What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-02-21 compared with 2022-03-11 · 483 added, 711 removed, 213 unchanged (85% of the section changed)

Financial Statements and Supplementary Data.

AURORA INNOVATION, INC.

Index to Consolidated Financial Statements

Reports of independent registered public accounting firm (PCAOB ID:

Balance sheets

Statements of operations

Statements of comprehensive loss

Statements of redeemable convertible preferred stock and stockholders’ deficit

Statements of cash flows

Notes to the financial statements

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

1 unchanged sentence

Aurora Innovation, Inc.:

Opinion on the Financial Statements

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Aurora Innovation, Inc.

(the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, redeemable convertible preferred stock and stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with U.S.

and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, redeemable convertible preferred stock and stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

6 unchanged sentences

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

4 unchanged sentences

Santa Clara, California

March 11, 2022

February 21, 2023

Aurora Innovation, Inc.

Consolidated Balance Sheets

December 31, 2021 and 2020

(in thousands, except share amounts)

December 31, 2021 December 31, 2020

(in millions)

2022 December 31,

Current assets:

1 unchanged sentence

$ 262 $ 1,610

Restricted cash

Contract asset 32,538 —

Related party receivable 10,726 —

Prepaid expenses and other current assets

23,765 18,918

Short-term investments 839 —

Other current assets

Total current assets

1,677,444 406,446

Property and equipment, net

93,517 10,897

Operating lease right-of-use assets

151,278 90,864

Restricted cash, long term

15,832 12,300

21,050 15,631

Acquisition related intangible assets

617,200 52,700

1,113,766 30,047

Other assets 36 37

$ 2,001 $ 3,690

Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ Equity (Deficit)

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$ 7,901 $ 6,502

Related party payable 540 —

Accrued expenses and other liabilities

70,006 18,768

Operating lease liabilities, current

Other current liabilities

Total current liabilities

90,721 31,951

Operating lease liabilities, long-term

134,551 97,153

Deferred tax liability

Warrant liabilities 65,678 —

Earnout Shares liability 52,380 —

Other long-term liabilities

Derivative liabilities

Other liabilities

Total liabilities

$ 348,385 $ 132,181

Redeemable convertible preferred stock

Redeemable convertible preferred stock, $ 0.00001 par value;

nil and 290,300,547 shares issued and outstanding as of December 31, 2021, and December 31, 2020, respectively

Stockholders’ deficit

Common stock - Class A shares, $ 0.00001 par value, 641,721,837 and 278,810,627 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively;

Class B shares, $ 0.00001 par value, 481,107,977 and nil shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively

Commitments and contingencies

Stockholders’ equity:

Common stock - $ 0.00001 par value, 51,000 shares authorized,

1,166 and 1,123 shares issued and outstanding, respectively

Additional paid-in capital

4,432,907 59,184

Accumulated other comprehensive loss ( 2 ) —

Accumulated deficit

( 2,814 ) ( 1,091 )

Total stockholders’ equity (deficit)

3,341,702 ( 276,579 )

Total liabilities, redeemable convertible preferred stock, and stockholder’s equity (deficit)

Total stockholders’ equity

Total liabilities and stockholders’ equity

$ 2,001 $ 3,690

See accompanying notes to the consolidated financial statements

Aurora Innovation, Inc.

Consolidated Statements of Operations

Years ended December 31, 2021 and 2020

(in thousands, except per share data)

(in millions, except per share data)

Twelve Months Ended

2022 2021 2020

Collaboration revenue $ 68 $ 82 $ —

1 unchanged sentence

Research and development

697,276 179,426

Selling, general and administrative

115,925 38,693

Goodwill impairment

Total operating expenses

3 unchanged sentences

Other income (expense):

Interest and other income 525 3,717

Change in fair value of derivative liabilities 114 ( 20 ) —

Transaction costs ( 4,516 ) —

Other expense

( 5,184 ) ( 45 )

Other income (expense), net

Loss before income taxes

( 1,723 ) ( 760 ) ( 214 )

Income tax expense (benefit)

Income tax benefit

$ ( 1,723 ) $ ( 755 ) $ ( 214 )

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

Basic and diluted net loss per share

$ ( 1.51 ) $ ( 1.22 ) $ ( 0.79 )

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

Basic and diluted weighted-average shares outstanding

1,143 621 271

See accompanying notes to the consolidated financial statements

Aurora Innovation, Inc.

Consolidated Statements of Comprehensive Loss

Years ended December 31, 2021 and 2020

(in thousands)

(in millions)

Twelve Months Ended

2022 2021 2020

Other comprehensive income:

Available-for sale investments

Net unrealized loss

$ ( 1,723 ) $ ( 755 ) $ ( 214 )

Other comprehensive loss:

Unrealized loss on investments

Other comprehensive loss

Comprehensive loss

$ ( 1,725 ) $ ( 755 ) $ ( 214 )

See accompanying notes to the consolidated financial statements

Aurora Innovation, Inc.

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficit

12 Months Ended December 31, 2021 and 2020 (in thousands, except share amounts)

Redeemable Convertible Preferred stock

Common stock Additional

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity

(in millions, except per share data)

Redeemable convertible

preferred stock Common stock Additional

paid-in capital

comprehensive

income Accumulated

loss Accumulated

deficit Total

stockholders’

equity (deficit)

Shares Amount Shares Amount

1 unchanged sentence

290 $ 764 264 $ — $ 39 $ — $ ( 122 ) $ ( 83 )

Recapitalization 156,640,742 — 142,157,477 3 ( 3 ) — —

Balance as of December 31, 2019

290,425,630 $ 763,815 263,572,316 $ 3 $ 38,961 $ 125 $ ( 121,314 ) $ ( 82,225 )

Issuance of common stock upon exercise of stock options

— — 3,433,498 — 2,952 — — 2,952

Vesting of early exercised stock options

— — 2,262,645 — 388 — — 388

Vesting of restricted stock

— — 9,542,168 — — — — —

Repurchase of series B redeemable convertible preferred stock at $ 4.26

Repurchase of Series B redeemable convertible preferred stock at $ 4.26 per share

— ( 1 ) — — — — — —

Equity issued under incentive compensation plans — — 15 — 3 — — 3

Stock-based compensation

— — — — 17 — — 17

Unrealized loss on held for sale investments — — — — — ( 125 ) — ( 125 )

Comprehensive loss

— — — — — — ( 214 ) ( 214 )

1 unchanged sentence

290 763 279 — 59 — ( 336 ) ( 277 )

Issuance of series U-1 redeemable convertible preferred stock at $ 9.06 per share in relation to acquisition

Issuance of Series U-1 redeemable convertible preferred stock at $ 9.06 per share for acquisitions

110 1,000 — — — — — —

1 unchanged sentence

45 398 — — — — — —

Issuance of common stock in relation to acquisitions

— — 257,863,127 3 937,665 — — 937,668

Purchase consideration allocated to non-cash compensation expense

— — — — 7,873 — — 7,873

Conversion of convertible preferred stock into common stock in connection with the reverse recapitalization

( 444,912,850 ) ( 2,161,145 ) 444,912,850 4 2,161,141 — — 2,161,145

Issuance of common stock upon the reverse recapitalization, net of issuance costs

