As filed with the Securities and Exchange Commission on September 29, 2025.

Registration No. 333-    

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

BETA Technologies, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware		3721		83-1276474
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(IRS Employer Identification No.)

1150 Airport Drive

South Burlington, Vermont 05403

(802) 281-3623

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Kyle Clark

Chief Executive Officer

1150 Airport Drive

South Burlington, Vermont 05403

(802) 281-3623

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Matthew R. Pacey, P.C. Kirkland & Ellis LLP 609 Main Street Houston, Texas 77002 (713) 836-3600		Jennifer Wu, P.C.     Kirkland & Ellis LLP     401 Congress Avenue     Austin, Texas 78701     (512) 678-9100		Roshni Banker Cariello Stephen A. Byeff Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 (212) 450-4421

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐		Accelerated filer ☐		Non-accelerated filer ☒		Smaller reporting company ☐
(Do not check if a smaller reporting company)						Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

The information in this prospectus is not complete and may be changed. The securities described herein may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities, in any jurisdiction where the offer or sale is not permitted.

 

Subject to completion, dated     , 2025

    Shares

 

BETA Technologies, Inc.

Class A Common Stock

 

 

This is the initial public offering of Class A common stock of BETA Technologies, Inc. We are offering     shares of our Class A common stock, par value $0.0001 per share (the “Class A common stock”). Prior to this offering, there has been no public market for our Class A common stock.

The estimated initial public offering price of our Class A common stock is between $     and $     per share.

We have applied to list our Class A common stock on the New York Stock Exchange (“NYSE”) under the symbol “BETA.”

Following this offering, we will have two series of authorized common stock, Class A common stock and Class B common stock, par value $0.0001 per share (the “Class B common stock” and, together with the Class A common stock, the “common stock”). The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting, conversion and transfer rights. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to 40 votes per share and is convertible at any time, subject to the satisfaction of certain conditions as described herein, into one share of Class A common stock. Immediately following the completion of this offering, all outstanding shares of Class B common stock will be beneficially owned by Kyle Clark (sometimes referred to herein as the “Class B Common Stockholder”), our founder, President and Chief Executive Officer and a member of our Board. Accordingly, Mr. Clark will own approximately      % of our outstanding capital stock and control approximately      % of the voting power of our outstanding capital stock (assuming no exercise of the underwriters’ option to purchase additional shares). As a result, Mr. Clark may have significant influence over the outcome of matters submitted to our stockholders for approval, including the election of our directors and the approval of any change of control transaction. We will be a “controlled company” within the meaning of the corporate governance standards of the NYSE, and therefore we are permitted to, and we intend to, elect not to comply with certain corporate governance requirements of the NYSE. Such corporate governance requirements include those that would otherwise require our board to establish a compensation committee and a nominating and corporate governance committee, each comprised entirely of independent directors. See “Management—Controlled Company Exception” and “Security Ownership of Certain Beneficial Owners and Management.”

We are an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act of 2012, and as such, we have elected to take advantage of certain reduced public company reporting requirements for this prospectus and future filings. See “Risk Factors” and “Prospectus Summary—The Offering—Emerging Growth Company.”

 

		Per share				Total
Initial public offering price			$				$
Underwriting discounts and commissions(1)			$				$
Proceeds to us, before expenses			$				$

(1)

See “Underwriting” for additional information regarding underwriting compensation.

We have granted the underwriters the option for a period of 30 days after the date of this prospectus to purchase up to      additional shares of our Class A common stock on the same terms and conditions set forth above.

At our request, the underwriters have reserved up to      shares of our Class A common stock, or     % of the shares offered by this prospectus (excluding the additional shares that the underwriters have an option to purchase), for sale at the initial public offering price through a directed share program to our current employees, including management and other individuals and entities as determined by certain of our authorized officers. For more information on our directed share program, see the section titled “Underwriting—Directed Share Program.”

Investing in our Class A common stock involves risks. See “Risk Factors” beginning on page 29.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of Class A common stock on or about     , 2025.

 

 

 

Morgan Stanley		Goldman Sachs & Co. LLC

 

BofA Securities		Jefferies		TPG Capital BD, LLC		Citigroup

 

Cantor		BTIG		Needham & Company

Prospectus dated     , 2025

TABLE OF CONTENTS

 

 

Neither we nor the underwriters have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus, any amendment or supplement to this prospectus or in any free writing prospectus prepared by us or on our behalf. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may provide you. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the cover page of this prospectus. Our business, financial condition, results of operations and prospects may have changed since such date. We are not, and the underwriters are not, making an offer to sell shares of our Class A common stock in any jurisdiction where an offer or sale is not permitted.

Through and including     , 2025 (the 25th day after the date of this prospectus), all dealers effecting transactions in shares of our Class A common stock, whether or not participating in this offering, may be required to deliver a prospectus. This requirement is in addition to the dealers’ obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

This prospectus contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” contain additional information regarding these risks.

 

i

COMMONLY USED DEFINED TERMS

As used in this prospectus, unless the context indicates or otherwise requires, references to “we,” “us,” “our,” “our business,” the “Company,” “BETA” and similar references refer to BETA Technologies, Inc. and, where appropriate, our consolidated subsidiaries. In addition, the terms below that are used frequently in this prospectus have the following meanings:

 

•

“Amended and Restated Bylaws” means the     Amended and Restated Bylaws of BETA, as in effect immediately prior to the completion of this offering.

 

•

“Amended and Restated Certificate of Incorporation” means the     Amended and Restated Certificate of Incorporation of BETA, as in effect immediately prior to the completion of this offering.

 

•

“Amended and Restated Investors’ Rights Agreement” means our Amended and Restated Investors’ Rights Agreement, dated as of September 26, 2025, by and among BETA and the investors party thereto, as amended.

 

•

“BETA Plan” means the BETA Technologies, Inc. First Amended and Restated 2018 Equity Incentive Plan.

 

•

“Board” means the board of directors of BETA.

 

•

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

 

•

“Common Stock” means the shares of Common Stock of BETA, $0.0001 par value per share prior to the Common Stock Reclassification (as defined in “Description of Capital Stock—General”).

 

•

“Credit Agreement” means the Credit Agreement, dated as of December 13, 2023, by and between the Company and Ex-Im, as amended, restated, amended and restated, supplemented, or otherwise modified from time to time.

 

•

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

•

“Ex-Im” means the Export-Import Bank of the United States.

 

•

“Final Assembly Facility” means the production facility of our aircraft manufacturing campus located in South Burlington, Vermont.

 

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“GAAP” means accounting principles generally accepted in the United States.

 

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“IPO Recapitalization” has the meaning ascribed to it described in “Description of Capital Stock—General”.

 

•

“JOBS Act” means the Jumpstart our Business Startups Act of 2012.

 

•

“LTIP” means the BETA Technologies, Inc. 2025 Long-Term Incentive Plan.

 

•

“Preferred Stock” means, collectively, the shares of Series A preferred stock, Series A-1 preferred stock, Series A-2 preferred stock, Series A-3 preferred stock, Series B preferred stock, Series C preferred stock and Series C-1 preferred stock of BETA, $0.0001 par value per share, outstanding prior to the Preferred Stock Recapitalization (as defined in “Description of Capital Stock—General”).

 

•

“SEC” means the U.S. Securities and Exchange Commission.

 

•

“Securities Act” means the Securities Act of 1933, as amended.

 

•

“Second Amended and Restated Stockholders’ Agreement” means the Second Amended and Restated Stockholders’ Agreement, dated as of March 16, 2021, by and among BETA and the other parties thereto, as amended.

 

•

“Super Voting Common Stock” means the shares of Super Voting Common Stock of BETA, $0.0001 par value per share, outstanding prior to the Class B Stock Exchange (as defined in “Description of Capital Stock—General”).

 

ii

INDUSTRY AND MARKET DATA

The market data and certain other statistical information included in this prospectus are based on a variety of sources, including independent industry publications, government publications and other published independent sources. Some data is also based on our good-faith estimates, which have been derived from management’s knowledge and experience in the industry in which we operate. Although we have not independently verified the accuracy or completeness of the third-party information included in this prospectus, based on management’s knowledge and experience, we believe that these third-party sources are reliable and that the third-party information included in this prospectus or in our estimates is accurate and complete. While we are not aware of any misstatements regarding the market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in this prospectus.

BASIS OF PRESENTATION

Unless otherwise indicated, the information presented in this prospectus, other than our historical financial statements (i) assumes that the underwriters’ option to purchase additional shares is not exercised and (ii) is adjusted to reflect our    -for-1 forward split of our capital stock (the “Stock Split”), occurring subsequent to the effectiveness of the registration statement for this offering, which will be effective upon filing of our Amended and Restated Certificate of Incorporation prior to the completion of this offering. Certain numbers reflected in this prospectus represent approximations due to required rounding in connection with the anticipated Stock Split. The actual numbers will not differ materially from such approximations.

TRADEMARKS AND TRADE NAMES

This prospectus may also contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names or products in this prospectus is not intended to, and does not imply a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the ^®, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, service marks and trade names.

 

iii

GLOSSARY

The following are abbreviations and definitions of certain terms used in this prospectus, which are commonly used in the Company’s industry:

 

•

“Backlog” refers to the aggregate number of Firm Orders and Options.

 

•

“CTOL” refers to a Conventional Take-Off and Landing aircraft that takes off and lands at speed along a runway.

 

•

“DSCA” refers to the Defense Security Cooperation Agency.

 

•

“DOT” refers to the U.S. Department of Transportation.

 

•

“EAR” refers to the Export Administration Regulations.

 

•

“Fixed Based Operator” refers to an entity granted the right by an airport to operate at the airport and provide services such as, but not limited to, fueling, hangaring and parking, along with other similar services.

 

•

“eCTOL” refers to electric Conventional Take-Off and Landing aircraft that takes off and lands at speed along a runway.

 

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“Enabling Technologies” include motors, inverters, batteries, flight controls, charging systems and a nationwide electric charging network.

 

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“eVTOL” refers to electric Vertical Take-Off and Landing aircraft.

 

•

“FAA” refers to the Federal Aviation Administration.

 

•

“FBW” refers to a fly-by-wire system that replaces manual flight controls with electrically signaled controls.

 

•

“FCC” refers to the BETA flight control computer.

 

•

“Firm Orders” refers to the number of aircraft under signed agreements with financial commitments. Unless otherwise specifically described, any reference to the number or value of Firm Orders in this prospectus is as of August 31, 2025.

 

•

“GSE” refers to Ground Support Equipment.

 

•

“ITAR” refers to the International Traffic in Arms Regulations.

 

•

“OEM” refers to an original equipment manufacturer.

 

•

“Options” refers to the number of aircraft that customers with Firm Orders have the right to purchase under signed agreements. Unless otherwise specifically described, any reference to the number or value of Options in this prospectus is as of August 31, 2025.

 

•

“VTOL” refers to a Vertical Take-Off and Landing aircraft that can take off and land vertically without the use of a runway (similar to a helicopter).

 

•

“zero-emission” as used herein with respect to our aircraft technology, refers to aircraft that produce no exhaust emissions during flight and does not refer to any emissions associated with manufacturing electricity used to power the planes or manufacturing or transporting the planes.

 

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RISK FACTORS

An investment in our Class A common stock involves a high degree of risk. You should carefully consider the risks described below before making an investment decision. Our business, results of operations, financial condition or prospects could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider immaterial. The trading price of the Class A common stock could decline due to any of these risks, and, as a result, you may lose all or part of your investment.

Certain statements in this “Risk Factors” section are forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements.”

Risks Related to Our Business and Industry

Our business plan requires a significant amount of capital. We expect to require additional future funding to support our operations and implementation of our growth plans and we may be unable to access the capital and credit markets or borrow on affordable terms to obtain additional capital that we may require.

Our proposed operations and our business strategy contemplate significant manufacturing capacity and aircraft and infrastructure development, including additional vertiports where our aircraft can land, both within the United States and internationally. Construction of additional manufacturing and testing facilities, chargers and other facilities will require significant capital expenditures, as will future expansion of and improvements to our operations. Based on our recurring losses and management’s expectations that significant on-going operating expenditures will be necessary to successfully implement our business plan and develop our powerhouses, we expect to require additional funding to continue our operations through commercialization. Although we intend to partner with or pursue leasing or other arrangements with third parties in relation to certain of our facility needs, we cannot be assured that such partnership opportunities or other arrangements will be available on commercially reasonable terms, or at all.

In addition, as our facilities and aircraft mature, our business will require capital expenditures for the maintenance, renovation and improvement of such facilities to remain competitive. This creates an ongoing need for capital, and, to the extent we cannot fund capital expenditures from cash flows from operations, we will need to borrow or otherwise obtain funds.

We expect to fund our operations through equity offerings or debt financings, credit or loan facilities, potential other capital resources, or a combination of one or more of these funding sources. Such financings may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business.

Periods of instability in the capital and credit markets (both generally and those impacting the aerospace industry in particular), including as a result of global health crises or other events contributing to the disruption and volatility of global financial markets, could limit our ability to access these markets to raise debt or equity capital on affordable terms or to obtain additional financing. Among other things, our lenders may seek to increase interest rates, enact tighter lending standards, refuse to refinance existing debt at maturity on favorable terms or at all and may reduce or cease to provide funding to us. For example, increased interest rates in 2022 and 2023 led to a widespread slowdown in investment and funding opportunities, especially for pre-revenue companies. We may sell equity securities or debt securities in one or more transactions at prices and in a manner that may materially dilute our current investors. Any debt financing, if available, may involve restrictive covenants that could reduce our operational flexibility or profitability. Debt financing, if available, may result in a significant financial burden if interest rates remain high for a prolonged period or increase in the future. We expect that the net proceeds from this offering, together with our existing cash and cash equivalents, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months.

 

29

However, our operating plan may change as a result of factors currently unknown to us, and we may need to seek additional funding sooner than planned. If we cannot raise funds or otherwise enter into financing arrangements on acceptable terms, we may be forced to delay, reduce, or eliminate our research and product development programs or future commercialization effort, or we may not be able to grow our business or respond to competitive pressures, any of which may have an adverse impact on our business, results of operations, financial condition and prospects.

We expect to be significantly dependent upon revenue generated from the sale of our electric aircraft, our batteries and our core technologies, along with the utilization of our charging infrastructure, and our future success will be dependent upon our ability to design and achieve market acceptance, adoption and utilization of these new technologies.

We expect to generate a significant portion of our revenue from the sale of our electric aircraft and batteries and the commercialization of our infrastructure and critical charging and software systems. While we believe we are uniquely positioned to capture revenues across the full aircraft lifecycle, from new aircraft sales for commercial and military applications to revenues from sales of related products and services, including batteries, motors, components, maintenance, training and charging solutions, each of our aircraft requires significant investment prior to commercial introduction, and may never be successfully developed or commercially successful. There can be no assurance that we will be able to design future models of electric aircraft or infrastructure and charging technologies that will meet the expectations of our customers or that our future models will become commercially viable. In particular, it is common in our industry for the production aircraft to have a styling and design different from that of the concept aircraft, which may happen with our future aircraft. As technologies change in the future for aircraft in general and electric aircraft specifically, we will be expected to upgrade or adapt our aircraft and introduce new models in order to continue to provide aircraft with the latest technology. To date, we have limited experience simultaneously designing, testing, manufacturing and selling our electric aircraft.

We may experience significant delays in the design, manufacture, certification and commercial rollout of our aircraft, which could harm our business, brand, results of operations, financial condition and prospects.

Any significant delay in the commercialization of our aircraft could materially damage our business, brand, results of operations, financial condition and prospects. Aircraft manufacturers often experience delays in the design, manufacture, certification and commercial release of new aircraft models. We may experience such delays in launching our aircraft, and any such delays could be significant.

In addition, final designs for our eVTOL and large passenger electric aircraft are still in process, and various aspects of the aircraft component procurement and manufacturing plans have not yet been determined. We are continually evaluating, qualifying and selecting our suppliers for the planned production of our aircraft. However, we may not be able to engage suppliers for the remaining materials and components in a timely manner, at an acceptable price or in the necessary quantities. In addition, we will also need to do extensive testing to ensure that our aircraft are in compliance with applicable airworthiness regulations and other applicable requirements prior to beginning mass production and delivery of the aircraft. Our plan to begin commercial production of our aircraft is dependent upon the timely availability of funds, upon our finalizing the related design, engineering, component procurement, testing, certification, build out and manufacturing plans in a timely manner and upon our ability to execute these plans within the current timeline.

The markets for our offerings are still in development, and if such markets do not materialize, or grow more slowly than we expect or fail to grow as large as we expect, our business, results of operations, financial condition and prospects could be harmed.

The markets for electric aircraft (as well as for technologies and product and service offerings relating to same) are still in development, and our success in these markets is dependent upon our ability to effectively

 

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design, develop, and certify electric aircraft and to market and gain traction in respect of electric aircraft utilization as a substitute for existing methods of transport, as well as the effectiveness of our other marketing and growth strategies. If our business customers, including, in the case of our defense program, government entities, do not perceive electric aircraft as beneficial or choose not to adopt electric aircraft as a result of concerns regarding safety, noise, affordability or for other reasons, then the market for our offerings may not materialize, may develop more slowly than we expect or may not achieve the growth potential we expect, any of which could harm our business, results of operations, financial condition and prospects.

Growth of our business will require significant investments in our infrastructure, technology and sales and marketing efforts, including significant expansion of our production facilities in the future. If our business does not have sufficient capital required to support these investments, our results of operations will be negatively affected. Further, our ability to effectively manage growth and expansion of our operations will also require us to enhance our operational systems, internal controls and infrastructure, human resources policies and reporting systems. These enhancements will require significant capital expenditures and allocation of valuable management and employee resources.

The electric and hybrid electric aviation (including VTOL) industry may not continue to develop, electric aircraft may not be adopted by the market, eVTOL aircraft may not be certified by government authorities or electric aircraft may not be an attractive alternative to existing modes of transportation, any of which could adversely affect our business, results of operations, financial condition and prospects.

Electric aircraft involve a complex set of technologies, which we must continue to further develop and rely on our commercial and defense program customers to adopt. However, as a prerequisite to commercializing our electric aircraft for sale to business customers or the U.S. government, we must receive requisite certifications and approvals from applicable governmental authorities. See “—Risks Related to Laws and Regulations” for a discussion of risks associated with such regulatory and related requirements. There are currently no electric aircraft certified by the FAA and operating commercially in the United States, and there can be no assurance that our design, development and certification efforts will result in our receiving FAA certification of our aircraft. In order to achieve FAA certification, the performance, reliability and safety of electric aircraft must be established, none of which can be assured. In particular, there is a risk that we will not obtain one or more certifications from the FAA that are required for ultimate commercial rollout and use of our aircraft, or that we will experience delays in receiving one or more of these certifications. Even if our electric aircraft receive Type Certification and airworthiness certificates and we receive Production Certification, aircraft operators must conform their operational authorizations to include electric aircraft, including eVTOL, which requires FAA approval of aircraft and operational procedures, and individual pilots also must be trained and ultimately approved by the FAA to fly such aircraft, which could contribute to delays in any widespread use of electric aircraft and potentially limit the number of electric aircraft operators available to purchase aircraft from or partner with us. Additional challenges to ensuring the demand for our aircraft, technologies and related services, all of which are outside of our control, include:

 

•

market acceptance of electric aircraft, including CTOL and VTOL;

 

•

state, federal or municipal regulations for our electric aircraft and charging infrastructure;

 

•

necessary changes to existing airport or vertiport infrastructure to enable adoption, including installation of necessary charging, navigation, lighting and other equipment;

 

•

ability for customers to obtain all government approvals necessary to operate our aircraft between commercially desirable origins and destinations;

 

•

ability for customers to obtain access to economical insurance policies for operating eVTOL aircraft; and

 

•

public perception regarding the safety of eVTOL aircraft and the resulting demand for our business customers’ services.

 

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There are a number of existing laws, regulations and standards that may apply to eVTOL aircraft, including standards that were not originally intended to apply to electric aircraft. The promulgation of additional federal, state and local laws and regulations that address eVTOL aircraft more specifically, such as the operational regulations, or the Special Federal Aviation Regulation (“SFAR”) adopted by the FAA in December 2024, could delay our ability to launch commercial production of our eVTOL aircraft as well as our customers’ ability to launch commercial eVTOL operations which could impact our business plans and expectations with respect to revenue from both aircraft and aftermarket components. In addition, depending on the nature of any revised or new regulations, we may need to modify our approach to certification, and we may not be able to timely comply with such regulations. Further, we have designed our aircraft to be certified under the current FAA regulatory framework. If the applicable FAA regulations are substantially changed or new regulations are adopted, we may need to modify the design of our aircraft to comply with the new regulations, which could cause us to incur significant expenses and scheduling delays in developing and commercializing our aircraft production and may impact the performance or functionality of the certified aircraft adversely, which could adversely affect our business, results of operations, financial condition and prospects. See “—Risks Related to Laws and Regulations—Failure to comply with applicable laws and regulations relating to the aerospace business in general and electric aircraft testing, certification and production specifically, could adversely affect our business, results of operations, financial condition and prospects.”

