UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2022

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

For the transition period from to

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 IdentificationNumber)

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 Capital Market
Redeemable warrants, exercisable for common stock at an exercise price of $11.50 per share, subject to adjustment	CPTNW	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 6, 2022, 154,048,074 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”). 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 indicate 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, the potential for the Company to achieve design awards, and the potential benefits of the Business Combination (including with respect to shareholder value). 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.

Cepton, Inc.

Quarterly Report on Form 10-Q

Table of Contents

		Page No.

PART I. FINANCIAL INFORMATION
		1
Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021	1

	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2022 and 2021	2

	Unaudited Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three months ended March 31, 2022 and 2021	3

	Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021	4

	Notes to Unaudited Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4.	Controls and Procedures	34

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	73

Item 3.	Defaults Upon Senior Securities	73

Item 4.	Mine Safety Disclosures	73

Item 5.	Other Information	73

Item 6.	Exhibits	73

SIGNATURES		74

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CEPTON, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(unaudited)

	March 31,			December 31,
	2022			2021
ASSETS

Current assets:
Cash and cash equivalents	$	24,593		$	3,654
Short-term investments		20,248			2,836
Accounts receivable, net of allowance for doubtful accounts of $0 and $0, respectively		1,066			500
Inventories		2,788			2,523
Right-of-use assets		1,138			—
Prepaid expenses and other current assets		7,850			6,998
Total current assets		57,683			16,511
Property and equipment, net		546			480
Other assets		2,238			293
Total assets	$	60,467		$	17,284

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:
Accounts payable	$	2,445		$	2,547
Operating lease liabilities		1,433			—
Accrued expenses and other current liabilities		2,605			2,777
Total current liabilities		6,483			5,324
Long-term debt		9,260			—
Warrant liability		2,536			—
Earnout liability		18,320			—
Other long-term liabilities		21			23
Total liabilities		36,620			5,347

Commitments and contingencies (Note 17)

Convertible preferred stock:
Convertible preferred stock – Par value $0.00001 per share – No shares authorized at March 31, 2022; 22,806,009 shares authorized at December 31, 2021; No shares issued and outstanding at March 31, 2022; 21,671,491 shares issued and outstanding at December 31, 2021 (aggregate liquidation preference of $96.7 million at December 31, 2021)		—			99,470

Stockholders’ equity (deficit):
Preferred stock – Par value $0.00001 per share – 5,000,000 shares authorized at March 31, 2022; No shares authorized at December 31, 2021; No shares issued and outstanding at March 31, 2022 or December 31, 2021		—			—
Common stock – Par value $0.00001 per share – 350,000,000 and 75,000,000 shares authorized at March 31, 2022 and December 31, 2021; 154,048,001 and 67,645,189 shares issued and outstanding at March 31, 2022 and December 31, 2021		2			—
Class F stock – Par value $0.00001 per share – No shares of Class F stock authorized as of March 31, 2022; 8,402,000 shares authorized at December 31, 2021; No shares of Class F stock issued and outstanding as of March 31, 2022; 8,372,143 shares issued and outstanding at December 31, 2021		—			—
Additional paid-in capital		78,143			7,949
Accumulated other comprehensive income		(58	)		(43	)
Accumulated deficit		(54,240	)		(95,439	)
Total stockholders’ equity (deficit)		23,847			(87,533	)
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	60,467		$	17,284

See accompanying notes to the condensed consolidated financial statements

CEPTON, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except share and per share data)

(unaudited)

	Three Months Ended March 31,
	2022			2021
Lidar Sensor and Prototype Revenue	$	1,485		$	438

Cost of Revenue		1,252			1,119
Gross Profit (Loss)		233			(681	)

Operating expenses:
Research and development		7,754			4,880
Selling, general and administrative		8,043			2,803
Total operating expenses		15,797			7,683
Operating loss		(15,564	)		(8,364	)
Other income (expenses)
Change in fair value of earnout liability		56,678			—
Change in fair value of warrant liability		780			—
Other income (expense), net		2			2
Interest (expense) income, net		(694	)		12
Income (loss) before income taxes		41,202			(8,350	)
Provision for income taxes		(4	)		(9	)

Net income (loss)	$	41,198		$	(8,359	)

Net income (loss) per share, basic	$	0.36		$	(0.13	)
Net income (loss) per share, diluted	$	0.32		$	(0.13	)
Weighted-average common shares, basic		115,865,890			66,735,026
Weighted-average common shares, diluted		127,082,423			66,735,026

Net income (loss)	$	41,198		$	(8,359	)
Other comprehensive loss, net of tax:
Changes in unrealized loss on available-for-sale securities		(11	)		(5	)
Foreign currency translation adjustments		(4	)		(8	)
Total other comprehensive loss, net of tax		(15	)		(13	)
Comprehensive income (loss)	$	41,183		$	(8,372	)

See accompanying notes to the condensed consolidated financial statements

CEPTON, INC. AND SUBSIDIARIES

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

(In thousands, except share and per share data)

(unaudited)

Convertible
Preferred Stock

Preferred
Stock

Common
Stock

Class F
Stock

Additional
Paid-in

Accumulated Other

Comprehensive

Accumulated

Total Stockholders’

Equity

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Loss

Deficit

(Deficit)

Balance — December 31, 2020 (as previously reported)

21,671,491

99,470

SEC Form 10-Q filed by Cepton Inc.