— — 129,294,175 1 1,040,520 — — 1,040,521

Issuance of common stock upon exercise of stock options

— — 8,393,301 — 7,847 — — 7,847

Issuance of common stock upon vesting of restricted stock units

— — 917,959 — — — — —

Common stock withheld for net share settlement of equity awards

Equity issued for acquisitions — — 258 — 946 — — 946

Conversion of redeemable convertible preferred stock into common stock with the Merger ( 445 ) ( 2,161 ) 445 — 2,161 — — 2,161

Issuance of common stock upon the Merger, net of issuance costs — — 129 — 1,041 — — 1,041

Equity issued under incentive compensation plans — — 12 — 4 — — 4

Stock-based compensation

— — — — 222 — — 222

Vesting of early exercised stock options

Comprehensive loss

— — — — — — ( 755 ) ( 755 )

Vesting of restricted stock

Balance as of December 31, 2021

— — 1,123 — 4,433 — ( 1,091 ) 3,342

Equity issued under incentive compensation plans — — 43 — 11 — — 11

Stock-based compensation

— — — — 156 — — 156

Comprehensive loss

— — — — — ( 2 ) ( 1,723 ) ( 1,725 )

1 unchanged sentence

— $ — 1,166 $ — $ 4,600 $ ( 2 ) $ ( 2,814 ) $ 1,784

See accompanying notes to the consolidated financial statements

Aurora Innovation, Inc.

Statement of Cash Flows

Years ended December 31

(in thousands)

Consolidated Statements of Cash Flows

(in millions)

Twelve Months Ended

2022 2021 2020

Cash flows from operating activities

$ ( 1,723 ) $ ( 755 ) $ ( 214 )

Adjustment to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Reduction in the carrying amount of ROU assets

25,424 14,109

Accretion of discount on short-term investments

Loss on disposal of equipment

Non-cash severance 7,873 —

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

Stock-based compensation

220,058 16,880

Change in deferred tax asset valuation allowance

Goodwill impairment 1,114 — —

Change in fair value of derivative liabilities ( 114 ) 20 —

Transaction costs associated with warrants 4,516 —

Other 3,836 —

Non-cash severance

Change in deferred tax asset valuation allowance

Other operating activities ( 3 ) 12 —

Changes in operating assets and liabilities:

Contract asset

Prepaid expenses and other current assets

( 9,901 ) ( 11,692 )

Other current and non-current assets

47 ( 48 ) ( 26 )

Accounts payable

Accrued expenses and other current and non-current liabilities

Operating lease liabilities

( 25 ) ( 21 ) ( 2 )

Operating lease liability

Other current and non-current liabilities

( 10 ) ( 36 ) 16

4 unchanged sentences

( 15 ) ( 48 ) ( 7 )

Proceeds from sale of property and equipment

Net cash acquired in acquisitions

Purchase of short-term investments

Purchases of short-term investments

( 1,610 ) — ( 120 )

Maturities of short-term investments 773 — 470

Net cash provided by investing activities

Other investing activities — 4 —

Net cash (used in) provided by investing activities

( 852 ) 250 343

Cash flows from financing activities

Proceeds from early exercised stock options

Payments to repurchase unvested early exercised stock options

Payments to repurchase series B preferred stock

Proceeds from issuance of common stock

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

Proceeds from the reverse recapitalization, net of transaction costs 1,133,961 —

Net cash provided by financing activities

Proceeds from the Merger, net of transaction costs — 1,134 —

Other financing activities

( 2 ) — ( 1 )

Net increase in cash, cash equivalents, and restricted cash

Net cash provided by financing activities

Net (decrease) increase in cash, cash equivalents, and restricted cash

( 1,349 ) 1,226 153

3 unchanged sentences

$ 277 $ 1,626 $ 400

See accompanying notes to the consolidated financial statements

Aurora Innovation, Inc.

Notes to Consolidated Financial Statements

Years ended December 31, 2021 and 2020

(in thousands, except share data)

(1) Overview and Organization

Notes to the Consolidated Financial Statements

Overview of the Organization

Aurora Innovation, Inc.

and its wholly-owned 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”).

The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.

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 change its name to Aurora Innovation, Inc.

As contemplated by the Agreement and Plan or Merger dated July 14, 2021 (the “Merger Agreement”), Aurora consummated the merger transaction (the “Merger”) whereby RTPY Merger Sub, Inc., a direct wholly owned subsidiary of the Company, merged with and into Aurora Innovation Holdings, Inc.

(“Legacy Aurora”), a Delaware corporation f/k/a Aurora, Innovation, Inc.

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 Company is headquartered in Pittsburgh, Pennsylvania and has offices in eight additional cities:

Palo Alto, Mountain View, and San Francisco, California;

Bozeman, Montana;

Coppell, Texas;

Wixom, Michigan;

Seattle, Washington;

and Louisville, Colorado .

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

(the “Company” or “Aurora”) is headquartered in Pittsburgh, Pennsylvania and its mission is to deliver the benefits of self-driving technology safely, quickly, and broadly.

The Company is developing the Aurora Driver, an advanced and scalable suite of self-driving hardware, software and data services designed as a platform to adapt and interoperate amongst vehicle types and applications.

The Company 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”), 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.

As contemplated by the Agreement and Plan of Merger dated July 14, 2021 (the “Merger Agreement”), Aurora consummated a business combination (the “Merger”) whereby RTPY Merger Sub, Inc., a direct subsidiary of the Company, merged with and into Aurora Innovation Holdings, Inc., a Delaware corporation (f/k/a Aurora Innovation, Inc.

and referred to herein as “Legacy Aurora”).

Refer to Note 3 – Acquisitions for additional details regarding the Merger.

Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The Company’s consolidated financial statements have been prepared in conformity with U.S.

generally accepted accounting principles.

The Merger was accounted for as a reverse recapitalization and operations prior to the Closing presented are those of Legacy Aurora (see “Note 3 - Reverse Recapitalization”).

All intercompany transactions and balances are eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S.

generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its controlled subsidiaries.

Intercompany balances and transactions between the Company and its controlled subsidiaries have been eliminated.

The preparation of these consolidated financial statements in conformity with U.S.

generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported.

Actual results could differ from those estimates.

Significant items subject to such estimates and assumptions include the useful lives of property and equipment;

valuation allowance for deferred income tax assets, valuation of intangible assets, fair value of options granted under the Company’s stock-based compensation plans, present value of the lease liability, total estimated hours used in determining the recognition of revenue, the valuation of the warrant liabilities, and the valuation of the Earnout Shares liability.

Segment Information

The Company has one reportable segment.

The Company’s chief operating decision maker (the “CODM”) manages the operations of the Company on a consolidated basis when allocating resources and all significant operating decisions are based on analysis of the Company as a single business.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity, when purchased, of 90 days or less to be cash equivalents.

The recorded carrying value of cash equivalents approximates their fair value.

Restricted Cash

Restricted cash consists of funds that are contractually restricted as to usage or withdrawal due to the signing of the Company’s operating lease agreements.

The Company has presented restricted cash separately from cash and cash equivalents on the balance sheet.

