Joby Aviation, Inc. Post-effective amendment to a registration statement that is not immediately effective upon filing

Post-effective amendment to a registration statement that is not immediately effective upon filing

Fair Value Measurements

Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Note 4. Fair Value Measurements

Assets and liabilities recorded at fair value on a recurring basis in the 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.

The Company’s financial liabilities measured at fair value on a recurring basis consist of Level 2 and Level 3 liabilities. Company classifies the Private Placement Warrants 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 the redeemable convertible preferred stock warrant and the Earnout Shares Liability within Level 3. The Common Stock 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 other income, net, in consolidated statements of operations.

The

following tables sets 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 December 31, 2021 and 2020 (in thousands):


	December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets measured at fair value

Money market funds	$	929,842	$	—	$	—	$	929,842

Cash equivalents		929,842		—		—		929,842

Term deposits		—		40,069		—		40,069
Asset backed securities		—		69,496		—		69,496
Government debt securities		—		47,308		—		47,308
Corporate debt securities		—		186,376		—		186,376

Available-for-sale investments		—		343,249		—		343,249

Total fair value of assets	$	929,842	$	343,249	$	—	$	1,273,091

Liabilities measured at fair value
Common stock warrant liabilities (Public)	$	26,910		—		—	$	26,910
Common stock warrant liabilities (Private Placement)		—		17,992		—		17,992
Earnout Shares Liability		—		—		109,844		109,844

Total fair value of liabilities	$	26,910	$	17,992	$	109,844	$	154,746


	December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets measured at fair value

Money market funds	$	74,049	$	—	$	—	$	74,049

Cash equivalents		74,049		—		—		74,049

Asset backed securities		—		52,022		—		52,022
Government debt securities		—		57,829		—		57,829
Corporate debt securities		—		258,736		—		258,736

Marketable debt securities		—		368,587		—		368,587

Total fair value of assets	$	74,049	$	368,587		—	$	442,636

The following is a summary of the Company’s

available-for-sale

securities (in thousands):


	December 31, 2021
	Adjusted Basis		Unrealized Gains		Unrealized Losses			Recorded Basis
Assets measured at fair value

Term deposits	$	40,069		—	$	—		$	40,069
Asset backed securities		69,579		—		(83	)		69,496
Government debt securities		47,355		—		(47	)		47,308
Corporate debt securities		186,471		—		(95	)		186,376

Total	$	343,474	$	—	$	(225	)	$	343,249


	December 31, 2020
	Adjusted Basis		Unrealized Gains		Unrealized Losses		Recorded Basis

Asset backed securities	$	51,938	$	84		—	$	52,022
Government debt securities		57,826		3		—		57,829
Corporate debt securities		258,502		234		—		258,736

Total	$	368,266	$	321		—	$	368,587

There were no transfers between Level 1, Level 2 or Level 3 financial instruments in the year ended December 31, 2021 and 2020.

In the year ended December 31, 2020, the Company did not have any Level 3 financial assets or liabilities measured at fair value on a recurring basis.

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


	In-Q-Tel Warrant Liability			Earnout Shares Liability

Fair value as of January 1, 2021	$	—		$	—
Initial fair value of the In-Q-Tel warrant liability		602			—
Earnout Shares Liability recognized upon the closing of the reverse recapitalization		—			149,911
Change in fair value		89			(40,067	)
Extinguishment of Legacy Joby In-Q-Tel warrant liability to common stock upon the reverse recapitalization		(691	)		—

Fair value as of December 31, 2021	$	—		$	109,844

The

fair values of the

In-Q-Tel

warrant liability and Earnout Shares Liability (see Note 11) are based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. In determining the fair value of the

In-Q-Tel

warrant liability, 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 11).

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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