10-Q 1 oust-20220930.htm 10-Q oust-20220930
false00018165812022FYDecember 31September 30, 20220.55000018165812022-01-012022-09-300001816581us-gaap:CommonStockMember2022-01-012022-09-300001816581us-gaap:WarrantMember2022-01-012022-09-3000018165812022-11-07xbrli:shares00018165812022-09-30iso4217:USD00018165812021-12-310001816581srt:AffiliatedEntityMember2022-09-300001816581srt:AffiliatedEntityMember2021-12-31iso4217:USDxbrli:shares00018165812022-07-012022-09-3000018165812021-07-012021-09-3000018165812021-01-012021-09-300001816581us-gaap:RedeemableConvertiblePreferredStockMember2021-12-310001816581us-gaap:CommonStockMember2021-12-310001816581us-gaap:AdditionalPaidInCapitalMember2021-12-310001816581us-gaap:RetainedEarningsMember2021-12-310001816581us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001816581us-gaap:CommonStockMember2022-01-012022-03-310001816581us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-3100018165812022-01-012022-03-310001816581us-gaap:RetainedEarningsMember2022-01-012022-03-310001816581us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001816581us-gaap:RedeemableConvertiblePreferredStockMember2022-03-310001816581us-gaap:CommonStockMember2022-03-310001816581us-gaap:AdditionalPaidInCapitalMember2022-03-310001816581us-gaap:RetainedEarningsMember2022-03-310001816581us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-3100018165812022-03-3100018165812022-04-012022-06-300001816581us-gaap:CommonStockMember2022-04-012022-06-300001816581us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001816581us-gaap:RetainedEarningsMember2022-04-012022-06-300001816581us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001816581us-gaap:RedeemableConvertiblePreferredStockMember2022-06-300001816581us-gaap:CommonStockMember2022-06-300001816581us-gaap:AdditionalPaidInCapitalMember2022-06-300001816581us-gaap:RetainedEarningsMember2022-06-300001816581us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-3000018165812022-06-300001816581us-gaap:CommonStockMember2022-07-012022-09-300001816581us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001816581us-gaap:RetainedEarningsMember2022-07-012022-09-300001816581us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001816581us-gaap:RedeemableConvertiblePreferredStockMember2022-09-300001816581us-gaap:CommonStockMember2022-09-300001816581us-gaap:AdditionalPaidInCapitalMember2022-09-300001816581us-gaap:RetainedEarningsMember2022-09-300001816581us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001816581us-gaap:RedeemableConvertiblePreferredStockMember2020-12-310001816581us-gaap:CommonStockMember2020-12-310001816581us-gaap:AdditionalPaidInCapitalMember2020-12-310001816581us-gaap:RetainedEarningsMember2020-12-310001816581us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100018165812020-12-3100018165812021-01-012021-03-310001816581us-gaap:CommonStockMember2021-01-012021-03-310001816581us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001816581us-gaap:RedeemableConvertiblePreferredStockMember2021-01-012021-03-310001816581us-gaap:RetainedEarningsMember2021-01-012021-03-310001816581us-gaap:RedeemableConvertiblePreferredStockMember2021-03-310001816581us-gaap:CommonStockMember2021-03-310001816581us-gaap:AdditionalPaidInCapitalMember2021-03-310001816581us-gaap:RetainedEarningsMember2021-03-310001816581us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100018165812021-03-310001816581us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-3000018165812021-04-012021-06-300001816581us-gaap:RetainedEarningsMember2021-04-012021-06-300001816581us-gaap:RedeemableConvertiblePreferredStockMember2021-06-300001816581us-gaap:CommonStockMember2021-06-300001816581us-gaap:AdditionalPaidInCapitalMember2021-06-300001816581us-gaap:RetainedEarningsMember2021-06-300001816581us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-3000018165812021-06-300001816581us-gaap:CommonStockMember2021-07-012021-09-300001816581us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001816581us-gaap:RetainedEarningsMember2021-07-012021-09-300001816581us-gaap:RedeemableConvertiblePreferredStockMember2021-09-300001816581us-gaap:CommonStockMember2021-09-300001816581us-gaap:AdditionalPaidInCapitalMember2021-09-300001816581us-gaap:RetainedEarningsMember2021-09-300001816581us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-3000018165812021-09-30xbrli:pure0001816581oust:ColonnadeAcquisitionCorpMemberus-gaap:CommonClassBMember2020-12-210001816581oust:ColonnadeAcquisitionCorpMemberus-gaap:CommonClassAMember2020-12-210001816581oust:ColonnadeAcquisitionCorpMemberoust:ConversionOfClassACommonStockToCommonStockMember2020-12-2100018165812020-12-210001816581oust:ColonnadeAcquisitionCorpMemberoust:CLAWarrantsMember2020-12-210001816581oust:ColonnadeAcquisitionCorpMemberoust:ConversionOfWarrantToOusterCommonStockMember2020-12-210001816581oust:ColonnadeAcquisitionCorpMemberoust:ConversionOfCanceledCLAUnitsToOusterCommonStockMember2020-12-210001816581oust:ColonnadeAcquisitionCorpMemberoust:PrivatePlacementWarrantsMember2020-12-210001816581oust:OusterTechnologiesIncMemberus-gaap:SeriesBPreferredStockMember2021-03-100001816581oust:OusterTechnologiesIncMemberoust:SeriesBPreferredStockConvertedToCommonStockMember2021-03-100001816581oust:OusterTechnologiesIncMember2021-03-100001816581us-gaap:CommonStockMember2021-03-112021-03-1100018165812021-03-1100018165812021-03-112021-03-110001816581us-gaap:PrivatePlacementMember2020-12-212020-12-210001816581us-gaap:PrivatePlacementMember2020-12-210001816581us-gaap:PrivatePlacementMember2021-03-112021-03-110001816581oust:AtTheMarketProgramMember2022-04-290001816581oust:AtTheMarketProgramMember2022-04-292022-09-300001816581oust:AtTheMarketProgramMember2022-09-300001816581oust:HerculesLoanAndSecurityAgreementMemberoust:TermLoanMember2022-04-290001816581oust:HerculesLoanAndSecurityAgreementMemberoust:TermLoanMembersrt:ScenarioForecastMember2022-04-292023-03-150001816581oust:HerculesLoanAndSecurityAgreementMemberoust:TermLoanMembersrt:ScenarioForecastMember2023-03-162023-06-150001816581oust:HerculesLoanAndSecurityAgreementMemberoust:TermLoanMember2022-04-292022-04-290001816581oust:ColonnadeAcquisitionCorpMemberoust:ConversionOfCanceledCLAUnitsToPublicWarrantMember2020-12-210001816581oust:CustomerAMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2021-01-012021-12-310001816581oust:CustomerAMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2022-01-012022-09-300001816581us-gaap:CustomerConcentrationRiskMemberoust:CustomerCMemberus-gaap:SalesRevenueNetMember2021-01-012021-09-300001816581us-gaap:CustomerConcentrationRiskMemberoust:CustomerCMemberus-gaap:SalesRevenueNetMember2022-01-012022-09-300001816581us-gaap:CustomerConcentrationRiskMemberoust:CustomerCMemberus-gaap:SalesRevenueNetMember2022-07-012022-09-300001816581us-gaap:CustomerConcentrationRiskMemberoust:CustomerCMemberus-gaap:SalesRevenueNetMember2021-07-012021-09-300001816581us-gaap:SupplierConcentrationRiskMemberus-gaap:CostOfGoodsTotalMemberoust:SupplierBMember2022-07-012022-09-300001816581us-gaap:SupplierConcentrationRiskMemberus-gaap:CostOfGoodsTotalMemberoust:SupplierBMember2021-07-012021-09-300001816581us-gaap:SupplierConcentrationRiskMemberus-gaap:CostOfGoodsTotalMemberoust:SupplierBMember2022-01-012022-09-300001816581us-gaap:SupplierConcentrationRiskMemberus-gaap:CostOfGoodsTotalMemberoust:SupplierBMember2021-01