What changed in this filing

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Item 1. Financial Statements

2022-08-12 compared with 2022-05-12 · 163 added, 117 removed, 491 unchanged (36% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(in thousands, except share data)

2022 December 31, 2021

5 unchanged sentences

Contract asset — 32,538

Related party receivable — 10,726

Related party receivables — 10,726

Prepaid expenses and other current assets

17 unchanged sentences

$ 2,787 $ 7,901

Related party payable

Accrued expenses and other current liabilities

31,210 70,006

Related party payables

Operating lease liabilities, current

11,399 12,274

Accrued expenses and other current liabilities

51,342 70,006

Total current liabilities

2 unchanged sentences

126,086 134,551

Deferred tax liability

Warrant liability

31,255 65,678

Deferred tax liabilities

Warrant liabilities

Earnout shares liability 3,923 52,380

4 unchanged sentences

Stockholders’ equity

Common stock - Class A shares, $ 0.00001 par value, 646,473,579 and 641,721,837 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively;

Class B shares, $ 0.00001 par value, 481,107,977 and 481,107,977 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

Common stock - $ 0.00001 par value, 1,146,572,506 and 1,122,829,814 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Collaboration revenue $ 20,733 $ — $ 62,731 $ —

4 unchanged sentences

33,467 21,646 64,519 54,326

Goodwill impairment

1,000,081 — 1,000,081 —

Total operating expenses

3 unchanged sentences

Other income (expense)

Interest and other income

Change in fair value of derivative liabilities 39,878 — 105,688 —

Other expense

Other income (expense), net

2,545 ( 353 ) 3,073 173

3 unchanged sentences

— 1 2 ( 2,643 )

Basic and diluted net loss per share - Class A and Class B

$ ( 1,154,177 ) $ ( 181,812 ) $ ( 1,230,985 ) $ ( 370,431 )

Basic and diluted weighted-average shares outstanding - Class A and Class B

Basic and diluted net loss per share

$ ( 1.02 ) $ ( 0.34 ) $ ( 1.09 ) $ ( 0.72 )

Basic and diluted weighted-average shares outstanding

1,131,113,012 541,133,301 1,129,118,006 512,608,940

See accompanying notes to unaudited condensed consolidated financial statements

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

$ ( 1,154,177 ) $ ( 181,812 ) $ ( 1,230,985 ) $ ( 370,431 )

Other comprehensive loss

Unrealized loss on investments

( 2,186 ) — ( 3,861 ) —

Other comprehensive loss

( 2,186 ) — ( 3,861 ) —

Comprehensive loss

17 unchanged sentences

110,437,359 1,000,000 — — — — — —

Issuance of Series U-2 redeemable convertible preferred stock at $ 9.06 per share, net of issuance cots of $ 2,138

44,174,944 397,862 — — — — — —

Issuance of common stock in relation to acquisitions — — 257,863,127 2 937,667 — — 937,669

Purchase consideration allocated to non-cash severance expense — — — — 7,873 — — 7,873

Issuance of common stock upon exercise of stock options

— — 950,236 — 702 — — 702

Vesting of early exercised stock options

— — 491,151 — 111 — — 111

Vesting of restricted stock

Issuance of Series U-2 redeemable convertible preferred stock at $ 9.06 per share, net of issuance costs of $ 2,138

44,174,944 397,862 — — — — — —

Equity issued in relation to acquisitions — — 257,863,127 2 945,540 — — 945,542

Equity issued under incentive compensation plans — — 5,438,300 — 2,347 — — 2,347

Stock-based compensation

2 unchanged sentences

— — — — — — ( 370,431 ) ( 370,431 )

Balance as of March 31, 2021

Balance as of June 30, 2021

444,912,850 $ 2,161,145 542,112,054 $ 5 $ 1,087,651 $ — $ ( 706,194 ) $ 381,462

1 unchanged sentence

— $ — 1,122,829,814 $ 11 $ 4,432,907 $ — $ ( 1,091,216 ) $ 3,341,702

Issuance of common stock upon exercise of stock options and warrants

Equity issued under incentive compensation plans — — 23,742,692 — 7,573 — — 7,573

