Aurora Innovation, Inc. (NASDAQ:AUR) Q2 2022 Earnings Conference Call August 3, 2022 5:00 PM ET Company Participants Richard Tame - Chief Financial Officer Chris Urmson - Co-Founder & Chief Executive Officer Conference Call Participants Tom White - D.A. Davidson Steven Fox - Fox Advisors Mark Delaney - Goldman Sachs David Vernon - Bernstein Operator Greetings. Welcome to the Aurora Second Quarter 2022 Business Review Conference Call. At this time all participants are in a listen only mode. A question-and-a ...

Aurora Innovation, Inc. (NASDAQ:AUR) Q1 2022 Earnings Conference Call May 4, 2022 5:00 PM ET Company Participants Stacy Feit - IR Chris Urmson - CEO Richard Tame - CFO Conference Call Participants Tom White - D.A. Davidson Mark Delaney - Goldman Sachs Steven Fox - Fox Advisors David Vernon - Bernstein Operator Greetings. Welcome to the Aurora First Quarter 2022 Business Review Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Stac ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Aurora Innovation, Inc. is developing the "Aurora Driver," a self-driving technology platform for various vehicles, aiming to commercialize through a "Driver as a Service" subscription model. - Aurora's core product is the **Aurora Driver**, a common self-driving platform adaptable to multiple vehicle types, including eight different platforms as of December 31, 2021[17](index=17&type=chunk) - The company's go-to-market strategy prioritizes trucking, followed by passenger mobility and local goods delivery, aiming to capture parts of the **$4 trillion global trucking** and **$5 trillion passenger mobility markets**[17](index=17&type=chunk)[24](index=24&type=chunk) - Aurora will use a **"Driver as a Service" (DaaS) business model**, offering its technology as a per-mile subscription to partners, designed to be an asset-light, high-margin model[18](index=18&type=chunk)[50](index=50&type=chunk) - Key strategic partnerships include PACCAR and Volvo for trucking (representing nearly **50% of U.S. Class 8 truck sales**), and Toyota and Uber for passenger mobility[18](index=18&type=chunk)[44](index=44&type=chunk) - A core technological advantage is the proprietary **FirstLight Lidar**, which uses FMCW technology for long-range sensing, enabling safe operation at highway speeds[18](index=18&type=chunk)[55](index=55&type=chunk) - In January 2021, Aurora acquired Uber's self-driving unit (Apparate), adding over **900 employees** and strengthening its technology and IP portfolio, with Uber also investing **$400 million** in Aurora[71](index=71&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks inherent to an early-stage company in an emerging industry, including technical challenges, financial losses, and intense competition. - Self-driving technology is an emerging field with significant technical and commercial challenges, which the company may not overcome on its expected timeline, if at all[95](index=95&type=chunk) - Aurora is an early-stage company with a history of losses, incurring a net loss of **$755.5 million in 2021**, and expects to incur significant expenses and losses for the foreseeable future[98](index=98&type=chunk) - The company operates in a highly competitive market against participants with substantial resources, such as Waymo, GM Cruise, and Tesla, where competitors commercializing first could adversely affect business prospects[103](index=103&type=chunk) - Success is highly dependent on maintaining and expanding strategic partnerships with OEMs (PACCAR, Volvo, Toyota) and network partners (Uber)[150](index=150&type=chunk) - The business relies on suppliers, some of which are single or limited source for critical components like GPU microchips and automotive radar sensors, posing a supply chain risk[153](index=153&type=chunk) - The dual-class stock structure concentrates **45.1% of voting control** with the company's founders as of December 31, 2021, limiting the influence of other stockholders[222](index=222&type=chunk) - The company is subject to evolving and potentially inconsistent federal, state, and international regulations for autonomous vehicles, which could hinder commercial deployment[157](index=157&type=chunk)[158](index=158&type=chunk) [Unresolved Staff Comments](index=50&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments. - None[238](index=238&type=chunk) [Properties](index=50&type=section&id=Item%202.%20Properties) Aurora's corporate headquarters is in Pittsburgh, Pennsylvania, where it leases over 590,000 square feet of office and industrial space, along with a 42-acre test track. - The company's headquarters is in Pittsburgh, PA, with over **590,000 sq. ft. of leased space**[238](index=238&type=chunk) - Aurora leases a **42-acre test track facility** in Pittsburgh[238](index=238&type=chunk) - Additional facilities are located in Mountain View, CA; San Francisco, CA; Bozeman, MT; Dallas/Fort Worth, TX; Seattle, WA; Wixom, MI; and Louisville, CO[238](index=238&type=chunk) [Legal Proceedings](index=50&type=section&id=Item%203.