Eve Holding Inc

An investment in our securities involves a high degree of risk. You should consider carefullyall of the risks described below, together with the other information contained in this Annual Report, including our financial statements and related notes, before making a decision to invest in our securities. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business, financial conditionand operating results.

Summary of Risk Factors

Our business is subject to numerous risks and uncertainties that represent challenges that we face in connection with the successful implementation of our strategy and the growth of our business. The occurrence ofone or more of the events or circumstances described in the section titled“Risk Factors,”alone or in combination with other events or circumstances, may harm our business, financial conditionand operating results. Such risks include, but are not limited to:

• The market for Urban Air Mobility (UAM) has not been established with precision, is still emerging and may not achieve the growth potential we expect, or may grow more slowly than expected.

• There may be reluctance by consumers to adopt this new form of mobility, or unwillingness to pay our projected prices.

• There may be rejection of eVTOL operation in certain localities due to a perceived risk of safety or burden on local communities from eVTOL operations.

• If current airspace regulations are not modified to increase air traffic capacity, our business could be subject to considerable capacity limitations.

• Urban Air Traffic Management (UATM) may not be able to provide adequate situational awareness and equitable airspace access to eVTOLs or may not allow industrial scalability.

• The regulatory environment for third-party service and technology providers (which UATM could be labeled as) may not be specific enough to support our UATM solution, or may delay its adoption.

• Our UATM solution may underperform if it has a defect or it is not delivered on the projected timeline.

• We may not be able to launch our eVTOL and related services on the timeline projected.

• We may be unable to secure third parties to provide aerial ridesharing services and to make the necessary changes to, and operate, vertiports using our aircrafts, or otherwise make the services sufficiently convenient to drive customer adoption.

• Our customers’ perception of us and our reputation may be impacted by the broader industry and customers may not differentiate our aircraft and services from our competitors.

• Our prospects and operations may be adversely affected by changes in consumer preferences, discretionary spending and other economic conditions that affect demand for UAM services.

• Neither we nor ERJ have manufactured or delivered any eVTOL aircraft to customers, which makes evaluating our business and future prospects difficult and increases the risk of investment.

• Our eVTOL aircraft may not perform at the level we expect, and may have potential defects, such as higher than expected noise profile, lower payload than initially estimated, shorter range, higher unit cost, higher cost of operation, perceived discomfort during transition phase of flight and/or shorter useful lives than we anticipate.

• We may not be able to produce eVTOL aircraft in the volumes and on the timelines projected.

• Crashes, accidents or incidents of eVTOL aircraft or involving UATM solutions, or lithium batteries involving us or our competitors could have a material adverse effect on our business, financial condition, and results of operations.

• We currently rely and expect to continue to rely on ERJ to provide services, products, parts and components required to develop and certify our aircraft and to supply critical services, components and systems necessary for our operations, which exposes us to a number of risks and uncertainties outside our control.

• Although we have a defined strategy for the manufacturing of our aircraft following type certification, we are exposed to a number of risks and uncertainties outside our control.

• Our agreements with our customers are non-binding and constitute all of the current orders for our aircraft. If we do not enter into definitive agreements with our customers, or the conditions to our customer’s orders (if any) are not met, or if such orders (if any) are cancelled, modified or delayed, our prospects, results of operations, liquidity and cash flow will be harmed.

• We may be unable to obtain relevant regulatory approvals for the commercialization of our aircraft, including Type Certification, Production Certification, and Operating Certification approvals for permitting new infrastructure or accessing existing infrastructure or otherwise.

• Changes in government regulation imposing additional requirements and restrictions on our operations could increase our operating costs and result in service delays and disruptions.

• If our relations with our strategic partners were to deteriorate or terminate, our business could be adversely affected or these parties may act in a manner adverse to us.

• The failure of certain advances in technology such as autonomy or battery density to mature at the rates we project may impact our ability to increase the volume of our service and/or drive down end-user pricing at the rates we project.

• We are an early-stage company with a history of losses, and we expect to incur significant losses for the foreseeable future, and we may not be able to achieve or maintain profitability.

• We are subject to cybersecurity risks to our operational systems, security systems, infrastructure, integrated software in our aircraft and customer data processed by our third-party vendors.

• Our available capital resources may not be sufficient to meet the requirements of our business plan and we may need to raise additional capital.

• Brazilian political and economic conditions have a direct impact on our business, and such conditions could adversely affect our business, financial condition and results of operations.

Risks Relatedto our Business and Industry

Market& Service

The marketfor Urban Air Mobility(UAM) has not been established with precision, isstill emergingand may not achievethe growth potentialwe expect, ormay grow more slowly than expected.

The UAMmarketis still emergingand has not been established with precision. Itis uncertainto what extent market acceptance will grow, ifatall. We intendto initially launch operationsin a limited numberof metropolitan areas. The successof these marketsand theopportunityfor future growth in these marketsmaynot be representativeof thepotential marketfor UAMin other metropolitan areas. Our success will depend to asubstantial extenton regulatory approvaland availabilityof eVTOL technology, investmentsand developmentof theecosystem infrastructure, community acceptance, as wellas thewillingnessof commutersand travelersto widely adoptair mobilityas an alternativefor ground transportation. Ifthe public does not perceive UAMas beneficialor choosesnot to adopt UAM because ofconcerns regarding safety, affordability, value proposition or forother reasons, thenthe marketforour offeringsmaynot develop, maydevelop more slowly thanwe expect or maynot achievethe growth potentialwe expect. As a result, thenumberof potential fliers usingour eVTOL cannotbe predicted with any degreeof certainty, and we cannot assure thatwe willbe ableto operatein a profitable mannerin any of our targeted markets. Any of theforegoing could materially adversely affectour business, financial condition, and resultsof operations.

Growth of our business will require significant investmentsin thedevelopmentof the UAMecosystem, infrastructure, technologyand marketingand sales efforts. Our current cash flow has not been sufficientto support these needs. Ifour business does not generatethe levelof available cash flow requiredto support these investments, our resultsof operations willbe negatively affected. Furthermore, our abilityto effectively manage growth and expansionof our operations will also requireus to enhanceour researchand development, manufacturing, operational systems, internal controlsand infrastructure, human resources policies, and reporting systems. These enhancements will require significant capital expendituresand allocationof valuable managementand employee resources.

There maybe reluctanceby consumersto adopt thisnew formof mobility, or unwillingnessto pay our projected prices.

Our growth ishighly dependent upon theadoptionby consumersof an entirelynew formof mobility offered by eVTOL aircraftand the UAMmarket. Ifconsumersdo not adopt thisnew formof mobilityor arenot willingto pay theprices sharedfor aerial ridesharing services, our businessmay never materializeand our prospects, financial conditionand operating results willbe harmed. This marketisnew, rapidly evolving, and characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulationand industry standards, new aircraft announcementsand changing consumer demandsand behaviors.

Our successin each market will depend on thelocal infrastructureand regulations, on our partners’ abilityto developa networkof passengersand accurately assessand predict passenger demandand price sensitivity. Demand and price sensitivitymay fluctuate basedon a varietyof factors, including macroeconomic factors, qualityof service, negative publicity, safety incidents, corporate reporting relatedto safety, qualityof customer support, perceived politicalor geopolitical affiliations, or dissatisfaction with our brand, products, and offeringsin general. Ifour commercial partners failto attract passengersor failto accurately predict demandand price sensitivity, itwill harmour financial performanceand our competitors’ productsmay achieve greater market adoptionand maygrow ata faster rate thanour business.

We expect thata large driverof passenger demandfor aerial ridesharing services willbe time savings when compared with alternative modesof transportation. Should we or our commercial partnersbe unableto delivera sufficient levelof time savingsforour eVTOL passengersor ifexpected time savingsare impactedby delaysor cancellations, itcould reduce demandfor aerial ridesharing services. Ifwe or our commercial partnersare unable to generate demandor demand falls, our business, financial condition, and resultsof operations couldbe adversely affected.

There maybe rejectionof eVTOL operationin certain localitiesdue to a perceived riskof safetyor burden on local communities from eVTOL operations.

We aredeveloping eVTOLto a levelof safety thatis higher than thatof a light aircraft, a level thatis perceivedby us and theregulatorsto be adequateforthe safe operationof eVTOLsin urban centers. However, thesafety recordof thefleet will also depend on factors externalto thevehicleand theunderstandingof which is currently being constructed, such as theintegrationof eVTOL fleets with other aircraft operatingin thesame urban airspace. Ifthe predictionof important characteristicsof thesystem, such as route placement, vehicle separationand communication protocols, isnot accurate, or ifthese considerationsarenot properly taken into account, thesafety levelof thefleet operationmaybe negatively affected.

The approvalof local authoritiesof theoperationof theeVTOLs willbe influencedby thepublic opinion aboutthe burden imposedon that communityby thevehicle operations. Local populations, being potential users of theeVTOL serviceor not, mayperceivethe external noiseof thevehicles, visual pollutionand changesin the neighborhood provokedby vertiport operationsto be unreasonable with respectto thebenefits broughtby the vehiclesin termsof traffic congestion reductionand decreasein travel times. Ifthatisthe case, thedemandfor thevehiclesand itsoperationsmaybe negatively affected.

Ifcurrent airspace regulationsare not modifiedto increaseair traffic capacity, our business could be subject to considerable capacity limitations.

A failureto increaseair traffic capacityatand in theairspace servingkey markets, including around major airports, in the United Statesor overseas, could create capacity limitationsforour future operationsand could have a material adverse effecton our business, resultsof operationsand financial condition. Weaknessesin airspaceand airtraffic control system worldwide, includingthe National Airspace Systemand the Air Traffic Control(“ATC”) system, such as outdated proceduresand technologies, could resultin capacity constraints during peak travel periodsor adverse weather conditionsin certain markets, resultingin delaysand disruptionsto our service. Whileour aircraftis designedto operatein the National Airspace System under existing rules, our businessat scale will likely require airspace allocationfor UAMoperations. Our inabilityto obtain sufficient accessto the National Airspace System could increaseour costsand reducethe attractivenessof our service.

Urban Air Traffic Management(UATM) maynot be ableto provide adequate situational awareness and equitable airspace accessto eVTOLsor maynot allow industrial scalability.

Urban Air Traffic Management(UATM) isa system that will enable UAMscalabilityand will mature over timeto support market requirements. The UATM systems will provide traffic management servicesto the UAMecosystem, includingto vehicles, fleet operators, vertiports, pilots, fleet managers, network operating centersand airnavigation service providers, with theobjectiveof improvingthe efficiencyand safetyof UAMoperations. The UATM systemsare therefore perceivedas an enablerto allowthe safe scalabilityof theindustryas the quantityof eVTOL operations increases over time.

An accidentor incident resulting fromthelow performanceofone of the UATM systemsor itsinabilityto provide adequate safety levelsmay negatively affect public perceptionand the UAMindustryas whole.

Additionally, if UATM systemsdo not target appropriate services, itmay affect their abilityto support increased traffic volumeand therefore impactthe abilityfor industrial scalability. This maybe theresultof collectingthe wrong data necessaryto support future safety cases requiredfor airspace authoritiesto approve new regulationsand/orthe inabilityto manage traffic equitablyforall airspace users, including airspace access foreVTOLs.

The regulatory environment for third-party service and technology providers (which UATM could be labeled as) may not be specific enough to support our UATM solution, or may delay its adoption.

Every countryison a different journey with a corresponding timetable towards establishingthe regulatory environment that will support third-party technologyand service providersto buttresstheair traffic management industry. As more variedand unique aircraft, each with unique operating characteristics(forinstance, dronesas comparedto general aviation aircraft), areall vying foraccessto dense, low altitude airspace, solutions like UATM seekto standardizetheway in which such airspacecan be safely managed. However, as technology development usually outpaces regulation, itis foreseeable thata certain degreeof business riskor regulatory risk isinherentin theinvestmentand deploymentof thisnew technology. Therefore, a lackof necessary regulations to helpthe industry understandhow itmay commercialize such third-party offerings, such as UATM, mayresult in a poor business environment thatmay makeit difficultto achievethe deploymentof UATM basedon each country’s progress towards regulating similar service providers.

Additionally, competing systemsor solution providersmayuse thelackof regulationto their advantage, leadingto an unsafe operating environment that would causewe and our UATM solutionto consider suspending operations until such time when clarityand an appropriate safety case with thelocal regulator couldbe established. This maynegatively impactthe financial resultsof our UATM product, itsabilityto providea return on itsinvestment, and therefore damagethe business modelof our UATM solution.

Our UATM solutionmay underperformifithas adefector itisnot deliveredon the projected timeline.

We aredevelopingour own UATM solution. We currently plan for our UATM systemsto include urban aeronautical information management, vertiport information management, flight planningand authorization, traffic flow management, weather management, and collaborativeor common situation awarenessand any other feature identified duringthe interaction with stakeholders.

The underperformanceof the UATM systems could result from improperly definingthe system requirementsand system architecture. The inabilityto accurately definethe system requirements would resultin an undesirable productby thetarget usersand customers, includingbut not limitedto thefleet operators, vertiport operatorsand airnavigation service providers. By not providingthe necessary servicesatthe required time, UATMmay negatively impactthe abilityof UAMto scaleatthe desired pace. Additionally, by not providingthe right services, thereisa heightened risk that competitors will capture additional market share. Failingto defineand implementthe right system architecture will makeit more difficultfor UATM systemsto scaleand evolve over time with new requirementsand to integrate with other systems.

Therecan be no assurance thatwe willbe ableto detectand fixall defectsin the UATM system priorto its entry into service. Defects could occuras a resultof incorrectly identifyingthe standards thatthe UATM software mustbe built towards. By failingto build towardsthe correct standards, theimpacted UATM system willnot be allowedto enter into service, resultingin significantre-workto meetthe required qualifications, with theproject incurring schedule delays, cost overrunor, ultimately, causing eVTOL accidents.

Schedule delaysof UATM systemsmay resultin losing near-term market shareto thecompetition. Competing service providers will begin generating hoursof in-service experience earlierand become more establishedand desirableto themarket, makingit more difficultforus to becomean established service provider in thefuture. Additionally, delaysof UATM systems currently under developmentand systemsto be developed in thefuturemay impedethe industrial scalabilityof UAM, impactingthe volumeof vehicle salesand service and support contracts.

We maynot be ableto launch our eVTOLand related serviceson the timeline projected.

We will need to address significant regulatory, political, operational, logistical, and other challengesin order tolaunchour eVTOLs. We do not currently have infrastructurein placeto operatethe serviceand such infrastructuremaynot be availableor maybe occupiedon an exclusive basisby competitors. We also have notyet received certifications from the FAA, the ANAC, the EASAor other certificationsof our aircraftor other required airspaceor operational authorityand government approvals, which areessentialfor aircraft productionand operation. In addition, our pre-certification operationsmay increasethe likelihoodof discovering issues with our aircraft, which could resultin delaysto the certificationof our aircraft. Any delayin thefinancing, design, manufacture, testing, certification, and launchof our aircraft could materially damageour brand, business, prospects, financial conditionand operating results. Aircraft manufacturers often experience delaysin thedesign, manufacture, testing, certification, and commercial releaseof new aircraft. These delaysmay resultin additional costsand adverse publicityforour business. Ifwe arenot ableto overcome these challenges, our business, financial condition and result of operations willbe negatively impactedand our abilityto grow our business willbe harmed.

Our competitorsmay commercialize their technology beforewe do, eitherin generalor in specific markets.

We expect this industryto be increasingly competitiveand itis possible thatour competitors couldgetto market beforewe do, either generallyor in specific markets. Even ifwe arefirstto market, we maynot fully realizethe benefitswe anticipate, and we maynot receiveany competitive advantageor maybe overcomeby other competitors. Ifnew companiesor existing aerospace companies launch competing solutionsin themarkets in which we intendto operateand obtain large scale capital investment, we mayface increased competition. Additionally, our competitorsmay benefit fromour effortsin developinga UATM solution, makingit easierfor themto obtainthe permitsand authorizations requiredto manufactureor operate eVTOL aircraftsin themarkets in which we intendto launchor in other markets.

Many of our currentand potential competitorsare largerand have substantially greater resources thanwe have and expectto have in thefuture. They mayalsobe ableto devote greater resourcesto thedevelopmentof their currentand future technologiesor thepromotionand saleof their offerings, oroffer lower prices. In particular, ourcompetitorsmaybe ableto receive airworthiness certificatesor production certificatesfor their aircraft priorto us receiving such certificates. Our currentand potential competitorsmay also establish cooperativeor strategic relationships amongst themselvesor with third parties thatmay further enhance their resourcesand offerings. Further, itis possible that domesticor foreign companiesor governments, some with greater experiencein theaerospace industryor greater financial resources thanwe possess, will seekto provide productsor services that compete directlyor indirectly with oursin thefuture.

We maybe unable to secure third partiesto provide aerial ridesharing servicesand to makethe necessary changes to, and operate, vertiports using our aircrafts, or otherwise makethe services sufficiently convenient to drive customer adoption.

