What changed in this filing

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Item 9A. Controls and Procedures

2025-02-28 compared with 2024-02-29 · 44 added, 52 removed, 163 unchanged (37% of the section changed)

12 unchanged sentences

The design of a control system must reflect the fact that there are resource constraints, and management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Remediation of Prior Year Material Weaknesses

We previously identified and disclosed in our 2022 Annual Report on Form 10-K as well as in our Quarterly Report on Form 10-Q for each interim period in fiscal 2023, the following material weaknesses in our internal control over financial reporting:

▪ We did not design and maintain an effective control environment commensurate with our financial reporting requirements.

We lacked a sufficient number of trained professionals with (i) an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately, and (ii) an appropriate level of knowledge and experience to establish effective processes and controls.

Additionally, the limited personnel resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in our finance and accounting functions.

▪ We did not design and maintain an effective risk assessment process at a precise enough level to identify new and evolving risks of material misstatement in our financial statements.

Specifically, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to the risks of material misstatement to financial reporting.

▪ We did not design and maintain formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over the preparation and review of business performance reviews, account reconciliations and journal entries.

▪ We did not design and maintain effective controls over IT general controls for information systems that are relevant to the preparation of our financial statements.

Specifically, we did not design and maintain:

• user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate company personnel;

• program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized, and implemented appropriately;

• computer operations controls to ensure that data backups are authorized and monitored.

We have taken the steps we believe are necessary to remediate these material weaknesses to comply with the rules and regulations of the SEC regarding compliance with Section 404(a) of the Sarbanes-Oxley Act.

Those remediation measures included the following:

▪ We prepared a remediation plan for each of the material weaknesses and trained process owners, developed new controls, enhanced existing controls and evaluated process adoption, and are monitoring results;

▪ We hired a new Chief Financial Officer in February 2022 and hired additional accounting, human resources and payroll, and IT personnel to bolster our accounting and IT capabilities and capacity, in order to establish and maintain our internal controls;

▪ We implemented controls to formalize roles and review responsibilities that align with our team’s skills and experience and to ensure segregation of duties;

▪ We engaged third-party professionals to aid in the design and implementation of a formal risk assessment process and identified and evaluated changes in our internal controls;

▪ We implemented formal processes, policies, and procedures supporting our financial close process, including establishing and reviewing thresholds for business performance reviews, formalizing procedures over the review of financial statements, and creation of standard balance sheet reconciliation templates and journal entry controls;

▪ We designed and implemented IT general controls, including controls over the review and updating of user access rights and privileges and segregation of duties, and implemented more robust IT policies and procedures over change management, data backup authorization and computer operations;

▪ We implemented a new enterprise resource planning system in February 2023 that automated some of our manual financial reporting processes, enhanced our information technology control environment, and mitigated necessary internal control gaps and limitations that previously resulted in the material weaknesses noted above.

As of December 31, 2023, management has concluded that the actions described above were satisfactorily implemented and have been in place for a sufficient period of time to demonstrate the previously identified material weaknesses have been remediated.

Changes in Internal Control Over Financial Reporting

1 unchanged sentence

Other Information

On February 28, 2025, we will issue an aggregate of 1,541,941 shares of our Class A common stock at a purchase price of $8.88 per share, issuable in satisfaction of payment to a vendor for services rendered (the “Vendor Shares”).

The Vendor Shares were offered by us pursuant to our shelf registration statement on Form S-3 (File No.

333-279289), which was filed with the SEC on May 10, 2024 and declared effective by the SEC on May 16, 2024 including the prospectus supplement dated February 14, 2025, and accompanying prospectus.

A copy of the opinion of Fenwick & West LLP relating to the validity of the Vendor Shares is filed herewith as Exhibit 5.1.

Rule 10b5-1 Trading Plans .

During the three months ended December 31, 2023, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K.

During the three months ended December 31, 2024, none of our directors or officers adopted , modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement”, in each case as defined in Item 408 of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

1 unchanged sentence

Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated herein by reference to our Proxy Statement to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report.

We have established an Insider Trading Policy governing the purchase, sale and other dispositions of our securities that applies to all employees, our officers, non-employee directors and other covered persons.