There can be no assurance that the market will accept electric aircraft, that we will be able to execute on our business strategy or that our electric aircraft or customers of our aircraft or our related or other offerings will obtain the necessary government approvals or be successful in the applicable target market or markets. There may be heightened public skepticism of this nascent technology and its adopters. In particular, there could be negative public perception surrounding electric aircraft, including the overall safety and the potential for injuries or death occurring as a result of accidents involving electric aircraft, regardless of whether any such safety incidents occur involving us. Any of the foregoing risks and challenges could adversely affect our business, results of operations, financial condition and prospects.

Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of your investment.

We are an early-stage company with limited operating history. As such, we may encounter unforeseen expenses, difficulties, complications, delays, and other known and unknown factors as we seek to a transition to a company capable of supporting commercialization. If we do not successfully address these risks, our business, results of operations, financial condition and prospects will be materially and adversely harmed. We were formed and began designing our electric aircraft in 2018.

Our revenues were $15.4 million for the year ended December 31, 2023, $15.1 million for the year ended December 31, 2024 and $15.6 million for the six months ended June 30, 2025. We have a very limited operating history on which investors can base an evaluation of our business, results of operations, financial condition and prospects. We intend in the longer term to derive substantial revenues from the sales of our aircraft.

It is difficult to predict our future revenues and appropriately budget for our expenses, and we have limited insight into trends that may emerge and affect our business. In the event that actual results differ from our estimates or we adjust our estimates in future periods, our operating results and financial position could be materially affected.

We have incurred significant losses since inception, we expect to incur losses in the future and we may not be able to achieve or maintain profitability.

We incurred net losses of $175.6 million and $275.6 million for the years ended December 31, 2023 and 2024, respectively. We incurred net losses of $124.1 million and $158.7 million for the six months ended June 30, 2024 and 2025, respectively. It is difficult for us to predict our future operating results. As a result, our

 

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losses may be larger than anticipated, and we may not achieve profitability when expected, or at all, and even if we do, we may not be able to maintain or increase profitability. While we expect that our existing cash and cash equivalents, together with anticipated net proceeds from this offering, will enable us to fund our current and planned operating expenses and capital expenditures for at least the next 12 months, until such time as we can generate significant revenue, if ever, the Company expects to fund its operations through public and private financing. There is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all. Such conditions, if they continue, may raise substantial doubt about the Company’s ability to continue as a going concern. The perception that we may be unable to continue as a going concern may make it more difficult to obtain financing for the continuation of our operations on terms that are favorable to us, or at all, and could result in the loss of confidence by investors.

We expect our operating expenses to increase over the next several years as we move towards commercial launch, continue to attempt to streamline our manufacturing process, increase our flight cadence, hire more employees and continue research and development efforts relating to new products and technologies. These efforts may be more costly than we expect and may not result in increased revenue or growth in our business. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving or maintaining profitability or positive cash flow. Furthermore, if our future growth and operating performance fail to meet investor or analyst expectations, or if we have future negative cash flow or losses resulting from our investment in acquiring customers or expanding our operations, this could have a material adverse effect on our business, financial condition and results of operations.

We have in the past and will continue to invest significant resources in developing new product offerings and exploring the application of our Enabling Technologies for other uses and those opportunities may never materialize.

While our primary focus has been on the design, manufacture and operation of our electric aircraft, we have invested in the past and will continue to invest significant resources in developing new technologies, services, products or offerings, such as those relating to the innovation and development of electric propulsion systems, charging solutions, motors and controls. However, we may not realize the expected benefits of these investments.

Such research and development initiatives may also have a high degree of risk and involve unproven business strategies and technologies with which we have limited operating or development experience. They may involve claims and liabilities, expenses, regulatory challenges and other risks that we may not be able to anticipate. We may not be able to predict whether customer demand for such initiatives will exist or be sustained at the levels that we anticipate, or whether we will generate sufficient revenue to offset any expenses or liabilities associated with these investments. For example, we plan to continue to invest resources in developing, with an eye toward ultimate commercialization, of our large passenger electric aircraft. Any such research and development efforts could distract management from current operations and would divert capital and other resources from our more established technologies. Even if we are successful in developing new products, services, offerings or technologies, regulatory authorities may subject us to new rules or restrictions in response to our innovations that may increase our expenses or prevent us from successfully commercializing new products, services, offerings or technologies and have an adverse impact on our business, results of operations, financial condition and prospects.

Our long-term success and ability to significantly grow our revenue will depend, in part, on our ability to establish and expand our presence within international markets.

Our future results will depend, in part, on our ability to establish and expand our presence within international markets. Our ability to expand into new markets involves various risks, including, but not limited to, the need to invest significant resources in such expansion, and the possibility that returns on such investments will not be achieved in the near future or at all in these less familiar competitive environments. Our ability to expand internationally will depend upon our ability to, among other things, obtain the necessary government

 

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approvals, adapt to international markets, understand the local customer base and address any unique local technological requirements. We may also choose to conduct our international business through joint ventures, minority investments or other partnerships with local companies as well as co-marketing with other established brands. If we are unable to identify partners or negotiate favorable terms, our international growth may be limited. In addition, we may incur significant expenses in advance of generating revenues, if any, as we attempt to establish our presence in particular international markets or market segments outside of aircraft sales, operating our charging network and our defense program.

Our growing charging network is subject to location-specific risks and regulatory uncertainties.

The footprint of our charging network is growing, which makes such part of our business susceptible to wide-ranging regulatory, economic, social, weather and other conditions and related uncertainties. Significant or repeated interruption or disruption in service in an airport or area where we have established charging infrastructure could have an adverse impact on our business, reputation, results of operations, financial condition and prospects. Disruption of operations at vertiports, whether caused by labor relations, utility or communications issues, power outages or changes in federal, state and local regulatory requirements could harm our business. Certain airports may regulate electric aircraft, including limiting the number of landings, banning operations or introducing new permitting requirements, which could significantly disrupt our charging operations and could, potentially, albeit indirectly, negatively impact customer demand for our aircraft.

Our competitors may commercialize their technology before us, or we may not be able to fully capture the first mover advantage that we anticipate.

While we believe we are well positioned to be the first manufacturer to achieve FAA Type Certification for an electric airplane, we expect the electric and hybrid electric aviation (including VTOL) industry to be increasingly competitive and our competitors could get to market with their eVTOL or eCTOL aircraft before or at the same time as us, either generally or in specific markets. Even if we are first to market, we may not fully realize the benefits we anticipate, and we may not receive any competitive advantage or may be overcome by other competitors. If new or existing companies launch competing solutions in the markets in which we intend to operate and obtain large scale capital investment, we may face increased competition. Additionally, our competitors may benefit from our efforts in developing customer and community acceptance of electric aircraft and its related infrastructure, making it easier for them to obtain the permits and authorizations required to certify and successfully commercialize their technology and operations.

If our current and potential competitors are larger and have substantially greater resources or are affiliated with larger companies that may allocate greater resources than we have and expect to have in the future, they may devote greater resources to the development, certification and marketing of their products and services or to offer lower prices. Our competitors may also establish strategic relationships amongst themselves or with third parties that may further enhance their resources and offerings. Some could have more experience in the electric and hybrid electric aviation (including VTOL) industry than we have, and any foreign competitors could benefit from subsidies or other protective measures offered by their home countries. If our competitors commercialize their technology before us, or if we do not capture the first mover advantage that we anticipate, it may harm our business, results of operations, financial condition and prospects.

Our future growth is dependent upon the market’s willingness to adopt electric aircraft and its supporting infrastructure, and the resulting impact of such market demand on our customers’ need for our aircraft and other offerings.

Our growth is highly dependent upon the adoption by customers of, and we are subject to an elevated risk of any reduced demand for, alternative fuel aircraft in general and electric aircraft in particular. If the market for electric aircraft and its supporting infrastructure does not develop as quickly or otherwise in the manner consistent with our expectations or those of our customers, our business, results of operations, financial condition

 

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and prospects will be harmed. The market for alternative fuel aircraft is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, increasingly frequent new aircraft announcements and changing demands and behaviors of customers and other stakeholders. Factors that may influence the adoption of alternative fuel aircraft, and specifically electric aircraft, include:

 

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perceptions about electric aircraft quality, safety (in particular with respect to battery packs, including those utilizing lithium-ion cells), design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric aircraft;

 

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perceptions about aircraft safety in general, in particular safety issues that may be attributed to the use of advanced technology, including aircraft electronics;

 

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the limited range over which electric aircraft may be flown on a single battery charge;

 

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the decline of an electric aircraft’s range resulting from deterioration over time of the battery’s ability to hold a charge;

 

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concerns about electric grid capacity and reliability, which could derail our past and present efforts to promote electric aircraft as a practical solution to aircraft which require jet fuel or aviation gasoline;

 

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the availability of alternative fuel aircraft, including plug-in hybrid electric aircraft;

 

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improvements in the fuel economy of conventional internal combustion or turbine engines;

 

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the availability of maintenance services for electric aircraft;

 

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the importance of environmental considerations to customers and other stakeholders;

 

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volatility in the cost of crude oil and, relatedly, aviation fuels;

 

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customers’ and other stakeholders’ perceptions of the dependency of the United States on oil from unstable or hostile countries;

 

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government regulations and economic incentives promoting fuel efficiency and alternate forms of energy;

 

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access to chargers, standardization of electric aircraft charging systems and customers’ and other stakeholders’ perceptions about convenience and cost to charge an electric aircraft;

 

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the availability of tax and other governmental incentives to purchase and operate electric aircraft or future regulation requiring increased use of nonpolluting aircraft;

 

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perceptions about and the actual cost of alternative fuel; and

 

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macroeconomic factors.

Additionally, we may become subject to regulations that may require us to alter the design of our aircraft, which could negatively impact interest in our aircraft.

The influence of any of the factors described above may cause current or potential customers not to purchase our electric aircraft, which would materially adversely affect our business, results of operations, financial condition and prospects.

Our customers’ and others’ perception of us and our reputation may be impacted by the broader industry and customers may not differentiate us from our competitors.

Customers and other stakeholders may not differentiate between us and the broader aerospace industry or, more specifically, the electric and hybrid electric aviation (including VTOL) industry. If other participants in this market have problems related to matters such as safety, technology development, engagement with certification

 

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authorities or other regulators, community engagement, security, data privacy, flight delays or customer service, such problems could impact the public perception of the entire electric and hybrid electric aviation (including VTOL) industry, including our business. We may fail to adequately differentiate our brand, our aircraft and other product offerings from others in the market which could impact our ability to attract customers or engage with other key stakeholders and have an adverse impact on our business, results of operations, financial condition and prospects.

If we are unable to keep up with advances in electric aircraft technology, we may suffer a decline in our competitive position.

It may be challenging to keep up with changes in electric aircraft technology. Any failure to keep up with advances in electric aircraft technology would result in a decline in our competitive position which could materially and adversely affect our business, results of operations, financial condition and prospects. Our research and development efforts may not be sufficient to adapt to changes in electric aircraft technology. As technologies evolve, we plan to upgrade or adapt our aircraft, charging systems and infrastructure and introduce new developments in order to continue to provide the latest technology, in particular battery cell technology. However, we may not compete effectively with our competitors if we are not able to source and integrate the latest technology into our aircraft and related components.

If we are unable to design, develop, market and sell new electric aircraft and services that address additional market opportunities, our business, results of operations, financial condition and prospects results will suffer.

We may not be able to successfully develop new electric aircraft and services, address new market segments or develop a significantly broader customer base. To date, we have focused our business on the design of high-performance electric aircraft and our Enabling Technologies that support our aircraft. We will need to address additional markets and expand our customer demographic in order to further grow our business. We have not completed the design, component sourcing or manufacturing process for our aircraft, so it is difficult to forecast their eventual cost, manufacturability or quality. Therefore, there can be no assurance that we will be able to deliver aircraft that is ultimately competitive in the electric aircraft market. Our failure to address additional market opportunities would harm our business, results of operations, financial condition and prospects.

The aircraft market is highly competitive, and we may not be successful in competing in this industry. We currently face competition from traditional aerospace companies and recent market entrants and expect to face competition from others in the future.

The worldwide aircraft market, particularly for alternative fuel aircraft, is highly competitive today and we expect it will become even more so in the future. With respect to our aircraft, we currently face strong competition from established electric aircraft manufacturers and recent market entrants who are also developing electric aircraft. Furthermore, electric aircraft have already been brought to market in China and may be brought to market in other foreign countries in the near-term.

Many of our current and potential competitors have significantly greater financial, manufacturing, marketing and other resources than we do and may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale and support of their products. Our competitors may be in a stronger position to respond quickly to new technologies and may be able to design, develop, market and sell their products more effectively.

We expect competition in the electric and hybrid electric aviation (including VTOL) industry to intensify in the future in light of increased demand for alternative fuel aircraft, continuing globalization and consolidation in the worldwide aircraft industry. Factors affecting competition include product quality and features, innovation

 

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and development time, pricing, reliability, safety, fuel economy, customer service and financing terms. Increased competition may lead to lower aircraft unit sales, which may adversely affect our business, results of operations, financial condition and prospects. Our ability to successfully compete in our industry will be fundamental to our future success in existing and new markets and our market share. There can be no assurances that we will be able to compete successfully in our markets.

Demand in the electric and hybrid electric aviation (including VTOL) industry is highly volatile.

Volatility of demand in the electric and hybrid electric aviation (including VTOL) industry may materially and adversely affect our business, results of operations, financial condition and prospects. The passenger, military and logistics end markets in which we primarily compete and plan to compete in the future have been subject to considerable volatility and unpredictability with respect to demand in recent periods. Demand for electric and hybrid electric (including VTOL) aircraft sales and related products, technologies and services depends to a large extent on general, economic, political and social conditions in a given market and the introduction of new aircraft and technologies. As a new aircraft manufacturer and low volume producer, we have fewer financial resources than more established aircraft manufacturers to withstand changes in the market and disruptions in demand. As our business grows, in addition to macroeconomic factors, economic conditions and trends in other countries and regions where we sell our aircraft will also impact our business, results of operations, financial condition and prospects. Demand for our electric aircraft may also be affected by factors directly impacting aircraft price or the cost of purchasing, operating, charging and maintaining aircraft (including the availability of financing and other incentives), prices of raw materials and parts and components, cost of fuel and governmental regulations, including tariffs, import regulation and other taxes. These effects may have a more pronounced impact on our business given our relatively smaller scale and financial resources as compared to many incumbents, and in particular, traditional, aircraft manufacturers.

Crashes, accidents or incidents of electric and hybrid aircraft, as well as accidents or incidents involving battery solutions, such as lithium-ion batteries, could have a material adverse effect on our business, results of operations, financial condition and prospects.

The operation of aircraft is subject to various risks, and demand for air transportation of persons as well as cargo, including in connection with our commercial offerings and defense program, has been, and may in the future be, impacted by accidents or other safety issues regardless of whether such accidents or issues involve any electric aircraft of ours. Air transportation hazards, such as adverse weather conditions, fire and mechanical failures and incidents caused by human error may result in death or injury to personnel and passengers or harm to property, which could impact customer or passenger confidence in a particular aircraft type or the air transportation services industry as a whole and could lead to a reduction in passenger or cargo volume. Safety statistics for air travel are reported by multiple parties, including the Department of Transportation and National Transportation Safety Board, and are often separated into categories of transportation. Because our commercial offerings and defense program may include a variety of transportation methods, fliers may have a hard time determining how safe electric aircraft and related products and services are and their confidence in electric aircraft and such products or services may be impacted by, among other things, the classification of accidents in ways that reflect poorly on electric aircraft and such products or services.

Test flying prototype aircraft is inherently risky, and crashes, accidents or incidents involving our aircraft, or other companies’ prototype aircraft that may utilize our products, are possible. Whether or not it involves our aircraft or our related technology, any such occurrence in the future could negatively impact our development, testing and certification efforts, and could result in re-design, certification delay and/or postponements or delays to our commercial launch.

We expect demand for our aircraft and other offerings (and, in some contexts, others’ services utilizing the same) to be impacted by accidents or other safety issues regardless of whether such accidents or issues involve

 

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our aircraft. Such accidents or incidents could also have a material impact on our ability to obtain or maintain airworthiness authorization with regulators, including the FAA, for our aircraft and could impact confidence in our aircraft type or the electric industry as a whole, particularly if such accidents or incidents were due to a safety fault or oversight.

We believe that safety and reliability are two of the primary attributes our potential customers consider when selecting a provider of electric aircraft or related products or services. Any failure by us to maintain standards of safety and reliability that are satisfactory to our customers, their clients or other end users could adversely impact our ability to attract and retain customers. We believe that regulators and the general public are still forming their opinions about the safety and utility of aircraft that are highly reliant on lithium-ion batteries and advanced flight control software capabilities and that operate in and around urban areas, among other things. An accident or incident involving either our aircraft or a competitor’s aircraft while these opinions are being formed could have a disproportionate impact on the longer-term view of the emerging market for electric and hybrid electric (including VTOL) aircraft.

We are at risk of adverse publicity stemming from any public incident involving us, our people or our brand. Such an incident could involve the actual or alleged behavior of our employees, contractors or partners. Further, if our electric aircraft, whether operated by us or a third party, were to be involved in a public incident, accident, catastrophe or regulatory enforcement action, we could be exposed to significant reputational harm and potential legal liability. The insurance we carry may be inapplicable or inadequate to cover any such incident, accident, catastrophe or action. In the event that our insurance is inapplicable or inadequate, we may be forced to bear substantial losses from an incident or accident. Any such incident, accident, catastrophe or action involving our electric aircraft or electric aircraft generally could create an adverse public perception, which could harm our reputation, result in customers, passengers or other end users being reluctant to use our products or services, and adversely impact our business, results of operations, financial condition and prospects.

Additionally, the battery packs that we sell, and that are expected to power our electric aircraft, use battery (including lithium-ion) cells. On rare occasions, battery cells, including lithium-ion cells, can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other cells. It is possible that a field or testing failure of our aircraft could occur in the future, which could subject us to lawsuits, environmental, health and safety – (“EHS”) related liabilities, product recalls or redesign efforts, any of which would be time-consuming and expensive. Also, negative public perceptions regarding the suitability of battery (including lithium-ion) cells for aerospace applications or any future fire or other incident involving battery cells could seriously harm our business. Moreover, any such failure of or otherwise in relation to a competitor’s electric aircraft may cause indirect adverse publicity for us and our aircraft. Such adverse publicity could negatively affect our brand and harm our business, results of operations, financial condition and prospects.

We store batteries, including lithium-ion batteries, at our production and testing facilities. Such storage and the handling of batteries and battery materials in connection with our research and development and other business activities poses risks. For example, in August 2022, we experienced a thermal runaway fire event with respect to one of our battery packs awaiting testing, and while such incident did not have a significant impact on our business operations or certification timing, any occurrence in the future of a similar incident or other fire involving or relating to our batteries could negatively impact our development, testing and certification efforts and could result in re-design, certification delay and/or postponements or delays in respect of our commercialization timeline. In addition, our manufacturing partners and suppliers are expected to store a significant number of batteries, including lithium-ion batteries, at their facilities. Any unanticipated use, or use beyond the scope of recommended parameters, in the transport, testing, storage or other use of battery cells, including lithium-ion cells, may cause disruption to the operation of our facilities or our manufacturers’ operations. A safety issue or fire related to the cells could disrupt operations or cause manufacturing delays, and could lead to adverse publicity and, potentially, a safety recall, depending on the extent of any resultant damage or related injury.

 

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We are subject to many hazards and operational risks that can disrupt our business, including interruptions or disruptions in service at our facilities, for which we may not be able to secure adequate insurance policies, or secure insurance policies at reasonable prices.

Our operations are subject to many hazards and operational risks, including general business risks, product liability, and damages to third parties, the environment, our infrastructure or properties that may be caused by natural or manmade disasters, power losses, telecommunications failures, terrorist attacks (including hijacking, use of the aircraft as a weapon, or use of the aircraft to disperse a chemical or biological agent), security related incidents, human errors or certain EHS risks and hazards to our employees or third parties associated with our manufacturing operations. See also “—We could incur significant costs in complying with EHS laws and regulations and could be adversely affected by liabilities or obligations imposed under such laws and regulations.”.

We maintain general liability insurance, aircraft liability coverage, directors and officers (“D&O”) insurance and other insurance policies. There can be no assurance that our insurance will be sufficient to cover all potential claims or that present levels of coverage will be available in the future at reasonable cost or at all. Further, we expect our insurance needs and costs to increase as we grow and enhance production facilities and capabilities, manufacture aircraft and other aircraft parts and related products, establish commercial operations and expand into new markets. It is too early to determine what impact, if any, the commercialization of electric aircraft will have on our insurance costs, which may have an adverse impact on our business, results of operations, financial condition and prospects.

We may become subject to product liability claims, which could harm our business, reputation, results of operations, liquidity, financial condition and prospects if we are not able to successfully defend or insure against such claims.

We may become subject to product liability claims, which could harm our business, brand, results of operations, liquidity, financial condition and prospects. The aircraft industry experiences significant product liability claims and we face inherent risk of exposure to claims in the event our aircraft do not perform as expected or malfunction resulting in personal injury or death. A successful product liability claim against us could require us to pay a substantial monetary award. Moreover, a product liability claim could generate substantial negative publicity about our industry, aircraft and business and inhibit or prevent commercialization of other future aircraft candidates which would have material adverse aircraft on our business, brand, results of operations, liquidity, financial condition and prospects. We maintain product liability insurance for our aircraft and our products on a claims made basis, but we cannot assure that our insurance will be sufficient to cover all potential product liability claims. Any lawsuit seeking significant monetary damages either in excess of our coverage, or outside of our coverage, may have a material adverse effect on our business, brand, results of operations, liquidity, financial condition and prospects. We may not be able to secure additional product liability insurance coverage on commercially acceptable terms or at reasonable costs when needed, particularly if we do face liability for our products and are forced to make a claim under our policy.

