock price (in Dollars per share)	$ 1.27	$ 0.49
Expected volatility	79.00%		106.00%
Risk-free interest rate	4.42%		5.10%
Expected term (in years)	2 years 1 month 6 days		1 year 7 months 6 days
Expected dividend yield	0.00%	0.00%	0.00%

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Warrants (Details) $ / shares in Units, $ in Thousands				3 Months Ended		6 Months Ended
	Feb. 09, 2022 shares	Jan. 04, 2022 USD ($) $ / shares shares	Feb. 02, 2021	Jun. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) tradingDay $ / shares shares	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Aug. 31, 2019 USD ($) shares
Warrants (Details) [Line Items]
Warrants exercise price (in Dollars per share) | $ / shares		$ 16.89		$ 0.01		$ 0.01
Warrants, redemption notice						30 days
Warrants, trading days threshold | tradingDay						20
Warrants, consecutive trading days threshold | tradingDay						30
Warrant, non-transferable or assignable period			30 days			30 days
Warrant liability				$ 300		$ 300
Gain on change in fair value of warrant liability						(130)	$ (2,684)
Estimated fair value of additional paid-in capital									$ 100
Warrants (in shares) | shares									60,000
Aggregate warrants to purchase of shares (in shares) | shares		96,998
Warrant liability		$ 1,300		$ 310		310		$ 440
Gain on exercise of warrants						$ 700
Excess Value Of Underwriter Warrants					$ 1,900		$ 2,000
Line of Credit | 2019 Loan Agreement | Secured Debt
Warrants (Details) [Line Items]
Debt instrument, face amount									$ 5,000
IPO
Warrants (Details) [Line Items]
Sale of public warrants (in shares) | shares				8,625,000		8,625,000
Warrants , term				5 years		5 years
Class A Stock
Warrants (Details) [Line Items]
Price per share (in Dollars per share) | $ / shares				$ 18.00		$ 18.00
Common stock shares (in shares) | shares	136,994	73,741
Class A Stock | IPO
Warrants (Details) [Line Items]
Number of shares per warrant (in shares) | shares				1		1
Price per share (in Dollars per share) | $ / shares				$ 11.50		$ 11.50
Business Combination
Warrants (Details) [Line Items]
Fair value of private placement				$ 2,600		$ 2,600
Warrants (in shares) | shares									60,000
Sponsor | Purchase Agreement
Warrants (Details) [Line Items]
Private placement warrants (in shares) | shares				5,175,000

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Leases - Narrative (Details)	Jun. 30, 2023
Leases [Abstract]
Lease term	1 year

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Leases (Details) - Schedule of components of lease expense - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Leases [Abstract]
Operating lease cost	$ 803	$ 377	$ 1,468	$ 743
Variable lease cost	203	208	408	420
Total operating lease cost	$ 1,006	$ 585	$ 1,876	$ 1,163

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Leases (Details) - Schedule of supplemental cash flow information - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Cash paid for operating leases included in operating activities	$ 984	$ 888
Right of use assets obtained in exchange for lease obligations:
Operating leases	$ 11,190	$ 1,789

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Leases (Details) - Schedule of supplemental balance sheet information related to leases - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Operating lease right-of-use assets:
Operating lease right-of-use assets, current	$ 0	$ 121
Operating lease right-of-use assets, non-current	10,862	324
Total operating lease right-of-use assets	10,862	445
Operating lease liabilities:
Operating lease liabilities, current	1,697	211
Operating lease liabilities, non-current	9,696	281
Total operating lease liabilities	$ 11,393	$ 492

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Leases (Details) - Schedule of weighted average remaining term and discount rates	Jun. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Weighted average remaining lease term	4 years 9 months 3 days	3 years 21 days
Weighted average discount rate	14.48%	13.78%

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Leases (Details) - Schedule of maturities of lease liabilities $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Leases [Abstract]
2022	$ 1,580
Lessee, Operating Lease, Liability, to be Paid, Year One	3,250
Lessee, Operating Lease, Liability, to be Paid, Year Two	3,328
Lessee, Operating Lease, Liability, to be Paid, Year Three	3,324
Thereafter	4,215
Total undiscounted lease payments	15,697
Present value adjustment for minimum lease commitments	(4,304)
Net lease liabilities	$ 11,393

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Related Party Transactions (Details) $ in Thousands, ¥ in Millions			3 Months Ended		6 Months Ended
	Jan. 19, 2023 designee	Oct. 27, 2022 USD ($) shares	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Oct. 27, 2022 JPY (¥) shares
Related Party Transaction [Line Items]
Consideration to be received on transaction				$ 226
Revenue from related parties			$ 1,200	$ 1,300	$ 2,100	$ 1,800
Accounts receivable from customer and investor			$ 800		$ 800		$ 1,000
Koito
Related Party Transaction [Line Items]
Number of designees on company's board | designee	2
Secured Debt | Koito | Secured Debt
Related Party Transaction [Line Items]
Debt instrument, face amount		$ 39,400						¥ 5,800
Warrants | Purchase Agreement
Related Party Transaction [Line Items]
Preferred stock, shares subscribed (in shares) | shares		100,000						100,000
Consideration to be received on transaction		$ 100,000

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Basic and Diluted Net Income (Loss) Per Share - Schedule of denominators of basic and diluted net income (loss) per share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Feb. 09, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted-average common shares, basic (in shares)	157,379,175	154,108,677	157,081,027	135,160,187
Stock options to purchase common stock and RSUs (in shares)	0	7,722,607	0	10,027,040
Weighted-average common shares outstanding - Diluted (in shares)	157,379,175	161,831,284	157,081,027	145,187,227
Common stock, shares issued (in shares)	158,224,189		158,224,189		156,747,708
Weighted average unvested shares (in shares)		16,748		23,465
Common Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Common stock, shares issued (in shares)						27,618,907
Common Stock | Lincoln Park Transaction
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Common stock, shares issued (in shares)	150,000		150,000

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Basic and Diluted Net Income (Loss) Per Share - Schedule of diluted net income (loss) per share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	57,746,407	7,600,258	56,019,340	4,067,107
Stock options to purchase common stock and RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	18,322,964	7,600,258	16,595,897	4,067,107
Preferred shares on an as-converted basis
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	39,423,443	0	39,423,443	0

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Basic and Diluted Net Income (Loss) Per Share - Narrative (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	57,746,407	7,600,258	56,019,340	4,067,107
Earnout Shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)			13,000,000
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)			13,800,000	13,800,000

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Segments (Details) - segment	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Segments (Details) [Line Items]
Number of operating segments		1
United States
Segments (Details) [Line Items]
Long lived assets	93.00%