Revenue Recognition

The Company accounts for the collaboration framework agreement and project plan with a major customer using the input measure of hours expended as a percentage of total estimated hours to complete the project commencing with initial recognition in August 2021 when a collaboration project plan was signed.

The excess of revenue recognized over cash collected is recognized as a contract asset.

Property and Equipment

Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets of three to five years except for leasehold improvements depreciated over the lesser of the asset’s useful life ( seven years ) or the remaining lease term and buildings are depreciated over twenty years .

The Company determines if an arrangement is a lease at inception.

All leases are assessed for classification as an operating lease or a finance lease.

Operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the lease commencement date.

The interest rate used to determine the present value of future payments is the Company’s incremental borrowing rate because the rate implicit in the Company’s leases is not readily determinable.

The incremental borrowing rate, calculated based on available information at the lease commencement date, is a hypothetical rate for collateralized borrowings in economic environments where the leased asset is located based on credit rating factors.

The Company’s right of use (ROU) assets are also recorded at the applicable lease commencement date.

The ROU assets equals the amount of the related lease liability, adjusted for prepaid lease payments made prior to the lease commencement date, lease incentives and initial direct costs.

Certain lease contracts include obligations to pay for other services, such as operations and maintenance.

The Company elected the practical expedient whereby the Company records all lease components and the related minimum non-lease components as a single lease component.

Cash payments made for variable lease costs, such as maintenance and tenant improvements, are not included in the measurement of the Company’s operating lease assets and liabilities as of the lease commencement date.

The Company does not include variable payments in the calculation of the ROU asset at the commencement of the lease, however if the variable payments are based on a contingent event, and that contingent event is ultimately resolved, the ROU asset is re-measured and all such variable payments are then included.

Many of the Company’s lease terms include one or more options to renew.

The Company does not assume renewals in the determination of the lease term unless it is reasonably certain that the Company will exercise that option.

Lease costs for minimum lease payments for operating leases is recognized on a straight-line basis over the lease term.

The Company’s lease agreements do not contain any residual value guarantees.

The Company has elected to not recognize a lease liability or right-of-use (ROU) asset for short-term leases, which are defined as leases with a term of twelve months or less that do not include an option to purchase the underlying asset.

The Merger was accounted for as a reverse recapitalization and operations and cash flows presented prior to the Closing Date represent those of Legacy Aurora and its consolidated subsidiaries (see Note 3 – Acquisitions).

Collaboration Revenue

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 project plan that was signed in August 2021.

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

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.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents are deposits and highly liquid investments that are readily convertible to known amounts of cash and are subject to insignificant risk of change include due to interest rate, quoted price, or penalty of withdrawal.

Treasury securities with a maturity, when purchased, of 90 days or less are considered to be cash equivalents.

Restricted cash consists of funds that are contractually restricted as to usage or withdrawal, typically due to the Company’s operating lease agreements.

Due to these restrictions, the Company has presented restricted cash separately from cash and cash equivalents on the balance sheet.

Short-term Investments

The Company’s short-term investments in U.S.

Treasury securities have been classified and accounted for as available-for-sale.

The Company measures short-term investments at fair value on a recurring basis based on quoted market prices, and unrealized gains and losses, net of taxes, are included in other comprehensive loss.

Upon sale, realized gains and losses are recognized in other income (expense), net on the statements of operations.

No impairment losses have been recognized on short-term investments in the periods presented.

The Company’s short-term investments in U.S.

Treasury securities with a maturity, when purchased, of 90 days or less are considered highly liquid investments and are reported as cash equivalents.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

In determining fair value, management uses a fair value hierarchy, which prioritizes the inputs used to measure fair value.

The three levels of the fair value hierarchy are set forth below:

Observable inputs such as quoted prices in active markets for identical assets or liabilities.

Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active or inputs other than the quoted prices that are observable either directly or indirectly for the full term of the assets or liabilities.

Unobservable inputs in which there is little or no market data and that are significant to the fair value of the assets or liabilities.

Our primary financial instruments include cash, cash equivalents, restricted cash, short-term investments, accounts payable, accrued liabilities, and derivative liabilities.

For the financial instruments not measured at fair value on a recurring basis, their estimated fair value approximates their carrying value due to the short-term maturities of these instruments.

Property and Equipment, Net

Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives, which is twenty years for buildings;

the shorter of the lease term and the estimated useful life (up to seven years ) for leasehold improvements;

and over three to five years for all other asset categories.

The Company determines whether a contract contains a lease at inception.

The Company leases real estate and equipment which have been recognized as operating leases, except for those leases with a lease term of 12 months or less which are recognized as short-term leases and expensed on a straight-line basis.

Variable lease payments that do not depend on an index or rate are not included in the initial measurement of operating lease liabilities.

Certain lease contracts include non-lease components, such as operations and maintenance.

The Company combines and accounts for lease and these non-lease components as a single lease component.

Certain real estate leases include one or more options to renew;

the exercise of lease renewal options is at the Company’s discretion and is included in the lease term when it is determined that the options are reasonably certain to be exercised.

The discount rates utilized to measure operating lease liabilities are generally based on estimates of the Company’s incremental borrowing rate, as the discount rates implicit in lease agreements cannot be readily determined.

Business Combinations

The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values.

The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets.

Significant estimates in valuing certain intangible assets include, but are not limited to, estimated replacement cost, profit margin, opportunity cost, useful lives, and discount rates.

Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

During the measurement period, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill.

Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

Goodwill, Acquired Intangible Assets, and Impairment of Long-Lived Assets

Goodwill represents the excess purchase consideration of acquired businesses over the estimated fair value of the net assets acquired and is not amortized.

The Company allocates the fair value of purchase consideration to the assets acquired and liabilities assumed based on their estimated fair values.

The excess of the fair value of purchase consideration over the net assets acquired is recorded as goodwill.

Measurement period adjustments are reflected at the time identified, up through the conclusion of the measurement period, which is the time at which all necessary information is received, and is not to exceed one year from the acquisition date.

Impairment of Goodwill, Acquired Intangible Assets and Long-Lived Assets

Goodwill is evaluated for impairment annually on December 31, or whenever events or circumstances indicate that the carrying amount may not be recoverable.

If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying

amount of the reporting unit’s goodwill over the implied fair value of the goodwill.

The Company did not record any impairment to goodwill in any of the periods presented.

(ii) Acquired Intangible Assets

Acquired Intangible Assets consist of in-process research and development (IPR&D) from the Company’s acquisitions of Apparate USA LLC (“Uber Advanced Technologies Group” or “ATG”), Blackmore Sensors and Analytics, and OURS Technology (“OURS”).

Each IPR&D has an indefinite useful life and is tested for impairment annually until completion.

As of December 31, 2021 the IPR&D have not been completed.

(iii) Impairment of Long-Lived Assets

Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount.

If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value.

Fair value is determined using various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary.

No impairment losses were recognized in the years ended December 31, 2021 and 2020.

Research and Development Costs

Research and development costs are expensed as incurred.

Research and development costs consist primarily of payroll, hardware and electrical engineering prototyping, cloud computing, data labeling, and third-party development services and are included in research and development in the accompanying statement of operations.

Advertising Costs

Advertising costs are expensed as incurred and are included in selling, general, and administrative in the accompanying statement of operations.