Our business will heavily depend on third-party operatorsto developand launch aerial ride sharing services and to makethe necessary changesto vertiport infrastructure, including installationof necessary charging equipment, to enable adoptionof our eVTOL aircraft. Whilewe expectto be ableto develop strategic partnerships with third-party fleetand vertiport operatorsto providea comprehensive UAMpassenger service, we cannot guarantee thatwe willbe ableto do so effectively, atprices thatare favorableto us, or atall. Whilewe do not intendto own or operate vertiportsor aerial ride sharing services, our business will relyon such services. Our businessand our brand willbe affiliated with these third-party ground operatorsand we mayexperience harmto our reputationifour third-party ground operators suffer from poor service, negative publicity, accidents, or safety incidents. The foregoing risks could adversely affectour business, financial conditionand resultsof operations.

Our customers’ perceptionof us and our reputationmaybe impactedby the broader industryand customers maynot differentiateour aircraftand services fromour competitors.

Customersand other stakeholdersmaynot differentiate betweenus and thebroader aviation industryor, more specifically, the UAMservice industry. Ifour competitorsor other participantsin this market have issuesin a wide rangeof areas, including safety, technology development, engagement with aircraft certification bodiesor other regulators, engagement with communities, target demographicsor other positioningin themarket, security, data privacy, flight delays, or bad customer service, such problems could impactthe public perceptionof the entire industry, includingour business. We mayfailto adequately differentiateour brand, ourservicesand our aircraft from othersin themarket which could impactour abilityto attract passengersor engage with otherkey stakeholders. The failureto differentiate ourselvesand theimpactof poor public perceptionof theindustry could have an adverse impacton our business, financial condition, and resultsof operations.

Our prospectsand operationsmaybe adversely affectedby changes in consumer preferences, discretionary spending and other economic conditions that affect demand for UAMservices.

Our business willbe primarily concentratedon commercializingour eVTOL aircraft, providing agnostic UAMcapacityby operatinga fleetof eVTOLs together with partnersand providinga suiteof services including maintenance, technical supportand trainingto our and third parties’ eVTOL aircrafts, which we expectmaybe vulnerableto changesin consumer preferences, discretionary spendingand other market changes impacting discretionary purchases. The global economyhas in thepast, and willin thefuture, experience recessionary periodsand periodsof economic instability. During such periods, eVTOL passengersmay choosenot to make discretionary purchasesor mayreduce overall spendingon discretionary purchases. Such changes could resultin reduced consumer demandforair transportation, including UAMservices, or could shift demand from our UAMservicesto other methodsof airor ground transportationfor which we do not offera competing service. Ifwe areunableto generate demandor thereisa future shiftin consumer spending away from UAMservices, our business, financial conditionand resultsof operations couldbe adversely affected.

Aircraftand Production

Neither we nor ERJ have manufactured or delivered any eVTOL aircraft to customers, which makes evaluating our business and future prospects difficult and increases the risk of investment.

The UAMBusinesswas launchedby ERJin 2017 and ERJhas a limited operating historyin the urbanair mobility industry, which iscontinuously evolving. Our eVTOL aircraftisin theearly development stageand we do not expectour first serial vehicleto be produced until the latter half of 2026, ifatall. We have no experiencein high volume manufacturingof theplanned eVTOL aircraft. We cannot assureyou thatwe or our partners willbe ableto develop efficient, automated, cost-efficient manufacturing capabilityand processes, and reliable sources of component supplies that will enableus to meetthe quality, price, engineering, designand production standards, as wellas theproduction volumes, requiredto successfully mass marketour aircraft. You should considerour businessand prospectsin lightofthe risksand significant challengeswe faceas a new entrant into the UAMindustry, including, among other things, with respectto our abilityto:

Ifwe failto adequately addressany orallof these risksand challenges, our businessmaybe harmed.

Our eVTOL aircraftmaynot performat the levelwe expect, and mayhave potential defects, such as higher than expected noise profile, lower payload than initially estimated, shorter range, higher unit cost, higher cost of operation, perceived discomfort during transition phase of flightand/or shorter useful lives than we anticipate.

Our eVTOL aircraftmay contain defectsin designand manufacture thatmay cause themnot to performas expectedor thatmay require repair. For example, our eVTOL aircraftmay have a higher noise profile thanwe expector carrya lower payloador have shorter maximum range thanwe estimate. Our eVTOL aircraft also uses a substantial amountof software code to operate. Software productsare inherently complexand often contain defectsand errors when first introduced. The abilityof our eVTOL aircraftto performas expected dependson thedevelopmentof certain components, such as batteries, thetechnologyof which is either currently under development or existing technology never before used in an eVTOL aircraftand thereforenot yetprovenin operation.

Whilewe have performed initial tests with flying vehiclesand componentsin test rigs, in some instanceswe arestill relyingon projectionsand modelsto validatethe projected performanceof our aircraft. To date, we have been unableto validatethe performanceof our eVTOL aircraft overthe expected lifetimeof theaircraft. Therecan be no assurance thatwe willbe ableto detectand fixany defectsin theeVTOL aircraft priorto theiruse in our service. For example, a flightin an eVTOL aircraft willbe unlike anything passengers have experienced before, and due to theaircraft characteristics (includinga comparatively light weight, multiple rotors, vertical takeoff, and transitionto forward flight) and operation characteristics (flyingatlow altitudes closeto buildings, likelyto frequently encounter turbulence), passengersmaybe susceptibleto motion sickness duringthe transitioning phases.

We expectto introducenew and additional featuresand capabilitiesto theaircraftand our service over time. For example, whileour vehicles will beginits operation with a pilot onboard, we project that they will evolveto become uncrewed vehicles over time. Ifsuccessful, this would reducethe costof operation relatedto hiringthe crew, although partof thecost reduction willbe offsetby theneed to introduce additional equipmentand sensors neededfor autonomous flights. As with other areasof thevehicle, we expectto improvethe autonomous capabilitiesof our aircraft through testingand simulations throughoutthe vehicle development process, since this technologyand capabilityis currentlynot availablefor vehiclesof this nature. However, we maybe unableto developor certify these upgradesin a timely manner, or atall, which could have a material adverse impacton our business, financial condition, andresultsof operations.

We maynot be ableto produce eVTOL aircraftin the volumesand on the timelines projected.

Thereare significant challenges associated with mass producing aircraftin thevolumes thatwe are projecting. The aerospace industryhas traditionally been characterizedby significant barriersto entry, including large capital requirements, investment costsof designingand manufacturing aircraft, long lead timesto bring aircraftto market fromthe conceptand design stage, theneed forspecialized designand development expertise, extensive regulatory requirements, establishinga brand nameand imageand theneed to establish maintenance and service locations. As a manufacturerof electric aircraft, we facea varietyof added challengesto entry thata traditional aircraft manufacturer would not encounter including additional costsof developingand producingan electric powertrain, regulations associated with thetransportof lithium-ionbatteriesand unproven high-volume customer demandfora fully electric aerial mobility service. Additionally, we arerelyingon ERJto develop production linesfor componentsand atvolumesfor which thereis little precedent withinthe traditional aerospace industry. The abilityto reach high vehicle production volumes also dependson thesupplyof componentsand systems reliablyat adequate rates, and such componentsarenot manufacturedat scaleat this moment. Additionally, theremaybe competition between marketsfor related products thatmay affectthe ability of suppliersto provide equipment. These products include, forexample, batteries, which arein high demandby theautomotive industry. In addition, sinceour eVTOL aircraft cannotbe deliveredvia long distance flights, itis pivotal thatwe have theability, in factory, to disassemble aircraft producedin areas thatarenot closeto customer operations immediately after unit production. Tests, transportationand assembly closeto customer operations need to follow high standardsof safetyand efficiencyin orderto deliverthe productsto different geographic regions. Ifwe arenot ableto overcome these barriers, our business, prospects, operating resultsand financial condition willbe negatively impactedand our abilityto grow our business willbe harmed.

Our business will initially relyon a single aircraft type. Our dependenceon our aircraft makesus particularly vulnerableto any design defectsor mechanical problems associated with our aircraftor its component parts. Any product defectsor any other failureof our aircraftto performas expected could harmour reputationand resultin adverse publicity, delaysin or inabilityto obtain certification, lost revenue, delivery delays, product recalls, product liability claims, harmto our brandand reputation, and significant warrantyand other expenses, and could have a material adverse impacton our business, financial condition, operating resultsand prospects.

We arerelyingon the ERJ entitiesto manufactureand assembleour eVTOL aircraft, conforming prototypes, and certification devices that will be used for certification purposes, pursuantto our MSA with ERJand Atech. The initial termsof the MSAs with Atechand ERJare expectedto end on the 10 th and 15 th anniversariesof May 9, 2022 (the “Closing Date”), respectively. If ERJor Atech terminatesor failsto renew or to comply with thetermsof the respective MSAs, we maynot be ableto engage other manufacturersand suppliersin a timely manner, atan acceptable priceor in thenecessary quantities.

In addition, our eVTOL willbe subjectto regulationin Brazil, the U.S., the European Union and in each jurisdiction where our customersare located. ANAC, as wellas Civil Aviation Authorities (CAA) in other countriesin which our potential customersare located, most notablythe FAAand the EASA, must certifyor validatethe design (Type Certificate) of our eVTOL beforewe can start deliveringitto any customers. As a result, we will also need to do extensive testingto ensure thatthe aircraftisin compliance with applicable local civil aviation regulation (e.g., ANAC, FAA, EASA), safety regulationsand other relevant regulations priorto entry into service. In additionto certificationof theaircraft (Type Certificate), we willbe requiredto obtain approval fromthe ANAC, or from local Civil Aviation Authorities where themanufacturing facilities willbe locatedto producethe aircraft accordingto theapproved type design. Our plan involves manufacturingthe vehiclein Brazil (under ANAC’s regulations) and, accordingto theevolutionof market demand, other production facilities shallbe implemented, which maybe locatedin other countries outside Brazil, such as the U.S. or Europe. Production approval involves local authority manufacturing approvaland extensive ongoing oversightof mass-produced aircraft. Ifwe areunableto obtain production approvalforthe aircraft, or the ANAC, the FAA, the EASAor local Civil Aviation Authority imposes unanticipated restrictionsas a conditionof approval, our projected costsof production could increase substantially.

The timingof our production rampis dependent upon finalizing certain aspectsof thedesign, engineering, component procurement, testing, buildout, and manufacturing plansin a timely mannerand upon our abilityto execute these plans withinthe current timeline. Itis also dependenton being ableto timely obtain Production Certification fromthe respective local Civil Aviation Authority.

Crashes, accidentsor incidentsof eVTOL aircraftor involving UATM solutions, or lithium batteries involvingusor our competitors could have a material adverse effecton our business, financial condition, and resultsof operations.

Test flying prototype aircraftis inherently risky, and crashes, accidentsor incidents involvingour aircraft arepossible. Any such occurrence would negatively impactour development, testingand certification efforts, and could resultin re-design, certification delayand/orpostponementsor delaysto our commercial service launch.

The operationof aircraftis subjectto various risks, and we expect demandforour eVTOL aircraftand our UAMservicesto be impactedby accidentsor other safety issues regardlessof whether such accidentsor issues involveour aircraft. Such accidentsor incidents could also have a material impacton our abilityto obtain ANAC, FAAand EASA certificationsforour aircraft, or to obtain such certificationsin a timely manner. Such events could impact confidencein a particular aircraft typeor theair transportation services industryas a whole, particularlyif such accidentsor disasters were due to a safety fault. We believe thatthe regulatorsand thegeneral publicare still forming their opinions aboutthe safetyand utilityof aircraft thatare highly relianton lithiumion batteries, and/oradvanced flight control software capabilities. An accidentor incident involving eitherour aircraftor a competitor’s aircraft during these early stagesof opinion formation could have a disproportionate impacton thelonger-term view of theemerging UAMmarket.

We areat riskof adverse publicity stemming fromany public incident involvingour company, our controlling stockholder, our people, ourbrandor other companiesin our industry. Such an incident could involve theactualor alleged behaviorof any of our employeesor third-party contractors, including ERJand itsother subsidiaries, or theemployeesor contractorsof our competitors. Further, ifour personnel, our aircraft, or other typesof aircraft, including ERJ’s aircraftand theaircraftof our competitors, areinvolvedin a public incident, accident, catastropheor regulatory enforcement action, we couldbe exposedto significant reputational harmand potential legal liability. The insurancewe carrymaybe inapplicableor inadequateto coverany such incident, accident, catastropheor action. In theevent thatour insuranceis inapplicableor inadequate, we maybe forcedto bear substantial losses froman incidentor accident. In addition, any such incident, accident, catastropheor action involvingour employees, our aircraft, theaircraftof our competitorsor other typesof aircraft could createan adverse public perception, which could harmour reputation, resultin passengers being reluctantto use our services, and adversely impactour business, financial condition, and resultsof operations.

Unsatisfactory safety performanceof our aircraft could have a material adverse effecton our business, financial condition, and resultsof operations.

Whilewe arebuilding operational processes designedto ensure thatthe design, testing, manufacture, performance, operationand servicingof our aircraft meet rigorous quality standards, therecan be no assurance thatwe willnot experience operationalor process failuresand other problems, including through flight test accidentsor incidents, manufacturingor design defects, pilot error, cyber-attacksor other intentional acts, that could resultin potential safety risks. Any actualor perceived safety issuesmay resultin significant reputational harmto our businesses, in additionto tort liability, maintenance, increased safety infrastructureand other costs thatmay arise. Such issues could resultin delayingor cancelling planned flights, increased regulationor other systemic consequences. Our inabilityto meetour safety standardsor adverse publicity affectingour reputationas a resultof accidents, mechanicalor operational failures, or other safety incidents could have a material adverse effecton our business, financial conditionand resultsof operations. In addition, our aircraftmaybe groundedby regulatory authoritiesdue to safety concerns that could have a material adverse impacton our business, financial condition, andresultsof operations.

We currently relyand expect tocontinueto relyon ERJto provide services, products, partsand components requiredto developand certifyour aircraftand to supply critical services, componentsand systems necessary forour operations, which exposesus to a number of risksand uncertainties outsideour control.

Whilewe will have our own engineering capabilities, we willbe substantially relianton ERJ, our controlling stockholder, to provideus with development, certificationand other servicesand supplyour aircrafts, atleast initially, pursuantto the MSAs. Additionally, ERJwill relyon itssuppliersand service providersforthe partsand componentsin our aircraft. ERJis currentlyour sole supplierof aircraft developmentand certain other services. We or ERJare also, in some cases, subjectto sole source suppliers forcertain partsand other componentsfor which we relyon, or maybe relianton, to achieveour projected type certification. Whilewe believe thatwe maybe ableto establish alternate supply relationshipsand can obtain replacement components, we maybe unableto do so in theshort termat prices thatare favorableto us or at all. These disruptionsin our supply chain could leadto delaysin aircraft development, type certificationand production, which could materially adversely affectour business, financial condition, and results of operations.

Although we have a defined strategyforthe manufacturingof our aircraft following type certification, we are exposedtoa number ofrisksand uncertainties outsideour control.

We have entered into supply agreements with, and expect torelyon ERJto provide certain services, products, partsand components requiredto manufactureour aircraftto sellto final customers, andwe also maybe subjectto sole source suppliersfor certain partsand other componentsfor which we maybe relianton to achieveour projected high- volume production numbers. This supply chainmay exposeus to multiple potential sourcesof delivery failureor component shortagesforour aircraft. Whilewe believe thatwe maybe ableto establish alternate supply relationshipsand can obtain replacement components, we maybe unableto do so in theshort termorat prices thatare favorableto us, or at all.

Ifany of our suppliersor service partners were to experience delays, disruptions, capacity constraintsor quality control problemsin itsmanufacturing operations, or ifthey chooseto not do business with us, wewould have significant difficultyin procuring, producingand deliveringour aircraft, and our business prospects would be significantly harmed. These disruptionsin our supply chainsmay cause delaysin our production processfor both prototypeand commercial production aircraft which would negatively impactour revenues, competitive positionand reputation. Outsidethe markets where themanufacturing takes place, we will relyon third partiesto transportand reassemblethe aircraft closeto customer operations. In addition, our suppliersor service partners mayrelyon certain statetax incentives thatmaybe subjectto changeor eliminationin thefuture, which could resultin additional costsand delaysin productionifa manufacturing site mustbe obtained. Further, ifwe are unableto successfully manageour relationship with our suppliersor service partners, thequalityand availability of our aircraftmaybe harmed. Our suppliersor service partners could, under some circumstances, declineto acceptnew purchase orders fromor otherwise reduce their business with us. Ifour suppliersor service partners stopor reduce manufacturingour aircraft componentsforany reason, we maybe unableto replacethe lost manufacturing capacityon a timelyand comparatively cost-effective basis, which would adversely impactits operations.

