ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
☒ | Smaller reporting company | ||||||||||
Emerging growth company |
Page | ||||||||
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | Change $ | |||||||||||||||
(In millions) | |||||||||||||||||
Operating expenses: | |||||||||||||||||
Research and development (1) | $ | 64.3 | $ | 21.1 | $ | 43.2 | |||||||||||
General and administrative (1) | 176.7 | 3.5 | 173.2 | ||||||||||||||
Other warrant expense | 117.3 | — | 117.3 | ||||||||||||||
Total operating expenses | 358.3 | 24.6 | 333.7 | ||||||||||||||
Loss from operations | (358.3) | (24.6) | (333.7) | ||||||||||||||
Gain on forgiveness of PPP Loan | 0.9 | — | 0.9 | ||||||||||||||
Other income | 10.6 | — | 10.6 | ||||||||||||||
Interest expense | (1.0) | (0.2) | (0.8) | ||||||||||||||
Loss before income taxes | (347.8) | (24.8) | (323.0) | ||||||||||||||
Net loss | $ | (347.8) | $ | (24.8) | $ | (323.0) |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Research and development | $ | 3.7 | $ | — | |||||||
General and administrative | 119.9 | 0.2 | |||||||||
Total stock-based compensation expense | $ | 123.6 | $ | 0.2 |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
(In millions) | |||||||||||
Net cash used in operating activities | $ | (108.4) | $ | (22.8) | |||||||
Net cash used in investing activities | (3.5) | (1.9) | |||||||||
Net cash provided by financing activities | 822.2 | 51.2 |
Report of Independent Registered Public Accounting Firm (PCAOB ID | |||||
As of December 31, | |||||||||||
2021 | 2020 | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Prepaid expenses | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Intangible assets, net | |||||||||||
Right-of-use assets | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders’ Equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Current portion of lease liabilities | |||||||||||
Current portion of notes payable | |||||||||||
Accrued expenses and other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Notes payable, net of current portion | |||||||||||
Lease liabilities, net of current portion | |||||||||||
Warrant liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 9) | |||||||||||
Stockholders’ equity | |||||||||||
Preferred stock, $ | |||||||||||
Class A common stock, $ | |||||||||||
Class B common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Operating expenses | |||||||||||
Research and development | $ | $ | |||||||||
General and administrative | |||||||||||
Other warrant expense | |||||||||||
Total operating expenses | |||||||||||
Loss from operations | ( | ( | |||||||||
Gain on forgiveness of PPP loan | |||||||||||
Other income | |||||||||||
Interest expense | ( | ( | |||||||||
Loss before income taxes | ( | ( | |||||||||
Net loss and comprehensive loss | $ | ( | $ | ( | |||||||
Net loss per share, basic and diluted | $ | ( | $ | ( | |||||||
Weighted-average shares outstanding, basic and diluted |
Redeemable Convertible Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series Seed | Series A | Common Stock | Class A | Class B | Additional Paid-in Capital | Accumulated Deficit | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 | $ | $ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Class B to Class A common stock | — | — | — | — | — | — | — | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock and restricted stock expense | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of warrants and warrant expense | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of warrants | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A common stock pursuant to the Business Combination Agreement | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PIPE financing | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | $ | $ | $ | $ | $ | $ | ( | $ |
Redeemable Convertible Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series Seed | Series A | Common Stock | Class A | Class B | Additional Paid-in Capital | Accumulated Deficit | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 (as previously reported) | $ | $ | $ | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retroactive application of recapitalization | ( | ( | — | — | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 (as adjusted) | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of preferred stock | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of notes and accrued interest to preferred stock | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 30, 2020 | $ | $ | $ | $ | $ | $ | $ | ( | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Cash flows from operating activities | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Debt discount amortization | |||||||||||
Stock-based compensation | |||||||||||
Change in fair value of warrant liabilities | ( | ||||||||||
Non-cash interest | |||||||||||
Non-cash lease expense | |||||||||||
Research and development warrant expense | |||||||||||
Other warrant expense | |||||||||||
Gain on forgiveness of PPP loan | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Prepaid expenses | ( | ( | |||||||||
Other current assets | ( | ||||||||||
Other long-term assets | ( | ||||||||||
Accounts payable | ( | ||||||||||
Accrued expenses and other current liabilities | |||||||||||
Operating lease liabilities | ( | ||||||||||
Other long-term liabilities | |||||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash flows from investing activities | |||||||||||
Purchase of property and equipment | ( | ( | |||||||||
Purchase of domain names | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities | |||||||||||
Proceeds from issuance of debt | |||||||||||
Proceeds from PIPE financing | |||||||||||
Recapitalization transaction | |||||||||||
Recapitalization transaction costs | ( | ||||||||||
Proceeds from exercise of stock options | |||||||||||
Proceeds from exercise of stock warrants | |||||||||||
Proceeds from issuance of preferred stock, net | |||||||||||
Payment of debt issuance costs | ( | ||||||||||
Net cash provided by financing activities | |||||||||||
Net increase in cash and cash equivalents | |||||||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ | |||||||||
Supplemental Cash Flow Information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Non-cash investing and financing activities: | |||||||||||
Purchases of property and equipment included in accounts payable | |||||||||||
Promissory notes and interest settled with preferred shares | |||||||||||
Allocation of debt proceeds to stock warrants | |||||||||||
Conversion of convertible preferred stock to common stock in connection with the reverse recapitalization | |||||||||||
PIPE financing issuance costs settled with the issuance of Class A common stock | |||||||||||
Recapitalization transaction costs settled with the issuance of Class A common stock |
As of December 31, | ||||||||||||||||||||
Description | Level | 2021 | 2020 | |||||||||||||||||
(In millions) | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Money Market Funds | 1 | $ | $ | |||||||||||||||||
Liabilities: | ||||||||||||||||||||
Warrant Liability – Public Warrants | 1 | $ | $ | |||||||||||||||||
Warrant Liability – Private Placement Warrants | 3 |
Input | December 31, 2021 | |||||||
Stock price | $ | |||||||
Strike price | $ | |||||||
Dividend yield | % | |||||||
Term (in years) | ||||||||
Volatility | % | |||||||
Risk-free rate | % |
Balance as of December 31, 2020 | $ | ||||
Addition of private placement warrants | |||||
Change in fair value | ( | ||||
Balance as of December 31, 2021 | $ |
Useful Life (In years) | |||||
Furniture, fixtures, and equipment | |||||
Computer hardware | |||||
Computer software | |||||
Website design | |||||
Leasehold improvements | Shorter of lease term or the asset standard life |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Options to purchase common stock | |||||||||||
Unvested restricted stock units | |||||||||||
Warrants | |||||||||||
Total |
Cash | $ | ||||
Warrant liability | ( | ||||
Net assets acquired | $ |
Number of shares | ||||||||||||||
Class A and B common stock outstanding on July 1, 2021 | ||||||||||||||
Common stock issued through option exercises between July 1, 2021 and September 16, 2021 | ||||||||||||||
Vesting of unvested shares between July 1, 2021 and September 16, 2021 | ||||||||||||||
Common stock outstanding prior to the Business Combination | ||||||||||||||
Conversion of preferred stock | ||||||||||||||
Common stock attributable to Atlas | ||||||||||||||
Adjustment related to reverse recapitalization* | ||||||||||||||
Restricted stock units vested at closing | ||||||||||||||
Common stock attributable to PIPE Financing | ||||||||||||||
Total shares of common stock as of closing of the Business Combination and related transactions as of September 16, 2021 |
As of December 31, | |||||||||||
2021 | 2020 | ||||||||||
Furniture, fixtures, and equipment | $ | $ | |||||||||
Computer hardware | |||||||||||
Computer software | |||||||||||
Website design | |||||||||||
Leasehold improvements | |||||||||||
Total property and equipment | |||||||||||
Less: Accumulated depreciation | ( | ( | |||||||||
Total property and equipment, net | $ | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Research and development | $ | $ | |||||||||
General and administrative | |||||||||||
Total depreciation expense | $ | $ |
As of December 31, | |||||||||||
2021 | 2020 | ||||||||||
Accrued professional fees | $ | $ | |||||||||
Accrued employee costs | |||||||||||
Accrued parts and materials | |||||||||||
Taxes payable | |||||||||||
Accrued capital expenditures | |||||||||||
Accrued marketing fees | |||||||||||
Other current liabilities | |||||||||||
Total | $ | $ |
As of December 31, | |||||||||||
2021 | 2020 | ||||||||||
Silicon Valley Bank (“SVB”) Term Loans | $ | $ | |||||||||
PPP loan | |||||||||||
Term Loans unamortized loan issuance fees and costs | ( | ||||||||||
Total debt, net of issuance costs | |||||||||||
Less current portion, net of loan issuance fees and costs | ( | ( | |||||||||
Total long-term notes payable, net of loan issuance fees and costs | $ | $ |
2022 | $ | ||||
2023 | |||||
$ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Operating lease cost | $ | $ | |||||||||
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Weighted-average remaining lease term (in months) | |||||||||||
Weighted-average discount rate | % | % |
2022 | $ | ||||
2023 | |||||
Total future lease payments | |||||
Less: imputed interest | ( | ||||
Present value of future lease payments | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Operating cash outflows from operating leases | $ | $ | |||||||||
Operating lease assets obtained in exchange for new lease liabilities |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding as of January 1, 2021 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Expired/forfeited | ( | ||||||||||||||||||||||
Outstanding as of December 31, 2021 | |||||||||||||||||||||||
Exercisable as of December 31, 2021 | $ | $ | |||||||||||||||||||||
Vested and expected to vest as of December 31, 2021 |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding as of January 1, 2021 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Outstanding as of December 31, 2021 | |||||||||||||||||||||||
Exercisable as of December 31, 2021 | $ | $ | |||||||||||||||||||||
Vested and expected to vest as of December 31, 2021 |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Risk-free interest rate: | |||||||||||
Employee stock options | % | ||||||||||
Non-employee stock options | % | % | |||||||||
Expected term (in years): | |||||||||||
Employee stock options | |||||||||||
Non-employee stock options | |||||||||||
Expected volatility: | |||||||||||
Employee stock options | % | ||||||||||
Non-employee stock options | % | % | |||||||||
Dividend yield: | |||||||||||
Employee stock options | % | % | |||||||||
Non-employee stock options | % | % | |||||||||
Grant date fair value per share: | |||||||||||
Employee stock options | $ | $ | |||||||||
Non-employee stock options | $ | $ |
Number of Shares | Weighted Average Grant Price | ||||||||||
Outstanding as of January 1, 2021 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding as of December 31, 2021 |
December 31, 2021 | ||||||||
Stock price | $ | |||||||
Term (in years) | ||||||||
Volatility | % | |||||||
Risk-free interest rate | % | |||||||
Dividend yield | % |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Research and development | $ | $ | |||||||||
General and administrative | |||||||||||
Total stock-based compensation expense | $ | $ |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding as of January 1, 2021 | $ | $ | |||||||||||||||||||||
Issued | |||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Outstanding as of December 31, 2021 | |||||||||||||||||||||||
Vested as of December 31, 2021 | $ | $ |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Federal income tax (benefit) | % | % | |||||||||
State and local income taxes (net of federal benefit) | % | % | |||||||||
Nondeductible expenses | ( | % | ( | % | |||||||
Warrant expense | ( | % | % | ||||||||
Nondeductible officers’ compensation | ( | % | % | ||||||||
Other | % | % | |||||||||
Credits | % | % | |||||||||
Change in valuation allowance | ( | % | ( | % | |||||||
Effective tax rate | % | % |
As of December 31, | |||||||||||
2021 | 2020 | ||||||||||
Deferred Tax Assets: | |||||||||||
Net operating loss carryforwards | $ | $ | |||||||||
Accrued expenses | |||||||||||
Operating lease liabilities | |||||||||||
Stock-based compensation | |||||||||||
Warrants | |||||||||||
Capitalized R&D expenses | |||||||||||
Credits | |||||||||||
Other | |||||||||||
Gross deferred tax assets | |||||||||||
Less: valuation allowance | ( | ( | |||||||||
Deferred tax assets, net of valuation allowance | |||||||||||
Deferred Tax Liabilities: | |||||||||||
Depreciation and amortization | ( | ( | |||||||||
Right-of-use assets | ( | ( | |||||||||
Total deferred tax liabilities | ( | ( | |||||||||
Total net deferred tax assets | $ | $ |
Balance as of December 31, 2019 | $ | ||||
Increases related to current year tax positions | |||||
Balance as of December 31, 2020 | |||||
Increases related to current year tax positions | |||||
Decreases based on tax positions related to prior years | ( | ||||
Balance as of December 31, 2021 | $ |
Exhibit | Description | |||||||
2.1†† | ||||||||
3.1 | ||||||||
3.2 | ||||||||
4.1* | ||||||||
4.2 | ||||||||
10.1 | ||||||||
10.2 | Amended and Restated Sponsor Letter Agreement, dated as of July 29, 2021, by and among Atlas Crest Investment Corp., Atlas Crest Investment LLC, Archer Aviation Inc., and the individuals named therein (incorporated by reference to Exhibit 10.1B to Registration Statement on Form S-4 (File No. 333-254007), filed August 3, 2021) | |||||||
10.3† | ||||||||
10.4† | ||||||||
10.5† | ||||||||
10.6† | ||||||||
10.7† | ||||||||
10.8† | ||||||||
10.9† | ||||||||
10.10† |
Exhibit | Description | |||||||
10.11† | ||||||||
10.12† | ||||||||
10.13† | ||||||||
10.14† | ||||||||
10.15 | ||||||||
10.16 | ||||||||
10.17 | ||||||||
10.18 | ||||||||
10.19 | ||||||||
10.20 | ||||||||
10.21* | ||||||||
10.22 | ||||||||
10.23* | ||||||||
10.24 | ||||||||
10.25 | ||||||||
10.26 | Loan and Security Agreement, dated July 9, 2021, by and among Silicon Valley Bank, in its capacity as administrative agent and collateral agent, Silicon Valley Bank and SVB Innovation Credit Fund VIII, L.P., as lenders, and Archer Aviation Inc. (incorporated by reference to Exhibit 10.10 to Registration Statement on Form S-4 (File No. 333-254007), filed August 3, 2021) | |||||||
10.27 | ||||||||
10.28 | ||||||||
21.1 | ||||||||
23.1* | ||||||||
24.1* | ||||||||
31.1* |
Exhibit | Description | |||||||
31.2* | ||||||||
31.3* | ||||||||
32.1# | ||||||||
32.2# | ||||||||
32.3# | ||||||||
101.INS* | XBRL Instance Document | |||||||
101.SCH* | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
ARCHER AVIATION INC. | ||||||||
March 14, 2022 | By: | /s/ Mark Mesler | ||||||
Mark Mesler | ||||||||
Chief Financial Officer (Principal Financial and Accounting Officer) |
Signature | Title | Date | ||||||||||||
/s/ Brett Adcock | Co-Chief Executive Officer and Co-Chairman of the Board of Directors (Principal Co-Executive Officer) | March 14, 2022 | ||||||||||||
Brett Adcock | ||||||||||||||
/s/ Adam Goldstein | Co-Chief Executive Officer and Co-Chairman of the Board of Directors (Principal Co-Executive Officer) | March 14, 2022 | ||||||||||||
Adam Goldstein | ||||||||||||||
/s/ Mark Mesler | Chief Financial Officer (Principal Financial and Accounting Officer) | March 14, 2022 | ||||||||||||
