joby-20230331

•

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 March 31, 2023


o			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: 001-39524

_____________________________________________

Joby Aviation, Inc.

(Exact Name of Registrant as Specified in its Charter)

_____________________________________________


Delaware			98-1548118
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
333 Encinal Street, Santa Cruz, CA			95060
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (831) 201-6700

_____________________________________________

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 $0.0001

JOBY

New York Stock Exchange

Warrants to purchase common stock

JOBY WS

New 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 x No o

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

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. (Check one):


Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
Emerging growth company	o

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. o

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

The registrant had 630,978,702 shares of common stock outstanding as of May 3, 2023.

Table of Contents


		Page
	Special Note Regarding Forward-Looking Statements	2

PART I.	FINANCIAL INFORMATION	3

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets (Unaudited)	3
	Condensed Consolidated Statements of Operations (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Loss (Unaudited)	5
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows (Unaudited)	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30

PART II.	OTHER INFORMATION	32

Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
	Signatures	34

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements contained in this Quarterly Report on Form 10-Q which are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements include, without limitation, statements regarding the future financial position, business strategy and plans and objectives of management of Joby Aviation, Inc. (the “Company,” “Joby,” “we,” “us” or “our”). These statements constitute projections and forecasts and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

These forward-looking statements are based on information available as of the date of this Quarterly Report and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. While we believe these expectations, forecasts, assumptions and judgments are reasonable, our forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. Our business, prospects, financial condition, operating results and the price of our common stock may be affected by a number of factors, whether currently known or unknown, including but not limited to those discussed in this Quarterly Report in Part I., Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the section titled “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 1, 2023. Any one or more of these factors could, directly or indirectly, cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

As a result of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements.

Table of Contents

PART 1. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

JOBY AVIATION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands, except share and per share amounts)


	March 31, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	49,795	$	146,101
Short-term investments	927,980		910,692
Total cash, cash equivalents and short-term investments	977,775		1,056,793
Restricted cash	2,235		3,204
Other receivables	10,912		4,021
Prepaid expenses and other current assets	22,218		20,160
Total current assets	1,013,140		1,084,178
Property and equipment, net	93,032		92,103
Operating lease right-of-use assets	24,023		25,149
Restricted cash	762		762
Intangible assets	11,085		12,581
Goodwill	14,011		14,011
Other non-current assets	62,674		64,200
Total assets	$	1,218,727	$	1,292,984
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	3,927	$	7,710
Operating lease liabilities, current portion	3,546		3,710
Accrued and other current liabilities	22,844		18,783
Total current liabilities	30,317		30,203
Operating lease liabilities, net of current portion	22,684		23,613
Warrant liability	37,814		28,783
Earnout shares liability	57,094		44,055
Other non-current liabilities	1,323		1,589
Total liabilities	149,232		128,243
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred stock: $0.0001 par value - 100,000,000 shares authorized. No shares issued and outstanding.	—		—
Common stock: $0.0001 par value - 1,400,000,000 shares authorized; 629,522,605 and 622,602,815 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively.	61		61
Additional paid-in capital	1,923,054		1,908,179
Accumulated deficit	(848,046)		(734,653)
Accumulated other comprehensive loss	(5,574)		(8,846)
Total stockholders’ equity	1,069,495		1,164,741
Total liabilities and stockholders’ equity	$	1,218,727	$	1,292,984

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

JOBY AVIATION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(In thousands, except share and per share data)


	Three Months Ended March 31,
	2023		2022
Operating expenses:
Research and development (including related party purchases of $128 and $644 for the three months ended March 31, 2023 and 2022, respectively.)	$	75,518	$	72,071
Selling, general and administrative (including related party purchases of $24 and $161 for the three months ended March 31, 2023 and 2022, respectively.)	24,198		22,272
Total operating expenses	99,716		94,343
Loss from operations	(99,716)		(94,343)
Interest and other income, net	8,400		757
Income from equity method investment	—		14,458
Gain (Loss) from change in fair value of warrants and earnout shares	(22,043)		16,814
Total other income (loss), net	(13,643)		32,029
Loss before income taxes	(113,359)		(62,314)
Income tax expense	34		5
Net loss	$	(113,393)	$	(62,319)
Net loss per share, basic and diluted	$	(0.19)	$	(0.11)
Weighted-average common stock outstanding, basic and diluted	605,184,671		579,090,606

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

JOBY AVIATION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)

(In thousands)


	Three Months Ended March 31,
	2023		2022
Net loss	$	(113,393)	$	(62,319)
Other comprehensive gain (loss):
Unrealized gain (loss) on available-for-sale securities	3,245		(2,596)
Foreign currency translation gain	27		38
Total other comprehensive gain (loss)	3,272		(2,558)
Comprehensive loss	$	(110,121)	$	(64,877)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

JOBY AVIATION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(In thousands, except share data)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount
Balance at January 1, 2023	622,602,815	$	61	$	1,908,179	$	(734,653)	$	(8,846)	$	1,164,741
Net loss	—	—		—		(113,393)		—		(113,393)
Stock-based compensation	—	—		14,157		—		—		14,157
Issuance of common stock upon exercise of stock options	945,803	—		614		—		—		614
Issuance of common stock upon release of restricted stock units	5,836,813	—		—		—		—		—
Vesting of early exercised stock options and common stock issued in private placement	—	—		104		—		—		104
Issuance of common stock in private placement	137,174	—		—		—		—		—
Other comprehensive loss	—	—		—		—		3,272		3,272
Balance at March 31, 2023	629,522,605	$	61	$	1,923,054	$	(848,046)	$	(5,574)	$	1,069,495

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

JOBY AVIATION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)

(unaudited)