We are highly dependent on the continued service and leadership of our founder, President and Chief Executive Officer and a member of our Board, Kyle Clark, and if we are unable to retain Mr. Clark, our ability to compete and overall performance could be harmed.

Our future success depends substantially on the continued contributions of our founder, Kyle Clark, whose vision, strategic direction and deep understanding of our technology, industry, target markets and mission have been integral to our innovation and growth outlook to date. Mr. Clark routinely engages directly with regulators and peers with first-hand experience and expertise not only as our CEO and Board member, but also as chair of the General Aviation Manufacturers Association (GAMA) Electric Propulsion & Innovation Committee (EPIC). Mr. Clark is also a test pilot for our company. From engineering and product development to talent recruitment and long-term strategic planning, Mr. Clark plays a central role in virtually all aspects of our business, and while every member of our team is valuable, retaining the services and leadership of Mr. Clark is paramount.

 

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We maintain, and we expect to continue to maintain, a key person life insurance policy with respect to Mr. Clark. If Mr. Clark were to discontinue his current role in the future or should he be unable to fulfill his duties for some reason, this could significantly disrupt our operations, impede the execution of our business strategy or otherwise have a material adverse effect on our ability to compete in an increasingly complex, evolving market. Although we have assembled a strong, capable leadership team, there is no guarantee that we could replace Mr. Clark with someone of comparable expertise and vision.

Our future success depends on the continuing efforts of our key personnel and on our ability to attract and retain highly skilled personnel and senior management.

Our future success depends, in part, on our ability to continue to attract and retain highly skilled personnel. In particular, we are highly dependent on the contributions of our senior management team and other key personnel. While our efforts to hire key personnel have generally been successful overall, the industry in which we operate is generally characterized by high levels of competition for skilled employees. Certain members of management, including our Chief Executive Officer, participate in various high-risk activities, such as recreational aviation, which carries the risk of serious injury and death. Relatedly, we support access to a flight program and use of aircraft by those of our personnel who elect to participate in our flight program. The loss of key personnel, including members of management as well as key engineering, product development, marketing and sales personnel, could disrupt our operations and make it more difficult to achieve our business plans.

Compensation packages for highly skilled personnel have increased over time and will likely continue to increase, and competition for highly skilled personnel is often intense, and we may incur significant costs to attract and retain our personnel. Although we have generally entered into employment offer letters with our key personnel, these letters have no specific duration and provide for at-will employment, which means our key personnel may terminate their employment relationship with us at any time. We may not be successful in attracting, integrating or retaining qualified personnel to fulfill our current or future needs. We have, from time to time, experienced, and we expect to continue to experience, difficulty or delay in hiring and retaining highly skilled personnel with appropriate qualifications. In addition, job candidates and existing personnel often consider the value of the equity awards they receive in connection with their service. If the perceived value of our equity or equity awards declines, it may adversely affect our ability to retain highly skilled personnel. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business, results of operations, financial condition and future growth prospects could be harmed.

Our business may be adversely affected by labor and union activities.

Although none of our employees are currently represented by a labor union, unionized labor is common throughout the aerospace industry and can result in higher employee and benefit costs and increased risk of work stoppages, strikes and labor disputes. We may also directly and indirectly depend upon other companies with unionized work forces, such as parts suppliers and trucking and freight companies, and work stoppages or strikes organized by such unions could harm our business, results of operations, financial condition and prospects.

We expect to conduct a portion of our business pursuant to U.S. government contracts, which are subject to unique risks.

We may enter into contracts with governmental organizations in the future. Sales to governmental organizations are subject to a number of challenges and risks that may adversely affect our business and operating results, including the following risks:

 

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new regulations, or changes to existing regulations, could result in increased compliance costs, and we could be subject to withheld payments and/or reduced future business if we fail to comply with new or existing requirements in the future;

 

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government demand and payment for our aircraft, motors, batteries and technologies may be impacted by public sector budgetary cycles and funding authorizations, with funding reductions or delays

 

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adversely affecting public sector demand for our offerings, including as a result of sudden, unforeseen and disruptive events such as government shutdowns, governmental defaults on indebtedness, competing priorities of a new administration, war, regional geopolitical conflicts around the world, incidents of terrorism, natural or manmade disasters and public health concerns including epidemics or pandemics;

 

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governments routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit could result in the government refusing to continue buying our aircraft or other offerings, grants or other forms of government funding, which would adversely impact our revenue and operating results, or institute fines or civil or criminal liability if an investigation, audit or other review, were to uncover improper or illegal activities;

 

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contracts with governments are subject to additional requirements such as protective statutes (e.g., the civil False Claims Act), suspension and debarment as well as other legal actions and proceedings that generally do not apply to purely commercial contracts;

 

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governments may require certain products and technologies to be manufactured, developed, produced or offered solely in their country or in other relatively high-cost locations, and we may not manufacture, develop, produce or offer all products or technologies (or certain aspects thereof) in locations that meet these requirements, affecting our ability to sell these products or technologies to governmental agencies;

 

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refusal to grant certain certifications or clearance by one government agency, or a decision by one government agency that our products or technologies do not meet certain standards, may cause reputational harm and cause concern with other government agencies;

 

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certain types of contracts impact contractor profitability, intellectual property rights, and compliance requirements, increasing associated costs and risks; and

 

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heightened physical and cybersecurity requirements associated with information and access to manufacturing facilities and secure locations.

The occurrence of any of the foregoing could cause governmental organizations to delay or refrain from purchasing our aircraft or other offerings in the future or otherwise adversely affect our business and operating results.

The U.S. government may modify or terminate one or more of our existing or future contracts.

We have previously been awarded contracts with the U.S. Military and may enter into additional contracts with other U.S. governmental organizations in the future. However, such opportunities carry the risk of the U.S. government’s ability to modify or terminate one or more of such contracts without prior notice and at the U.S. government’s convenience. We believe that the U.S. Military may be shifting its priorities under the Agility Prime program towards hybrid aircraft and autonomous flight technology; however, any future contracts we secure with the U.S. government could be modified or terminated under standard U.S. government contract terms. Moreover, opportunities to pursue such contracts could be less than we currently anticipate. In addition, funding may be reduced or withheld as part of the annual U.S. Congressional appropriations process due to fiscal constraints, changing priorities, geopolitical or other reasons. Any loss or reduction of expected funding and/or modification or termination of one or more U.S. government contracts that may be awarded to us could have a material adverse effect on our access to government testing facilities and/or our ability to secure pre-certification operating experience and/or revenues, which could have an adverse impact on our business, results of operations, financial condition and prospects.

We may be unable to secure contracts or continue to grow our relationship with the U.S. government and the U.S. Military.

We are currently pursuing contracts with the U.S. government that may enable us to supply our aircraft, charging capabilities and other products and technologies, and/or services related to them, to the U.S. Military or

 

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other U.S. government agencies both prior to receiving a Type Certification from the FAA and after. While we believe we are uniquely qualified to participate in future initiatives, particularly those related to autonomous flight and hybrid aircraft, there can be no guarantees of our ability to negotiate and secure additional contracts in these areas. The timing of securing additional contracts may also be impacted by several factors that depend on actions by U.S. government personnel and the possibility remains that the time to secure additional contracts may be extended in the event of a bid protest. Our market is growing increasingly competitive and will continue to draw interest by large defense contractors as technology advances. Failure to obtain these contracts could limit our ability to gain additional operational learnings about our aircraft and other offerings and secure meaningful revenue, which could have a material adverse effect on business, results of operations, financial condition and prospects.

Our ability to attract and retain a U.S. Military customer base and the related success of our defense program may be dependent upon our personnel obtaining and maintaining required security clearances for U.S. government classified work, as well as our ability to maintain our facility security clearance for the organization.

We maintain a Secret-level facility security clearance for the performance of classified U.S. Military contracts and subcontracts. We operate under Security Control Agreement, which currently requires that the U.S. Military approve one Director who is considered the Outside Director whose duties require that such director balance our business interests with U.S. national security interests in board-level decisions. In the future, one or more U.S. government contracts could require certain of our personnel to maintain various levels of security clearances in connection with our facility security clearance. The U.S. Military has strict security clearance requirements for personnel who work on classified programs. Obtaining and maintaining security clearances for personnel involves a lengthy process, and it is difficult to identify, recruit and retain personnel who already hold security clearances. If our employees or other personnel are unable to obtain security clearances in a timely manner, or at all, or if our employees who hold security clearances are unable to maintain the clearances or terminate employment with us, then a potential or then-existing customer requiring classified work could elect not to award us a contract, terminate its contract with us or decide not to renew a contract upon its expiration, as applicable. In addition, we expect that many of the contracts on which we will bid will require us to demonstrate our ability to employ personnel with specified types of security clearances in addition to maintaining the organization’s facility security clearance. To the extent we are not able to engage personnel with the required security clearances for a particular contract, we may not be able to bid on or win defense or other government contracts, or effectively rebid on future contracts.

The National Industrial Security Program requires that a company maintaining a facility security clearance be effectively insulated from foreign ownership, control or influence (“FOCI”). We are party to a Security Control Agreement, dated June 15, 2025, by and among the U.S. Military, QIA Industrials Holding LLC and BETA Technologies, Inc. (the “SCA”), as a suitable FOCI mitigation arrangement under the National Industrial Security Program Operating Manual Rule. Depending on changes to our ownership and governance composition, DCSA may determine, from time to time, that a different FOCI mitigation arrangement is appropriate.

We may be subject to risks associated with our strategic relationships.

We are or may be subject to risks associated with strategic relationships or other opportunities and may not be able to identify adequate strategic relationship opportunities, or form strategic relationships, in the future. We have entered into strategic relationships, and may in the future enter into additional strategic relationships or joint ventures or minority equity investments, in each case with various third parties for the production or operation of our aircraft as well as with other collaborators with capabilities on data and analytics and engineering.

We have also entered into agreements with potential partners in a number of international markets to establish operations in these markets. These alliances subject us to a number of risks, including risks associated with sharing proprietary information, non-performance by the third-party and increased expenses in establishing new strategic relationships, any of which may adversely affect our business. We may have limited ability to

 

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monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffer negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with any such third party.

Strategic business relationships will be an important factor in the growth and success of our business. However, there can be no assurances that we will be able to continue to identify or secure suitable business relationship opportunities in the future or our competitors may capitalize on such opportunities before we do. Moreover, identifying such opportunities could require substantial management time and resources, and negotiating and financing relationships involves significant costs and uncertainties. If we are unable to successfully source and execute on strategic relationship opportunities in the future, our overall growth could be impaired, and our business, prospects, financial condition and operating results could be adversely affected. Even if we are able to successfully source, negotiate and execute on strategic relationship opportunities, there can be no assurances that the expected synergies contemplated by the strategic business relationship will materialize, advance our business strategy, meet the expected return-on-investment targets or prove successful or effective for our business See also “—Our current collaboration with GE Aerospace and future strategic alliances could have an adverse effect on our financial condition and results of operations.”

When appropriate opportunities arise, we may acquire or license additional assets, products, technologies or businesses that are complementary to our existing business. In addition to possible stockholder approval, we may need approvals and licenses from relevant government authorities for the acquisitions or licenses and to comply with any applicable laws and regulations, which could result in increased delay and costs, and may disrupt our business strategy if we fail to do so. Furthermore, acquisitions or licenses and the subsequent integration of new assets and businesses into our own would likely require significant attention from our management and could result in a diversion of resources from our existing business, which in turn could have an adverse effect on our operations. Acquired or licensed assets or businesses may not generate the financial results we expect. Acquisitions or licenses could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant.

If conflicts arise between our collaborators or strategic partners and us, the other party may act in a manner adverse to us which could limit our ability to implement our strategies.

Our collaborators or strategic partners may develop, either alone or with others, products in related fields that are competitive with our products. Specifically, conflicts with key collaborators may adversely impact our ability to manufacture aircraft or scale production or sales. Conflicts with foreign partners may adversely impact our ability to scale operations outside the U.S. effectively. If such conflicts arise it may adversely affect our business, results of operations, financial condition and prospects.

We enter into aerospace commercial contracts, which are subject to unique risks, particularly with respect to contracts for our electric aircraft.

Contracts in the aerospace industry, and particularly aircraft contracts, may include complex technical terms governing the sale of our electric aircraft and/or maintenance, repair and overhaul support requirements. Pursuant to such contracts, we may provide services on an integrated basis, and may be required to provide warranty service and international support and/or meet certain service level, hardware performance and/or timing requirements, which may require us to assume additional risks associated with cost over-runs, delays and project losses.

Providing services on an integrated basis may also require us to assume additional risks associated with operating cost inflation, labor availability and productivity, supplier pricing and performance and potential claims for liquidated damages and other financial and contractual remedies for nonperformance. Circumstances

 

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out of our control, including disruptions in our supply chain, could delay our performance of such contracts. If the amount we are required to pay for these goods and services exceeds the amount we have estimated to be recognized as revenue, we could experience losses in the performance of these contracts. These delays and additional costs may be substantial, and we may be required to compensate customers for these delays, which may have an adverse impact on our business, results of operations, financial condition and prospects.

Our current collaboration with GE Aerospace and future strategic alliances could have an adverse effect on our financial condition and results of operations.

We may form strategic alliances or collaborations, such as our current collaboration with GE Aerospace, or create joint ventures with third parties that we believe will complement or augment our existing business. If we enter into strategic alliances or collaborations with promising technologies, we may not be able to realize the benefit of collaborating with such businesses if we are unable to successfully execute on the objectives of such strategic alliances or if exclusivity provisions prevent us from exploring alternative partnerships. In particular, our collaboration with GE Aerospace includes exclusive supply and right of first refusal (“ROFR”) provisions that may limit our ability to independently develop, source, or commercialize certain technologies, which could impact our flexibility and operational decision-making. We may encounter difficulties in developing, manufacturing and marketing any new technologies resulting from a strategic alliance or collaboration, including our current collaboration with GE Aerospace, that delay or prevent us from realizing their expected benefits or enhancing our business and may have an adverse effect on our results of operations. We cannot assure our stockholders that, following any such strategic alliance or collaboration, we will achieve the expected synergies to justify the transaction.

We may not realize all expected sales.

We cannot assure you that we will realize the revenue we expect to generate from our Backlog in the periods we expect to realize such revenue, or at all. Backlog represents the aggregate of our Firm Orders and Options. Agreements relating to our Backlog generally contain conditions with respect to the purchase of our aircraft or that require us to perform and provide certain deliverables ahead of completion of a purchase order. Certain of our contracts depend on certification of our aircraft by the FAA. Payment obligations arise after meeting certain manufacturing milestones. If the conditions to or performance of obligations under such agreements are not met, or if such agreements are otherwise canceled, modified or delayed, we may not generate the revenue we expect, which would materially and adversely affect our business, results of operations, financial condition and prospects. In addition, expected sales of our chargers, components and other offerings may not be realized.

A loss of one or more of our significant customers, their inability to perform under their contracts, or their default in payment, could negatively impact our revenues, results of operations and cash flows.

Historically, we have been dependent on a relatively small number of customers for our sales, and a small number of customers have accounted for a material portion of our revenue. For the year ended December 31, 2024, the U.S. government and United Therapeutics constituted 48% and 34% of total revenues, respectively. For the six months ended June 30, 2025, the U.S. government and United Therapeutics constituted 37% and 18% of total revenues, respectively. The loss of any one of our significant customers, their inability to perform under their contracts, or their default in payment, could have a materially adverse effect on our revenues, results of operations and cash flows.

We depend on suppliers and service partners for raw materials and certain parts and components.

Despite our high degree of vertical integration, we still rely on purchased materials and parts for our aircraft and all products and manufacturing equipment, which we source from suppliers globally, some of whom are currently single source suppliers, and certain of the components used in our aircraft that are custom made for us by third parties. To date, we have not qualified alternative sources for most of the single sourced components used in our aircraft and we generally do not maintain long-term agreements with our single source suppliers. For example,

 

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while several sources of the lithium-ion cell we have selected for battery packs are available, we have fully qualified only one supplier for these lithium-ion cells. While we believe that we may be able to establish alternate supply relationships and can obtain or engineer replacement components for our single source components, we may be unable to do so in the short term or at all at prices or costs that are favorable to us. In particular, while we believe that we will be able to secure alternate sources of supply for almost all of our single sourced components on a relatively short time frame, qualifying alternate suppliers or developing our own replacements for certain highly customized components of our electric aircraft, such as avionics, sidesticks or servos which are supplied to us by Garmin, Sensata Technologies and Volz Servos, respectively, may be time consuming and costly.

We face risks relating to the availability of these materials, parts and components, including that we will be subject to demand shortages and supply chain challenges and generally may not have sufficient purchasing power to eliminate the risk of price increases for the raw materials and lines we need. To the extent that we are unable to enter into commercial agreements with any of our suppliers on beneficial terms, or any of our suppliers experience difficulties ramping up their supply to meet our requirements, the production of our batteries and aircraft will be delayed and we will not be able to meet our production timelines.

Separately, we may be subject to various supply chain requirements regarding, among other things, conflict minerals, hazardous substance management, environmental sustainability and labor practices. We may be required to incur substantial costs to comply with these and potential future requirements, which may include locating new suppliers to replace existing ones, and could also be subject to substantial costs or penalties in the event of non-compliance. We may not be able to find any new suppliers for certain raw materials or components required for our operations, or such suppliers may be unwilling or unable to provide what we require. While we believe that we may be able to establish alternate supply relationships and can obtain substitutes, we may be unable to do so in the short-term, or at all, at prices that are favorable to us.

We expect to incur significant costs related to procuring various materials required to manufacture and assemble our batteries, aircraft and other products, which will require us to negotiate purchase agreements and delivery lead-times on advantageous terms. We may not be able to control fluctuation in the prices for these materials or negotiate agreements with suppliers on terms that are beneficial to us. Substantial increases in the prices for our raw materials, or our inability to reduce our raw material costs as we scale, would negatively impact our prospects.

In addition, currency fluctuations, geopolitics, trade barriers, embargoes, tariffs or shortages and other general economic or political conditions may limit our ability to obtain key materials or components for our batteries and aircraft or significantly increase freight charges, raw material costs and other expenses associated with our business.

While we have not experienced material supply chain disruptions to date, we may experience material supply chain disruptions in the future. Any disruption in the supply of materials, parts, services or outsourced components could temporarily disrupt research and development activities or production of our batteries or aircraft and could impede our commercialization efforts. Changes in business conditions, unforeseen circumstances, governmental and regulatory changes, and other factors beyond our control or which we do not presently anticipate could also affect our suppliers’ ability to deliver to us on a timely basis. Any of the foregoing could materially and adversely affect our business, results of operations, financial condition and prospects.

We may be unable to seek, obtain, maintain, protect or enforce our intellectual property rights, or to otherwise defend our intellectual property rights from unauthorized access or use by third parties.

Our success depends, in part, on our ability to seek, obtain, maintain, protect, defend or enforce our intellectual property rights, including technologies deployed in our current or future aircraft or utilized in our aircraft components and related products and services. To date, we have relied primarily on patents, trade secrets,

 

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trademarks, other intellectual property and contractual rights to protect our know-how, technology and proprietary information. Our software is also subject to certain protections under copyright law, though we have chosen to protect the software as a trade secret.

We routinely take steps to maintain, protect and enforce our intellectual property and proprietary technology. Although we seek to enter into agreements, including confidentiality, non-disclosure and intellectual property assignment agreements, with parties who have access to our intellectual property and proprietary technology, such as our employees, contractors, consultants, and other third parties, no assurance can be given that these agreements will be effective in controlling access to and distribution of our technology and proprietary information. In addition, such agreements may be breached, may not be self-executing or we may fail to enter into such agreements with all relevant individuals and entities. We may become subject to claims that current or former employees, contractors, consultants and other third parties engaged by us for development of intellectual property misappropriated intellectual property rights from their previous employers. Further, our employees are able to leave and may unintentionally take certain intellectual property with them to direct and indirect competitors. As such, we may also become subject to claims challenging the inventorship or ownership of our intellectual property, or claims that former employees, collaborators or other third parties have an ownership interest in our intellectual property. Accordingly, we cannot guarantee that the steps we have taken to protect our intellectual property will be adequate to prevent infringement of our rights or misappropriation of our technology, trade secrets or know-how that we have secured, or will be able to secure, appropriate permissions or protections for all of the intellectual property rights we use or claim rights to.

We also limit access to and restrict disclosure of our trade secrets and other proprietary or confidential information. For example, we rely on physical and electronic security measures to protect our proprietary information. However, we cannot provide assurance that these security measures will not be breached or will provide adequate protection for our proprietary or confidential information. We intend to continue to rely on the foregoing steps and other means in the future, but the steps we take to protect our intellectual property may be ineffective or inadequate to deter infringement, misappropriation, or other violations of our proprietary information or other intellectual property, and unauthorized parties may attempt to copy, reverse engineer or misappropriate aspects of our intellectual property or obtain and use information that we regard as proprietary. Additionally, it is possible that others will design around our intellectual property, independently develop the same, similar or superior technology or otherwise obtain access to our unpatented technology in a manner that does not violate our intellectual property rights, and in such cases we may have difficulty asserting trade secret rights against such parties or otherwise may not be able to successfully assert our intellectual property or other proprietary rights against them.

