Archer Aviation Inc
For the period ended Jun 30, 2024. Filed Aug 9, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 9, 2024
ACHR$4.44+14.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0001628280-24-022240
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001628280-24-036279
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 84 previous paragraphs and 89 current paragraphs.
65 unchanged; 17 reworded; 5 added; 0 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Research and development expenses increased by $44.2 million, or 34.2%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, as we invested in people and materials to advance our technology development. The increase was primarily due to an increase of $21.2 million in personnel-related expenses due to a significant increase in our workforce from the prior year period, an increase of $12.2 million in costs related to professional services and tools and materials to support our increased research and development activities, and an increase of $10.1 million in stock-based compensation expenses. The remainder of the increase was made up of other incidental items.
Current report
There was no other warrant expense recognized for each of the three months ended June 30, 2024 and 2023.
Current report
In November 2023, we filed a shelf registration statement on Form S-3 with the SEC and a related prospectus supplement pursuant to which we may, from time to time, sell shares of our Class A common stock, having an aggregate value of up to $70.0 million pursuant to a Controlled Equity Offering SM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”), as the sales agent (the “First ATM Program”). During the three and six months ended June 30, 2024, we sold 3,705,137 and 10,275,033 shares of Class A common stock for net proceeds of $14.2 million and $48.1 million, respectively. The First ATM Program was completed in May 2024.
Current report
On June 27, 2024, pursuant to the forward purchase agreement (the “Stellantis Forward Purchase Agreement”) entered into on January 3, 2023 with Stellantis, we elected to draw down the $55.0 million remaining available under the Stellantis Forward Purchase Agreement associated with Milestone 3 (as defined in the Stellantis Forward Purchase Agreement). In accordance therewith, on July 1, 2024, we issued 17,401,153 shares of Class A common stock to Stellantis at a price of $3.16 per share, for gross proceeds of approximately $55.0 million.
Current report
Net cash used in operating activities during the six months ended June 30, 2023 was $120.8 million, resulting from a net loss of $297.2 million, adjusted for non-cash items consisting primarily of a $73.0 million non-cash charge comprised of a $25.0 million non-cash charge associated with the initial vested share tranche and a $48.0 million non-cash charge for the unvested portion of the Wisk Warrant that is contingent and may never be realized, relating to the Technology and Dispute Resolution Agreements (see Note 7 - Commitments and Contingencies to our consolidated condensed financial statements for further details), $52.2 million in stock-based compensation primarily related to the Founder Grants, a loss of $15.6 million due to a change in fair value of our warrant liabilities, and $8.7 million of research and development warrant expenses related to the warrants issued to Stellantis (see Note 9 - Stock-Based Compensation to our consolidated condensed financial statements for further details). The net cash provided by changes in our net operating assets and liabilities of $25.8 million was primarily related to a $12.8 million increase in accrued expenses and other current liabilities mainly due to professional service fees and expenses and an $8.2 million increase in accounts payable due to timing of payments.
Reworded paragraphs (17)
Previous wording
Comparison of the Three Months Ended March 31, 2024 and 2023
Current wording
Comparison of the Three and Six Months Ended June 30, 2024 and 2023
Previous wording
Research and development expenses increased by $17.7 million, or 26.9%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, as we invested in people and materials to advance our technology development. The increase was primarily due to an increase of $10.5 million in personnel-related expenses due to a significant increase in our workforce from the prior year period, and an increase of $5.7 million in stock-based compensation expenses. The remainder of the increase was made up of other incidental items.
Current wording
Research and development expenses increased by $26.5 million, or 41.9%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, as we invested in people and materials to advance our technology development. The increase was primarily due to an increase of $11.1 million in costs related to professional services and tools and materials to support our increased research and development activities, an increase of $10.7 million in personnel-related expenses due to a significant increase in our workforce from the prior year period, and an increase of $4.4 million in stock-based compensation expenses. The remainder of the increase was made up of other incidental items.
Previous wording
General and administrative expenses increased by $14.6 million, or 33.1%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase was primarily due to a $10.3 million charge for the Wisk Warrant, an increase of $6.4 million in stock-based compensation expense associated with the Founder Grant, an increase of $3.0 million in personnel-related expenses due to significant increase in our workforce from the prior year period, and an increase of $3.0 million in stock-based compensation expenses. The increase was partially offset by a decrease of $8.9 million in professional service expenses mainly due to legal fees and expenses. See Note 7 - Commitments and Contingencies and Note 9 - Stock-Based Compensation to our consolidated condensed financial statements for further details on our commitments and contingencies and stock-based compensation, respectively. The remainder of the increase was made up of other incidental items.