Mark Mesler | ||||||||||||||
/s/ Deborah Diaz | Director | March 14, 2022 | ||||||||||||
Deborah Diaz | ||||||||||||||
/s/ Fred Diaz | Director | March 14, 2022 | ||||||||||||
Fred Diaz | ||||||||||||||
/s/ Oscar Munoz | Director | March 14, 2022 | ||||||||||||
Oscar Munoz | ||||||||||||||
/s/ Barbara J. Pilarski | Director | March 14, 2022 | ||||||||||||
Barbara J. Pilarski | ||||||||||||||
/s/ Maria Pinelli | Director | March 14, 2022 | ||||||||||||
Maria Pinelli | ||||||||||||||
/s/ Michael Spellacy | Director | March 14, 2022 | ||||||||||||
Michael Spellacy | ||||||||||||||
Condition | Milestone | Shares | |||||||||
I | Upon the issuance of this Warrant. | 5,858,246 | |||||||||
II | The Company’s acquisition in a SPAC Transaction or other financing transaction undertaken in connection with (up to and including) an IPO or Direct Listing (“Financing Transaction”) in which United is afforded the opportunity to invest, and does invest, $25,000,000 (any such transaction, a “United Investment”), including but not limited to any private placement in public equity transaction consummated in connection with such SPAC Transaction. United shall be permitted to assign up to 20% of the United Investment to a Pre-Approved Assignee and such amounts shall be credited toward the satisfaction of this condition; provided that such Pre-Approved Assignee in fact invests such assigned. If the Company is party to a SPAC, IPO or Direct Listing (a “Public Event”) and United is not provided the opportunity to make a United Investment up to and including in connection with such Public Event, then all such unvested Condition II Shares shall automatically become vested and exercisable immediately prior to, but conditioned upon, the closing of the Financing Transaction. | 2,929,123 | |||||||||
III | Approval of the Aircraft’s (as defined in the Purchase Agreement) final Type Certificate (as defined in the Purchase Agreement) by the FAA so long as the Purchase Agreement or the Collaboration Agreement is in effect on the date that such Type Certificate is issued and no cancellation notice has been issued by either party under the Purchase Agreement or the Collaboration Agreement; provided, that if the Purchase Agreement or Collaboration Agreement is not then in effect due to a material breach of either agreement by the Company, that goes uncured by the Company, then all such unvested Condition III Shares shall automatically become vested and exercisable upon the Approval of the Aircraft’s final Type Certificate by the FAA. | 1,464,561 |
IV | 1/200th of the remaining 4,393,684 unvested Shares (the “Condition IV Shares”) shall become vested and exercisable upon the acceptance of delivery and final purchase by United (or its nominee as permitted under the Purchase Agreement) of each Firm Aircraft (as defined in the Purchase Agreement) as set forth in the Purchase Agreement. In the event that (i) the Company is unable to deliver all Firm Aircraft on the date agreed pursuant to the Purchase Agreement (the “Outside Delivery Date”), and (ii) the Purchase Agreement or the Collaboration Agreement is still in full force and effect or is no longer in full force and effect due to the Company’s material breach, and such breach goes uncured, then all such unvested Condition IV Shares shall automatically become vested and exercisable upon the Outside Delivery Date. | 4,393,684 | |||||||||
TOTAL: | 14,645,614 |
Event | % | |||||||
I | Execution of Manufacturing Consulting Agreement by Holder and Company | 50% | ||||||
II | Twelve (12) months from the Effective Date (as defined in the Manufacturing Consulting Agreement) of the Manufacturing Consulting Agreement | 50% |
/s/ Brett Adcock | ||
Brett Adcock | ||
Co-Chief Executive Officer | ||
(Principal Co-Executive Officer) |
/s/ Adam Goldstein | ||
Adam Goldstein | ||
Co-Chief Executive Officer | ||
(Principal Co-Executive Officer) |
/s/ Mark Mesler | ||
Mark Mesler | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
/s/ Brett Adcock | ||
Brett Adcock | ||
Co-Chief Executive Officer | ||
(Principal Co-Executive Officer) |
/s/ Adam Goldstein | ||
Adam Goldstein | ||
Co-Chief Executive Officer | ||
(Principal Co-Executive Officer) |
/s/ Mark Mesler | ||
Mark Mesler | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Firm ID | 238 |
Auditor Location | Irvine, California |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common Class A | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, issued (in shares) | 162,789,591 | 49,828,517 |
Common stock, outstanding (in shares) | 162,789,591 | 49,828,517 |
Common Class B | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, issued (in shares) | 74,937,945 | 66,714,287 |
Common stock, outstanding (in shares) | 74,937,945 | 66,714,287 |
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Operating expenses | ||
Research and development | $ 64.3 | $ 21.1 |
General and administrative | 176.7 | 3.5 |
Other warrant expense | 117.3 | 0.0 |
Total operating expenses | 358.3 | 24.6 |
Loss from operations | (358.3) | (24.6) |
Gain on forgiveness of PPP loan | 0.9 | 0.0 |
Other income | 10.6 | 0.0 |
Interest expense | (1.0) | (0.2) |
Loss before income taxes | (347.8) | (24.8) |
Net loss | (347.8) | (24.8) |
Comprehensive loss | $ (347.8) | $ (24.8) |
Net loss per share, basic (in dollars per share) | $ (3.14) | $ (0.49) |
Net loss per share, diluted (in dollars per share) | $ (3.14) | $ (0.49) |
Weighted-average common shares, basic (in shares) | 110,836,238 | 50,164,360 |
Weighted-average common shares, diluted (in shares) | 110,836,238 | 50,164,360 |
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity - USD ($) $ in Millions |
Total |
Previously Reported |
Revision of Prior Period, Adjustment |
Common Stock |
Common Stock
Previously Reported
|
Common Stock
Revision of Prior Period, Adjustment
|
Additional Paid-in Capital |
Additional Paid-in Capital
Previously Reported
|
Additional Paid-in Capital
Revision of Prior Period, Adjustment
|
Accumulated Deficit |
Accumulated Deficit
Previously Reported
|
Series Seed Preferred Stock |
Series Seed Preferred Stock
Previously Reported
|
Series Seed Preferred Stock
Revision of Prior Period, Adjustment
|
Series A Preferred Stock |
Series A Preferred Stock
Previously Reported
|
Series A Preferred Stock
Revision of Prior Period, Adjustment
|
Common Class A
Common Stock
|
Common Class A
Common Stock
Previously Reported
|
Common Class A
Common Stock
Revision of Prior Period, Adjustment
|
Common Class B
Common Stock
|
Common Class B
Common Stock
Previously Reported
|
Common Class B
Common Stock
Revision of Prior Period, Adjustment
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Redeemable Convertible Preferred Stock, beginning balance (in shares) at Dec. 31, 2019 | 0 | 18,193,515 | (18,193,515) | 0 | 0 | ||||||||||||||||||
Redeemable Convertible Preferred Stock, beginning balance at Dec. 31, 2019 | $ 0.0 | $ 5.9 | $ (5.9) | $ 0.0 | $ 0.0 | $ (55.6) | |||||||||||||||||
Redeemable Convertible Preferred Stock, ending balance (in shares) at Dec. 31, 2020 | 0 | 0 | |||||||||||||||||||||
Redeemable Convertible Preferred Stock, ending balance at Dec. 31, 2020 | $ 0.0 | $ 0.0 | |||||||||||||||||||||
Common stock, beginning balance (in shares) at Dec. 31, 2019 | 0 | 50,000,000 | (50,000,000) | 15,250,985 | 0 | 15,250,985 | 53,390,228 | 0 | 53,390,228 | ||||||||||||||
Stockholders' Equity, beginning balance at Dec. 31, 2019 | $ 4.9 | $ (1.0) | $ 5.9 | $ 0.0 | $ 0.0 | $ 5.9 | $ 0.0 | $ 5.9 | $ (1.0) | $ (1.0) | $ 0.0 | $ 0.0 | $ 0.0 | $ 0.0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Conversion of stock (in shares) | 2,651,027 | 1,772,846 | |||||||||||||||||||||
Conversion of notes and accrued interest to preferred stock | 5.3 | 5.3 | |||||||||||||||||||||
Issuance of restricted stock (in shares) | 1,141,444 | ||||||||||||||||||||||
Issuance of restricted stock | 0.0 | ||||||||||||||||||||||
Exercise of stock options (in shares) | 188,984 | ||||||||||||||||||||||
Exercise of stock options | 0.0 | ||||||||||||||||||||||
Stock-based compensation | 0.2 | 0.2 | |||||||||||||||||||||
Issuance of preferred stock (in shares) | 30,596,077 | 11,551,213 | |||||||||||||||||||||
Issuance of preferred stock | 50.3 | 50.3 | |||||||||||||||||||||
Net loss | (24.8) | (24.8) | |||||||||||||||||||||
Common stock, ending balance (in shares) at Dec. 31, 2020 | 0 | 49,828,517 | 66,714,287 | ||||||||||||||||||||
Stockholders' Equity, ending balance at Dec. 31, 2020 | 35.9 | $ 0.0 | 61.7 | (25.8) | $ 0.0 | $ 0.0 | |||||||||||||||||
Redeemable Convertible Preferred Stock, ending balance (in shares) at Dec. 31, 2021 | 0 | 0 | |||||||||||||||||||||
Redeemable Convertible Preferred Stock, ending balance at Dec. 31, 2021 | $ 0.0 | $ 0.0 | |||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Conversion of stock (in shares) | 5,337,446 | (5,337,446) | |||||||||||||||||||||
Issuance of restricted stock (in shares) | 20,833 | 10,004,612 | |||||||||||||||||||||
Issuance of restricted stock | 118.1 | 118.1 | |||||||||||||||||||||
Exercise of stock options (in shares) | 859,544 | 3,556,492 | |||||||||||||||||||||
Exercise of stock options | 0.5 | 0.5 | |||||||||||||||||||||
Issuance of warrants and warrant expense | 124.3 | 124.3 | |||||||||||||||||||||
Exercise of warrants (in shares) | 8,845,058 | ||||||||||||||||||||||
Exercise of warrants | 0.1 | 0.1 | |||||||||||||||||||||
Stock-based compensation | 5.5 | 5.5 | |||||||||||||||||||||
Issuance of Class A common stock pursuant to the Business Combination Agreement (in shares) | 36,385,693 | ||||||||||||||||||||||
Issuance of Class A common stock pursuant to the Business Combination Agreement | 162.3 | 162.3 | |||||||||||||||||||||
PIPE financing (in shares) | 61,512,500 | ||||||||||||||||||||||
PIPE financing | 600.0 | 600.0 | |||||||||||||||||||||
Net loss | (347.8) | (347.8) | |||||||||||||||||||||
Common stock, ending balance (in shares) at Dec. 31, 2021 | 0 | 162,789,591 | 74,937,945 | ||||||||||||||||||||
Stockholders' Equity, ending balance at Dec. 31, 2021 | $ 698.9 | $ 0.0 | $ 1,072.5 | $ (373.6) | $ 0.0 | $ 0.0 |
Organization and Nature of Business |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | Organization and Nature of Business Organization and Nature of Business Archer Aviation Inc. (the “Company” “we,” “us” or “our”), a Delaware corporation, with our headquarters located in Palo Alto, California, is an aerospace company. The Company is a former blank check company incorporated on August 26, 2020 under the name Atlas Crest Investment Corp. (“Atlas”) as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Our mission is to advance the benefits of sustainable air mobility. Our goal is to move people throughout the world's cities in a quick, safe, sustainable, and cost-effective manner. To accomplish this goal, we are designing and developing an electric vertical takeoff and landing (“eVTOL”) aircraft for use in future urban air mobility (“UAM”) networks. Our Planned Lines of Business Upon receipt of all necessary Federal Aviation Administration (“FAA”) certifications and any other government approvals necessary for us to manufacture and operate our aircraft, we intend to operate two complementary lines of business. Our core focus is direct-to-consumer (“Archer UAM”) with our secondary focus being business-to-business (“Archer Direct”). Archer UAM We plan to operate our own UAM ecosystem initially in select major U.S. cities, such as Los Angeles and Miami. Our UAM ecosystem will operate using our eVTOL aircraft which is currently in development. Archer Direct We also plan to selectively sell a certain amount of our eVTOL aircraft to third parties. Business Combination On September 16, 2021 (the “Closing Date”), Archer Aviation, Inc., a Delaware corporation (prior to the closing of the Business Combination (as defined below), “Legacy Archer”), Atlas, and Artemis Acquisition Sub Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Atlas (“Merger Sub”), consummated the closing of the transactions contemplated by the Business Combination Agreement, dated February 10, 2021, as amended and restated on July 29, 2021, by and among Atlas, Legacy Archer and Merger Sub (the “Business Combination Agreement”), following approval at a special meeting of the stockholders of Atlas held on September 14, 2021 (the “Special Meeting”). Unless otherwise specified or unless the context otherwise requires, references in these notes to Legacy Archer refer to Archer prior to the Business Combination and references in these notes to “New Archer” refer to Archer following the Business Combination. Pursuant to the terms of the Business Combination Agreement, a business combination of Legacy Archer and Atlas was effected by the merger of Merger Sub with and into Legacy Archer, with Legacy Archer surviving the merger (the “Surviving Entity”) as a wholly-owned subsidiary of Atlas (the “Merger,” and, collectively with the other transactions described in the Business Combination Agreement, the “Business Combination”). Following the consummation of the Merger on the Closing Date, the Surviving Entity changed its name from Archer Aviation, Inc. to Archer Aviation Operating Corp., and Atlas changed its name from Atlas Crest Investment Corp. to Archer Aviation Inc. and it became the successor registrant with the U.S. Securities and Exchange Commission (the “SEC”). Prior to the closing of the Business Combination, the Class A common stock and public warrants of Atlas were listed on the New York Stock Exchange (“NYSE”) under the symbols “ACIC” and “ACIC WS,” respectively. New Archer Class A common stock and public warrants are currently listed on the NYSE under the symbols “ACHR” and “ACHR WS,” respectively. Additionally, certain investors had agreed to subscribe for and purchase an aggregate of up to $600.0 million of Class A common stock of the combined company (“PIPE Financing”). The PIPE Financing was consummated substantially concurrent with the closing of the Merger. The Business Combination generated gross cash proceeds of $857.6 million, including $600.0 million proceeds from the PIPE Financing. Total direct and incremental transaction costs aggregated $81.8 million, of which $10.9 million were expensed as part of the Business Combination, $55.8 million were recorded to additional paid-in-capital (“APIC”) as equity issuance costs, and the remaining $15.1 million was settled through the issuance of shares of New Archer Class A common stock. While the legal acquirer in the Business Combination Agreement was Atlas, for financial accounting and reporting purposes under accounting principles generally accepted in the United States of America (“U.S. GAAP”), Legacy Archer is the accounting acquirer, and the Business Combination is accounted for as a “reverse recapitalization.” A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the financial statements of Legacy Archer in many respects. Under this method of accounting, Atlas is treated as the “acquired” company for financial reporting purposes. For accounting purposes, Legacy Archer is deemed to be the accounting acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of Legacy Archer (i.e., a capital transaction involving the issuance of stock by Atlas for the stock of New Archer). Refer to Note 4 for additional information. The financial statements included in this report reflect (i) the historical operating results of Legacy Archer prior to the Business Combination; (ii) the combined results of Atlas and Legacy Archer following the closing of the Business Combination; (iii) the assets and liabilities of Legacy Archer at their historical cost; and (iv) the Company’s equity structure for all periods presented. COVID-19 Pandemic In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic. The rapid spread of COVID-19 caused volatility and disruption in financial markets and prompted governments and businesses to take unprecedented measures such as travel restrictions, quarantines, shelter-in-place orders, and business shutdowns. The impact of the COVID-19 pandemic continues to evolve due to, among other reasons, the emergence of additional variants or strains of COVID-19. As such, the full magnitude of the pandemic’s effect on our financial condition, liquidity, and future results of operations is uncertain. Management continues to actively monitor our financial condition, liquidity, operations, suppliers, industry, and workforce, but currently does not anticipate any material impairments as a result of COVID-19 and will continue to evaluate the impact of COVID-19 on an ongoing basis. See Part I, Item 1A, “Risk Factors” in this Annual Report for more information.