Costly and time-consuming litigation could be necessary to enforce and determine the scope of our intellectual property and related confidentiality and nondisclosure provisions. However, even if we initiate litigation against third parties such as suits alleging infringement, misappropriation, or other violations of our intellectual property, we may not prevail. Our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights. Moreover, third parties may challenge, invalidate, or circumvent our intellectual property and other proprietary rights, or otherwise assert rights therein or ownership thereof, including through administrative processes or litigation, and we may be unable to successfully resolve any such conflicts in our favor or to our satisfaction. Additionally, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. An adverse determination of any litigation proceedings could put our intellectual property at risk of being invalidated, unenforceable or interpreted narrowly and could put any of our related intellectual property at risk of not issuing or being cancelled. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments. Moreover, adequate remedies may not be available in the event of an unauthorized use or disclosure of our trade secrets. Trade secrets can be difficult to protect. While we strive to undertake measures that protect and preserve our trade secrets, such measures can be breached and would require extensive litigation to be compensated appropriately. In addition,

 

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our trade secrets may be independently discovered by competitors. Accordingly, if we fail to obtain or maintain our intellectual property, or if our competitors obtain our trade secrets or independently develop technology similar or superior to ours, our competitive market position could be materially adversely affected. Even if we obtain or maintain our intellectual property rights, we cannot guarantee that such rights will be valid, enforceable, sufficiently broad in scope or provide adequate protection of our intellectual property and any other proprietary rights.

Further, obtaining and maintaining patent, trademark, and copyright protection can be costly. We may choose not to, or may fail to, pursue or maintain such forms of protection for our technology in the United States or foreign jurisdictions, which could harm our ability to maintain our competitive advantage in such jurisdictions. It is also possible that we will fail to identify patentable aspects of our technology before it is too late to obtain patent protection, that we will be unable to devote the resources to file and prosecute all patent applications for such technology or that we will lose protection for failing to comply with all procedural, documentary, payment and other obligations during the patent prosecution process. Additionally, we do not know whether any of our pending patent applications will result in the issuance of patents or whether the examination process will require us to narrow our claims. Even if granted, there can be no assurance that the patent protections will not be narrowed or lost completely due to third party re-examination and other post-grant proceedings.

The laws of some countries do not protect proprietary rights to the same extent as the laws of the United States, and mechanisms for enforcement of intellectual property rights in some foreign countries may be inadequate to prevent other parties from infringing our proprietary technology. We may also fail to detect unauthorized access or use of our intellectual property, or to take appropriate steps to enforce our intellectual property rights, or we may be required to expend significant resources to monitor and protect our intellectual property rights, including engaging in litigation, which may be costly, time-consuming and divert the attention of management and resources, and may not ultimately be successful. If we fail to meaningfully establish, maintain, protect and enforce our intellectual property rights, our business, results of operations, financial condition and prospects could be adversely affected.

We have used certain of our intellectual property in performance of contracts with the U.S. government, and may do so more broadly in the future. The Federal Acquisition Regulation and Defense Federal Acquisition Regulation Supplement provide that the U.S. government may obtain certain rights in intellectual property, including patents, developed by us and our subcontractors and suppliers in performance of government contracts or with government funding. The U.S. government may use or authorize others (including our competitors) to use such patents and intellectual property for government and other purposes. The U.S. government is pursuing aggressive positions on the acquisition of broad data and software packages as well as the scope and applicability of these rights once acquired. The U.S. Military is also implementing an overarching intellectual property acquisition policy that will require a greater focus and planning as to intellectual property rights for its programs, with the potential impacts of this policy or any associated regulatory changes on future acquisitions yet to be determined. The U.S. Military’s efforts could affect our ability to protect and exploit our intellectual property. Governments may also challenge the sufficiency of intellectual property rights we have granted in government contracts and attempt to obtain greater rights, which could reduce our ability to protect our intellectual property rights and to compete. Relatedly, our ability to procure and perform government contracts requires us to obtain certain rights in the intellectual property of others through government grants. Governments may deny us the right to obtain such rights in the intellectual property of others, which may affect our ability to perform government contracts. Additionally, the U.S. government may choose to apply secrecy orders to various patent applications precluding their publication, foreign filing, and enforcement even if they become granted and issued patents.

Third parties may claim that we infringe, misappropriate or otherwise violate their intellectual property.

We have in the past been subject to, and could in the future be subject to, claims and legal proceedings regarding alleged infringement, misappropriation or other violation by us of the intellectual property rights of third parties. Such claims, whether or not meritorious, have in the past resulted in, and may in the future result in,

 

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the expenditure of significant time and financial, managerial, and engineering resources. To resolve these claims, we may enter into royalty-bearing and cross-licensing agreements, which may be only available on terms that are less favorable than currently available, or not at all, or we may be required to modify, redesign, undertake workarounds or substantial reengineering, stop selling or otherwise limit our ability to use or offer affected technologies, products, services, and branding materials, or pay damages, including damages to satisfy indemnification commitments with our customers. Even if a license is available to us, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, which could adversely affect our business, financial condition and results of operations. Adverse outcomes could also include monetary damages, including legal fees, settlement payments and other costs or damages, or injunctive relief that may limit or prevent importing, marketing, and selling our products or services that have infringing, misappropriating or otherwise violating technologies. These risks have been amplified by the increase in third parties whose sole or primary businesses are to assert such claims.

Intellectual property rights do not necessarily address all potential threats.

The degree of future protection afforded by our intellectual property and other proprietary rights is uncertain

because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage. For example:

 

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we might not have been the first to invent the inventions covered by our patent portfolio;

 

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we might not have been the first to file the patent application covering our patent portfolio or future patents;

 

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it is possible that any patent applications we may file in the future will not lead to issued patents;

 

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others may have access to intellectual property rights which have been licensed to us on a non-exclusive basis;

 

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our competitors might conduct R&D activities in countries where we do not have patent rights, or in countries where R&D safe harbor laws exist, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

 

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we may choose not to file a patent for certain inventions, instead choosing to rely on trade secret protection or know-how, and a third party may independently develop such invention and subsequently file a patent covering such invention; and

 

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the patents of third parties or pending or future applications of third parties, if issued, may have an adverse effect on our business.

Should any of these events occur, it could significantly harm our business, financial condition and results of operations.

Interruption to, interference with, or failure of our complex information technology and communications systems could hurt our ability to effectively operate our business.

We depend on our: (a) operational systems, including business, financial, accounting, product development, data processing or production processes, owned by us or our third-party vendors or suppliers; (b) facility security systems, owned by us or our third-party vendors or suppliers; (c) aircraft technology, including powertrain and avionics and flight control software, owned by us or our third-party vendors or suppliers; (d) integrated software in our aircraft and GSE; or (e) customer data that we process or our third-party vendors or suppliers process on our behalf. These systems could fail or be interrupted due to conditions beyond our control, including security incidents, cyber-attacks and agreement terminations with third-party service providers. A failure of or interruption to our systems could disrupt our business operations, result in loss of intellectual property, trade secrets or other proprietary or competitively sensitive information, compromise certain information of customers, employees, suppliers or others, jeopardize the security of our facilities or affect the performance of in-product technology and the integrated software in our aircraft and GSE.

 

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We collect, store, transmit and otherwise process data from our aircraft and GSE, our employees and others as part of our business and operations, which may include personal, confidential or proprietary information. We also work with partners and third-party service providers or vendors that collect, store and otherwise process such data on our behalf and in connection with our aircraft and GSE.

We plan to use data connectivity software to monitor aircraft performance, enhance safety and enable cost-saving preventative maintenance. Our services depend on the availability, effectiveness and continued operation of information technology and communications systems and our ability to obtain and maintain satisfactory contracts with service providers. Our systems, or those of our third-party service providers, may be vulnerable to damage or interruption from physical theft, fire, terrorist attacks, natural or manmade disasters, power loss, actual or threatened acts of war, telecommunications failures, insider theft or misuse, human error and similar events. We and our third-party service providers are also vulnerable to cybersecurity-related incidents, including, among others, computer viruses, worms, trojan horses, bugs, distributed denial or degradation of service attacks, ransomware, malware, infiltration by unauthorized persons, malicious and destructive code, phishing attacks, social engineering schemes, or other attempts to harm our systems or those of our third-party service providers. We intend to log information about each aircraft’s use to aid in aircraft diagnostics and servicing. Our customers may object to the use of this data or place limitations that materially restrict its use, which may increase our aircraft maintenance costs and harm our business prospects.

There are inherent risks associated with developing, improving, expanding and updating our current systems, such as the disruption of our data management, procurement, production execution, finance, supply chain, sales and service processes. These risks may affect our ability to manage our data and inventory, to procure parts or supplies, to manufacture, deploy, deliver and service our aircraft and GSE, to adequately protect our intellectual property, or to achieve and maintain compliance with, or to realize available benefits under, applicable laws, regulations and contracts. We cannot be sure that these systems, including those of our third-party vendors or suppliers, will be effectively implemented, maintained or expanded as planned. If we do not successfully implement, maintain or expand these systems as planned, our operations may be disrupted and our ability to accurately and timely report our financial results could be impaired. Moreover, our proprietary information or intellectual property could be compromised or misappropriated, which could adversely affect our reputation. We may need to expend significant resources to make corrections or find alternative sources for these functions if such functions do not operate as intended.

We, along with our third-party service providers, vendors and suppliers, are at risk for cybersecurity-related attacks and cyber-incidents, which may adversely affect our business.

Cybersecurity risks and cyber-incidents may adversely affect our business by disrupting our operations or those of our third-party service providers, vendors and suppliers, compromising or corrupting our confidential information and/or damaging our business relationships, all of which could negatively impact our business, reputation, results of operations, financial condition and prospects. Although we have implemented a variety of security measures, our computer systems, networks and data, like those of other companies, could be subject to cyber-incidents, including intentional attacks or unauthorized access, use, alteration or destruction. Third parties, including activist, criminal, nation-state or terrorist actors, may attempt to fraudulently induce us or our personnel to disclose sensitive information (including passwords) in order to gain access to data, accounts, funds or other assets, or otherwise to inflict harm. In the event that we are subject to a successful cyber-attack or other cyber-incident, substantial losses may occur in the form of stolen, lost or corrupted: (i) data or payment information; (ii) financial information; (iii) software, contact lists or other databases; (iv) proprietary information or trade secrets; or (v) other items.

As our reliance on technology has increased, including internet or cloud-based programs, so have the risks posed to our internal and third-party information systems. Our aircraft contain complex information technology systems and built-in data connectivity to share aircraft data with ground operations infrastructure. We design, implement and test security measures intended to prevent unauthorized access to our information technology

 

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networks, our aircraft and related systems but these measures do not guarantee that a cyber-attack or cyber-incident will not occur. Hackers may attempt to gain unauthorized access to modify, alter, or use such networks, aircraft and systems to gain control of or to change our aircraft’s functionality or performance characteristics, or to gain access to data stored in or generated by the aircraft. A significant breach of our third-party service providers’ or vendors’ or our own network security and systems could have serious negative consequences for our business and future prospects, including possible fines, penalties and damages, reduced customer demand for our aircraft and harm to our reputation and brand.

Cybersecurity threats are constantly evolving and are difficult to predict due to advances in the technological capabilities and methods of threat actors, including phishing, social engineering or other illicit acts. We cannot be sure that any security measures that we or our third-party service providers or vendors have implemented will be effective against current or future security threats. For example, we may have limited insight into the data privacy or cybersecurity practices of third-party service providers and vendors. Even if our own security measures remain intact, cyber-attacks, data breaches, security incidents, malicious internet-based activities or other incidents or failures at one of our third-party service providers or our vendors could compromise our systems and data. Further, in such a circumstance, we may not receive timely notice of, or sufficient information about, the breach or other incident or failure, or be able to exert any meaningful control of or influence over how and when the breach or other incident or failure is addressed. Any theft, loss, or misappropriation of, or access to, clients’ or other proprietary data, or other breach of our third-party service providers’ and vendors’ information technology systems, could disrupt our operations, damage our reputation, result in fines, legal claims, or proceedings, including regulatory investigations and actions, liability for failure to comply with privacy and information security laws, or otherwise result in loss of revenue, fraudulent transactions, loss of clients, transaction errors, processing inefficiencies, service reliability and increased costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants. Further, the costs of mitigating cybersecurity risks may be significant, including, but not limited to, retaining the services of cybersecurity providers; compliance costs arising out of existing and future cybersecurity, data protection and privacy laws and regulations; and costs related to maintaining redundant networks, data backups and other damage-mitigation measures. Moreover, the mere perception of a security breach involving us or any part of the broader aerospace industry, whether or not true, could also damage our business, operations or reputation.

Threat actors, nation-states and nation-state supported actors now engage, and are expected to continue to engage, in cyber-attacks, including for geopolitical reasons and in connection with military conflicts and operations. During times of war and other major conflicts, we and our third-party vendors or suppliers may be vulnerable to heightened risk of these attacks. Our systems, networks and physical facilities could be breached, or personal information could otherwise be compromised due to employee error or malfeasance, if, for example, third parties attempt to fraudulently induce our employees or our customers to disclose information or usernames and/or passwords. Third parties may also exploit vulnerabilities in, or obtain unauthorized access to, platforms, systems, networks and/or physical facilities utilized by our third-party service providers and vendors. If a compromise of data were to occur, we may become liable under our contracts with other parties and under applicable law for damages, incur penalties and be responsible for other costs to respond to such an incident.

In addition, we are subject to domestic and international cybersecurity-related laws and regulations, alongside government, customer and other cybersecurity requirements. The scope and breadth of these requirements have expanded our compliance obligations, and cybersecurity regulatory enforcement activity has grown. We expect regulatory and compliance requirements to continue to evolve. Staying apace with these regulatory changes could require us, our suppliers and our business partners to modify existing practices, increase operational and compliance expenditures and incur new or additional information technology and product development expenses. Given that compliance with regulatory changes can take time, it is possible that our practices may not at all times comply fully or partially with all applicable requirements. Additionally, a failure to comply with the National Institute of Standards and Technology Special Publication 800-171, 32 CFR Part 117 or other applicable U.S. government or U.S. Military cybersecurity requirements and guidelines,

 

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including the Cybersecurity Material Model Certificate (“CMMC”), whether or not resulting in a security breach or disruption, could restrict our ability to bid for, be awarded and perform on U.S. Military contracts. U.S. Military requirements to comply with the CMMC and its obligations now and in the future may cause additional expense. We plan to implement cybersecurity policies and frameworks based on industry and governmental standards to align closely with U.S. Military requirements, instructions and guidance. Moreover, we continue to work with the U.S. Military on assessing cybersecurity risk and on policies and practices aimed at mitigating these risks.

We may be subject to increased compliance burdens by certain regulators and customers with respect to our aircraft and products, as well as additional costs to oversee and monitor security risks. Most jurisdictions have enacted laws mandating companies to inform individuals, stockholders, regulatory authorities and/or others of security breaches. In addition, some of our customer agreements may require us to promptly report security breaches on our systems. These mandatory disclosures can be costly, harm our reputation, erode customer trust and require significant resources to mitigate issues stemming from actual or perceived security breaches.

While we currently maintain cyber liability insurance, our insurance may be insufficient or may not cover all liabilities we could incur. A successful claim against us that exceeds our available cyber liability insurance coverage or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements) could adversely affect our business. In addition, we cannot be sure that our existing cyber liability insurance coverage will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim.

We are subject to evolving Privacy Laws, which subjects us to a number of potential regulatory and reputational risks. We may face investigations, fines and sanctions as a result of our or our service providers’ actual or perceived failure to comply with the Privacy Laws and incur increased operational costs in order to ensure future compliance.

We currently do, and in the future expect to continue to, collect, store, transmit and otherwise process data from our aircraft and GSE, our customers, our employees and others as part of our business and operations, which may include personal, confidential or proprietary information. We also work with partners and third-party service providers or vendors that collect, store and process such data on our behalf and in connection with our aircraft and GSE. As such, we are subject to data protection, privacy, cybersecurity and/or information security laws, regulations, and industry standards in the jurisdictions in which we do business (collectively, the “Privacy Laws”). These Privacy Laws impose obligations in relation to the collection, use, and disclosure of personal information, including providing consumers with certain rights to access, correct, delete, and restrict the processing of their personal information.

The Privacy Laws are constantly evolving and can be subject to significant change. As a result, the application, interpretation, and enforcement of the Privacy Laws and regulations are often uncertain, particularly in the new and rapidly evolving industries in which we operate. These laws and regulations may be interpreted and applied inconsistently from jurisdiction to jurisdiction and inconsistently with our current policies and practices. For example, regulatory or legislative actions or litigation could adversely affect the manner in which we provide our products and services, or adversely affect our financial results, including by imposing significant fines that increasingly may be calculated based on global revenue. Compliance with applicable Privacy Laws may require adhering to stringent legal and operational obligations and necessitate dedicating substantial time and financial resources, which may increase over time.

Numerous jurisdictions, including other states in the United States, have either passed, proposed, adopted or are considering laws and regulations related to the collection, use or other processing of data. Given the rapidly evolving landscape of data privacy and security laws, we cannot yet determine the full impact these privacy, security, and data protection laws and regulations, or other such future privacy, security, and data protection laws and regulations, may have on our current or future business. Such laws and regulations are expected to vary from jurisdiction to jurisdiction, thus increasing costs, operational and legal burdens, and the potential for significant liability for regulated entities. Additionally, these laws and regulations, and any changes or new laws or

 

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regulations, could impose significant limitations, require changes to our business, or restrict our use or storage of personal information, which may increase our compliance expenses and make our business more costly or less efficient to conduct. In addition, any such changes could compromise our ability to develop an adequate marketing strategy and pursue our growth strategy effectively, which, in turn, could adversely affect our business, results of operations, financial condition and prospects. Finally, any actual or perceived failure to comply with these laws could result in a costly investigation, enforcement actions, fines or litigation resulting in potentially significant liability or other costs and a material and adverse impact on our reputation and business.

Our use of artificial intelligence (“AI”) technologies may adversely impact our business, reputation, financial condition and results of operations.

We use AI technologies in connection with our business operations and intend to increase this use over time. Our use of AI technologies, particularly generative AI technologies, carries certain risks, including regarding the accuracy and quality of AI outputs, which may or may be perceived to be inaccurate, incomplete, biased, misleading, discriminatory or otherwise inappropriate for our needs, which could adversely affect our business and reputation. Our use of AI, particularly generative AI, may also create legal and financial exposure, including for claims and liabilities associated with AI outputs that may be alleged to infringe the intellectual property rights of third parties.

Furthermore, our use or any use by our contractors, consultants, vendors or service providers, of third-party AI providers to process our confidential or other sensitive information could put the confidentiality of such information at risk, including if any such third-party AI provider breaches its contractual obligations to us, suffers cyber-attacks or intentionally or inadvertently discloses, or misuses our confidential or sensitive information or otherwise incorporates the same into publicly available training sets. In such an instance, it is possible that our confidential or other sensitive information could become available to third parties, including our competitors. We or our employees may use AI technologies, inadvertently or otherwise, in a manner that puts our confidential information or intellectual property rights at risk. Any of the foregoing risks may result in diversion of management’s attention and resources, and may harm our business, reputation, results of operations, financial condition and prospects.

Further, any output created by us using AI technologies may not be subject to copyright protection, which may adversely affect our intellectual property rights in, or ability to commercialize or use, any such content. In the United States, a number of civil lawsuits have been initiated related to the foregoing and other concerns, any one of which may, among other things, require us to limit the ways in which we use AI technologies. To the extent that we do not have sufficient rights to use the data or other material or content used in or produced by the AI technologies we employ, or if we experience cybersecurity incidents in connection with our use of AI, it could adversely affect our reputation and expose us to legal liability or regulatory risk, including with respect to third-party intellectual property, privacy, data protection and cybersecurity, publicity, contractual or other rights. Further, our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively.

Additionally, changes in AI technology could require us to make significant ongoing investments to maintain and upgrade our technological capabilities. We may not successfully implement these developments in a timely or cost-effective manner, or at all, and the AI technologies in which we invest may be less effective than expected, or become unavailable to us on favorable terms, or at all. We may also be impacted by risks related to evolving laws, regulations and standards regarding the development and use of AI technologies. Changes in laws, regulations or industry standards governing AI use could lead to increased costs and compliance requirement or restrict our ability to use certain AI technologies in our operations altogether.

As the use of AI becomes more prevalent, we anticipate that it will continue to present new or unanticipated ethical, reputational, technical, operational, legal, competitive and regulatory issues, among others. We expect that our incorporation of AI in our business will require additional resources, including the incurrence of additional costs, to develop and maintain our products and features to minimize potentially harmful or

 

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unintended consequences, to comply with applicable and emerging laws and regulations, to maintain or extend our competitive position, and to address any ethical, reputational, technical, operational, legal, competitive or regulatory issues which may arise as a result of any of the foregoing.