There were no advertising costs incurred in 2021 and 2020.

Software Development Costs

The Company follows the provisions of ASC 985-20, Software - Costs of Software to be Sold, Leased, or Marketed (“ASC 985-20”).

Costs have not yet met the criteria for capitalization as technological feasibility has not been established as defined by ASC 985-20.

If the carrying amount of goodwill exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of goodwill over its implied fair value.

Acquired intangible assets primarily consist of in-process research and development (“IPR&D”) from the Company’s historical acquisitions.

IPR&D assets that have not been completed are subject to impairment considerations annually on December 31, or whenever events or circumstances indicate that the carrying amounts may not be recoverable.

No impairment losses were recognized on acquired intangible assets during the periods presented.

Long-lived assets, such as property and equipment and operating lease right-of-use assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

The Company performs impairment testing at the level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

Recoverability is measured by comparing the carrying amounts to the expected future undiscounted cash flows attributable to the assets.

If it is determined that an asset may not be recoverable, an impairment is recognized to the extent that the carrying amount exceeds its fair value.

No material impairment losses were recognized on long-lived assets during the periods presented.

Research and Development

Research and development costs are expensed as incurred, and consist primarily of personnel costs, hardware and electrical engineering prototyping, cloud computing, data labeling, and third-party development services.

To date, the Company has not capitalized software development costs related to the development of the Aurora Driver due to the remaining planning, designing, coding and testing activities necessary for technology validation and safe autonomous operation.

Stock-based Compensation

The Company measures stock-based compensation using the fair value based method on the grant date.

Restricted stock units (“RSUs”) are measured based on fair value of the Company’s publicly traded common stock, while stock options are measured using a Black-Scholes option pricing model with assumptions including expected term, risk-free interest rate, and expected volatility.

Due to the Company’s limited historical stock option exercise experience as a public company, the expected term of stock options is determined utilizing the simplified method based on vesting and contractual terms.

The expected volatility is determined based on the historical volatility of comparable public companies over the expected term of the stock option.

The risk-free interest rate is based on the U.S.

Treasury yield curve in effect at the time of grant.

Stock-based compensation for awards with only service conditions is recognized on a straight-line basis over the requisite service period, which is generally the vesting period, while awards with service and performance conditions is recognized on a graded-vesting basis over the requisite service period.

The Company recognizes the effect of forfeitures in the period they occur.

Derivative Liabilities

The Company accounts for the public and private placement stock purchase warrants (collectively “the warrants”) as derivative liabilities .

The liabilities are measured at fair value on a recurring basis with any changes in fair value reflected in the statement of operations until the warrants are exercised, redeemed, or expire.

The Company accounts for shares held by Reinvent Sponsor Y LLC (the “Sponsor”) not forfeited under the terms of the Merger Agreement and subject to price based vesting terms (the “Earnout Shares”) as derivative liabilities .

The liability is measured at fair value on a recurring basis with any changes in fair value reflected in the statement of operations until the vesting conditions are met or the shares expire.

The Company accounts for income taxes using the asset-and-liability method.

ASC 740, Accounting for Income Taxes (“ASC 740”) , requires the recognition of deferred tax assets and liabilities based upon the temporary differences between the financial reporting and tax bases of assets and liabilities and using enacted rates in effect for the years in which the differences are expected to reverse.

Deferred tax assets and liabilities are recognized based upon the temporary differences between the financial reporting and tax basis of assets and liabilities using enacted rates in effect for the years in which the differences are expected to reverse.

Valuation allowances are established when necessary to reduce the deferred tax assets when it is more likely than not that a portion or all of the deferred tax assets will not be realized.

ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

The Company records uncertain tax positions on the basis of a two-step process in which:

(1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of technical merits of the position, and (2) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the tax benefit as the largest amount that is cumulatively more than 50% likely to be realized upon ultimate settlement with the related tax authority.

Stock-based Compensation

The Company recognizes share-based compensation cost using the fair value method of accounting.

The fair value of the Company’s stock options are measured based on the grant-date fair value which is calculated using a Black-Scholes option pricing model and the fair value of restricted stock units are measured as the fair value of Aurora common stock.

The fair value of the stock-based compensation for awards with only service conditions is recognized on a straight-line basis over the requisite service period, which is generally the vesting period.

Expense for awards with service and

performance conditions is recognized on a graded-vesting basis over the requisite service period.

The Company recognizes the effect of forfeitures in the period they occur.

Public and Private Placement Warrants

The Company accounts for the public and private placement stock purchase warrants (collectively “the warrants”) as derivative liabilities under ASC 815 D erivatives and Hedging.

The liabilities are measured at fair value on Closing and in subsequent periods with any changes in fair value reflected in the statement of operations until the warrants are exercised, redeemed, or expire.

Earnout Shares

The Earnout Shares are accounted for as a liability as the shares are not indexed to our common stock.

The liability is measured at fair value on Closing and in subsequent periods with any changes in fair value reflected in the statement of operations until the vesting conditions are met or the shares expire.

(1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of technical merits of the position, and (2) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the tax benefit as the largest amount that is cumulatively more likely than not to be realized upon ultimate settlement with the related tax authority.

Commitments and Contingencies

1 unchanged sentence

Legal costs incurred in connection with loss contingencies are expensed as incurred.

Significant Risks and Uncertainties Including Business and Credit Concentrations

The Company’s principal operations are the research, design, and implementation of the Aurora Driver.

The Company is currently researching and developing its proprietary technology with the goal of commercializing the Aurora Driver.

The Company expects that it will need to raise additional capital to support its development and commercialization activities.

Significant risks and uncertainties to the Company’s operations include failing to secure additional funding and the threat of other companies developing and bringing to market similar technology at an earlier time than the Company.

However, given the amount of available cash and cash equivalents, management believes available capital resources are sufficient to meet working capital and capital expenditure needs for at least twelve months following the issuance date of these financial statements.

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents.

The Company maintains its cash and cash equivalents at U.S.

commercial banks.

Cash and cash equivalents deposited with domestic commercial banks generally exceed the Federal Deposit Insurance Corporation insurable limit.

To date, the Company has not experienced any losses on its deposits of cash and cash equivalents.

In 2021, the Company reported $ 82,538 in collaboration revenue from an agreement with an automotive original equipment manufacturers (OEM).

The commercial relationship with this OEM was governed by a collaboration framework agreement and a project plan agreement that specify the work that was to occur and payments that were to be made.

The revenue arrangement is nonrecurring, and, as of December 31, 2021, the Company does not have any long-term contracts with customers that are expected to provide recurring revenue streams.

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus, COVID-19, a global pandemic and recommended containment and mitigation measures worldwide.

As of the date of these financial statements, the Company has not experienced a negative impact to its financial position, results of operations, and operating cash flows.

The Company cannot accurately predict the length or severity of this pandemic and the impact it might have on the world and domestic economies.

However, the Company believes that for the foreseeable future, based on its current capital resources and its operations and cash flows, it will not be materially nor negatively affected.

Recently Issued Accounting Standards – Not Yet Adopted

Certain Risks and Uncertainties

The Company’s operations are principally funded by available liquidity from cash, cash equivalents and short-term investments.

Management expects to continue to incur operating losses and that the Company will need to opportunistically raise additional capital to support the continued development and commercialization of the Aurora Driver.

Management believes that cash on hand and short-term investments will be sufficient to meet its working capital and capital expenditure requirements for a period of at least twelve months from the date of these financial statements.

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash, cash equivalents and short-term investments.

The Company primarily maintains its cash and cash equivalents at U.S.

commercial banks, while its short-term investments primarily consist of U.S.

Treasury securities.

Cash and cash equivalents deposited with domestic commercial banks generally exceed the Federal Deposit Insurance Corporation insurable limit, though the Company has not experienced any credit losses on its deposits.

Recently Adopted Accounting Standards

In December 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes , which simplifies accounting for income taxes by revising or clarifying existing guidance in ASC 740, Income Taxes, as well as removing certain exceptions within ASC 740.

The Company adopted the standard effective January 1, 2022 and there was not a material impact.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):

2 unchanged sentences

Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first effective reporting period.

The standard will be effective for the Company on January 1, 2022.

The Company is currently evaluating the impact of the new guidance.

In December 2020, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes , which simplifies accounting for income taxes by revising or clarifying existing guidance in ASC 740, Income Taxes, as well as

removing certain exceptions within ASC 740.

The standard will be effective for the Company on January 1, 2022.

The Company is currently evaluating the impact of the new guidance.

Recently Issued Accounting Standards – Adopted in Fiscal 2021

In August 2018, the FASB issued ASU No.

2018-15, Intangibles—Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

The new standard requires capitalized costs to be amortized on a straight-line basis generally over the term of the arrangement, and the financial statement presentation for these capitalized costs would be the same as that of the fees related to the hosting arrangements.

The Company adopted the standard effective January 1, 2021.

The adoption did not have a material impact on the financial statements.

The Company adopted the standard effective January 1, 2022 and there was not a material impact.

On November 3, 2021, Aurora consummated the Merger with Legacy Aurora.

In connection with the Merger, issued and outstanding shares of Legacy Aurora common stock converted into shares of Aurora common stock and outstanding Legacy Aurora equity awards converted into Aurora equity awards based on the exchange ratio of approximately 2.1708 (the “Exchange Ratio”), based on the following events contemplated by the Merger Agreement:

• the cancellation and conversion of all 205 million issued and outstanding shares of Legacy Aurora redeemable convertible preferred stock into 205 million shares of Legacy Aurora common stock;

• the surrender and exchange of all 458 million shares of Legacy Aurora common stock, including shares of Legacy Aurora common stock resulting from the conversion of Legacy Aurora redeemable convertible preferred stock, were converted to 995 million shares of Aurora common stock, as adjusted by the Exchange Ratio;

• the cancellation and surrender of all 38 million granted and outstanding vested and unvested Legacy Aurora stock options, which were converted into 82 million Aurora stock options to purchase shares of Aurora common stock with the same terms and vesting conditions, as adjusted by the Exchange Ratio;

• the cancellation and exchange of all 16 million granted and outstanding vested and unvested Legacy Aurora RSUs, which were converted into 35 million Aurora RSUs for shares of Aurora common stock with the same terms and vesting conditions, as adjusted by the Exchange Ratio.

The other related events that occurred concurrent with the Merger are summarized below:

• the Company sold 100 million shares of Aurora common stock for aggregate proceeds of $ 1,000 million to certain institutional and accredited investors (the “PIPE Investment”);

• the 7 million issued and outstanding shares of Aurora common stock beneficially held by the Sponsor became subject to transfer restrictions and contingent forfeiture provisions upon the Merger (the “Earnout Shares”), of which 2 million of the Earnout Shares became subject to time-based provisions and 5 million of the Earnout Shares became subject to time- and market-based provisions;

see Note 8 – Equity Incentive Plans for more information;

• the public holders of 76 million shares of Aurora common stock exercised their redemption feature resulting in an aggregate payment of $ 755 million (the “Redemption”).

After giving effect to the Merger and other related events described above, the number of shares of Aurora common stock issued and outstanding subsequent to the Merger was as follows (in millions):

Aurora common stock, prior to redemptions 98

Redemption of Aurora common stock ( 76 )

Aurora common stock, net of redemptions 22

Sponsor shares including Earnout Shares 7

PIPE Investment 100

Total shares of Aurora common stock, prior to the Merger 129

Shares issued in exchange in the Merger 995

Total shares of Aurora common stock, subsequent to the Merger 1,124

In connection with the Merger, the Company raised net proceeds of $ 1,223 million including $ 1,000 million from the PIPE Investment, and $ 223 million of cash held in the trust account from its initial public offering.

The proceeds were net of $ 755 million paid in relation with the Redemption and $ 49 million of costs incurred prior to the Merger.

In connection with the Merger, Legacy Aurora incurred $ 41 million in transaction costs consisting of banking, legal, and other professional fees, of which $ 36 million was recorded as a reduction to additional paid-in capital and $ 5 million was expensed in the consolidated statements of operations.

Total net cash proceeds to the Company were $ 1,134 million.

Reverse Recapitalization

On November 3, 2021, Legacy Aurora consummated the merger with RTPY Merger Sub, Inc., a direct wholly owned subsidiary of Aurora.

Prior to the Merger, holders of 75,459,006 shares of RTPY ordinary Class A shares exercised their right to redeem such shares at a price of approximately $ 10.00 per share.

The remaining 22,291,089 public shares converted to Aurora Class A common stock with the consummation of the Merger.

In connection with the Closing, issued and outstanding shares of Legacy Aurora common stock (including converted preferred stock), options to purchase Legacy Aurora common stock, and awards of restricted stock units based on shares of Legacy Aurora common stock were converted into rights to receive shares, options, or awards of Aurora at the Exchange Ratio of approximately 2.1708 .

Transactions in Legacy Aurora capital stock and equity incentive plans included:

• 204,949,573 shares of Legacy Aurora preferred stock were converted to 204,949,573 shares of Legacy Aurora common stock.

• 458,202,021 shares of Legacy Aurora common stock, including shares resulting from the conversion of Legacy Aurora preferred stock, were converted to 513,575,278 shares of Aurora Class A common stock and 481,107,977 shares of Aurora Class B common stock.

• 37,972,693 outstanding options to purchase shares of Legacy Aurora common stock (“Legacy Aurora Options”) were converted into 82,432,681 options to purchase shares of Aurora Class A common stock (“Aurora Options”).

• 15,984,012 awards of restricted stock units based on shares of Legacy Aurora common stock (“Legacy Aurora RSU Awards”) were converted into 34,698,749 awards of restricted stock units based on shares of Aurora Class A common stock (“Aurora RSU Awards”).

Concurrently with the merger, certain institutional and accredited investors entered into subscription agreements pursuant to which the investors agreed to purchase 100,000,000 shares of Aurora Class A common stock at $ 10.00 per share for aggregate proceeds of $ 1,000,000 .

RTPY Class B ordinary shares held by Reinvent Sponsor Y LLC (the “Sponsor”) converted into 120,000 shares of Aurora Class A common stock in connection with the merger.

In connection with the Sponsor Agreement entered into on July 14, 2021, RTPY Class A ordinary shares held by the Sponsor which were not forfeited due to redemption activity prior to the merger are deemed to be effectively issued on the Closing Date for financial reporting purposes.

6,883,086 shares are effectively issued with 1,720,772 of these shares subject to lock up provisions and 5,162,314 of these shares subject to price based vesting conditions (the “Earnout Shares”).

Each of the then issued and outstanding 12,218,750 redeemable warrants of RTPY converted automatically into a redeemable warrant to purchase one share of Aurora Class A common stock (the “Public Warrants”).

Additionally, each of the then issued and outstanding 8,900,000 private placement warrants of RTPY converted automatically into an Aurora warrant (the “Private Placement Warrants”).

The number of shares of Aurora Class A and Class B common stock issued and outstanding following the consummation of the merger was as follows:

RTPY public shares 97,750,095

redemptions of RTPY public shares ( 75,459,006 )

RTPY public shares, net of redemptions 22,291,089

RTPY Sponsor shares 7,003,086

PIPE shares 100,000,000

Total shares of RTPY common stock outstanding prior to the merger 129,294,175

Legacy Aurora shares 994,683,255

Total shares of Aurora common stock outstanding subsequent to the merger 1,123,977,430

The Business Combination is accounted for as a reverse recapitalization in accordance with GAAP.

Under this method of accounting, RTPY is treated as the acquired company and the Merger is treated as the equivalent of Legacy Aurora issuing shares for the net assets of RTPY, accompanied by a recapitalization.

The Merger was accounted for as a reverse recapitalization in accordance with GAAP.

Under this method of accounting, the Company is treated as the acquired company and the Merger is treated as the equivalent of Legacy Aurora issuing shares for the net assets of the Company, accompanied by a recapitalization.

The accounting acquirer was primarily determined based on Legacy Aurora shareholders having the largest voting interest in the post-combination company and the ability to appoint the majority of the members of the Board of Directors as well as Legacy Aurora management holding executive management roles in the post-combination company and are responsible for the day-to-day operations which are comprised of Legacy Aurora activities.

The net assets of RTPY were recognized at historical cost as of the Closing, with no goodwill or other intangible assets recorded.

Operations prior to the merger presented are those of Legacy Aurora and the accumulated deficit of Legacy Aurora has been carried forward after Closing.

In connection with the merger, the Company raised proceeds of $ 1,223,156 including $ 1,000,000 from the PIPE investment, $ 222,911 cash held in RTPY’s trust account from its initial public offering, and $ 245 in cash held in RTPY’s operating cash account.

The proceeds were net of $ 754,590 paid to redeem RTPY public shares and $ 48,577 in costs incurred by RTPY prior to Closing.

Legacy Aurora incurred $ 40,617 in transaction costs consisting of banking, legal, and other professional fees.

Of this total, $ 36,101 was recorded as a reduction to additional paid-in capital and $ 4,516 was expensed in the consolidated statements of operations.

Total net cash proceeds to the Company was $ 1,133,961 .

(4) Balance Sheet Detail

(a) Fair Value of Financial Instruments

The Company uses a three-level hierarchy, which prioritizes, within the measurement of fair value, the use of market-based information over entity-specific information for fair value measurement based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.

Fair value focuses on an exit price and is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The inputs or methodology used for valuing financial instruments are not necessarily an indication of the risk associated with those financial instruments.

The three-level hierarchy for fair value measurements is defined as follows:

Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Inputs to the valuation methodology included quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Inputs to the valuation methodology, which are significant to the fair value measurement, are unobservable.

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 measured at fair value on a recurring bases as of December 31, 2021 and 2020:

As of December 31, 2021

Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds

$ 1,609,919 $ — $ — $ 1,609,919

Total cash equivalents

$ 1,609,919 $ — $ — $ 1,609,919

Public warrants 37,999 — — 37,999

Private placement warrants — 27,679 — 27,679

Earnout Shares liability — — 52,380 52,380

Total liabilities $ 37,999 $ 27,679 $ 52,380 $ 118,058

As of December 31, 2020

Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds

$ 387,464 $ — $ — $ 387,464

Total cash equivalents

$ 387,464 $ — $ — $ 387,464

The Public Warrants and Private Placement Warrants (see Note 8:

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

The Public Warrants are valued based on the closing price of the publicly traded instrument.

The Private Placement Warrants are valued using observable inputs for similar liabilities resulting in Level 2 classification.

The Earnout Shares liability (see Note 8:

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

The fair value was determined using a Monte Carlo simulation with a risk free rate of 1.60 % and 1.52 % and volatility of 50 % and 50 % as of November 3, 2021 and December 31, 2021, respectively.

(b) Property and Equipment

Property and equipment consist of the following at December 31:

Land $ 13,503 $ —

Furniture and fixtures

Test and lab equipment

Leasehold improvements

Computers and equipment

Computer software

Buildings 1,040 —

113,197 16,187

Less accumulated depreciation and amortization

( 19,680 ) ( 5,290 )

Total property and equipment, net

$ 93,517 $ 10,897

Other assets consist of the following at December 31:

Long-term prepaid expenses and other assets

$ 4,631 $ 15,507

Equity method investment 16,088 —

Security deposits

Total other assets

$ 21,050 $ 15,631

(d) Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following at December 31:

Accrued expenses

$ 16,074 $ 3,412

Accrued compensation

51,401 13,938

Total accrued expenses and other current liabilities

$ 70,006 $ 18,768

(5) Collaboration Revenue

The Company received $ 50,000 in cash consideration in April 2021 and expects the remaining $ 100,000 in 2022.

Revenue is recognized using the input measure of hours expended as a percentage of total estimated hours to complete the project commencing with initial recognition in August 2021 when the project plan was signed.

$ 32,538 is recognized as a contract asset as of December 31, 2021 as a result of revenue of $ 82,538 and cash receipts of $ 50,000 .

(6) Acquisitions

The net assets of the Company were recognized at historical cost as of the Closing Date, with no goodwill or other intangible assets recorded.

Operations and cash flows presented prior to the Closing Date represent are those of Legacy Aurora and the accumulated deficit of Legacy Aurora has been carried forward after the Closing Date.

All share and per share information presented have been adjusted to reflect the recapitalization on a retrospective basis for all periods presented.

Apparate USA LLC

On January 19, 2021, the Company acquired 100 % of the voting interests of ATG, which was a company developing self-driving technology.

The acquisition date fair value of the consideration transferred for ATG was approximately $ 1,915,708 which consisted of stock consideration.

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 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 the year ended December 31, 2021.

The Company has 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.

We recorded a measurement period adjustment to the preliminary purchase price allocation which included an $ 21,652 decrease in property and equipment, an $ 3,342 increase in deferred tax liability and an $ 24,994 increase in goodwill.

This measurement period adjustment was made to reflect facts and circumstances that existed as of the acquisition date.

The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of the ATG acquisition:

On January 19, 2021, the Company acquired 100 % of the voting interests of Apparate USA LLC (“ATG”) which was a company developing self-driving technology.

The fair value of the consideration transferred for ATG was $ 1,916 million which consisted of non-cash equity consideration, including 110 million shares of redeemable convertible preferred stock and 252 million shares of common stock.

The redeemable convertible preferred stock was valued based on a concurrent purchase of the Company’s redeemable convertible preferred stock.