|
Liquidity and Going Concern |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidation and Going Concern | Liquidity and Going Concern Since our formation, we have devoted substantial effort and capital resources to the design and development of our planned eVTOL aircraft and UAM network. Funding of these activities has primarily been through the net proceeds received from the issuance of related and third-party debt (Note 7 and Note 8), and the sale of preferred and common stock to related and third parties (Note 10). Through December 31, 2021, we have incurred cumulative losses from operations, negative cash flows from operating activities, and have an accumulated deficit of $373.6 million. Following the closing of the Business Combination on the Closing Date, we received net cash proceeds of $801.8 million. Additionally, we had cash and cash equivalents of $746.9 million as of December 31, 2021, which management believes will be sufficient to fund our current operating plan for at least the next 12 months from the date these consolidated financial statements were issued. There can be no assurance that we will be successful in achieving our business plans, that our current capital will be sufficient to support our ongoing operations, or that any additional financing will be available in a timely manner or on acceptable terms, if at all. If events or circumstances occur such that we do not meet our business plans, we may be required to raise additional capital, alter, or scale back our aircraft design, development and certification programs, as well as our manufacturing capabilities, or be unable to fund capital expenditures. Any such events would have a material adverse effect on our financial position, results of operations, cash flows, and ability to achieve our intended business plans.
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Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP and include the accounts of the Company. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to the: (i) realization of deferred tax assets and estimates of tax liabilities, (ii) valuation of common stock, (iii) fair value of debt, (iv) fair value of share-based payments, (v) valuation of leased assets and liabilities, and (vi) estimated useful lives of long-lived assets. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Such estimates often require the selection of appropriate valuation methodologies and models and may involve significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ from those estimates under different assumptions, financial inputs, or circumstances. Given the global economic climate and unpredictable nature and unknown duration of the COVID-19 pandemic, estimates are subject to additional volatility. Retroactive Application of Reverse Recapitalization As discussed in Note 4, Reverse Recapitalization and Related Transactions, the Business Combination is accounted for as a reverse recapitalization of equity structure. Pursuant to U.S. GAAP, we recast our consolidated statements of redeemable convertible preferred stock and stockholders’ equity from December 31, 2019 to the Closing Date, the total stockholders’ equity within our consolidated balance sheet as of December 31, 2020 and the weighted-average outstanding shares, basic and diluted for the year ended December 31, 2020 by applying the recapitalization retroactively. In addition, we recast the stock class and issued and outstanding number of stock, exercise prices of options, and warrants for each balance sheet period presented in these consolidated financial statements and the accompanying notes. Retroactive Application of Reverse Recapitalization to the Consolidated Statements of Stockholders’ Equity Pursuant to the terms of the Business Combination Agreement, as part of the closing, all of the issued series seed redeemable convertible preferred stock and series A redeemable convertible preferred stock of Legacy Archer were automatically converted into Legacy Archer common stock at a 1:1 ratio, which were converted again, along with all other issued and outstanding common stock of Legacy Archer, into 124,735,762 shares of New Archer Class A and Class B common stock at an exchange ratio of 1.00656519 (“Exchange Ratio”). Additionally, each of Legacy Archer options, restricted stock units (“RSUs”), and warrants that were outstanding immediately prior to the closing of the Business Combination remained outstanding and converted into options, RSUs, and warrants for New Archer Class A and Class B common stock equal to the number of Legacy Archer common stock, subject to such options, RSUs, or warrants, multiplied by the Exchange Ratio at an exercise price per share equal to the current exercise price per share for such option or warrant divided by the Exchange Ratio, with the aggregate number of shares of New Archer Class A and B common stock issuable upon exercise of such options, RSUs, and warrants to be 60,260,483. Retroactive Application of Reverse Recapitalization to the Consolidated Statements of Operations and Comprehensive Loss Furthermore, based on the retroactive application of the reverse recapitalization to our consolidated statements of redeemable convertible preferred stock and stockholders’ equity, we recalculated the weighted-average shares for the year ended December 31, 2020. The basic and diluted weighted-average Legacy Archer common stock were retroactively converted to New Archer Class A and B common stock using the Exchange Ratio to conform to the recast in the consolidated statements of redeemable convertible preferred stock and stockholders’ equity. Retroactive Application of Reverse Recapitalization to the Consolidated Balance Sheets Finally, to conform to the retroactive application of recapitalization to our statements of redeemable convertible preferred stock and stockholders’ equity, the Company reclassified the $5.9 million of Legacy Archer series seed redeemable convertible preferred stock and the $55.6 million of Legacy Archer series A redeemable convertible preferred stock to APIC, less amounts attributable to the par value of the common stock as adjusted, as of December 31, 2020. Cash and Cash Equivalents Cash consists of cash on deposit with financial institutions. Cash equivalents consist of short-term, highly liquid financial instruments that are readily convertible to cash and have maturities of three months or less from the date of purchase. Cash and cash equivalent balances were $746.9 million and $36.6 million as of December 31, 2021 and 2020, respectively, of which money market funds were $0.3 million and $34.4 million as of December 31, 2021 and 2020, respectively. Money market funds, which are considered cash equivalents, are recorded at fair value and classified as Level 1 within the fair value hierarchy. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and deposits. The Company’s cash and cash equivalents are held at major financial institutions located in the United States of America. At times, cash account balances with any one financial institution may exceed Federal Deposit Insurance Corporation insurance limits ($250 thousand per depositor per institution). Management believes the financial institutions that hold the Company’s cash and cash equivalents are financially sound, and accordingly, minimal credit risk exists with respect to cash and cash equivalents. Fair Value Measurements We apply the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurement, which defines a single authoritative definition of fair value, sets out a framework for measuring fair value, and expands on required disclosures about fair value measurements. The provisions of ASC 820 relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The carrying amounts of our cash, accounts payable, accrued compensation, and accrued liabilities approximate fair value due to the short-term nature of these instruments. The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2021 and 2020 and indicates the fair value hierarchy of the valuation inputs we utilized to determine such fair value:
Public Warrants The measurement of the public warrants as of December 31, 2021 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker ACHR WS. The quoted price of the public warrants was $1.16 per warrant as of December 31, 2021. Private Placement Warrants We utilize a Monte Carlo simulation model for the private placement warrants at each reporting period, with changes in fair value recognized in the statement of operations and comprehensive loss. The estimated fair value of the private placement warrant liability is determined using Level 3 inputs. Inherent in a binomial options pricing model and Monte Carlo simulation model are assumptions related to expected share-price volatility, expected life, risk-free interest rate, and dividend yield. The key inputs into the Monte Carlo simulation model for the private placement warrants are as follows:
The following table presents the change in fair value of our Level 3 private placement warrants during the years ended December 31, 2021 and 2020:
We recognized a gain in connection with changes in the fair value of warrant liabilities of $10.4 million within other income in the statement of operations and comprehensive loss during the year ended December 31, 2021. Refer to Note 14 for additional information about the public and private placement warrants. Financial Instruments Not Recorded at Fair Value on a Recurring Basis Certain financial instruments, including debt, are not measured at fair value on a recurring basis in the balance sheets. The fair value of debt as of December 31, 2021 approximates its carrying value. Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis Certain assets and liabilities are subject to measurement at fair value on a non-recurring basis if there are indicators of impairment or if they are deemed to be impaired as a result of an impairment review. Intangible Assets, Net Intangible assets consist solely of domain names and are recorded at cost, net of accumulated amortization, and if applicable, impairment charges. Amortization of domain names is provided over a 15-year estimated useful life on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. We review intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We have analyzed a variety of factors in light of the known impact to date of the COVID-19 pandemic on our business to determine if any circumstance could trigger an impairment loss, and, at this time and based on the information presently known, do not believe that it is more likely than not that an impairment loss has been incurred. As of December 31, 2021 and 2020, the gross carrying amount for domain names was $0.5 million with $36 thousand and $3 thousand recorded in accumulated amortization on our balance sheets in each period, respectively. During the years ended December 31, 2021 and 2020, we recognized amortization expense of $33 thousand and $3 thousand, respectively, included within general and administrative expenses in the statements of operations and comprehensive loss. Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Expenditures for major renewals and betterments are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation is removed from the accounts, and any difference between the selling price and net carrying amount is recorded as a gain or loss in the statements of operations and comprehensive loss. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows:
Impairment of Long-Lived Assets We review our long-lived assets, consisting primarily of property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being or intended to be used, a significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. We perform impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets including any cash flows upon their eventual disposition to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. We determined there was no impairment of long-lived assets during all periods presented. Operating Expenses Research and Development Research and development (“R&D”) costs are expensed as incurred and are primarily comprised of personnel-related costs including salaries, bonuses, benefits, and stock-based compensation for employees focused on R&D activities, costs associated with building prototype aircraft, other related costs, depreciation, and an allocation of general overhead. R&D efforts focus on the design and development of our eVTOL aircraft, including certain of the systems that are used in it. General and Administrative General and administrative expenses are primarily comprised of personnel-related costs including salaries, bonuses, benefits, and stock-based compensation for employees associated with our administrative services such as finance, legal, human resources, and information technology, other related costs, depreciation, and an allocation of general overhead. General and administrative expenses include $118.1 million of expense related to the vesting of a certain portion of the restricted stock units granted to our founders pursuant to the terms and conditions of the Business Combination Agreement immediately prior to closing (the “Founder Grants”), for the year ended December 31, 2021. Refer to Note 11 - Stock-Based Compensation for additional information. Other Warrant Expense Other warrant expense consists of expense related to the vesting of warrants issued related to the first two milestones in conjunction with the execution of the purchase agreement (“Purchase Agreement”), collaboration agreement (“United Collaboration Agreement”), and warrant agreement (“United Warrant Agreement”) with United Airlines Inc. (“United”). Refer to Note 11 - Stock-Based Compensation for additional information. Stock-Based Compensation Our stock-based compensation awards consist of options granted to employees and non-employees and restricted stock units granted to employees, directors, and non-employees that convert into shares of our Class A common stock upon vesting. We recognize stock-based compensation expense in accordance with the provisions of ASC 718, Compensation - Stock Compensation. ASC 718 requires the measurement and recognition of compensation expense for all stock-based compensation awards made to employees, directors, and non-employees to be based on the grant date fair values of the awards. We estimate the fair value of share options using the Black-Scholes option-pricing model. The value of the award is recognized as expense over the requisite service period on a straight-line basis. Determining the grant date fair value of the awards using the Black-Scholes option-pricing model requires management to make assumptions and judgments, including but not limited to the following: Expected term — The estimate of the expected term of employee awards is determined in accordance with the simplified method, which estimates the term based on an averaging of the vesting period and contractual term of the option grant. We use the contractual term for non-employee awards. Expected volatility — Since we were a private entity without sufficient historical data on the volatility of our common stock, the expected volatility used is based on the volatility of similar entities (referred to as “guideline companies”) for a period consistent with the expected term of the award. Risk-free interest rate — The risk-free interest rate used to value awards is based on the United States Treasury yield in effect at the time of grant for a period consistent with the expected term of the award. Dividend yield — We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Forfeiture rate — We have elected to account for forfeitures as they occur and will record stock-based compensation expense assuming all option holders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, we will reverse stock-based compensation expense previously recognized in the period the award is forfeited. Fair value of common stock Our board of directors grants stock options with exercise prices equal to the fair value of our common stock on the date of grant. Prior to the closing of the Business Combination on the Closing Date, we determined the fair value of our common stock at the time of the grant of stock options in accordance with the American Institute of Certified Public Accountants (“AICPA”) Accounting and Valuation Guide: Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “AICPA Practice Aid”). We determined the fair value of our common stock based on a variety of factors including, but not limited to (i) the results of contemporaneous independent third-party valuations of our common stock and the prices, rights, preferences and privileges of our redeemable convertible preferred stock relative to those of our common stock; (ii) the lack of marketability of our common stock; (iii) actual operating and financial results; (iv) current business conditions and projections; (v) the likelihood of achieving a liquidity event, such as an IPO or sale of the Company, given prevailing market conditions; and (vi) precedent transactions involving our shares. As provided in the AICPA Practice Aid, there are several approaches for setting the value of an enterprise and various methodologies for allocating the value of an enterprise to its outstanding equity. We determined the fair value of equity awards using a combination of the market and income approach. Within the market approach, the guideline public company method was used, which employs the use of ratios developed from the market price of traded shares from publicly traded companies considered reasonably similar to the Company. Under the income approach, the enterprise value was estimated using the discounted cash flow method, which involves estimating the future cash flows of a business for a discrete period and discounting them to their present value. In allocating enterprise value to our outstanding equity, we applied a hybrid approach, which consisted of the option pricing method (“OPM”) and probability-weighted expected return method (“PWERM”). The OPM treats securities, including debt, common and preferred stock, as call options on the enterprise’s value, with exercise prices based on the securities’ respective liquidation preferences and conversion values. The PWERM estimates the fair market value of the common stock based on an analysis of future values for the enterprise assuming various exit scenarios, such as IPO, merger or sale, staying private, and liquidation. Since there was no active market for our common stock, we also applied a discount for lack of marketability for both OPM and PWERM scenarios. In conducting the valuations, we considered all objective and subjective factors that we believed to be relevant in the valuation conducted, including management’s best estimate of our business condition, and prospects and operating performance at the valuation dates. There are significant judgments and estimates inherent in these valuations. Leases The Company accounts for leases in accordance with ASC 842, Leases and determines if an arrangement is a lease at its inception. Right-of-use (“ROU”) assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments for a term similar to the lease term in a similar economic environment as the lease. The lease term includes renewal options when it is reasonably certain that the option will be exercised and excludes termination options. To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time. Lease expense for leases is recognized on a straight-line basis over the lease term. The Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. In addition, the Company has elected as an accounting policy, the practical expedient to not separate lease and non-lease components within a contract and instead treat it as a single lease component. Operating leases are included in ROU assets, current portion of lease liabilities, and lease liabilities, net of current portion in the Company’s consolidated balance sheets. Income Taxes The Company accounts for its income taxes using the asset and liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the basis used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more-likely-than-not that the Company will not realize those tax assets through future operations. Significant judgment is applied when assessing the need for valuation allowances and includes the evaluation of historical income (loss) adjusted for the effects of non-recurring items. Areas of estimation include consideration of future taxable income. The Company has placed a full valuation allowance against its federal and state deferred tax assets since the recovery of the assets is uncertain. Should a change in circumstances lead to a change in judgment about the utilization of deferred tax assets in future years, the adjustment related to valuation allowances would be reported as an increase to income. The Company utilizes the guidance in ASC 740-10, Income Taxes, to account for uncertain tax positions. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more-likely-than-not that the positions will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more-likely-than-not of being realized and effectively settled. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. The Company’s policy is to recognize interest and penalties related to uncertain tax positions, if any, in the income tax provision. Net Loss Per Share Basic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding. For all periods presented, the calculation of basic net loss per share excludes shares issued upon the early exercise of stock options where the vesting conditions have not been satisfied. Because we reported net losses for all periods presented, diluted loss per share is the same as basic loss per share. Contingently issuable shares, including equity awards with performance conditions, are considered outstanding common shares and included in basic net loss per share as of the date that all necessary conditions to earn the awards have been satisfied. Prior to the end of the contingency period, the number of contingently issuable shares included in diluted net loss per share is based on the number of shares, if any, that would be issuable under the terms of the arrangement at the end of the reporting period. Because we reported net losses for all periods presented, all potentially dilutive common stock equivalents are antidilutive and have been excluded from the calculation of net loss per share. The diluted net loss per common share were the same for Class A and Class B common shares because they are entitled to the same liquidation and dividend rights. The following table presents the number of antidilutive shares excluded from the calculation of diluted net loss per share:
Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM consists of its Co-Chief Executive Officers. The Company has determined that it operates as a single operating segment and one reportable segment, as the CODM reviews financial information presented on a combined basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Given the Company’s pre-revenue operating stage, it currently has no concentration exposure to products, services, or customers. Comprehensive Loss There were no differences between net loss and comprehensive loss presented in the statements of operations and comprehensive loss for the years ended December 31, 2021 and 2020. Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which outlines a comprehensive lease accounting model that supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. In July 2018, the FASB issued ASU 2018-11, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company entered into its first lease in July of 2020 and applied ASU 2016-02 to this lease and subsequent leases. In June 2018, the FASB issued ASU 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). This amendment expands the scope of Topic 718, Compensation — Stock Compensation (“Topic 718”) (which only included share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees is substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. Early adoption of ASU 2018-07 is permitted and should be applied on a prospective basis. The Company began applying ASU 2018-07 during 2020 upon the Company’s first grant of share-based payment awards. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) (“ASU 2018-13”), which modifies, removes, and adds certain disclosure requirements on fair value measurements based on the FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. The ASU is effective for all entities for fiscal years beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company has applied ASU 2018-13 to all periods presented. In November 2019, the FASB issued ASU 2019-08, Compensation — Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) (“ASU 2019-08”), which requires entities to measure and classify share-based payments to a customer in accordance with the guidance in ASC 718. ASU 2019-08 expanded the scope of Topic 718 to include awards issued to customers for purposes of measurement and classification and amended portions of ASC 606, Revenue from Contracts with Customers, to refer to this guidance. The amount that would be recorded as a reduction in revenue would be measured based on the grant date fair value of the share-based payment in accordance with Topic 718. The Company adopted ASU 2019-08 on January 1, 2021 and has applied its provisions to the measurement of the warrants issued to United. Refer to Note 11 - Stock-Based Compensation for details. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). This amendment was issued to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intraperiod allocation, and calculating income taxes in interim periods. Further, ASU 2019-12 adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax basis goodwill and allocating taxes to members of a consolidated group. The Company has applied ASU 2019-12 to all periods presented, and there was no adoption date impact to its financial statements. Recently issued accounting pronouncements not yet adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470-20, Debt—Debt with Conversion and Other Options, for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. Further, the ASU made amendments to the Earnings Per Share (“EPS”) guidance in ASU 2015-06, Earnings per share (Topic 260) for convertible instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The ASU is effective for public business entities for interim and annual periods beginning after December 15, 2021, with early adoption permitted. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements and related disclosures.
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Reverse Recapitalization and Related Transactions |
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Reverse Recapitalization [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reverse Recapitalization and Related Transactions | Reverse Recapitalization and Related Transactions Upon the consummation of the Business Combination, in accordance with the terms and conditions of the Business Combination Agreement, all issued and outstanding Legacy Archer common stock was converted into shares of common stock of New Archer at the Exchange Ratio. Additionally, upon closing the Business Combination, Legacy Archer received $257.6 million in cash proceeds released from Atlas’ trust account, after redemptions of $242.4 million. At the closing of the Business Combination, each non-redeemed outstanding share of Atlas Class A common stock was converted into one share of Class A common stock of New Archer. Upon consummation of the Business Combination, the shares of Legacy Archer held by Legacy Archer stockholders converted into 124,735,762 shares of common stock of New Archer, including 54,987,838 shares of Class A common stock and 69,747,924 shares of Class B common stock. While the legal acquirer in the Business Combination was Atlas, for accounting and financial reporting purposes under U.S. GAAP, Legacy Archer is the accounting acquirer and the Business Combination was accounted for as a “reverse recapitalization.” A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the financial statements of Legacy Archer in many respects. Under this method of accounting, Atlas was treated as the “acquired” company. Accordingly, the consolidated assets, liabilities, and results of operations of Legacy Archer became the historical financial statements of New Archer, and Atlas’ assets and liabilities were consolidated with Legacy Archer’s on the Closing Date. Operations prior to the Business Combination are presented as those of New Archer in reports subsequent to the Closing Date. The net assets of Atlas were recognized at their carrying value immediately prior to the closing of the Business Combination with no goodwill or other intangible assets recorded and were as follows, net of transaction costs (in millions):
The Company has accounted for the Business Combination as a tax-free reorganization. Additionally, as part of the recapitalization, 1,875,000 shares of Atlas Class A common stock held by Atlas Crest Investment LLC (the “Atlas Sponsor”) were exchanged with 1,875,000 shares of New Archer Class A common stock that will be subject to forfeiture if the vesting condition is not met over the three-year term following the Closing Date. The vesting condition states that these earn-out shares of New Archer Class A common stock will vest if the New Archer’s Class A common stock volume weighted-average price, as defined in the Amended and Restated Sponsor Letter Agreement, by and among Atlas Sponsor, Atlas, Legacy Archer, and the individuals named therein, is greater than or equal to $12.00 per share for any period of ten (10) trading days out of twenty (20) consecutive trading days. The earn-out shares were recognized at fair value upon the closing of the Business Combination and classified in stockholders’ equity (with no net impact to APIC) since the earn-out shares were determined to be indexed to the Company’s own equity and meet the requirements for equity classification. Pursuant to the terms of the Business Combination Agreement, all of the issued and outstanding series seed redeemable convertible preferred stock and series A redeemable convertible preferred stock converted into 64,884,120 shares of Legacy Archer common stock immediately prior to the Business Combination. Then, as of the closing of the Business Combination, all outstanding shares of Legacy Archer common stock converted into 124,735,762 shares of New Archer Class A and B common stock. Additionally, each of Legacy Archer options, RSUs, and warrants that were outstanding immediately prior to the closing of the Business Combination remained outstanding and converted into options, RSUs, and warrants for New Archer Class A and Class B common stock equal to the number of the Company’s common stock, subject to such options, RSUs, or warrants, multiplied by the Exchange Ratio at an exercise price per share equal to the current exercise price per share for such option or warrant divided by the Exchange Ratio, with the aggregate number of shares of New Archer Class A and B common stock issuable upon exercise of such options, RSUs, and warrants to be 60,260,483. Additionally, 10,004,612 of outstanding RSUs vested at the closing of the Business Combination into New Archer Class B common stock. Substantially concurrently with the execution of the Business Combination Agreement, Atlas entered into Subscription Agreements (the “Subscription Agreements”) with certain investors in the PIPE Financing (the “Subscription Investors”). Pursuant to the Subscription Agreements, the Subscription Investors agreed to purchase, and Atlas agreed to sell to the Subscription Investors, an aggregate of 60,000,000 shares of New Archer Class A common stock for a purchase price of $10.00 per share, or an aggregate of $600 million in gross cash proceeds. Pursuant to the Subscription Agreements, Atlas granted certain registration rights to the Subscription Investors with respect to the shares issued and sold in the PIPE Financing. The closing of the PIPE Financing occurred immediately prior to the closing of the Business Combination. In conjunction with the PIPE Financing, 1,512,500 shares of New Archer Class A common stock were issued to satisfy certain fees related to the Business Combination and PIPE Financing. The number of shares of common stock issued immediately following the consummation of the Business Combination were as follows:
* The corresponding adjustment to APIC related to the reverse recapitalization was comprised of (i) $162.3 million which represents the fair value of the consideration transferred in the Business Combination, less the excess of the fair value of the shares issued over the value of the net monetary assets of Atlas, net of transaction costs and (ii) $61.5 million which represents the conversion of the convertible preferred stock into New Archer Class A and Class B common stock. At the Closing Date, Legacy Archer had 56,390,023 outstanding options and RSUs under the 2019 Plan (as defined below) in addition to 13,112,602 outstanding warrants, which remained outstanding and converted into 70,265,095 options, RSUs, and warrants in New Archer Class A or B common stock, as derived by multiplying the number of Legacy Archer common stock subject to such option or warrant by the Exchange Ratio. In addition, of the RSUs outstanding immediately prior to the closing of the Business Combination, 10,004,612 vested at closing into New Archer Class B common stock. The options and warrants shall be exercised at an exercise price per share equal to the current exercise price per share for such option or warrant divided by the Exchange Ratio. Following the Business Combination, Atlas’ warrants to purchase 24,666,667 shares of New Archer Class A common stock, consisting of (i) 16,666,667 public warrants listed on the NYSE and (ii) 8,000,000 private warrants, each with an exercise price of $11.50 per share, remained outstanding. As part of the closing, total direct and incremental transaction costs aggregated $81.8 million, of which $10.9 million was expensed as part of the Business Combination, $55.8 million was recorded to APIC as equity issuance costs, and the remaining $15.1 million was settled through the issuance of shares of New Archer Class A common stock.
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Property and Equipment, Net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net, consisted of the following (in millions):
The following table presents depreciation expense included in each respective expense category in the statements of operations and comprehensive loss (in millions):
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Accrued Expenses and Other Current Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in millions):
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Related Party Transactions |
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Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Partial Recourse Promissory Notes On November 21, 2020, we entered into a partial recourse promissory note arrangement with each of our founders which provided each of them with a partial recourse loan as consideration for the issuance of stock, which proceeds were used for the exercise of 2,662,885 shares, per founder, of our common stock pursuant to the outstanding option agreements issued by us to the founders on November 3, 2020. Due to the partial recourse nature of the notes, the promissory note arrangements are considered nonrecourse loans in their entirety for accounting purposes and thus are accounted for as in-substance share options. The purchase price for the shares was $0.15 per share for a total amount of $0.4 million paid by each founder. The notes bear interest at a rate of 0.38% per annum, compounded annually. The promissory notes may be repaid at any time and from time to time and are due upon the earlier of five years from issuance or upon a deemed liquidation event, initial draft registration statement filing, or within 90 days of the respective founder’s termination. Concurrent with the execution of the notes, the founders early exercised their common stock options at the exercise price of $0.15 per share in accordance with the terms of the early exercise agreements. These options are subject to vesting conditions and are subject to forfeiture in the form of a company repurchase option at the original $0.15 per share price if the founders terminate employment prior to the vesting dates of the original option agreements. We determined that the stock options exercised by a nonrecourse note are considered unexercised until the nonrecourse note is repaid. Because the loan is deemed nonrecourse for accounting purposes, the principal and interest represent the strike price of the in-substance awards for the purposes of fair valuing the in-substance awards, and the principal and interest on the note and shares underlying the in-substance share options will not be recorded on our balance sheets or statements of operations and comprehensive loss. We estimated the fair value of the in-substance share options using the Black-Scholes option-pricing model and compared this fair value to the value of the original awards immediately prior to the issuance of the promissory note. We determined that the promissory note terms did not result in incremental fair value of these awards and no incremental compensation cost would be recognized under the promissory note arrangement. The grant date fair value of the original award is recognized as expense over the requisite service period on a straight-line basis. The partial recourse promissory notes were repaid in full prior to the closing of the Business Combination.