The Insider Trading Policy also provides that Archer will not transact in its own securities unless in compliance with U.S.

securities laws.

We believe that our Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to Archer.

A copy of the Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report.

The remaining information required by this item is incorporated herein by reference to our Proxy Statement to be filed with the SEC within 120 days of the end of the fiscal year covered by this Annual Report.

Executive Compensation

17 unchanged sentences

001-39668), filed July 29, 2021)

3.1 Amended and Restated Certificate of Incorporation of Archer ( incorporated by reference to Exhibit 3.1 to Form 8-K (File No.

001-39668), filed September 22, 2021 )

3.2 Amended and Restated Bylaws of Archer ( incorporated by reference to Exhibit 3.1 to Form 8-K (File No.

3.1 Amended and Restated Certificate of Incorporation of Archer , as amended and restated (incorporated by reference to Exhibit 3.1 to Form S-3ASR (File No.

333- 284812 ), filed February 11 , 2025)

3.2 Amended and Restated Bylaws of Archer , as amended and restated (incorporated by reference to Exhibit 3.2 to Form 8-K (File No.

001-39668), filed December 27, 2024)

4.1* Description of Archer’s Securities

1 unchanged sentence

001-39668), filed November 2, 2020)

5.1 Opinion of Fenwick & West LLP

10.1 Form of Subscription Agreement (incorporated by reference to Exhibit 10.2 to Form 8-K (File No.

25 unchanged sentences

333-254007) , filed August 10, 2021)

Offer Letter, dated May 5.

2021, by and between the Company and Andy Missan (incorporated by reference to Exhibit 10.17 to Registration Statement on Form S-4 (File No.

333-254007) filed August 10, 2021 )

Settlement Agreement, dated August 10, 2023, by and among Archer, The Boeing Company and Wisk Aero LLC (incorporated by reference to Exhibit 10.1 to Form 10-Q (File No.

001-39668), filed November 9, 2023

Sublease Agreement, dated January 14, 2022, between Forescout Technologies, Inc.

1 unchanged sentence

001-39668) , filed May 12, 2022)

First Warrant to Purchase Shares, dated August 15, 2023, by and among Archer, Wisk Aero LLC and The Boeing Company (incorporated by reference to Exhibit 4.9 to Registration Statement on Form S-3 (File No.

333-273996), filed August 15, 2023)

10.15 Warrant to Purchase Shares, dated January 3, 2023, by and between Archer and Stellantis N.V.

(incorporated by reference to Exhibit 10.3 to Archer’s Current Report on Form 8-K filed with the SEC on January 9, 2023)

(incorporated by reference to Exhibit 10.3 to Form 8-K (File N o.

001-39668), filed January 9, 2023)

10.16 Warrant to Purchase Shares, dated as of November 6, 2020, by and among FCA US LLC and Legacy Archer (incorporated by reference to Exhibit 10.8 to Registration Statement on S-4 (File No.

5 unchanged sentences

1 to Warrant to Purchase Shares, dated August 9, 2022, by and among United Airlines, Inc.

and Archer (incorporated by reference to Exhibit 10.1 to F orm 10-Q (File No.

and Archer (incorporated by reference to Exhibit 10.1 to Form 10-Q (File No.

001-39668), filed November 10, 2022)

7 unchanged sentences

001-39668), filed August 10, 2023)

10.22 Form of Warrant to Purchase Shares by and between Archer and Blue Skies Consulting & Trading Limited (incorporated by reference to Exhibit 4.1 to Form 10-Q (File No.

001-39668), filed August 9, 2024)

10.23 Amended and Restated Registration Rights Agreement, by and between Archer and certain stockholders, dated September 16, 2021 (incorporated by reference to Exhibit 10.2 to Form 8-K (File No.

4 unchanged sentences

(incorporated by reference to Exhibit 10.4 to Form 8-K (File No.