The manufacturing facilitiesof our suppliersor service partnersand theequipment used to manufactureour aircraft would be costlyand could require substantial lead timeto replaceand qualifyforuse. The manufacturing facilitiesof our suppliersor service partnersmaybe harmedor rendered inoperableby naturalor human-made disasters, including earthquakes, flooding, fireand power outages, or by health epidemics, which mayrenderit difficultor impossibleforus to manufactureour aircraftfor some periodof time. The inabilityto manufactureour aircraft, our aircraft componentsor thebacklog that could developifthe manufacturing facilitiesof our suppliersor service partnersare inoperablefor even a short period of timemay resultin thelossof customersor harmour reputation.

We do not control ERJor our other suppliersor service partnersor such parties’ laborand other legal compliance practices, including their environmental, healthand safety practices. If ERJor our other current suppliersor service partners, or any other suppliersor service partners which we mayuse in thefuture, violates U.S. or foreign laws or regulations, we maybe subjectedto extra duties, significant monetary penalties, adverse publicity, theseizureand forfeitureof products thatwe areattemptingto importor thelossof our import privileges. The effectsof these factors could renderthe conductof our businessin a particular country undesirableor impracticaland have a negative impact business, financial condition, and results of operations.

Furthermore, ifwe experience significant increased demand, or need to replaceour existing suppliers, there can be no assurance that additional suppliesof aircraft manufacturingor other servicesor products, partsor other components willbe available when requiredon terms thatare acceptableto us, or atall, or thatany supplier would allocate sufficient suppliesto us in orderto meetour requirementsor fillour ordersin a timely manner. These disruptionsin our supply chain could leadto delaysin aircraft developmentand production, which could materially adversely affectour business, financial condition, and results of operations.

Our agreements with our customersare non-binding and constituteallofthe current ordersforour aircraft. Ifwe do not enter into definitive agreements with our customers, or the conditionsto our customer’s orders (ifany) are not met, or ifsuch orders (ifany) are cancelled, modifiedor delayed, our prospects, resultsof operations, liquidityand cash flow willbe harmed.

Our agreements with potential customersforour eVTOL aircraftarenon-bindingand constituteallofthe current ordersforour aircraft. Such ordersand agreementsare subjectto conditions, includingthe parties reaching mutual agreementon certain material terms, such as aircraft specifications, warranties, usageand transferof theaircraft, performance guarantees, delivery periodsand other matters, and entering into definitive agreements. The obligationsof such potential customersand strategic partnersto consummateany order will arise only afterallof such material termsare agreedin thediscretionof each party and we enter into definitive agreements with such potential customers. Further, such definitive agreements (if any) will likelybe subjectto several conditions, including, forexample, certificationof our aircraftby the ANAC, FAA, EASAor other aviation authorities, and will likelybe subjectto termination rights. Ifwe do not enter into definitive agreements with our potential customersor, ifafter entering into definitive agreements, we do not meetany of theagreed conditionsor any ordersforour aircraftare cancelled, modifiedor delayed, or otherwisenot consummated, or we areotherwise unableto convertour strategic relationshipsor collaborations into sales revenue, our business, financial condition, and results of operations will be adversely affected.

Our businessmaybe adversely affectedby union activities.

Mostof our employeesare locatedin Brazil. Itis common throughoutthe aerospaceand airline industries generallyand in Brazilfor many employeesto belongto a union, which can resultin higher employee costsand increased riskof work stoppages. Our Brazilian employeesare currently representedbyone or more labor unions. As we expand our business therecan be no assurances that moreof our employees willnot joinor forma labor union or thatwe willnot be requiredto becomea union signatory. We arealso directlyor indirectly dependent upon companies with unionized work forces, such as ERJand parts suppliers. Work stoppagesor strikes organizedby such unions could have a material adverse impacton our business, financial conditionor operating results. Ifa work stoppage occurs, itcould delaythe manufactureand saleof our eVTOL aircraftand have a material adverse effecton our business, financial condition, and results of operations.

Regulatory & Airspace

We may be unable to obtain relevant regulatory approvals for the commercialization of our aircraft, including Type Certification, Production Certification, and Operating Certification approvals for permitting new infrastructure or accessing existing infrastructure or otherwise.

The commercializationof new aircraft requires certain regulatory authorizationsand certifications, including Type Certification issuedby the FAAunder the special class validation process. Whilewe anticipate being ableto meetthe requirementsof any required authorizationsand certificates, we maybe unableto obtain such authorizationsand certificationson our anticipated timeline, ifatall. Should we failto obtainany of therequired authorizationsor certificatesin a timely manner, or ifany such required authorizationsor certificatesare modified, suspendedor revoked afterwe obtain them, we maybe unableto launchour eVTOLand related serviceson our anticipated timeline, ifatall, which would have material adverse effectson our business, financial condition, andresults of operations.

Changes in government regulation imposing additional requirementsand restrictionson our operations could increaseour operating costsand resultin service delaysand disruptions.

Aerospace manufacturersare subjectto extensive regulatoryand legal requirements that involve significant compliance costs. The ANAC, FAA, EASAand other regulatorsmay issue regulations relatingto theoperation of eVTOL aircraft that could require significant expenditures. Implementationof therequirements createdby such regulationsmay resultin increased costsforour customersand us and may delay the launch of our eVTOL and related services on our anticipated timeline, which would have a material adverse effect on our business, financial condition, and results of operations.

Additional laws, regulations, taxesand airport ratesand charges have been proposed from timeto time that could significantly increasethe costof UAM operationsor reducethe demandforair travel. Ifadopted, these measures could have theeffectof raising fares and reducing demand. We cannot assureyou that theseand other laws or regulations enactedin thefuture willnot harmour business.

The UAMBusiness issubjectto stringent U.S. exportand import control laws and regulations. Unfavorable changes in these laws and regulationsor U.S. government licensing policies, our failureto secure timely U.S. government authorizations under these laws and regulations, or our failureto comply with these laws and regulations could have a material adverse effecton our business, financial conditionand resultsof operation.

Our businessis subjectto stringent U.S. importand export control laws and regulationsas wellas economic sanctions laws and regulations. We arerequiredto importand exportour products, software, technologyand services, as wellas run our operationsin the United States, in full compliance with such laws and regulations, which mayincludethe EAR, the International Trafficin Arms Regulations (“ITAR”), and economic sanctions administeredby the Departmentof Stateand the Treasury Department’s Officeof Foreign Assets Control (OFAC). Similar laws that impactour business existin other jurisdictions. These foreign trade controls prohibit, restrict, or regulateour abilityto, directlyor indirectly, export, deemed export, re-export, deemedre-exportor transfer certain hardware, technical data, technology, software, or servicesto certain countries, territories, entities, individualsand end users. Ifwe arefound to be in violationof these laws and regulations, itcould result in civiland criminal, monetaryand non-monetary penalties, thelossof exportor import privileges, debarmentand reputational harm. While none of our current technologies requireus to maintaina registration under ITAR, we maybecome subjectto ITARin thefuture, which could have a material adverse effecton our business, financial conditionand resultsof operations.

Pursuantto these international trade control laws and regulations, we arerequired, among other things, to(i) determinethe proper licensing jurisdictionand export classificationof products, software, and technology, and (ii) obtain licensesor other formsof U.S. government authorizationto engagein theconductof our business. The authorization requirementsmay includethe need to getpermissionto release controlled technologyto certain foreign person employeesand other foreign persons. The authorization requirements further includethe need to ensure compliance with trade controlsas they applyto thecross-border releaseof products, software, and technology amongour personnel locatedin the U.S. and abroad. Changes in U.S. foreign trade control laws and regulations, or reclassificationsof our productsor technologies, mayrestrictour operations. The inabilityto secureand maintain necessary licensesand other authorizations could negatively impactour abilityto compete successfullyor to operateour businessas planned. Any changesin theexport control regulationsor U.S. government licensing policy, such as those necessaryto implement U.S. government commitmentsto multilateral control regimes, mayrestrictour operations. Given thegreat discretionthe governmenthas in issuingor denying such authorizationsto advance U.S. national securityand foreign policy interests, therecan be no assurancewe willbe successfulin our future effortsto secureand maintain necessary licenses, registrations, or other U.S. government regulatory approvals.

We willbe subjectto rapidly changing and increasingly stringent laws, regulations, industry standards, and other obligations relatingto privacy, data protection, and data security. The restrictionsand costs imposedby these requirements, or our actualor perceived failureto comply with them, could harm our business.

We aresubjectto or areaffectedbya numberof federal, stateand local laws and regulations, as wellas contractual obligationsand industry standards, that impose certain obligationsand restrictions with respectto data privacyand security, and governour collection, storage, retention, protection, use, processing, transmission, sharingand disclosureof personal information including thatof our employees, customersand others. Most jurisdictions have enacted laws requiring companiesto notify individuals, regulatory authoritiesand othersof security breaches involving certain typesof data. Such laws maybe inconsistentor maychangeor additional laws maybe adopted. In addition, our agreements with certain customersmay requireus to notify themin the eventof a security breach. Such mandatory disclosuresare costly, could leadto negative publicity, resultin penaltiesor fines, resultin litigation, maycauseour customersto lose confidencein theeffectivenessof our security measuresand requireus to expend significant capitaland other resourcesto respondto and/oralleviate problems causedby theactualor perceived security breach.

The global data protection landscape is rapidly evolving, and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. Privacy, data protection and consumer protection laws may change or develop over time through judicial decisions or as new guidance or interpretations are provided by regulatory and governing bodies and such changes or developments may be contrary to our existing practices. In addition, we may not be able to monitor and react to all developments in a timely manner. For example, the California Consumer Privacy Act of 2018, which took effect on January 1, 2020, gives California residents expanded rights related to their personal information, including the right to access and delete their personal information, and receive detailed information about how their personal information is used and shared. Other laws relating to privacy, data protection, and data security have been passed or been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. Compliance with any applicable privacy and data security laws and regulations is a rigorous and time- intensive process, and we may be required to put in place additional mechanisms to comply with such laws and regulations. In addition, the enactment of such laws could impose conflicting requirements that would make compliance challenging.

Despiteour efforts, we maynot be successfulin complying with therapidly evolving privacy, data protection, and data security requirements discussed above. Any actualor perceivednon-compliance with such requirements could resultin litigationand proceedings againstus by governmental entities, passengers, or others, fines, civilor criminal penalties, limited abilityor inabilityto operateour business, offer services, or marketour platformin certain jurisdictions, negative publicityand harmto our brandand reputation. We couldbe requiredto expend significant capitaland other resourcesto addressany such actualor perceivednon-compliance which maynot be coveredor fully coveredby our insurance. Such actualor perceivednon-compliance could have a material adverse effecton our business, financial conditionor resultsof operations.

Macroeconomic

The eVTOL aircraft industrymaynot continueto develop, eVTOL aircraftmaynot be adoptedby the market or our independent third-party aircraft operators, eVTOL aircraftmaynot be certifiedby transportation authoritiesor eVTOL aircraftmaynot deliverthe expected reductionin operating costs, any of which could adversely affectour prospects, business, financial condition, and resultsof operations.

eVTOL aircraft involvea complexsetof technologies, which we must continueto further developand rely on our independent third-party aircraft operatorsto adopt. However, before eVTOL aircraftcan flypassengers, we must receive requisite approvals from federal transportation authorities. No eVTOL aircraftare currently certifiedby the FAAfor commercial operationsin the United States, by ANACfor commercial operationsin Brazilor by the EASAfor commercial operationsin the European Union, and thereisno assurance thatour researchand development will resultin government-certified aircraft thatare market-viableor commercially successfulin a timely manneror atall. To gain government certification, theperformance, reliabilityand safetyof eVTOL aircraft mustbe proven, none of which can be assured. Even ifeVTOL aircraftare certified, individual operators must conform eVTOL aircraftto their licenses, which requires FAAapprovalin the U.S., ANAC approvalin Braziland EASA approvalin the European Union, and individual pilots also mustbe licensed and approvedby the FAA, ANACand EASAto flyeVTOL aircraftin the U.S., Braziland Europe, respectively, which could contributeto delaysin any widespreaduse of eVTOL aircraftand potentially limitthe numberof eVTOL aircraft operators availableto partner with us.

Additional challengesto theadoptionof eVTOL aircraft, allof which areoutsideof our control, include:

Thereare several existing laws, regulationsand standards thatmay applyto eVTOL aircraft, including standards that were not originally intendedto applyto electric aircraft. Regulatory changes that address eVTOL aircraft more specifically could delayour abilityto receive type certificationby transportation authoritiesand thus delayour independent third-party aircraft operators’ abilityto utilize eVTOL aircraftfor their flights. Inaddition, therecan be no assurance thatthe market will accept eVTOL aircraft, thatwe willbe ableto executeon our business strategy, or thatour offerings utilizing eVTOL aircraft will obtainthe necessary government operating authorityor be successfulin themarket. Theremaybe heightened public skepticismto this nascent technologyand itsadopters. There couldbe negative public perception surrounding eVTOL aircraft, includingthe overall safetyand thepotentialfor injuriesor death occurringas a resultof accidents involving eVTOL aircraft, regardlessof whetherany such safety incidents occur involvingus. Any of theforegoing risks and challenges could adversely affectour business, financial condition, and resultsof operations.

Intellectual property violations may adversely affect us.

We rely on patent, copyright, trademark and trade secret laws, and agreements with our employees, customers, suppliers and other parties, to establish and maintain our intellectual property rights in technology and products used in our operations. Despite these efforts to protect our intellectual property rights, any of our direct or indirect intellectual property rights could be challenged, invalidated or circumvented. In addition, although we believe that we lawfully comply with the intellectual property rights granted to others, we may be accused of infringement or misappropriation on occasion and could have claims asserted against us in the future. These claims could harm our reputation, lead to fines and penalties and prevent us from offering certain products or services. Any claims or litigation in this area, whether we ultimately win or lose, could be time-consuming and costly, hurt our reputation and/or require us to enter into licensing arrangements. We may not be able to enter into these licensing arrangements on acceptable terms. If any infringement brought against us is successful, an injunction may also be ordered against us to stop infringing, or otherwise violating, the alleged rights, which could adversely affect us, our research and/or production.

We maybe unable to protectour intellectual property rights from unauthorizeduse by third parties.

Failureto adequately protectour intellectual property rights could resultin our competitors offering similar productsor services, potentially resultingin thelossof someof our competitive advantageand a decreasein our revenue, which could adversely affectour business, prospects, financial conditionand operating results. Our success depends, in part, on our abilityto protectour proprietary intellectual property rights, including certain technologies deployedin our aircraftor thatwe utilizein arrangingair transportation. To date, we have relied primarilyon patentsand trade secrets (including know-how), employeeand third-partynon-disclosure agreements, copyrights, trademarks, intellectual property licensesand other contractual rightsto establishand protectour proprietary technology. Our softwaremay alsobe subjectto certain protection under copyrightlaw, though we have chosennot to registerany of our copyrightsin our software. We routinely enter intonon-disclosure agreements with our employees, consultants, volunteersin usability testsor collaborative sessions, third partiesand other relevant personsand take other measuresto protectour intellectual property rights, such as limiting accessto our trade secretsand other confidential information. We intendto continueto relyon theseand other means, including patent protection, in thefuture. The protectionof our intellectual property rights willbe importantto our future business opportunities. However, thestepswe taketo protectour intellectual property from unauthorizeduse by othersmaynot be effectivefor various reasons, includingthe following:

Further, obtainingand maintaining patent, copyright, and trademark protectioncan be costly, and we may choosenot to, or mayfailto, pursueor maintain such formsof protectionforour technologyin the United States, Brazilor other foreign jurisdictions, which could harmour abilityto maintainour competitive advantagein such jurisdictions. Itis also possible thatwe will failto identify patentable aspectsof our technology beforeitistoo lateto obtain patent protection, thatwe willbe unableto devotethe resourcesto fileand prosecuteall patent applicationsfor such technology, or thatwe will inadvertently lose protectionfor failingto comply with all procedural, documentary, payment, and similar obligations duringthe patent prosecution process. The laws of some countriesdo not protect proprietary rightsto thesame extentas thelaws of the United States, and mechanismsfor enforcementof intellectual property rightsin some foreign countriesmaybe inadequateto prevent other parties from infringingour proprietary technology. To theextentwe expand our international activities, our exposureto unauthorizeduse of our technologiesand proprietary informationmay increase. We mayalso failto detect unauthorizeduse of our intellectual property, orbe requiredto expand significant resourcesto monitorand protectour intellectual property rights, including engagingin litigation, which maybe costly, time-consuming, and divertthe attentionof managementand resources, and maynot ultimatelybe successful.

Also, whilewe have registeredand appliedfor trademarksin an effortto protectour investmentin our brand and goodwill with customers, competitorsmay challengethe validityof those trademarksand other brand names in which we have invested. Such challengescan be expensiveand mayadversely affectour abilityto maintainthe goodwill gainedin connection with a particular trademark. Ifwe failto meaningfully establish, maintain, protectand enforceour intellectual property rights, our business, financial conditionand resultsof operations couldbe adversely affected.