(In thousands, except share data)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount
Balance at January 1, 2022	604,174,329	$	60	$	1,793,431	$	(476,610)	$	(122)	$	1,316,759
Net loss	—	—		—		(62,319)		—		(62,319)
Stock-based compensation	—	—		12,088		—		—		12,088
Issuance of common stock upon exercise of stock options	823,524	—		428		—		—		428
Issuance of common stock upon release of restricted stock units	851,557	—		—		—		—		—
Vesting of early exercised stock options	—	—		121		—		—		121
Shares withheld related to net share settlement	(13,041)			(85)		—		—		(85)
Other comprehensive loss	—	—		—		—		(2,558)		(2,558)
Balance at March 31, 2022	605,836,369	$	60	$	1,805,983	$	(538,929)	$	(2,680)	$	1,264,434

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

JOBY AVIATION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands)


	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities
Net loss	$	(113,393)	$	(62,319)
Reconciliation of net loss to net cash used in operating activities:
Depreciation and amortization expense	7,067		5,212
Stock-based compensation expense	17,258		19,429
Loss (Gain) from change in the fair value of warrants and earnout shares	22,070		(16,814)
Income from equity method investment	—		(14,458)
Net accretion and amortization of investments in marketable debt securities	(3,670)		774
Changes in operating assets and liabilities
Other receivables and prepaid expenses and other current assets	(8,517)		418
Other non-current assets	2,629		9,332
Accounts payable and accrued and other liabilities	(1,083)		(3,000)
Non-current liabilities	(929)		—
Net cash used in operating activities	(78,568)		(61,426)
Cash flows from investing activities
Purchase of marketable securities	(126,445)		(571,890)
Proceeds from sales and maturities of marketable securities	116,072		108,056
Purchases of property and equipment	(8,756)		(10,833)
Acquisition, net of cash	—		(1,465)
Net cash used in investing activities	(19,129)		(476,132)
Cash flows from financing activities
Proceeds from issuance of common stock in private placement	50		—
Proceeds from the exercise of stock options	612		342
Repayments of tenant improvement loan and obligations under finance and capital lease	(240)		(262)
Net cash provided by financing activities	422		80
Net change in cash, cash equivalents and restricted cash	(97,275)		(537,478)
Cash, cash equivalents and restricted cash, at the beginning of the period	150,067		956,325
Cash, cash equivalents and restricted cash, at the end of the period	$	52,792	$	418,847
Reconciliation of cash, cash equivalents and restricted cash to balance sheets
Cash and cash equivalents	$	49,795	$	417,116
Restricted cash	2,997		1,731
Cash, cash equivalents and restricted cash	$	52,792	$	418,847
Non-cash investing and financing activities
Unpaid property and equipment purchases	$	1,357	$	426
Property and equipment purchased through capital leases	$	—	$	252

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

JOBY AVIATION, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Company and Nature of Business

Description of Business

Joby Aviation, Inc. (“Joby Aviation” or the “Company”) is a vertically integrated air mobility company that is building a clean, quiet, fully-electric vertical takeoff and landing (“eVTOL”) aircraft to be used by the Company to deliver air transportation as a service. The Company is headquartered in Santa Cruz, California.

Merger with RTP

On August 10, 2021 (the “Closing Date”), Reinvent Technology Partners, a Cayman Islands exempted company and special purpose acquisition company (“RTP”), completed the transactions contemplated by that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of February 23, 2021, by and among RTP, RTP Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of RTP (“RTP Merger Sub”), and Joby Aero, Inc., a Delaware corporation (“Legacy Joby”). On the Closing Date, RTP was domesticated as a Delaware corporation, Merger Sub merged with and into Legacy Joby and the separate corporate existence of Merger Sub ceased (the “Merger”), and Legacy Joby survived as a wholly-owned subsidiary of RTP, which changed its name to Joby Aviation, Inc.

In connection with the execution of the Merger Agreement, RTP entered into separate subscription agreements (each a “Subscription Agreement”) with a number of investors (each a “PIPE Investor”), pursuant to which the PIPE Investors agreed to purchase, and RTP agreed to sell to the PIPE Investors, shares of Common Stock (“PIPE Shares”), in a private placement (“PIPE Financing”). The PIPE Financing closed substantially concurrently with the consummation of the Merger.

The Merger, together with the other transactions described in the Merger Agreement and the PIPE Financing, are referred to herein as the (“Reverse Recapitalization”). The number of Legacy Joby common shares and redeemable convertible preferred shares for all periods prior to the Closing Date have been retrospectively increased using the exchange ratio that was established in accordance with the Merger Agreement. Please refer to Note 3, “Reverse Recapitalization,” in the Company’s annual report on Form 10-K for the year ended December 31, 2022.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The Condensed Consolidated Financial Statements are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position, results of operations and cash flows for the periods presented.

The Condensed Consolidated Financial Statements include accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

There have been no changes to the Company’s significant accounting policies described in Note 2 “Summary of Significant Accounting Policies” to the audited Consolidated Financial Statements in the Company’s annual report on Form 10-K for the year ended December 31, 2022, that have had a material impact on the Condensed Consolidated Financial Statements and related notes.

Certain information and footnote disclosures normally included in the Company’s annual audited Consolidated Financial Statements and accompanying notes have been condensed or omitted in these accompanying interim Condensed Consolidated Financial Statements and footnotes. Accordingly, the accompanying interim Condensed Consolidated Financial Statements included herein should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2022.

The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2023, any other interim periods, or any future year or period. In the opinion of management, these unaudited Condensed Consolidated Financial Statements include all adjustments and accruals, consisting only of normal, recurring adjustments that are necessary for a fair statement of the results of all interim periods reported herein.

Table of Contents

Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid investments with remaining original maturity of three months or less, from the date of purchase, to be cash and cash equivalents. The recorded carrying amount of cash and cash equivalents approximates their fair value. At March 31, 2023 and December 31, 2022, restricted cash primarily related to (i) approximately $2.2 million of cash temporarily retained by the Company to satisfy the Company’s post-closing indemnification claims, if any, against the seller, in connection with the acquisition of an aerospace software engineering company in May 2022 (Note 4) and (ii) a security deposit for a lease obligation of approximately $0.8 million. Additionally, at December 31, 2022, restricted cash included collateral on a letter of credit associated with key equipment purchases of approximately $1.0 million which was settled during the three months ended March 31, 2023.

Investment in SummerBio, LLC

Following the outbreak of the COVID-19 pandemic, the Company’s management determined that certain previously developed technology that was accessible to the Company could be repurposed and applied in providing high-volume rapid COVID-19 testing through its investment in SummerBio, LLC (“SummerBio”), a related party. The Company has determined that it is not the primary beneficiary of SummerBio. Therefore, it accounts for its investment in SummerBio under the equity method of accounting with an ownership interest of approximately 44.5% as of March 31, 2023 and December 31, 2022. In June 2022, SummerBio notified the Company of its decision to wind down testing operations and close the business, which SummerBio substantially completed by the end of December 2022.

The Company recognized income of nil and $14.5 million for the three months ended March 31, 2023 and 2022, respectively, within income from equity method investment on the condensed consolidated statement of operations for its investment in SummerBio.

New Accounting Pronouncements Not Yet Adopted

There are no recent accounting pronouncements applicable to the Company pending adoption that the Company expects will have a material impact on our condensed consolidated financial condition, results of operations, or cash flows.

Note 3. Fair Value Measurements

Assets and liabilities recorded at fair value on a recurring basis in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value represents 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. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

•Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

•Level 2 - Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

•Level 3 - Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

The Company’s financial assets consist of Level 1 and 2 assets. The Company classifies its cash equivalents and marketable debt securities within Level 1 or Level 2 because they are valued using either quoted market prices or inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded. The Company’s fixed income available-for-sale securities consist of high quality, investment grade securities from diverse issuers. The valuation techniques used to measure the fair value of the Company’s marketable debt securities were derived from non-binding market consensus prices that are corroborated by observable market data and quoted market prices for similar instruments.

Table of Contents

The Company’s financial liabilities measured at fair value on a recurring basis consist of Level 1, Level 2 and Level 3 liabilities. The Company’s Public Warrants (as defined in Note 7) are classified as Level 1 because they are directly observable in the market. The Company classifies the Private Placement Warrants (as defined in Note 7) within Level 2, because they were valued using inputs other than quoted prices which are directly observable in the market, including readily available pricing for the Company’s Public Warrants. The Company classifies Delta Warrant and Earnout Shares Liability (as defined in Note 7) within Level 3, because they were valued using unobservable inputs that are significant to the fair value measurement. The Delta Warrant and Earnout Shares Liability are measured at fair value on a recurring basis. Changes in fair value of Level 3 liabilities are recorded in total other income (loss), net in the condensed consolidated statements of operations.

The following tables set forth the fair value of the Company’s financial assets and liabilities measured on a recurring basis by level within the fair value hierarchy as of March 31, 2023 and December 31, 2022 (in thousands):


	March 31, 2023
	Level 1		Level 2		Level 3		Total
Assets measured at fair value
Money market funds	$	16,016	$	—	$	—	$	16,016
Cash equivalents	$	16,016	$	—	$	—	$	16,016
Term deposits	$	—	$	40,925	$	—	$	40,925
Asset backed securities	—		54,250		—		54,250
Government debt securities	—		444,229		—		444,229
Corporate debt securities	—		388,576		—		388,576
Available-for-sale investments	—		927,980		—		927,980
Total fair value of assets	$	16,016	$	927,980	$	—	$	943,996

Liabilities measured at fair value
Common stock warrant liabilities (Public)	$	11,213	$	—	$	—	$	11,213
Common stock warrant liabilities (Private Placement)	—		7,497		—		7,497
Common stock warrant liabilities (Delta)	—		—		19,104		19,104
Warrant liabilities	11,213		7,497		19,104		37,814
Earnout Shares Liability	—		—		57,094		57,094
Total fair value of liabilities	$	11,213	$	7,497	$	76,198	$	94,908

Table of Contents


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets measured at fair value
Money market funds	$	108,119	$	—	$	—	$	108,119
Cash equivalents	$	108,119	$	—	$	—	$	108,119
Term deposits	$	—	$	40,709	$	—	$	40,709
Asset backed securities	—		54,707		—		54,707
Government debt securities	—		362,851		—		362,851
Corporate debt securities	—		452,425		—		452,425
Available-for-sale investments	—		910,692		—		910,692
Total fair value of assets	$	108,119	$	910,692	$	—	$	1,018,811

Liabilities measured at fair value
Common stock warrant liabilities (Public)	$	8,318	$	—	$	—	$	8,318
Common stock warrant liabilities (Private Placement)	—		5,561		—		5,561
Common stock warrant liabilities (Delta)	—		—		14,903		14,903
Warrant liabilities	8,318		5,561		14,903		28,783
Earnout Shares Liability	—		—		44,055		44,055
Total fair value of liabilities	$	8,318	$	5,561	$	58,958	$	72,838

The following is a summary of the Company’s available-for-sale securities (in thousands):


	March 31, 2023
	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses		Allowance for credit losses		Fair value
Assets measured at fair value
Term deposits	$	40,925	$	—	$	—	$	—	$	40,925
Asset backed securities	54,505		—		(255)		—		54,250
Government debt securities	446,660		196		(2,627)		—		444,229
Corporate debt securities	390,857		19		(2,300)		—		388,576
Total	$	932,947	$	215	$	(5,182)	$	—	$	927,980


	December 31, 2022
	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses		Allowance for credit losses		Fair value
Assets measured at fair value
Term deposits	$	40,709	$	—	$	—	$	—	$	40,709
Asset backed securities	55,016		—		(309)		—		54,707
Government debt securities	367,324		—		(4,473)		—		362,851
Corporate debt securities	455,854		—		(3,429)		—		452,425
Total	$	918,903	$	—	$	(8,211)	$	—	$	910,692

There were no transfers between Level 1, Level 2 or Level 3 financial instruments in the three months ended March 31, 2023 and 2022.