001-39668), filed with the SEC on January 9, 2023)

10.28 Loan and Security Agreement, dated July 9, 2021, by and among Silicon Valley Bank, in its capacity as administrative agent and collateral agent, Silicon Valley Bank and SVB Innovation Credit Fund VIII, L.P., as lenders, and Legacy Archer (incorporated by reference to Exhibit 10.10 to Registration Statement on Form S-4 (File No.

001-39668), filed January 9, 2023)

10.26 Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.

4 to Form 8-K (File No.

001-39668), filed August 8 , 202 4 )

Credit Agreement, dated as of October 5, 2023, by and among Archer, the subsidiary guarantors thereto, and Synovus Bank, as administrative agent and lender

10.27 F orm of Registration Rights Agreement, by and between Archer and Stellantis N.V.

(incorporated by reference to Exhibit 10.

5 to Form 8-K (File No.

001-39668), filed August 8 , 202 4 )

10.28 Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.

4 to Form 8-K (File No.

001-39668), filed December 10 , 202 4 )

10.29 Form of Registration Rights Agreement, by and between Archer and Stellantis N.V.

(incorporated by reference to Exhibit 10.

5 to Form 8-K (File No.

001-39668), filed December 1 2 , 2024 )

Credit Agreement, dated as of October 5, 2023, by and among Archer, the subsidiary guarantors thereto, and Synovus Bank, as administrative agent and lender (incorporated by reference to Exhibit 10.29 t o Form 10-K (File No .

001-39668), filed February 29, 2024)

Form of Indemnity Agreement (incorporated by reference to Exhibit 10.26 to Form 8-K (File No.

5 unchanged sentences

Exhibit Description

10.33 Restricted Stock Purchase Agreement, dated August 10, 2023, by and between Archer and Gibson, Dunn & Crutcher LLP (incorporated by reference to Exhibit 4.10 to Registration Statement on Form S-3 (File No.

333-273996), filed August 15, 2023)

10.34 Forward Purchase Agreement, dated January 3, 2023, by and between Archer and Stellantis N.V.

(incorporated by reference to Exhibit 10.2 to Form 8-K (File No.

001-39668), filed January 9, 2023)

10.34 Manufacturing Collaboration Agreement, dated January 3, 2023, by and between Archer and Stellantis N.V.

1 unchanged sentence

001-39668), filed January 9, 2023)

Design-Build Agreement, dated as of October 3, 2023, by and between Archer and Evans General Contractors, LLC

10.35 Controlled Equity Offering SM Sales Agreement, dated November 9, 2023, by and between Archer and Cantor Fitzgerald & Co.

1 unchanged sentence

333-275465), filed November 13, 2023)

19.1 Policy Against Insid er Trading

21.1* List of Subsidiaries

23.1* Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm

Opinion of Fenwick & West LLP (included in Exhibit 5.1)

24.1* Power of Attorney (reference is made to the signature page thereto)

5 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

97.1 Clawback Policy

97.1 Clawback Policy (incorporated by reference to Exhibit 97.1 to Form 10-K (File No.001-39668), filed February 29, 2024)

101.INS* Inline XBRL Instance Document

19 unchanged sentences

February 27, 2025 By:

/s/ Mark Mesler

Chief Financial Officer

/s/ Priya Gupta

Acting Chief Financial Officer

(Principal Financial and Accounting Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS , that each person whose signature appears below constitutes and appoints Adam Goldstein and Mark Mesler, and each of them, as his or her true and lawful attorneys-in-fact, proxies and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this report and to file the same, with any exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorneys-in-fact, proxies and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, proxies and agents, or their or his or her substitutes, may lawfully do or cause to be done by virtue hereof.

KNOW ALL PERSONS BY THESE PRESENTS , that each person whose signature appears below constitutes and appoints Adam Goldstein and Priya Gupta, and each of them, as his or her true and lawful attorneys-in-fact, proxies and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this report and to file the same, with any exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorneys-in-fact, proxies and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, proxies and agents, or their or his or her substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report has been signed by the following persons in the capacities and on the dates indicated:

3 unchanged sentences

Adam Goldstein

/s/ Mark Mesler

Chief Financial Officer

/s/ Priya Gupta

Acting Chief Financial Officer

( Principal Financial and Accounting Officer )

15 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures