Archer Aviation Inc.

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Risks Related to Our Business and Industry

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We are still developing our eVTOL aircraft, have not yet obtained governmental certification of our eVTOL aircraft under development and are in the early stages of developing our manufacturing and UAM operations, which makes evaluating our business and future prospects difficult and increases the risk of investment in our securities.

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We were incorporated in October 2018 and have a limited operating history in designing, developing, and working to certify an eVTOL aircraft. Our eVTOL aircraft is in the development stage and we are still working with the FAA and DOT in the U.S. and equivalent government authorities in certain other countries in an attempt to obtain the required certifications and authorizations relating to our aircraft design, aircraft production and air carrier operations. While we have received our Part 135 Air Carrier Certificate in the U.S. from the FAA and anticipate being able to obtain the remaining required authorizations and certifications, we are dependent upon engagement with the FAA and other U.S. government agencies to achieve certification of our eVTOL aircraft in the U.S., and any inability or unwillingness of such government agencies to engage with us could prevent us from achieving certification in a timely manner or at all. For example, on October 1, 2025, the U.S. government shut down and remains shut down as of the date of this filing. In the event of a prolonged shutdown, requirements to furlough employees in certain government agencies, including the FAA, could cause disruptions or delays to the certification process. Although we plan to develop Hawthorne Airport into our flagship Los Angeles hub, including for supporting our operations during the LA28 Olympic Games, we can provide no assurance that we will be able to obtain the required authorizations and certifications from the FAA and others prior to the LA28 Olympic Games. In addition, it is possible that any of our competitors achieve certification in U.S. or non-U.S. markets before we do.

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As an organization, we have no experience in volume manufacturing of aircraft. Some of our current and potential competitors are larger and have substantially greater resources than we have and expect to have in the future. Although we are currently producing six Midnight aircraft, we may not be able to scale our production to meet future demand. As a result, those competitors may be able to devote greater resources to the development of their current and future technologies, the promotion and sale of their offerings, and/or offer their technologies at lower prices. In particular, our competitors may be able to receive type, production or airworthiness certification from the FAA covering their eVTOL aircraft prior to us receiving such certifications. Our current and potential competitors may also establish cooperative or strategic relationships amongst themselves or with third parties that may further enhance their resources and offerings. Further, it is possible that domestic or foreign companies or governments, some with greater experience in the aerospace industry or greater financial resources than we possess, will seek to provide products or services that compete directly or indirectly with ours in the future. Any such foreign competitor, for example, could benefit from subsidies from, or other protective measures by, its home country from which we may not be able to benefit.

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We are developing aircraft and related services that can serve multiple use cases. For example, in February 2025, we announced our Launch Edition program, through which we are offering aircraft, services and technologies to governments and customers to prepare for the planned commercial launch of air taxi services with our Midnight aircraft in markets outside the U.S. Through this program, we have begun providing services related to certification, testing, pilot training, demonstration flights, market survey and early trial operations, and maintenance and repair. We have entered into Launch Edition agreements with program partners, some of which remain conditional and subject to the execution of further definitive agreements and the satisfaction of certain conditions. There is no assurance that we will be able to execute the definitive agreements on these Launch Edition programs in a timely manner or at all. In the U.S., we plan to design and execute trial operations of our aircraft in participating cities under the eIPP. We expect to work with partners to invest financial and other resources in these early adopter markets and markets that we designate to be critical hubs for our UAM operations, such as Southern California, which will include building out vertiport and charging infrastructure, as well as designing and developing products and services to meet the needs of our customers and partners. It is possible that these investments may not achieve the competitive advantages and benefits that we anticipate.

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We or our partners may not be able to obtain the necessary production certificates from the applicable regulatory authorities, ramp up manufacturing or develop supply chain capabilities that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes, required to successfully commercialize our aircraft. You should consider our business and prospects in light of the risks and significant challenges we face as a new entrant into a new industry, including, with respect to our ability to:

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•design and manufacture safe, reliable and quality aircraft on an ongoing basis;

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•obtain the necessary regulatory approvals in a timely manner, including receipt of FAA certifications covering our aircraft and, in turn, any other government approvals necessary for manufacturing, marketing, selling and operating UAM networks or selling our aircraft, or for operating our defense program;

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•build a well-recognized and respected brand;

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•establish and expand our customer base;

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•successfully market not just our aircraft but also the other services we intend to provide, such as aerial ride sharing services;

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•successfully service our aircraft after sales and maintain a good flow of spare parts and customer goodwill;

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•improve and maintain our operational efficiency;

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•successfully execute our manufacturing and production model and maintain a reliable, secure, and scalable technology infrastructure;

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•predict our future revenues and appropriately budget for our expenses;

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•attract, retain and motivate talented employees;

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•anticipate trends that may emerge and affect our business;

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•anticipate and adapt to changing market conditions, including technological developments and changes in competitive landscape; and

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•navigate an evolving and complex global regulatory environment.

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•If we fail to adequately address any or all of these risks and challenges, our business may be harmed.

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The markets for our offerings are still in development and our growth strategies will require additional resources. If these markets do not materialize, grow more slowly than we expect or fail to reach the scale we anticipate, our business, results of operations, and prospects could be harmed.

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The markets for eVTOL aircraft are still in development, and our success in these markets is dependent upon our ability to effectively design, develop, and certify eVTOL aircraft and to market and gain traction of air UAM as a substitute for existing methods of transportation, as well as the effectiveness of our other marketing and growth strategies. If the public, or in the case of our defense program, government entities, do not perceive eVTOL aircraft/UAM as beneficial or choose not to adopt eVTOL aircraft/UAM as a result of concerns regarding safety, noise, affordability or for other reasons, then the market for our offerings may not materialize, may develop more slowly than we expect or may not achieve the growth potential we expect, any of which could harm our business, financial condition and results of operations.

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Our management regularly makes strategic decisions to determine how to efficiently and effectively deploy our limited resources, such as aircraft, personnel and funds across a number of opportunities to commercialize and grow our business and operations, and the opportunities we choose to pursue may not ultimately be successful. For example, we intend to submit a proposal to participate in the eIPP and to devote significant resources to the program, which may require us to forgo certain other opportunities. If we are not selected for participation, the program is abandoned by the U.S. government or our test operations under the program are not successful, our prospects may be adversely affected.

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Growth of our business will require significant investments in our infrastructure, technology, and sales and marketing efforts. If our business does not have sufficient capital required to support these investments or if our competitors adopt more effective growth strategies, our competitive position and business will be negatively affected. Further, our ability to effectively manage growth and expansion of our operations will also require us to enhance our operational systems, internal controls and infrastructure, human resources policies and reporting systems. These enhancements will require significant capital expenditures and allocation of valuable management and employee resources.

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We are party to certain purchase agreements and other contract orders for our Midnight aircraft and the provision of related services that contain conditions with respect to the purchase of our aircraft or that require us to perform and provide certain deliverables. If the conditions to or performance obligations under such contracts are not met, or if such contracts are otherwise canceled, modified or delayed, our prospects, results of operations, liquidity and cash flow will be harmed.

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We are party to certain purchase agreements, including the United Purchase Agreement (as defined below), as well as other contract orders for our Midnight aircraft and the provision of related services, including with the USAF (the “USAF Contracts”), that contain conditions with respect to the purchase of our aircraft or that require us to perform and deliver certain tests, certificates and other services. Payment obligations under the agreement with United Airlines Inc. (“United”) for the conditional purchase of up to $1.0 billion worth of aircraft, with an option for another $500.0 million worth of aircraft (as amended, the “United Purchase Agreement”), for example, are conditioned upon, among other things, us receiving certification of our aircraft by the FAA and further negotiation and reaching mutual agreement on certain material terms, such as aircraft specifications, warranties, usage and transfer of the aircraft, performance guarantees, delivery periods, most favored nation provisions, the type and extent of assistance to be provided by United in obtaining certification of the aircraft for its intended use, territorial restrictions, rights to jointly developed intellectual property, escalation adjustments and other matters. The obligations of United to consummate an order pursuant to the United Purchase Agreement will arise only after all such material terms are agreed by the parties. Payment obligations under the USAF Contracts are predicated upon, among other things, our ability to complete the design, development and ground test of our Midnight aircraft, our delivery of certain test reports and certificates, the receipt of an FAA Airworthiness Certificate, the development of pilot and maintenance training workshops, the completion of flight tests and the delivery of a certain number of our Midnight production aircraft. The obligations of the USAF to provide funding will arise only after a particular deliverable has been received and accepted by the USAF. Further, with respect to the United Purchase Agreement, in addition to other termination rights set forth in the United Purchase Agreement and the Collaboration Agreement with United (the “United Collaboration Agreement”), if the parties do not agree on such material terms, either party will have the right to terminate the agreements if such party determines in its discretion that it is not likely that such material terms will be agreed in a manner that is consistent with such party’s business and operational interests (as those interests may change from time to time). The USAF Contracts may be terminated by the USAF upon advanced written notice and may also be subject to stop orders issued by the USAF. If the United Purchase Agreement, the USAF Contracts or any future purchase agreements or contracts are canceled, modified or delayed, or otherwise not consummated, or if we are otherwise unable to convert our strategic relationships or collaborations into revenue, our prospects, result…

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Further, we are subject to counterparty risk with respect to our existing purchase agreements and may become further subject to such risk if and when we enter into additional purchase agreements, which could adversely impact our business, results of operations, financial condition and prospects. Our business is, and may in the future be, subject to the risks of non-payment and non-performance by our counterparties. Additionally, the availability of financing for the purchase of our aircrafts is based in part on our counterparties’ creditworthiness, and there can be no assurance that we will be able to secure financing from third parties.

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Failure to comply with the debt covenants in our loan agreements could result in our inability to borrow additional funds and adversely impact our business.