Stock-based compensation

— — — — 75,525 — — 75,525

Vesting of early exercised stock options

Comprehensive loss

— — — — — ( 3,861 ) ( 1,230,985 ) ( 1,234,846 )

Vesting of restricted stock

Balance as of June 30, 2022

— — 1,146,572,506 11 4,516,005 ( 3,861 ) ( 2,322,201 ) 2,189,954

See accompanying notes to unaudited condensed consolidated financial statements

AURORA INNOVATION, INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity

(in thousands, except share data)

Redeemable convertible

preferred stock Common stock Additional

paid-in capital

comprehensive

loss Accumulated

deficit Total

stockholders’

Shares Amount Shares Amount

Balance as of March 31, 2021

444,912,850 $ 2,161,145 539,544,481 $ 5 $ 1,044,574 $ — $ ( 524,382 ) $ 520,197

Equity issued under incentive compensation plans — — 2,567,573 — 1,534 — — 1,534

Stock-based compensation

2 unchanged sentences

— — — — — — ( 181,812 ) ( 181,812 )

Balance as of June 30, 2021

444,912,850 $ 2,161,145 542,112,054 $ 5 $ 1,087,651 $ — $ ( 706,194 ) $ 381,462

Balance as of March 31, 2022

— $ — 1,127,581,556 $ 11 $ 4,464,191 $ ( 1,675 ) $ ( 1,168,024 ) $ 3,294,503

Equity issued under incentive compensation plans — — 18,990,950 — 5,536 — — 5,536

Stock-based compensation — — — — 46,278 — — 46,278

Comprehensive loss — — — — — ( 2,186 ) ( 1,154,177 ) ( 1,156,363 )

Balance as of June 30, 2022

— $ — 1,146,572,506 $ 11 $ 4,516,005 $ ( 3,861 ) $ ( 2,322,201 ) $ 2,189,954

See accompanying notes to unaudited condensed consolidated financial statements

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities

2 unchanged sentences

Depreciation and amortization

Reduction in the carrying amount of ROU assets

Accretion of discount on short-term investments

Reduction in the carrying amount of right-of-use assets

14,117 12,012

Stock-based compensation

75,525 78,438

Non-cash severance expense

Change in deferred tax asset valuation allowance

Goodwill impairment 1,000,081 —

Change in fair value of derivative liabilities ( 105,688 ) —

Non-cash severance

Change in deferred tax asset valuation allowance

Other 966 2,106

Changes in operating assets and liabilities:

4 unchanged sentences

( 9,517 ) ( 3,389 )

Accrued expenses and other current and non-current liabilities

Operating lease liabilities

( 12,384 ) ( 14,553 )

Operating lease liability

Contract liability 91 50,000

Accrued expenses and other current and non-current liabilities

( 17,810 ) ( 48,491 )

7 unchanged sentences

( 966,063 ) —

Maturities of short-term investments 133,000 —

Net cash (used in) provided by investing activities

3 unchanged sentences

Proceeds from issuance of Series U-2 preferred stock, net

Principal repayments of finance leases

Net cash provided by financing activities

13 unchanged sentences

Aurora Innovation, Inc.

and its consolidated subsidiaries (the “Company” or “Aurora”) was initially incorporated as a Cayman Islands exempted company on October 2, 2020 and formerly known as Reinvent Technology Partners Y (“RTPY”).

and its consolidated subsidiaries (the “Company” or “Aurora”) was initially incorporated as a Cayman Islands exempted company on October 2, 2020 and was formerly known as Reinvent Technology Partners Y (“RTPY”).

On November 3, 2021 (the “Closing Date” or “Closing”), the Company filed a notice of deregistration with the Cayman Islands Registrar of Companies, domesticated as a Delaware corporation, and changed its name to Aurora Innovation, Inc.

2 unchanged sentences

The Company’s common stock is listed on the NASDAQ under the symbol “AUR” and the Company’s warrants to purchase shares of Class A common stock are listed on the NASDAQ under the symbol “AUROW”.

The Merger was accounted for as a reverse capitalization and operations prior to the Closing presented are those of Legacy Aurora.

The Company designs and develops the Aurora Driver, which is the hardware, software, and data services that allow vehicles to drive themselves.