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Notes Payable |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable | Notes Payable Long-term notes payable consisted of the following (in millions):
PPP Loan On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act also appropriated funds for the U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. On April 9, 2020, we entered into a PPP loan with JPMorgan Chase Bank, N.A. under the PPP of the CARES Act and received total proceeds of $0.9 million, with interest accruing at a rate of 0.98% per annum. The application for these funds required the us to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company and that we will use the loan funds to retain workers, maintain payroll, or make mortgage, lease, and utility payments. In accordance with the requirements of the CARES Act, we used the proceeds for payroll costs. In June 2021, the Company received notification from the SBA that the loan and accrued interest were forgiven in full. Accordingly, we recorded a gain on forgiveness of the PPP loan and interest in the consolidated statement of operations and comprehensive loss. SVB Loan On July 9, 2021, we, as the borrower, entered into a Loan and Security Agreement with SVB and SVB Innovation Credit Fund VIII, L.P. (“SVB Innovation”) as the lenders, and SVB as the collateral agent. The total principal amount of the loans is $20 million (the “Term Loans”), and all obligations due under the Term Loans are collateralized by all of our right, title, and interest in and to its specified personal property in favor of the collateral agent. The Term Loans include events of default and covenant provisions, whereby accelerated repayment may result if we were to default. The Term Loans are subject to a final payment fee which was determined to be zero as a result of the completion of the Business Combination prior to October 10, 2021 (the “Outside Date”). Commencing on January 1, 2022, we shall repay the Term Loans in 24 equal monthly installments, which include principal and interest. The interest rate on the loans is a floating rate per annum equal to the greater of (1) 8.5% and (2) the Prime Rate plus the Prime Rate Margin (each as defined in the Loan and Security Agreement), which increases by 2% per annum upon the occurrence of an event of default. As of December 31, 2021, we accrued interest of $0.1 million, and for the year ended December 31, 2021, the Company recognized interest expense of $0.9 million. Additionally, in conjunction with the issuance of the Term Loans, we agreed to issue 366,140 warrants to SVB and 366,140 warrants to SVB Innovation, totaling 732,280 warrants. We issued the warrants to the lenders as consideration for entering into the Term Loans, representing a loan issuance fee. Each warrant provides SVB and SVB Innovation with the right to purchase one share of our Class A common stock. We determined the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classified the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized as a gain or loss in our statement of operations and comprehensive loss. See Note 14 - Liability Classified Warrants for further details. The initial offsetting entry to the warrant liability was a debt discount recorded to reflect the loan issuance fee. We estimated the fair value of the warrants at the issuance date to be $1.2 million using the probability-weighted fair value of the warrants under two scenarios, the Business Combination occurring prior to, or after, the Outside Date, with the first scenario of the Business Combination occurring prior to the Outside Date weighted at 95% and the second scenario of the Business Combination occurring after the Outside Date weighted at 5%. For the second scenario, we determined the fair value of the warrants using a Monte Carlo simulation approach. Determining the fair value of these warrants under this model requires subjective assumptions. Upon the closing of the Business Combination, the SVB warrants became public warrants. The subsequent measurement of the SVB warrants as of December 31, 2021 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker ACHR WS. The quoted price of the public warrants was $1.16 as of December 31, 2021. We also incurred issuance costs of $0.2 million. The loan issuance fee and issuance costs will be amortized to interest expense over the commitment period of 30 months. During the year ended December 31, 2021, we recognized interest expense in the amount of $0.2 million to the amortization of the loan issuance fee and issuance costs. The unamortized balance of the discount and issuance costs totaled $1.2 million as of December 31, 2021. The future scheduled principal maturities of notes payable as of December 31, 2021 are as follows (in millions):
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Commitment and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company leases office, lab, hangar, and storage facilities under various operating lease agreements with lease periods expiring between 2022 and 2023 and generally containing periodic rent increases and various renewal and termination options. The Company’s lease costs were as follows (in millions):
The Company’s weighted-average remaining lease term and discount rate were as follows:
The minimum aggregate future obligations under our non-cancelable operating leases as of December 31, 2021 were as follows (in millions):
Supplemental cash information and non-cash activities related to right-of-use assets and lease liabilities were as follows (in millions):
Letter of Credit In conjunction with our operating lease for our headquarters, we entered into a standby letter of credit in favor of the Company’s lessor, in lieu of paying cash to the lessor to satisfy the security deposit requirements of the leased property. The standby letter of credit was issued on September 15, 2020 for an amount of $0.3 million and expired on September 30, 2021. On June 24, 2021, we entered into a standby letter of credit for the same amount, which expires on September 1, 2022. The letter of credit automatically renews annually until September 1, 2023, unless cancelled earlier by us. Litigation During the ordinary course of our business, we may be subject to legal proceedings, various claims, and litigation. Such proceedings can be costly, time consuming, and unpredictable, and therefore, no assurance can be given that the final outcome of such proceedings will not materially impact financial condition or results of operations. Wisk Litigation and Government Investigation On April 6, 2021, Wisk Aero LLC (“Wisk”) brought a lawsuit against us in the United States District Court for the Northern District of California (the “District Court”) alleging misappropriation of trade secrets and patent infringement. On June 1, 2021, we filed a motion to dismiss the trade secret claims and filed counterclaims. On June 15, 2021, Wisk amended its complaint, and the following day we filed a motion to dismiss the amended complaint. On July 13, 2021, we filed amended counterclaims. On July 27, 2021, Wisk filed a motion to strike and dismiss certain of our amended counterclaims. On August 10, 2021, we filed an opposition to Wisk’s motion to strike and dismiss certain of the amended counterclaims. On August 24, 2021, the District Court denied our motion to dismiss the trade secret claims. On September 14, 2021, the District Court denied Wisk’s motion to strike and dismiss certain of our amended counterclaims. A trial on Wisk’s claims and our counterclaims has been scheduled to begin on January 30, 2023. We continue to strongly believe Wisk’s lawsuit is without merit. We will continue to vigorously defend ourselves against Wisk’s claims and pursue our counterclaims. On May 19, 2021, Wisk filed a motion for preliminary injunction and expedited discovery. On June 23, 2021, we filed an opposition to the motion for preliminary injunction. On July 22, 2021, the District Court denied Wisk’s motion for preliminary injunction. On August 20, 2021, Wisk filed a notice of appeal of the District Court’s denial of the motion for preliminary injunction. On September 30, 2021, Wisk withdrew its notice of appeal of the District Court’s denial of the motion for preliminary injunction. Prior to Wisk bringing the lawsuit against us, on March 30, 2021, one of our employees, who is a former employee of Wisk, had a search warrant executed at his home in connection with a federal investigation. We placed this former Wisk employee on paid administrative leave in connection with this government investigation. In relation to the same investigation, we and three of our employees, who are also former Wisk employees, received grand jury subpoenas from the United States Attorney’s Office for the Northern District of California. On January 28, 2022, the U.S. Attorney’s Office informed us that, based on its review, it has made the decision not to bring charges against this employee and does not intend to continue its investigation. The proceedings are in the early stages. We cannot predict their outcome or impact on us and our business. As such, and in consideration of the above, we have not accrued any amounts related to the award of damages or settlement of this matter with Wisk. Therefore, a negative result in these proceedings could have a material adverse effect on our reputation, financial position, liquidity, operations, and cash flows.
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Preferred and Common Stock |
12 Months Ended |
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Dec. 31, 2021 | |
Equity [Abstract] | |
Preferred and Common Stock | Preferred and Common Stock Amended and Restated Certificate of Incorporation Upon the effectiveness of our amended and restated certificate of incorporation on September 16, 2021, we are authorized to issue up to 700,000,000 shares of Class A common stock, par value $0.0001 per share, 300,000,000 shares of Class B common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share. There were 162,789,591 and 49,828,517 shares of Class A common stock issued and outstanding as of December 31, 2021 and 2020, respectively. There were 74,937,945 and 66,714,287 shares of Class B common stock issued and outstanding as of December 31, 2021 and 2020, respectively. Preferred Stock As of December 31, 2021, no shares of preferred stock were outstanding, and the Company has no present plans to issue any shares of preferred stock. Pursuant to the terms of our amended and restated certificate of incorporation, shares of preferred stock may be issued from time to time in one or more series. The board of directors is authorized to fix the voting rights, if any, designations, powers and preferences, the relative, participating, optional or other special rights, and any qualifications, limitations and restrictions thereof, applicable to the shares of each series of preferred stock. The board of directors is able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of the board of directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control or the removal of existing management. Class A and Class B Common Stock Except for voting rights and conversion rights, or as otherwise required by applicable law, the shares of our Class A common stock and Class B common stock have the same powers, preferences, and rights and rank equally, share ratable and are identical in all respects as to all matters. The rights, privileges, and preferences are as follows: Voting Holders of the Company’s Class A common stock are entitled to one vote per share on all matters to be voted upon by the stockholders, and holders of Class B common stock are entitled to ten votes per share on all matters to be voted upon by the stockholders. The holders of Class A common stock and Class B common stock will generally vote together as a single class on all matters submitted to a vote of the stockholders, unless otherwise required by Delaware law or the Company’s amended and restated certificate of incorporation. Dividends Holders of Class A common stock and Class B common stock are entitled to receive such dividends, if any, as may be declared from time to time by the Company’s board of directors in its discretion out of funds legally available therefor. No dividends on common stock have been declared by the Company’s board of directors through December 31, 2021, and the Company does not expect to pay dividends in the foreseeable future. Preemptive Rights Stockholders have no preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to Class A common stock and Class B common stock. Conversion Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of Class B common stock will automatically convert into one share of Class A common stock upon transfer to a non-authorized holder. In addition, Class B common stock is subject to “sunset” provisions, under which all shares of Class B common stock will automatically convert into an equal number of shares of Class A common stock upon the earliest to occur of (i) the ten-year anniversary of the closing of the Business Combination, (ii) the date specified by the holders of two-thirds of the then outstanding Class B common stock, voting as a separate class, and (iii) when the number of Class B common stock represents less than 10% of the aggregate number of Class A common stock and Class B common stock then outstanding. In addition, each share of Class B common stock will automatically convert into an equal number of Class A common stock upon the earliest to occur of (a) in the case of a founder of the Company, the date that is nine months following the death or incapacity of such founder, and, in the case of any other holder, the date of the death or incapacity of such holder, (b) in the case of a founder of the company, the date that is 12 months following the date that such founder ceases to provide services to the Company and our subsidiaries as an executive officer, employee or director of the Company, and, in the case of any other holder, immediately at the occurrence of any such event, and (c) in the case of a founder of the Company or any other holder, at least 80% (subject to customary capitalization adjustments) of the Class B common stock held by such founder (on a fully as converted/as exercised basis) as of immediately following the closing of the Business Combination having been transferred (subject to exceptions for certain permitted transfers). Liquidation In the event of our voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up, subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of the Company’s common stock will be entitled to receive an equal amount per share of all of our assets of whatever kind available for distribution to stockholders, after the rights of the holders of any preferred stock have been satisfied.
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Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation 2021 Plan In August 2021, we adopted the 2021 Equity Incentive Plan (the “2021 Plan”), which was approved by the stockholders of the Company in September 2021 and became effective immediately upon the closing of the Business Combination. The 2021 Plan provides for the grant of incentive and non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards, and other awards to employees, directors, and non-employees. Initially, the aggregate number of shares of Class A common stock that may be issued under the plan will not exceed 7,453,588 shares. In addition, the number of shares of Class A common stock reserved for issuance under the 2021 Plan will automatically increase on January 1st of each year, starting on January 1, 2022 and ending on December 31, 2030, in an amount equal to the lesser of (1) 2.0% of the total number of shares of Class A common stock outstanding on December 31 of the preceding year, or (2) a lesser number of Class A common stock determined by the board of directors prior to the date of the increase. The maximum number of Class A common stock that may be issued on the exercise of incentive stock options under the 2021 Plan is 22,360,764 shares. 2019 Plan On October 11, 2019, we adopted the 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan terminated in connection with the Business Combination on September 16, 2021, and no further awards will be made under the 2019 Plan. Following the closing of the Business Combination, we assumed the outstanding stock options under the 2019 Plan and converted such stock options into options to purchase our common stock. Such stock options will continue to be governed by the terms of the 2019 Plan and the stock option agreements thereunder, until such outstanding options are exercised or until they terminate or expire. Stock Options A summary of our employee stock option activity is as follows (in millions, except share and per share data):
A summary of our non-employee stock option activity is as follows (in millions, except share and per share data):
In January 2021, we granted 1,277,622 incentive and non-statutory stock options under the 2019 Plan. Determination of Fair Value The assumptions used in the Black-Scholes option pricing model are provided in the following table.