-012021-09-300001816581us-gaap:AccountsPayableMemberus-gaap:SupplierConcentrationRiskMemberoust:SupplierBMember2022-01-012022-09-300001816581us-gaap:AccountsPayableMemberus-gaap:SupplierConcentrationRiskMemberoust:SupplierBMember2021-01-012021-12-310001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2022-09-300001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2022-09-300001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMember2022-09-300001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-09-300001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-09-300001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-09-300001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-09-300001816581us-gaap:FairValueMeasurementsRecurringMember2022-09-300001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2021-12-310001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2021-12-310001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMember2021-12-310001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-12-310001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310001816581us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-12-310001816581us-gaap:FairValueMeasurementsRecurringMember2021-12-310001816581us-gaap:FairValueInputsLevel3Memberoust:RedeemableConvertiblePreferredStockWarrantLiabilityMember2021-12-310001816581oust:PrivatePlacementWarrantLiabilityMemberus-gaap:FairValueInputsLevel3Member2021-12-310001816581us-gaap:FairValueInputsLevel3Memberoust:RedeemableConvertiblePreferredStockWarrantLiabilityMember2022-01-012022-09-300001816581oust:PrivatePlacementWarrantLiabilityMemberus-gaap:FairValueInputsLevel3Member2022-01-012022-09-300001816581us-gaap:FairValueInputsLevel3Memberoust:RedeemableConvertiblePreferredStockWarrantLiabilityMember2022-09-300001816581oust:PrivatePlacementWarrantLiabilityMemberus-gaap:FairValueInputsLevel3Member2022-09-300001816581us-gaap:FairValueInputsLevel3Memberoust:RedeemableConvertiblePreferredStockWarrantLiabilityMember2020-12-310001816581oust:PrivatePlacementWarrantLiabilityMemberus-gaap:FairValueInputsLevel3Member2020-12-310001816581us-gaap:FairValueInputsLevel3Memberoust:RedeemableConvertiblePreferredStockWarrantLiabilityMember2021-01-012021-09-300001816581oust:PrivatePlacementWarrantLiabilityMemberus-gaap:FairValueInputsLevel3Member2021-01-012021-09-300001816581us-gaap:FairValueInputsLevel3Memberoust:RedeemableConvertiblePreferredStockWarrantLiabilityMember2021-09-300001816581oust:PrivatePlacementWarrantLiabilityMemberus-gaap:FairValueInputsLevel3Member2021-09-300001816581oust:RestrictedCashRelatedToLeaseDepositMember2022-09-300001816581us-gaap:CostOfSalesMember2022-07-012022-09-300001816581us-gaap:CostOfSalesMember2021-07-012021-09-300001816581us-gaap:CostOfSalesMember2022-01-012022-09-300001816581us-gaap:CostOfSalesMember2021-01-012021-09-300001816581us-gaap:ResearchAndDevelopmentExpenseMember2022-07-012022-09-300001816581us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-09-300001816581us-gaap:MachineryAndEquipmentMember2022-01-012022-09-300001816581us-gaap:MachineryAndEquipmentMember2022-09-300001816581us-gaap:MachineryAndEquipmentMember2021-12-310001816581us-gaap:ComputerEquipmentMember2022-01-012022-09-300001816581us-gaap:ComputerEquipmentMember2022-09-300001816581us-gaap:ComputerEquipmentMember2021-12-310001816581us-gaap:VehiclesMember2022-01-012022-09-300001816581us-gaap:VehiclesMember2022-09-300001816581us-gaap:VehiclesMember2021-12-310001816581us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-01-012022-09-300001816581us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-09-300001816581us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-12-310001816581us-gaap:FurnitureAndFixturesMember2022-01-012022-09-300001816581us-gaap:FurnitureAndFixturesMember2022-09-300001816581us-gaap:FurnitureAndFixturesMember2021-12-310001816581us-gaap:ConstructionInProgressMember2022-09-300001816581us-gaap:ConstructionInProgressMember2021-12-310001816581us-gaap:LeaseholdImprovementsMember2022-09-300001816581us-gaap:LeaseholdImprovementsMember2021-12-310001816581oust:SensePhotonicsIncMember2021-10-012021-12-310001816581oust:SensePhotonicsIncMember2021-01-012021-12-310001816581oust:SensePhotonicsIncMember2022-01-012022-09-300001816581oust:SensePhotonicsIncMember2021-12-310001816581oust:SensePhotonicsIncMember2022-09-300001816581us-gaap:TechnologyBasedIntangibleAssetsMemberoust:SensePhotonicsIncMember2021-12-310001816581us-gaap:TechnologyBasedIntangibleAssetsMemberoust:SensePhotonicsIncMember2022-09-300001816581oust:VendorRelationshipMemberoust:SensePhotonicsIncMember2021-12-310001816581oust:VendorRelationshipMemberoust:SensePhotonicsIncMember2022-09-300001816581oust:SensePhotonicsIncMemberus-gaap:CustomerRelationshipsMember2021-12-310001816581oust:SensePhotonicsIncMemberus-gaap:CustomerRelationshipsMember2022-09-300001816581us-gaap:TechnologyBasedIntangibleAssetsMember2022-01-012022-09-300001816581us-gaap:TechnologyBasedIntangibleAssetsMember2022-09-300001816581oust:VendorRelationshipMember2022-01-012022-09-300001816581oust:VendorRelationshipMember2022-09-300001816581us-gaap:CustomerRelationshipsMember2022-01-012022-09-300001816581us-gaap:CustomerRelationshipsMember2022-09-300001816581us-gaap:TechnologyBasedIntangibleAssetsMember2021-01-012021-12-310001816581us-gaap:TechnologyBasedIntangibleAssetsMember2021-12-310001816581oust:VendorRelationshipMember2021-01-012021-12-310001816581oust:VendorRelationshipMember2021-12-310001816581us-gaap:CustomerRelationshipsMember2021-01-012021-12-310001816581us-gaap:CustomerRelationshipsMember2021-12-310001816581us-gaap:SecuredDebtMemberoust:RunwayLoanAndSecurityAgreementMember2018-11-270001816581us-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:SecuredDebtMemberoust:RunwayLoanAndSecurityAgreementMember2018-11-272018-11-270001816581us-gaap:SecuredDebtMemberus-gaap:PrimeRateMemberoust:LIBORRateNotAvailableOrApplicableMemberoust:RunwayLoanAndSecurityAgreementMember2018-11-272018-11-270001816581oust:ApplicableInterestRateAtTheTimeOfDefaultMemberus-gaap:SecuredDebtMemberoust:InTheEventOfDebtDefaultMemberoust:RunwayLoanAndSecurityAgreementMember2022-01-012022-09-300001816581oust:SeriesARedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMember2018-11-270001816581us-gaap:SecuredDebtMemberoust:OusterTechnologiesIncMemberoust:RunwayLoanAndSecurityAgreementMember2018-11-270001816581oust:SeriesARedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMember2019-08-050001816581oust:SeriesARedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMember2019-08-052019-08-050001816581oust:SeriesARedeemableConvertiblePreferredStockWarrantsMemberus-gaap:OtherNonoperatingIncomeExpenseMember2021-01-012021-03-310001816581oust:SeriesARedeemableConvertiblePreferredStockWarrantsMember2021-01-012021-03-310001816581us-gaap:SecuredDebtMemberoust:RunwayLoanAndSecurityAgreementMember2021-03-262021-03-260001816581us-gaap:SecuredDebtMemberoust:RunwayLoanAndSecurityAgreementMember2021-12-310001816581us-gaap:SecuredDebtMemberoust:RunwayLoanAndSecurityAgreementMember2022-09-300001816581us-gaap:InvestorMemberoust:PromissoryNoteMemberus-gaap:NotesPayableOtherPayablesMember2021-01-310001816581us-gaap:InvestorMemberoust:PromissoryNoteMemberus-gaap:NotesPayableOtherPayablesMember2021-01-012021-01-310001816581oust:HerculesLoanAndSecurityAgreementMemberus-gaap:PrimeRateMembersrt:MinimumMemberoust:TermLoanMember2022-04-292022-04-290001816581oust:HerculesLoanAndSecurityAgreementMembersrt:MinimumMemberoust:TermLoanMember2022-04-290001816581srt:MaximumMemberoust:HerculesLoanAndSecurityAgreementMemberoust:TermLoanMember2022-04-290001816581oust:HerculesLoanAndSecurityAgreementMemberoust:DebtInstrumentPrepaymentMadeWithin12MonthsFollowingTheClosingDateMemberoust:TermLoanMember2022-04-290001816581oust:HerculesLoanAndSecurityAgreementMemberoust:TermLoanMemberoust:DebtInstrumentPrepaymentMadeAfter12MonthsPriorTo24MonthsFollowingTheClosingDateMember2022-04-290001816581oust:HerculesLoanAndSecurityAgreementMemberoust:DebtInstrumentPrepaymentMadeAfter24MonthsFollowingTheClosingDateMemberoust:TermLoanMember2022-04-290001816581oust:OusterTechnologiesIncMemberoust:SeriesBRedeemableConvertiblePreferredStockWarrantsMember2020-04-030001816581srt:MaximumMemberoust:OusterTechnologiesIncMemberoust:SeriesBRedeemableConvertiblePreferredStockWarrantsMember2020-04-030001816581oust:OusterTechnologiesIncMemberus-gaap:OtherNonoperatingIncomeExpenseMemberoust:SeriesBRedeemableConvertiblePreferredStockWarrantsMember2022-01-012022-09-300001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberus-gaap:MeasurementInputSharePriceMemberoust:OusterTechnologiesIncMemberus-gaap:ValuationTechniqueOptionPricingModelMember2018-11-270001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberus-gaap:MeasurementInputSharePriceMemberoust:OusterTechnologiesIncMemberus-gaap:ValuationTechniqueOptionPricingModelMember2020-04-030001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberus-gaap:MeasurementInputSharePriceMemberoust:OusterTechnologiesIncMemberus-gaap:ValuationTechniqueOptionPricingModelMember2020-12-310001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberus-gaap:MeasurementInputSharePriceMemberoust:OusterTechnologiesIncMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-02-110001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberus-gaap:MeasurementInputSharePriceMemberoust:OusterTechnologiesIncMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-03-110001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputExpectedTermMemberus-gaap:ValuationTechniqueOptionPricingModelMember2018-11-27oust:year0001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputExpectedTermMemberus-gaap:ValuationTechniqueOptionPricingModelMember2020-04-030001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputExpectedTermMemberus-gaap:ValuationTechniqueOptionPricingModelMember2020-12-310001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputExpectedTermMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-02-110001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputExpectedTermMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-03-110001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:MeasurementInputPriceVolatilityMember2018-11-270001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:MeasurementInputPriceVolatilityMember2020-04-030001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:MeasurementInputPriceVolatilityMember2020-12-310001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:MeasurementInputPriceVolatilityMember2021-02-110001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:MeasurementInputPriceVolatilityMember2021-03-110001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputRiskFreeInterestRateMemberus-gaap:ValuationTechniqueOptionPricingModelMember2018-11-270001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputRiskFreeInterestRateMemberus-gaap:ValuationTechniqueOptionPricingModelMember2020-04-030001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputRiskFreeInterestRateMemberus-gaap:ValuationTechniqueOptionPricingModelMember2020-12-310001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputRiskFreeInterestRateMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-02-110001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputRiskFreeInterestRateMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-03-110001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputExpectedDividendRateMemberus-gaap:ValuationTechniqueOptionPricingModelMember2018-11-270001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputExpectedDividendRateMemberus-gaap:ValuationTechniqueOptionPricingModelMember2020-04-030001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputExpectedDividendRateMemberus-gaap:ValuationTechniqueOptionPricingModelMember2020-12-310001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputExpectedDividendRateMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-02-110001816581oust:RedeemableConvertiblePreferredStockWarrantsMemberoust:OusterTechnologiesIncMemberus-gaap:MeasurementInputExpectedDividendRateMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-03-110001816581oust:SponsorMemberoust:PrivatePlacementWarrantsMember2020-08-310001816581oust:SponsorMemberoust:PrivatePlacementWarrantsMember2020-08-012020-08-310001816581oust:SponsorMemberoust:PrivatePlacementWarrantsMemberoust:ConversionOfWarrantToOusterCommonStockMember2021-03-110001816581oust:PrivatePlacementWarrantsMember2021-03-110001816581oust:SponsorMemberoust:PrivatePlacementWarrantsMemberus-gaap:OtherNonoperatingIncomeExpenseMember2022-07-012022-09-300001816581oust:SponsorMemberoust:PrivatePlacementWarrantsMemberus-gaap:OtherNonoperatingIncomeExpenseMember2022-01-012022-09-300001816581oust:SponsorMemberoust:PrivatePlacementWarrantsMemberus-gaap:OtherNonoperatingIncomeExpenseMember2021-07-012021-09-300001816581oust:SponsorMemberoust:PrivatePlacementWarrantsMemberus-gaap:OtherNonoperatingIncomeExpenseMember2021-01-012021-09-300001816581oust:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputSharePriceMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-09-300001816581oust:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputSharePriceMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-12-310001816581oust:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputSharePriceMemberus-gaap:ValuationTechniqueOptionPricingModelMember2022-09-300001816581oust:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputExercisePriceMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-09-300001816581oust:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputExercisePriceMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-12-310001816581oust:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputExercisePriceMemberus-gaap:ValuationTechniqueOptionPricingModelMember2022-09-300001816581oust:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputExpectedTermMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-09-300001816581oust:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputExpectedTermMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-12-310001816581oust:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputExpectedTermMemberus-gaap:ValuationTechniqueOptionPricingModelMember2022-09-300001816581oust:PrivatePlacementWarrantsMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:MeasurementInputPriceVolatilityMember2021-09-300001816581oust:PrivatePlacementWarrantsMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:MeasurementInputPriceVolatilityMember2021-12-310001816581oust:PrivatePlacementWarrantsMemberus-gaap:ValuationTechniqueOptionPricingModelMemberus-gaap:MeasurementInputPriceVolatilityMember