What changed in this filing

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Item 1A. Risk Factors

2022-11-03 compared with 2022-08-12 · 45 added, 39 removed, 745 unchanged (10% of the section changed)

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• Our limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.

• Our progress and performance metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics and metrics and values that are below expectations could materially and adversely affect our business, prospects, financial condition and results.

• We operate in a highly competitive market and some market participants have substantially greater resources.

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We have incurred net losses on an annual basis since our inception.

During the six months ended June 30, 2022, w e incurred net losses of $1,231.0 million, including a non-cash goodwill impairment of $1,000.1 million.

During the nine months ended September 30, 2022, w e incurred net losses of $1,429.2 million, including a non-cash goodwill impairment of $1,000.1 million.

We believe that we will continue to incur operating and net losses each quarter until at least the time we begin commercial operation of our self-driving technology, which may take longer than we currently expect or may never occur.

Even if we successfully develop and sell our self-driving solutions, there can be no assurance that they will be commercially successful.

We expect the rate at which we will incur losses to be substantially higher in future periods (excluding the non-cash goodwill impairment recognized in six months ended June 30, 2022) as we continue to scale our development and commercialize products.

We expect the rate at which we will incur losses to be substantially higher in future periods (excluding the non-cash goodwill impairment recognized in nine months ended September 30, 2022) as we continue to scale our development and commercialize products.

Because we will incur the costs and expenses from these efforts before we receive incremental revenues with respect thereto, our losses in future periods will be significant.

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These improvements may take us longer than expected which would increase our capital requirements for technology development, delay our timeline to commercialization, and reduce the potential financial returns that may be expected from the business.

We plan to publicly disclose certain progress and performance metrics, including the Autonomy Readiness Measure and the Autonomy Performance Indicator.

These metrics are subject to inherent challenges in measurement;

real or perceived inaccuracies in such metrics and metrics values that are below expectations could materially and adversely affect our business, prospects, financial condition and results of operations.

We plan to publicly disclose a measure of our progress toward the commercial launch of Aurora Horizon (the “Autonomy Readiness Measure”).

The Autonomy Readiness Measure is the weighted function of completeness of our Safety Case (which is an internally-derived, claims-based approach that provides a generalized structured argument to addressing safety items implicated by developing and operating self-driving technology on public roads).

There are inherent challenges in calculating the Autonomy Readiness Measure, including the fact that management judgment is used when applying weighting to individual pieces of evidence that support the claims that we are making in our Safety Case (e.g., based on complexity, effort required to complete, scope of the Company’s commercial launch route, etc.) as well as when evaluating the percentage complete of a particular piece of evidence.

If individual pieces of evidence supporting the claims of our Safety Case turn out to be more complex, more challenging to complete, insufficiently comprehensive or conclusive, or more time or capital intensive than we originally anticipated, adjustments will be required to be made to our calculations of the Autonomy Readiness Measure.

If our Autonomy Readiness Measure is not an accurate representation of our progress toward commercial launch, or if investors perceive this measure not to be accurate, or if we discover material inaccuracies in the Safety Case or our calculations of the Autonomy Readiness Measure, our reputation may be significantly harmed, the timing of commercial launch of Aurora Horizon could be delayed, and our stock price could decline, any of which could materially and adversely affect our business, prospects, financial condition and results of operations.

We also plan to publicly disclose supplemental information regarding the on-road performance of the Aurora Driver (the “Autonomy Performance Indicator”).

There are inherent challenges in calculating this metric.

For example, one of the components of this indicator is commercially representative miles driven where the vehicle received human assistance via a vehicle operator intervention or other on-site support, but where it is determined, through internal analysis including simulation, that the support received was not required by the Aurora Driver.

There is management judgment involved in using internal analysis to determine whether or not such human assistance was necessary, and third parties may reasonably disagree with positions taken by the Company on such determinations.

Further, it is possible that we could conclude that human assistance was not necessary even where the Aurora Driver did not perform correctly and/or in a way that we intended.

Additionally, we do not expect the Autonomy Performance Indicator to increase linearly as we approach commercial launch, nor do we anticipate that this indicator will be 100% even at launch, because certain situations (e.g., flat tires) will always require on-site support.

If the Autonomy Performance Indicator is not an accurate representation of the Aurora Driver’s on-road performance, if investors do not perceive it to be accurate, or it does not convey the level of performance anticipated, our reputation may be significantly harmed, our stock price could decline, and it could materially and adversely affect our business, prospects, financial condition and results of operations.

In addition, our internal systems and tools have a number of limitations, and our methodologies for tracking the Autonomy Readiness Measure and the Autonomy Performance Indicator may change over time, which could result in unanticipated changes to the metrics or estimates that we publicly disclose.

If the internal systems and tools we use to track these metrics are not an accurate indicator of our performance or contain other technical errors, the data we report may not be accurate.

While these numbers are based on what we believe to be reasonable estimates of our metrics for the applicable period of measurement, there are inherent challenges in measuring our progress toward commercial launch.

We operate in a highly competitive market and some market participants have substantially greater resources.

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Our financial instruments, including warrants, are accounted for as liabilities and the changes in fair value could have a material effect on our financial results.

Included on our balance sheet as of June 30, 2022 contained elsewhere in this Quarterly Report are derivative liabilities related to embedded features contained within our public and private placement warrants as well as shares issued to the former sponsor of RTPY with price-based vesting criteria.