Current wording
General and administrative expenses decreased by $72.1 million, or 44.5%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The decrease was primarily due to a decrease of $62.7 million in the charge for the Wisk Warrant, a decrease of $17.3 million in professional service expenses mainly due to legal fees and expenses, and a decrease of $5.1 million in stock-based compensation expense associated with the Founder Grants. The decrease was partially offset by an increase of $6.3 million in stock-based compensation expense, and an increase of $5.0 million in personnel-related expenses due to significant increase in our workforce from the prior year period. See Note 7 - Commitments and Contingencies and Note 9 - Stock-Based Compensation to our consolidated condensed financial statements for further details on our commitments and contingencies and stock-based compensation, respectively. The remainder of the increase was made up of other incidental items.
Previous wording
Other warrant expense decreased by $2.1 million, or 100.0%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The decrease was primarily due to the vesting of United warrants associated with specific milestones during the three months ended March 31, 2023. The warrants associated with the specific milestones fully vested in the first quarter of 2023. See Note 9 - Stock-Based Compensation to our consolidated condensed financial statements for further details on our warrants.
Current wording
Other warrant expense decreased by $2.1 million, or 100.0%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The decrease was primarily due to the vesting of United warrants associated with specific milestones during the six months ended June 30, 2023. The warrants associated with the specific milestones fully vested in the first quarter of 2023. See Note 9 - Stock-Based Compensation to our consolidated condensed financial statements for further details on our warrants.
Previous wording
Other income (expense), net increased by $23.3 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase was primarily due to changes in fair value of our warrant liabilities. See Note 3 - Summary of Significant Accounting Policies to our consolidated condensed financial statements for further details.
Current wording
Other income (expense), net increased by $15.9 million and $39.2 million for the three and six months ended June 30, 2024, respectively, compared to the same periods ended June 30, 2023. The increase was primarily due to changes in fair value of our warrant liabilities. See Note 3 - Summary of Significant Accounting Policies to our consolidated condensed financial statements for further details.
Previous wording
Interest income, net increased by $3.7 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase was primarily due to interest income from our cash and cash equivalents.
Current wording
Interest income, net increased by $1.0 million, or 24.4%, and $4.7 million, or 82.5%, for the three and six months ended June 30, 2024, respectively, compared to the same periods ended June 30, 2023. The increase was primarily due to interest income from our cash and cash equivalents.
Previous wording
As of March 31, 2024, our principal sources of liquidity were cash and cash equivalents of $405.8 million. We have incurred net losses since our inception and to date have not generated any revenues. We expect to incur additional losses and higher operating expenses for the foreseeable future. We believe that our existing cash and cash equivalents will be sufficient for at least the next 12 months to meet our requirements and plans for cash, including meeting our working capital requirements and capital expenditure requirements.
Current wording
As of June 30, 2024, our principal sources of liquidity were cash and cash equivalents of $360.4 million. We have incurred net losses since our inception and to date have not generated any revenues. We expect to incur additional losses and higher operating expenses for the foreseeable future. We believe that our existing cash and cash equivalents, together with the gross proceeds of approximately $55.0 million from the sale of shares of Class A common stock to Stellantis N.V. (“Stellantis”) received on July 1, 2024, will be sufficient for at least the next 12 months to meet our requirements and plans for cash, including meeting our working capital requirements and capital expenditure requirements.
Previous wording
On October 5, 2023, we entered into the Credit Agreement with Synovus Bank, as administrative agent and lender, and the additional lenders (the “Lenders”) from time to time. We may request the Lenders to provide multiple delayed term loan advances (together, the “Loan”) in an aggregate principal amount of up to $65.0 million for the construction and development of our manufacturing facility in Covington, Georgia. The Loan under the Credit Agreement shall accrue interest from and including the date the applicable advance is made but excluding the repayment date at a rate of the secured overnight financing rate (“SOFR”), plus 2.00% subject to a SOFR floor of 0.00%. We are required to make interest-only payments for 36 months on the Loan starting on November 14, 2023, followed by monthly interest and principal payments for the remaining maturity, with any outstanding principal, interest and other then outstanding indebtedness due at maturity. The Credit Agreement matures on the earlier of October 5, 2033 or the date on which the outstanding Loan has been declared or automatically becomes due and payable pursuant to the terms of the Credit Agreement. Our obligations under the Credit Agreement are jointly and severally guaranteed by our current and future wholly-owned domestic subsidiaries, and are secured by cash, general intangibles, instruments, securities, financial assets, security entitlements and other property maintained in a money market account at Synovus Bank.