We mayneed to defend ourselves against intellectual property infringement claimsor misappropriation claims, which maybe time-consumingand expensiveand, ifadversely determined, could limitour abilityto commercializeour aircraft.

Companies, organizationsor individuals, includingour competitors, mayown or obtain patents, trademarks or other proprietary rights that could preventor limitour abilityto make, use, developor deployour aircraftand UAMservices, which could makeit more difficultforus to operateour business. We mayreceive inquiries from patent, copyrightor trademark owners inquiring whetherwe infringe upon their proprietary rights. We mayalso be thesubjectof more formal allegations thatwe have misappropriated such parties’ trade secretsor other proprietary rights.

Companies owning patentsor other intellectual property rights relatingto battery packs, electric motors, aircraft configurations, fly-by-wire flight control softwareor electronic power management systemsmay allege infringementor misappropriationof such rights. In responseto a determination thatwe have infringed upon or misappropriateda third-party’s intellectual property rights, we maybe requiredto doone or moreof the following:

A successful claimof infringementor misappropriation againstus could harmour business, financial condition, andresults of operations. Even ifwe aresuccessfulin defending against these claims, litigation could resultin substantial costsand demandon management resources.

We maynot be ableto secure adequate insurance policies, or secure insurance policiesat reasonable prices.

Through ERJ, we maintain general liability insurance, aviation flight testing insurance, aircraft liability coverage, directorsand officers insuranceand other insurance policiesand we believeour levelof coverageis customaryin theindustryand adequateto protect against claims. However, therecan be no assurances thatit will be sufficientto cover potential claims, that present levelsof coverage willbe availablein thefutureat reasonable costor thatwe will continueto be ableto maintain insurance coverage through ERJ. Further, we expectour insurance needsand coststo increaseas we manufacture aircraft, establish commercial operationsand expand intonew markets, and itistoo earlyto determine what impact, ifany, thecommercial operationof eVTOLs will have on our insurance costs.

If our relations with our strategic partners were to deteriorate or terminate, our business could be adversely affected or these parties may act in a manner adverse to us.

Ifour relations with our strategic partners were to deteriorateor terminate, theother partymayactin a manner adverseto us and could limitour abilityto implementour strategies. Our collaboratorsor strategic partnersmay develop, either aloneor with others, productsin related fields thatare competitive with our products. Specifically, conflicts with ERJmay adversely impactour abilityto develop and certify the eVTOL, while conflicts with Atechmay adversely impactour abilityto successfully provide UAMservices. While ERJhas agreedin the BCA not to compete with the Company with respectto certain actions relatedto the UAMmarket followingthe business combination, such non-compete only appliesfor three years from the Closing Date with respectto activitiesin the European Union andfive years from the Closing Date with respectto activities elsewherein theworld, and ERJmay still pursue certain investment opportunities relatedto the UAMBusiness underthe termsof the BCA. Such conflicts with our strategic partnersmay resultin adverse effectson our business, financial conditionand resultsof operations.

The failureof certain advancesin technology such as autonomyor battery densityto matureat the rateswe projectmay impactour abilityto increasethe volumeof our serviceand/or drive downend-user pricingat the rateswe project.

Our projections relyin parton future advancementof technology, such as aerialand ground-based autonomyand an increasein energy densityin batteries. Should these technologies failto develop, matureor be commercially available withinthe periods thatwe project, we mayunderperformour financial projections, which would materiallyand adversely affectour business, financial condition, and results of operations.

We are an early-stage company with a history of losses, and we expect to incur significant losses for the foreseeable future, and we may not be able to achieve or maintain profitability.

We have incurred significant losses since inception. We incurrednet lossesof $127.7 million,$174.0 million, and$18.3 millionforthe years ended December 31, 2023,2022, and 2021, respectively. We have not yetstarted commercial operations, and itis difficultforus to predictour future operating results. We believe thatwe will continueto incur operatingand netlosses each quarter untilat leastthe timewe begin deliveriesofour eVTOL aircraft, which arenot expectedto begin untilthe latter half of 2026 and mayoccur lateror not atall. Even ifweare ableto successfully developand sellour aircraft, therecan be no assurance that they willbe financially successful. Our potential profitabilityis dependent upon thesuccessful developmentand successful commercial introductionand acceptanceof our aircraft, which maynot occur. As a result, our lossesmaybe larger than anticipated, and we maynot achieve profitability when expected, or atall, and even ifwe do, we maynot be able to maintainor increase profitability.

We expectour operating expensesto increase overthe next several yearsas we:

Becausewe will incurthe costsand expenses from these efforts beforewe receiveany revenue with respect thereto, our lossesin future periods willbe significant. In addition, these effortsmaybe costlier thanwe expect and maynot resultin any revenueor growth in our business. Any failureto generate revenue sufficientlyto keep pace with our investmentsand other expenses could preventus from achievingor maintaining profitabilityor positive cash flow. Furthermore, ifour future growth and operating performance failto meet investoror analyst expectations, or ifwe have future negative cash flow or losses resulting fromour investmentin acquiring customersor expandingour operations, this could have a material adverse effecton our business, financial conditionand resultsof operations.

We mayin the future invest significant resourcesin developingnew offeringsand exploringthe applicationof our proprietary technologiesfor other uses and those opportunitiesmay never materialize.

Whileour primary focusison thedesign, manufactureand operationof our eVTOL aircraftand related UAMservices, we mayinvest significant resourcesin developingnew technologies, services, productsand offerings. However, we maynot realizethe expected benefitsof these investments. Relatedly, ifsuch technologies become viable offeringsin thefuture, we maybe subjectto competition fromour competitors withinthe aviation industryor other industries, someof which mayhave substantially greater monetaryand knowledge resources thanwe have and expectto have in thefutureto devoteto thedevelopmentof these technologies. Such competitionor any limitationson our abilityto take advantageof such technologies could impactour market share, which could have a material adverse effecton our business, financial conditionand resultsof operations.

Such researchand development initiativesmay also have a high degreeof riskand involve unproven business strategiesand technologies with which we have limited operatingor development experience. They may involve claimsand liabilities, expenses, regulatory challengesand other risks thatwe maynot be ableto anticipate. Therecan be no assurance that consumer demandfor such initiatives will existor be sustainedatthe levels thatwe anticipate, or thatany of these initiatives will gain sufficient tractionor market acceptanceto generate sufficient revenueto offsetany new expensesor liabilities associated with thesenew investments. Further, any such researchand development efforts could distract management from current operationsand would divert capitaland other resources fromour more established technologies. Even ifwe were to be successfulin developingnew products, services, offeringsor technologies, regulatory authoritiesmay subjectus to new rulesor restrictionsin responseto our innovations thatmay increaseour expensesor preventus from successfully commercializingnew products, services, offeringsor technologies.

We maybe unable to make certain advancesin technology, such as uncrewed flying technologies, or such technologiesmaynot matureor be commercially availableat the rates projected, which could adversely affect our business, financial conditionand resultsof operations.

Our projections relyin parton future advancementof technology, such as autonomous flying technologies. Should these technologies failto develop, matureor be commercially available withinthe periods thatwe project, we mayunderperformour financial projections, which would materiallyand adversely affectour business, financial conditionand resultsof operations.

We are subjectto cybersecurity risksto our operational systems, security systems, infrastructure, integrated softwarein ouraircraftand customer data processedby our third-party vendors.

We areat riskfor interruptions, outagesand breachesof our: (a) operational systems, including business, financial, accounting, product development, data processingor production processes, owned by us or our third- party vendorsor suppliers; (b) facility security systems, owned by us or our third-party vendorsor suppliers; (c) aircraft technology including powertrainand avionicsand flight control software, owned by us or our third- party vendorsor suppliers; (d) integrated softwarein our aircraft; or (e) customer data thatwe processor our third-party vendorsor suppliers processon our behalf. Such incidents could: disruptour operational systems; resultin lossof intellectual property, trade secretsor other proprietaryor competitively sensitive information; resultin a lossof competitive advantage over othersin our industry; compromise certain informationof customers, employees, suppliers, or others; jeopardizethe securityof our facilities; or affectthe performanceof in-product technologyand theintegrated softwarein our aircraft.

We planto include avionicsand flight control software servicesand functionality that utilize data connectivityto monitor aircraft performanceand to enhance safetyand enable cost-saving preventative maintenance. The availabilityand effectivenessof our services depend on thecontinued operationof information technologyand communications systems. Our systems willbe vulnerableto damageor interruption from, among others, physical theft, fire, terrorist attacks, natural disasters, power loss, war, telecommunications failures, viruses, denialor degradationof service attacks, ransomware, social engineering schemes, insider theftor misuse or other attemptsto harmour systems. We intendto use our avionicsand flight control softwareand functionality to log information about each aircraft’s usein ordertoaidus in aircraft diagnosticsand servicing. Our customers mayobjectto theuse of this data, which mayincreaseour vehicle maintenance costsand harmour business prospects.

Our aircraft contains complex information technology systemsand built-indata connectivityto share aircraft data with ground operations infrastructure. We planto design, implementand test security measures intendedto prevent unauthorized accessto our information technology networks, our aircraftand related systems. However, hackersmay attemptto gain unauthorized accessto modify, alterand use such networks, aircraftand systemsto gain controlof or to changeour aircraft’s functionality, performance characteristics, or to gain access to data storedin or generatedby theaircraft. A significant breachof our third-party service providers’ orvendors’ or our own network securityand systems could have serious negative consequencesforour business andfuture prospects, including possible fines, penaltiesand damages, reduced customer demandforour aircraft or urban aerial ride sharing servicesand harmto our reputationand brand.

Moreover, thereare inherent risks associated with developing, improving, expandingand updatingour current systems, such as thedisruptionof our data management, procurement, production execution, finance, supply chainand salesand service processes. These risksmay affectour abilityto manageour dataand inventory, procure partsor suppliesor manufacture, deploy, deliverand serviceour aircraft, adequately protect our intellectual propertyor achieveand maintain compliance with, or realize available benefits under, applicable laws, regulationsand contracts. We cannotbe sure that these systems upon which we rely, including thoseof our third-party vendorsor suppliers, willbe effectively implemented, maintainedor expandedas planned. Ifwe do not successfully implement, maintainor expand these systemsas planned, our operationsmaybe disruptedandour abilityto accuratelyand timely reportour financial results couldbe impaired. Moreover, our proprietary informationor intellectual property couldbe compromisedor misappropriated, and our reputationmaybe adversely affected. Ifthese systemsdo not operateas we expect themto, we maybe requiredto expend significant resourcesto make correctionsor find alternative sourcesfor performing these functions.

We are dependenton our senior management teamand other highly skilled personnel, and ifwe are not successfulin attracting, engaging andretaining highly qualified personnel, we maynot be ableto successfully implement our business strategy.

From time to time, there is significant competition within the aviation industry for skilled personnel in general and engineers in particular. To the extent this competition re-emerges, we may be unable to recruit, and retain the necessary number of highly skilled engineers and other personnel we require. Failure to coordinate our resources in a timely manner or to attract and retain skilled personnel could slow down our development efforts and cause delays in production and deliveries of our products and services, which would adversely affect us.

Our success depends, in significant part, on thecontinued servicesof our senior management teamand on our abilityto attract, motivate, developand retaina sufficient numberof other highly skilled personnel. The lossof anyone or more members of our senior management team, forany reason, including resignationor retirement, could impairour abilityto executeour business strategyand harmour business, financial conditionand resultsof operations. Additionally, our business, financial conditionand resultsof operationsmaybe adversely affectedifwe areunableto attractand retain skilled employeesto supportour operationsand growth.

Ifwe or our third-party service providers experiencea security breach, or ifunauthorized parties otherwise obtain accessto our customers’ data, our reputationmaybe harmed, demand forservicesmaybe reduced, and we mayincur significant liabilities.

Our services involvethe storage, processingand transmissionof data, including certain confidentialand sensitive information. Any security breach, including those resulting froma cybersecurity attack, a phishing attack, an unauthorized access, an unauthorized usage, a virusor a similar breachor disruption, could resultin: (i) thelossor destructionof, or unauthorized accessto, or use, alteration, disclosure, or acquisitionof, data, (ii) damageto our reputation, (iii) litigation, (iv) regulatory investigations, or (v) other liabilities. These attacks maycome from individual hackers, criminal groups, and state-sponsored organizations. Ifour security measures arebreachedas a resultof third-party action, employee error, a defector bug in our productsor thoseof ourthird-party service providers, malfeasanceor otherwiseand, as a result, someone obtains unauthorized accessto our data, includingour confidential, sensitive, or other information about individuals, or any of these typesof informationis lost, destroyed, or used, altered, disclosed, or acquired without authorization, our reputationmay be damaged, our businessmay suffer, and we could incur significant liability. Even theperceptionof inadequate securitymay damageour reputationand negatively impactour abilityto win new customersand retainand receive timely payments from existing customers. Further, we couldbe requiredto expend significant capitaland other resourcesto addressany data security incidentor breach, which maynot be coveredor fully coveredby ourinsuranceand which mayinvolve paymentsfor investigations, forensic analyses, legal advice, public relations advice, system repairor replacement, or other services.

We engage third-party vendorsand service providersto storeand otherwise process someof our data, including confidential, sensitive, and other information about individuals. Our vendorsand service providersmay alsobe thetargetsof cyberattacks, malicious software, phishing schemes, and fraud. Our abilityto monitorour vendorsand service providers’ data securityis limited, and, in any event, third partiesmaybe ableto circumvent those data security measures, resultingin unauthorized accessto our data, or misuse, acquisition, disclosure, loss, alteration, or destructionof our data, including confidentialor sensitive information, such as intellectual property and trade secrets, and personal information.

Techniques used to sabotageor obtain unauthorized accessto systemsor networksare constantly evolving and, in some instances, arenot identified until after they have been launched againsta target. We and our service providersmaybe unableto anticipate these techniques, reactin a timely manner, or implement adequate preventativeand mitigating measures. Ifwe areunableto efficientlyand effectively maintainand upgradeour system safeguards, we mayincur unexpected costsand certainof our systemsmay become more vulnerableto unauthorized accessor disruption.

If our operations grow as planned, for which there can be no assurance, we will need to expand our sales, marketing, operations, and the number of partners with whom we do business. Our continued growth could increase the strain on our resources, and we could experience operating difficulties, including difficulties in hiring, training and managing an increasing number of employees. These difficulties may result in the erosion of our brand image, divert the attention of management and key employees and impact financial and operational results. The continued expansion of our business may also require additional space for administrative support. If we are unable to drive commensurate growth, these costs, which include lease commitments, marketing costs and headcount, could result in decreased margins, which could have an adverse effect on our business, financial condition and results of operations.

We areincurring increased costsas a resultof operatingas a public company, and our managementis devoting substantial timeto new compliance initiatives.

As a public company, we are incurring significant legal, accounting and other expenses that we did not incur as a private company prior to the business combination, and these expenses may increase even more after we are no longer an emerging growth company, as defined in Section 2(a)(19) of the Securities Act of 1933 ("Securities Act"). As a public company, we are also subject to the reporting requirements of the Securities Exchange Act of 1934 ("Exchange Act"), the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules adopted, and to be adopted, by the SEC and the NYSE. Our management and other personnel are devoting a substantial amount of time to these compliance initiatives. Moreover, we expect these rules and regulations to substantially increase our legal and financial compliance costs and may make other activities more time-consuming and costly, which may increase our net loss. For example, we expect these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be forced to accept reduced policy limits or incur substantially higher costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

We are subject to risks associated with strategic alliances or acquisitions and may not be able to identify adequate strategic relationship opportunities, or form strategic relationships, in the future.

We have entered into strategic alliances and may in the future enter into additional strategic alliances, joint ventures or minority equity investments, in each case with various third parties for the production of our aircraft, development of an Urban Air Traffic Management solution, development of agnostic fleet operations and provision of aftermarket services. We may collaborate with other strategic parties with capabilities in the areas of data and analytics, industrial design and manufacture, user experience and engineering. These alliances subject us to a number of risks, including risks associated with sharing proprietary information, non-performance by the third-party and increased expenses in establishing new strategic alliances, any of which may adversely affect our business. We may have limited ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffer negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with any such third party.

Strategic business relationships will be an important factor in the growth and success of our business. However, there are no assurances that we will be able to continue to identify or secure suitable business relationship opportunities in the future or our competitors may capitalize on such opportunities before we do. Moreover, identifying such opportunities could require substantial management time and resources, and negotiating and financing relationships involves significant costs and uncertainties. If we are unable to successfully source and execute on strategic relationship opportunities in the future, our overall growth could be impaired, and our business, financial condition and results of operations could be adversely affected.