Included on our balance sheet as of September 30, 2022 contained elsewhere in this Quarterly Report are derivative liabilities related to embedded features contained within our public and private placement warrants as well as shares issued to the former sponsor of RTPY with price-based vesting criteria.

Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations.

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A claim that our products infringe a third party’s intellectual property rights, even if untrue, could adversely affect our relationships with our partners, may deter future partners from purchasing our products and could expose us to costly litigation and settlement expenses.

Even if we are not a party to any litigation between a partner and a third party relating to infringement by our products, an adverse outcome in any such litigation could make it more difficult for us to defend our products against intellectual

property infringement claims in any subsequent litigation in which we are a named party.

Any of these results could materially and adversely affect our business, financial condition and results of operations.

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If the market price of our Class A common stock declines significantly, you may be unable to resell your shares at an attractive price (or at all).

We cannot assure you that the market price of our Class A common stock will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following:

The market price of our Class A common stock could fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the factors listed below.

In such circumstances, the trading price of our securities may not recover and may experience a further decline.

Factors affecting the trading price of our securities may include:

• the realization of any of the risk factors presented in this Quarterly Report;

• our ability to bring our products to market on a timely basis, or at all;

• any major change in our management or Board;

• our ability to adhere to the anticipated timelines on our roadmap to commercial launch of Aurora Horizon and/or progress in the Autonomy Readiness Measure that does not meet the expectations of the market;

• poor performance or fluctuations of the Autonomy Performance Indicator;

• changes in the industries in which we and our customers operate;

• developments involving our competitors;

• changes in laws and regulations affecting its business;

• developments involving, or successes of, our competitors;

• changes in laws and regulations affecting our business;

• actual or anticipated differences in our estimates, or in the estimates of analysts, for our revenues, results of operations, level of indebtedness, liquidity or financial condition;

• changes in the market’s expectations about our revenues, results of operations, level of indebtedness, liquidity or financial condition;

• additions and departures of key personnel;

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• future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases, of our securities;

• publication of research reports by securities analysts about us or our competitors or our industry;

• the volume of shares of our common stock available for public sale;

• publication of research reports, financial estimates and recommendations by securities analysts about us or our competitors or our industry;

• the public’s reaction to our press releases, its other public announcements and its filings with the SEC;

• actions by stockholders, including the sale by significant investors of any of their shares of our common stock;

• the performance and market valuations of other similar companies;

• actions by stockholders, including the sale by our directors, executive officers or significant investors of any of their shares of our common stock or the perception that such sales could occur;

• the performance, financial results and market valuations of other companies that are, or are perceived to be, similar to us;

• commencement of, or involvement in, litigation involving us;

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• changes in accounting principles, policies and guidelines;

• general economic and political conditions such as recessions, interest rates, fuel prices, and international currency fluctuations;

• other events or factors, including those resulting from infectious diseases, health epidemics and pandemics (including the ongoing COVID-19 public health emergency), natural disasters, war, acts of terrorism or responses to these events.

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance.

The stock market in general, and Nasdaq in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected.

The trading prices and valuations of these stocks, and of our securities, may not be predictable.

A loss of investor confidence in the market stocks of other companies which investors perceive to be similar to ours could materially and adversely affect our business, prospects, financial condition and results of operations.

A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

In the past, securities class-action litigation has often been instituted against companies following periods of volatility in the market price of their shares.

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Our Class B common stock has 10 votes per share, and our Class A common stock has one vote per share.

Shares held by the Aurora Founders represent 49.0% of the voting control of the Company as of June 30, 2022.

Shares held by the Aurora Founders represent 48% of the voting control of the Company as of September 30, 2022.

Therefore, the Aurora Founders, individually or together, will be able to significantly influence matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions.

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The exercise of warrants for our Class A common stock would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

As of June 30, 2022, we had warrants to purchase an aggregate of 21,118,291 shares of our Class A common stock outstanding, comprising 12,218,291 public warrants and 8,900,000 private placement warrants.

As of September 30, 2022, we had warrants to purchase an aggregate of 21,118,291 shares of our Class A common stock outstanding, comprising 12,218,291 public warrants and 8,900,000 private placement warrants.

These warrants became exercisable 30 days after the completion of the Merger.

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You may be unable to sell your securities unless a market can be established or sustained.

The market price of our Class A common stock may be volatile and could decline significantly.

Fluctuations in the price of our securities could contribute to the loss of all or part of your investment.

The trading price of our securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control.

Any of the factors listed below could have a material adverse effect on your investment in our securities and our securities may trade at prices significantly below the price you paid for them.

In such circumstances, the trading price of our securities may not recover and may experience a further decline.

Factors affecting the trading price of our securities may include:

• actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

• changes in the market’s expectations about our results of operations;

• success of competitors;

• our results of operations failing to meet the expectation of securities analysts or investors in a particular period;

• changes in financial estimates and recommendations by securities analysts concerning the Company or the self-driving technology industry in general;

• operating and share price performance of other companies that investors deem comparable to the Company;

• our ability to bring our products and technologies to market on a timely basis, or at all;

• changes in laws and regulations affecting our business;

• our ability to meet compliance requirements;

• commencement of, or involvement in, litigation involving the Company;

• changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

• the volume of shares of common stock available for public sale;

• any major change in our Board or management;

• sales of substantial amounts of the shares of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur;

• general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance.

The trading prices and valuations of these stocks, and of our securities, may not be predictable.

A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to the Company could materially and adversely affect our business, prospects, financial condition and results of operations.

A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

Unregistered Sales of Equity Securities and Use of Proceeds

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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 1A. Risk Factors