Social media and mobile messaging platforms present risks and challenges to maintaining and enhancing our brand, and any damage to our reputation or information leakage could adversely impact our business.

The inappropriate and/or unauthorized use of certain social media and mobile messaging channels could cause brand damage or information leakage or could lead to legal implications, including from the improper collection and/or dissemination of personally identifiable information. In addition, negative or inaccurate posts or comments about our company, technologies or products on any social networking platforms could damage our reputation, brand image and goodwill. Further, the disclosure of non-public Company-sensitive information by our current or former personnel or others through external media channels could lead to information loss. Although we have internal communications, social media and mobile messaging protocols that guide our employees on appropriate personal and professional use of these platforms for communication about the Company, the processes in place may not completely secure and protect information. Identifying potential new points of unauthorized entry as new communication tools expand also presents new challenges.

Moreover, repairing our brand and reputation in the case of any adverse event may be difficult, time-consuming and expensive. Our failure to address, or the appearance of our failure to address, issues that give rise to reputational risk could significantly harm our brand and reputation. To the extent we fail to respond quickly and effectively to address corporate crises and other threats to our brand and reputation, the ensuing negative public reaction could significantly harm our brand and reputation, which could result in loss of trust from our consumers, third-party service providers and employees and could lead to an increase in litigation claims and asserted damages or subject us to regulatory actions or restrictions.

We are subject to risks associated with global climate change, including physical and transitional risks.

The potential physical effects of climate change, such as increased frequency and severity of high wind conditions, storms, floods, fires, fog, mist, freezing conditions, droughts, sea-level rise and other climate-related events, could affect our operations, assets, infrastructure, supply chain and financial results. Climate change risks could result in but are not limited to operational risk from the physical effect of climate events on our charging facilities, production facilities and other assets and we could incur significant costs to improve the climate resiliency of our aircraft or infrastructure and otherwise prepare for, respond to, and mitigate such physical effects of climate change. We may also be impacted by transitional risks related to climate change, including new or more stringent regulatory requirements, increased monitoring and disclosure requirements and potential effects on our reputation and/or changes in our business. Changes in climate change laws or regulations could lead to increased costs and compliance requirements or otherwise could negatively impact our business and/or competitive position. Further, there is an increased focus from a variety of stakeholders, including governments, investors, lenders and customers, on climate change matters, including increased pressure and regulatory requirements to expand disclosures related to the physical and transition risks related to climate change or to establish climate-related goals, such as the reduction of greenhouse gas emissions, which could expose us to market, operational and execution costs or risks. Our failure to comply with applicable requirements or establish such climate-related targets or targets that are perceived to be appropriate, as well as to achieve progress on those targets on a timely basis, or at all, could adversely affect the reputation of our brand and business and demand for our offerings. We are not able to accurately predict the materiality of any potential losses or costs associated with the physical effects of climate change.

Our aircraft utilization may be lower than expected due to weather and other factors.

Although we design our aircraft to maximize operational utilization, our aircraft may not be able to fly in poor weather conditions, including snowstorms, thunderstorms, high winds, lightning, hail, known icing

 

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conditions and/or fog. Our inability to operate in these conditions will reduce our aircraft utilization and cause delays and disruptions. We intend to maintain a high daily aircraft utilization rate, which is the amount of time our aircraft spend in the air. This is achieved, in part, by reducing turnaround times at vertiports. Aircraft utilization is reduced by delays and cancellations from various factors, many of which are beyond our control, including adverse weather conditions, security requirements, air traffic congestion and unscheduled maintenance events. The success of our business is dependent, in part, on the utilization rate of our aircraft, and reductions in utilization would adversely impact our financial performance, cause customer dissatisfaction and could have an adverse impact on our business, results of operations, financial condition and prospects.

Our aircraft and chargers may require maintenance at frequencies or at costs which are unexpected.

Our aircraft and network of chargers will require regular maintenance and support. We are still developing our understanding of the long-term maintenance profile of these and certain of our other offerings. If useful lifetimes are shorter than expected, or if trained and qualified aircraft mechanics continue to be in short supply, this may lead to greater maintenance costs than we anticipate. If our aircraft and related equipment or our chargers require maintenance more frequently than anticipated or at costs that exceed our estimates, that could impact our commercialization efforts or, in the case of our charging network, could result in higher operating costs, or otherwise negatively impact customer satisfaction or demand with respect to our offerings. Any of these could have a material adverse effect on our business, results of operations, financial condition or prospects.

If we are unable to maintain adequate facilities and infrastructure, including securing access to key infrastructure, we may be unable to offer our aircraft and other products or charging services in a way that is useful to customers.

If we are unable to obtain and maintain adequate facilities and infrastructure, including access, on commercially viable terms, to key infrastructure such as airports where our chargers are then-located or proposed to be located, we may be unable to offer our aircraft and other products or charging services in a way that is useful to passengers. To operate and expand our current and planned business activities, we must secure or otherwise develop adequate manufacturing, testing, charging and maintenance infrastructure in fit-for-purpose and, in the case of our charging network, desirable locations.

There is also a complex patchwork of federal, regional and municipal regulatory considerations applicable to asset management and property development in general, and aviation assets and infrastructure in particular, including EHS regulations. See also “—We could incur significant costs in complying with EHS laws and regulations and could be adversely affected by liabilities or obligations imposed under such laws and regulations.” The nature and extent of any changes in these laws, rules, regulations and permits associated with these laws and regulations may be unpredictable and may have material effects on our business. Local community groups, some of which may be opposed to property development in general, and new aviation infrastructure in particular, can impact the application of these regulations or the development of new regulations.

Our facilities are subject to a risk of closure due to zoning, permitting and leasing issues. We may not be able to obtain necessary permits and approvals or to make necessary infrastructure changes to enable adoption of our aircraft, charging equipment or other offerings. Further, the destruction of or our inability to use any of our facilities for a prolonged period of time could materially impact our ability to meet our projected timelines. If we are unable to acquire, lease or otherwise maintain space and related facilities integral to our operations on terms and in locations that are favorable, this could prevent our aircraft and other offerings from being purchased or deemed desirable by our customers and, in turn, have a material adverse effect on our business, results of operations, financial condition and prospects.

 

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Our ability to use net operating losses and other tax attributes to offset future taxable income may be subject to certain limitations.

As of December 31, 2024, we had federal and state net operating losses (“NOLs”) of approximately $364.7 million and $289.3 million, respectively, and as of June 30, 2025, we had federal and state NOLs of approximately $484.7 million and $345.1 million, respectively, which carryforward indefinitely for federal purposes and begin to expire for state purposes in 2030. We intend to file amended state and local tax returns for years 2021 and 2022 due to a recent analysis of state apportionment and have recorded the anticipated effects of the amended returns as of June 30, 2025. As of December 31, 2024, we had federal and state research and development tax credit carryforwards of approximately $19.0 million and $2.9 million net of federal benefit, respectively, and as of June 30, 2025, we had federal and state research and development tax credit carryforwards of approximately $21.2 million and $4.2 million, respectively, which begin to expire for federal and state purposes in 2039. Under the Tax Cuts and Jobs Act of 2017 (“TCJA”), federal NOLs generated in tax years through December 31, 2017 may be carried forward for 20 years and may fully offset taxable income in the year utilized and federal NOLs generated in tax years beginning after December 31, 2017 may be carried forward indefinitely but may only be used to offset 80% of taxable income annually. Further, under the TCJA, federal and state research and development tax credits may be carried forward for 20 years. Our U.S. federal and state NOLs and certain other tax credits (such as research and development tax credits) may be subject to limitation under Sections 382 and 383 of the Code, respectively, and similar provisions of state law. Under those sections of the Code, a corporation that undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, is subject to limitations on its ability to utilize its pre-change NOLs and other pre-change tax attributes, such as research and development tax credits, to offset post-ownership change taxable income or taxes. If we undergo an ownership change in connection with or after this offering, our ability to utilize NOLs and other tax attributes could be further limited by Sections 382 and 383 of the Code. In addition, future changes in our stock ownership, many of which are outside of our control, could result in an ownership change under Sections 382 and 383 of the Code. “Ownership changes” that have occurred in the past or that may occur in the future could result in the imposition of an annual limit on the amount of pre-ownership change NOLs and other tax attributes we can use to reduce taxable income, potentially increasing and accelerating our liability for income taxes.

Changes in financial accounting standards may cause adverse unexpected fluctuations and affect our reported results of operations.

A change in accounting standards or policies, and varying interpretations of existing or new accounting pronouncements, as well as significant costs incurred or that may be incurred to adopt and to comply with these new pronouncements, could have a significant effect on our reported financial results or the way we conduct our business. If we do not ensure that our systems and processes are aligned with the new standards, we could encounter difficulties generating quarterly and annual financial statements in a timely manner, which could have an adverse effect on our business, our ability to meet our reporting obligations and compliance with internal control requirements.

Management will continue to make judgments and assumptions based on our interpretation of new standards. If our circumstances change or if actual circumstances differ from our assumptions, our operating results may be adversely affected and could fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of the Class A common stock.

Increasing scrutiny, regulatory requirements and changing expectations from various stakeholders with respect to sustainability and other environmental, social and governance matters may impose additional costs on us or expose us to reputational or other risks.

Investors, customers and other stakeholders have focused increasingly on sustainability and environmental, social and governance practices of companies, including, among other things, practices with respect to human capital resources, emissions, climate change and environmental impact. Stakeholder expectations are not uniform

 

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and support for and opposition to such matters have increasingly resulted in a range of activism and legal and regulatory developments. Expectations and requirements of our investors, customers and other third parties evolve rapidly, whether in support of or opposition to such matters, and are largely out of our control, and our initiatives and disclosures in response to such expectations and requirements may result in increased costs (including but not limited to increased costs related to compliance, stakeholder engagement, contracting and insurance), changes in demand for certain services, enhanced compliance or disclosure obligations or other adverse impacts to our business, financial condition and results of operations. While we have programs and initiatives in place related to our sustainability practices, there is no assurance that our stakeholders will agree with our sustainability-related strategies, and investors may decide to reallocate capital or to not commit capital as a result of their assessment of our services and practices. In addition, our customers, business partners and suppliers may be subject to similar expectations and may require that we implement certain additional procedures or standards to continue to do business with us, which may augment or create additional costs or risks, including costs or risks that may not be known to us. Relatedly, there is increasing focus by regulators, customers and other stakeholders on greenwashing issues and environmental marketing and sustainability-related claims. There can be no assurance that we will not be subject to greenwashing allegations or claims associated with the veracity of our environmental- and sustainability-related claims, including those related to the environmental sustainability and energy efficiency of our aircraft, our renewable energy usage or our battery recycling practices, among other things, which could expose us to liabilities or require us to incur additional costs to adequately prepare disclosures or improve internal controls. There is also increasing focus on environmental, social and governance and sustainability disclosure and regulation across various jurisdictions and exposure to any new regulatory and legal requirements may lead to increased operational costs and compliance burden for us. Any failure to comply with regulatory or legal requirements or adapt to investor, customer and other stakeholder expectations and standards, which are evolving and can conflict, or if we are perceived (whether validly or not) not to have responded effectively to their growing concerns around sustainability or environmental, social and governance issues, regardless of whether there is a legal requirement to do so, or to effectively respond to new or additional legal or regulatory requirements regarding such matters or potential regulatory/investor engagement or litigation, could cause or result in reputational harm to our business and could have a material adverse impact on our business, financial condition and results of operations.

We may in the future become subject to legal proceedings, which may be time-consuming and expensive and, if adversely determined, could delay, limit or prevent our ability to commercialize our aircraft or otherwise execute on our business plans.

Future legal proceedings against us or our employees, regardless of outcome or merit, could be time consuming and expensive to defend or resolve, result in substantial diversion of management and technical resources, delay, limit or prevent our ability to make, develop, commercialize or deploy our aircraft and deteriorate our reputation and our business relationships, any of which could make it more difficult or impossible for us to operate our business or otherwise execute on our business plan and significantly adversely affect our business, results of operations, financial condition or prospects. In the event of an adverse outcome of litigation, we may have to cease developing and/or using the asserted intellectual property, which could significantly adversely impact our business, results of operations, financial condition or prospects.

The requirements of being a public company will cause us to incur increased costs and may strain other resources, divert management’s attention and affect our ability to attract and retain additional executive management and qualified board members.

We will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements of the NYSE and other applicable securities rules and regulations. Compliance with these rules and regulations will increase, and may continue to increase, our legal and financial compliance costs, make some activities more difficult, time-consuming, or costly, and increase demand on our systems and resources. The Exchange Act requires, among other things, that, once we are a public company, we file annual, quarterly and

 

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current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that, once we are a public company, we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight will be and may in the future be required. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results. Although we will hire additional employees to comply with these requirements, we may need to hire more employees in the future or engage outside consultants, which would increase our costs and expenses.

In the future, changes in laws or regulations governing our operations, changes in the interpretation thereof or newly enacted laws or regulations and any failure by us to comply with these laws or regulations, could have a materially adverse effect on our business. In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure could create uncertainty for public companies, increase legal and financial compliance costs, and make some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve or otherwise change over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards (or changing interpretations of them), and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us, and our business may be adversely affected. As a public company, we will also have to incur increased expenses in order to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to maintain the same or similar coverage or obtain coverage in the future. These factors could also make it more difficult for us to attract and retain qualified members of our Board, particularly to serve on our audit committee, compensation committee and nominating and governance committee, and qualified executive officers.

As a result of disclosure of information in the filings required of a public company, our business and financial condition will be more visible, which may result in threatened or actual litigation, including by competitors. If such claims are successful, our business and operating results could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and operating results. In addition, as a result of the disclosure obligations as a public company, we may have reduced flexibility and be under pressure to focus on short-term results, which may adversely affect our ability to achieve long-term profitability.

Our management team has limited experience managing a public company.

Some members of our management team have limited experience managing a publicly traded company, interacting with public company investors and regulators and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely impact our business, results of operations, financial condition and prospects.

 

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Risks Related to Laws and Regulations

Failure to comply with applicable laws and regulations relating to the aerospace business in general and electric aircraft testing, certification and production specifically, could adversely affect our business, results of operations, financial condition and prospects.

In order to commercialize our product offerings, we will need to obtain and maintain approvals from governmental authorities based on compliance with a variety of aerospace laws and regulations. If we are unable to obtain, experience delays in obtaining, or are unable to maintain such approvals, our business could be negatively impacted. Our electric aircraft, motors and subsystems will be subject to substantial regulation in the jurisdictions in which we intend our electric aircraft and other offerings to be sold and used. We expect to incur significant costs in complying with these regulations. Regulations related to eVTOL aircraft in particular, including aircraft certification, Production Certification, passenger operation, flight operation, including operations under experimental and special airworthiness certificates, airspace operation, security regulation and infrastructure regulation are currently evolving, and we face risks associated with the development, evolution and enforcement of these regulations. For example, in October 2024, the FAA published the SFAR for eVTOL aircraft. Any other regulatory changes or revisions could delay our ability to obtain Type Certification, and could delay our ability to execute on our business plans with respect to sale of aircraft and certain other offerings.

Rigorous testing and the use of approved materials and equipment are among the requirements for achieving certification. Our failure to obtain or maintain certification for our aircraft would have a material adverse effect on our business and operating results. In addition to obtaining and maintaining certification of our aircraft, we will need to obtain and maintain a production certificate necessary to manufacture type certified aircraft and motors. A transportation or aviation authority may determine that we cannot manufacture, provide, or otherwise engage in those product or service offerings as we have contemplated. The inability to commercialize our envisioned product offerings could materially and adversely affect our business, results of operations, financial condition and prospects.

To the extent the laws change, our aircraft and/or related or other offerings may not comply with those laws, which would have an adverse effect on our business. Complying with changing laws could be burdensome, time consuming and expensive. To the extent compliance with new laws is cost prohibitive, our business, results of operations, financial condition and prospects could be adversely affected.

Our aircraft must be certified with the FAA in the United States or other comparable regulatory agencies in international jurisdictions. If we expand beyond the United States, there will be additional laws and regulations we must comply with, and there may be laws and regulations in other jurisdictions we have not yet entered or laws we are unaware of in jurisdictions we have entered that may restrict our operations or business practices or that are difficult to interpret and change rapidly. See “—We may be unable to obtain relevant regulatory approvals for the commercialization of our aircraft, motors or subsystems, either in the United States or in foreign markets.”

Continued regulatory limitations and other obstacles interfering with our business operations could have a negative and material impact on our business, results of operations, financial condition and prospects.

We are required to comply with a wide variety of laws and regulations, and are subject to regulation by various federal, state and foreign agencies, and our failure to comply with existing and future regulatory requirements could adversely affect our business, results of operations, financial condition and prospects.

We expect to compete in markets in which we and our customers are subject to federal, state, local, international and transnational laws and regulations, including, but not limited to, laws and regulations relating to zoning and those imposing requirements with respect to business licenses and registrations. Any significant change in laws, regulations and standards could impact the manner in which we conduct business, as well as the

 

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design, manufacture and operation of our electric aircraft and other offerings, delay our timeline or reduce demand for our products or increase our expenses. For example, business licenses and the approval to operate can vary by country, state and municipality.

We are also registered with the Directorate of Defense Trade Controls of the U.S. Department of State, as is required to manufacture and export goods controlled by the ITAR, and we are subject to strict export control and prior approval requirements related to these goods. Our failure to comply with the ITAR and other export control laws and regulations, as well as economic sanctions, could result in penalties, loss, or suspension of contracts or other consequences. Any of these could adversely affect our business, results of operations, financial condition and prospects. Failure by us or by our customers to meet one or more of these various regulatory obligations could have adverse consequences in the event of material non-compliance. Compliance with relevant sanctions and export control laws could restrict our access to, and increase the cost of obtaining, certain products and at times could interrupt our supply of imported inventory or our ability to service certain customers. Conversely, compliance with these regulatory obligations may require us to incur significant expenses.

In addition, certain of our facilities and products are or will be certified to industry standards such as ISO, AS9100 and/or UL. These standards are voluntary safety and quality management system standards, the maintenance of which indicates to customers certain quality and operational norms. Customers may rely on contractual assurances that we make with respect to such certifications to transact business. Failure to comply with these standards can lead to observations of non-compliance or even suspension of such certifications. If we were to fail to obtain or maintain such a certification it could result in breach of contracts or difficulty in obtaining new customer contracts, which could adversely affect our business.

We may be unable to obtain relevant regulatory approvals for the commercialization of our aircraft, motors or subsystems, either in the United States or in foreign markets.

We may be unable to obtain the regulatory approvals needed for the commercialization of our aircraft, motors or subsystems in accordance with our business plan. The commercialization of new aircraft requires certain regulatory authorizations and certifications, including Type Certification, Production Certification and FAA Airworthiness Certification. While we have received FAA special airworthiness certificates for certain ALIA CTOL aircraft, and while we anticipate being able to obtain the required authorizations and certifications with respect to our aircraft or motors, we may be unable to do so on the timeline we project or at all. Circumstances outside of our control could delay the receipt of our required certifications. For example, FAA staffing depends, in large part, on the annual appropriations process and the agency’s ability to retain and recruit sufficient resources with relevant experience and expertise. Failure to pass an annual appropriation bill has in the past resulted in temporary government shutdowns. A future shutdown, or a failure by Congress to pass an FAA reauthorization bill (or extension) could delay the rulemaking and certification process. Additionally, recent focus on reducing the size of the federal workforce could negatively impact the availability of resources within the FAA which could delay our progress towards certification.

We also plan to pursue regulatory approval of our aircraft, motors and other offerings in other countries. While many of these countries have established processes for validating a Type Certification issued by the FAA, others are developing new processes to leverage our work with the FAA and provide a path for approval of initial operations that could precede Type Certification in the United States. The regulatory agencies charged with granting approvals with respect to our aircraft and other offerings in other countries may be subject to many of the same funding, staffing and other risks that exist in the United States. Additionally, pursuing certification and operations outside the United States is subject to additional risks, including, but not limited to, other regulatory regimes being less familiar with or to us or having less experience in certifying and approving new and novel aircraft or technology. If we fail to obtain any of the required authorizations or certificates, or do so in a timely manner, or any of these authorizations or certificates are modified, suspended or revoked after we obtain them, we may be unable to launch our commercial rollout or do so on the timelines we project and there may be a resultant adverse impact on our business, results of operations, financial condition and prospects.

 

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We are subject to stringent U.S. export and import control laws and regulations, which may change. We may be unable to comply with these laws and regulations or U.S. government licensing policies, or to secure required authorizations in a timely manner.

Certain aspects of our business are subject to stringent U.S. import and export control laws and regulations as well as economic sanctions laws and regulations. We are required to import and export our products, software, technical data, technology and services, and run our operations in the United States, in full compliance with such laws and regulations, which may include the EAR, the ITAR and the economic sanctions administered by the Treasury Department’s Office of Foreign Assets Control. Similar laws may impact our business in other jurisdictions. These trade controls prohibit, restrict or regulate our ability to, directly or indirectly, export or transfer certain hardware, software, technical data, technology, software or services to certain countries and territories, entities and individuals, and for certain end uses. In addition, the Treasury Department’s Committee on Foreign Investment in the U.S. (“CFIUS”) has the authority to review direct and indirect investments in U.S. businesses by foreign persons. Among other things, CFIUS is empowered to require certain foreign investors to make mandatory filings, charge filing fees related to such filings and self-initiate national security reviews of investments if the parties to that investment choose not to file voluntarily. In the case that CFIUS determines an investment to be a threat to national security, CFIUS has the power to place restrictions, conditions or limitations on or even prohibit, or require divestment of, the investment. If we are found to be in violation of these laws and regulations it could result in civil and criminal penalties, including the loss of export or import privileges, debarment and reputational harm.