When appropriate opportunities arise, we mayacquire additional assets, products, technologiesor businesses thatare complementaryto our existing business. In additionto possible stockholder approval, we may need approvalsand licenses from relevant government authoritiesforthe acquisitionsand to comply with any applicable laws and regulations, which could resultin increased delayand costs, and maydisruptour business strategyifwe failto do so. Furthermore, acquisitionsand thesubsequent integrationof new assetsand businesses intoour own require significant attention fromour managementand could resultin a diversionof resources from our existing business, which in turn could have an adverse effecton our operations. Acquired assetsor businesses maynot generatethe financial resultswe expect. Acquisitions could resultin theuse of substantial amountsof cash, potentially dilutive issuancesof equity securities, theoccurrenceof significant goodwill impairment charges, amortization expensesfor other intangible assetsand exposureto potential unknown liabilitiesof the acquired business. Moreover, thecostsof identifyingand consummating acquisitionsmaybe significant.

Ifwe or ERJexperience harm to our or itsreputationand brand, our business, financial conditionand resultsof operations could be adversely affected.

Continuingto increasethe strengthof our reputationand brandfor high-performing, sustainable, safeand cost-effective urbanair mobilityis criticalto our abilityto attractand retain customersand partners. Because ERJisour controlling stockholderand we arehighly relianton ERJto provideus with certain services and products, partsand other componentsforour eVTOL underthe MSA, thestrengthof the “ERJ” brandis also criticalto our abilityto attractand retain customers. In addition, our growth strategy includes plansfor international expansion through joint ventures, minority investmentsor other partnerships with local companies, as wellas event activationsand cross-marketing with other established brands, allof which benefit fromour reputationand brand recognition. The successful developmentof our reputationand brandand themaintenanceof ERJ’s reputationand brand will depend ona numberof factors, manyof which are outsideits control. Negative perceptionof our platformor companyor of our controlling stockholderand key suppliermay harmour reputationand brand, includingas a resultof:

In addition, changeswe maymaketo enhanceand improveour offeringsand balancethe needsand interests of our independent third-party aircraft operatorsand fliersmaybe viewed positively fromone group’sperspective (suchas fliers) but negatively from another’s perspective (suchas independent third-party aircraft operators), ormaynot be viewed positivelyby either independent third-party aircraft operatorsor fliers. Ifwe failto balancethe interestsof independent third-party aircraft operatorsand fliersor make changes that they view negatively, independent third-party aircraft operatorsand fliersmay stop purchasingour aircraftor stop usingour platformor take fewer flights, any of which could adversely affectour reputation, brand, business, financial conditionand resultsof operations.

Operationsand Infrastructure

There isa shortageof pilotsand mechanics which could increaseour operating costsand reduceour abilityto deployour serviceat scale.

Thereisa shortageof pilots thatis expectedto exacerbate over timeas more pilotsin theindustry approach mandatory retirementage. Similarly, trainedand qualified aircraft mechanicsare alsoin short supply. This will affectthe aviation industry, including UAMservicesand more specifically, our business. Our businessis dependenton our operating partners’ abilityto recruitand retain pilots qualifiedto operateour aircraftand mechanics qualifiedto performthe requisite maintenance activities, eitheror both of which maybe difficultdue to thecorresponding personnel shortages. Ifour partnerswho will operateour fleetof eVTOLsare unableto hire, train, and retain qualified pilotsand qualified mechanics, our business couldbe harmed, and we maybe unableto implementour growth plans.

This risk would be exacerbated if certifying authorities alter prevailing operating assumptions to requiretwo pilots per aircraft. This would increase operating expenses of eVTOLs, possibly reducing addressable market, while also potentially delaying (or even cancelling) our ambitions for autonomous flights.

We maynot have enough qualified employees.

Periodically, thereis strong competitionin theaerospace sectorfor qualified employees, especially engineers. Whenever this demand occurs, we maynot be ableto recruitand retainthe necessary numberof engineersand other qualified employees. Ifwe areunableto timely coordinateour resourcesor attractand retain qualified employees, our development efforts could slow down and cause aircraft productionand delivery delays, which mayadversely affectus.

Our aircraft utilizationmaybe lower than expectedand our aircraftmaybe limitedin itsperformance during certain weather conditions.

Our aircraftmaynot be ableto flysafelyin poor weather conditions, including snowstorms, thunderstorms, lightning, hail, known icing conditionsand/orfog. Our inabilityto operatein these conditions will reduceour aircraft utilizationand cause delaysand disruptionsin our services. We intendto maintaina high daily aircraft utilization rate which isthe amountof timeour aircraft spend in theair carrying passengers. High daily aircraft utilizationis achievedin partby reducing turnaround timesat vertiportsso we can flymore hourson averagein a day. Aircraft utilizationis reducedby delaysand cancellations from various factors, manyof which arebeyond our control, including adverse weather conditions, security requirements, airtraffic congestionand unscheduled maintenance events. The successof our businessis dependent, in part, on theutilization rateof our aircraftand reductionsin utilization will adversely impactour financial performanceas wellas cause passenger dissatisfaction.

Our aircraftmay require maintenanceat frequenciesor at costs which are unexpectedand could adversely impactour businessand operations.

Our aircraftare highly technical products that require maintenanceand support. We arestill developingour understandingof thelong-term maintenance profileof theaircraft, and ifuseful lifetimesare shorter than expected, thismay leadto greater maintenance costs than previously anticipated. Ifour aircraftand related equipment require maintenance more frequently thanwe planforor atcosts that exceedour estimates, that would disruptthe operationof our serviceand have a material adverse effecton our business, financial condition, and resultsof operations.

We are subjectto risks associated with climate change, includingthe potential increased impactsof severe weather eventson our operationsand infrastructure.

The potential physical effectsof climate change, such as increased frequencyand severityof storms, floods, fires, fog, mist, freezing conditions, sea-level riseand other climate-related events, could affectour operations, infrastructureand financial results. We could incur significant coststo improvethe climate resiliencyof our infrastructureand otherwise preparefor, respondto, and mitigate such physical effectsof climate change. We are not ableto accurately predictthe materialityof any potential lossesor costs associated with thephysical effectsof climate change.

We are subjectto many hazards and operational risks thatcan disruptour business, including interruptionsor disruptionsin serviceat our facilities, which could have a material adverse effecton our business, financial conditionand resultsof operations.

Our operationsare subjectto many hazardsand operational risks inherentto our business, including general business risks, product liabilityand damageto third parties, our infrastructureor properties thatmaybe causedby fires, floodsand other natural disasters, power losses, telecommunications failures, terrorist attacks (including hijacking, use of theaircraftas a weapon, or use of theaircraftto dispersea chemicalor biological agent), catastrophic lossdue to security related incidents, human errorsand similar events. Additionally, our manufacturing operationsare hazardousat timesand mayexposeus to safety risks, including environmental risks and healthand safety hazardsto our employeesor third parties.

Financial Risks

We have broad discretionin howwe use the net proceeds fromthe business combination, and we maynot use them effectively.

We cannot specify with any certaintythe particular usesof thenet proceeds thatwe received fromthe business combination. Our managementhas broad discretionin applyingthenet proceedswe received upon consummationof thebusiness combination. We mayuse thenet proceedsfor general corporate purposes, including working capital, operating expenses, and capital expenditures, and we mayuse a portionof thenet proceedsto acquire complementary businesses, products, offerings, or technologies. We mayalso spend or invest these proceedsin a way with which our stockholders disagree. Ifour management failsto use these funds effectively, our business couldbe seriously harmed.

Ifsecuritiesor industry analysts eitherdo not publish research about us, or publish inaccurateor unfavorable research about us, our business, or our market, or, ifsuch analysts change their recommendations regarding our common stock adversely, the trading priceor trading volumeof our common stock could decline.

The trading marketforour common stockis influencedin partby theresearchand reports that securitiesor industry analysts publish aboutus, our business, our market, or our competitors. Ifone or moreof theanalysts initiate research with an unfavorable ratingor downgrade our common stock, provide more favorable recommendations aboutour competitors, or publish inaccurateor unfavorable research aboutour business, our common stock price would likely decline. Ifany analystwho maycoverus were to cease coverageof us or failto regularly publish reportson us, we could lose visibilityin thefinancial markets, which in turn could causethe trading priceor trading volumeof our common stockto decline.

Our available capital resources may not be sufficient to meet the requirements of our business plan and we may need to raise additional capital.

Priorto theconsummationof thebusiness combination, our operationsand capital expenditures were financed primarily with ERJ’s available cash. On January 23, 2023, EVE Soluções de Mobilidade Aérea Urbana, Ltda. (“Eve Brazil”), a Brazilian limited liability company and a wholly owned subsidiary of the Company, entered into a loan agreement with Banco Nacional de Desenvolvimento Econômico e Social – BNDES, Brazilian Development Bank (“BNDES”), pursuant to which, subject to the conditions set forth therein, BNDES agreed to granttwo lines of credit to Eve Brazil, with an aggregate amount of R$490 million (approximately $101.2 million), to support the first phase of the development of the Company’s eVTOL project. Eve Brazil has started to withdraw from these two lines of credit from BNDES in September 2023 to pay for the development services provided by Embraer under the Master Services Agreement with Eve. Eve Brazil expects to continue to access those lines during 2024. In thefuture, we couldbe requiredto raise capital through publicor private financingor other arrangements. Such financingmaynot be availableon acceptable terms, or at all, and our failureto raise capital when needed could harmour business. In addition, anysignificant disruptionand volatilityof global financial markets could adversely impactour abilityto access capital. We maysell equity securitiesor debt securitiesinone or more transactionsat pricesand in a manneras we maydetermine from time to time. Ifwe sellany such securitiesin subsequent transactions, our current investorsmaybe materially diluted. Any debt financing, ifavailable, mayinvolve restrictive covenantsand could reduceour operational flexibilityor profitability. Ifwe cannot raise fundson acceptable terms, we maynot be ableto grow our businessor respondto competitive pressures.

EAH isa majority stockholderof the Company. The concentrationof ownership mayaffectthe market demand for Eve Holding shares.

EAHholdsa significant majorityof the Company’s sharesof common stock. While EAHmaintains such holding, andas a consequenceof such holding, EAHwill have substantial influence overthe Company’s business, including decisions regarding mergers, consolidations, thesaleof allor substantiallyallof itsassets, electionof directors, declarationof dividendsand other significant corporate actions. As thecontrolling stockholder, EAHmay take actions thatarenot in thebest interestsof the Company’s other stockholders. These actionsmaybe takenin many cases even iftheyare opposed by the Company’s other stockholders. In addition, this concentrationof ownershipmay discourage, delayor preventa changein control which could deprive stockholdersof an opportunityto receivea premiumto thetrading priceforthe sharesas partof a saleof the Company.

Risks Related to our Ties to Brazil

Developmentsand the perceptionof riskin Braziland other countries, especially other emerging markets, may adversely affectour business, financial conditionand resultsof operations.

Whilewe area Delaware corporation, ERJ, our indirect controlling stockholderand main supplier, as wellasone of our operating subsidiaries, areboth Brazilian companies. As a result, themarket valueof our securitiesmaybe affectedby economicand market conditionsin Braziland other countries, including European Union and Latin American countriesand other emerging market countries. Although economic conditionsin those countriesmay differ significantly from economic conditionsin the U.S., investors’ reactionsto developmentsin other countriesmay have an adverse effecton themarket valueof our securities. Crises elsewheremay diminish investor interestin securitiesof companies with strong tiesto Brazil, likeus. This could adversely affectthe trading priceof our securitiesand could also makeit more difficultforus to accessthe capital marketsand financeour operationsin thefutureon acceptable terms, or atall.

To theextentthe conditionsof theglobal marketsor economy deteriorate, our businessmaybe adversely affected. The weaknessin theglobal economyhas been markedby, among other adverse factors, lower levelsof consumerand corporate confidence, decreased business investmentand consumer spending, increased unemployment, reduced incomeand asset valuesin many areas, currency volatilityand limited availabilityof creditand accessto capital. Developmentsor economic conditionsin other emerging countries have attimes significantly affectedthe availabilityof creditto companies with significant operationsin Braziland resultedin considerable outflowsof funds from Brazil, decreasingthe amountof foreign investmentsin Braziland impacting overall growth expectationsforthe Brazilian economy.

Crisesand political instabilityin other emerging market countries, as wellas the United States, Europeor other countries, including increased international trade tensionsand protectionist policies, could decrease investor demandfor securities offeredby companies with significant operationsin Brazil, such as ours. Additionally, growing economic uncertaintyand news of a potentially recessive economyin the United States mayalso create uncertaintyin the Brazilian economy. These developments, as wellas potential crisesand other formsof political instability arising therefromor any other unforeseen development, mayadversely affectthe United Statesand theglobal economyand capital markets, which may, in turn, materially adversely affectour business, financial conditionand resultsof operations.

Brazilian political and economic conditions have a direct impact on our business, and such conditions could adversely affect our business, financial condition and results of operations.

The Brazilian federal governmenthas frequently intervenedin the Brazilian economyand occasionallyhas made significant changesto policyand regulations, includingits monetary, fiscal, creditand tariff policiesand rules. The Brazilian government’s actionsto control inflationand other policiesand regulations have often involved, among other measures, increasesor decreasesin interest rates, changesin taxpolicies, wageand price controls, blocking accessto bank accounts, foreign exchange rate controls, currency exchangeand remittance controls, devaluations, capital controlsand importand export restrictions. We have no control overand cannot predict what measuresor policiesthe Brazilian governmentmay takein thefutureand how these could impactus and our business. Our business, financial conditionand resultsof operationsmaybe adversely affectedby changesin policyand regulationsatthe federal, stateor municipal level involving factors such as:

• expansionor contractionof the Brazilian economy, as measuredby gross domestic product, or GDP, rates;

• interest rates;

• exchange rates;

• currency fluctuations;

• monetary policies;

• inflation;

• liquidity of capital and lending markets;

• importand export controls;

• exchange controland restrictionson remittances abroad;

• theregulatory framework governingthe aeronautical sector;

• commodity prices;

• public health, includingas a resultof epidemicsand pandemics;

• fiscal policiesand changesin taxlaws;

• labor and social security regulations;

• energy and water shortages and rationing; and

Uncertainty over whetherthe Brazilian government would implement changesin policy, regulationor legislation affectingthe above mentioned factorsand others creates instabilityin the Brazilian economy, increasingthe volatilityof the Brazilian market. These uncertaintiesand other future developmentsin the Brazilian economymay adversely affectour activities, and consequentlyour operating results. We cannot predict which policiesthe Brazilian government will adoptor whether these newly adopted policiesor changesin current policiesmay have an adverse effecton us or the Brazilian economy. These factorsare compoundedas Brazil emerges froma prolonged recession aftera periodof a slow recovery.

Our resultsof operationsand financial condition have been, and will continueto be, affectedby thegrowth rateof the Brazilian GDP. Developmentsin the Brazilian economymay affect Brazil’s growth ratesand, consequently, theuse of our productsand services.

Further, Brazil’s political environmenthas historically influenced, and continuesto influence, the performanceof thecountry’s economy. The recent economic instabilityin Brazilhas contributedto a declinein market confidencein the Brazilian economyas wellas to a deteriorating political environment.

As has been truein thepast, thecurrent politicaland economic environmentin Brazilhas affectedand is continuingto affectthe confidenceof investorsand thegeneral public, which has historically resultedin economic decelerationand heightened volatilityin thesecurities offeredby companies with significant operationsin Brazil, which mayadversely affectthe priceof our common stock.

Political instability, includingas a resultof ongoing corruption investigations, mayadversely affectour business, financial conditionand resultsof operations.

Brazil’s political environmenthas historically influenced, and continuesto influence, theperformanceof the country’s economy. Political crises have affected, and continueto affect, theconfidenceof investorsand thatof thepublicin general, resultingin economic downturn and heightened volatilityof securities issuedby Brazilian companies, like ERJ.

Brazilian markets have experienced heightened volatilitydue to uncertainties derived from ongoing investigations into money launderingand corruption conductedby the Brazilian Federal Policeand the Federal Prosecutor’s Office, and theimpactof these investigationson the Brazilian economyand political environment.

The ultimate outcomeof these investigationsis uncertain, but theyhad an adverse impacton theimageand reputationof theimplicated companies, and on thegeneral market perceptionof the Brazilian economy. We cannot predictthe effectsof further political developmentson the Brazilian economy, includingthe policies that the Brazilian governmentmay adoptor theoutcomeand developmentof any of these investigations, which has affectedand maycontinueto adversely affectthe Brazilian economyand mayadversely affectour businessand resultsof operations.

Furthermore, Brazil’s former President Jair Bolsonaro’s COVID-19 responses were strongly criticizedin Braziland abroad. COVID-19 haddisruptive effects that enhanced political uncertaintyin Brazil, especially considering political discussions that culminatedin thedismissalor resignationof Brazilian Federal Ministers, as wellas thecorruption accusations against former President Jair Bolsonaro.

On April 14,2021, the Brazilian Senate establisheda parliamentary commission (Comissão Parlamentarde Inquértio, or CPI), to investigatethe alleged mishandlingof public funds assignedto combat COVID-19 effectsin Brazil. Endorsedby the Brazilian Supreme Court Minister, Luis Roberto Barroso, CPI’s purposeisto investigate actionsand omissionsby the Brazilian federal government while fightingthe pandemic, as wellas the healthcare system collapsein the Stateof Amazonasin early 2021.

In addition, the Brazilian Supreme Court has recently annulled the criminal convictions against then-former Brazilian President Luiz Inácio Lula da Silva, and subsequently reinstated his political rights, which enabled him to run for presidency in the October 2022 election. Mr. Luiz Inácio Lula da Silva was victorious in the election and took office as President on January 1, 2023.

Therecan be no assurance that other political events willnot cause further instabilityin the Brazilian economy, in capital marketsand in thetrading priceof securities issuedby us. We cannot guarantee that, as these events unfold, they willnot have additional adverse impactson theeconomicand political situationin Brazil.

The recent economic instabilityin Brazilhas contributedto a declinein market confidenceas wellas a deteriorationin thepolitical environment. The current administration promised duringthe electoral campaignto be committedto a strong anticorruption agendaand a liberal economic view. However, due to thefragmented legislationand different views withinthe administration, thereare uncertaintiesin themarket regardingthe futureof thesetwo branchesof thegovernment, which canleadto increasesin volatilityand risksto theeconomy.

A failureby the Brazilian governmentto implement necessary economicand structural reformsmay result in diminished confidencein the Brazilian government’s budgetary conditionand fiscal standing, which could resultin a downgrade of Brazil’s sovereign foreign credit ratingby credit rating agencies, negatively impact Brazil’s economy, and leadto further depreciationof thecurrencyand an increasein inflationand interest rates, which could adversely affectour business, financial conditionand resultsof operations.

Inflationand government effortsto combat inflationmay adversely affectthe Brazilian economyand leadto heightened volatilityin the Brazilian capital marketsand, consequently, mayadversely affectour business, financial conditionand resultsof operations.

Historically, Brazilhas experienced high inflation rates. Inflationand certain actions takenby the Central Bank to curbit have had significant negative effectson the Brazilian economy. Brazilmay experience high levelsof inflationin thefutureand inflationary pressuresmay leadto the Brazilian government interveningin theeconomyand introducing policies that could harmour businessand thepriceof our common stock. In thepast, the Brazilian government’s interventions includedthe maintenanceof a restrictive monetary policy with high interest rates that restricted credit availabilityand reduced economic growth, causing volatility in interest rates. Conversely, more lenient governmentand Central Bank policiesand interest rate decreases have triggeredand maycontinue to trigger increasesin inflation, and, consequently, growth volatilityand theneed forsudden and significant interest rate increases, which could negatively affectus and increaseour indebtedness.

We areparticularly affectedby increased inflationin Brazil, and we maynot be ableto increasethe amount chargedto our customersatthe same rateas theincreasein inflation. Therefore, inflationand the Brazilian government’s measuresto combat inflation have had, and maycontinueto have, significant effectson the Brazilian economyand on our business. Strict monetary policies, with high interest rates and high requirements for compulsory deposits, can restrict Brazil’s growth and the availability of credit. On the other hand, softer government and central bank policies and declining interest rates may trigger increases in inflation and, consequently, the volatility of economic growth and the need for sudden and significant increases in interest rates.

Inflationary pressuresmay resultin government interventionin theeconomy, including policies thatmay adversely affectthe overall performanceof the Brazilian economy, which could, in turn, adversely affectour operationsand thepriceof our common stock. Inflation, measuresto contain inflationand speculation about potential measurescan also contributeto significant uncertaintyin relationto the Brazilian economyand weaken investor confidence, which can affectour abilityto access finance, including accessto equityof international capital markets.

Future measuresby the Brazilian government, including reductionsin interest rates, interventionin the foreign exchange marketand actionsto adjustor fixthe valueof thereal, maytrigger increasesin inflation, adversely affectingthe overall performanceof the Brazilian economy.

Inflationcan also increaseour costsand expenses, and we maynot be ableto transfer such coststo customers, reducingour profitand netprofit margins. In addition, high inflation rates generally increase Brazilian interest ratesand, therefore, thedebt serviceof theportionof our debt thatisin reais, which isindexed to floating rates, mayalso increase. Due to this, netprofitmay decrease. Inflationand itseffects relatedto Brazilian interest rates could, in addition, reduce liquidityin the Brazilian capitaland financial markets, which would affectthe abilityto refinanceour indebtednessin those markets.

Exchange rate volatilitymay have adverse effectson the Brazilian economy, our business, financial conditionand resultsof operations.

The Brazilian currency (Brazilianreal) has, duringthe last decades, experienced frequentand substantial variationsin relationto the U.S. dollarand other foreign currencies. In 2018, thereal depreciated againstthe U.S. dollarin comparisonto December 31, 2017, reaching R$3.8748 per U.S.$1.00 as of December 31, 2018. In 2019, thereal depreciated againstthe U.S. dollarin comparisonto December 31, 2018, reaching R$4.0307 per U.S.$1.00 as of December 31, 2019. In 2020, thereal depreciated againstthe U.S. dollarin comparisonto December 31, 2019, reaching R$5.1967 per U.S.$1.00 as of December 31, 2020. In 2021, therealhad further depreciated againstthe U.S. Dollar, reaching R$5.5799 per U.S.$1.00, and in 2022 thereal appreciated againstthe U.S. dollar, reaching R$5.2780 per U.S.$1.00. For 2023 the real appreciated again against the U.S. dollar, reaching R$4.8525 per U.S.$1.00. Therecan be no assurance thatthe real willnot appreciateor depreciate further againstthe U.S. dollaror other currencies.

Depreciationof thereal againstthe U.S. dollar creates inflationary pressuresin Braziland causes increases in interest rates, which negatively affectsthe growth of the Brazilian economyas a whole, curtails accessto foreign financial marketsand mayprompt government intervention, including recessionary governmental policies. Depreciationof thereal againstthe U.S. dollarhas also, includingin thecontextof an economic slowdown, ledto decreased consumer spending, deflationary pressuresand reduced growth of theeconomyas a whole. On theother hand, appreciationof thereal relativeto the U.S. dollarand other foreign currencies could leadto a deteriorationof the Brazilian foreign exchange current accounts, as wellas dampen export-driven growth. Depending on thecircumstances, either depreciationor appreciationof therealmay materiallyand adversely affectus.

Depreciationof thereal relativeto theprevailing rateof inflation, mayadversely affectus, mainlydue to thefact thatwe have a substantial amountof our laborand engineering development costsin Brazil linkedto therealand fluctuationsof thereal relativeto inflation, could resultin different than expected engineeringand selling, generaland administrative (SG&A) expenses.

Depreciationsof thereal relativeto the U.S. dollar could also adversely affectus, mainlydue to thefact that we will maintainthe majorityof our cash denominatedin U.S. dollarsatthe same time thata significant portionof our development costsare linkedto the Brazilian real currency. A significant fluctuationof the Brazilian real versusthe U.S. dollarmay resultin different than expected development expensesin dollar terms.

On theother hand, an appreciationof thereal relativeto the U.S. dollarand other foreign currenciesmay deterioratethe Brazilian foreign exchange current accounts. We and certainof our suppliers purchase goods and services from countries outside Brazil, and thus changesin thevalueof the U.S. dollar comparedto other currenciesmay affectthe costsof goods and services thatwe purchase. Depending on thecircumstances, either devaluationor appreciationof thereal relativeto the U.S. dollarand other foreign currencies could restrictthe growth of the Brazilian economy, as wellas our business, resultsof operationsand profitability. As a result, we maybe materiallyand adversely affectedby exchange rate variations.

Infrastructureand workforce deficiencyin Brazilmay impact economic growth and have a material adverse effecton our business, financial conditionand resultsof operations.

Our performanceis affectedby theoverall healthand growth of theglobal economy, specificallyin Brazil. In Brazil, GDPgrowth has fluctuated overthe pastfew years, with contractionsof 3.5% and 3.3% in 2015 and 2016, respectively, followedby growth of 1.1% in both 2017 and 2018. In 2019, Brazilian GDPgrew by 1.0%, and in 2020, itcontracted 4.1%. In 2021, Brazilian GDPgrew by 5.0% and in 2022 the growth was 2.9%. For 2023, it is expected that GDP grows 3.0%. Growth islimitedby inadequate infrastructure, including potential energy shortagesand deficient transportation, logisticsand telecommunication sectors, general strikes, thelackof a qualified labor force (particularlyin information technology sectors), and thelackof privateand public investmentsin these areas, which limit productivityand efficiency. Additionally, despitethe business continuityand crisis management policies currentlyin place, travel restrictionsor potential impactson personneldue topandemicsmay disruptour businessand themarketsin which we operate. Any of these factors could leadto labor market volatilityand generally impact income, purchasing power and consumption levels, which could limit growth and ultimately have a material adverse effecton us.

Any further downgrading of Brazil’s credit rating could adversely affectthe market priceof our common stockand debt instruments.

Given thecurrent significanceof our Brazil operationsto our resultsof operationsas a whole, we maybe harmedby investors’ perceptionsof risks relatedto Brazil’s sovereign debt credit rating. Rating agencies regularly evaluate Braziland itssovereign credit ratings, which arebasedon a numberof factors including macroeconomic trends, fiscaland budgetary conditions, indebtedness metricsand theperspectiveof changesin any of these factors.

The rating agencies began to review Brazil’s sovereign credit ratingin September 2015. Subsequently, thethree major rating agencies downgraded Brazil’s investment-grade status:

Additionally, a downgrade of thesovereign credit ratingof Brazilmay affectour own credit rating, hinderingour abilityto secure loansat competitive rates comparedto our competitors, which mayimpactour abilityto grow our businessand consequently, affectthe priceof our common shares.

Any decreasein Brazilian government-sponsored customer financing, or increasesin government-sponsored financing that benefitsour competitors, maydecreasethe competitivenessof our aircraft.

Traditionally, aircraft original equipment manufacturers("OEMs"), have received support from governments through governmental export credit agencies, or ECAs, in orderto offer competitive financing conditionsto their customers, especiallyin periodsof credit tightening fromthe traditional lending market.

Government supportmay constitute unofficial subsidies causing market distortions, which mayriseto disputes among governmentsatthe World Trade Organization, or WTO. Since 2007, an agreement known as the Aircraft Sector Understanding, or ASU, developedby the Organizationfor Economic Co-operationand Development, or OECD, has provided guidelinesforthe predictable, consistentand transparentuse of government-supported export financingforthe saleor leaseof civil aircraft, in orderto establisha“level-playing field.” ECAs from signatory countriesare requiredto offer termsand conditionsno more favorable than those containedin the ASU’s base financial agreement when financing salesof aircraft that compete with those producedby the OEMs of their respective countries. The effectof theagreementisto encourage aircraft purchasersto focuson thepriceand qualityof aircraft products offeredby OEMs rather thanon thefinancial packages offeredby their respective governments.

The Brazilian ECA, BNDES, together with the Brazilian National Treasury Export Guarantee Fund, offer financingand export credit insuranceto our customers under termsand conditions requiredby the ASU. On January 23, 2023, Eve Brazil entered into a loan agreement with BNDES, pursuant to which BNDES agreed, subject to the conditions set forth therein, to granttwo lines of credit to Eve Brazil, with an aggregate amount of R$490 million (approximately$101.2 million), to support the first phase development of the Company’s eVTOL project. Any future reductionor restrictionto the Brazilian export financing program, and any increasein our customers’ financing costsfor participationin this program, above those providedin the ASU’s base financial agreement, maycausethe cost-competitivenessof our aircraftto decline. Other external factorsmay also impactour competitivenessin themarket, including, but not limitedto, aircraft OEMs from countries which arenot signatoriesto the ASUagreement offering attractive financing packages, or any new government subsidies supportingany of our major competitors.

Risks Relatedto the Business Combination

Warrants will become exercisableforthe Company’s common stock, which would increasethe number of shares eligiblefor future resalein the public marketand resultin dilutionto our stockholders.

Thereare 11,499,879 outstanding public warrantsto purchase 11,499,879 sharesof common stockatan exercise priceof $11.50 pershare, which warrants became exercisableon June 8, 2022. In addition, thereare 14,250,000 private placement warrants outstanding exercisablefor 14,250,000 sharesof common stockatan exercise priceof $11.50 pershare, which warrants became exercisable on June 8, 2022. Moreover, the Company has issued or has agreed to issuenew warrants, thatareor willbe, as applicable, exercisablefor (i) 24,095,072 sharesof common stockatan exercise priceof $0.01 pershare ("Penny Warrants"), either without contingencies or contingent on the achievement of certain milestones, (ii) 12,000,000 shares of common stock at an exercise price of $15.00 per share without contingencies and (iii) 5,000,000 shares of common stock at an exercise price of $11.50 per share without contingencies. Since the Business Combination,3,672,536 Penny Warrants have been exercised. To the extent such warrants are exercised, additional shares of common stock will be issued, which will result in dilution to the holders of the Company’s common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our common stock, the impact of which is increased as the value of our stock price increases.

We mayredeem unexpired public warrants and certain other warrants priorto their exerciseat a time thatis disadvantageousto you, thereby making your warrants worthless.

We have theabilityto redeem outstanding public warrantsand certain other warrantsatany time after they become exercisableand priorto their expiration, ata priceof $0.01 perwarrant, provided thatthe closing priceof thecommon stock equalsor exceeds $18.00 pershare (asadjustedfor stock splits, stock capitalizations, reorganizations, recapitalizationsand thelike) forany 20 trading days withina 30-tradingday period endingon thethird tradingday priorto proper noticeof such redemption provided thaton thedatewe give noticeof redemption. We willnot redeemthe warrants unlessan effective registration statement underthe Securities Act coveringthe sharesof common stock issuable upon exerciseof thewarrantsis effectiveand a current prospectus relatingto those sharesof common stockis available throughoutthe 30-dayredemption period, exceptifthe warrantsmaybe exercisedon a cashless basisand such cashless exerciseis exempt from registration underthe Securities Act. Ifand whenthe warrants become redeemableby us, we mayexerciseour redemption right even if we areunableto registeror qualifythe underlying securitiesfor sale underall applicable state securities laws. Redemptionof theoutstanding warrants could forceyou to (i) exercise your warrantsand pay theexercise price thereforata time when itmaybe disadvantageousforyou to do so, (ii) sell your warrantsatthe then-current market price when you might otherwise wish to hold your warrantsor (iii) acceptthe nominal redemption price which, atthe timethe outstanding warrantsare calledfor redemption, islikelyto be substantially less thanthe market valueof your warrants. None of theprivate placement warrants willbe redeemableby us forcashso long as theyare heldby their initial purchasersor their permitted transferees.

Historical trading closing prices for our shares of common stock have varied between a low of approximately $5.45 pershareon June 28, 2022, to a high of$12.38 pershareon September 21,2022, but have not approachedthe$18.00 pershare thresholdfor redemption (which, as described above, would be requiredfor 20 trading days within a 30 trading-day period after they become exercisable and prior to their expiration, at which point the public warrants would become redeemable). In the event that the Company elects to redeem all of the redeemable warrants as described above, the Company will fix a date for the redemption. Notice of redemption will be mailed by first class mail, postage prepaid, by us not less than 30 days prior to the redemption date to the registered holders of the public warrants to be redeemed at their last addresses as they appear on the registration books. Any notice mailed in the manner provided in the applicable warrant agreement shall be conclusively presumed to have been duly given whether or not the registered holder received such notice. In addition, beneficial owners of the redeemable warrants will be notified of such redemption by our posting of the redemption notice to Depository Trust Company.

There can be no assurance thatour public warrants, private placementor certain other warrants willbe in the moneyat the time they become exercisable, and theymay expire worthless.

The exercise priceforthe outstanding public warrantsand private placement warrantsis $11.50 pershareof common stock. In addition, theexercise pricesfor certainnew warrantsare $11.50 pershareof common stock and $15.00 pershareof common stock Therecan be no assurance that such warrants willbe in themoney followingthe time they become exercisableand priorto their expiration, and as such, thewarrantsmay expire worthless.

We mayamend the termsof the public warrants in a manner thatmaybe adverseto holdersof public warrants with the approvalby the holdersof at least 50% of the then-outstanding public warrants. As a result, the exercise priceof your warrants could be increased, the exercise period could be shortenedand the number of sharesof our common stock purchasable upon exerciseof a public warrant could be decreased, allwithout the approvalof public warrant holders.

Our public warrants have been issuedin registered form underthe Warrant Agreement. The Warrant Agreement provides thatthe termsof thewarrantsmaybe amended withoutthe consentof any holderto cureany ambiguityor correctany defective provision, butrequiresthe approvalby theholdersof atleast 50% of thethen outstanding public warrantsto makeany change that adversely affectsthe interestsof theregistered holdersof public warrants.

Accordingly, we mayamendthe termsof thepublic warrantsin a manner adverseto a holderif holdersof at least 50% of thethen outstanding public warrants approveof such amendment. Although our abilityto amendthe termsof thepublic warrants with theconsentof atleast 50% of thethen outstanding public warrantsis unlimited, examplesof such amendments couldbe amendmentsto, among other things, increasethe exercise priceof the warrants, convertthe warrants into cashor stock (ata ratio different than initially provided), shortenthe exercise periodor decreasethe numberof sharesof common stock purchasable upon exerciseof a warrant.