2022-09-300001816581oust:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-09-300001816581oust:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMemberus-gaap:ValuationTechniqueOptionPricingModelMember2021-12-310001816581oust:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMemberus-gaap:ValuationTechniqueOptionPricingModelMember2022-09-300001816581oust:ColonnadeAcquisitionCorpMemberoust:PublicWarrantsMember2020-08-310001816581oust:ColonnadeAcquisitionCorpMemberoust:PublicWarrantsMember2020-08-012020-08-310001816581oust:PublicWarrantsMember2021-03-110001816581oust:PublicWarrantsMember2020-08-310001816581oust:PublicWarrantsMember2020-08-012020-08-310001816581oust:ThirdPartyContractManufacturerMember2022-09-300001816581oust:OtherVendorsMember2022-09-30oust:vote0001816581oust:OusterTechnologiesIncMemberus-gaap:RedeemableConvertiblePreferredStockMember2021-03-10oust:plan0001816581oust:A2022EmployeeStockPurchasePlanMember2022-09-300001816581oust:A2022EmployeeStockPurchasePlanMember2022-09-012022-09-300001816581oust:A2022EmployeeStockPurchasePlanMember2022-01-012022-09-300001816581oust:ManagementAndEmployeeMemberoust:ConvertiblePromissoryNoteMemberus-gaap:NotesPayableOtherPayablesMember2020-10-120001816581oust:A2015StockPlanMemberoust:ManagementAndEmployeeMember2020-10-122020-10-120001816581oust:ManagementAndEmployeeCertainExecutivesMember2021-03-012021-03-310001816581oust:A2015StockPlanMemberoust:ManagementAndEmployeeCertainExecutivesMember2022-01-012022-09-3000018165812021-01-012021-12-310001816581oust:ExercisePriceRangeOneMember2022-01-012022-09-300001816581oust:ExercisePriceRangeOneMember2022-09-300001816581oust:ExercisePriceRangeTwoMember2022-01-012022-09-300001816581oust:ExercisePriceRangeTwoMember2022-09-300001816581oust:ExercisePriceRangeThreeMember2022-01-012022-09-300001816581oust:ExercisePriceRangeThreeMember2022-09-300001816581oust:ExercisePriceRangeFourMember2022-01-012022-09-300001816581oust:ExercisePriceRangeFourMember2022-09-300001816581oust:ExercisePriceRangeFiveMember2022-01-012022-09-300001816581oust:ExercisePriceRangeFiveMember2022-09-300001816581oust:ExercisePriceRangeSixMember2022-01-012022-09-300001816581oust:ExercisePriceRangeSixMember2022-09-300001816581us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001816581us-gaap:RestrictedStockUnitsRSUMember2021-12-310001816581us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001816581us-gaap:RestrictedStockUnitsRSUMember2022-09-300001816581us-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300001816581us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300001816581us-gaap:SellingAndMarketingExpenseMember2022-07-012022-09-300001816581us-gaap:SellingAndMarketingExpenseMember2021-07-012021-09-300001816581us-gaap:SellingAndMarketingExpenseMember2022-01-012022-09-300001816581us-gaap:SellingAndMarketingExpenseMember2021-01-012021-09-300001816581us-gaap:GeneralAndAdministrativeExpenseMember2022-07-012022-09-300001816581us-gaap:GeneralAndAdministrativeExpenseMember2021-07-012021-09-300001816581us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-09-300001816581us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-09-300001816581us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300001816581us-gaap:RestrictedStockUnitsRSUMember2021-07-012021-09-300001816581us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300001816581us-gaap:EmployeeStockOptionMember2022-07-012022-09-300001816581us-gaap:EmployeeStockOptionMember2021-07-012021-09-300001816581us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001816581us-gaap:EmployeeStockMember2022-07-012022-09-300001816581us-gaap:EmployeeStockMember2021-07-012021-09-300001816581us-gaap:EmployeeStockMember2022-01-012022-09-300001816581us-gaap:EmployeeStockMember2021-01-012021-09-300001816581us-gaap:RestrictedStockMember2022-07-012022-09-300001816581us-gaap:RestrictedStockMember2021-07-012021-09-300001816581us-gaap:RestrictedStockMember2022-01-012022-09-300001816581us-gaap:RestrictedStockMember2021-01-012021-09-300001816581oust:ManagementAndEmployeeMember2021-03-012021-03-310001816581oust:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOptionsToPurchaseCommonStockMember2022-01-012022-09-300001816581oust:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOptionsToPurchaseCommonStockMember2021-01-012021-09-300001816581oust:PublicAndPrivateCommonStockWarrantsMember2022-01-012022-09-300001816581oust:PublicAndPrivateCommonStockWarrantsMember2021-01-012021-09-300001816581us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001816581us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300001816581oust:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsUnvestedEarlyExercisedCommonStockOptionsMember2022-01-012022-09-300001816581oust:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsUnvestedEarlyExercisedCommonStockOptionsMember2021-01-012021-09-300001816581us-gaap:EmployeeStockMember2022-01-012022-09-300001816581us-gaap:EmployeeStockMember2021-01-012021-09-300001816581oust:ShareBasedCompensationArrangementByShareBasedPaymentAwardUnvestedRestrictedStockAwardMember2022-01-012022-09-300001816581oust:ShareBasedCompensationArrangementByShareBasedPaymentAwardUnvestedRestrictedStockAwardMember2021-01-012021-09-300001816581oust:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndEarlyExercisedOptionsSubjectToNonrecourseNotesMember2022-01-012022-09-300001816581oust:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndEarlyExercisedOptionsSubjectToNonrecourseNotesMember2021-01-012021-09-300001816581us-gaap:TransferredAtPointInTimeMemberus-gaap:ProductMember2022-07-012022-09-300001816581us-gaap:TransferredAtPointInTimeMemberus-gaap:ProductMember2021-07-012021-09-300001816581us-gaap:TransferredAtPointInTimeMemberus-gaap:ProductMember2022-01-012022-09-300001816581us-gaap:TransferredAtPointInTimeMemberus-gaap:ProductMember2021-01-012021-09-300001816581country:US2022-07-012022-09-300001816581country:US2021-07-012021-09-300001816581country:US2022-01-012022-09-300001816581country:US2021-01-012021-09-300001816581oust:AmericasExcludingUnitedStatesMember2022-07-012022-09-300001816581oust:AmericasExcludingUnitedStatesMember2021-07-012021-09-300001816581oust:AmericasExcludingUnitedStatesMember2022-01-012022-09-300001816581oust:AmericasExcludingUnitedStatesMember2021-01-012021-09-300001816581srt:AsiaPacificMember2022-07-012022-09-300001816581srt:AsiaPacificMember2021-07-012021-09-300001816581srt:AsiaPacificMember2022-01-012022-09-300001816581srt:AsiaPacificMember2021-01-012021-09-300001816581us-gaap:EMEAMember2022-07-012022-09-300001816581us-gaap:EMEAMember2021-07-012021-09-300001816581us-gaap:EMEAMember2022-01-012022-09-300001816581us-gaap:EMEAMember2021-01-012021-09-300001816581oust:VelodyneLidarIncMemberus-gaap:SubsequentEventMember2022-11-040001816581us-gaap:SubsequentEventMember2022-11-040001816581oust:VelodyneCommonStockholdersMemberus-gaap:SubsequentEventMember2022-11-050001816581oust:PreMergerCommonStockholdersMemberus-gaap:SubsequentEventMember2022-11-050001816581oust:HerculesLoanAndSecurityAgreementMemberoust:TermLoanMemberus-gaap:SubsequentEventMember2022-10-172022-10-170001816581oust:HerculesLoanAndSecurityAgreementMemberoust:TermLoanMemberus-gaap:SubsequentEventMember2022-11-012022-11-010001816581oust:HerculesLoanAndSecurityAgreementMemberoust:TermLoanMemberus-gaap:SubsequentEventMember2022-11-01