Pursuant to these trade control laws and regulations, we are required, among other things, to (i) determine the proper licensing jurisdiction and export classification of products, software and technical data/technology, (ii) obtain licenses or other forms of authorization to conduct our business and (iii) manage physical access and security accordingly. These requirements include the need to get permission to release controlled technology to foreign person employees and other foreign persons in the United States. Changes in U.S. trade control laws and regulations, or reclassifications of our products or technologies, may restrict our operations. The inability to secure and maintain necessary licenses and other authorizations could negatively impact our ability to compete successfully or to operate our business as planned. Any changes in the export control regulations or U.S. licensing policy, such as those necessary to implement U.S. commitments to multilateral control regimes, may restrict our operations. Given the great discretion the government has in issuing or denying such authorizations, there can be no assurance we will be successful in our future efforts to secure and maintain necessary licenses, registrations or other regulatory approvals which may have an adverse impact on our business, results of operations, financial condition and prospects.

In addition, the global economy has recently seen a rise in tariffs and threats of tariffs. While tariffs have not had a material impact on our business, results of operations, financial condition or prospects to date, new tariffs could increase the costs of raw materials and other goods, both for us and our suppliers, which could impact our business, particularly as we begin to scale our manufacturing operations.

We could incur significant costs in complying with EHS laws and regulations and could be adversely affected by liabilities or obligations imposed under such laws and regulations.

We are subject to a variety of increasingly stringent foreign, federal, state and local EHS laws, regulations and ordinances relating to the protection of the environment, including those relating to emissions to air and other environmental media, discharges (including storm water) to surface and subsurface waters, safe drinking water, wildlife preservation, operational constraints like noise abatement, including relating to aircraft noise, and the use, management, disposal and release of, and exposure to, hazardous substances, oils and waste materials. We could incur significant costs, including fines, cleanup costs and third-party claims, as a result of violations of or liabilities under these laws and regulations, and may also incur significant costs to achieve or maintain compliance in the future. In addition, fines and penalties may be imposed for non-compliance with applicable EHS laws and regulations and the failure to have or to comply with the terms and conditions of required permits. From time to time, our operations may not be in full compliance with the terms and conditions of our permits or

 

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licenses and we can provide no assurance that the cost of achieving and maintaining compliance with EHS laws and requirements will not become material in the future.

In addition, it is difficult to accurately predict the nature and extent of environmental liabilities and obligations that may result from laws or regulations adopted in the future and how existing or future laws and regulations will be administered or interpreted. For example, changes in EHS laws, including laws relating to energy consumption and aircraft noise, could require additional investments in manufacturing designs, which may be more expensive or difficult to manufacture, and could increase environmental compliance expenditures. The adoption of new EHS regulations could result in increased costs and have an adverse impact on our results of operations.

Governmental regulations and reporting regarding aircraft noise, including those adopted by the FAA, the International Civil Aviation Organization (“ICAO”) and other jurisdictions, apply based on where the relevant aircraft is registered and operated. These regulations, as well as the potential for new and more stringent regulations, could limit the economic life of our aircraft, reduce their value, limit our ability to sell non-compliant aircraft or, if aircraft modifications are permitted, require us to make significant additional investments in the aircraft to make them compliant.

We may also be subject to potential strict, joint and several liability for the investigation and remediation of contamination, including contamination caused by other parties, that may exist at properties we currently own, lease or operate and previously owned, leased or operated and at other properties where we or our predecessors have arranged for the disposal of hazardous substances. We may incur significant costs, including cleanup costs and other environmental liabilities, as a result of any environmental conditions that are existing or discovered or obligations that are imposed in the future. From time to time, we may be involved in administrative and judicial proceedings, investigation and remediation activities and other claims relating to these and other environmental matters. As a result, the aggregate amount of future cleanup costs and other environmental liabilities and obligations could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We are and will be subject to rapidly changing and increasingly restrictive Privacy Laws and other obligations relating to privacy, data protection and data security, which may be costly and difficult to comply with.

We are and will be collecting, using, disclosing or otherwise processing the personal information of customers, employees and others in the course of operating our business. These activities are or may become regulated by a variety of domestic and foreign laws and regulations relating to privacy, data protection and data security, which are complex, rapidly evolving and increasingly restrictive. Several states in the United States and foreign countries have granted their respective residents expanded rights related to their personal information. For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act, grants California residents the right to access and request the deletion of their personal information and receive detailed reports of how their personal information is processed, and provides a private right of action for certain data breaches involving the loss of personal data. Such laws and any laws adopted in the future could have potentially conflicting requirements that would make compliance challenging. Despite our best efforts, we may not be successful in complying with the rapidly evolving privacy, data protection and data security requirements. The existence of comprehensive privacy laws in various jurisdictions will make our compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance. Any actual or perceived non-compliance could result in litigation and proceedings against us by governmental entities, customers or others, which could result in fines, civil or criminal penalties, limited ability or inability to operate our business, offer our products and services or market our technologies in certain jurisdictions, negative publicity and harm to our brand and reputation, which could have a material adverse effect on our business, results of operations, financial condition or prospects. See also “—Risks Related to Our Business and Industry—We are subject to evolving Privacy Laws, which subjects us to

 

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a number of potential regulatory and reputational risks. We may face investigations, fines and sanctions as a result of our or our service providers’ actual or perceived failure to comply with the Privacy Laws and incur increased operational costs in order to ensure future compliance.”

We currently have subsidiaries located outside of the United States and plans for international operations in the future, which could subject us to political, operational and regulatory challenges.

While our primary operations are in the United States, we currently have a subsidiary in each of Canada, Ireland and the UAE, certain of which are engaged in limited test manufacturing, research and development and other activities, and we may eventually expand our international operations further. We also have established relationships with suppliers and potential partners in select international markets and have begun working with regulators in other countries to pursue commercialization opportunities in those markets. International operations are subject to a number of risks, including regulations that may differ from or be more stringent than analogous U.S. regulations, local political or economic instability, cross-border political tensions, import and export compliance, privacy, data protection, information security, labor and employment matters and exposure to potential liabilities under anti-corruption or anti-bribery laws and similar laws and regulations. If any of these risks materialize, it could adversely impact our business.

Changes in tax laws or regulations that are applied adversely to us may have a material adverse effect on our business, results of operations, cash flows or financial condition.

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could adversely affect our business operations and financial performance. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. Future changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings and the deductibility of expenses could have a material impact on the value of our deferred tax assets, could result in significant one-time charges, and could increase our future U.S. tax expense.

Risks Related to Our Indebtedness

The covenants in our Credit Agreement may restrict our operations, and failure to comply with the covenants in our Credit Agreement could adversely impact our business.

Our Credit Agreement and the other financing documentation entered into in connection therewith impose restrictive covenants that may limit our ability to operate our business, including, without limitation, covenants that limit our ability to create liens and dispose of assets. If we violate these or any other covenants set forth therein, any loans outstanding under the Credit Agreement could become due and payable prior to their stated maturity dates, and Ex-Im could proceed against the collateral granted in connection therewith by exercising its rights and remedies with respect to its first-priority liens on and security interests in our production facility and such other collateral. These restrictions may also limit our flexibility to plan for, or react to, changes in our business and industry and our ability to borrow additional funds and pursue other business opportunities or strategies that we would otherwise consider to be in our best interests.

We may not be able to generate sufficient cash to service all of our indebtedness or repay such indebtedness when due, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments on or to refinance our indebtedness obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to financial, business, legislative, regulatory, and other factors, some of which are beyond our control. We cannot be sure that our business will generate sufficient cash flows from operating activities, or that future borrowings will be available, to permit us to pay the principal, premium, if any, and interest on our indebtedness.

 

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If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital, or restructure or refinance our indebtedness. The loans outstanding under our $170.1 million credit facility established pursuant to the Credit Agreement (the “Credit Facility”) mature in December 2038. We may not be able to implement any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, those alternative actions may be on less favorable terms, may occur under unfavorable market conditions, and/or may not allow us to meet our scheduled debt service obligations. The Credit Agreement restricts our ability to dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facility.”

Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would have a material adverse effect on our business, results of operations, financial condition and prospects.

If we cannot make scheduled payments on our indebtedness under our Credit Facility, we will be in default, and Ex-Im could cause any loans outstanding under our Credit Agreement to become due and payable prior to their stated maturity date and/or exercise its rights and remedies with respect to its first-priority liens on and security interests in our production facility and the other collateral granted in connection with our Credit Agreement, and as a result thereof, we could be forced into bankruptcy or liquidation.

Risks Related to This Offering, Ownership of Our Class A Common Stock and Our Capital Structure

There is no existing market for the Class A common stock, and a trading market that will provide stockholders with adequate liquidity may not develop. The price of the Class A common stock may fluctuate significantly, and stockholders could lose all or part of your investment.

We have applied to list the Class A common stock on the NYSE under the symbol “BETA.” However, there is currently no public trading market for the Class A common stock. We do not know the extent to which investor interest will lead to the development of an active trading market or how liquid that market might become. If an active trading market does not develop, you may have difficulty reselling shares of Class A common stock at or above the initial public offering price, or at all. Additionally, the lack of liquidity may result in wide bid-ask spreads, contribute to significant fluctuations in the market price of the Class A common stock and limit the number of investors who are able to buy the Class A common stock.

The initial public offering price for the Class A common stock offered hereby will be determined by discussions between us and the representatives of the underwriters and may not be indicative of the market price of the Class A common stock that will prevail in the trading market. Consequently, stockholders may not be able to sell shares of the Class A common stock at prices equal to or greater than the price paid by stockholders in this offering.

The following is a non-exhaustive list of factors that could affect the market price of the Class A common stock:

 

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our operating and financial performance;

 

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quarterly variations in the rate of growth of our financial indicators, such as net income per share, net income and revenues;

 

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the public reaction to our press releases, our other public announcements and our filings with the SEC;

 

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strategic actions by our competitors;

 

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our failure to meet revenue or earnings estimates by research analysts or other investors;

 

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changes in revenue or earnings estimates, or changes in recommendations or withdrawal of research coverage, by equity research analysts;

 

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speculation in the press or investment community;

 

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the failure of research analysts to cover the Class A common stock;

 

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sales of the Class A common stock by us or other stockholders, or the perception that such sales may occur;

 

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changes in accounting principles, policies, guidance, interpretations or standards;

 

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additions or departures of key management personnel;

 

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actions by our stockholders;

 

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general market conditions, including fluctuations in commodity prices;

 

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domestic and international economic, legal and regulatory factors unrelated to our performance; and

 

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the realization of any risks described under this “Risk Factors” section.

The stock markets in general have experienced extreme volatility that has often been unrelated to the operating performance of companies. These broad market fluctuations may adversely affect the trading price of the Class A common stock. Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company’s securities. Such litigation, if instituted against us, could result in substantial costs, divert our management’s attention and resources and harm our business, results of operations, financial condition and prospects.

We are controlled by Kyle Clark, our Chief Executive Officer and a member of our Board, whose interests in our business may conflict with ours or yours.

The Class B common stock is beneficially owned by Kyle Clark, our Chief Executive Officer and a director of the Company, whose interests may differ from or conflict with the interests of our other stockholders. Each share of Class A common stock is entitled to one vote per share. Each share of our Class B common stock is entitled to 40 votes per share. Following this offering, Mr. Clark will beneficially own all of the issued and outstanding shares of Class B common stock and, accordingly, will own approximately    % of our outstanding capital stock and control approximately    % of the voting power of our outstanding capital stock (assuming (i) no exercise of the underwriters’ option to purchase additional shares and (ii) Mr. Clark does not purchase any shares of Class A common stock pursuant to the directed share program). As a result, Mr. Clark will have the ability to exercise control over our affairs, including control over the outcome of all matters submitted to our stockholders for approval, including the election of directors and significant corporate transactions. The directors so elected, including Mr. Clark for so long as he continues to stand for reelection and serve as our director, will have the authority, subject to the terms of our indebtedness and applicable rules and regulations, to issue additional stock, implement stock repurchase programs, declare dividends and make other decisions. Mr. Clark may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests.

For example, Mr. Clark may have differing incentives from other stockholders that could influence his decisions regarding whether and when to cause us to dispose of assets, incur new or refinance existing indebtedness or take other actions. Additionally, Mr. Clark may cause us to make strategic decisions or pursue acquisitions that could involve risks to you or may not be aligned with your interests. This concentrated control may have the effect of delaying, preventing or deterring a change in control of the Company, could deprive our stockholders of an opportunity to receive a premium on their shares of Class A common stock as part of a sale of the Company and might ultimately affect the market price of the Class A common stock. Moreover, while stockholders would generally be entitled to dissenters’ rights of appraisal under applicable Delaware law, there are certain exceptions. As a result, Mr. Clark will be able to effectively control us.

 

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Future transfers of Class B common stock will generally result in those shares converting into shares of Class A common stock, subject to limited exceptions described in our Amended and Restated Certificate of Incorporation, including transfers to family members, trusts (including grantor retained annuity trusts) for which Mr. Clark or his family members serve as trustee and partnerships, corporations and other entities exclusively owned by Mr. Clark or his family. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon the death or disability of Mr. Clark or Mr. Clark’s ceasing to provide services to the Company as an officer, employee or director of the Company. See “Conversion” for additional information.

Certain of our directors and members of management may have interests that are different from, or in addition to, those of other stockholders.

We have from time to time entered into transactions, arrangements or relationships with our directors, members of management or their respective affiliates. These transactions have in the past included, and in the future could include, without limitation, the purchase, sale or leasing of real or other property, the provision or receipt of financing or other business dealings. There is a risk that such transactions may not be on terms as favorable to us as those that could be obtained from unrelated third parties. Even if such transactions are subject to approval by disinterested directors or are otherwise conducted in accordance with applicable laws and policies, the existence of these relationships may give rise to actual or perceived conflicts of interest. These conflicts could result in decisions that are not in our or your best interests, and could adversely affect our business, financial condition or prospects. See “Certain Relationships and Related Party Transactions.”

We expect that provisions in our Amended and Restated Certificate of Incorporation relating to certain relationships and transactions will address certain actual or potential conflicts of interest between us, on the one hand, and our directors, officers or employees, on the other hand. By becoming our stockholder, you will be deemed to have notice of, and consented to, these provisions.

Upon the listing of the Class A common stock on the NYSE, we will be a “controlled company” within the meaning of the NYSE rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.

After completion of this offering, Kyle Clark, our Chief Executive Officer and a member of our Board, will continue to control a majority of the combined voting power of all classes of our stock entitled to vote generally in the election of directors through his ownership of the Class B common stock. As a result, we will be a “controlled company” within the meaning of the NYSE corporate governance standards. Under these rules, a company of which more than 50% of the voting power in the election of directors is held by an individual, group or another company is a “controlled company” may elect not to comply with certain corporate governance requirements, including those which require, within one year of the date of the listing of the Class A common stock:

 

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a majority of our Board consist of independent directors;

 

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our Board have a compensation committee that is comprised entirely of independent directors; and

 

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our Board have a nominating and corporate governance committee that is comprised entirely of independent directors.

We currently do not plan to establish a compensation committee or nominating and corporate governance committee composed entirely of independent directors as permitted by these exemptions. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of these corporate governance requirements. See “Management—Controlled Company Exception.”

 

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Management will have broad discretion over the use of our proceeds from this offering.

The principal purposes of this offering include increasing our capitalization and financial flexibility, creating a public market for the Class A common stock, thereby enabling access to the public equity markets by our employees and stockholders, obtaining additional capital and increasing our visibility in the marketplace. We intend to use our net proceeds from this offering for general corporate purposes. See “Use of Proceeds.” We cannot specify with certainty the particular uses of our net proceeds to us from this offering. Accordingly, we will have broad discretion in using our proceeds and might not be able to obtain a significant return, if any, on investment of our net proceeds. Investors in this offering will need to rely upon the judgment of our management with respect to the use of our proceeds. If we do not use our net proceeds from this offering effectively, our business, results of operations, financial condition and prospects could be harmed.

Our issuance of additional capital stock or other equity-related securities in connection with financings, acquisitions, investments, our LTIP or otherwise could dilute each stockholder’s ownership interest or adversely affect the market price of the Class A common stock.

We may raise capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in complementary companies, products or technologies and issue equity securities to pay for any such acquisition or investment. We expect to issue additional equity securities in the future in connection with one or more of these practices. We also utilize equity-based compensation as a key component of our compensation program. Any additional issuances of common stock would have the effect of diluting our earnings per share and our existing stockholders’ respective individual ownership percentages and lead to volatility in the market price of the Class A common stock. We cannot predict the effect that future issuances of shares of common stock or other equity-related securities would have on the market price of the Class A common stock.

We do not intend to pay dividends following the completion of this offering and may never pay dividends.

Following the completion of this offering, our Board may elect to declare cash dividends on the Class A common stock, subject to our compliance with applicable law. The declaration and amount of any future dividends is subject to the discretion of our Board, and we have no obligation to pay any dividends at any time. We do not intend to pay dividends following the completion of this offering and may never pay dividends. We have not adopted, and do not currently expect to adopt, a written dividend policy. Our future dividend policy will be based on the operating results and capital needs of our business, and any future earnings may be retained to finance our future expansion and for the implementation of our business plan.

The payment of dividends is dependent on, among other things, economic conditions, our financial condition, results of operations, projections, liquidity and earnings and legal requirements. Any financing arrangements or debt arrangements that we enter into in the future may also include restrictive covenants that limit our ability to pay dividends.

As an investor, you should take note of the fact that a lack of a dividend may affect the market value of the Class A common stock and could affect the value of any investment.

The multi-class structure of our common stock may adversely affect the trading market for the Class A common stock.

We cannot predict whether our multi-class structure will result in a lower or more volatile market price of the Class A common stock, adverse publicity or other adverse consequences. Certain stock index providers exclude or limit the ability of companies with multi-class share structures from being added to certain of their indices. In addition, several stockholder advisory firms and large institutional investors oppose the use of multiple class structures. As a result, the multi-class structure of our common stock may make us ineligible for

 

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inclusion in certain indices and may discourage such indices from selecting us for inclusion may cause stockholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure, and may result in large institutional investors not purchasing shares of the Class A common stock. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, any exclusion from certain stock indices could result in less demand for the Class A common stock. Any actions or publications by stockholder advisory firms or institutional investors critical of our corporate governance practices or capital structure could also adversely affect the value of the Class A common stock.

Future sales of the Class A common stock in the public market could reduce the market price of the Class A common stock, and any additional capital raised by us through the sale of equity or convertible or exchangeable securities may dilute your ownership in us.

We may sell additional shares of Class A common stock in subsequent public offerings. We may also issue additional shares of Class A common stock or convertible or exchangeable securities. After the completion of this offering, we will have outstanding    shares of the Class A common stock (or    shares of Class A common stock if the underwriters exercise in full their option to purchase additional shares of Class A common stock), of which our directors and officers will own    shares or approximately    % (or    % if the underwriters exercise in full their option to purchase additional shares of Class A common stock) of the total outstanding shares of Class A common stock, all of which will be restricted from immediate resale under the federal securities laws and subject to the lock-up agreements with the underwriters as described in “Underwriting” section of this prospectus, but which may be sold into the market in the future. See “Shares Eligible for Future Sale.” In addition, at our request, the underwriters have reserved up to   shares of our Class A common stock, or   % of the shares to be issued by us and offered by this prospectus (excluding the additional shares that the underwriters have an option to purchase) for sale, at the initial public offering price, to certain of our current employees, including management and other individuals and entities as determined by certain of our authorized officers, under the directed share program. Participants in the directed share program will not be subject to the terms of any lock-up agreement with respect to any shares purchased through the directed share program, except in the case of shares purchased by any of our directors or officers. Future sales of such shares may cause the price of our Class A Common Stock to be reduced or become more volatile. See “Underwriting—Directed Share Program.” After the completion of this offering, our Chief Executive Officer will own    shares of the Class B common stock or approximately     % of our total outstanding shares of common stock, all of which will be restricted from immediate resale under the federal securities laws and subject to the lock-up agreement with the underwriters described in the “Underwriting” section of this prospectus but may be sold into the market in the future. See “Shares Eligible for Future Sale.”

Furthermore, in connection with this offering, we intend to file a registration statement with the SEC on Form S-8 providing for the registration of shares of the Class A common stock issued or reserved for issuance under our LTIP. Subject to the satisfaction of vesting conditions, the expiration of lock-up agreements and the requirements of Rule 144 under the Securities Act (“Rule 144”), shares registered pursuant to the registration statement on Form S-8 will be available for resale immediately in the public market without restriction.

We cannot predict the size of future issuances of the Class A common stock or securities convertible into or exchangeable for Class A common stock or other securities of the Company, or the effect, if any, that future issuances and sales of shares of the Class A common stock will have on the market price of the Class A common stock. Sales of substantial amounts of our Class A common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices of the Class A common stock.