We recognized stock-based compensation expense of $3.4 million and $0.5 million for employee and non-employees, respectively, for stock options for the year ended December 31, 2021. For the year ended December 31, 2020, we recognized $0.1 million and an immaterial amount of stock-based compensation expense related to stock options for employees and non-employees, respectively. As of December 31, 2021, the total remaining stock-based compensation expense for unvested stock options was $13.6 million and $0.5 million for employees and non-employees, respectively, which are expected to be recognized over a weighted-average period of 1.5 years and 0.9 years for employees and non-employees, respectively. Restricted Stock Units A summary of our restricted stock activity is as follows:
In December 2021, we granted 6,265,293 RSUs under the 2021 Plan. The RSUs generally vest over a or four-year period with a straight-line vesting and a 33% or 25% one-year cliff and remain subject to forfeiture if vesting conditions are not met. Upon vesting, RSUs are settled in Class A common stock on a one-for-one basis. The shares of Class A common stock underlying this grant are not issued and outstanding until the applicable vesting date. Immediately prior to closing of the Business Combination, each of our founders was granted 20,009,224 RSUs under the 2019 Plan pursuant to the terms and conditions of the Business Combination Agreement. Considering each of the founder’s existing equity ownership and assuming the Founder Grants fully vest, it would result in each of the founders owning approximately 18% of all outstanding shares of the Total Outstanding Capitalization of the Company (as defined in the Business Combination Agreement). One-quarter of each Founder Grant vests upon the achievement of the earlier to occur of (i) a price-based milestone or (ii) a performance-based milestone, with a different set of such price and performance-based milestones applying to each quarter of each Founder Grant and so long as the achievement occurs within seven years following the closing of the Business Combination. We account for the Founder Grants as four separate tranches, with each tranche consisting of two award grants, a performance award grant and market award grant. Each tranche vests when either the market condition or performance condition is satisfied (only one condition is satisfied). We determined the fair value of the performance award by utilizing the trading price on the Closing Date. When the applicable performance milestone is deemed probable of being achieved, we will recognize compensation expense for the portion earned to date over the requisite period. For the market award, we determined both the fair value and derived service period using a Monte Carlo simulation model on the Closing Date. The Company will recognize compensation expense for the market award on a straight-line basis over the derived service period. If the applicable performance condition is not probable of being achieved, compensation cost for the value of the award incorporating the market condition is recognized, so long as the requisite service is provided. If the performance milestone becomes probable of being achieved, the full fair value of the award will be recognized, and any remaining expense for the market award will be cancelled. The following assumptions were used to estimate the fair value, using the Monte Carlo simulation, of the market award grant:
For the year ended December 31, 2021, the Company recorded $118.1 million of expense for the amortized portion of the market award and the vesting of one-quarter of each Founder Grant, totaling 5,002,306 shares each of Class B common stock, in general and administrative expenses in the statements of operations and comprehensive loss. For the year ended December 31, 2021, the Company recorded recurring expense of $1.6 million related to restricted stock awards. For the year ended December 31, 2020, the Company recognized an immaterial amount of stock-based compensation expense related to restricted stock awards. As of December 31, 2021, the total remaining stock-based compensation expense for unvested restricted stock was $322.3 million, which is expected to be recognized over a weighted-average period of 2.6 years. The Company records stock-based compensation expense for stock-based compensation awards based on the fair value on the date of grant. The stock-based compensation expense is recognized ratably over the course of the requisite service period. The Company has elected to account for forfeitures as they occur and will record stock-based compensation expense assuming all stockholders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse stock-based compensation expense previously recognized in the period the award is forfeited. The following table presents stock-based compensation expense included in each respective expense category in the statements of operations and comprehensive loss (in millions):
Employee Stock Purchase Plan In August 2021, we adopted the 2021 Employee Stock Purchase Plan (the “ESPP”), which became effective immediately upon the closing of the Business Combination. The ESPP permits eligible employees to purchase shares of Class A common stock at a price equal to 85% of the lower of the fair market value of Class A common stock on the first day of an offering or on the date of purchase. The maximum number of shares of Class A common stock that may be issued under the ESPP will not exceed 4,969,059 shares. Additionally, the number of shares of Class A common stock reserved for issuance under the ESPP will automatically increase on January 1st of each year, beginning on January 1, 2022 and continuing through and including January 1, 2031, by the lesser of (i) 1.0% of the total number of shares of Class A common stock outstanding on December 31st of the preceding calendar year; (ii) 9,938,118 shares of Class A common stock; or (iii) such lesser number of shares of the Company as determined by the board of directors. Warrants A summary of our warrant activity is as follows (in millions, except share and per share data):
United Airlines On January 29, 2021, the Company entered into the Purchase Agreement, United Collaboration Agreement, and United Warrant Agreement with United. Under the terms of the Purchase Agreement, United has a conditional purchase order for up to 200 of our aircraft, with an option to purchase an additional 100 aircraft. Those purchases are conditioned upon us meeting certain conditions that include, but are not limited to, the certification of our aircraft by the FAA and further negotiation and reaching of mutual agreement on certain material terms related to the purchases. We issued 14,741,764 warrants to United to purchase shares of the Company’s common stock. Each warrant provides United with the right to purchase one share of our Class A common stock at an exercise price of $0.01 per share. The warrants vest in four equal installments in accordance with the following milestones: the execution of the Purchase and United Collaboration Agreements, completion of the Business Combination, the certification of the aircraft by the FAA, and the initial sale of aircraft to United. On January 29, 2021, a valuation of the Company’s common stock was performed, valuing the Company’s common stock at $13.35 per share. The value of the common stock was determined using a hybrid approach of the OPM and PWERM, with the PWERM weighted at 80% primarily based on management’s expectation of the planned merger as described in Note 1 and the OPM weighted at 20% due to uncertainties in the timing of other possible scenarios. The Company used the OPM to allocate value in a stay private scenario. Given the $0.01 exercise price, each warrant also had a fair value of $13.35 at the grant date. The Company determined that as a result of the relationship established by signing the Purchase Agreement, United is a customer with the intention of obtaining the output of the Company’s ordinary activities (design and production of aircraft). United has not contracted to share in the risks and benefits of development of the aircraft, and United is not otherwise involved in the development of the aircraft. As a result, the Company accounts for the Purchase and United Collaboration Agreements under ASC 606. The Company identified the sale of each aircraft ordered by United as a separate performance obligation in the contract. As the performance obligations have not been satisfied, the Company has not recognized any revenue as of December 31, 2021. With respect to the four warrant vesting milestones outlined above, the Company accounts for them as consideration payable to a customer under ASC 606 related to the future purchase of aircraft by United. Pursuant to ASC 718, the Company measured the grant date fair value of the warrants to be recognized upon the achievement of each of the four milestones and the vesting of the related warrants. The Company determined that the warrants will be classified as equity awards based on the criteria of ASC 480, Distinguishing Liabilities from Equity and ASC 718. Pursuant to ASC 606, consideration payable to the customer is generally accounted for as a reduction to revenue and recorded at the later of when (i) the entity recognizes revenue for the transfer of related goods, or (ii) the entity pays the consideration. Due to the nature of the four warrant vesting milestones, and the Company’s unique circumstances upon the actual or anticipated vesting dates as described below, the recognition pattern and cost presentation of each will differ. For the first milestone, issuance of the warrant in conjunction with the execution of the Purchase and United Collaboration Agreements, the Company has recorded the grant date fair value of the respective warrant tranche at the vesting date upon satisfaction of the milestone. The Company does not believe that the consideration payable for the first milestone was provided in exchange for a distinct good or service. Rather, the consideration was to induce United to commit to a contingent purchase agreement for an aircraft from the Company. The related costs for this milestone were recorded in other warrant expense in the statements of operations and comprehensive loss due to the absence of historical or probable future revenue. For the second milestone, the completion of the Business Combination, the related costs were also recorded in other warrant expense in the statements of operations and comprehensive loss due to the absence of historical or probable future revenue. For the third warrant vesting milestone, the certification of the aircraft by the FAA, the Company will assess whether it is probable that the award will vest at the end of every reporting period. If and when the award is deemed probable of vesting, the Company will begin capitalizing the grant date fair value of the associated warrant as an asset through the vesting date and subsequently amortize the asset as a reduction to revenue as it sells the new aircraft to United. For the fourth milestone, the sale of aircraft to United, the Company will record the cost associated with the vesting of each portion of warrants within this milestone as a reduction of the transaction price as revenue is recognized for each sale of the aircraft. As of December 31, 2021, the first and second vesting milestones had been achieved. Accordingly, the Company recorded the associated expense of $117.3 million for the year ended December 31, 2021 related to 8,845,058 warrants that vested. FCA US LLC On November 6, 2020, we entered into a Collaboration Agreement with FCA US LLC (“FCA”) (the “FCA Collaboration Agreement”), in which both parties agreed to work together to complete a series of fixed duration collaboration projects related to our ongoing efforts to design, develop, and bring up production capabilities for our aircraft. We issued a warrant to FCA on November 6, 2020, in which FCA has the right to purchase up to 1,671,202 shares of our Class A common stock at an exercise price of $0.01 per share (subject to appropriate adjustment in the event of a stock dividend, stock split, combination, or other similar recapitalization). In September 2020, a valuation of the Company’s common and preferred stock was performed, valuing our common stock and Series A Preferred Stock at $0.15 and $1.20 per share, respectively. The warrant expires on November 6, 2025. Shares under the warrant vest based on the completion of specific aircraft development milestones identified under the FCA Collaboration Agreement which are expected to be achieved on a rolling basis through December 2022. As the Company is currently in pre-revenue stage and is not generating any revenue from the FCA Collaboration Agreement, all costs incurred with third parties are recorded based on the nature of the cost incurred. The Company accounts for the warrant in accordance with the provisions of ASC 718. The Company will assess whether it is probable that the award will vest for each of the seven milestones at the end of every reporting period. If and when the award is deemed probable of vesting, the Company will recognize compensation expense for the portion of the grant determined probable of vesting on a straight-line basis over the duration of each milestone. If services had been provided by FCA prior to management determining the milestone is probable of being achieved, a cumulative catch-up adjustment will be recorded for services performed in prior periods. Costs incurred under the FCA Collaboration Agreement and warrant are associated with the design, development, and bring up of production for our aircraft. During the year ended December 31, 2021, the Company recorded $0.2 million in R&D expense in the statements of operations and comprehensive loss. As of December 31, 2021, four milestones have been completed, amounting to 986,010 shares that have vested. FCA Italy S.p.A. On July 19, 2021, we entered into a manufacturing consulting agreement with an affiliate of FCA, FCA Italy S.p.A. (“FCA Italy”) (the “Manufacturing Consulting Agreement”), in which both parties agreed to work together to complete a series of fixed duration projects to develop manufacturing and production processes in connection with our ongoing efforts to bring up production capabilities for our aircraft. In conjunction with the Manufacturing Consulting Agreement, we issued a warrant to FCA Italy, in which FCA Italy has the right to purchase up to 1,077,024 shares of our Class A common stock at an exercise price of $0.01 per share. In August 2021, a valuation of the warrant was performed, valuing it at $8.98 per share. The shares underlying the warrant vest in two equal installments in accordance with two time-based milestones. The Company accounts for the warrant in accordance with ASC 718. The Company recognized compensation cost for half of the shares that were fully vested upon execution of the Manufacturing Consulting Agreement. The Company will recognize compensation cost for the remaining half of the warrant as the related services are received from FCA Italy on a straight-line basis over the service period of 12 months. During the year ended December 31, 2021, the Company recorded $6.8 million of expense in R&D expense in the statements of operations and comprehensive loss related to the warrants that vested.
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Income Taxes |
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Income Taxes | Income Taxes The Company’s loss before income taxes was approximately $347.8 million and $24.8 million for the years ended December 31, 2021 and 2020, respectively. The Company’s loss was generated entirely in the United States. Current income tax for the years ended December 31, 2021 and 2020 was zero. The Company did not record any deferred income tax provision for the years ended December 31, 2021 and 2020. The related increase in the deferred tax asset was offset by the increase in valuation allowance. The following table presents the principal reasons for the difference between the effective tax rate and the federal statutory income tax rate of 21%:
Differences between state statutory rate and state effective tax rate for the year ended December 31, 2021 primarily relate to the disallowance of warrant expense as a deduction for tax purposes and limitations imposed on certain share-based compensation under Section 162(m). The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are provided below (in millions):
In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Based upon the analysis of federal and state deferred tax balances and future tax projections and the Company’s lack of taxable income in the carryback period, the Company recorded a valuation allowance against the federal and state deferred tax assets of $47.1 million. As of December 31, 2021 and 2020, the Company has U.S. federal net operating loss (“NOL”) carryforwards of $81.4 million and $27.0 million, respectively, which can be carried forward indefinitely. As of December 31, 2021 and 2020, the Company has state NOL carryforwards of $76.7 million and $26.7 million, respectively, which will both begin to expire in 2038. In the ordinary course of its business, the Company incurs costs that, for tax purposes, are determined to be qualified R&D expenditures within the meaning of IRC §41 and are, therefore, eligible for the Increasing Research Activities credit under IRC §41. The U.S. federal R&D tax credit carryforward is $3.9 million and $2.1 million for December 31, 2021 and 2020, respectively. The U.S. federal R&D tax credit carryforward begins to expire in 2039. The state R&D tax credit carryforward is $3.1 million and $0.8 million for December 31, 2021 and 2020, respectively, which can be carried forward indefinitely. The following table summarizes the activity related to the Company’s unrecognized tax benefits during the years ended December 31, 2021 and 2020 (in millions):
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of December 31, 2021 and 2020 is zero due to the valuation allowance that would otherwise be recorded on the deferred tax asset associated with the recognized position. During the years ended December 31, 2021 and 2020, the Company recognized no interest and penalties related to uncertain tax positions. It is not expected that there will be a significant change in uncertain tax positions in the next 12 months. In accordance with Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” (generally defined as a cumulative change of more than 50% in the equity ownership of certain stockholders over a rolling three-year period) is subject to limitations on its ability to utilize its pre-change NOLs and R&D tax credits to offset post-change taxable income and post-change tax liabilities, respectively. The Company’s existing NOLs and R&D credits may be subject to limitations arising from previous ownership changes, and the ability to utilize NOLs could be further limited by Section 382 and Section 383 of the Code. In addition, future changes in the Company’s stock ownership, some of which may be outside of the Company’s control, could result in an ownership change under Section 382 and Section 383 of the Code. The amount of such limitations, if any, has not been determined. The Company is subject to taxation and files income tax returns with the U.S. federal government and the state of California. The tax years ended December 31, 2018 through December 31, 2020 remain open to examination by the Internal Revenue Service and New York State Department of Revenue, and from December 31, 2020, by the California Franchise Tax Board. In addition, the utilization of NOL and R&D credit carryforwards is subject to federal and state review for the periods in which those net losses were incurred. The Company is not under audit by any tax jurisdictions at this time.
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401(k) Savings Plan |
12 Months Ended |
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Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
401(k) Savings Plan | 401(k) Savings PlanWe maintain a 401(k) savings plan for the benefit of our employees. We make matching contributions equal to 50% of each employee contribution, subject to the maximum amount established by the Internal Revenue Service. All current employees are eligible to participate in the 401(k) savings plan. Our matching contributions were $0.8 million and $0.3 million for the years ended December 31, 2021 and 2020, respectively. |
Liability Classified Warrants |
12 Months Ended |
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Dec. 31, 2021 | |
Warrants and Rights Note Disclosure [Abstract] | |
Liability Classified Warrants | Liability Classified Warrants As of December 31, 2021, there were 17,398,947 public warrants outstanding. Public warrants may only be exercised for a whole number of shares. No fractional shares are issued upon exercise of the public warrants. The public warrants became exercisable on October 30, 2021, 12 months after the closing of the initial public offering of Atlas. The public warrants will expire five years from the consummation of the Business Combination or earlier upon redemption or liquidation. Once the public warrants become exercisable, the Company may redeem the public warrants for redemption: •in whole and not in part; •at a price of $0.01 per public warrant; •upon not less than 30 days’ prior written notice of redemption to each warrant holder; and •if, and only if, the closing price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing after the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Each public warrant entitles the registered holder to purchase one share of Class A common stock at a price of $11.50 per share. The exercise price and number of Class A common stock issuable upon exercise of the public warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger, or consolidation. The public warrants will not be adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the public warrants. As of December 31, 2021, there were 8,000,000 private placement warrants outstanding. The private placement warrants are identical to the public warrants underlying the shares sold in the initial public offering of Atlas, except that the private placement warrants and the shares of Class A common stock issuable upon the exercise of the private placement warrants became transferable, assignable, and salable as of October 16, 2021, 30 days after the completion of the Business Combination, subject to certain limited exceptions. Additionally, the private placement warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the private placement warrants are held by someone other than the initial purchasers or their permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants.
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Subsequent Events |
12 Months Ended |
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Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events We evaluated subsequent events and transactions that occurred after the balance sheet date through the date of the issuance of these consolidated financial statements. Other than as described below, we did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On January 14, 2022, we entered into a sublease agreement with Forescout Technologies, Inc. The sublease is for approximately 96,000 rentable square feet of building space in the building located at 190 West Tasman Drive, San Jose, California. Archer intends that the premises will become its corporate headquarters. The term of the sublease commences on March 26, 2022 and will expire on October 31, 2026, with no option to extend. Base rent payments due under the sublease are expected to be approximately $12 million in the aggregate over the term of the sublease. We are also responsible for certain other costs under the sublease, such as certain build-out expenses, operating expenses, taxes, assessments, insurance, and utilities. On March 9, 2022, we entered into a lease agreement with SIR Properties Trust. The lease is for approximately 68,000 rentable square feet of building space in the building located at 77 Rio Robles, San Jose, California. Archer intends that the premises will be used for lab space and a low rate initial production facility. The term of the lease commences 210 days after the landlord delivers possession of the premises to us, subject to certain demolition work being completed, and will expire 90 months thereafter, with an option for us to extend the term for one additional five-year period. Base rent payments due under the lease are expected to be approximately $15 million in the aggregate over the term of the lease. We are also responsible for certain other costs under the lease, such as certain build-out expenses, operating expenses, taxes, assessments, insurance, and utilities. However, the lease does require that the landlord shall provide us with an allowance that may be applied against certain of our build-out and moving expenses. The foregoing summary of key terms of the lease does not purport to be complete and is subject to, and qualified in its entirety by, the complete text of the lease, a copy of which we expect to file with our Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2022.
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Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP and include the accounts of the Company.
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Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to the: (i) realization of deferred tax assets and estimates of tax liabilities, (ii) valuation of common stock, (iii) fair value of debt, (iv) fair value of share-based payments, (v) valuation of leased assets and liabilities, and (vi) estimated useful lives of long-lived assets. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Such estimates often require the selection of appropriate valuation methodologies and models and may involve significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ from those estimates under different assumptions, financial inputs, or circumstances. Given the global economic climate and unpredictable nature and unknown duration of the COVID-19 pandemic, estimates are subject to additional volatility.
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Cash and Cash Equivalents | Cash and Cash EquivalentsCash consists of cash on deposit with financial institutions. Cash equivalents consist of short-term, highly liquid financial instruments that are readily convertible to cash and have maturities of three months or less from the date of purchase. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and deposits. The Company’s cash and cash equivalents are held at major financial institutions located in the United States of America. At times, cash account balances with any one financial institution may exceed Federal Deposit Insurance Corporation insurance limits ($250 thousand per depositor per institution). Management believes the financial institutions that hold the Company’s cash and cash equivalents are financially sound, and accordingly, minimal credit risk exists with respect to cash and cash equivalents.
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Fair Value Measurements | Fair Value Measurements We apply the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurement, which defines a single authoritative definition of fair value, sets out a framework for measuring fair value, and expands on required disclosures about fair value measurements. The provisions of ASC 820 relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Public Warrants The measurement of the public warrants as of December 31, 2021 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker ACHR WS.Private Placement Warrants We utilize a Monte Carlo simulation model for the private placement warrants at each reporting period, with changes in fair value recognized in the statement of operations and comprehensive loss. The estimated fair value of the private placement warrant liability is determined using Level 3 inputs. Inherent in a binomial options pricing model and Monte Carlo simulation model are assumptions related to expected share-price volatility, expected life, risk-free interest rate, and dividend yield. Financial Instruments Not Recorded at Fair Value on a Recurring Basis Certain financial instruments, including debt, are not measured at fair value on a recurring basis in the balance sheets. The fair value of debt as of December 31, 2021 approximates its carrying value. Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis Certain assets and liabilities are subject to measurement at fair value on a non-recurring basis if there are indicators of impairment or if they are deemed to be impaired as a result of an impairment review.
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Intangible Assets, Net | Intangible Assets, Net Intangible assets consist solely of domain names and are recorded at cost, net of accumulated amortization, and if applicable, impairment charges. Amortization of domain names is provided over a 15-year estimated useful life on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. We review intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We have analyzed a variety of factors in light of the known impact to date of the COVID-19 pandemic on our business to determine if any circumstance could trigger an impairment loss, and, at this time and based on the information presently known, do not believe that it is more likely than not that an impairment loss has been incurred.
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Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Expenditures for major renewals and betterments are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation is removed from the accounts, and any difference between the selling price and net carrying amount is recorded as a gain or loss in the statements of operations and comprehensive loss.
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We review our long-lived assets, consisting primarily of property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being or intended to be used, a significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. We perform impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets including any cash flows upon their eventual disposition to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. We determined there was no impairment of long-lived assets during all periods presented.
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Research and Development | Research and Development Research and development (“R&D”) costs are expensed as incurred and are primarily comprised of personnel-related costs including salaries, bonuses, benefits, and stock-based compensation for employees focused on R&D activities, costs associated with building prototype aircraft, other related costs, depreciation, and an allocation of general overhead. R&D efforts focus on the design and development of our eVTOL aircraft, including certain of the systems that are used in it.
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General and Administrative | General and AdministrativeGeneral and administrative expenses are primarily comprised of personnel-related costs including salaries, bonuses, benefits, and stock-based compensation for employees associated with our administrative services such as finance, legal, human resources, and information technology, other related costs, depreciation, and an allocation of general overhead. General and administrative expenses include $118.1 million of expense related to the vesting of a certain portion of the restricted stock units granted to our founders pursuant to the terms and conditions of the Business Combination Agreement immediately prior to closing (the “Founder Grants”), for the year ended December 31, 2021. |
Other Warrant Expense | Other Warrant ExpenseOther warrant expense consists of expense related to the vesting of warrants issued related to the first two milestones in conjunction with the execution of the purchase agreement (“Purchase Agreement”), collaboration agreement (“United Collaboration Agreement”), and warrant agreement (“United Warrant Agreement”) with United Airlines Inc. (“United”). |
Stock-based Compensation | Stock-Based Compensation Our stock-based compensation awards consist of options granted to employees and non-employees and restricted stock units granted to employees, directors, and non-employees that convert into shares of our Class A common stock upon vesting. We recognize stock-based compensation expense in accordance with the provisions of ASC 718, Compensation - Stock Compensation. ASC 718 requires the measurement and recognition of compensation expense for all stock-based compensation awards made to employees, directors, and non-employees to be based on the grant date fair values of the awards. We estimate the fair value of share options using the Black-Scholes option-pricing model. The value of the award is recognized as expense over the requisite service period on a straight-line basis. Determining the grant date fair value of the awards using the Black-Scholes option-pricing model requires management to make assumptions and judgments, including but not limited to the following: Expected term — The estimate of the expected term of employee awards is determined in accordance with the simplified method, which estimates the term based on an averaging of the vesting period and contractual term of the option grant. We use the contractual term for non-employee awards. Expected volatility — Since we were a private entity without sufficient historical data on the volatility of our common stock, the expected volatility used is based on the volatility of similar entities (referred to as “guideline companies”) for a period consistent with the expected term of the award. Risk-free interest rate — The risk-free interest rate used to value awards is based on the United States Treasury yield in effect at the time of grant for a period consistent with the expected term of the award. Dividend yield — We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Forfeiture rate — We have elected to account for forfeitures as they occur and will record stock-based compensation expense assuming all option holders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, we will reverse stock-based compensation expense previously recognized in the period the award is forfeited. Fair value of common stock Our board of directors grants stock options with exercise prices equal to the fair value of our common stock on the date of grant. Prior to the closing of the Business Combination on the Closing Date, we determined the fair value of our common stock at the time of the grant of stock options in accordance with the American Institute of Certified Public Accountants (“AICPA”) Accounting and Valuation Guide: Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “AICPA Practice Aid”). We determined the fair value of our common stock based on a variety of factors including, but not limited to (i) the results of contemporaneous independent third-party valuations of our common stock and the prices, rights, preferences and privileges of our redeemable convertible preferred stock relative to those of our common stock; (ii) the lack of marketability of our common stock; (iii) actual operating and financial results; (iv) current business conditions and projections; (v) the likelihood of achieving a liquidity event, such as an IPO or sale of the Company, given prevailing market conditions; and (vi) precedent transactions involving our shares. As provided in the AICPA Practice Aid, there are several approaches for setting the value of an enterprise and various methodologies for allocating the value of an enterprise to its outstanding equity. We determined the fair value of equity awards using a combination of the market and income approach. Within the market approach, the guideline public company method was used, which employs the use of ratios developed from the market price of traded shares from publicly traded companies considered reasonably similar to the Company. Under the income approach, the enterprise value was estimated using the discounted cash flow method, which involves estimating the future cash flows of a business for a discrete period and discounting them to their present value. In allocating enterprise value to our outstanding equity, we applied a hybrid approach, which consisted of the option pricing method (“OPM”) and probability-weighted expected return method (“PWERM”). The OPM treats securities, including debt, common and preferred stock, as call options on the enterprise’s value, with exercise prices based on the securities’ respective liquidation preferences and conversion values. The PWERM estimates the fair market value of the common stock based on an analysis of future values for the enterprise assuming various exit scenarios, such as IPO, merger or sale, staying private, and liquidation. Since there was no active market for our common stock, we also applied a discount for lack of marketability for both OPM and PWERM scenarios. In conducting the valuations, we considered all objective and subjective factors that we believed to be relevant in the valuation conducted, including management’s best estimate of our business condition, and prospects and operating performance at the valuation dates. There are significant judgments and estimates inherent in these valuations.
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Leases | Leases The Company accounts for leases in accordance with ASC 842, Leases and determines if an arrangement is a lease at its inception. Right-of-use (“ROU”) assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments for a term similar to the lease term in a similar economic environment as the lease. The lease term includes renewal options when it is reasonably certain that the option will be exercised and excludes termination options. To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time. Lease expense for leases is recognized on a straight-line basis over the lease term. The Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. In addition, the Company has elected as an accounting policy, the practical expedient to not separate lease and non-lease components within a contract and instead treat it as a single lease component. Operating leases are included in ROU assets, current portion of lease liabilities, and lease liabilities, net of current portion in the Company’s consolidated balance sheets.
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Income Taxes | Income Taxes The Company accounts for its income taxes using the asset and liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the basis used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more-likely-than-not that the Company will not realize those tax assets through future operations. Significant judgment is applied when assessing the need for valuation allowances and includes the evaluation of historical income (loss) adjusted for the effects of non-recurring items. Areas of estimation include consideration of future taxable income. The Company has placed a full valuation allowance against its federal and state deferred tax assets since the recovery of the assets is uncertain. Should a change in circumstances lead to a change in judgment about the utilization of deferred tax assets in future years, the adjustment related to valuation allowances would be reported as an increase to income. The Company utilizes the guidance in ASC 740-10, Income Taxes, to account for uncertain tax positions. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more-likely-than-not that the positions will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more-likely-than-not of being realized and effectively settled. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. The Company’s policy is to recognize interest and penalties related to uncertain tax positions, if any, in the income tax provision.
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Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding. For all periods presented, the calculation of basic net loss per share excludes shares issued upon the early exercise of stock options where the vesting conditions have not been satisfied. Because we reported net losses for all periods presented, diluted loss per share is the same as basic loss per share. Contingently issuable shares, including equity awards with performance conditions, are considered outstanding common shares and included in basic net loss per share as of the date that all necessary conditions to earn the awards have been satisfied. Prior to the end of the contingency period, the number of contingently issuable shares included in diluted net loss per share is based on the number of shares, if any, that would be issuable under the terms of the arrangement at the end of the reporting period. Because we reported net losses for all periods presented, all potentially dilutive common stock equivalents are antidilutive and have been excluded from the calculation of net loss per share. The diluted net loss per common share were the same for Class A and Class B common shares because they are entitled to the same liquidation and dividend rights.
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Segments | Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM consists of its Co-Chief Executive Officers. The Company has determined that it operates as a single operating segment and one reportable segment, as the CODM reviews financial information presented on a combined basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Given the Company’s pre-revenue operating stage, it currently has no concentration exposure to products, services, or customers.
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Comprehensive Loss | Comprehensive Loss There were no differences between net loss and comprehensive loss presented in the statements of operations and comprehensive loss for the years ended December 31, 2021 and 2020.
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Recently adopted accounting pronouncements and Recently issued accounting pronouncements not yet adopted | Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which outlines a comprehensive lease accounting model that supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. In July 2018, the FASB issued ASU 2018-11, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company entered into its first lease in July of 2020 and applied ASU 2016-02 to this lease and subsequent leases. In June 2018, the FASB issued ASU 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). This amendment expands the scope of Topic 718, Compensation — Stock Compensation (“Topic 718”) (which only included share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees is substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. Early adoption of ASU 2018-07 is permitted and should be applied on a prospective basis. The Company began applying ASU 2018-07 during 2020 upon the Company’s first grant of share-based payment awards. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) (“ASU 2018-13”), which modifies, removes, and adds certain disclosure requirements on fair value measurements based on the FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. The ASU is effective for all entities for fiscal years beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company has applied ASU 2018-13 to all periods presented. In November 2019, the FASB issued ASU 2019-08, Compensation — Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) (“ASU 2019-08”), which requires entities to measure and classify share-based payments to a customer in accordance with the guidance in ASC 718. ASU 2019-08 expanded the scope of Topic 718 to include awards issued to customers for purposes of measurement and classification and amended portions of ASC 606, Revenue from Contracts with Customers, to refer to this guidance. The amount that would be recorded as a reduction in revenue would be measured based on the grant date fair value of the share-based payment in accordance with Topic 718. The Company adopted ASU 2019-08 on January 1, 2021 and has applied its provisions to the measurement of the warrants issued to United. Refer to Note 11 - Stock-Based Compensation for details. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). This amendment was issued to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intraperiod allocation, and calculating income taxes in interim periods. Further, ASU 2019-12 adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax basis goodwill and allocating taxes to members of a consolidated group. The Company has applied ASU 2019-12 to all periods presented, and there was no adoption date impact to its financial statements. Recently issued accounting pronouncements not yet adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470-20, Debt—Debt with Conversion and Other Options, for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. Further, the ASU made amendments to the Earnings Per Share (“EPS”) guidance in ASU 2015-06, Earnings per share (Topic 260) for convertible instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The ASU is effective for public business entities for interim and annual periods beginning after December 15, 2021, with early adoption permitted. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements and related disclosures.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2021 and 2020 and indicates the fair value hierarchy of the valuation inputs we utilized to determine such fair value:
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Fair Value Measurement Inputs and Valuation Techniques | The key inputs into the Monte Carlo simulation model for the private placement warrants are as follows:
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents the change in fair value of our Level 3 private placement warrants during the years ended December 31, 2021 and 2020:
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Schedule of Useful Life for Property, Plant and Equipment | Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows:
Property and equipment, net, consisted of the following (in millions):
The following table presents depreciation expense included in each respective expense category in the statements of operations and comprehensive loss (in millions):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the number of antidilutive shares excluded from the calculation of diluted net loss per share:
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Reverse Recapitalization and Related Transactions (Tables) |
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Reverse Recapitalization [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Reverse Recapitalization | The net assets of Atlas were recognized at their carrying value immediately prior to the closing of the Business Combination with no goodwill or other intangible assets recorded and were as follows, net of transaction costs (in millions):
The number of shares of common stock issued immediately following the consummation of the Business Combination were as follows:
* The corresponding adjustment to APIC related to the reverse recapitalization was comprised of (i) $162.3 million which represents the fair value of the consideration transferred in the Business Combination, less the excess of the fair value of the shares issued over the value of the net monetary assets of Atlas, net of transaction costs and (ii) $61.5 million which represents the conversion of the convertible preferred stock into New Archer Class A and Class B common stock.