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 10-Q
_______________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR

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

For the transition period from                      to
Commission File Number: 001-39463
_______________________
Ouster, Inc.
(Exact name of registrant as specified in its charter)
_______________________
Delaware

86-2528989
(State or other jurisdiction
of incorporation)
(I.R.S. Employer
Identification No.)
350 Treat Avenue
San Francisco, California 94110
(Address of principal executive offices) (Zip Code)
(415) 949-0108
(Registrant’s telephone number, including area code)
N/A
(Former name, former address, and former fiscal year, if changed since last report)
_______________________
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
Common stock, $0.0001 par value per shareOUSTNew York Stock Exchange
Warrants to purchase common stockOUST WSNew York Stock Exchange
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 filerAccelerated filer
Non-accelerated filerSmaller 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 November 7, 2022, the registrant had 184,531,202 shares of common stock, $0.0001 par value per share, outstanding.
1

TABLE OF CONTENTS
Page
Part II - Other Information
2


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Ouster, Inc. (the “Company”, “Ouster,” or “we”) intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding Ouster’s future operating results and financial position, its business strategy and plans, including new products, the expected timing of the closing of the Velodyne Merger (as defined herein); the ability of the parties to complete the Velodyne Merger considering the various closing conditions; the Company’s ability to continue as a going concern; the availability of cash or additional financing to fund our operations; future cost savings measures; market growth and trends, and the Company’s objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “potentially,” “preliminary,” “likely,” “aim,” “forecast,” “should,” “can have,” “likely,” and similar expressions are intended to identify forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including Ouster’s limited operating history and history of losses; the negotiating power and product standards of its customers; fluctuations in its operating results; supply chain constraints and challenges; cancellation or postponement of contracts or unsuccessful implementations; the adoption of its products and the growth of the lidar market generally; the risk that the Velodyne Merger may not be completed in a timely manner or at all; uncertainties as to the timing of the consummation of the Velodyne Merger and the potential failure to satisfy the conditions to the consummation of the Velodyne Merger, including obtaining stockholder and regulatory approvals; the risk that the Velodyne Merger may involve unexpected costs, liabilities or delays; the risk that the Company may not recognize the anticipated benefits of the Velodyne Merger;its ability to grow its sales and marketing organization; substantial research and development costs needed to develop and commercialize new products; the competitive environment in which it operates; selection of its products for inclusion in target markets; its future capital needs and ability to secure additional capital on favorable terms or at all; its ability to use tax attributes; its dependence on key third party suppliers, in particular Benchmark Electronics, Inc., and manufacturers; its ability to maintain inventory and the risk of inventory write-downs; inaccurate forecasts of market growth; its ability to manage growth; the creditworthiness of its customers; risks related to acquisitions; risks related to international operations; risks of product delivery problems or defects; costs associated with product warranties; its ability to maintain competitive average selling prices or high sales volumes or reduce product costs; conditions in its customers’ industries; its ability to recruit and retain key personnel; its use of professional employer organizations; its ability to adequately protect and enforce its intellectual property rights; its ability to effectively respond to evolving regulations and standards; risks related to operating as a public company; risks related to the COVID-19 pandemic; and risks related to certain of its warrants being accounted for as liabilities. Other risk factors include the important factors described in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2022, as may be updated from time to time in the Company’s other filings with the SEC, that may cause its actual results, performance or achievements to differ materially and adversely from those expressed or implied by the forward-looking statements.
Any forward-looking statements made herein speak only as of the date of this Quarterly Report on Form 10-Q, and you should not rely on forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or achievements reflected in the forward-looking statements will be achieved or occur. Except as required by applicable law, we undertake no obligation to update any of these forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q or to conform these statements to actual results or revised expectations.










3

GENERAL
Unless the context otherwise indicates, references in this Quarterly Report on Form 10-Q to the terms “Ouster,” “the Company,” “we,” “our” and “us” refer to Ouster, Inc.
We may announce material business and financial information to our investors using our investor relations website at https://investors.ouster.com/overview. We therefore encourage investors and others interested in Ouster to review the information that we make available on our website, in addition to following our SEC filings, webcasts, press releases and conference calls. Information contained on our website is not part of this Quarterly Report on Form 10-Q.
As of June 30, 2022, the Company determined that it qualified as a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act. Consistent with Section 5120.1(d) of the Financial Reporting Manual, the Company has elected to reflect this status immediately. As a result, for the year ending December 31, 2023 and the remainder of the year ending December 31, 2022, we expect that we will be exempt from certain disclosure requirements and permitted to rely on certain reduced disclosure requirements. For instance, smaller reporting companies are not required to obtain an auditor attestation report regarding management’s assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; and may present only two years of audited financial statements and related MD&A disclosure.
4


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
OUSTER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share data)
September 30,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents$133,189 $182,644 
Restricted cash, current250 977 
Accounts receivable, net10,783 10,723 
Inventory20,804 7,448 
Prepaid expenses and other current assets6,923 5,566 
Total current assets171,949 207,358 
Property and equipment, net8,594 10,054 
Operating lease, right-of-use assets13,652 15,156 
Goodwill51,151 51,076 
Intangible assets, net19,286 22,652 
Restricted cash, non-current1,088 1,035 
Other non-current assets554 371 
Total assets$266,274 $307,702 
Liabilities, redeemable convertible preferred stock and stockholders’ equity
Current liabilities:
Accounts payable$8,154 $4,863 
Accrued and other current liabilities14,395 14,173 
Operating lease liability, current portion3,127 3,067 
Total current liabilities25,676 22,103 
Operating lease liability, long-term portion14,288 16,208 
Warrant liabilities (at September 30, 2022 and December 31, 2021 related party $97 and $2,669, respectively)
276 7,626 
Debt19,181  
Other non-current liabilities1,561 1,065 
Total liabilities60,982 47,002 
Commitments and contingencies (Note 7)
Redeemable convertible preferred stock, $0.0001 par value per share; 100,000,000 shares authorized at September 30, 2022 and December 31, 2021; Nil shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively (aggregate liquidation preference of nil at September 30, 2022 and December 31, 2021, respectively)
  
Stockholders’ equity:
Common stock, $0.0001 par value; 1,000,000,000 shares authorized at September 30, 2022 and December 31, 2021; 184,190,016 and 172,200,417 issued and outstanding at September 30, 2022 and December 31, 2021, respectively
18 17 
Additional paid-in capital605,195 564,045 
Accumulated deficit(399,740)(303,356)
Accumulated other comprehensive loss(181)(6)
Total stockholders’ equity205,292 260,700 
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity$266,274 $307,702 

The accompanying notes are an integral part of these condensed consolidated financial statements
5

OUSTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands, except share and per share data)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Product revenue$11,204 $7,755 $30,091 $21,726 
Cost of product revenue7,488 5,879 21,002 16,212 
Gross profit3,716 1,876 9,089 5,514 
Operating expenses:
Research and development17,212 8,390 49,011 19,576 
Sales and marketing8,541 6,737 23,194 14,777 
General and administrative14,008 14,073 40,306 36,177 
Total operating expenses39,761 29,200 112,511 70,530 
Loss from operations(36,045)(27,324)(103,422)(65,016)
Other (expense) income:
Interest income733 165 1,231 305 
Interest expense(699) (1,143)(504)
Other income (expense), net61 14,490 7,071 (422)
Total other expense, net95 14,655 7,159 (621)
Loss before income taxes(35,950)(12,669)(96,263)(65,637)
Provision for income tax expense37  121  
Net loss$(35,987)$(12,669)$(96,384)$(65,637)
Other comprehensive loss
Foreign currency translation adjustments$(87)$ $(175)$ 
Total comprehensive loss$(36,074)$(12,669)$(96,559)$(65,637)
Net loss per common share, basic and diluted$(0.20)$(0.08)$(0.55)$(0.53)
Weighted-average shares used to compute basic and diluted net loss per share181,361,354 156,647,259 175,795,093 123,175,390 
The accompanying notes are an integral part of these condensed consolidated financial statements
6

OUSTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
(unaudited)
(in thousands, except share data)