The underwriters of this offering may waive or release parties to the lock-up agreements entered into in connection with this offering, which could adversely affect the price of the Class A common stock.

Prior to this offering, we, all of our directors and executive officers and     , will enter into lock-up agreements with respect to their Class A common stock (including any Class A common stock into or for which

 

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securities of the Company held by such parties are convertible or exchangeable), pursuant to which, subject to certain exceptions, they are subject to certain resale restrictions for a period of 180 days following the effectiveness date of the registration statement of which this prospectus forms a part. Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC may, at any time and without notice, release all or any portion of the Class A common stock subject to the foregoing lock-up agreements. If the restrictions under the lock-up agreements are waived, then Class A common stock will be available for sale into the public markets, subject to any applicable restrictions imposed by the federal securities laws, which could cause the market price of the Class A common stock to decline and impair our ability to raise capital. See “Underwriting.”

Terms of subsequent financings may adversely impact stockholder equity.

If we raise more equity capital from the sale of Class A common stock, such equity could be offered at a price more favorable than the then-current market price of the Class A common stock. If we issue debt securities, the holders of the debt will have a claim to our assets that would be senior to the rights of the holders of shares of Class A common stock until the debt is paid. Interest on these debt securities would increase costs and could negatively impact our operating results.

In accordance with Delaware law and the provisions of our Amended and Restated Certificate of Incorporation, we may issue one or more classes or series of preferred stock that ranks senior in right of dividends, liquidation or voting relative to the Class A common stock. Preferred stock may have such designations, preferences, limitations and relative rights, including preferences relative to the Class A common stock in respect of dividends and distributions, as our Board may determine, and the issuance of preferred stock would dilute the ownership of our existing stockholders. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of the Class A common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of our common stock. The terms of any series of preferred stock may also reduce or eliminate the amount of cash available for payment of dividends to holders of the Class A common stock or subordinate the claims of such holders to our assets in the event of our liquidation. The Class A common stock will not be subject to redemption or sinking fund provisions.

If securities analysts or industry analysts were to downgrade the Class A common stock, publish negative research or reports or fail to publish reports about our business, our competitive position could suffer, and the price and trading volume of the Class A common stock could decline.

The trading market for the Class A common stock will, to some extent, depend on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us should downgrade the Class A common stock or publish negative research or reports, cease coverage of the Company or fail to regularly publish reports about our business, our competitive position could suffer, and the price and trading volume of the Class A common stock could decline.

As a public company, we will be obligated to develop and maintain proper and effective internal control over financial reporting. The requirements of being a public company, including compliance with the reporting requirements of the Exchange Act, and the requirements of the Sarbanes-Oxley Act, may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner, which could adversely affect investor confidence in our company and, as a result, the value of the Class A common stock.

As a public company, we will need to comply with new laws, regulations and requirements, certain corporate governance provisions of Sarbanes-Oxley Act, related regulations of the SEC and the requirements of

 

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the NYSE, with which we were not required to comply as a private company. Complying with these statutes, regulations and requirements will occupy a significant amount of our time and will significantly increase our costs and expenses. We will need to:

 

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institute a more comprehensive compliance function to test and conclude on the sufficiency of our internal control over financial reporting;

 

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comply with rules promulgated by the NYSE;

 

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prepare and distribute periodic public reports;

 

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establish new internal policies, such as those relating to insider trading; and

 

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involve and retain to a greater degree outside professionals in the above activities.

Furthermore, while we generally must comply with Section 404 of the Sarbanes-Oxley Act, we are not required to have our independent registered public accounting firm attest to the effectiveness of our internal controls until our first annual report subsequent to our ceasing to be an “emerging growth company.” We may not be required to have our independent registered public accounting firm attest to the effectiveness of our internal controls until as late as our annual report for the year ending December 31, 2030. At any time, we may conclude that our internal controls, once tested, are not operating as designed or that our system of internal controls does not address all relevant financial statement risks. Once required to attest to control effectiveness, our independent registered public accounting firm may issue a report that concludes it does not believe our internal control over financial reporting is effective. Compliance with Sarbanes-Oxley Act requirements may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.

Taking advantage of the reduced disclosure requirements applicable to “emerging growth companies” may make the Class A common stock less attractive to investors.

We qualify as an “emerging growth company” as defined in the JOBS Act. An emerging growth company may take advantage of certain reduced reporting and other requirements that are otherwise applicable generally to public companies. Pursuant to these reduced disclosure requirements, emerging growth companies are not required to, among other things, comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, provide certain disclosures regarding executive compensation, holding stockholder advisory votes on executive compensation or obtain stockholder approval of any golden parachute payments not previously approved. In addition, emerging growth companies have longer phase-in periods for the adoption of new or revised financial accounting. We will cease to be an emerging growth company upon the earliest of (i) the last day of the fiscal year in which we have $1.235 billion or more in annual revenues; (ii) the date on which we become a “large accelerated filer” (the fiscal year-end on which the total market value of our common equity securities held by non-affiliates is $700 million or more as of June 30); (iii) the date on which we issue more than $1.0 billion of non-convertible debt securities over a three-year period; or (iv) the last day of the fiscal year following the fifth anniversary of this offering. We may take advantage of all of the reduced reporting requirements and exemptions until we are no longer an emerging growth company.

We have elected to take advantage of the extended transition period to comply with new or revised accounting standards under Section 107 of the JOBS Act. Electing to use the phase-in periods permitted by this election may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the longer phase-in periods under Section 107 of the JOBS Act and who will comply with new or revised financial accounting standards. We cannot predict if investors will find our Class A common stock less attractive if we rely on these exemptions. If some investors find the Class A common stock less attractive as a result, there may be a less active trading market for the Class A common stock and the price of the Class A common stock may be more volatile. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies.

 

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Investors in this offering will experience immediate and substantial dilution of $      per share.

Based on an assumed initial public offering price of $     per share (the midpoint of the price range set forth on the cover of this prospectus), purchasers of the Class A common stock in this offering will experience an immediate and substantial dilution of $     per share in the net tangible book value per share of Class A common stock from the initial public offering price, and our historical and as adjusted net tangible book deficit as of     , 2025 would be $     per share. See “Dilution.”

Provisions of our corporate governance documents could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management or members of our Board, even if beneficial to our stockholders.

In addition to certain provisions of the Delaware General Corporation Law (as amended, the “DGCL”) that apply to us, our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws will contain provisions that could make it more difficult for a third party to acquire us, even if doing so might be beneficial to our stockholders. Among other things, these provisions:

 

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will allow our Board to authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include supermajority voting, special approval, dividend or other rights or preferences superior to the rights of other stockholders;

 

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provide for a classified Board with staggered three-year terms;

 

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prohibiting stockholders from acting by written consent at any time when the outstanding shares of Class B common stock represent less than  % in voting power of shares of common stock;

 

•

provide that, at any time when the Class B Common Stockholder controls, in the aggregate, less than  % in voting power of shares of common stock entitled to vote generally in the election of directors, directors, other than the GE Director (as defined in our Amended and Restated Charter), may only be removed for cause and only by the affirmative vote of holders of at least  % in voting power of all the then-outstanding shares of common stock entitled to vote thereon, voting together as a single class;

 

•

provide that, at any time when the Class B Common Stockholder controls, in the aggregate, less than  % in voting power of shares of common stock, the affirmative vote of holders of at least  % of the voting power of all of the then outstanding shares of common stock will be required to amend provisions of our Amended and Restated Charter relating to the management of our business, our board of directors, stockholder action by written consent, calling special meetings of stockholders, competition and corporate opportunities, Section 203 of the DGCL, forum selection and the liability of our directors, or to amend, alter, rescind or repeal our Amended and Restated Bylaws; and

 

•

establish advance notice requirements for nominations for elections to our Board or for proposing matters that can be acted upon by stockholders at stockholder meetings.

These and other provisions of our corporate governance documents and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our Board or initiate actions that are opposed by our then-current Board, including actions to delay or impede a merger, tender offer or proxy contest involving the Company. The existence of these provisions could negatively affect the price of the Class A common stock and limit opportunities for you to realize value in a corporate transaction.

We may be subject to securities litigation, activist investors and short-selling campaigns, which are expensive and could divert management attention.

Following the completion of this offering, the market price of the Class A common stock may be volatile. Companies that have experienced volatility in the market price of their stock have, in the past, been subject to

 

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securities class action litigation, activist investor campaigns and short-selling. We may be the target of these types of activities in the future, any for which could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm our business.

Our Amended and Restated Certificate of Incorporation will designate the Court of Chancery of the State of Delaware (the “Delaware Court of Chancery”) as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to bring a claim in a different judicial forum for disputes with us or our directors, officers, employees or agents.

Our Amended and Restated Certificate of Incorporation will provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum, to the fullest extent permitted by law, for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a duty (including any fiduciary duty) by, or other wrongdoing by, any of our current or former director, officer, employee, agent or stockholder to us or to our stockholders, (iii) any action asserting a claim against us or any of our current or former director, officer, employee, agent, or stockholder arising out of or relating to any provision of the DGCL, our Amended and Restated Certificate of Incorporation or our Amended and Restated Bylaws (as either may be amended and/or restated from time to time), (iv) any action to interpret, apply, enforce or determine the validity of our Amended and Restated Certificate of Incorporation or our Amended and Restated Bylaws, (v) any action asserting a claim against us or any of our current or former director, officer, employee, agent or stockholder governed by the internal affairs doctrine or (vi) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL shall be the Delaware Court of Chancery (or, if and only if the Delaware Court of Chancery lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom (the “Delaware Forum Provision”). Notwithstanding the foregoing, our Amended and Restated Certificate of Incorporation will provide that the Delaware Forum Provision will not apply to any action or proceeding asserting a claim under the Securities Act. Further, our Amended and Restated Certificate of Incorporation will provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act against us or any of our director, officer, employee or agent (the “Federal Forum Provision”).

The Delaware Forum Provision and the Federal Forum Provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find the Delaware Forum Provision or the Federal Forum Provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition or results of operations. Any person or entity purchasing or otherwise acquiring any interest in our shares of capital stock shall be deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision, but will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

There can be no assurance that we will be able to comply with the continued listing standards of the NYSE following the completion of this offering. If we are unable to comply with its continued listing requirements, the NYSE may delist the Class A common stock from trading on its exchange, which could limit investors’ ability to transact in the Class A common stock and subject us to additional trading restrictions.

We have applied to list the Class A common stock on the NYSE under the symbol “BETA.” However, we cannot assure you that the Class A common stock will continue to be listed on the NYSE following the completion of this offering. We will be required to demonstrate compliance with the NYSE’s continued listing

 

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requirements in order to maintain the listing of the Class A common stock on the NYSE. If the NYSE delists the Class A common stock from trading on its exchange and we are not able to list the Class A common stock on another national securities exchange, the Class A common stock could be quoted on an over-the-counter market. If this were to occur, we could face significant adverse consequences, including:

 

•

a limited availability of market quotations for our securities;

 

•

reduced liquidity for the Class A common stock;

 

•

a determination that the Class A common stock is a “penny stock,” which would require brokers trading in the Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for the Class A common stock;

 

•

a limited amount of news and analyst coverage; and

 

•

a decreased ability to issue additional securities or obtain additional financing in the future.

If we are deemed to be an investment company under the Investment Company Act of 1940, our results of operations could be harmed.

Under the Investment Company Act of 1940, as amended (the “Investment Company Act”), absent an applicable exemption, a company generally will be deemed to be an “investment company” if (a) it is in the business of investing, reinvesting, owning, holding or trading in securities and (b) it owns or proposes to acquire “investment securities” having a value exceeding 40% of its total assets (other than U.S. government securities and cash items) on an unconsolidated basis (such second prong, the “40% Test”). We do not believe that we or any of our subsidiaries are an “investment company” for purposes of the Investment Company Act, including in part, because neither we nor any of our subsidiaries are in the business of investing, reinvesting, owning, holding or trading in securities, as required under Section 3(a)(1)(C) of the Investment Company Act, and because we qualify for the safe harbor from “investment company” status provided in Rule 3a-8 under the Investment Company Act.

We are engaged primarily in developing an all-electric, conventional and vertical take-off and landing electric aircraft, and our historical development, the activity of our officers and directors, the nature of our present assets, the sources of our present income and the public perception of the nature of our business all support the conclusion that we are an operating company and not an investment company. Further, we qualify for the nonexclusive safe harbor from the definition of “investment company” provided in Rule 3a-8 under the Investment Company Act, which applies to certain research and development companies. We currently conduct, and intend to continue to conduct, our operations so that neither we, nor any of our subsidiaries, is required to register as an “investment company” under the Investment Company Act. If we were obligated to register as an “investment company,” we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things, limitations on capital structure, restrictions on specified investments, prohibitions on transactions with affiliates and compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would increase our operating and compliance costs, could make it impractical for us to continue our business as contemplated, and could have a material adverse effect on our business.

General Risk Factors

Our business may be adversely affected by the current global political and macroeconomic challenges, including the tariffs, effects of inflation, volatile interest rates or an economic downturn or recession.

Current global political and macroeconomic conditions and the effects thereof, including inflation, volatile interest rates, changes in trade agreements or regulations, tariffs, uncertainty with respect to the federal budget and federal debt ceiling and potential government shutdowns related thereto, actual or perceived instability in the

 

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global banking sector, the war in Ukraine and conflicts in the Middle East, supply chain issues and any economic downturn or recession in certain regions or worldwide have, and may continue to, adversely affect our business, results of operations, financial condition and prospects. The existence of inflation in certain economies has resulted in, and may continue to result in, volatile interest rates and capital costs, supply shortages, increased costs of labor, certain components, manufacturing and shipping as well as weakening exchange rates and other similar effects. As a result, we may experience cost increases. Although we take measures to mitigate the effects of macroeconomic challenges, if these measures are not effective, our business, results of operations, liquidity, financial condition and prospects could be materially adversely affected. Even if such measures are effective, there could be a delay between the adverse effects of macroeconomic conditions and the timing of when those beneficial actions impact our business, results of operations, financial condition and/or prospects.

We have been, and may in the future be, adversely affected by public health threats, the duration and economic, governmental and social impact of which is difficult to predict, which could significantly harm our business, results of operations, financial condition and prospects.

We face various risks related to public health issues, including epidemics, pandemics and other outbreaks that could harm our operations and financial results. For example, COVID-19 created a disruption in the manufacturing, delivery and overall supply chain of aircraft manufacturers and suppliers. The extent to which the health epidemics or pandemics can impact our business, results of operations, financial condition and prospects will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of such health epidemics or pandemics, their severity, the actions taken by governments and others in response to such health epidemics and pandemics and how quickly and to what extent normal economic and operating activities can resume. Even after health epidemics or pandemics have subsided, we may continue to experience an adverse impact to our business because of such public health threats, including ongoing supply chain shortages.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding:

 

•

the consummation of and use of proceeds from this offering;

 

•

our expectations regarding our financial condition and results of operations, including, but not limited, to our expectations regarding revenue, cost of revenue, operating expenses and our ability to achieve and maintain future profitability;

 

•

our future sources of and needs for liquidity and capital resources;

 

•

our ability to obtain debt financing or refinance existing indebtedness on satisfactory terms, or otherwise raise financing in the future;

 

•

economic, industry and other trends relevant to our business;

 

•

the commercialization of our offerings, including with respect to the design, development, testing, certification, manufacture, performance, attributes and launch of our aircraft;

 

•

our business model and expectations and management of future growth, including expansion in international markets and expenditures associated with such growth;

 

•

our ability to expand and retain our customer base;

 

•

our ability to compete with existing and new competitors in existing and new markets;

 

•

our ability to maintain and enhance our brand or reputation;

 

•

our current collaboration with GE Aerospace and future strategic alliances, which could have an adverse effect on our financial condition and results of operations;

 

•

the increasing complexity of our operations;

 

•

our ability to obtain, maintain, protect and enhance our intellectual property;

 

•

our ability to attract and retain key personnel;

 

•

the liquidity and trading of our Class A common stock;

 

•

the increased expenses associated with being a public company; and

 

•

the impact of the regulatory environment and complexities with compliance related to such environment.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

 

•

our ability to design, manufacture and deliver our aircraft and other offerings to customers;

 

•

our ability to obtain all required certifications, licenses, approvals or authorizations from governmental authorities;

 

•

our ability to achieve our business milestones for the commercialization of our aircraft and other offerings in a timely manner, or at all;

 

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•

the impact of competing products, services or technologies or technological changes that result in reduced demand for our aircraft or other offerings, or in other adverse effects on the electric and hybrid electric aviation (including VTOL) industry or our business;

 

•

our ability to access the capital and credit markets or borrow on affordable terms to obtain additional capital that we may require;

 

•

our ability to manage and grow our business effectively;

 

•

risks associated with our defense program and our ability to secure and comply with existing or future contracts or otherwise grow our relationship with the U.S. Military and other U.S. governmental organizations;

 

•

the potential for losses and adverse publicity stemming from any accidents or other incidents involving aircraft and, in particular, from accidents involving electric aircraft, or battery solutions, such as lithium-ion batteries;

 

•

natural disasters, outbreaks and pandemics, economic, social, weather, growth constraints and regulatory conditions;

 

•

our dependence on suppliers and service partners for raw materials and certain parts and components;

 

•

threats of cybersecurity-related attacks and other cyber-incidents;

 

•

our success in retaining or recruiting, or changes in, our officers or other key employees or our directors;

 

•

our ability to address a wide variety of extensive and evolving laws and regulations with which we are, or may in the future be, required to comply;

 

•

changes in tax laws or regulations that are applied adversely to us or challenges to our tax positions;

 

•

claims and litigation that could ultimately be resolved against us;

 

•

the cost of compliance with governmental regulations, evolving scrutiny and changing expectations from global regulators and our stakeholders regarding our environmental, social and governance practices and value proposition;

 

•

costs incurred in complying with, or liabilities or obligations imposed under, EHS laws and regulations; and

 

•

such other factors as discussed throughout the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of this prospectus.

Any forward-looking statement made by us in this prospectus is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement whether as a result of new information, future developments or otherwise.

 

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USE OF PROCEEDS

We will receive net proceeds of approximately $     million (or approximately $     million if the underwriters exercise in full their option to purchase additional shares of Class A common stock) from the sale of the Class A common stock by us in this offering, assuming an initial public offering price of $     per share (the midpoint of the price range set forth on the cover page of this prospectus) and after deducting estimated expenses and underwriting discounts and commissions payable by us.

We intend to use the net proceeds from this offering primarily for general corporate purposes. Each $1.00 increase or decrease in the assumed initial public offering price of $     per share would cause the net proceeds from this offering, after deducting the underwriting discounts and commissions and estimated offering expenses, received by us to increase or decrease, respectively, by approximately $    , assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. Each 1,000,000 increase or decrease in the number of shares offered would cause the net proceeds from this offering, after deducting the underwriting discounts and commissions and estimated offering expenses, received by us to increase or decrease, respectively, by approximately     $ million, assuming that the assumed initial public offering price per share for the offering remains at $     (the midpoint of the price range set forth on the cover page of this prospectus).

 

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DIVIDEND POLICY

We do not anticipate declaring or paying any cash dividends to holders of our Class A common stock in the foreseeable future. We currently intend to retain future earnings, if any, to fund our operations and to develop and grow our business and research, development and production, including investing in aircraft production, building out our manufacturing facilities and expanding our charging network in the U.S. and abroad. Our future dividend policy is within the discretion of our Board and will depend upon various factors our Board deems relevant, including our results of operations, financial condition, capital requirements and investment opportunities.

 

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of June 30, 2025:

 

•

on an actual basis as derived from our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus;

 

•

on an as adjusted basis to give effect to the (i) Stock Split, (ii) IPO Recapitalization and (iii) filing and effectiveness of our Amended and Restated Certificate of Incorporation, each of which will occur after the effectiveness of the registration statement for this offering and become effective prior to the completion of this offering and;

 

•

on a further as adjusted basis to give effect to (i) the sale of shares of our Class A common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and the application of the net proceeds from this offering as described under “Use of Proceeds.”

The as further adjusted information set forth in the table below is illustrative only and the as adjusted information will be further adjusted based on the actual initial public offering price and other final terms of this offering. You should read the following table in conjunction with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical consolidated financial statements and related notes thereto appearing elsewhere in this prospectus.