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Property and Equipment, Net (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Plant and Equipment Net | Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows:
Property and equipment, net, consisted of the following (in millions):
The following table presents depreciation expense included in each respective expense category in the statements of operations and comprehensive loss (in millions):
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Accrued Expenses and Other Current Liabilities (Tables) |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other current liabilities | Accrued expenses and other current liabilities consisted of the following (in millions):
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Notes Payable (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | Long-term notes payable consisted of the following (in millions):
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Schedule of Maturities of Long-term Debt | The future scheduled principal maturities of notes payable as of December 31, 2021 are as follows (in millions):
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Commitment and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Lease Costs | The Company’s lease costs were as follows (in millions):
The Company’s weighted-average remaining lease term and discount rate were as follows:
Supplemental cash information and non-cash activities related to right-of-use assets and lease liabilities were as follows (in millions):
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Summary of Operating Lease Maturities | The minimum aggregate future obligations under our non-cancelable operating leases as of December 31, 2021 were as follows (in millions):
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Option, Activity | A summary of our employee stock option activity is as follows (in millions, except share and per share data):
A summary of our non-employee stock option activity is as follows (in millions, except share and per share data):
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The assumptions used in the Black-Scholes option pricing model are provided in the following table.
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Share-based Payment Arrangement, Restricted Stock Unit, Activity | A summary of our restricted stock activity is as follows:
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Schedule of Share-based Payment Award, Equity Instruments Other Than Options, Valuation Assumptions | The following assumptions were used to estimate the fair value, using the Monte Carlo simulation, of the market award grant:
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Share-based Payment Arrangement, Expensed and Capitalized, Amount | The following table presents stock-based compensation expense included in each respective expense category in the statements of operations and comprehensive loss (in millions):
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Share-based Payment Arrangement, Warrant Activity | A summary of our warrant activity is as follows (in millions, except share and per share data):
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | The following table presents the principal reasons for the difference between the effective tax rate and the federal statutory income tax rate of 21%:
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Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are provided below (in millions):
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Schedule of Unrecognized Tax Benefits Roll Forward | The following table summarizes the activity related to the Company’s unrecognized tax benefits during the years ended December 31, 2021 and 2020 (in millions):
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Organization and Nature of Business (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Sep. 16, 2021 |
Feb. 10, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||
Consideration received on transaction | $ 600.0 | $ 600.0 | ||
Business combination gross proceeds | 857.6 | |||
Proceeds from PIPE financing | 600.0 | $ 600.0 | $ 0.0 | |
Direct and incremental transaction, aggregate cost | 81.8 | |||
Reverse recapitalization, transaction costs | 10.9 | |||
Adjustments to additional paid in capital, stock issued, issuance costs | 55.8 | |||
Issuance of Class A common stock pursuant to the Business Combination Agreement | $ 162.3 | |||
Common Class A | ||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||
Issuance of Class A common stock pursuant to the Business Combination Agreement | $ 15.1 |
Liquidity and Going Concern (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ 373.6 | $ 25.8 |
Reverse recapitalization net proceeds received | 801.8 | |
Cash and cash equivalents | $ 746.9 | $ 36.6 |
Summary of Significant Accounting Policies - Fair Value Recurring Basis (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liability, fair value disclosure | $ 1.2 | |
Recurring | Level 1 | Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value | 0.3 | $ 34.4 |
Recurring | Level 1 | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liability, fair value disclosure | 20.2 | 0.0 |
Recurring | Level 3 | Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liability, fair value disclosure | $ 10.1 | $ 0.0 |
Summary of Significant Accounting Policies - Measurement Input (Details) |
12 Months Ended |
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Dec. 31, 2021
$ / shares
| |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, term | 4 years 8 months 15 days |
Stock price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liability, measurement input | 6.04 |
Strike price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liability, measurement input | 11.50 |
Dividend yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liability, measurement input | 0.0000 |
Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liability, measurement input | 0.453 |
Risk-free rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liability, measurement input | 0.0122 |
Summary of Significant Accounting Policies - Private Placement Warrants (Details) - Private Placement Warrants $ in Millions |
12 Months Ended |
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Dec. 31, 2021
USD ($)
| |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 0.0 |
Addition of private placement warrants | 13.0 |
Change in fair value | (2.9) |
Ending balance | $ 10.1 |
Summary of Significant Accounting Policies - Property Plant and Equipment (Details) |
12 Months Ended |
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Dec. 31, 2021 | |
Furniture, fixtures, and equipment | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Computer hardware | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Computer software | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Website design | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities (Details) - shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation (in shares) | 80,087,974 | 14,879,023 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation (in shares) | 9,444,221 | 12,637,099 |
Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation (in shares) | 38,124,396 | 570,722 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation (in shares) | 32,519,357 | 1,671,202 |
Reverse Recapitalization and Related Transactions - Transaction Costs (Details) $ in Millions |
Sep. 16, 2021
USD ($)
|
---|---|
Reverse Recapitalization [Abstract] | |
Cash | $ 201.8 |
Warrant liability | (39.5) |
Net assets acquired | $ 162.3 |
Property and Equipment, Net (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 7.3 | $ 1.7 |
Less: Accumulated depreciation | (1.4) | (0.1) |
Total property and equipment, net | 5.9 | 1.6 |
Furniture, fixtures, and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2.8 | 1.0 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2.5 | 0.5 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 0.5 | 0.0 |
Website design | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 0.5 | 0.1 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 1.0 | $ 0.1 |
Property and Equipment, Net - Depreciation Expense (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Depreciation | ||
Total depreciation expense | $ 1.3 | $ 0.1 |
Research and development | ||
Depreciation | ||
Total depreciation expense | 0.9 | 0.1 |
General and administrative | ||
Depreciation | ||
Total depreciation expense | $ 0.4 | $ 0.0 |
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Accrued professional fees | $ 6.9 | $ 0.0 |
Accrued employee costs | 2.6 | 0.2 |
Accrued parts and materials | 0.9 | 0.0 |
Taxes payable | 0.6 | 0.0 |
Accrued capital expenditures | 0.4 | 0.0 |
Accrued marketing fees | 0.3 | 0.0 |
Other current liabilities | 0.6 | 0.1 |
Accrued expenses and other current liabilities | $ 12.3 | $ 0.3 |
Related Party Transactions (Details) - Affiliated Entity - Partial Recourse Promissory Notes $ / shares in Units, $ in Millions |
Nov. 21, 2020
USD ($)
$ / shares
shares
|
---|---|
Related Party Transaction [Line Items] | |
Exercises of shares during the period, per Founder (in shares) | shares | 2,662,885 |
Price per share (in dollars per share) | $ / shares | $ 0.15 |
Amounts of transaction, per Founder | $ | $ 0.4 |
Related party transaction, rate | 0.38% |
Payment term from issuance | 5 years |
Note repayment terms, period following Founder termination | 90 days |
Notes Payable - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 20.0 | |
Term Loans unamortized loan issuance fees and costs | (1.2) | $ 0.0 |
Total debt, net of issuance costs | 18.8 | 0.9 |
Less current portion, net of loan issuance fees and costs | (9.5) | (0.6) |
Total long-term notes payable, net of loan issuance fees and costs | 9.3 | 0.3 |
SVB Term Loans | Secured Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 20.0 | 0.0 |
Term Loans unamortized loan issuance fees and costs | (1.2) | |
PPP Loan | Notes Payable | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 0.0 | $ 0.9 |
Notes Payable - Maturity Schedule (Details) $ in Millions |
Dec. 31, 2021
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2022 | $ 10.0 |
2023 | 10.0 |
Long-term debt | $ 20.0 |
Commitment and Contingencies - Lease Costs (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease cost | $ 2.1 | $ 0.1 |
Weighted-average remaining lease term (in months) | 16 years | 30 years |
Weighted-average discount rate | 11.06% | 12.17% |
Commitment and Contingencies - Operating Lease Schedule of Maturity (Details) $ in Millions |
Dec. 31, 2021
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 3.4 |
2023 | 1.2 |
Total future lease payments | 4.6 |
Less: imputed interest | (0.3) |
Present value of future lease payments | $ 4.3 |
Commitment and Contingencies - Noncash Lease Activities (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Operating cash outflows from operating leases | $ 1.9 | $ 0.1 |
Operating lease assets obtained in exchange for new lease liabilities | $ 3.7 | $ 2.3 |
Commitment and Contingencies - Letter of Credit (Details) - USD ($) $ in Millions |
Jun. 24, 2021 |
Sep. 15, 2020 |
---|---|---|
Standby Letters of Credit | Line of Credit | ||
Debt Instrument [Line Items] | ||
Line of credit, borrowing capacity | $ 0.3 | $ 0.3 |
Stock-Based Compensation - Restricted stock activity (Details) - Restricted Stock Units (RSUs) - $ / shares |
12 Months Ended | |
---|---|---|
Sep. 16, 2021 |
Dec. 31, 2021 |
|
Number of Shares [Abstract] | ||
Beginning balance (in shares) | 570,722 | |
Granted (in shares) | 20,009,224 | 46,283,741 |
Vested (in shares) | (10,596,167) | |
Forfeited (in shares) | (8,900) | |
Ending Balance (in shares) | 36,249,396 | |
Weighted Average Grant Price [Abstract] | ||
Beginning Balance (in dollars per share) | $ 0.04 | |
Granted (in dollars per share) | 7.26 | |
Vested (in dollars per share) | 9.38 | |
Forfeited (in dollar per share) | 7.19 | |
Ending Balance (in dollars per share) | $ 6.53 |
Stock-Based Compensation - Monte Carlo simulation of market award grant (Details) - Restricted Stock Units (RSUs) |
12 Months Ended |
---|---|
Dec. 31, 2021
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share price (in dollars per share) | $ 9.92 |
Term (in years) | 7 years |
Volatility | 55.00% |
Risk-free interest rate | 1.13% |
Dividend yield | 0.00% |
Stock-Based Compensation - Stock-based compensation expense included in respective expense category (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 123.6 | $ 0.2 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 3.7 | 0.0 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 119.9 | $ 0.2 |
Stock-Based Compensation - Schedule of Share-based Compensation, Warrant Activity (Details) - Warrants - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Number of Shares | ||
Beginning balance (in shares) | 1,671,202 | |
Granted (in shares) | 15,818,788 | |
Exercised (in shares) | (8,845,058) | |
Ending Balance (in shares) | 8,644,932 | 1,671,202 |
Vested (in shares) | 1,524,522 | |
Weighted Average Exercise Price | ||
Beginning Balance (in dollars per share) | $ 0.01 | |
Granted (in dollars per share) | 0.01 | |
Exercised (in dollars per share) | 0.01 | |
Ending Balance (in dollars per share) | 0.01 | $ 0.01 |
Vested (in dollars per share) | $ 0.01 | |
Weighted Average Remaining Contractual Life (Years) | ||
Outstanding (in years) | 8 years 10 months 13 days | 3 years 10 months 6 days |
Vested (in years) | 4 years 1 month 6 days | |
Aggregate Intrinsic Value | ||
Outstanding at period start | $ 20,700,000 | |
Exercised | 85,300,000 | |
Outstanding at period end | 52,100,000 | $ 20,700,000 |
Vested | $ 9,200,000 |
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock |
1 Months Ended |
---|---|
Aug. 31, 2021
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Purchase price of common stock, percent | 85.00% |
Number of shares authorized (in shares) | 4,969,059 |
Percentage of outstanding stock maximum | 1.00% |
Number of additional shares authorized (in shares) | 9,938,118 |
Income Taxes - Narrative (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Operating Loss Carryforwards [Line Items] | ||
Loss before income taxes | $ (347,800,000) | $ (24,800,000) |
Current Income Tax Expense (Benefit) | 0 | 0 |
Deferred income tax expense (benefit) | 0 | 0 |
Valuation allowance | 47,100,000 | 7,200,000 |
Unrecognized tax benefits | 0 | 0 |
Income tax matters accrued interest or penalties | 0 | 0 |
Domestic Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 81,400,000 | 27,000,000 |
Domestic Tax Authority | Research Tax Credit Carryforward | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforward, amount | 3,900,000 | 2,100,000 |
State and Local Jurisdiction | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 76,700,000 | 26,700,000 |
State and Local Jurisdiction | Research Tax Credit Carryforward | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforward, amount | $ 3,100,000 | $ 800,000 |
Income Taxes - Schedule Of Effective Income Tax Rate Reconciliation (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income Tax Disclosure [Abstract] | ||
Federal income tax (benefit) | 21.00% | 21.00% |
State and local income taxes (net of federal benefit) | 2.60% | 8.80% |
Nondeductible expenses | (0.20%) | (0.10%) |
Warrant expense | (7.10%) | 0.00% |
Nondeductible officers’ compensation | (6.90%) | 0.00% |
Other | 0.80% | 0.00% |
Credits | 1.30% | 0.00% |
Change in valuation allowance | (11.50%) | (29.70%) |
Effective tax rate | (0.00%) | 0.00% |
Income Taxes - Schedule Of Deferred Tax Assets And Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Deferred Tax Assets: | ||
Net operating loss carryforwards | $ 22.4 | $ 7.5 |
Accrued expenses | 0.7 | 0.0 |
Operating lease liabilities | 1.2 | 0.7 |
Stock-based compensation | 1.3 | 0.0 |
Warrants | 2.0 | 0.0 |
Capitalized R&D expenses | 14.9 | 0.0 |
Credits | 6.1 | 0.0 |
Other | 0.1 | 0.0 |
Gross deferred tax assets | 48.7 | 8.2 |
Less: valuation allowance | (47.1) | (7.2) |
Deferred tax assets, net of valuation allowance | 1.6 | 1.0 |
Deferred Tax Liabilities: | ||
Depreciation and amortization | (0.3) | (0.4) |
Right-of-use assets | (1.3) | (0.6) |
Total deferred tax liabilities | (1.6) | (1.0) |
Total net deferred tax assets | $ 0.0 | $ 0.0 |
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Changes in uncertain income tax positions | ||
Beginning balance | $ 2.0 | $ 0.0 |
Increases related to current year tax positions | 0.3 | 2.0 |
Decreases based on tax positions related to prior years | (2.0) | |
Ending balance | $ 0.3 | $ 2.0 |
401(k) Savings Plan (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Retirement Benefits [Abstract] | ||
Employer matching contribution, percent of match | 50.00% | |
Defined contribution plan, cost | $ 0.8 | $ 0.3 |
Subsequent Events (Details) ft² in Thousands, $ in Millions |
Mar. 10, 2022
USD ($)
ft²
option_to_extend
|
Jan. 14, 2022
USD ($)
ft²
option_to_extend
|
Dec. 31, 2021
USD ($)
|
---|---|---|---|
Subsequent Event [Line Items] | |||
Operating lease, liability, to be paid | $ 4.6 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Area of sublease | ft² | 68 | 96 | |
Number of options to extend the term | option_to_extend | 1 | 0 | |
Operating lease, liability, to be paid | $ 15.0 | $ 12.0 | |
Commencement term | 210 days | ||
Expiration term | 90 months | ||
Option to extend, term | 5 years |
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