%20Legal%20Proceedings) The company states that it is subject to various claims and legal proceedings in the ordinary course of business but does not consider any currently pending matters to be material. - The company is not currently involved in any legal proceedings that it considers to be material[239](index=239&type=chunk) [Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company. - Not applicable[239](index=239&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=51&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Aurora's Class A common stock and warrants are traded on the NASDAQ, and the company has never paid cash dividends, with no current plans to do so. - Class A common stock trades on NASDAQ under the symbol **"AUR"**; warrants trade under **"AUROW"**[242](index=242&type=chunk) - The company has never paid dividends and does not anticipate paying them in the foreseeable future[243](index=243&type=chunk) - As of March 1, 2022, there were **368 record holders** of Class A common stock and **119 record holders** of Class B common stock[244](index=244&type=chunk) [Reserved]](index=52&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information. - Item 6 is noted as [Reserved][247](index=247&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=52&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section details Aurora's financial condition and operational results, highlighting a significant increase in net loss driven by higher R&D and SG&A expenses, and a strong liquidity position post-business combination. - The Business Combination in November 2021 was accounted for as a reverse recapitalization, resulting in a net cash increase of **$1.1 billion**[254](index=254&type=chunk) - The acquisition of Uber's self-driving division, Apparate, in January 2021 was a business combination with consideration valued at approximately **$1.9 billion**[256](index=256&type=chunk) Comparison of Operations for Years Ended December 31 | (in thousands) | 2021 | 2020 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Collaboration revenue | $82,538 | $— | $82,538 | n/m | | Research and development | $697,276 | $179,426 | $517,850 | 288.6% | | Selling, general, and administrative | $115,925 | $38,693 | $77,232 | 199.6% | | Loss from operations | ($730,663) | ($218,119) | ($512,544) | 235.0% | | Net loss | ($755,453) | ($214,449) | ($541,004) | 252.3% | - The increase in R&D expenses was primarily due to a **$246.2 million increase in payroll costs** and a **$195.9 million increase in stock-based compensation**, driven by higher headcount[283](index=283&type=chunk) - As of December 31, 2021, the company had **$1.61 billion in cash and cash equivalents**, which management believes is sufficient to meet working capital and capital expenditure needs for at least the next 12 months[291](index=291&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks primarily related to interest rates and inflation, though management does not believe a 100-basis point change in interest rates would materially affect its business. - The company's primary market risks are changes in interest rates and inflation[310](index=310&type=chunk) - Management believes a **100-basis point change in interest rates** would not have a material effect on financial results[312](index=312&type=chunk) - Inflation has not had a material effect on the business to date, but future cost pressures are a risk[313](index=313&type=chunk) [Financial Statements and Supplementary Data](index=64&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the audited consolidated financial statements for 2021 and 2020, reflecting significant increases in assets and net loss following the 2021 business combination and Apparate acquisition. Consolidated Balance Sheet Highlights (as of Dec 31) | (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,610,135 | $387,346 | | Goodwill | $1,113,766 | $30,047 | | Total Assets | $3,690,087 | $618,885 | | Warrant liabilities | $65,678 | $— | | Total Liabilities | $348,385 | $132,181 | | Total stockholders' equity (deficit) | $3,341,702 | ($276,579) | Consolidated Statement of Operations Highlights (Year ended Dec 31) | (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Collaboration revenue | $82,538 | $— | | Total operating expenses | $813,201 | $218,119 | | Net loss | ($755,453) | ($214,449) | | Net loss per share | ($1.22) | ($0.79) | Consolidated Cash Flow Highlights (Year ended Dec 31) | (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($563,288) | ($191,879) | | Net cash provided by investing activities | $249,885 | $343,289 | | Net cash provided by financing activities | $1,539,822 | $1,446 | - Note 3: The merger with RTPY was accounted for as a reverse recapitalization, with Legacy Aurora as the accounting acquirer, providing net cash proceeds of **$1.13 billion**[367](index=367&type=chunk)[371](index=371&type=chunk) - Note 6: The acquisition of ATG (Apparate) from Uber for approximately **$1.9 billion in stock consideration** resulted in the recognition of **$545.5 million in IPR&D** and **$1.06 billion in goodwill**[384](index=384&type=chunk)[386](index=386&type=chunk) - Note 10: Total stock-based compensation expense was **$220.1 million in 2021**, a significant increase from **$16.9 million in 2020**, largely due to increased headcount and RSU vesting related to the business combination[437](index=437&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosures](index=93&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) The company reports no changes in or disagreements with its accountants on accounting and financial disclosures. - None[468](index=468&type=chunk) [Controls and Procedures](index=93&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2021, with no material changes reported. - The CEO and CFO concluded that disclosure controls and procedures were effective as of December 31, 2021[468](index=468&type=chunk) - A management report on internal control over financial reporting is not included, as permitted for newly public companies[469](index=469&type=chunk) [Other Information](index=93&type=section&id=Item%209B.