Redeemable Convertible
Preferred Stock
Common StockAdditional
Paid-in-
Capital
Accumulated
Deficit
Accumulated other comprehensive lossTotal
Stockholders’
Equity
SharesAmountSharesAmount
Balance — December 31, 2021 $ 172,200,417 $17 $564,045 $(303,356)$(6)$260,700 
Issuance of common stock upon exercise of stock options— — 822,702 — 209 — — 209 
Issuance of common stock upon exercise of restricted stock awards - net of tax withholding— — 812,491 — (59)— — (59)
Repurchase of common stock— — (233,107)— (31)— — (31)
Stock-based compensation expense— — — — 8,750 — — 8,750 
Vesting of early exercised stock options— — — — 19 — — 19 
Net loss— — — — — (32,397)— (32,397)
Other Comprehensive loss— — — — — — (12)(12)
Balance — March 31, 2022  173,602,503 17 572,933 (335,753)(18)237,179 
Proceeds from at-the-market offering, net of commissions and fees of $451 and issuance costs of $546
— — 6,749,344 1 14,021 — — 14,022 
Issuance of common stock upon exercise of stock options— — 234,241 — 45 — — 45 
Issuance of common stock upon exercise of restricted stock awards— — 950,858 —  — —  
Repurchase of common stock— — (57,301)— (12)— — (12)
Vesting of early exercised stock options— — — — 52 — — 52 
Cancellation of Sense acquisition shares— — (55,130)— (358)— — (358)
Stock-based compensation expense— — — — 8,119 — — 8,119 
Net loss— — — — — (28,000) (28,000)
Other Comprehensive loss— — — — — — (76)(76)
Balance — June 30, 2022  181,424,515 18 594,800 (363,753)(94)230,971 
Proceeds from at-the-market offering, net of commissions and fees of $54
— — 1,084,365  1,754 — — 1,754 
Issuance of common stock upon exercise of stock options— — 722,087 — 146 — — 146 
Issuance of common stock upon exercise of restricted stock awards— — 975,147 —  — —  
Repurchase of common stock— — (16,098)— (3)— — (3)
Vesting of early exercised stock options— — — — 43 — — 43 
Stock-based compensation expense— — — — 8,455 — — 8,455 
Net loss— — — — — (35,987) (35,987)
Other Comprehensive loss— — — — — — (87)(87)
Balance — September 30, 2022 $ 184,190,016 $18 $605,195 $(399,740)$(181)$205,292 

The accompanying notes are an integral part of these condensed consolidated financial statements









7

OUSTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)
(unaudited)
(in thousands, except share data)

Redeemable Convertible
Preferred Stock
Common StockAdditional
Paid-in-
Capital
Accumulated
Deficit
Accumulated other comprehensive lossTotal
Stockholders’
Equity (Deficit)
Shares (1)
Amount
Shares (1)
Amount
Balance — December 31, 202088,434,754 $39,225 33,327,294 $ $133,468 $(209,375)$ (75,907)
Issuance of common stock upon exercise of stock options— 727,114 1 189 — — 190 
Repurchase of common stock— (220,561)— (43)— — (43)
Issuance of redeemable convertible preferred stock upon exercise of warrants4,232,947 58,097 — — — — — — 
Conversion of redeemable convertible preferred stock to common stock(92,667,701)(97,322)92,667,701 12 97,322 — — 97,334 
Issuance of common stock upon merger and private offering, net of acquired private placement warrants of $19,377
— — 34,947,657 3 272,061 — — 272,064 
Offering costs in connection with the merger— — — — (26,620)— — (26,620)
Vesting of early exercised stock options— — — — 438 — — 438 
Stock-based compensation expense— — — — 5,256 — — 5,256 
Net loss— — — — — (20,957)— (20,957)
Balance — March 31, 2021  161,449,205 16 482,071 (230,332) 251,755 
Vesting of early exercised stock options— — — — 104 — — 104 
Stock-based compensation expense— — — — 6,154 — — 6,154 
Net loss— — — — — (32,011)— (32,011)
Balance — June 30, 2021 $ 161,449,205 $16 $488,329 $(262,343)$ $226,002 
Issuance of common stock upon exercise of stock options— — 186,165  35 — — 35 
Cancellation of previously issued awards— — (105,921)— — — —  
Vesting of early exercised stock options— — — — 65 — — 65 
Stock-based compensation expense— — — — 7,147 — — 7,147 
Net loss— — — — — (12,669)— (12,669)
Balance — September 30, 2021 $ 161,529,449 $16 $495,576 $(275,012)$ $220,580 
(1) The shares of the Company’s common and redeemable convertible preferred stock, prior to the Merger (as defined in Note 1), have been retroactively restated as shares reflecting the exchange ratio of approximately 0.703 established in the Merger as described in Note 1.

The accompanying notes are an integral part of these condensed consolidated financial statements
8

OUSTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Nine months ended September 30,
20222021
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss$(96,384)$(65,637)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization7,070 3,428 
Stock-based compensation25,324 18,557 
Change in right-of-use asset2,075 1,292 
Interest expense290 36 
Amortization of debt issuance costs and debt discount104 250 
Change in fair value of warrant liabilities(7,350)406 
Inventory write down894 866 
Provision for doubtful accounts9  
Gain from disposal of property and equipment(100) 
Changes in operating assets and liabilities:
Accounts receivable(69)(4,378)
Inventory(14,249)(2,551)
Prepaid expenses and other assets(1,540)42 
Accounts payable3,225 (2,707)
Accrued and other liabilities(158)7,060 
Operating lease liability(2,431)(1,770)
Net cash used in operating activities(83,290)(45,106)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property & equipment275  
Purchases of property and equipment(2,353)(1,774)
Net cash used in investing activities(2,078)(1,774)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the merger and private offering 291,454 
Payment of offering costs (27,124)
Repayment of debt (7,000)
Proceeds from issuance of promissory notes to related parties 5,000 
Repayment of promissory notes to related parties (5,000)
Repurchase of common stock(46)(43)
Proceeds from exercise of stock options398 539 
Proceeds from borrowings, net of debt discount and issuance costs19,077  
Proceeds from the issuance of common stock under at-the-market offering, net of commissions and fees16,322  
At-the-market offering costs for the issuance of common stock(278) 
Taxes paid related to net share settlement of restricted stock awards(59) 
Net cash provided by financing activities35,414 257,826 
Effect of exchange rates on cash and cash equivalents(175) 
Net increase (decrease) in cash, cash equivalents and restricted cash(50,129)210,946 
Cash, cash equivalents and restricted cash at beginning of period184,656 12,642 
Cash, cash equivalents and restricted cash at end of period$134,527 $223,588 
SUPPLEMENTAL DISCLOSURES OF OPERATING ACTIVITIES:
Cash paid for interest$750 $635 
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION:
Property and equipment purchases included in accounts payable and accrued liabilities$45 $334 
Private placement warrants acquired as part of the merger$ $19,377 
Issuance of redeemable convertible preferred stock upon exercise of warrants$ $58,097 
Conversion of redeemable convertible preferred stock to common stock$ $97,322 
Right-of-use assets obtained in exchange for operating lease liability$571 $ 
Unpaid at-the-market offering costs$267 $ 

The accompanying notes are an integral part of these condensed consolidated financial statements
9

OUSTER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1 – Description of Business and Basis of Presentation
Description of Business
Ouster, Inc. was incorporated in the Cayman Islands on June 4, 2020 as “Colonnade Acquisition Corp”. Following the closing of the business combination in March 2021, the Company domesticated as a Delaware corporation and changed its name to “Ouster, Inc.” The Company’s prior operating subsidiary, Ouster Technologies, Inc. (“OTI” and prior to the Merger (as defined below)), was incorporated in the state of Delaware on June 30, 2015. The Company is a leading provider of high-resolution digital lidar sensors that offer advanced 3D vision to machinery, vehicles, robots, and fixed infrastructure assets, allowing each to understand and visualize the surrounding world and ultimately enabling safe operation and ubiquitous autonomy. Unless the context otherwise requires, references in this subsection to “the Company” refer to the business and operations of OTI (formerly known as Ouster, Inc.) and its consolidated subsidiaries prior to the Merger (as defined below) and to Ouster, Inc. (formerly known as Colonnade Acquisition Corp.) and its consolidated subsidiaries following the consummation of the Merger.

Colonnade Acquisition Corp. (“CLA”), the Company’s legal predecessor, was originally a blank check company incorporated as a Cayman Islands exempted company on June 4, 2020. CLA was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. On March 11, 2021, CLA consummated a merger with the Company pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) dated as of December 21, 2020, details of which are included below.
Basis of Presentation and Principles of Consolidation
The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries (all of which are wholly owned) and have been prepared in conformity with U.S. generally accepted accounting principles (“US GAAP”) applicable to interim periods. The functional currency for the Company is the United States dollar. All intercompany balances and transactions have been eliminated in consolidation.