Table of Contents

The following table sets forth a summary of the change in the fair value, which is recognized as a component of total other income (loss), net within the condensed consolidated statement of operations, of the Company’s Level 3 financial liabilities (in thousands):


	Earnout Shares Liability		Common Stock Warrant Liabilities Delta
Fair value as of January 1, 2023	$	44,055	$	14,903
Change in fair value	13,039		4,201
Fair value as of March 31, 2023	$	57,094	$	19,104

The fair value of the Earnout Shares Liability and Common stock warrant liabilities (Delta) (see Note 7) are based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy.

Note 4. Acquisitions

2022 Acquisitions

On March 9, 2022, the Company completed the acquisition of an aerospace composite manufacturing company, whereby it acquired all the purchased assets and assumed selected liabilities in exchange for a total consideration consisting of (i) $1.5 million in cash, and (ii) RSUs with the aggregate acquisition date value of $0.1 million. The acquisition was accounted for as a business combination as the assets acquired and liabilities assumed constituted a business in accordance with ASC 805 Business Combinations. The purchase consideration of $1.5 million was allocated to the following: a $1.1 million in favorable lease assets, $0.4 million of acquired machinery and equipment, $0.1 million of acquired current assets, and $0.1 million of acquired current liabilities.

On May 17, 2022, the Company completed the acquisition of an aerospace software engineering company that specializes in full-lifecycle software and firmware development and verification to aviation regulatory standards, in exchange for total cash consideration of $7.2 million. The acquisition was accounted for as a business combination as the assets acquired and liabilities assumed constituted a business in accordance with ASC 805 Business Combinations. Part of the cash consideration in an amount of $2.2 million was temporarily retained by the Company to satisfy the Company’s post-closing indemnification claims, if any, against the seller. This retained amount is payable to the seller, net of indemnification claims, at the one-year anniversary of the acquisition. As of March 31, 2023, this retained amount of $2.2 million is presented as restricted cash on the Company’s condensed consolidated balance sheet, with a related corresponding amount in accrued and other liabilities, reflecting obligations to the seller.

In relation to the acquisition, the Company issued 790,529 RSUs with an aggregate acquisition date value of approximately $4.5 million. The Company also paid $0.5 million to the employees of the acquired company, and settled accounts payable to the acquired company of $0.2 million. The RSUs vest contingent upon each employee’s continued employment with the Company or its subsidiaries, and are recognized as stock-based compensation expense over the RSUs’ vesting terms, commencing on the acquisition date.

The purchase consideration of $7.2 million was, preliminarily, allocated to $3.3 million of goodwill, primarily resulting from the combined workforce and expected increased regulatory efficiencies, $2.5 million of total intangible assets comprising of $2.4 million of acquired customer relationships intangible asset and $0.1 million of acquired developed technology intangible asset, $1.5 million of acquired current assets, primarily consisting of cash and accounts receivable, $0.3 million of acquired fixed assets, and $0.4 million of acquired current liabilities. Amounts recognized as of the acquisition date are provisional and subject to change within the measurement period as the Company’s fair value assessments are finalized. In September 2022, the Company made certain measurement period adjustments, which included a working capital adjustment with the seller in accordance with the agreement terms, resulting in an increase to the purchase consideration of $0.1 million which was paid during the three months ended December 31, 2022.

Table of Contents

Note 5. Balance Sheet Components

Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):


	March 31, 2023		December 31, 2022
Equipment	$	67,485	$	63,656
Buildings	21,384		21,384
Leasehold improvements	15,100		14,319
Computer software	11,598		10,920
Molds and tooling	10,793		10,298
Land	6,270		6,270
Vehicles and aircraft	1,597		1,582
Furniture and fixtures	690		682
Construction in-progress	6,465		6,094
Gross property and equipment	141,382		135,205
Accumulated depreciation and amortization	(48,350)		(43,102)
Property and equipment, net	$	93,032	$	92,103

Depreciation and amortization expense of property and equipment for the three months ended March 31, 2023 and 2022 was $5.5 million and $4.1 million, respectively. Vehicles and aircraft includes utility automobiles used at the Company’s various facilities and purchased aircraft to support the Company’s air operations and training.

Intangible Assets, Net

The intangible assets consist of the following (in thousands):


	March 31, 2023		December 31, 2022
Automation platform software	$	7,200	$	7,200
Multimodal software technology	4,900		4,900
System simulation software technology	4,600		4,600
Other intangibles	5,328		5,328
Gross intangible assets	22,028		22,028
Accumulated amortization	(10,943)		(9,447)
Intangible assets, net	$	11,085	$	12,581

Amortization expense related to intangible assets for the three months ended March 31, 2023 and 2022 was $1.5 million and $1.1 million, respectively. As of March 31, 2023 the weighted-average amortization period of intangible assets was 2.1 years.

The following table presents the estimated future amortization expense of acquired amortizable intangible assets as of March 31, 2023 (in thousands):


Fiscal Year	Amount
2023 (remainder)	$	4,537
2024	4,382
2025	2,166
	$	11,085

Table of Contents

Prepaid Expenses and Other Current Assets

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


	March 31, 2023		December 31, 2022
Prepaid equipment	$	4,883	$	4,525
Prepaid software	5,180		5,522
Prepaid taxes	2,048		1,273
Prepaid insurance	7,675		7,702
Other	2,432		1,138
Total	$	22,218	$	20,160

Other non-current assets

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


	March 31, 2023		December 31, 2022
Contractual agreement asset	$	59,611	$	59,611
Long term prepaid insurance	2,360		3,770
Other non-current assets	703		819
Total	$	62,674	$	64,200

Accrued and other current liabilities

Accrued and other current liabilities consist of the following (in thousands):


	March 31, 2023		December 31, 2022
Vendor related accruals	$	8,462	$	7,508
Payroll accruals	9,778		5,992
Acquisition-related obligation accrual	2,167		2,167
Other accruals and current liabilities	2,437		3,116
Total	$	22,844	$	18,783

Note 6. Commitments and Contingencies

Contingencies

The Company is subject to claims and assessments from time to time in the ordinary course of business. Accruals for litigation and contingencies are reflected in the Condensed Consolidated Financial Statements based on management’s assessment, including the advice of legal counsel, of the expected outcome of litigation or other dispute resolution proceedings and/or the expected resolution of contingencies. Liabilities for estimated losses are accrued if the potential losses from any claims or legal proceedings are considered probable and the amounts can be reasonably estimated. Significant judgment is required in both the determination of probability of loss and the determination as to whether the amount can be reasonably estimated. Accruals are based only on information available at the time of the assessment due to the uncertain nature of such matters. As additional information becomes available, management reassesses potential liabilities related to pending claims and litigation and may revise its previous estimates, which could materially affect the Company’s condensed consolidated results of operations in a given period. As of March 31, 2023, and December 31, 2022, the Company was not involved in any material legal proceedings.

