Archer Aviation (ACHR) - 2024 Q4 - Annual Report

Financial Performance - As of December 31, 2024, the company incurred a net loss of $536.8 million, totaling approximately$ 1.7 billion since inception[54]. - The company expects to continue incurring significant operating and net losses each quarter until it begins generating substantial revenues from its planned business lines[54]. - The net loss for the year ended December 31, 2024, was $536.8 million, compared to a net loss of$ 457.9 million in 2023, indicating a 17.2% increase in losses[284]. - The company's accumulated deficit as of December 31, 2024, was $(1,685.6) million, compared to$ (1,148.8) million in 2023, reflecting a 46.6% increase in the deficit[280]. - The company reported a loss before income taxes of $536.6 million for the year ended December 31, 2024, compared to a loss of$ 457.4 million in 2023, which is a 17.3% increase[281]. - The company's total assets as of December 31, 2024, were $1,001.2 million, up from$ 554.3 million in 2023, marking an 80.4% increase[280]. - The total stockholders' equity as of December 31, 2024, was $752.6 million, up from$ 367.1 million in 2023, reflecting a 104.5% increase[280]. - The company's research and development (R&D) expense for the year ended December 31, 2024, was $357.7 million, an increase from$ 276.4 million in 2023, representing a 29.4% year-over-year growth[274]. - Total operating expenses for the year ended December 31, 2024, were $509.7 million, compared to$ 446.9 million in 2023, reflecting a 14.0% increase[281]. - Cash flows from operating activities resulted in a net cash used of $368.6 million in 2024, up from$ 271.6 million in 2023, indicating a 35.7% increase in cash outflow[292]. Capital and Funding - The company anticipates significant capital expenditures and operating expenses as it develops its aircraft and business, with current cash expected to fund operations for at least the next 12 months[60]. - Future capital needs may require the company to issue additional equity or debt securities, potentially diluting existing stockholders[64]. - The company has entered into a conditional purchase agreement with United Airlines for up to $1.0 billion worth of aircraft, with an option for an additional$ 500 million[87]. - The company raised $590.1 million through PIPE financing in 2024, compared to$ 145.0 million in 2023, reflecting a significant increase of 307.6%[292]. - The company has entered into subscription agreements resulting in the issuance of 142,348,733 shares of Class A common stock in private placements[172]. - A shelf registration statement was filed in May 2024 to sell up to $95.0 million in various securities, with approximately$ 18.7 million available for issuance to certain vendors as of December 31, 2024[173]. - The company may issue additional securities in connection with investments or acquisitions, which could result in dilution to existing stockholders[177]. - The company has approximately $47.5 million available for issuance under its "at the market" offering program as of December 31, 2024[173]. Regulatory and Compliance Risks - The company faces challenges in obtaining necessary regulatory approvals and certifications, which could delay the commercial launch of its eVTOL aircraft[68]. - The company must obtain and maintain FAA certification for its aircraft, and failure to do so could materially impact business operations and financial condition[118]. - The company expects to incur significant costs to comply with evolving regulations related to eVTOL aircraft, which could delay operations and impact financial performance[116]. - The company is subject to various risks associated with strategic relationships, which may impact its ability to secure future opportunities[83]. - The company must comply with covenants in its Credit Agreement, with potential violations leading to restrictions on borrowing and business opportunities[94]. - The evolving landscape of cybersecurity laws and regulations could increase compliance costs and operational complexities for the company[129]. - The company is subject to significant penalties for non-compliance with data protection laws, such as the GDPR, which can impose fines of up to €20 million or 4% of total worldwide revenue[134]. - Regulatory limitations and compliance burdens could negatively impact the company's financial condition and operational results[121]. Operational Challenges - The company faces challenges related to maintaining effective disclosure controls and internal controls over financial reporting, which may divert management's attention from core business activities[141]. - The company is highly dependent on key personnel, including its founder and CEO, and the loss of any key personnel could hinder its business plans[71]. - Competition for highly skilled personnel is intense, particularly in the San Francisco Bay Area, which may increase costs for the company[72]. - The company may face challenges in managing future growth, which could strain resources and impact financial results[73]. - The company relies on third-party partners for critical components, exposing it to risks related to supply chain disruptions and quality control issues[80]. - The company’s operations may be adversely affected by safety-related incidents involving its aircraft, impacting customer confidence and financial performance[76]. - The company’s reliance on lithium-ion cells in its aircraft poses safety risks that could lead to negative public perception and operational disruptions[78]. - The aerial ride-sharing operations will initially be concentrated in a limited number of metropolitan areas, making the business susceptible to local economic and regulatory conditions[96]. - Disruptions at take-off and landing facilities could harm the company's aerial ride-sharing operations, particularly if regulations limit operations or increase costs[97]. Market and Strategic Outlook - The eVTOL aircraft market is still developing, and the company's success depends on effective design, development, certification, and market acceptance of its offerings[66]. - Future revenue growth will depend on the company's ability to expand into international markets and new segments, such as defense and logistics, which involves significant investment risks[98]. - The company plans to expand operations internationally, including in Brazil and the UAE, which may expose it to various regulatory and operational challenges[138]. - The company plans to expand its aircraft manufacturing capabilities and increase sales and marketing activities to support growth[56]. - The success of the company's defense program is uncertain, with potential risks including unanticipated development problems and increased costs[88]. Environmental and Social Governance (ESG) Risks - Climate change poses risks to the company's operations, potentially leading to increased costs for improving climate resiliency of aircraft and infrastructure[139]. - Evolving ESG expectations from stakeholders could negatively impact the company's reputation and operational costs if not adequately addressed[156]. Financial Position and Assets - As of December 31, 2024, the company reported approximately$ 616.5 million in federal net operating loss carryforwards and $58.2 million in state net operating loss carryforwards[159]. - The company has$ 53.2 million in federal research and development tax credits and $27.9 million in state research and development tax credits[159]. - The company currently maintains cybersecurity insurance, but there is a risk that coverage may be insufficient for potential liabilities[130]. - The fair value of public warrants increased from$ 25.4 million in 2023 to $56.0 million in 2024, reflecting a significant rise in market valuation[314]. - The estimated fair value of private placement warrants was$ 33.4 million as of December 31, 2024, compared to $14.5 million in 2023, indicating a substantial increase[322]. - The stock price used in the Monte Carlo simulation for private placement warrants rose from$ 6.14 in 2023 to $9.75 in 2024, a 59% increase[320]. - The company recognized a loss of$ 18.9 million related to the change in fair value of private placement warrants in 2024, compared to a loss of $12.0 million in 2023[322]. - The accrued technology and dispute resolution agreements liability decreased from$ 58.5 million in 2023 to $33.4 million in 2024 after settlement[322]. - The company did not record any impairment charges for its intangible assets for the years ended December 31, 2024, 2023, and 2022, indicating stable asset valuation[327]. - The net carrying amounts for domain names were$ 0.3 million as of December 31, 2024, down from $0.4 million in 2023[328]. - The fair value of debt approximates its carrying value as of December 31, 2024, indicating stable debt valuation[325].