The common stock was valued based on its fair value as the acquisition date, as determined using an option pricing method model.

In January 2021, the Company paid $ 10 million relating to financial advisory fees with a former related party of which $ 8 million was recognized as transaction costs associated with the acquisition and $ 2 million was recorded as a reduction to redeemable convertible preferred stock as issuance costs in the twelve months ended December 31, 2021.

Including the financial advisory fees with a former related party, the total transaction costs associated with the acquisition were $ 15 million in the twelve months ended December 31, 2021 and were recorded in selling, general and administrative.

The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of the ATG acquisition (in millions):

Cash and cash equivalents

Prepaid expenses and other current assets

Property and equipment 63,395

Property and equipment, net

Operating lease right-of-use assets

Other assets 18,351

Acquisition related intangible assets

Accounts payable

Related party payable

Accrued expenses and other current liabilities

Operating lease liabilities

Deferred tax liability ( 3,342 )

The sole identifiable intangible asset acquired in the ATG acquisition was in-process research and development (IPR&D) and has an indefinite useful life as of the date of the acquisition.

Other assets and (liabilities), net ( 19 )

The acquisition related intangible asset identified was IPR&D, which has an indefinite useful life as of the date of the acquisition.

The fair value of the IPR&D intangible asset was determined through a replacement cost approach, which identifies the costs that would be necessary to recreate the asset if the Company were to internally develop the acquired technology.

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 December 31, 2021.

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 twelve months ended December 31, 2021, the Company recognized $ 8 million in non-cash severance paid by the former parent of ATG.

This amount was allocated from total equity consideration transferred.

The following supplemental pro forma information combines the historical results of Aurora and ATG as if the ATG acquisition had occurred on January 1, 2020, the beginning of the earliest period presented and includes pro forma adjustments related to depreciation and amortization of acquired property, plant and equipment, share-based compensation expense, and severance expense.

Twelve months ended December 31,

Revenue $ 82,538 $ —

Net loss ( 626,964 ) ( 1,033,727 )

Subsequent to the acquisition, the Company entered into a transition services agreement which expired during the first quarter of 2022.

Expenses incurred under the transition services agreement were not significant to the reporting periods.

OURS Technology, Inc.

On March 5, 2021, the Company acquired 100 % of the voting interests in OURS, a silicon photonics company.

On March 5, 2021, the Company acquired 100 % of the voting interests in OURS Technology, Inc.

(“OURS”), a silicon photonics company.

The Company has included the financial results of OURS in the condensed consolidated financial statements prospectively from the date of acquisition.

The OURS acquisition date fair value of the consideration transferred for OURS was approximately $ 40,821 , which consisted of the following

The fair value of the consideration transferred for OURS was $ 41 million, which consisted of the following (in millions):

Stock consideration

Assumed liabilities related to third-party expenses

As part of the OURS acquisition, the Company assumed certain OURS compensation agreements, including the conversion of certain shares of OURS restricted stock into rights to receive the Company’s restricted stock, and assuming certain stock options with an estimated fair value of $ 3,789 .

For the stock options assumed, based on the service period related to the period prior to the OURS acquisition date, $ 2,145 was allocated to the purchase price, and $ 1,644 relating to post-acquisition services which will be recorded as operating expenses over the remaining requisite service periods.

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 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 twelve months ended December 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.

We recorded a measurement period adjustment to the preliminary purchase price allocation which included an $ 774 decrease in deferred tax liability and an $ 774 decrease in goodwill.

This measurement period adjustment was made to reflect facts and circumstances that existed as of the acquisition date.

The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of the OURS acquisition:

Cash and cash equivalents

Prepaid expenses and other current assets

Property and equipment 218

Other assets 9

Total fair value of consideration transferred

The non-cash stock consideration transferred comprised 6 million shares of common stock and was valued using an option pricing model as of the acquisition date.

For the stock options assumed, based on the service period related to the period prior to the OURS acquisition date, $ 2 million was allocated to the purchase price, and $ 2 million relating to post-acquisition services which will be recorded as operating expenses over the remaining requisite service periods.

The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of the OURS acquisition (in millions):

Acquisition related intangible assets

Accounts payable

Deferred tax liability

The sole identifiable intangible asset acquired in the OURS acquisition was in-process research and development (IPR&D) and has an indefinite useful life as of the date of the acquisition.

The acquisition related intangible asset identified was IPR&D, which has an indefinite useful life as of the date of the acquisition.

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 December 31, 2021.

Pro forma results for the OURS acquisition are not presented as the financial impact is immaterial.

(7) Stockholders’ Equity (Deficit)

The changes in the carrying amount of goodwill were as follows (in millions):

2021 Goodwill impairment December 31,

Goodwill $ 1,114 $ — $ 1,114

Accumulated impairment loss — ( 1,114 ) ( 1,114 )

Carrying amount of goodwill $ 1,114 $ ( 1,114 ) $ —

During the second quarter and fourth 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 goodwill impairment assessments were performed.

For each goodwill impairment assessment, 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 $ 1,114 million goodwill impairment during the twelve months ended December 31, 2022.

Cash, Cash Equivalents and Short-Term Investments

Cash, cash equivalents and restricted cash were as follows (in millions):

2022 December 31,

Cash and cash equivalents $ 262 $ 1,610

Restricted cash, long-term (a)

Total cash, cash equivalents and restricted cash

$ 277 $ 1,626

(a) Included in Other assets on the consolidated balance sheets

The components of cash equivalents and short-term investments measured at fair value on a recurring basis were as follows (in millions):

Fair value level December 31,

2022 December 31,

Cash equivalents:

Money market funds

Level 1 $ 204 $ 1,610

Treasury securities

Total cash equivalents

$ 261 $ 1,610

Short-term investments:

Treasury securities

Level 2 $ 839 $ —

Total short-term investments $ 839 $ —

The amortized cost, unrealized gains and losses, and fair value of available-for-sale debt securities were as follows (in millions):

As of December 31, 2022

Amortized cost Unrealized losses Fair value

Treasury securities $ 841 $ ( 2 ) $ 839

Collaboration Revenue

In the twelve months ended December 31, 2022, 2021 and 2020, the Company received payments of $ 100 million, $ 50 million and $ — , respectively, under the collaboration project plan with Toyota.

As of December 31, 2022, the Company has received all cash payments provided under the collaboration project plan.

In the twelve months ended December 31, 2022, 2021 and 2020, the Company recognized collaboration revenue of $ 68 million, $ 82 million and $ — , respectively.

To date, the Company has recognized cumulative revenue under the agreement of $ 150 million through December 31, 2022.

Stockholders' Equity

Preferred Stock

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

Concurrently with the consummation of the Merger on November 3, 2021, 458,202,021 shares of Legacy Aurora common stock were cancelled and reissued as 513,575,278 shares of par value $ 0.00001 Aurora Class A common stock and 481,107,977 shares of par value $ 0.00001 Aurora Class B common stock.

Shares were converted by the exchange ratio of approximately 2.1708 .

In November 2021, the Company authorized 51,000,000,000 shares of common stock to be issued, 50,000,000,000 shares are designated Class A common stock and 1,000,000,000 shares are designated Class B common stock.