Indemnifications

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements

Table of Contents

is unknown because it involves claims that may be made against the Company in the future, but that have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations.

The Company has indemnified its Board of Directors and officers, to the extent legally permissible, against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or officer, other than liabilities arising from willful misconduct of the individual. The Company currently has directors’ and officers’ insurance. The Company believes the estimated fair value of these obligations is minimal. The Company did not record any liabilities in connection with these possible obligations as of March 31, 2023 and December 31, 2022.

Note 7. Stock Warrants and Earnout Shares

Private Placement and Public Warrants

In connection with the Merger, each of the 17,250,000 publicly-traded warrants (“Public Warrants”) and 11,533,333 private placement warrants (“Private Placement Warrants” and, together with the Public Warrants, the “Common Stock Warrants”) issued to Reinvent Sponsor, LLC (the “Sponsor”) in connection with RTP’s initial public offering and subsequent overallotment were converted into an equal number of warrants that entitle the holder to purchase one share of the Company’s Common stock, par value $0.0001 (“Common Stock”) at an exercise price of $11.50 per share, subject to adjustments, and will expire five years after the completion of the Merger or earlier upon redemption or the Company’s liquidation. Once the Common Stock Warrants become exercisable, the Company may redeem the outstanding Common Stock Warrants subject to certain Common Stock price and other conditions as defined in the Warrant Agreement between RTP and Continental Stock Transfer & Trust Company (“Warrant Agreement”) and the Sponsor Agreement by and among the Company, Sponsor and RTP (“Sponsor Agreement”). During the three months ended March 31, 2023, no Common Stock Warrants were exercised.

The Private Placement Warrants were initially recognized as a liability on August 10, 2021, at a fair value of $21.9 million. For the three months ended March 31, 2023 and 2022, the Private Placement Warrant liability was remeasured to fair value as of March 31, 2023 and 2022, resulting in losses of $1.9 million and $1.0 million, respectively, which is included within the gain (loss) from change in the fair value of warrants and earnout shares in the condensed consolidated statements of operations.

The Public Warrants were initially recognized as a liability on August 10, 2021 at a fair value of $32.8 million. For the three months ended March 31, 2023 and 2022, the public warrant liability was remeasured to fair value based upon the market price as of March 31, 2023 and 2022, resulting in losses of $2.9 million and $1.6 million, respectively, classified within the gain (loss) from change in the fair value of warrants and earnout shares in the condensed consolidated statements of operations.

Earnout Shares Liability

In connection with the Reverse Recapitalization and pursuant to the Sponsor Agreement, Sponsor agreed to certain terms of vesting, lock-up and transfer with respect to the 17,130,000 common shares held by it (“Earnout Shares”). The terms of the Sponsor Agreement specify that the Earnout Shares will vest upon achieving certain specified release events. In accordance with ASC 815 Derivatives and Hedging, the Earnout Shares are not indexed to the Common Stock and therefore are accounted for as a liability (“Earnout Shares Liability”) as of the Closing Date and subsequently remeasured at each reporting date with changes in fair value recorded as a component of total other income (loss), net in the condensed consolidated statements of operations.

Under the vesting schedule, 20% of the Earnout Shares vest in tranches when the volume-weighted average price of the Company’s common stock quoted on the NYSE is greater than $12.00, $18.00, $24.00, $32.00 and $50.00 for any 20 trading days within a period of 30 trading days (each such occurrence a “Triggering Event”). After ten years following the consummation of the Merger (the “Earnout Period”), any Earnout Shares which have not yet vested are forfeited. No Earnout Shares vested as of March 31, 2023.

Earnout Shares Liability at the closing of the Merger on August 10, 2021, was $149.9 million based on a Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over the Earnout Period using the most reliable information available.

During the three months ended March 31, 2023 and 2022, the Company recognized a loss related to the change in the fair value of the Earnout Shares Liability of $13.0 million and a gain of $19.4 million, respectively, included within the gain (loss) from change in fair value of warrants and earnout shares in the condensed consolidated statement of operations.

Table of Contents

Assumptions used in the valuation are as follows:


	March 31, 2023		December 31, 2022
Expected volatility	70.60	%	73.70	%
Risk-free interest rate	3.52	%	3.92	%
Dividend rate	0.00	%	0.00	%
Expected term (years)	8.36		8.61

Delta Warrant

In connection with the umbrella agreement that the Company entered with Delta Air Lines, Inc. (“Delta”) on October 7, 2022, the Company sold and issued to Delta, in private placement, 11,044,232 shares of the Company’s Common Stock, at the per-share purchase price of $5.4327, for an aggregate cash consideration of $60.0 million. In addition, the Company issued a warrant for Delta to purchase up to 12,833,333 shares of the Company's common stock in two tranches, subject to certain milestone achievement conditions (“Delta Warrant”).

The first and the second tranches of the warrant permit Delta to purchase up to 7,000,000 and 5,833,333 shares of Common Stock at exercise prices of $10 and $12, respectively, starting from the date the applicable milestones are satisfied and ending on the ten year anniversary of the warrant issuance date. The number of shares and exercise price for both tranches is subject to value cap adjustment if the 30 day volume weighted average price per share of the Company’s stock exceeds 150% of each respective tranche’s exercise price, but disregarding any price increases occurring within 10 business days after a public announcement of the achievement of an applicable milestone, if any.