Current wording
On October 5, 2023, we entered into the Credit Agreement with Synovus Bank, as administrative agent and lender, and the additional lenders (the “Lenders”) from time to time. We may request the Lenders to provide multiple delayed term loan advances (together, the “Loan”) in an aggregate principal amount of up to$65.0 million for the construction and development of our manufacturing facility in Covington, Georgia. The Loan under the Credit Agreement shall accrue interest from and including the date the applicable advance is made but excluding the repayment date at a rate of the secured overnight financing rate (“SOFR”), plus 2.0% subject to a SOFR floor of 0.0%. We are required to make interest-only payments for 36 months on the Loan starting on November 14, 2023, followed by monthly interest and principal payments for the remaining maturity, with any outstanding principal, interest and other then outstanding indebtedness due at maturity. The Credit Agreement matures on the earlier of October 5, 2033 or the date on which the outstanding Loan has been declared or automatically becomes due and payable pursuant to the terms of the Credit Agreement. Our obligations under the Credit Agreement are jointly and severally guaranteed by our current and future wholly-owned domestic subsidiaries, and are secured by cash, general intangibles, instruments, securities, financial assets, security entitlements and other property maintained in a money market account at Synovus Bank.
Previous wording
Fitzgerald & Co., as the sales agent, pursuant to which we may offer and sell shares of our Class A common stock having an aggregate offering amount of up to $70.0 million (the “ATM Program”). The $70.0 million of Class A common stock that may be issued and sold pursuant to the ATM Program is included in the $70.0 million of securities that may be issued and sold pursuant to the Shelf Registration Statement. We will pay Cantor Fitzgerald & Co. a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of Class A common stock pursuant to the ATM Program. As of March 31, 2024, we had $14.6 million remaining eligible for sale under the ATM Program.
Current wording
Under the Sales Agreement, we paid Cantor a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of Class A common stock pursuant to the First ATM Program.
Previous wording
In November 2023, we filed a shelf registration statement on Form S-3 (the “Shelf Registration Statement”), which became effective in November 2023. The Shelf Registration Statement permits the offering of an aggregate of up to $70.0 million of shares of our Class A common stock or preferred stock, debt securities, warrants to purchase our Class A common stock, preferred stock or debt securities, subscription rights to purchase our Class A common stock, preferred stock or debt securities and/or units consisting of some or all of these securities, in one or more offerings and in any combination. In connection with the Shelf Registration Statement, we entered into an Open Market Sales Agreement SM (the “Sales Agreement”), with Cantor
Current wording
In May 2024, we filed a shelf registration statement on Form S-3 with the SEC and a related prospectus (the “Second Shelf Registration Statement”). The Second Shelf Registration Statement permits the offering of an aggregate of up to $95.0 million of shares of our Class A common stock or preferred stock, debt securities, warrants to purchase our Class A common stock, preferred stock or debt securities, subscription rights to purchase our Class A common stock, preferred stock or debt securities and/or units consisting of some or all of these securities, in one or more offerings and in any combination. In connection with the Second Shelf Registration Statement, pursuant to which we may offer and sell shares of our Class A common stock having an aggregate offering amount of up to $70.0 million (the “Second ATM Program”) pursuant to the Sales Agreement. The $70.0 million of Class A common stock that may be issued and sold pursuant to the Second ATM Program is included in the $95.0 million of securities that may be issued and sold pursuant to the Second Shelf Registration Statement. During the three months ended June 30, 2024, we sold 7,767,900 shares of Class A common stock for net proceeds of $25.2 million. As of June 30, 2024, we had $44.2 million remaining eligible for sale under the Second ATM Program.
Previous wording
We lease office, lab, hangar, and storage facilities in the normal course of business. Under our operating leases as noted in Note 7 - Commitments and Contingencies to our consolidated condensed financial statements, we have current obligations of $6.0 million and long-term obligations of $17.6 million.