6 unchanged sentences

The condensed consolidated balance sheet as of December 31, 2021 included in the condensed consolidated financial statements was derived from the audited financial statements as of that date but does not contain all of the footnote disclosures from the annual financial statements.

The condensed consolidated financial statements reflect, in the opinion of management, all adjustments of a normal, recurring nature necessary for a fair statement of our financial position, results of operations, and cash flows for the three month period but are not necessarily indicative of the expected results for the full fiscal year or any future period.

The condensed consolidated financial statements reflect, in the opinion of management, all adjustments of a normal, recurring nature necessary for a fair statement of our financial position, results of operations, and cash flows for the periods presented but are not necessarily indicative of the expected results for the full fiscal year or any future period.

(2) Significant Accounting Policies

35 unchanged sentences

An asset or liability’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following table summarizes the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

As of March 31, 2022

The following table summarizes the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021:

As of June 30, 2022

Level 1 Level 2 Level 3 Total

2 unchanged sentences

$ 549,199 $ — $ — $ 549,199

government securities — 132,933 — 132,933

Total cash equivalents

26 unchanged sentences

Derivative Liabilities ) is measured at fair value on a recurring basis.

The fair value was determined using a Monte Carlo simulation with a risk free rate of 2.33 % and 1.52 % and volatility of 50.00 % and 50.00 % as of March 31, 2022 and December 31, 2021, respectively.

The fair value was determined using a Monte Carlo simulation with a risk free rate of 2.99 %and 1.52 % and volatility of 50.00 % and 50.00 % as of June 30, 2022 and December 31, 2021, respectively.

Earnout shares liability

Balance as of December 31, 2021

Fair value adjustment

Balance as of March 31, 2022

The amortized cost, unrealized gains and estimated fair values of the Company’s short-term investments as of March 31, 2022 was:

As of March 31, 2022

Change in fair value

Balance as of June 30, 2022

The amortized cost, unrealized gains and estimated fair values of the Company’s short-term investments as of June 30, 2022 was:

As of June 30, 2022

Amortized cost Unrealized losses Fair value

2 unchanged sentences

(b) Property and Equipment, Net

Property and equipment, net consist of the following as of March 31, 2022 and December 31, 2021:

Property and equipment, net consist of the following as of June 30, 2022 and December 31, 2021:

2022 December 31,

13 unchanged sentences

$ 93,165 $ 93,517

Accrued expenses and other current liabilities consist of the following as of March 31, 2022 and December 31, 2021:

The changes in the carrying amount of goodwill for the six months ended June 30, 2022, are as follows:

Balance as of December 31, 2021:

Goodwill $ 1,113,766

Accumulated impairment loss —

Carrying amount of goodwill 1,113,766

Impairment loss ( 1,000,081 )

Balance as of June 30, 2022:

Goodwill 1,113,766

Accumulated impairment loss ( 1,000,081 )

Carrying amount of goodwill $ 113,685

During the second quarter of 2022, the market price of the Company’s Class A common stock and its market capitalization declined significantly.

As a result, the Company determined that a triggering event had occurred and an interim goodwill impairment assessment was performed.

The Company utilized a market approach valuation method utilizing the observable market price of the Company’s Class A common stock as it represented the best evidence of the fair value of its reporting unit.

Based on the results, the Company recognized a $ 1,000,081 goodwill impairment during the three and six months ended June 30, 2022.

(d) Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following as of June 30, 2022 and December 31, 2021:

2022 December 31,

Accrued expenses

$ 15,717 $ 16,074

Accrued compensation

$ 30,272 $ 51,401

Accrued expenses

17,553 16,074

Total accrued expenses and other current liabilities

2 unchanged sentences

In January 2021, the Company entered into a collaboration framework agreement with Toyota Motor Corporation (“Toyota”) with the intention of deploying the Aurora Driver into a fleet of Toyota Sienna vehicles, subject to further agreement of a collaboration projection plan that was signed in August 2021.

The Company has received $ 97,500 of cash consideration as of March 31, 2022 and expects to receive the remaining $ 52,500 in 2022.

In the six months ended June 30, 2022 and June 30, 2021, the Company received payments of $ 95,360 and $ 50,000 , respectively, under the agreement.