The Company concluded that no assets or liabilities were transferred by either party beyond the Company’s issuance of common stock and warrants in exchange for the total cash consideration from Delta, that the umbrella agreement does not constitute a funded research and development agreement in the scope of ASC 730 “Research and Development” or a collaborative agreement in the scope of ASC 808 “Collaborative Agreements”, and that the Delta Warrant is a freestanding financial instrument not indexed to the Company’s own stock. Accordingly, the Company recognized the issuance of Common Stock as equity in additional paid-in capital on condensed consolidated balance sheets and the Delta Warrant as liability on the condensed consolidated balance sheets at fair value.

The Delta Warrant issuance was initially recognized as a liability on October 7, 2022, at a fair value of $16.1 million based on a Monte Carlo simulation valuation model using the most reliable information available. The Delta Warrant’s liability was remeasured to fair value as of March 31, 2023, resulting in a loss of $4.2 million, which is included within the gain (loss) from change in the fair value of warrants and earnout shares in the condensed consolidated statements of operations

Assumptions used in the valuation of Delta Warrants are as follows:


	March 31, 2023		December 31, 2022
Expected volatility	78.40	%	75.10	%
Risk-free interest rate	3.49	%	3.89	%
Dividend rate	—	%	—	%
Expected term (in years)	9.5		9.8

Note 8. Stock-based Compensation

Equity Compensation Plans

In November 2016, the Company’s Board of Directors adopted the 2016 Stock Option and Grant Plan (“2016 Plan”) under which officers, employees, directors, consultants and other key persons of the Company or its affiliates may be granted

Table of Contents

incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock and restricted stock units. On August 10, 2021, the Company’s Board of Directors amended the 2016 Plan to provide that no new awards could be granted under the 2016 Plan.

Under the 2016 Plan, stock options are generally granted with an exercise price equal to the estimated fair value of the Company’s common stock, as determined by the Company’s Board of Directors on the date of grant. Options generally have contractual terms of ten years. Incentive stock options (ISO) may only be granted to employees, whereas all other stock awards may be granted to employees, directors, consultants and other key persons.

Outstanding options generally vest over six years, contain a one year cliff, are exercisable immediately and, upon early exercise, are subject to repurchase by the Company at the original exercise price. If an ISO is granted to an optionee who, at the time of grant, owns more than 10% of the voting power of all classes of capital stock, the term of the ISO is five years. Options issued under the 2016 Plan must be priced at no less than the fair value of the shares on the date of the grant provided, however, that the exercise price of an option granted to a 10% stockholder is not less than 110% of the fair value of the shares on the date of grant. The Board of Directors determines the exercisability provisions of a stock option agreement at its sole discretion.

On August 10, 2021, the Company adopted the 2021 Equity Incentive Plan (“2021 Plan”). Under the 2021 Plan, the Company can grant incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units and performance awards to employees, directors and consultants. The number of shares available for issuance under the 2021 Plan will be increased on the first day of each fiscal year, beginning on January 1, 2022, in an amount equal to the lesser of (i) a number of shares equal to four percent (4%) of the total number of shares of all classes of common stock of the Company outstanding on the last day of the immediately preceding fiscal year, or (ii) such number of shares determined by the Company’s Board of Directors. On January 1, 2023, the number of shares available for issuance under 2021 plan increased by 24,904,113 shares.

Restricted Stock Units

The summary of RSU activity is as follows (in thousands, except per share data):


	Number of Units	Weighted-Average Grant Date Fair Value Per Share		Aggregate Intrinsic Value (in thousands)
Balances—December 31, 2022	28,537,127	$	5.75	$	95,599
Granted	1,973,570	$	3.84
Vested	(5,839,302)	$	4.58
Forfeited	(815,705)	$	6.32
Balances—March 31, 2023	23,855,690	$	5.86	$	103,534

On December 16, 2021, the Company’s Board of Directors approved a performance-based bonus program under which RSUs were awarded in connection with the achievement of specified goals to be achieved in 2022 (“2022 Bonus Plan”). The RSUs awarded under 2022 Bonus Plan vested on January 1, 2023 and are included in Restricted Stock Units activity for the three months ended March 31, 2023.

On February 27, 2023, the Company’s Compensation Committee of the Board of Directors ("Compensation Committee") approved a performance-based bonus program under which RSUs will be awarded in connection with the achievement of specified goals in 2023 ("2023 Bonus Plan"). The RSU awards will be granted when the achievement of each goal is approved by the Compensation Committee in 2023, and the RSUs will vest in equal installments in each of January, February, March and April 2024 provided the employee or consultant continues to be a service provider through the relevant vesting dates. The target bonus opportunity is equal to 30% of the employee’s base salary as of the applicable grant date, with stretch bonus goals that are one-third higher than the target amounts unless otherwise established by the Compensation Committee.

The Company recorded stock-based compensation expense of $3.3 million and $7.3 million during the three months ended March 31, 2023 and 2022 in relation to 2023 Bonus Plan and 2022 Bonus Plan, respectively. The Company considers the probability of achieving each of the performance goals at the end of each reporting period and recognizes expense over the requisite service period when achievement of the goal is determined to be probable, and adjusts the expense if the probability of achieving the goal later changes. In accordance with ASC 718 Compensation - Stock Compensation, awards under 2023 Bonus Plan and 2022 Bonus Plan are classified as a liability until such time that the respective milestones are

Table of Contents

met, at which point the liability is reclassified to equity. If it is determined that the milestone cannot be met, the liability will be reversed.

Employee Stock Purchase Plan

On August 10, 2021, the Company adopted the 2021 Employee Stock Purchase Plan (“2021 ESPP”). Under the 2021 ESPP, participating employees may be offered the option to purchase shares of the Company’s Common Stock at a purchase price which equals 85% of the fair market value of the Company’s common stock on the enrollment date or on the exercise date, whichever is lower. The number of shares of common stock available for issuance under the 2021 ESPP will be increased on the first day of each fiscal year beginning on January 1, 2022, in an amount equal to the lesser of (i) a number of shares of common stock equal to half percent (0.5%) of the total number of shares of all classes of common stock of the Company on the last day of the immediately preceding fiscal year, or (ii) such number of shares determined by the Company’s Board of Directors. On January 1, 2023, the number of shares available for issuance under 2021 ESPP increased by 3,113,014 shares. The 2021 ESPP’s first offering and purchase periods began in November 2022 with the first purchase period ending in May 2023. Accordingly, as of March 31, 2023, no shares have been issued under the 2021 ESPP. The stock-based compensation expense recognized for the 2021 ESPP was $0.8 million and nil for the three months ended March 31, 2023 and 2022, respectively.

Stock-based Compensation Expense

The following sets forth the total stock-based compensation expense included in the Company’s condensed consolidated statements of operations (in thousands):


	Three Months Ended March 31,
	2023		2022
Research and development expenses	$	13,044	$	14,722
Selling, general and administrative expenses	4,214		4,707
Total stock-based compensation expense	$	17,258	$	19,429

Shares subject to repurchase

The Company allows certain option holders to exercise unvested options to purchase shares of common stock. Common shares received from such early exercises are subject to a right of repurchase at the original issuance price. The Company’s repurchase right with respect to these shares lapses as the shares vest. These awards are typically subject to a vesting period of six years. As of March 31, 2023 and December 31, 2022, 3,338,985 and 3,923,509 shares, respectively, were subject to repurchase at a weighted average price of $0.10 per share and $0.10 per share, respectively, and $0.3 million and $0.4 million, respectively, was recorded within the other non-current liabilities on the Company’s condensed consolidated balance sheets.

In addition, upon completion of the Reverse Recapitalization 2,677,200 Series C Preferred shares which were subject to time-based vesting conditions were converted to restricted common shares. As of March 31, 2023 and December 31, 2022, the number of such shares that were subject to repurchase was 1,895,180 and 2,007,595, respectively.

Table of Contents

Note 9. Related Party Transactions

The Company’s Chief Executive Officer and founder has ownership interests in certain vendors providing services to the Company. The services purchased from these vendors include rent of office space and certain utilities and maintenance services related to the property on which the rented premises are located. Expenses and related payments to these vendors totaled $0.2 million and $0.2 million during the three months ended March 31, 2023 and 2022, respectively.

In addition, the Company entered into certain transactions with SummerBio in the year ended December 31, 2022. These transactions included purchases of COVID-19 testing services for the Company’s employees and certain assets for a total amount of $0.6 million during the three months ended March 31, 2022.

Note 10. Net Loss per Share Attributable to Common Stockholders

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period. Because the Company reported a net loss for the three months ended March 31, 2023 and 2022, the number of shares used to calculate diluted net loss per common share is the same as the number of shares used to calculate basic net loss per common share for those periods presented because the potentially dilutive shares would have been antidilutive if included in the calculation.

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data):


	Three Months Ended March 31,
	2023		2022
Numerator:
Net loss attributable to common stockholders	$	(113,393)	$	(62,319)
Denominator:
Weighted-average shares outstanding	605,184,671		579,090,606
Net loss per share attributable to common stockholders, basic and diluted	$	(0.19)	$	(0.11)

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive:


			March 31, 2023
Common stock warrants			28,783,333
Unvested restricted stock units			23,855,690
Options to purchase common stock and unvested restricted stock awards			17,782,326
Unvested early exercised common stock options			3,338,985
Total			73,760,334


			March 31, 2022
Common stock warrants			28,783,333
Unvested restricted stock units			18,964,922
Options to purchase common stock and unvested restricted stock awards			22,622,456
Unvested early exercised common stock options			6,266,063
Earnout Shares			17,130,000
Total			93,766,774

Table of Contents

Note 11. Subsequent Events

The Company evaluated subsequent events and transactions that occurred up to the date financial statements were issued.

On May 3, 2023, the Company entered into a common stock purchase agreement with certain institutional investors for the issuance and sale in a registered direct offering of 43,985,681 shares of the Company's common stock, par value $0.0001 per share, at an offering price of $4.10 per share. The offering is expected to close on or about May 5, 2023. The net proceeds from the offering were approximately $180.2 million, after deducting estimated offering expenses payable by the Company. The offering was made pursuant to the Company's effective shelf registration statement on Form S-3 previously filed with and declared effective by the Securities and Exchange Commission (the “SEC”) and a prospectus supplement and accompanying prospectus filed with the SEC.

Table of Contents

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

The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read together with our Condensed Consolidated Financial Statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis includes forward looking statements that involve risks and uncertainties. Please see the section of this Quarterly Report on Form 10-Q titled “Special Note Regarding Forward-Looking Statements.”

Overview

We have spent more than a decade designing and testing a piloted all-electric aircraft that can take off and land vertically, while cruising like a traditional airplane. The aircraft is quiet when taking off, near silent when flying overhead and is designed to transport a pilot and four passengers at speeds of up to 200 mph, with a maximum range of 150 miles on a single charge. The low noise enabled by the all-electric powertrain will allow the aircraft to operate around dense, urban areas while blending into the background noise of cities. With more than 1,000 successful test flights already completed, and as the first eVTOL aircraft developer to receive a signed, stage 4 G-1 certification basis, we believe we are well positioned to be the first eVTOL manufacturer to earn airworthiness certification from the Federal Aviation Administration (“FAA”).

We do not currently intend to sell these aircraft to third parties or individual consumers. Instead, we plan to manufacture, own and operate our aircraft, building a vertically integrated transportation company that will deliver transportation services to our customers, including the U.S. Air Force through contracted operations, and to individual end-users through a convenient app-based aerial ridesharing platform. Our goal is to begin initial service operations with the Department of Defense in 2024, followed by commercial passenger operations in 2025. We believe this business model will generate the greatest economic returns, while providing us with end-to-end control over the customer experience to optimize for customer safety, comfort and value. There may be circumstances in which it is either required (for example, due to operating restrictions on foreign ownership in other countries) or otherwise desirable to sell aircraft in the future. While we do not expect this would change our core focus on building a vertically integrated transportation company, we may choose to sell aircraft in circumstances where we believe there is a compelling business reason to do so.

Since our inception in 2009, we have been primarily engaged in research and development of eVTOL aircraft. We have incurred net operating losses and negative cash flows from operations in every year since our inception. As of March 31, 2023, we had an accumulated deficit of $848.0 million. We have funded our operations primarily with proceeds from the issuance of stock, convertible notes and the proceeds from the merger described below.

The Merger

We entered into an Agreement and Plan of Merger (the “Merger Agreement”) on February 23, 2021, with Reinvent Technology Partners, a special purpose acquisition company (“RTP”). Pursuant to the Merger Agreement, on August 10, 2021 (the “Closing Date”), Joby Aero, Inc. (“Legacy Joby”) was merged with and into a wholly-owned subsidiary of RTP (the “Merger”). Legacy Joby survived as a wholly-owned subsidiary of RTP, which was renamed Joby Aviation, Inc. (“Joby Aviation”).

The Merger is accounted for as a reverse capitalization in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Under this method of accounting, RTP is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of Joby Aviation represent a continuation of the financial statements of Legacy Joby, with the Merger being treated as the equivalent of Joby Aviation issuing stock for the net assets of RTP, accompanied by a recapitalization. Legacy Joby operations prior to the Merger are presented as those of Joby Aviation. The Merger, which raised $1,067.9 million, has significantly impacted our capital structure and operating results, supporting our product development, manufacturing and commercialization efforts.

As a result of becoming a reporting company with the SEC and NYSE-listed company, we have hired and will continue to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We expect to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees, and additional internal and external accounting, legal and administrative resources.

All shares and per share amounts of Legacy Joby for all presented periods have been retrospectively adjusted using the exchange ratio that was established in accordance with the Merger Agreement (the “Exchange Ratio”).

Table of Contents

Key Factors Affecting Operating Results

For a more comprehensive discussion of the risks and uncertainties that could impact the Company’s business, please see the section entitled “Risk Factors” in the Company’s annual report on Form 10-K for the year ended December 31, 2022.

Development of the Urban Air Mobility (“UAM”) market

Our revenue will be directly tied to the continued development of short distance aerial transportation. While we believe the market for UAM will be large, it remains undeveloped and there is no guarantee of future demand. We are targeting initial service with the Department of Defense beginning in 2024, followed by commercial passenger operations in 2025, and our business will require significant investment leading up to launching these services, including, but not limited to, final engineering designs, prototyping and testing, manufacturing, software development, certification, pilot training, infrastructure and commercialization.

We believe one of the primary drivers for adoption of our aerial ridesharing service is the value proposition and time savings offered by aerial mobility relative to traditional ground-based transportation. Additional factors impacting the pace of adoption of our aerial ridesharing service may include but are not limited to: perceptions about eVTOL quality, safety, performance and cost; perceptions about the limited range over which eVTOL may be flown on a single battery charge; volatility in the cost of oil and gasoline; availability of competing forms of transportation, such as ground, air taxi or ride-hailing services; the development of adequate infrastructure; consumers’ perception about the safety convenience and cost of transportation using eVTOL relative to ground-based alternatives; and increases in fuel efficiency, autonomy, or electrification of cars. In addition, macroeconomic factors could impact demand for UAM services, particularly if end-user pricing is at a premium to ground-based transportation alternatives or more permanent work-from-home behaviors persist following the COVID pandemic. We anticipate initial operations with our U.S. government customers to be followed by operations in selected high-density metropolitan areas where traffic congestion is particularly acute and operating conditions are suitable for early eVTOL operations. If the market for UAM does not develop as expected, this would impact our ability to generate revenue or grow our business.

Competition

We believe that the primary sources of competition for our service are ground-based mobility solutions, other eVTOL developers/operators and local/regional incumbent aircraft charter services. While we expect to be first to market with an eVTOL facilitated aerial ridesharing service, we expect this industry to be dynamic and increasingly competitive; and our competitors could get to market before us, either generally or in specific markets. Even if we are first to market, we may not receive any competitive advantage or may be overtaken by other competitors. If new or existing aerospace companies launch competing solutions in the markets in which we intend to operate or obtain large-scale capital investment, we may face increased competition. Additionally, our competitors may benefit from our efforts in developing consumer and community acceptance for eVTOL aircraft and aerial ridesharing, making it easier for them to obtain the permits and authorizations required to operate an aerial ridesharing service in the markets in which we intend to launch or in other markets. If we do not capture the first mover advantage that we anticipate, it may harm our business, financial condition, operating results and prospects. For a more comprehensive discussion, please see the section entitled “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2022.

Government Certification

We agreed to a signed, stage 4 “G-1” certification basis for our aircraft with the FAA in 2020. This agreement lays out the specific requirements that need to be met by our aircraft for it to be certified for commercial operations. Reaching this milestone marks a key step on the way towards certifying any new aircraft in the U.S. Our aircraft was originally intended to be certified in line with the FAA’s existing Part 23 requirements for Normal Category Airplanes, with special conditions introduced to address requirements specific to our unique aircraft. In May 2022, the FAA indicated that they were revisiting the decision to certify all eVTOLs under Part 23 and would, instead, require certification under the “powered lift” classification. Based on the FAA’s revised certification requirements, we re-signed an updated stage 4 "G-1" certification basis in July 2022 and it was published in the federal register in November 2022.

In 2022, we received our Part 135 operating certificate, which is required for us to operate an on-demand air service. While that currently allows us to operate the service with conventional aircraft, the FAA will need to publish operational regulations related to eVTOLs before we add our aircraft to our Part 135 operating certificate. The FAA recently indicated that they do not expect the relevant operational regulations, or Special Federal Aviation Regulations (“SFARs”), for eVTOL aircraft to be finalized until late 2024. If the publication of the SFARs is further delayed, if the FAA requires further modifications to our existing G-1 certification basis, or if there are other regulatory changes or revisions, this could delay our ability to obtain type certification, and could delay our ability to launch our commercial passenger service.