Current wording
We lease office, lab, hangar, and storage facilities in the normal course of business. Under our operating leases as noted in Note 7 - Commitments and Contingencies to our consolidated condensed financial statements, we have current obligations of $5.9 million and long-term obligations of $16.2 million.
Previous wording
Net cash used in operating activities during the three months ended March 31, 2023 was $63.7 million, resulting from a net loss of $113.1 million, adjusted for non-cash items consisting primarily of $25.7 million in stock-based compensation primarily related to the Founder Grants. The net cash provided by changes in our net operating assets and liabilities of $12.0 million was primarily related to a $8.9 million increase in accrued expenses and other current liabilities mainly due to professional service fees and expenses.
Current wording
Net cash used in operating activities during the six months ended June 30, 2024 was $167.0 million, resulting from a net loss of $223.4 million, adjusted for non-cash items consisting primarily of $63.5 million in stock-based compensation, a gain of $30.3 million due to a change in fair value of our warrant liabilities, and a $5.6 million non-cash charge for the Wisk Warrant. The net cash provided by changes in our net operating assets and liabilities was $7.2 million.
Previous wording
Net cash used in investing activities during the three months ended March 31, 2024 was $17.3 million, driven by purchases of property and equipment of $17.3 million within the period.
Current wording
Net cash used in investing activities during the six months ended June 30, 2024 was $38.2 million, driven by purchases of property and equipment within the period.
Previous wording
Net cash provided byinvesting activities during the three months ended March 31, 2023 was $302.6 million, consisting of purchases of short-term investments of $314.0 million, offset by purchases of property and equipment of $11.4 million within the period.
Current wording
Net cash provided byinvesting activities during the six months ended June 30, 2023 was $445.5 million, driven by proceeds from maturities of short-term investments of $465.0 million, partially offset by purchases of property and equipment of $19.5 million within the period.
Previous wording
Cash Flows Provided by (Used in) Financing Activities
Current wording
Cash Flows Provided by Financing Activities
Previous wording
Net cash provided by financing activities during the three months ended March 31, 2024 was $44.8 million, driven by proceeds from shares issued under the ATM Program of $33.9 million, and proceeds from issuance of debt of $11.0 million.
Current wording
Net cash provided by financing activities during the six months ended June 30, 2024 was $100.8 million, driven by proceeds from shares issued under the First ATM Program and Second ATM Program of $73.3 million, and proceeds from issuance of debt of $25.8 million.
Previous wording
Net cash used in financing activities during the three months ended March 31, 2023 was $4.8 million, consisting of the repayment of term loans to Silicon Valley Bank, a division of First-Citizens Bank, for $2.5 million and payments for taxes related to net share settlement of equity awards for $2.3 million.
Current wording
Net cash provided by financing activities during the six months ended June 30, 2023 was $17.8 million, driven by proceeds from issuance of Class A common stock to Stellantis with an aggregate value of $25.0 million, partially offset by the repayment of term loans to Silicon Valley Bank, a division of First-Citizens Bank, for $5.0 million and payments for taxes related to net share settlement of equity awards for $3.5 million.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
General and administrative expenses decreased by $86.7 million, or 73.4%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The decrease was primarily due to a $73.0 million charge for the Wisk Warrant during the three months ended June 30, 2023, a decrease of $11.5 million in stock-based compensation expense associated with the Founder Grants, and a decrease of $8.3 million in professional service expenses mainly due to legal fees and expenses. The decrease was partially offset by an increase of $3.4 million in stock-based compensation expenses. See Note 7 - Commitments and Contingencies and Note 9 - Stock-Based Compensation to our consolidated condensed financial statements for further details on our commitments and contingencies and stock-based compensation, respectively. The remainder of the increase was made up of other incidental items.
Current report — wording carried from elsewhere
Under the Sales Agreement, we will pay Cantor a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of Class A common stock pursuant to the Second ATM Program.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Net cash used in operating activities during the three months ended March 31, 2024 was $86.5 million, resulting from a net loss of $116.5 million, adjusted for non-cash items consisting primarily of $40.7 million in stock-based compensation, a gain of
Previous report — wording carried elsewhere
$20.8 million due to a change in fair value of our warrant liabilities, and a $5.6 million non-cash charge for the Wisk Warrant. The net cash used in changes in our net operating assets and liabilities was $0.6 million.