 

		As of June 30, 2025
		Actual				As Adjusted				As Further Adjusted(1)
		(in thousands, except shares and par value)
Cash and cash equivalents		$	174,531			$	174,531			$
Long-term debt:
Credit Facility		$	170,103			$	170,103			$
Unamortized discount and debt issuances			(16,963	)			(16,963	)
Total notes payable		$	153,140			$	153,140			$
Stockholders’ equity(2):
Series A preferred stock – $0.0001 par value per share; 5,020,952 shares authorized, issued and outstanding, actual; no shares issued and outstanding, as adjusted and as further adjusted			352,614				—
Series A-1 preferred stock – $0.0001 par value per share; 480,307 shares authorized, issued and outstanding, actual; no shares issued and outstanding, as adjusted and as further adjusted			34,989				—
Series A-2 preferred stock – $0.0001 par value per share; 1,584,493 shares authorized, issued and outstanding, actual; no shares issued and outstanding, as adjusted and as further adjusted			115,375				—
Series A-3 preferred stock – $0.0001 par value per share; 1,703,958 shares authorized, issued and outstanding, actual; no shares issued and outstanding, as adjusted and as further adjusted			121,755				—
Series B preferred stock – $0.0001 par value per share; 4,846,370 shares authorized; 3,982,998 shares issued and outstanding, actual; no shares issued and outstanding, as adjusted and as further adjusted			484,494				—

 

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		As of June 30, 2025
		Actual				As Adjusted				As Further Adjusted(1)
		(in thousands, except shares and par value)
Series C Preferred Stock – $0.0001 par value per share; 3,480,442 shares authorized; 2,856,966 shares issued and outstanding, actual; no shares issued and outstanding, as adjusted and as further adjusted			329,506				—
Common Stock – $0.0001 par value per share, voting common stock; 35,000,000 shares authorized; 5,859,988 shares issued and outstanding, actual; no shares issued and outstanding, as adjusted and as further adjusted			1				—
Super Voting Common Stock – $0.0001 par value per share, super voting common stock; 1,332,277 shares authorized, issued and outstanding, actual; no shares issued and outstanding, as adjusted and as further adjusted			—				—
Class A common stock – $0.0001 par value per share, voting common stock; no shares authorized and outstanding, actual; 35,000,000 shares authorized, 23,085,435 issued and outstanding, as adjusted;   shares authorized, issued and outstanding, as further adjusted			—				2
Class B common stock – $0.0001 par value per share, voting common stock; no shares authorized and outstanding, actual; 1,332,277 shares authorized and outstanding, as adjusted;    shares issued and outstanding, as further adjusted			—				0
Additional paid-in capital			—				1,438,732
Treasury stock			(5,888	)			(5,888	)
Accumulated deficit			(1,139,651)				(1,139,651	)
Foreign currency translation adjustments			17				17
Total stockholders’ equity		$	293,212			$	293,212			$
Total capitalization		$	446,352			$	446,352			$

(1)

A $1.00 increase or decrease in the assumed initial public offering price of $   per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease additional paid-in capital, total stockholders’ equity and total capitalization by approximately $   million, $   million and $   million, respectively, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. An increase or decrease of one million shares offered by us at an assumed offering price of $   per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease additional paid-in capital, total stockholders’ equity and total capitalization by approximately $   million, $   million and $   million, respectively, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

(2)	Preferred stock is presented net of issuance costs.

 

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DILUTION

Purchasers of our Class A common stock in this offering will experience immediate and substantial dilution in the net tangible book value per share of the Class A common stock for accounting purposes. Our historical net tangible book value as of June 30, 2025 was $291.3 million, or $49.72 per share of our common stock. Our historical net tangible book value represents the amount of our total tangible assets less our total liabilities. Historical net tangible book value per share represents historical net tangible book value divided by 5,859,988 shares of our common stock outstanding as of June 30, 2025. Our as adjusted net tangible book value as of June 30, 2025, was $291.3 million, or $12.62 per share of Class A common stock. As adjusted net tangible book value per share is determined by dividing our as adjusted tangible net worth (tangible assets less total liabilities) by the total number of outstanding shares of Class A common stock that will be outstanding prior to the closing of this offering after giving effect to (i) the Stock Split, (ii) the IPO Recapitalization and (iii) the filing and effectiveness of our Amended and Restated Certificate of Incorporation, each of which will occur after the effectiveness of the registration statement for this offering and become effective prior to the completion of this offering. Assuming an initial public offering price of $     per share (the midpoint of the price range set forth on the cover page of this prospectus), after giving effect to the receipt of the estimated net proceeds (after deducting estimated underwriting discounts and commissions and estimated offering expenses), our as further adjusted net tangible book value as of June 30, 2025 would have been approximately $     million, or $     per share. This represents an immediate increase in the as further adjusted net tangible book value of $     per share to our existing stockholders and an immediate dilution (i.e., the difference between the offering price and the as further adjusted net tangible book value after this offering) to new investors purchasing shares of Class A common stock in this offering of $     per share. The following table illustrates the per share dilution to new investors purchasing shares in this offering:

 

Initial public offering price per share						$
Historical net tangible book value per common share as of June 30, 2025		$	49.72
Increase (decrease) in as adjusted net tangible book value per share of Class A common stock prior to the closing of this offering			(37.10	)
As adjusted net tangible book value per share as of June 30, 2025			12.62
Increase (decrease) in as adjusted net tangible book value per share of Class A common stock attributable to new investors in this offering
As further adjusted net tangible book value per share of Class A common stock after this offering
Dilution in as further adjusted net tangible book value per share of Class A common stock to investors in this offering						$

If the underwriters exercise in full their option to purchase    additional shares of Class A common stock, the as further adjusted net tangible book value after the offering would be $     per share, the increase in as further adjusted net tangible book value per share to existing stockholders would be $     per share and the dilution to new investors would be $     per share.

A $1.00 increase (decrease) in the assumed initial public offering price of $    per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our as further adjusted net tangible book value per share after the offering by $    per share and increase (decrease) the dilution to new investors in this offering by $    per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

 

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The following table summarizes, on an as further adjusted basis as of June 30, 2025, the total number of shares of Class A common stock owned by existing stockholders and to be owned by new investors, the total consideration paid, and the average price per share paid by our existing stockholders and to be paid by new investors in this offering at our initial public offering price of $    per share, calculated before deduction of estimated underwriting discounts and commissions:

 

Shares Acquired

Total Consideration

Average Price per Share

Number

Percent

Amount

Percent

(in thousands)

Existing stockholders

%

$

%

$

New Investors in this offering

%

$

%

$

Total

The above tables and discussion are based on the number of shares of our Class A common stock and Class B common stock to be outstanding as of the closing of this offering. If the underwriters’ option to purchase additional shares is exercised in full, the number of shares held by new investors will be increased to    , or    % of the total number of shares of Class A common stock.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the “Prospectus Summary—Summary Financial Data” and the consolidated financial statements and related notes appearing elsewhere in this prospectus. This discussion contains “forward-looking statements” reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this prospectus, particularly in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We assume no obligation to update any of these forward-looking statements. The information in this section does not give effect to the Stock Split.

Overview

We are redefining the aerospace industry. We have developed an electric aircraft platform and propulsion systems that are positioned to transform the aviation industry forward into a new phase of growth. We design, manufacture and sell high-performance electric aircraft, advanced electric propulsion systems, charging systems and components. Further, we have invested in the underlying infrastructure of this breakthrough technology, which is critical to bringing electric aviation to life. We believe we have developed a differentiated presence in North America and are well positioned to expand globally.

Our company was purpose-built to capture the significant, untapped market opportunity in sustainable, reliable and efficient electric aviation.

Vertical integration allows us to innovate rapidly and capture meaningful economic value throughout an aircraft’s lifetime, by providing batteries and aftermarket services for BETA aircraft and other customers. Our focus is on the Enabling Technologies essential to electric aviation, including batteries, motors, flight control systems and a nationwide network of electric charging and related equipment. With proprietary control over these core technologies, we offer customers a complete platform to support their adoption of electric aircraft to enable both existing and new missions. This multilayered approach provides us with recurring, high margin opportunities.

We are developing highly scalable technologies that can be tailored to and deployed for cost-effective and safe missions across cargo and logistics, medical, defense and passenger end markets. Our simplified approach to designing electric aircraft allows us to service a variety of end markets and mission types leveraging the same core technologies. The portability of our technologies and systems across various aircraft also unlocks flexibility to innovate on future generations of aircraft.

Industry Trends and Outlook

The emergence of electric aviation is ushering in a new era of aviation, with the potential to dramatically lower costs, reduce environmental impact, and open up entirely new markets. By leveraging electric propulsion technologies, aircraft can be made quieter, more efficient, and cheaper to operate than traditional fuel-based models. This shift is especially significant for short-haul and regional routes, where electric aircraft can enable point-to-point travel between smaller cities and underserved areas, bypassing the need for large airport infrastructure. This will be impactful for cargo and logistics, medical, defense, and passenger operations. As battery technology and regulatory frameworks evolve, electric aviation is set to further unlock a wave of innovation, which we believe we are at the forefront of.

 

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Moreover, as global commercial aircraft fleets grow, replacement batteries and maintenance requirements are also expected to grow. These maintenance requirements are recurring and often times non-deferrable, even during periods of economic downturn or reduced demand for commercial air travel. In addition, to support growing fleets of electric aircraft, charging infrastructure will be required at airports and vertiports globally. We primarily compete across four end markets within the aerospace industry: cargo and logistics, medical, defense and passenger.

Cargo and Logistics: We believe cargo and logistics represent near-term, sizable and compelling opportunity for our aircraft and products. Based on the demand for timely supply chain solutions caused by the rise of e-commerce, large global parcel and e-commerce companies have tested and placed orders for electric aircraft and drones to address supply chain constraints. In 2024, e-commerce made up approximately 16% of total retail sales in the United States based on the U.S. Census Bureau, 2024 Annual Retail Trade Survey. In parallel, customers are increasingly demanding faster delivery times, pressuring traditional distribution networks. The introduction of electric aircraft in cargo and logistics, specifically in rural areas, received additional support in the June 2025 Executive Order entitled “Unleashing American Drone Dominance” (the “June 2025 Executive Order”). Customers including UPS and Bristow have placed Firm Orders.

Medical: Electric aviation, both CTOL and VTOL, are well-suited to meet the growing demand for fast, reliable and environmentally sustainable healthcare logistics. Our aircraft are uniquely suited for medical operations with their large and flexible interior spaces. Lower operating costs of electric aircraft make them well-suited for Medical Cargo and Low-Acuity Patient Transfer missions. Customers including United Therapeutics, Metro Aviation and New Zealand Air Ambulance have placed Firm Orders.

Defense: Our ALIA platform is well suited for emerging necessities of modern warfare in both their low maintenance burden and their autonomy-ready designs. Current events and conflicts across the globe have resulted in increased defense and national security spending, both nationally and internationally. Existing defense logistics platforms, mainly helicopters, are poorly suited for imminent threats, including conflicts across wide expanses of ocean. In the United States, defense and national security spending benefits from strong bi-partisan support, which has resulted in a stable and growing investment over time. Our demand forecast consists of nearly 2,000 BETA aircraft for defense applications through 2035 based on U.S. Military estimates and internal opportunity sizing. We believe the increased focus on lower cost, attributable, and, where possible, dual-use technology that can be rapidly produced, will benefit us and aligns with our key focus areas.

Passenger: We believe that the demand for Urban and Regional Air Mobility services will usher in a new wave of growth for the commercial aerospace market. To date, 20% of flights globally are under 300 miles, demonstrating this trend. As traditional, ground-based transportation alternatives become increasingly expensive and population growth accelerates, their scalability is becoming highly questionable. At the same time, technological advances in battery energy density, propulsion, design and materials are enabling aircraft to serve shorter distances in a more cost-effective and environmentally sustainable manner. The convergence of these forces has led airlines, aircraft lessors and charter companies to place orders for over ten thousand aircraft worth over $80 billion. We expect these trends to continue and create new opportunities to convert terrestrial transportation demand to aircraft.

Factors and Trends Affecting Our Business

Development of the Urban and Regional Air Mobility Markets

We expect to derive revenue from the continued development of aerial transportation for cargo and logistics, medical, defense and passenger applications globally. Our ALIA CTOL and ALIA VTOL aircraft are well positioned to serve the urban and regional air mobility markets. While we believe the global market for urban and regional aerial transportation will be large, it remains in the early stages of development and there is no guarantee of future demand.

 

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Government Certification

In the U.S., new aircraft must undergo a rigorous FAA certification process to ensure the design, manufacturing, and individual aircraft meet all applicable safety and airworthiness standards. This begins with Type Certification, in which the FAA evaluates the aircraft design through extensive ground and flight testing to verify compliance with federal regulations. The Type Certification process is conducted in five phases. Each phase is a milestone that addresses product, builds regulatory trust, and unlocks commercial value. Stages one to three can be considered the “definition” phase, while stages four and five are the “implementation” phase. We began working with the FAA in 2020 and have made significant progress toward the certification of both our eCTOL aircraft and our eVTOL aircraft, as well as the certification of our engines for aircraft integration. We expect to be an early manufacturer to achieve Part 23 FAA Type Certification for an electric aircraft, which we believe will allow us to reach a large addressable market of cargo and logistics, medical, defense and passenger operators, while simultaneously building momentum for our VTOL and larger passenger aircraft variants. We target entering FAA-conforming production for our CTOL aircraft at the end of 2026 or early 2027. Our business will require continued focus leading up to certification of our aircraft, including, but not limited to, prototyping and testing, manufacturing, software development, certification, infrastructure and commercialization. If the FAA requires further modifications to our CTOL electric aircraft’s existing certification basis or if there are other regulatory changes or revisions, this could delay our ability to obtain Type Certification for our VTOL aircraft, and could delay our ability to commercialize our aircraft, GSE and enabling technology. We have not yet delivered any certified aircraft, and therefore, no associated revenue has been recognized. See also “Business—Certification.”

We expect the FAA Type Certificate will be reciprocated in certain global markets pursuant to bilateral agreements between the FAA and its counterpart civil aviation authorities. This reciprocal recognition provides the regulatory foundation for civil operation of our aircraft in non-U.S. markets. Following FAA Type Certification, we intend to pursue validation with Transport Canada and the Civil Aviation Authority of New Zealand, in support of firm orders from customers. We have also initiated discussions with EASA regarding validation of H500A and ALIA CTOL. We anticipate we will start the validation process on H500A with EASA immediately following FAA Type Certification or in 2026, which we believe can position us for efficient international expansion as we develop commercial operations around the world.

In addition to certifying our aircraft, we will also need to obtain authorizations and certifications related to the production of our electric aircraft, GSE and Enabling Technologies. While we expect to meet the applicable requirements, if we fail to obtain any of the required authorizations or certifications, or do so in a timely manner, or if any of these authorizations or certifications are modified, suspended or revoked after we obtain them, we may be unable to launch our commercial electric aviation or do so on the timelines we project, which would have adverse effects on our business, prospects, financial condition or results of operations.

Financing and Commercialization

Since inception, we have made investments across research and development, facilities, equipment, and tooling needed to move toward manufacturing of our aircraft and charging systems. Current and future programs will require significant research and development effort, including extensive testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure. Near-term cash requirements include investing in our manufacturing facilities and equipment, supporting FAA certification, scaled manufacturing operations for commercialization and development and production of aircraft and charging systems. As a result of these anticipated expenditures, we will need additional financing to support our continuing operations and pursue our growth strategy. While we expect that our existing cash and cash equivalents, together with anticipated net proceeds from this offering, will enable us to fund our current and planned operating expenses and capital expenditures for at least the next 12 months, until such time as we generate significant revenue, if ever, we expect to fund our operations through equity offerings or debt financings, credit or loan facilities, potentially other capital resources, or a combination of one or more of these funding sources. There can be no assurances that the Company will be successful in obtaining sufficient funding

 

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on terms acceptable to the Company to fund continuing operations, if at all. Failure to raise capital as and when needed could have a negative impact on our financial condition and ability to pursue our business strategies, and we may be required to delay, reduce or eliminate certain aircraft development programs or other strategic initiatives. See “—Liquidity and capital resources” and “Risk Factors—We have incurred significant losses since inception, we expect to incur losses in the future and we may not be able to achieve or maintain profitability.”

Public Company Costs

We expect to incur incremental, non-recurring costs related to our transition to a publicly traded corporation, including the costs of this initial public offering and the costs associated with the initial implementation of our Sarbanes-Oxley Section 404 internal control implementation and testing. We also expect to incur additional significant and recurring expenses as a publicly traded corporation, including costs associated with the employment of additional personnel, compliance under the Exchange Act, including filing of annual and quarterly reports, registrar and transfer agent fees, national stock exchange fees, audit fees, incremental director and officer liability insurance costs and director and officer compensation.

Components of Results of Operations

We use a variety of financial metrics to assess the performance of our operations, including: revenues; cost of revenues; research and development expenses; and general and administrative expenses.

Revenues

Our product revenue is primarily generated from the sale of tangible products such as GSE and Enabling Technologies, including motors. Our service revenue is primarily generated from engineering, consulting and other service arrangements for our customers. Service revenue also includes revenue associated with usage and priority access from our charge stations.

Costs of Revenues

Cost of product revenues and service revenues may include the direct cost of materials, labor, subcontractors, depreciation, and overhead costs (where allowable) depending on the nature of the agreement. Included within cost of product revenues are purchases made directly for contractual performance obligations primarily recognized over time, and as such no inventories are recorded in the consolidated balance sheet.

Research and Development Expenses

We have invested in research and development for our electric aircraft, electric propulsion systems and charging solutions and network. We have also invested in critical components of our enabling technology including batteries, motors and flight computers. We manage our expenses based on several factors, including industry conditions and expected demand for our services.

Research and development expenses consist primarily of personnel expenses, including salaries, benefits, and stock based compensation, costs of consulting, equipment and materials, temporary tooling, depreciation and amortization associated with long-lived assets, and certain overhead expenses, including rent, information technology costs and utilities. Research and development expenses are partially offset by tax credits for scientific research and development from Revenu Québec, a governmental agency of the Canadian province of Québec, which funds public services using tax monies collected, and payments we receive in the form of government grants.

General and Administrative Expenses

General and administrative expenses consist of personnel expenses, including salaries, benefits, and stock based compensation, related to executive management, finance, legal, and human resource functions and other general corporate expenses, including rent, depreciation and amortization associated with long-lived assets,

 

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information technology costs, and utilities. General and administrative expenses are partially offset by payments we received in the form of government grants and other reimbursement agreements, including our agreement with the Advanced Regenerative Manufacturing Institute, Inc. (“ARMI”) in which we are reimbursed for certain expenses incurred.

Interest Expense

Interest expense consists primarily of interest on outstanding long-term debt under our Credit Facility and amortization of the associated deferred financing fees.

Interest Income

Interest income consists of interest earned on cash and cash equivalent balances.

Income Tax Expense

Our provision for income taxes consists of an estimate of federal, state, and foreign income taxes based on enacted federal, state, and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in tax law. Due to the level of historical losses, we maintain a valuation allowance against U.S. federal and state deferred tax assets as it has been concluded it is more likely than not that these deferred tax assets will not be realized.

Results of Operations

Comparison of Results for the Six Months Ended June 30, 2025 and 2024

The following table presents selected financial information for the periods presented (dollars in thousands):

 

		Six Months Ended June 30,								Increase (Decrease) ($)				Increase (Decrease) (%)
		2025				2024
Revenues
Product revenue		$	5,032			$	596				4,436				*
Service revenue			10,533				6,993				3,540				50.6	%
			15,565				7,589				7,976				*
Cost of revenues
Product revenue			595				589				6				1.0	%
Service revenue			2,333				1,521				812				53.4	%
			2,928				2,110				818				38.8	%
Gross margin
Product revenue			4,437				7				4,430				*
Service revenue			8,200				5,472				2,728				49.9	%
			12,637				5,479				7,158				*
Operating expenses
Research and development			115,899				92,105				23,794				25.8	%
General and administrative			54,075				36,567				17,508				47.9	%
Total operating expenses			169,974				128,672				41,302				32.1	%
Loss from operations			(157,337	)			(123,193	)			34,144				27.7	%

 

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		Six Months Ended June 30,								Increase (Decrease) ($)				Increase (Decrease) (%)
		2025				2024
Other (expense) income
Interest expense			(5,750	)			(5,594	)			156				2.8	%
Interest income			4,720				4,705				15				0.3	%
Total other income (expense)			(1,030	)			(889	)			141				15.9	%
Loss before income taxes			(158,367	)			(124,082	)			34,285				27.6	%
Income tax expense			(327	)			(55	)			272				*
Net loss		$	(158,694	)		$	(124,137	)			34,557				27.8	%

*	Percentage increase (decrease) is not meaningful

Revenues

Product revenues increased by $4.4 million during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily attributable to new contracts with commercial customers to deliver electric propulsion motors, batteries, and flight control systems totaling $4.9 million offset by a reduction in revenue of $0.5 million due to completion of the forward operating base (“FOB”) during 2024.

Service revenues increased by $3.5 million, or 50.6% during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily attributable to new contracts with commercial customers of $2.3 million related to engineering and consulting services to support our customers’ research and development activities, $0.6 million related to priority access to the Company’s charging stations, and a net increase of $0.6 million from U.S. government customers during 2025.

Cost of Revenues

Cost of product revenues increased by less than $0.1 million or 1.0%, during the six months ended June 30, 2025 compared to the six months ended June 30, 2024 due to the completion of certain higher cost contracts during 2024.

Cost of service revenues increased by $0.8 million, or 53.4%, during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily attributable to an increase of $1.4 million in labor and material costs to fulfill contracts with commercial customers, partially offset by a decrease in labor and material costs of $0.6 million to fulfill trade study and service agreements with the U.S. government during 2025.

Gross Margin

Product revenue gross margin increased by $4.4 million during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily attributable to increased product revenue of $4.4 million as well as a more favorable mix of customer contracts.

Service revenue gross margin increased by $2.7 million, or 49.9%, during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was attributable to higher service revenue of $3.5 million, partially offset by an increase in cost of service revenue of $0.8 million. Service revenue gross margin as a percentage of service revenue increased due to a more favorable mix of customer contracts during 2025.

 

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