To date, the Company has received cumulative payments under the agreement of $ 145,360 through June 30, 2022 and expects to receive the remaining $ 5,000 in 2022.

Collaboration revenue is recognized using the input measure of hours expended as a percentage of total estimated hours to complete the project.

Collaboration revenue earned in excess of amounts billable are reported as contract assets.

In the three and six months ended June 30, 2022, the Company recognized collaboration revenue of $ 20,733 and $ 62,731 , respectively.

To date, the Company has recognized cumulative revenue under the agreement of $ 145,269 through June 30, 2022.

Differences between collaboration revenue recognized and payments collected under the agreement are recognized as a contract asset or contract liability at the end of each reporting period.

(5) Acquisitions

3 unchanged sentences

The stock consideration transferred comprised 110,437,359 shares of the Company’s Series U-1 preferred stock and 252,194,518 shares of the Company’s common stock.

The preferred stock was valued referencing a subsequent purchase of the Company’s Series U-2 redeemable convertible preferred stock.

The preferred stock was valued referencing the concurrent purchase of the Company’s Series U-2 redeemable convertible preferred stock.

The common stock was valued based on the fair value as of January 19, 2021, as determined by a third-party valuation expert using an Option Pricing Method model.

The transaction costs associated with the acquisition were approximately $ 15,113 and were recorded in general and administrative expense in 2021, including $ 8,259 recorded in the three months ended March 31, 2021.

The transaction costs associated with the acquisition were approximately $ 15,113 and were recorded in general and administrative expense in 2021, including $ 6,854 and $ 15,113 recorded in the three and six months ended June 30, 2021.

The Company accounted for the ATG acquisition as a business combination, and therefore the assets acquired and liabilities assumed were recognized at their fair values on the date of the ATG acquisition.

16 unchanged sentences

Significant unobservable inputs include overhead costs, profit margin, opportunity cost, and obsolescence.

The asset has not been placed into service and there have been no impairment charges related to the intangible asset as of March 31, 2022.

The asset has not been placed into service and there have been no impairments related to the intangible asset as of June 30, 2022.

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributed to the assembled workforce, and is not deductible for tax purposes.

Separately, the Company recognized $ 7,873 in non-cash compensation expense for severance payments by the former parent of ATG.

During the three months ended March 31, 2021, the Company recognized $ 7,873 in non-cash compensation expense for severance payments by the former parent of ATG.

This amount was allocated from total equity consideration transferred.

9 unchanged sentences

The stock consideration transferred comprised 6,064,675 shares of the Company’s common stock including 396,067 shares of restricted stock granted.

The restricted stock awards (RSAs) were valued based on the March 5, 2021 fair value, as determined by a third party valuation expert using an Option Pricing Method model, and the estimated fair value of the stock options assumed by the Company was determined using the Black-Scholes option pricing model.

The restricted stock awards (RSAs) were valued based on the March 5, 2021 fair value, as determined by a third party valuation expert using an Option Pricing Method model, and the estimated fair

value of the stock options assumed by the Company was determined using the Black-Scholes option pricing model.

The RSAs vest monthly over a 2 -year period starting on the vesting commencement date and expire once the holder ceases to be a service provider of the Company.

The transaction costs associated with the OURS acquisition were approximately $ 262 and were recorded in general and administrative expense in the three months ended March 31, 2021.

The Company has accounted for the OURS acquisition as a business combination, and therefore the assets acquired and liabilities assumed were recognized at their fair values on the date of the OURS acquisition.

9 unchanged sentences

Significant unobservable inputs include profit margin and opportunity cost.

The asset has not been placed into service and there have been no impairment charges related to the intangible asset as of March 31, 2022.

The asset has not been placed into service and there have been no impairments related to the intangible asset as of June 30, 2022.

2 unchanged sentences

The Company is authorized to issue 1,000,000,000 shares of preferred stock with a par value of $ 0.00001 per share.

There were no shares of preferred stock issued and outstanding at March 31, 2022 and December 31, 2021.

There were no shares of preferred stock issued and outstanding at June 30, 2022 and December 31, 2021.

The Company is authorized to issue 51,000,000,000 shares of common stock with a par value of $ 0.00001 per share;

50,000,000,000 shares are designated Class A common stock and 1,000,000,000 shares are designated Class B common stock.

of which 50,000,000,000 shares are designated Class A common stock and 1,000,000,000 shares are designated Class B common stock.

Class A common stock holders are entitled to one vote for each share and Class B common stock holders are entitled to ten votes for each share.

1 unchanged sentence

Class B shares are convertible into Class A upon election by the holder or upon transfer (except for certain permitted transfers).

At March 31, 2022, the Company had 646,473,579 shares of Class A common stock and 481,107,977 shares of Class B common stock issued and outstanding.

Common stock reserved for future issuance at March 31, 2022 and December 31, 2021 was as follows:

2022 December 31, 2021

Outstanding stock options 75,948,673 81,405,867

Outstanding restricted stock units 66,436,448 34,054,713

Outstanding public warrants 12,218,291 12,218,420

Outstanding private placement warrants 8,900,000 8,900,000

Shares available for issuance under the equity incentive plans 147,424,419 122,487,648

Total shares of common stock reserved 310,927,831 259,066,648

At June 30, 2022, the Company had 716,866,208 shares of Class A common stock and 429,706,298 shares of Class B common stock issued and outstanding.

(7) Derivative Liabilities

1 unchanged sentence

On the consummation of the Merger, 12,218,750 publicly traded warrants for Class A common stock at an exercise price per share of $ 11.50 and 8,900,000 private placement warrants held by the Sponsor with an exercise price per share of $ 11.50 converted automatically into warrants of Aurora common stock.

Public warrants outstanding were 12,218,291 and 12,218,420 as of March 31, 2022 and December 31, 2021, respectively.

During the three months ended March 31, 2022, 129 Public Warrants were exercised for total cash proceeds of $ 1 .

Private placement warrants outstanding were 8,900,000 and 8,900,000 as of March 31, 2022 and December 31, 2021, respectively.

The estimated fair value of the warrant liabilities was $ 31,255 and $ 65,678 at March 31, 2022 and December 31, 2021, respectively.

For the three months ended March 31, 2022, a gain of $ 34,423 was recognized in changes in fair value of derivative liabilities in the consolidated statements of operations.

Public warrants outstanding were 12,218,291 and 12,218,420 as of June 30, 2022 and December 31, 2021, respectively.

During the six months ended June 30, 2022, 129 public warrants were exercised for total cash proceeds of $ 1 .

Private placement warrants outstanding were 8,900,000 and 8,900,000 as of June 30, 2022 and December 31, 2021, respectively.

The estimated fair value of the warrant liabilities was $ 8,447 and $ 65,678 at June 30, 2022 and December 31, 2021, respectively.

For the three and six months ended June 30, 2022, a gain of $ 22,808 and $ 57,231 , respectively, was recognized in changes in fair value of derivative liabilities in the consolidated statements of operations.

Public Warrants

18 unchanged sentences

• 1,720,771 shares vest when it has been at least 4 years since the Closing and the VWAP equals or exceeds $ 20.00 for 20 trading days of any consecutive 30 trading day period.

The estimated fair value of the earnout shares liability was $ 20,993 and $ 52,380 at March 31, 2022 and December 31, 2021, respectively.

For the three months ended March 31, 2022, a gain of $ 31,387 was recognized in changes in fair value of derivative liabilities in the consolidated statements of operations.

No earnout shares vested as of March 31, 2022.

The estimated fair value of the earnout shares liability was $ 3,923 and $ 52,380 at June 30, 2022 and December 31, 2021, respectively.

For the three and six months ended June 30, 2022, a gain of $ 17,070 and $ 48,457 , respectively, was recognized in changes in fair value of derivative liabilities in the consolidated statements of operations.

No earnout shares vested as of June 30, 2022.

(8) Equity Incentive Plans

1 unchanged sentence

the 2021 Equity Incentive Plan (the “Plan”), the 2017 Equity Incentive Plan (the “2017 Plan”), the Blackmore Sensors & Analytics, Inc.

Equity Incentive Plan (the “Blackmore Plan”), and the OURS Technologies Inc Equity Incentive Plan (the “OURS Plan”).

2016 Equity Incentive Plan (the “Blackmore Plan”), and the OURS Technology Inc 2016 Stock Incentive Plan (the “OURS Plan”).

The Company assumed stock options under the Blackmore Plan and the OURS Plan to the extent such employees continued as employees of the Company.

On November 2, 2021, the Company adopted the Plan.

The Plan makes available for issuance Class A common shares equal to 120,900,000 shares plus any shares subject to awards assumed in the Merger.

The Plan makes available for issuance Class A common shares equal to 120,900,000 shares plus any shares subject to awards assumed in the Merger that are forfeited or otherwise expire after the Closing.

Additionally, the Plan includes an annual increase on the first day of each fiscal year beginning in fiscal 2022 and ending in fiscal 2031 equal to the lesser of (i) 120,900,000 , (ii) 5 % of total shares outstanding on the last day of the preceding fiscal year, and (iii) a lesser number of shares determined by the Plans’ administrator.

Any stock options, restricted stock units (“RSU”s) or other awards from the 2017 Plan, the Blackmore Plan, or the OURS Plan that, on or after the Closing, expire or otherwise terminate without having been exercised or issued in full are added to the Plan up to a maximum of 120,692,205 shares.

As of March 31, 2022, 147,424,419 shares were available for grant.

As of June 30, 2022, 106,439,376 shares were available for grant under the Plan.

Under the Plan, equity-based compensation in the form of RSUs, restricted stock awards, incentive stock options, nonqualified stock options, stock appreciation rights, and performance units may be granted to employees, officers, directors, consultants, and others.

7 unchanged sentences

Stock options granted to a stockholder that owns greater than 10 % of the company expire, if not exercised, five years from the date of grant.

Stock option activity under the 2017 Plan in the three months ended March 31, 2022 is as follows:

Stock option activity under the 2017 Plan in the six months ended June 30, 2022 is as follows:

Options outstanding

5 unchanged sentences

( 2,702,952 ) 2.24

Balance, March 31, 2022

Balance, June 30, 2022

62,748,638 $ 1.60 6.8 46,791

Exercisable, March 31, 2022

Exercisable, June 30, 2022

44,973,713 $ 1.24 6.3 41,871

The compensation expense recognized for options for the three months ended March 31, 2022 and 2021 was $ 4,639 and $ 7,131 , respectively.

The unrecognized deferred compensation expense was $ 31,114 as of March 31, 2022 and will be recognized over an estimated weighted average amortization period of approximately 1.9 years.

The compensation expense recognized for options for the six months ended June 30, 2022 and 2021 was $ 8,786 and $ 12,458 , respectively.

The unrecognized deferred compensation expense was $ 24,588 as of June 30, 2022 and will be recognized over an estimated weighted average amortization period of approximately 1.75 years.

Restricted Stock Units

The Company has granted RSUs under the Plan and the 2017 Plan.

The vesting of most RSUs granted under the 2017 Plan is based on the satisfaction of 2 separate vesting requirements on or before the expiration date:

The vesting of most RSUs granted under the 2017 Plan is based on the satisfaction of two separate vesting requirements:

(1) a time-based vesting requirement, and (2) a liquidity event.

1 unchanged sentence

The liquidity event vesting requirement was satisfied with the closing of the Merger in November 2021.

RSUs granted under the Plan require time-based vesting.

Generally, the time-based vesting requirement is four years starting on the vesting commencement date except for retention grants which generally vest over one to two years .

RSUs granted under the Plan generally are subject to time-based vesting.

Generally, the time-based vesting requirement is four years starting on the vesting commencement date (with a one-year cliff for new hire awards) except for retention grants which generally vest over one to two years .

RSU activity under the Plan and the 2017 Plan is as follows:

6 unchanged sentences

82,788,961 4.06

Released ( 14,141,974 ) 4.07

( 7,679,851 ) 4.32

Balance, March 31, 2022

Balance, June 30, 2022

95,021,849 4.27 $ 183,392

Stock-based compensation related to RSUs granted to employees was $ 18,061 and $ 0 in three months ended March 31, 2022 and March 31, 2021, respectively.

The unrecognized deferred compensation expense for future years’ compensation expense related to unvested RSUs was approximately $ 213,875 at March 31, 2022.