%20Other%20Information) The company reports no other information. - None[470](index=470&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=93&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company. - Not applicable[470](index=470&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=94&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The information required for this item will be included in the company's definitive proxy statement for the 2022 Annual Meeting of Stockholders and is incorporated by reference. - Information is incorporated by reference from the forthcoming Proxy Statement[472](index=472&type=chunk) [Executive Compensation](index=94&type=section&id=Item%2011.%20Executive%20Compensation) The information required for this item will be included in the company's definitive proxy statement for the 2022 Annual Meeting of Stockholders and is incorporated by reference. - Information is incorporated by reference from the forthcoming Proxy Statement[473](index=473&type=chunk) [Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters](index=94&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owner%20and%20Management%20and%20Related%20Stockholder%20Matters) The information required for this item will be included in the company's definitive proxy statement for the 2022 Annual Meeting of Stockholders and is incorporated by reference. - Information is incorporated by reference from the forthcoming Proxy Statement[473](index=473&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=94&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The information required for this item will be included in the company's definitive proxy statement for the 2022 Annual Meeting of Stockholders and is incorporated by reference. - Information is incorporated by reference from the forthcoming Proxy Statement[473](index=473&type=chunk) [Principal Accounting Fees and Services](index=94&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) The information required for this item will be included in the company's definitive proxy statement for the 2022 Annual Meeting of Stockholders and is incorporated by reference. - Information is incorporated by reference from the forthcoming Proxy Statement[474](index=474&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=95&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Form 10-K report, including consolidated financial statements and various exhibits. - This item lists all exhibits filed with the 10-K, including the Agreement and Plan of Merger, Certificate of Incorporation, Bylaws, and various compensation plans[476](index=476&type=chunk)[477](index=477&type=chunk) [Form 10-K Summary](index=97&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no Form 10-K summary. - None[481](index=481&type=chunk)

Financial Data and Key Metrics Changes - In 2021, Aurora reported $83 million in collaboration revenue, primarily from development work associated with Toyota [34] - Operating expenses totaled $813 million, with R&D expenses at $491 million, indicating a strong investment in autonomy [35][36] - The company ended 2021 with $1.6 billion in cash, providing a solid financial foundation for future operations [38] Business Line Data and Key Metrics Changes - Aurora's operational fleet expanded to 18 trucks, more than doubling its size from the previous quarter, enhancing testing and development capabilities [19] - The company launched two multi-phase commercial pilots with FedEx and Uber Freight, demonstrating operational progress in autonomous trucking [14][16] Market Data and Key Metrics Changes - Aurora is engaged with major players in the freight industry, including the largest LTL freight carrier and a significant freight broker, indicating strong market interest [17] - Initial non-binding indications of interest for Aurora Horizon subscription reservations exceeded anticipated launch fleet capacity through 2025, highlighting robust demand for autonomous trucking solutions [17] Company Strategy and Development Direction - Aurora aims to launch its autonomous trucking business, Aurora Horizon, in late 2023 and its ride-hailing business in late 2024, focusing on safety and scalability [9][10] - The company emphasizes a common core technology in the Aurora Driver, which is designed to work across various vehicle types, enhancing development efficiency [20][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformative potential of self-driving technology and its societal benefits, aligning with the Department of Transportation's principles for Transportation Innovation [33][31] - The company is committed to transparency and collaboration with stakeholders, including regulators and safety advocacy groups, to ensure safe deployment of autonomous technology [31] Other Important Information - Aurora's proprietary FirstLight LiDAR technology enhances its ability to operate safely at highway speeds, a critical component of its autonomous vehicle strategy [27][28] - The company has invested heavily in virtual testing technology, allowing for efficient and safe training of its self-driving systems [29][30] Q&A Session Summary Question: Discussion on digitally enabled fleets and autonomy opportunities - Management highlighted the importance of understanding unique needs in the freight space through partnerships with companies like US Xpress and FedEx [41][42] Question: Metrics for investors regarding real-world miles driven - Management indicated that while traditional metrics may not be as useful, they are exploring ways to communicate product maturity and progress [48][51] Question: Expectations for removing safety drivers from trucks - Management reiterated the goal of a commercial launch by the end of 2023, emphasizing the need for continuous advancement in technology before removing oversight [56][57] Question: Clarification on cash burn rate and future expectations - Management confirmed a clean cash burn rate of $563 million for 2021 and expressed confidence in having sufficient cash to support operations through commercialization [58][61]