The unaudited condensed consolidated financial statements include all adjustments (consisting of only normal recurring adjustments) necessary for a fair statement of the results of operations for the periods shown. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2021 and the notes related thereto, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 28, 2022. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by US GAAP. Certain information and note disclosures normally included in the audited financial statements prepared in accordance with US GAAP have been condensed or omitted from this report, as is permitted by applicable rules and regulations. The results of operations for any interim period are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other future years or interim periods.
Liquidity
The Company has experienced recurring losses from operations, and negative cash flows from operations. As of September 30, 2022, the Company had an accumulated deficit of approximately $399.7 million. The Company has historically financed its operations primarily through the Merger and related transactions, the sale of convertible notes and equity securities, proceeds from debt and, to a lesser extent, cash received from sales. Management expects significant operating losses and negative cash flows from operations to continue for the foreseeable future. The Company expects to continue investing in product development and sales and marketing activities. The long-term continuation of the Company’s business plan is dependent upon the generation of sufficient revenues from its products to offset expenses and its ability to raise more capital. In the event that the Company does not generate sufficient cash flows from operations and is unable to obtain funding on acceptable terms or at all, the Company will be forced to delay, reduce, or eliminate some or all of its discretionary spending, which could adversely affect the Company’s business prospects, ability to meet long-term liquidity needs or ability to continue operations.

The FASB Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) requires the Company to make certain disclosures if it concludes that there is substantial doubt about the entity’s ability to continue as a going concern within one year from the date of the issuance of these condensed consolidated financial statements.
10

Management has determined that the Company has funds that are sufficient to continue as a going concern. The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis.

In evaluating the Company’s ability to continue as a going concern, the Company considered the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern for 12 months following November 8, 2022, the date the Company’s condensed financial statements were issued. Management considered the Company’s current financial condition and liquidity sources, including current funds and available working capital, forecasted future cash flows and the Company’s obligations due before November 8, 2023. As discussed in Note 14 the Company intends to execute the merger transaction with Velodyne Lidar, Inc. (which is subject to usual and customary closing conditions beyond our control). Although there is no assurance that the merger transaction will be successfully completed, the Company believes it can successfully complete the acquisition, enabling it to continue as a going concern. Also, the Company will evaluate whether it can meet its future obligations through the issuance of additional shares. If neither of these occur, the Company would expect to execute plans to reduce operating costs.

Impact of the COVID-19 Pandemic
Ouster has been actively monitoring the COVID-19 pandemic on a global scale and continues to evaluate the long-term impacts on the business while keeping abreast of the latest developments, particularly the variants of the virus, to ensure preparedness for Ouster’s employees and its business. We maintain our commitment to protecting the health and safety of our employees and customers. We continue to adapt and enhance our safety protocols as we follow the guidance from local authorities. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, research and development costs and employee-related amounts, will depend on future events that are uncertain, including as a result of new information that continues to emerge concerning the virus, its variants, the deployment and effectiveness of vaccination roll-outs, vaccination hesitancy, therapeutics, and the actions taken to contain the virus or treat it, as well as the economic impact on local, regional, national and international customers and markets. Thus, the Company is not able to estimate the future consequences on its operations, its financial condition, or its liquidity.

Merger Agreement with Colonnade Acquisition Corp. and Beam Merger Sub, Inc.
On December 21, 2020, OTI entered into the Merger Agreement with CLA and Beam Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and subsidiary of CLA. OTI’s board of directors unanimously approved OTI’s entry into the Merger Agreement, and on March 11, 2021, the transactions contemplated by the Merger Agreement were consummated. Pursuant to the terms of the Merger Agreement, (i) CLA domesticated as a corporation incorporated under the laws of the State of Delaware and changed its name to “Ouster, Inc.” and (ii) Merger Sub merged with and into OTI (such transactions contemplated by the Merger Agreement, the “Colonnade Merger”), with OTI surviving the Colonnade Merger.
As a result of the Merger, among other things, (1) each of the then issued and outstanding 5,000,000 CLA Class B ordinary shares, par value $0.0001 per share, of CLA (the “CLA Class B ordinary shares”) converted automatically, on a one-for-one basis, into a CLA Class A ordinary share (as defined below), (2) immediately following the conversion described in clause (1), each of the then issued and outstanding 25,000,000 Class A ordinary shares, par value $0.0001 per share, of CLA (the “CLA Class A ordinary shares”), converted automatically, on a one-for-one basis, into a share of common stock, par value $0.0001 per share, of Ouster (the “Ouster common stock”), (3) each of the then issued and outstanding 10,000,000 redeemable warrants of CLA (the “CLA warrants”) converted automatically into a redeemable warrant to purchase one share of Ouster common stock (the “Public warrants”) pursuant to the Warrant Agreement, dated August 20, 2020 (the “Warrant Agreement”), between CLA and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent, and (4) each of the then issued and outstanding units of CLA that had not been previously separated into the underlying CLA Class A ordinary shares and underlying CLA warrants upon the request of the holder thereof (the “CLA units”), were cancelled and entitled the holder thereof to one share of Ouster common stock and one-half of one Public warrant, and (5) each of the then issued and outstanding 6,000,000 private placement warrants of CLA (the “Private Placement warrants”) converted automatically into a Public warrant pursuant to the Warrant Agreement. No fractional Public warrants were issued upon separation of the CLA units.
Immediately prior to the effective time of the Colonnade Merger, (1) each share of OTI’s Series B Preferred Stock, par value $0.00001 per share (the “OTI Preferred Stock”), converted into one share of common stock, par value $0.00001 per share, of OTI (the “OTI common stock” and, together with OTI Preferred Stock, the “OTI Capital Stock”) (such conversion, the “OTI Preferred Conversion”) and (2) all of the outstanding warrants to purchase shares of OTI Capital Stock were exercised in full or terminated in accordance with their respective terms (the “OTI Warrant Settlement”).
11

As a result of and upon the closing of the Colonnade Merger, among other things, all shares of OTI Capital Stock (after giving effect to the OTI Warrant Settlement) outstanding immediately prior to the closing of the Colonnade Merger together with shares of OTI common stock reserved in respect of options to purchase shares of OTI common stock and restricted shares of OTI common stock (together, the “OTI Awards”) outstanding immediately prior to the closing of the Colonnade Merger that were converted into awards based on Ouster common stock, were cancelled in exchange for the right to receive, or the reservation of, an aggregate of 150,000,000 shares of Ouster common stock (at a deemed value of $10.00 per share), which, in the case of OTI Awards, were shares underlying awards based on Ouster common stock, representing a fully-diluted pre-transaction. Upon closing of the Colonnade Merger, the Company received gross proceeds of $299.9 million from the Colonnade Merger and private offering, offset by $8.5 million of pre-merger costs relating to CLA and offerings costs of $26.6 million.
The Colonnade Merger was accounted for as a reverse recapitalization under US GAAP. Under this method of accounting, CLA is treated as the “acquired” company for financial reporting purposes. This determination is primarily based on OTI stockholders comprising a relative majority of the voting power of the Company and having the ability to nominate the members of the board of directors of the Company after the Colonnade Merger, OTI’s operations prior to the Colonnade Merger comprising the only ongoing operations of the Company following the Colonnade Merger, and OTI’s senior management prior to the Colonnade Merger comprising a majority of the senior management of the Company following the Colonnade Merger. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of OTI with the Colonnade Merger being treated as the equivalent of OTI issuing stock for the net assets of CLA, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Transactions and balances prior to the Colonnade Merger are those of OTI. The shares and net loss per share available to holders of OTI’s common stock prior to the Colonnade Merger have been retroactively restated as shares reflecting the exchange ratio established in the Colonnade Merger Agreement.
PIPE Investment
On December 21, 2020, concurrently with the execution of the Colonnade Merger Agreement, CLA entered into subscription agreements with certain institutional and accredited investors (collectively, the “PIPE Investors”), pursuant to which the PIPE Investors agreed to purchase, in the aggregate, 10,000,000 shares of Ouster common stock at $10.00 per share for an aggregate commitment amount of $100,000,000 (the “PIPE Investment”), a portion of which was funded by certain affiliates of Colonnade Sponsor LLC, CLA’s sponsor (the “Sponsor”). The PIPE Investment was consummated substantially concurrently with the closing of the Colonnade Merger.
At the Market Issuance Sales Agreement
On April 29, 2022, the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with B. Riley Securities, Inc., Cantor Fitzgerald & Co. and Oppenheimer & Co. Inc., pursuant to which the Company may offer and sell, from time to time, through or to the agents, acting as agent or principal, shares of the Company’s common stock having an aggregate offering price of up to $150 million under the Company’s Form S-3 registration statement. From the date of the ATM Agreement through September 30, 2022, the Company sold 7,833,709 shares at a weighted-average sales price of $2.08 per share, resulting in cumulative gross proceeds to the Company totaling approximately $16.8 million before deducting offering costs, sales commissions and fees.
Loan and Security Agreement
On April 29, 2022, the Company entered into a loan and security agreement (the “Loan Agreement”) with Hercules. The Loan Agreement provides with the term loan of up to $50.0 million, subject to terms and conditions. The Company borrowed the initial tranche of $20.0 million on April 29, 2022. The Company may borrow an additional $20.0 million on or before March 15, 2023, subject satisfying certain conditions. An additional $10.0 million may be drawn on or before June 15, 2023, subject to satisfying certain conditions relating to the achievement of trailing twelve-month revenue and profit milestones.