Stock-based compensation related to RSUs granted to employees was $ 59,755 and $ 0 in six months ended June 30, 2022 and June 30, 2021, respectively.

The unrecognized deferred compensation expense for future years’ compensation expense related to unvested RSUs was approximately $ 343,161 at June 30, 2022.

Unrecognized deferred compensation will be recognized over an estimated weighted average amortization period of approximately 2.9 years.

Stock-based payments awarded by a related party

Prior to the ATG acquisition, employees of ATG received grants of RSUs in the former ultimate parent company of ATG, a related party after the closing of the transaction.

Prior to the ATG acquisition, employees of ATG received grants of RSUs in the former ultimate parent company of ATG, which became a related party of the Company after the closing of the transaction.

These awards were modified after the transaction to allow the awards to continue to vest for the first year subsequent to the closing of the acquisition as long as personnel remain employees of the Company.

2 unchanged sentences

The fair value of these awards was equal to the market value of the related party’s common stock on the date of modification.

Stock-based compensation of $ 6,200 was recognized in the three months ended March 31, 2022.

No unrecognized deferred compensation expense remains as of March 31, 2022.

Stock-based compensation of $ 6,200 was recognized in the six months ended June 30, 2022.

No unrecognized deferred compensation expense remains as of June 30, 2022.

Stock-based Compensation Expense

Stock-based compensation is allocated on a departmental basis, based on the classification of the option holder or grant recipient.

No income tax benefits have been recognized in the statement of operations for stock-based compensation arrangements and no stock-based compensation has been capitalized as of March 31, 2022.

No income tax benefits have been recognized in the statement of operations for stock-based compensation arrangements and no stock-based compensation has been capitalized as of June 30, 2022.

Total stock-based compensation expense by function was as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Research and development

2 unchanged sentences

4,854 2,044 7,874 4,124

$ 46,278 $ 41,543 $ 75,525 $ 78,438

(9) Income Taxes

The income tax benefit recognized differs from our statutory tax rate of 21% primarily due to changes in the valuation allowance on deferred tax assets.

An income tax benefit was recognized in the six months ended June 30, 2021 due to the release of a deferred tax asset valuation allowance as a result of deferred tax liabilities incurred from the acquisition of OURS Technology, Inc.

The Company leases its office facilities, data centers, and warehouses under non-cancelable operating lease agreements that expire between 2022 through 2042, including renewal options that are reasonably certain to be exercised by the Company.

As of March 31, 2022, the Company’s operating leases had a weighted average remaining lease term of 8.4 years and a weighted average discount rate of 6.26 %.

Operating lease expense was $ 6,862 and $ 6,070 in the three months ended March 31, 2022 and 2021, respectively.

As of June 30, 2022, the Company’s operating leases had a weighted average remaining lease term of 8.5 years and a weighted average discount rate of 6.3 %.

Operating lease expense was $ 7,255 and $ 14,117 in the three and six months ended June 30, 2022, respectively, and was $ 5,942 and $ 12,012 in the three and six months ended June 30, 2021, respectively.

(11) Commitments and Contingencies

3 unchanged sentences

Reserve estimates are recorded when and if it is determined that a loss related to certain matters is both probable and reasonably estimable.

No material losses were recorded in the three months ended March 31, 2022 and 2021.

No material losses were recorded in the three and six months ended June 30, 2022 and 2021.

(12) Employee Benefit Plan

3 unchanged sentences

The Company may make a matching contribution at the discretion of the board of directors.

The Company recognized $ 0 for matching contributions in the three months ended March 31, 2022 and 2021.

The Company recognized no matching contributions in the three and six months ended June 30, 2022 and 2021.

(13) Supplemental Cash Flow Information

Cash paid for income taxes and interest was $ 0 in the three months ended March 31, 2022 and 2021.

Cash paid for noncash investing and financing activities were as follows:

Three Months Ended

2022 March 31,

Non-cash investing and financing activities were as follows:

Six Months Ended

Noncash investing and financing activities:

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Non-cash acquisition

— ( 1,939,804 )

Cash paid for income taxes and interest were not significant in the six months ended June 30, 2022 and 2021.

(14) Earnings Per Share

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The participating securities do not share in losses.

Share amounts and net loss per share have been recast for the three months ended March 31, 2021 to reflect the Exchange Ratio from the Merger.

Three Months Ended March 31,

Share amounts and net loss per share have been recast for the three and six months ended June 30, 2021 to reflect the Exchange Ratio from the Merger.

Three Months Ended June 30,

Class A Class B Class A Class B

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686,055,230 445,057,782 541,133,301 —

Six Months Ended June 30,

Class A Class B Class A Class B

$ ( 726,124 ) $ ( 504,861 ) $ ( 370,431 ) $ —

Net loss per share:

Basic and diluted

$ ( 1.09 ) $ ( 1.09 ) $ ( 0.72 ) $ —

Weighted average common shares outstanding - basic and diluted

666,035,126 463,082,880 512,608,940 —

The following table presents the potential common stock outstanding excluded from the computation of diluted loss per share because including them would have had an antidilutive effect:

Three Months Ended March 31,

June 30, 2022 June 30, 2021

Class A Class B Class A Class B

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In January 2021, the Company paid $ 10,000 relating to financial advisory fees with a former related party for a contract that was entered into by the Company in December 2020.

The Company recognized $ 8,250 in selling, general and administrative expenses and $ 1,750 as a reduction to redeemable convertible preferred stock for issuance costs in the three months ended March 31, 2021.

The Company recognized $ 8,250 in selling, general and administrative expenses and $ 1,750 as a reduction to redeemable convertible preferred stock for issuance costs in the six months ended June 30, 2021.

The Company assumed a net liability of $ 46,970 from the ATG acquisition for an obligation due to the former owner of ATG, an affiliate of Uber Technologies, Inc.

Uber became a related party of the Company subsequent to the ATG acquisition.

The net related party liability was paid during the three months ended June 30, 2021.

The net related party liability was paid during the six months ended June 30, 2021.

In January 2021, Uber and its affiliates paid $ 7,873 in severance to former employees of ATG which was reimbursed by the Company.

In December 2021 and January 2022, the Company made withholding tax payments for equity compensation for former employees of ATG and received a $ 12,770 reimbursement in the three months ended March 31, 2022 from Uber and its affiliates.

During the three months ended March 31, 2022 and 2021, the Company recognized operating expenses of $ 2,908 and $ 1,672 , respectively, related to the transition service agreement and ongoing operating services provided by Uber and its affiliates.

The term of the transition service agreement expired during the three months ended March 31, 2022.

At March 31, 2022 and December 31, 2021, the Company recorded related party payables to Uber and its affiliates of $ 1,369 and $ 540 , respectively.

At March 31, 2022 and December 31, 2021, the Company recorded related party receivables from Uber and its affiliates of $ 0 and $ 10,726 , respectively.

In December 2021 and January 2022, the Company made withholding tax payments for equity compensation for former employees of ATG and received a $ 12,770 reimbursement in the six months ended June 30, 2022 from Uber and its affiliates.

During the three and six months ended June 30, 2022, the Company recognized operating expenses of $ 1,150 and $ 4,058 , respectively, related to the transition service agreement and ongoing operating services provided by Uber and its affiliates.

During the three and six months ended June 30, 2021, the Company recognized operating expense of $ 1,415 and $ 3,087 , respectively, related to the transition service agreement provided by Uber and its affiliates.

The term of the transition service agreement expired during the first quarter of 2022.

At June 30, 2022 and December 31, 2021, the Company recorded related party payables to Uber and its affiliates of $ 950 and $ 540 , respectively.

At June 30, 2022 and December 31, 2021, the Company recorded related party receivables from Uber and its affiliates of $ 0 and $ 10,726 , respectively.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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Forward-looking statements contained in this Quarterly Report include statements about:

• our ability to recognize anticipated benefits of the Business Combination (defined below), which may be affected by, among other things, our ability to grow and manage growth profitably following the closing of the Business Combination;

• our ability to recognize anticipated benefits of the Merger, which may be affected by, among other things, our ability to grow and manage growth profitably following the closing of the Merger;

• our ability to commercialize the Aurora Driver safely, quickly, and broadly on the timeline we expect;

26 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-Q

Item 1. Financial Statements