Business Update - Aurora acquired Uber's self-driving vehicle business[5] - Aurora introduced Aurora Horizon and Aurora Connect[5] - Aurora solidified partnerships and pilots[5] - Aurora advanced cutting-edge technology[5] - Aurora became a public company[5] Commercialization Progress - Aurora began pulling loads 5 days a week in Q4 and started nighttime hauls in January 2022[6] - Aurora is regularly driving between Fort Worth and El Paso in preparation for a new pilot[8] - Aurora's fleet size increased to 18 trucks, more than double the size in Q4[9] - Aurora expects to launch Aurora Driver Beta 2.0 powered truck and Toyota Sienna fleets by the end of Q1[9] Technology and Safety - Aurora expects to demonstrate the Aurora Driver's ability to respond to system failures at highway speeds by safely pulling over to the shoulder without vehicle operator intervention in Q3[12] - Aurora's self-driving vehicles are acceptably safe to operate on public roads[12]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The company reported a $5.8 million net loss for the six months ended June 30, 2021, primarily due to warrant liability fair value changes and administrative expenses, with $977.5 million in its Trust Account and a subsequent merger agreement with Aurora Innovation, Inc [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $501,493 | $0 | | Investment held in Trust Account | $977,543,775 | $0 | | **Total Assets** | **$979,369,873** | **$62,863** | | **Liabilities & Equity** | | | | Derivative warrant liabilities | $38,914,670 | $0 | | Deferred underwriting commissions | $34,212,500 | $0 | | Total liabilities | $73,994,236 | $56,483 | | Class A ordinary shares subject to possible redemption | $900,375,630 | $0 | | Total shareholders' equity | $5,000,007 | $6,380 | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Highlights (Unaudited) | Item | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | General and administrative expenses | $799,535 | $1,008,041 | | Loss from operations | $(799,535) | $(1,008,041) | | Change in fair value of derivative warrant liabilities | $(2,841,130) | $(3,753,970) | | Financing costs - derivative warrant liabilities | $0 | $(1,111,480) | | Unrealized gain on investments held in Trust Account | $34,940 | $43,775 | | **Net loss** | **$(3,605,725)** | **$(5,829,716)** | [Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) - Total shareholders' equity increased from **$6,380** at December 31, 2020, to approximately **$5.0 million** at June 30, 2021, primarily due to IPO and private warrant sales, offset by offering costs, shares subject to redemption, and net loss[13](index=13&type=chunk) [Unaudited Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Cash Flow Summary for the Six Months Ended June 30, 2021 (Unaudited) | Cash Flow Category | Amount | | :--- | :--- | | Net cash used in operating activities | $(1,747,231) | | Net cash used in investing activities | $(977,500,000) | | Net cash provided by financing activities | $979,748,724 | | **Net increase in cash** | **$501,493** | - Financing activities were driven by gross proceeds of **$977.5 million** from the IPO and **$22.25 million** from the private placement, offset by **$19.7 million** in offering costs paid[16](index=16&type=chunk) - Investing activities consisted entirely of depositing **$977.5 million** into the Trust Account[16](index=16&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - The company, a blank check company, consummated its Initial Public Offering (IPO) on March 18, 2021, raising gross proceeds of **$977.5 million**[18](index=18&type=chunk)[20](index=20&type=chunk) - Concurrently with the IPO, the company sold **8,900,000** private placement warrants to its sponsor for approximately **$22.3 million** in gross proceeds[21](index=21&type=chunk) - On July 14, 2021, the company entered into a definitive merger agreement with Aurora Innovation, Inc., a transaction valued at a pre-transaction equity value of **$11.0 billion** for Aurora[101](index=101&type=chunk)[102](index=102&type=chunk) - The company accounts for its public and private warrants as derivative liabilities, which are remeasured to fair value at each reporting period, with changes recognized in the statement of operations[49](index=49&type=chunk)[94](index=94&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's blank check status, March 2021 IPO, and subsequent merger agreement with Aurora Innovation, attributing the $5.8 million net loss to non-cash warrant liability changes, financing costs, and administrative expenses, with sufficient liquidity for operations - The company, a blank check company, completed its IPO of **97,750,000 units** at **$10.00 per unit** on March 18, 2021, generating **$977.5 million** in gross proceeds[111](index=111&type=chunk)[112](index=112&type=chunk) - On July 14, 2021, the company entered into a merger agreement with Aurora Innovation, Inc., which includes a **$1 billion PIPE investment**[117](index=117&type=chunk)[121](index=121&type=chunk) Results of Operations Summary | Period | Net Loss | Key Drivers | | :--- | :--- | :--- | | **Three months ended June 30, 2021** | ~$3.6 million | $2.8M change in warrant liability fair value, $0.8M G&A costs | | **Six months ended June 30, 2021** | ~$5.8 million | $3.8M change in warrant liability fair value, $1.1M financing costs, $1.0M G&A costs | - As of June 30, 2021, the company had approximately **$501,000** in its operating bank account and working capital of approximately **$977,000**[127](index=127&type=chunk) - A critical accounting policy is the classification of public and private warrants as derivative liabilities, which are remeasured to fair value each reporting period, impacting the statement of operations[135](index=135&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states it is not subject to any material market or interest rate risk, as funds in the Trust Account are invested in short-term U.S. government treasury bills or money market funds - The company's funds held in the Trust Account are invested in U.S. government treasury bills with maturities of **185 days or less** or in money market funds investing in U.S. Treasuries[147](index=147&type=chunk) - Due to the short-term nature of these investments, management believes there is no material exposure to interest rate risk[147](index=147&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that as of June 30, 2021, the company's disclosure controls and procedures were not effective due to a material weakness in internal control over financial reporting related to warrant accounting classification, with remediation efforts underway - Management concluded that disclosure controls and procedures were **not effective** as of June 30, 2021[149](index=149&type=chunk) - The ineffectiveness is due to a material weakness related to the classification of public and private warrants as derivative liabilities rather than equity components[149](index=149&type=chunk) - Remediation efforts have begun, including implementing new procedures for complex transactions and establishing additional monitoring controls, aiming to remediate the weakness during fiscal 2021[151](index=151&type=chunk) [PART II. OTHER INFORMATION](index=28&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) On August 6, 2021, the company's counsel received a demand letter from a purported shareholder alleging that the Registration Statement for the proposed transaction with Aurora Innovation, Inc. omits material information and seeks corrective disclosures - On August 6, 2021, a purported shareholder sent a demand letter alleging that the Registration Statement for the proposed Aurora merger omits material information[153](index=153&type=chunk) - The demand letter requests that the company issue corrective disclosures in an amendment or supplement to the Registration Statement[153](index=153&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) The company highlights a key risk related to its warrant accounting, reclassified as derivative liabilities requiring fair value remeasurement, which can cause significant non-cash gains or losses and financial result fluctuations - A significant risk is that the company's warrants are accounted for as liabilities, and changes in their fair value could materially affect financial results[155](index=155&type=chunk) - This accounting treatment resulted from an SEC Staff Statement issued on April 12, 2021, which prompted a reevaluation of the warrants' classification[155](index=155&type=chunk) - The recurring fair value measurement of these derivative liabilities will likely cause quarterly fluctuations in the statement of operations, potentially impacting the market price of the company's securities[156](index=156&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%20from%20Registered%20Securities) The company details unregistered sales of Founder Shares and Private Placement Warrants, confirming $977.5 million from its IPO was placed into the Trust Account as planned - Unregistered sales include **24,437,500 Class B ordinary shares** (Founder Shares) issued to the Sponsor and directors, and **8,900,000 Private Placement Warrants** sold to the Sponsor for approximately **$22.3 million**[158](index=158&type=chunk)[159](index=159&type=chunk) - The company generated gross proceeds of **$977.5 million** from its IPO of **97,750,000 units**[160](index=160&type=chunk) - After deducting underwriting discounts and offering expenses, **$977.5 million** of the net proceeds from the IPO and Private Placement was placed in the Trust Account[161](index=161&type=chunk) [Defaults Upon Senior Securities](index=29&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[162](index=162&type=chunk) [Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[162](index=162&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) The company reported no other information for the period - None[162](index=162&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) The report lists key exhibits filed, including the Merger Agreement with Aurora, the Warrant Agreement, and officer certifications - Key exhibits filed with the report include the Merger Agreement with Aurora, the Warrant Agreement, and officer certifications[163](index=163&type=chunk)