We mayface litigationand other risksas a resultof prior material weaknesses in our internal control over financial reporting.

Followingthe issuanceof the Staff Statementon Accountingand Reporting Considerationsfor Warrants Issuedby Special Purpose Acquisition Companieson April 12, 2021, our managementand our audit committee concluded thatitwas appropriateto restateour previously issued audited financial statementsas of December 31,2020. We identified material weaknessesin our internal control over financial reporting relatedto theaccounting forcertain financial instruments issuedin connection with Zanite'sinitial public offering ("IPO") in November 2020. In addition, in September 2022, the Company reviewed its accounting for certain warrants to acquire an aggregate of 24,200,000 shares of common stock that were issued and became exercisable at the closing on May 9, 2022, of the transactions contemplated by the BCA. The Company also reviewed the accounting for certain warrants to acquire an aggregate of 200,000 shares of common stock that are issuable and exercisable pursuant certain future milestones. On September 23, 2022, the Audit Committee of the Board of Directors of the Company (the “Audit Committee”), after considering the recommendations of management regarding the accounting treatment for the warrants described above, concluded that the Company’s consolidated financial statements as of and for the year ended December 31, 2021, and condensed consolidated financial statements as of and for the three months ended March 31, 2022, and as of and for the three and six months ended June 30, 2022, should be restated and should no longer be relied upon.

As a resultof prior material weaknesses, therestatementof our financial statements, thechangein accounting forthe warrants, theforward contractto issue additional warrants, and thecommon stock, and other matters raisedor thatmayin thefuturebe raisedby the SEC, we face potentialfor litigationor other disputes which may include, among others, claims invokingthe federaland state securities laws, contractual claimsor other claims arising fromthe restatementand material weaknessesin our internal control over financial reportingand the preparationof our financial statements. As of December 31, 2023, we have no knowledge of any such litigation or dispute. However, we can provideno assurance that such litigationor dispute willnot arisein thefuture. Any such litigationor dispute, whether successfulor not, could have a material adverse effect on our business financial condition, and results of operations.

The market priceand trading volumeof our securitiesmaybe volatileand could decline significantly.

The stock markets, includingthe NYSEon which we listour securities, from time-to-time experience significant priceand volume fluctuations. Even ifan active, liquidand orderly trading market developsand is sustainedforour securities, themarket priceof our securitiesmaybe volatileand could decline significantly. In addition, thetrading volumein our securitiesmay fluctuateand cause significant price variationsto occur. Ifthe market priceof our securities declines significantly, you maybe unableto resell your securitiesatan attractive price (oratall).

Factors affectingthe trading priceof our securitiesmay include:

Broad marketand industry factorsmay materially harmthe market priceof our securities irrespectiveof our operating performance. The stock marketin generalhas experienced extreme volatility thathas often been unrelatedto theoperating performanceof particular companies. As a resultof this volatility, you maynot be able to sell your securitiesator above thepriceat which they were acquired. A lossof investor confidencein the marketforthe stocksof other companies which investors perceiveto besimilartous could depressour stock price regardlessof our business, financial condition, and results of operations. A declinein themarket priceof our securities could also adversely affectour abilityto issue additional securitiesand our abilityto obtain additional financingin thefuture.

There can be no assurance thatwe willbe ableto maintain compliance with the listing standardsof the NYSE.

Our common stockand public warrantsare listedon the NYSE. However, althoughwe currently meetthe minimum initial listing standards requiredby the NYSE, therecan be no assurance thatour securities will continue to be listed on the NYSE in the future. In order to continue listing our securities on the NYSE, we must maintain certain financial, distribution and share price levels, and a minimum number of holders of our securities.

Ifthe NYSE delistsany of our securities from tradingon itsexchangeand we arenot ableto listour securitieson another national securities exchange, we expectour securities couldbe quotedon anover-the-counter market. Ifthis were to occur, we could face significant material adverse consequences, including:

The National Securities Markets Improvement Act of 1996, which isa federal statute, preventsor preempts thestates from regulatingthe saleof certain securities, which arereferredto as“covered securities.” Becauseour common stockand public warrantsare listedon the NYSE, theyare covered securities underthe statute. Although thestatesare preempted from regulatingthe saleof our securities, thefederal statute does allowthe statesto investigate companiesif thereisa suspicionof fraud, and, ifthereisa findingof fraudulent activity, thenthe statescan regulateor barthe saleof covered securitiesin a particular case. State securities regulators mayuse these powers, or threatento use these powers, to hinderthe saleof our securitiesin their states. Further, ifin thefutureour securitiesareno longer listedon the NYSE, then such securities would not be covered securitiesand we would be subjectto regulationin each statein which we offerour securities.

Delaware law and provisionsin the Charter and Bylaws could makea takeover proposal more difficult.

Our organizational documentsare governedby Delawarelaw. Certain provisionsof Delawarelaw and of the Charterand Bylaws could discourage, delay, deferor preventa merger, tender offer, proxy contestor other changeof control transaction thata stockholder might considerin itsbest interest, including those attempts that might resultin a premium overthe market priceforthe sharesof common stock heldby our stockholders. These provisions providefor, among other things:

These anti-takeover provisionsas wellas certain provisionsof Delawarelaw could makeit more difficult fora third partyto acquireus, even ifthe third party’s offermaybe considered beneficialby manyof our stockholders. As a result, our stockholdersmaybe limitedin their abilityto obtaina premiumfor their shares. If prospective takeoversarenot consummatedforany reason, we mayexperience negative reactions fromthe financial markets, including negative impactson thepriceof our common stock. These provisions could also discourage proxy contestsand makeit more difficultforour stockholdersto elect directorsof their choosingand to causeus to take other corporate actions thatour stockholders desire. See“Descriptionof Securities”.

Our abilityto operateour business effectively depends in large parton certain administrativeand other support functions providedto us by ERJpursuant to the Services Agreements. Following the expiration or terminationof the Services Agreements, our abilityto operateour business effectivelymay sufferifitis unable to cost-effectively establishitsown administrativeand other support functionsin orderto operateas a stand-alone company.

We will relyon certain administrativeand other resourcesof ERJ, including information technology, financial reporting, tax, treasury, human resources, procurement, insuranceand risk managementand legal services, to operateour business. In connection with the Pre-Closing Restructuring, Eveentered into three MSAs, includingone by and between Eve and ERJand anotherby and between Eve and Atech. Pursuantto such MSAs, ERJand its subsidiaries (other than Eve and itss ubsidiaries) will supply productsand perform certain services, relatingto thedevelopment, certification, manufacturingand supportof eVTOLs. The initial termof the Atech MSA isexpectedto end on the 10 th anniversaryof theeffective dateof such agreement, and on the 15 th anniversaryof theeffective dateof such agreement forthe MSA with ERJ. Eve also entered intoa MSA with the Brazilian Subsidiary pursuantto which the Brazilian Subsidiary will developand facilitatethe executionof a commercial business planforthe strategic developmentof the UAMBusinesson behalfof Eve. In addition, Eve and the Brazilian Subsidiary entered intoa SSA with ERJand EAHpursuantto which the ERJ entities (other than Eve and its Subsidiaries) will provide certain corporateand administrative servicesto Eve and the Brazilian Subsidiary. The initial termof the SSA with ERJ isexpectedto end on the 15 th anniversaryof theeffective date of such agreement. These servicesmaynot be sufficientto meet Eve’s needsand maynot be providedatthe same levelas when theentities comprising Eve were partof ERJ. We and ERJwill each relyon theotherto performour respective obligations underthe Services Agreements. If ERJis unableto satisfyits material obligations underthe agreement, or ifthe agreementis terminatedas to any servicesor entirely, we maynot be ableto obtain such servicesatallor obtain theserviceson termsas favorableas thosein the Services Agreementsand could, as a result, suffer operational difficultiesor significant losses.

In addition, priorto thedateon which the Services Agreements were entered into, Eve and its Subsidiaries received informal support from ERJas wholly owned subsidiariesof ERJ, and thelevelof this informal supportmay diminishnow thatwe area separate, independent company. Any failureor significant interruption of our own administrative systemsor in ERJ’s administrative systems duringthe termof the Services Agreements could resultin unexpected costs, impactour resultsor preventus from payingour suppliersor employeesand performing other administrative serviceson a timely basis.

Eve mayhave been ableto obtain better terms from unaffiliated third parties than the termsit received pursuant to the Services Agreements with ERJ.

The termsof the Services Agreements were negotiated while Eve was a wholly owned subsidiaryof ERJ. Accordingly, Eve did not have an independent boardof directorsor a management team thatwas independentof ERJduringthe periodin which the Services Agreements were prepared. As a result, the termsof the Services Agreementsmaynot reflect terms that would have resulted from arms-length negotiations between unaffiliated third partiesand any such arms-length negotiations with an unaffiliated third partymay have resultedin more favorable termsto Eve.

We have a short historyas a separate public company.

In thepast, Eve’s operations were a partof ERJand ERJprovided Eve with certain financial, operationaland managerial resourcesfor conductingits business. While ERJcontinuesto providea numberof these resourcesto us underthe Services Agreements, we must also perform certainof our own financial, operationaland managerial functions. Thereareno assurances thatwe will be ableto successfully implementthe financial, operationaland managerial resources necessaryto perform these functions.

The UAMBusiness’ historical financial resultsand Combined Financial Statementsmaynot be representativeof Eve’s resultsas a separate company.

The UAMBusiness’ historical financial information includedin this Annual Report on Form 10-Khas been derivedon a carve-outbasis fromthe consolidated financial statementsand accounting recordsof ERJand does not necessarily reflect what Eve’s financial position, resultsof operationsor cash flows would have been had itbeen a separate company duringthe periods presented. The historical costsand expenses reflectedin the Combined Financial Statements includean allocationfor certain corporate functions historically providedby ERJ, most of which will continueto be provided pursuantto the Services Agreements. These allocations were basedon what management consideredto be reasonable reflectionsof thehistorical utilization levelsof these services requiredin supportof Eve’s business. The historical information does not necessarily reflect what thecostof these functions willbe to Eve or the Company, as applicable, in thefuture, pursuantto the Services Agreements or otherwise. For additional informationin relationto materially significant related party transactions duringthe years ended December 31, 2023, 2022, and 2021, see Note 2 and 5 of theconsolidated financial statementsin this Annual Report on Form 10-K.

Our Warrant Agreement designatesthe courtsof the Stateof New York or the United States District Court for the Southern Districtof New York as the soleand exclusive forumfor certain typesof actionsand proceedings thatmaybe initiatedby holdersof our publicor private placement warrants, which could limitthe abilityof publicor private placement warrant holdersto obtaina favorable judicial forumfor disputes with our company.

Our Warrant Agreement dated as of November 16, 2020, by and between Zanite and Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant Agreement”), provides that, subjectto applicablelaw, (i) any action, proceedingor claim against us arisingout of or relatingin any way to our Warrant Agreement, including underthe Securities Act, willbe broughtand enforcedin thecourtsof the Stateof New York or the United States District Court forthe Southern Districtof New York, and (ii) thatwe irrevocably submitto such jurisdiction, which jurisdiction shallbe the exclusive forumforany such action, proceedingor claim. We will waive any objectionto such exclusive jurisdictionand that such courts representan inconvenient forum.

Notwithstandingthe foregoing, these provisionsof our Warrant Agreement willnot applyto suits broughtto enforceany liabilityor duty createdby the Exchange Act or any other claimfor which thefederal district courts of the United Statesof Americaarethe soleand exclusive forum. Any personor entity purchasingor otherwise acquiringany interestin any of our publicor private placement warrants shallbe deemedto have noticeof, andto have consentedto, theforum provisionsin our Warrant Agreement.

Ifany action, thesubject matterof which iswithinthe scopeof theforum provisionsof our Warrant Agreement, isfiledin a court other thana courtof the Stateof New York or the United States District Court for the Southern Districtof New York (a “foreign action”) in thenameof any holderof our publicor private placement warrants, such holderof our publicor private placement warrants shallbe deemedto have consentedto (x) thepersonal jurisdictionof thestateand federal courts locatedin the Stateof New York in connection with any action broughtin any such courtto enforcethe forum provisions (an “enforcement action”), and (y) having serviceof process made upon such holderof our publicor private placement warrantsin any such enforcement actionby service upon such holder’s counselin theforeign actionas agentfor such holderof our publicor private placement warrants.

This choice-of-forum provisionmay limitthe abilityof a holderof our publicor private placement warrants to bringa claimin a judicial forum thatit finds favorablefor disputes with us, which maydiscourage such lawsuits. Alternatively, ifa court were to find this provisionof our Warrant Agreement inapplicableor unenforceable with respecttoone or moreof thespecified typesof actionsor proceedings, we mayincur additional costs associated with resolving such mattersin other jurisdictions, which could materiallyand adversely affectour business, financial conditionand resultsof operationsand resultin a diversionof thetime and resourcesof our managementand boardof directors.

You mayonly be ableto exercise your public warrants on a“cashless basis” under certain circumstances, and ifyou do so, you will receive fewer sharesof common stock from such exercise than ifyou were to exercise such warrants forcash.

The Warrant Agreement provides thatin thefollowing circumstances holdersof warrantswho seekto exercise their warrants willnot be permittedto do so forcashand will, instead, be requiredto do so on a cashless basisin accordance with Section 3(a)(9) of the Securities Act: (i) ifthe sharesof common stock issuable upon exerciseof thewarrantsarenot registered underthe Securities Act in accordance with thetermsof the Warrant Agreement; (ii) ifwe have so electedand thesharesof common stockisatthe timeof any exerciseof a warrant not listedon a national securities exchange such that they satisfythe definitionof“covered securities” under Section 18(b)(1) of the Securities Act; and (iii) ifwe have so electedand we callthe public warrantsfor redemption. Ifyou exercise your public warrantson a cashless basis, you would pay thewarrant exercise priceby surrenderingthe warrantsfor that numberof sharesof common stock equalto thequotient obtainedby dividing (x) theproductof thenumberof sharesof common stock underlyingthe warrants, multipliedby theexcessof the“fair market value” of our sharesof common stock (asdefinedin thenext sentence) overthe exercise priceof the warrantsby (y) thefair market value. The“fair market value” isthe average reported closing priceof thesharesof common stockforthe 10 trading days endingon thethird tradingday priorto thedateon which thenoticeof exerciseis receivedby thewarrant agentor on which thenoticeof redemptionis sentto theholdersof warrants, as applicable. As a result, you would receive fewer sharesof common stock from such exercise thanifyou were to exercise such warrantsfor cash.

The only principal assetof the Company isits interestin Eve and accordingly, itdepends on distributions from Eve to pay taxesand expenses.

We area holding company with no material assets other thanour interestsin Eve. We arenot expectedto have independent meansof generating revenueor cash flow, and our abilityto pay taxesand operating expenses, as wellas dividendsin thefuture, ifany, willbe dependent upon thefinancial resultsand cash flowsof Eve. Therecan be no assurance that Eve will generate sufficient cash flow to distribute fundsto us, or that applicable law and contractual restrictions, including negative covenants underany debt instruments, ifapplicable, will permit such distributions. If Eve does not distribute sufficient fundsto us to pay our taxesor other liabilities, we maydefaulton contractual obligationsor have toborrow additional funds. In theevent thatwe arerequiredto borrow funds, itcould adversely affectour liquidityand subjectitto additional restrictions imposedby lenders.

Pursuant to the Tax Receivable Agreement (the“TRA”), the Company will in certain circumstances berequiredto pay to EAH 75% of the net incometax savings thatthe Company realizesas a resultof increasesin tax basisin the assetsof the Company or certain of itssubsidiaries resulting fromthe Pre-Closing Restructuringand tax benefits relatedto entering intothe TRA, includingtax benefits attributableto payments under the TRA, for periods when the Company is not a member of EAH’s U.S. federal consolidated group, and those payments may be substantial.

The Pre-Closing Restructuring resulted in increases in the Company’s tax basis of its tangible and intangible assets. These increases in tax basis may increase (for income tax purposes) depreciation and amortization deductions and therefore reduce the amount of income or franchise tax that the Company would otherwise be required to pay in the future had such tax basis increase never occurred.