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Our credit agreement with Synovus Bank (the “Credit Agreement”) imposes numerous financial and other restrictive covenants on our operations, including covenants relating to our liquidity. As of September 30, 2025, we were in compliance with the covenants imposed by the Credit Agreement. In connection with the Hawthorne Airport Acquisition, we plan to assume the Hawthorne Bank Loan from the Sellers.

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If we violate any covenants, either loan could become due and payable prior to their stated maturity dates, and our creditors could proceed against any loan collateral. These restrictions may also limit our ability to borrow additional funds and pursue other business opportunities or strategies that we would otherwise consider to be in our best interests.

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Risks Related to the Hawthorne Airport Acquisition

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After completion of the Hawthorne Airport Acquisition, we may fail to realize the anticipated benefits of the transaction.

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We believe that there are significant benefits that may be realized through the Hawthorne Airport Acquisition. However, the efforts to realize these benefits will be a complex process and may disrupt our existing operations if not implemented in a timely manner. Failure to achieve the anticipated benefits of the Hawthorne Airport Acquisition could adversely affect our business, results of operations, or financial condition, decrease or delay any accretive effect of the Hawthorne Airport Acquisition, adversely affect the price of our Class A common stock and cause our business to not perform as expected. In addition, while key management that has operated Hawthorne Airport since 2005 is expected to remain in place following the Hawthorne Airport Acquisition, our management has limited experience operating the properties and aviation business that we are acquiring, and may encounter challenges and risks inherent in these operations. If we fail to effectively manage the risks and challenges inherent in such businesses, our operating results and financial condition will be materially and adversely affected. Our ability to generate revenue from these assets will depend, in part, on our abilities to attract and maintain customers to use the airport and hangar facilities and integrate the property into our planned infrastructure for our anticipated air taxi operations.

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We are also planning on completing certain capital projects at Hawthorne Airport, including preparing the site for planned air tax operations in the Los Angeles area and developing a flagship hub for use during the LA28 Olympic Games. The estimated costs of, and the projected schedule for, our planned capital projects are subject to a number of uncertainties. Our ability to complete these projects within budgets and on expected schedules may be adversely affected by various factors including: estimating errors; design and engineering errors; cost increases because of demand for labor and materials; cost increases due to instituted or proposed changes in trade policies; contractors’ difficulty in predicting costs over a lengthy construction period; changes to the scope of the projects; material and/or labor shortages; adverse weather conditions; contractor defaults and bankruptcy; labor disputes; unanticipated levels of inflation; litigation; and environmental issues. We expect to use a portion of the proceeds from this offering to complete the redevelopment of up to 200,000 square feet of hangar space and to build a planned advanced air mobility center of excellence. Eventually, we aim to develop Hawthorne Airport into an AI-powered operations platform with such features as AI-powered air traffic coordination, AI-coordinated ground operations for managing aircraft, crews and turns, VR-based flight simulation with adaptive AI feedback, operational forecasting driven by AI models, machine learning to detect maintenance needs and biometric and AI-enabled screening for more seamless and secure boarding. These efforts to build the airport of the future, including our plans to use Hawthorne Airport as a testbed for the next generation of AI-based aviation technologies, will require significant additional capital and other resources for implementation and if we are unable to access such capital, we may not be able to realize our long term plan for Hawthorne Airport.

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In addition, the attention of certain members of our business or management and resources may be focused on completion of the Hawthorne Airport Acquisition and operations of the acquired business and diverted from our existing business operations.

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As part of the Hawthorne Airport Acquisition, we will enter into a ground lease with the City of Hawthorne for the property on which Hawthorne Airport is located and such lease may not be renewed or may not be renewed on terms that are favorable to us.

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We will not own the property on which Hawthorne Airport is located. Instead, we are assuming from the Seller the existing ground lease that is in place with the City of Hawthorne. The remaining term of that ground lease runs through 2055. The master ground lease contains provisions for a fixed rate increase over the life of the lease on the rent to be paid to the City of Hawthorne. The City authorities may choose not to renew a lease at all or to only renew the lease on terms that are unfavorable to us. At the conclusion of a lease, we may be required to participate in a bidding process to renew the master lease, which could require unanticipated capital spending and could divert management’s attention during the pendency of the process.

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Following the Hawthorne Airport Acquisition, we will be subject to additional governmental regulations that could require additional expenditures. Regulators have and may again consider regulations that could impair the relative convenience of general aviation and adversely affect demand for use of the airport.

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Following the Hawthorne Airport Acquisition, we will be subject to additional regulatory requirements and compliance with those requirements could result in additional costs. For example, the FAA, from time to time, issues directives and other regulations relating to the management, maintenance, and operation of airport facilities. Compliance with those requirements may cause us to incur significant expenditures.

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The aviation business is subject to increasingly stringent federal, state, local, and foreign laws, regulations, and ordinances relating to the protection of the environment and noise, including those relating to emissions to the air, discharges, and the use, management, disposal, and release of, and exposure to, hazardous substances and waste materials.