For additional information, see Note 5, Debt.
Note 2 – Summary of Significant Accounting Policies
During the nine months ended September 30, 2022, there were no significant changes to the Company’s significant accounting policies as disclosed in the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2022, except for the changes described below. The Company has consistently applied the accounting policies to all periods presented in these condensed consolidated financial statements.
12

Deferred Debt Financing Costs
Financing costs incurred in connection with a loan and security agreement with Hercules Capital, Inc. (“Hercules”) are deferred and amortized using the effective interest rate method over the life of the respective agreement. Any discount or premium on the issuance of any debt is amortized using the effective interest method over the life of the respective debt security.
The Company presents deferred debt financing costs on the balance sheet as a contra-liability as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.
Recently Issued and Adopted Accounting Pronouncements
In August 2020, the FASB issued ASU No. 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 (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition, the amendments in the ASU also simplify the guidance in ASC 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity, by removing certain criteria that must be satisfied in order to classify a contract as equity, which is expected to decrease the number of freestanding instruments and embedded derivatives accounted for as assets or liabilities. Finally, the amendments revise the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity’s ability to rebut the presumption of share settlement for instruments that may be settled in cash or other assets. The new standard became effective for the Company for annual periods beginning December 15, 2021. The Company adopted this ASU as of January 1, 2022 using a modified retrospective method of transition, which did not have an impact on its condensed consolidated financial statements and related disclosures.
Recently Issued Accounting Pronouncements Not Yet Adopted
The Company considers the applicability and impact of all ASUs. ASUs not referenced below were assessed and determined to be either not applicable or are not expected to have a material impact on the Company’s consolidated financial statements.
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which amends ASC 805 to add contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and to require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption of the amendments is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of this ASU on the Company’s consolidated financial statements.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to credit risk consist primarily of cash, cash equivalents, restricted cash, and accounts receivable. Cash, cash equivalents, and restricted cash are deposited with federally insured commercial banks in the United States; and at times, cash balances may be in excess of federal insurance limits. The Company generally does not require collateral or other security deposits for accounts receivable.
To reduce credit risk, the Company considers customer creditworthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms when determining the collectability of specific customer accounts. Past due balances over 90 days and other higher risk amounts are reviewed individually for collectability. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable.
Accounts receivable from the Company’s major customer representing 10% or more of total accounts receivable was as follows:
September 30,
2022
December 31,
2021
Customer A*11 %
* Customer accounted for less than 10% of total accounts receivable in the period.
13

Revenue from the Company’s major customers representing 10% or more of total revenue was as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Customer C***10 %
* Customer accounted for less than 10% of total revenue in the period.
Concentrations of Supplier Risk
Purchases from the Company’s major suppliers representing 10% or more of total purchases were as follows:

Three Months Ended September 30,Nine Months Ended September 30, 2022
2021202020212020
Supplier B29 %19 %33 %17 %

Supplier B accounted for 32% and 55% of total accounts payable balance as of September 30, 2022 and December 31, 2021.
Note 3. Fair Value of Financial Instruments
The Company applies the fair value measurement accounting standard whenever other accounting pronouncements require or permit fair value measurements. Fair value is defined in the accounting standard as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels:
Level 1 - Quoted prices for identical instruments in active markets.
Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3 - Instruments whose significant value drivers are unobservable.
As of September 30, 2022 and December 31, 2021, the Company’s Level 3 liabilities consisted of the Private Placement warrant liability. The determination of the fair value of warrant liability is discussed in Note 6.
The following table provides information by level for the Company’s assets and liabilities that were measured at fair value on a recurring basis (in thousands):
September 30, 2022
Level 1Level 2Level 3Total
Assets
Money market funds$129,919 $ $ $129,919 
Total financial assets$129,919 $ $ $129,919 
Liabilities
Warrant liabilities$ $ $276 $276 
Total financial liabilities$ $ $276 $276 
14

December 31, 2021
Level 1Level 2Level 3Total
Assets
Money market funds$177,513 $ $ $177,513 
Total financial assets$177,513 $ $ $177,513 
Liabilities
Warrant liabilities$ $ $7,626 $7,626 
Total financial liabilities$ $ $7,626 $7,626 
Money market funds are included within Level 1 of the fair value hierarchy because they are valued using quoted market prices.
The fair value of the redeemable convertible preferred stock warrant, redeemable convertible preferred stock tranche and Private Placement warrant liabilities is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. In determining the fair value of the warrant liabilities, the Company used the Black-Scholes option pricing model to estimate the fair value using unobservable inputs, including the expected term, expected volatility, risk-free interest rate and dividend yield (see Note 6).
The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments (in thousands):
Redeemable
Convertible
Preferred Stock
Warrant Liability
Private Placement Warrant Liability
Fair value as of December 31, 2021$ $7,626 
Change in the fair value included in other income (expense), net (7,350)
Fair value as of September 30, 2022$ $276 
Fair value as of December 31, 2020(49,293) 
Private placement warrant liability acquired as part of the Colonnade Merger (19,377)
Change in the fair value included in other income (expense), net(8,804)8,398 
Issuance of preferred stock upon exercise of warrants58,097  
Fair value as of September 30, 2021$ $(10,979)
Disclosure of Fair Values
Financial instruments that are not re-measured at fair value include accounts receivable, accounts payable, accrued and other current liabilities and debt. The carrying values of these financial instruments approximate their fair values.
Note 4. Balance Sheet Components
Cash and Cash Equivalents
The Company’s cash and cash equivalents consist of the following (in thousands):
 September 30,
2022
December 31,
2021
Cash$3,270 $5,131 
Cash equivalents:
Money market funds(1)
129,919 177,513 
Total cash and cash equivalents$133,189 $182,644 
(1)The Company maintains a cash sweep account, which is included in money market funds as of September 30, 2022. Cash is invested in short-term money market funds that earn interest.

15

Restricted Cash
Restricted cash consists of certificates of deposit held by a bank as security for outstanding letters of credit. In September 2022, the Company received $0.7 million of restricted cash balance that was related to a deposit in connection with the execution of a respective lease contract at 2741 16th Street. The Company had a restricted cash balance of $