In connection with the business combination, the Company and EAH entered into the TRA, which generally provides for the payment by the Company of 75% of certain net tax benefits, if any, that the Company realizes (or in certain cases is deemed to realize) as a result of these increases in tax basis and tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA. The timing of any payments under the TRA will vary depending upon a number of factors, including the amount and timing of the recognition of the Company’s income. Moreover, the timing of any payments under the TRA is uncertain because the Company is a member of a consolidated, combined, affiliated or other group filing a joint return for U.S. federal or state income tax purposes of which EAH or an affiliate of EAH is the common parent (the “EAH Consolidated Group”). As a result, the income, operations, and any depreciation and amortization deductions of the Company will generally be reflected on the joint return of EAH as parent of the EAH Consolidated Group, rather than on a separate tax return of the Company. During the period during which the Company is a member of the EAH Consolidated Group, the sharing of tax benefits between EAH and the Company will be governed by the Tax Sharing Agreement (the “TSA”) entered into by the Company and EAH at the closing of the business combination, rather than the TRA. In general, pursuant to the TSA, for periods in which the Company has taxable income that contributes to and increases the overall tax liability of the EAH Consolidated Group, the TSA requires the Company to make payments to EAH equal to the tax liability the Company would be required to pay if it had not been a member of the EAH Consolidated Group but had filed a separate return. For periods in which the Company’s inclusion in the EAH Consolidated Group decreases the tax liability of the EAH Consolidated Group, tax benefits generated by the Company that are realized by EAH will be recorded in an off-book register and will apply to offset future payments, if any, due from the Company to EAH under the TSA. When the Company is no longer a member of the EAH Consolidated Group, any tax benefits generated by the Company that have not been applied to offset payments under the TSA at the time the Company ceases to be a member of the EAH Consolidated Group will offset any amounts payable by the Company to EAH under the TRA. For purposes of determining the amount of payments required to be made by the Company pursuant to the foregoing, and for determining the extent to which tax benefits generated by the Company that are realized by the EAH Consolidated Group may offset future payments under the TSA or the TRA, the TSA will generally disregard 75% of the tax benefit arising from the tax basis in the assets of the company created in the Pre-Closing Restructuring, consistent with the agreed sharing percentages for such tax savings under the TRA. Payments the Company will make under the TRA may be substantial and could have a material adverse effect on the Company’s financial condition.

Any payments made by the Company under the TRA will generally reduce the amount of overall cash flow that might have otherwise been available to the Company. To the extent that the Company is unable to make timely payments under the TRA for any reason, the unpaid amounts will be deferred and will accrue interest until paid; however, nonpayment for a specified period and/or under certain circumstances may constitute a material breach of a material obligation under the TRA and therefore accelerate payments due under the TRA, as further described below. Furthermore, the Company’s future obligation to make payments under the TRA could make it a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that may be deemed realized under the TRA.

In certain cases, payments under the TRA mayexceedthe actualtax benefitsthe Company realizesor be accelerated.

Payments underthe TRA willbe basedon thetax reporting positions thatthe Company determines, and the IRS or another taxing authoritymay challengeallor any partof thetax basis increases, as wellas othertax positions thatthe Company takes, and a courtmay sustain such a challenge. In the event thatany taxbenefits initially claimedby the Company aredisallowed, EAHwillnot be requiredto reimbursethe Company forany excess payments thatmay previously have been made underthe TRA, forexample, due to adjustments resulting from examinationsby taxing authorities. Rather, excess payments madeto EAHwillbe applied againstand reduceany future cash payments otherwise requiredto be madeby the Company, ifany, afterthe determinationof such excess. However, a challengeto any taxbenefits initially claimedby the Company maynot arisefora numberof years followingthe initial timeof such payment and, even ifchallenged earlier, such excess cash paymentmaybe greater thanthe amountof future cash payments thatthe Company might otherwisebe requiredto make underthe termsof the TRAand, as a result, there mightnot be future cash payments against which such excesscan be applied.

As a result, in certain circumstancesthe Company could make payments underthe TRAin excessofthe Company’s actual incomeor franchisetax savings, which could materially impairthe Company’s business, financial condition, and results of operations.

Moreover, the TRA provides that, in theevent that (i) the Company exercisesits early termination rights underthe TRA, or (ii) the Company in certain circumstances, materially breachesany of itsmaterial obligations underthe TRA, whetheras a resultof failureto makeany payment when due (exceptforallor a portionof such payment thatis being validly disputedin good faith under this Agreement, and then only with respectto theamountin dispute) or failureto honor any other material obligation required hereunderto theextentnot cured within 30 calendar days following receiptby the Company of written noticeof such failure from EAHor by operationof law as a resultof therejectionof this Agreementin a case commenced underthe U.S. Bankruptcy Code or otherwise, unless with respectto clauses (ii) certain liquidity exceptions apply, the Company’s payment obligations will accelerateand the Company will be requiredto makea lump-sumcash paymentto EAHequalto thepresent valueof allforecasted future payments that would have otherwise been made underthe TRA basedon certain assumptions (including those relatingto the Company’s future taxable income). Additionally, in thecaseof actionsor transactions constitutinga changeof controlor a divestitureof certain assets, thepaymentsdue under the TRA would be determined using certain valuation assumptions, including thatthe Company will generate sufficient taxable incometo fully utilizethe applicabletax assetsand attributes covered underthe TRA and as a resultthe Company maybe requiredto make payments underthe TRA priorto thetime when the Company actually realizes cashtax savings. Such lump-sumpaymentand other advance payments couldbe substantialand could exceedthe actualtax benefits that the Company realizes subsequentto such payment because such payment would be calculated assuming, among other things, thatthe Company would have certain assumedtax benefits availableto itand thatthe Company would be ableto use theassumedand potentialtax benefitsin future years.

Theremaybe a material negative effecton the Company’s liquidityifthe payments underthe TRAexceedthe actual incomeor franchisetax savings thatthe Company and itsdirector indirect subsidiaries realize. Furthermore, the Company’s obligationsto make payments underthe TRAcould also have theeffectof delaying, deferringor preventing certain mergers, asset sales, other formsof business combinationsor other changesof control.

We are an emerging growth company within the meaningof the Securities Act, and ifwe take advantageof certain exemptions from disclosure requirements availableto emerging growth companies, this could makeour securities less attractiveto investors and maymakeit more difficultto compareour performance with other public companies.

We arean“emerging growth company” withinthe meaningof the Securities Act, as modifiedby the JOBS Act, and we maytake advantageof certain exemptions from various reporting requirements thatare applicableto other public companies thatarenot emerging growth companies including, but not limitedto, not being required to comply with theauditor attestation requirementsof Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensationin our periodic reports, and exemptions fromthe requirementsof holdinga nonbinding advisory voteon executive compensationand stockholder approvalof any golden parachute paymentsnot previously approved. As a result, our stockholders maynot have accessto certain information theymay deem important. We couldbe an emerging growth company forup tofive years from Zanite's IPO, although circumstances could causeus to lose that status earlier, includingifthe market valueof our common stock heldby nonaffiliates exceeds $700 millionas of June 30 of theprior year, in which casewe would no longerbe an emerging growth companyas of thefollowing December 31. We cannot predict whether investors will findour securities less attractive becausewe will relyon these exemptions. Ifsome investors findour securities less attractiveas a resultofour relianceon these exemptions, thetrading pricesofour securitiesmaybe lower than they otherwise would be, theremaybe a less active trading marketforour securitiesand thetrading pricesof our securitiesmaybe more volatile.

Further, Section 102(b)(1) of the JOBSAct exempts emerging growth companies from being requiredto comply with new or revised financial accounting standards until private companies (thatis, those that have not had a Securities Act registration statement declared effectiveor do not have a classof securities registered under the Exchange Act) arerequiredto comply with thenew or revised financial accounting standards. The JOBSAct provides thata companycan electto opt out of theextended transition periodand comply with therequirements that applyto non-emerging growth companiesbut any such an electionto opt out isirrevocable. We have elected not to opt out of such extended transition period which means that when a standardis issuedor revisedand ithas different application datesfor publicor private companies, we, as an emerging growth company, can adoptthe new or revised standardatthe time private companies adoptthenew or revised standard. This maymake comparisonof our financial statements with other public companies difficult or impossible because of the potential differences in accounting standards used.

Additionally, until June 30, 2022, we qualifiedas a“smaller reporting company” as definedin Item 10(f)(1) of Regulation S-K and took advantageof certain reduced disclosure obligations untilthe following December 31 st. Taking advantageof such reduced disclosure obligationsmay make comparisons of our financial statements with other public companies difficult or impossible.

Risks Relatedto Ownership of Common Stock and Warrants

Our managementhas limited experiencein operatinga public company.

Our executive officers have limited experiencein themanagementof a publicly traded company. Our management teammaynot successfullyor effectively manageour transitionto a public company that willbe subjectto significant regulatory oversightand reporting obligations under federal securities laws. Their limited experiencein dealing with theincreasingly complex laws pertainingto public companies couldbe a significant disadvantagein thatitis likely thatan increasing amountof their timemaybe devotedto these activities which will resultin less time being devotedto themanagementand growth of the Company. We maynot have adequate personnel with theappropriate levelof knowledge, experience, and trainingin theaccounting policies, practices or internal control over financial reporting requiredof public companiesin the United States. The development and implementationof thestandardsand controls necessaryforthe Company to achievethe levelof accounting standards requiredof a public companyin the United Statesmay require costs greater than expected. Itis possible thatwe willbe requiredto expand our employee baseand hire additional employeesto supportour operationsas a public company which will increaseour operating costsin future periods.

Failureto timelyand effectively buildour accounting systemsto effectively implement controlsand procedures requiredby Section 404(a) of the Sarbanes-Oxley Act could have a material adverse effecton our business.

The standards requiredfora public company under Section 404(a) of the Sarbanes-Oxley Act aresignificantly more stringent than those requiredof a private company. Managementmaynot be ableto effectivelyand timely implement controlsand procedures that adequately respondto theincreased regulatory complianceand reporting requirements. Ifwe arenot ableto implementthe requirementsof Section 404(a) in a timely manneror with adequate compliance, we maynot be ableto adequately assess whetherour internal control over financial reporting is effective, which maysubjectus to adverse regulatory consequencesand could negatively impact investor confidenceand themarket priceof our securities.

To managethe expected growth of our operationsand increasing complexity, we will need to improveour operationaland financial systems, procedures, and controlsand continueto increase systems automationto reduce relianceon manual operations. Any inabilityto do so will affectour reporting. Our currentand planned systems, proceduresand controlsmaynot be adequateto supportour complex arrangementsand therules governing revenueand expense recognitionforour future operationsand expected growth. Delaysor problems associated with any improvementor expansionof our operationaland financial systemsand controls could adversely affectour relationships with our partners, cause harmto our reputationand brandand could also result in errorsin our financialand other reporting.

Our Certificate of Incorporation designatesa stateor federal court located within the Stateof Delaware and the federal district courtsof the United Statesas the exclusive forumfor substantiallyall disputes between us and our stockholders, which could limitour stockholders’ abilityto choose the judicial forumfor disputes with us or our directors, officersor employees.

Our Certificate of Incorporation (“Charter”) provides that unlesswe consentin writingto theselectionof an alternative forum, to thefullest extent permittedby law, thesoleand exclusive forumfor (i) any derivative action, suitor proceeding broughton behalfof the Company, (ii) any action, suitor proceeding assertinga claimof breachof a fiduciary duty owed by any currentor former director, officer, other employee, agentor stockholderof the Company to the Company or to the Company’s stockholders, (iii) any action, suitor proceeding assertinga claim againstthe Company or any currentor former director, officer, other employee, agentor stockholder arising pursuantto any provisionof the DGCLor our Bylaws or our Charter (aseithermaybe amended from timeto time), (iv) any action, suitor proceedingas to which the DGCL confers jurisdictionon the Chancery Court of the Stateof Delaware, or (v) any action, suitor proceeding assertinga claim againstthe Company or any currentor former director, officer, other employee, agentor stockholder governedby theinternal affairs doctrine. Our Charter further provides that, to the fullest extent permittedby law, thefederal district courtsof the United Statesof America shallbe thesoleand exclusive forumforthe resolutionof any complaint assertinga causeof action arising underthe Securities Act of 1933, as amended.

Any personor entity purchasingor otherwise acquiringany interestin any of our securities shallbe deemed to have noticeof and consentedto these provisions. This exclusive forum provisionmay limita stockholder’s abilityto bringa claimin a judicial forumof itschoosingfor disputes with us or our directors, officersor other employees, which maydiscourage lawsuits againstus and our directors, officersand other employees. This exclusive forum provision willnot applyto any causesof action arising underthe Exchange Act or any other claimfor which thefederal courtsof the United States have exclusive jurisdiction. Further, theenforceabilityof similar choiceof forum provisionsin other companies’ charter documentshas been challengedin legal proceedings, and itis possible thata court could find these typesof provisionsto be inapplicableor unenforceable. For example, the Court of Chanceryof the Stateof Delaware recently determined thata provision stating that U.S. federal district courtsarethe exclusive forumfor resolvingany complaint assertinga causeof action arising underthe Securities Act isnot enforceable. However, this decisionmaybe reviewedand ultimately overturnedby the Delaware Supreme Court. Ifa court were to find either exclusive forum provisionin our Charterto be inapplicableor unenforceablein an action, we mayincur additional costs associated with resolving thedisputein other jurisdictions, which could harmour resultsof operations.

Claimsfor indemnificationby our directorsand officersmay reduceour available funds to satisfy successful third-party claims againstus and mayreducethe amount of money availableto us.

Our Charterand Bylaws provide thatwe will indemnifyour directorsand officers, in each caseto thefullest extent permittedby Delawarelaw. In addition, as permittedby Section 145 of the DGCL, our Bylaws and our indemnification agreements thatwe entered into with our directorsand officers provide that:

We do not intendto pay dividendsforthe foreseeable future.

We have never declaredor paidany cash dividendson our capital stockand do not intendto pay any cash dividendsin theforeseeable future. We expectto retain future earnings, ifany, to fund thedevelopmentand growth of our business. Any future determinationto pay dividendson our capital stock willbe atthe discretionof our Board. Accordingly, investors must relyon salesof our common stock after price appreciation, which may never occur, as theonly way to realizeany future gainson their investments.

We maybe subjectto securities litigation, which isexpensiveand could divert management attention.

The market priceof our common stockmaybe volatileand, in thepast, companies that have experienced volatilityin themarket priceof their stock have been subjectto securities class action litigation. We maybe the targetof this typeof litigationin thefuture. Securities litigation againstus could resultin substantial costsand divert management’s attention from other business concerns, which could seriously harmits business.

Future salesor resalesor the perceptionof future salesor resalesof common stockby us or our existing securityholdersmay cause the market priceof our securitiesto drop significantly, even ifour businessis doing well.

The sale or resale of substantial amounts of shares of common stock or warrants in the public market, or the perception that such sales or resales could occur, could harm the prevailing market price of shares of common stock and warrants. These sales or resales, or the possibility that these sales or resales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. We believe the likelihood that warrant holders will exercise their warrants, and therefore the amount of cash proceeds that we would receive is, among other things, dependent upon the market price of common stock. If the market price for shares of common stock is less than the exercise price of a holder’s warrant, such holder may be less likely to exercise their warrants as they would be selling at a loss if they exercised their warrants and then sold their common stock. The issuance and exercise of the new warrants are also subject to the UAM Business milestones and lock-up periods described in our prospectus, dated January 18, 2023, filed on January 20, 2023, pursuant to Rule 424(b) under the Securities Act, relating to the Registration Statement on Form S-1, as amended (File No.333-265337).

On December 21, 2021, December 24, 2021, March 9, 2022, March 16, 2022 and April 4, 2022, in connection with the business combination, Zanite entered into subscription agreements or amendments thereto (as amended from time to time, the “Subscription Agreements”) with certain investors, including certain strategic investors and/or investors with existing relationships with ERJ (the “Strategic Investors”), Zanite Sponsor LLC, a Delaware limited liability company (the “Sponsor”), and EAH (collectively, the “PIPE Investors”), pursuant to which, and on the terms and subject to the conditions of which, Zanite agreed to issue and sell to the PIPE Investors in private placements to close immediately prior to the Closing, an aggregate of 35,730,000 shares of Class A common stock at a purchase price of $10.00 per share, for an aggregate purchase price of $357,300,000, which included the commitment of the Sponsor to purchase 2,500,000 shares of Class A common stock for a purchase price of $25,000,000 and the commitment of EAH to purchase 18,500,000 shares of Class A common stock for a purchase price of $185,000,000 (the “PIPE Investment”). The PIPE Investment was consummated substantially concurrently with the closing of the business combination. The Sponsor and EAH are contractually restricted from selling or transferring any of their shares of common stock (not including the shares of our common stock issued to the Sponsor and EAH in the PIPE Investment pursuant to the terms of the Subscription Agreements or purchased in the public market) (the “Lock-up Shares”) for certain periods of time. Under the amended and restated registration rights agreement, dated as of May 9, 2022, by and among the Sponsor, Zanite, EAH and certain other parties thereto (the “Amended and Restated Registration Rights Agreement”), such lock-up restrictions applicable to the Lock-up Parties’ (as defined in the Amended and Restated Registration Rights Agreement) Lock-up Shares (as defined in the Amended and Restated Registration Rights Agreement) begin at the closing of the business combination and end on the date that isthree years after the closing of the business combination. Other PIPE Investors, however, are not restricted from selling any of their shares of common stock, other than by applicable securities laws. As such, sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our stock. As restrictions on resale end and registration statements are available for use, the sale or possibility of sale of these shares could have the effect of increasing the volatility in our share price. Additionally, the market price of our stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.