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

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

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

of which 50,000 million shares are designated Class A common stock and 1,000 million 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 December 31, 2021, the Company had 641,721,837 shares of Class A common stock and 481,107,977 shares of Class B common stock issued and outstanding.

Common Stock Reserved for Issuance

C ommon stock reserved for future issuance at December 31, 2021, and December 31, 2020 was as follows.

December 31, 2020 balances have been converted using the exchange ratio of 2.1708.

December 31, 2021 December 31, 2020

Redeemable convertible preferred stock

— 290,300,547

Outstanding stock options 81,405,867 76,067,205

Outstanding restricted stock units 34,054,713 —

Outstanding Public Warrants 12,218,420 —

Outstanding Private Placement Warrants 8,900,000 —

Shares available for issuance under the equity incentive plans 122,487,648 12,386,940

Total shares of common stock reserved 259,066,648 378,754,692

(8) Derivative Liabilities

Common Stock Warrants

On the consummation of the Merger on November 3, 2021, 12,218,750 publicly traded warrants for Class A common stock at an exercise price of $ 11.50 (the “Public Warrants”) and 8,900,000 warrants held by the Sponsor with an exercise price of $ 11.50 (the “Private Placement Warrants”) converted automatically into warrants of Aurora common stock.

During the year ended December 31, 2021, 330 Public Warrants were exercised for total cash proceeds of $ 4 .

The estimated fair value of the warrant liabilities was $ 53,219 at Closing and $ 65,678 at December 31, 2021.

For the year-ended December 31, 2021, an expense of $ 12,459 was recognized in changes in fair value of derivative liabilities in the consolidated statements of operations.

As of December 31, 2021, issued and outstanding warrants were as follows:

Warrant Type December 31, 2021

Public Warrants

Private Placement Warrants

Public Warrants

Public Warrants were exercisable beginning on December 3, 2021.

The Company may redeem the Public Warrants when the last reported sales price of Class A common stock for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”) exceeds $ 10.00 or $ 18.00 .

Warrants are redeemable in whole and upon a minimum of 30 days’ prior written notice.

If the Reference Value exceeds $ 18.00 , warrants are redeemable at $ 0.01 per warrant, in whole and upon a minimum of 30 days prior written notice

If the Reference Value exceeds $ 10.00 , warrants are redeemable at $ 0.10 per warrant, in whole and upon a minimum of 30 days prior written notice that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the fair market value of Class A ordinary shares.

Fair market value of Class A common stock is the volume-weighted average price of Class A ordinary shares for the 10 trading days following the date on which the notice of redemption is sent.

The number of ordinary shares received upon exercise is capped at 0.361 shares of Aurora Class A common stock per warrant.

Private Placement Warrants

Private Placement Warrants are not redeemable by the Company as long as they are held by a Sponsor or its permitted transferees.

If the Reference value exceeds $ 18.00 per share and the Company elects to redeem the Public Warrants, the Private Placement Warrants are exercised.

If the Public Warrants are redeemed by the Company when the Reference Value equals or exceeds $ 10.00 , the Private Placement Warrants are also concurrently called for redemption on the same terms as of the Public Warrants.

If the Public Warrants are redeemed by the Company when the Reference Value exceeds $ 18.00 per share, the Sponsor will exercise the Private Placement Warrants for cash or on a cashless basis.

Earnout Shares liability

In connection with the execution of the Merger Agreement, the Company, Legacy Aurora and the Sponsor entered into the Sponsor Agreement on July 14, 2021.

Under the agreement, existing Sponsor shares not forfeited due to redemptions are subject to lock-up and price-based vesting.

1,720,772 shares are subject to a lock-up provision but not price-based vesting.

5,162,314 shares are subject to time-based lock-up provisions as well as price-based vesting as follows:

• 1,720,772 shares vest when it has been at least 2 years since the Closing and the volume weighted average price (“VWAP”) of the Company’s class A common stock equals or exceeds $ 15.00 for 20 trading days of any consecutive 30 trading day period.

• 1,720,771 shares vest when it has been at least 3 years since the Closing and the VWAP equals or exceeds $ 17.50 for 20 trading days of any consecutive 30 trading day period.

• 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 at Closing was $ 44,723 at Closing and $ 52,380 at December 31, 2021.

For the year ended December 31, 2021, an expense of $ 7,657 was recognized in changes in fair value of derivative liabilities in the consolidated statements of operations.

No Earnout Shares vested as of December 31, 2021.

(9) Redeemable Convertible Preferred Stock

In January 2021, Legacy Aurora issued 50,873,075 shares of Series U-1 in connection with the ATG acquisition and issued 20,349,230 shares of Series U-2 in exchange for cash proceeds of $ 397,862 , net of transaction costs of $ 2,138 .

Prior to the Closing of the Merger on November 3, 2021, Legacy Aurora had 20,177,530 shares of Seed 1, 9,653,930 shares of Seed 2, 29,948,750 shares of Series A, 71,389,540 shares of Series B, 2,557,518 shares of Series B-1, 50,873,075 shares of Series U-1, and 20,349,230 shares of Series U-2 issued and outstanding.

Concurrent with Closing of the Merger, the 204,949,573 shares of redeemable convertible preferred stock issued and outstanding automatically converted into 204,949,573 shares of Legacy Aurora common stock.

The Legacy Aurora common stock converted into 444,912,850 shares of Aurora common stock in connection with the Merger.

As of December 31, 2021, no shares of redeemable convertible preferred stock were issued and outstanding.

The significant rights and preferences of the redeemable convertible preferred stock until the Closing of the Merger are as follows:

(i) Dividends

The holders of Seed 1, Seed 2, Series A, and Series B (collectively, the “Senior Preferred Stock”) were entitled to receive dividends, when, as and if declared by the board of directors of the Company, out of any available assets of the Company.

The annual dividend rate was $ 0.014 per share per annum for Seed 1, $ 0.026 per share per annum for Seed 2, $ 0.222 per share per annum for Series A, and $ 0.739 per share per annum for Series B (subject to adjustment from time to time for recapitalization with respect to each such series of preferred stock).

The right to receive dividends on shares of Senior Preferred Stock was not cumulative, and payment of any dividends to the holders of Senior Preferred Stock would have been on a pro rata pari passu basis in proportion to the dividend rates for each series of Senior Preferred Stock.

Subject to the prior dividend rights of the Senior Preferred Stock, the holders of outstanding shares of Series B-1 were entitled to receive dividends, when, as and if declared by the board of directors of the Company, out of any available assets of the Company.

The annual dividend rate was $ 0.739 per share per annum for Series B-1 (subject to adjustment from time to time for recapitalization with respect to each such series of redeemable convertible preferred stock).

The right to receive dividends on shares of Series B-1 was not cumulative and payment of any dividends to the holders of Series B-1 would have been on a pro rata pari passu basis in proportion to the dividend rates for Series B-1.

After dividends in the full preferential amounts specified for the preferred stock had been paid or set aside, any additional dividends would have been paid among the holders of the redeemable convertible preferred stock and common stock in proportion to the greatest whole number of shares of common stock, which would be held by each holder if all shares of redeemable convertible preferred stock were converted at the then effective conversion rate.

The Company has not declared any dividends as of December 31, 2021 and 2020.

(ii) Conversion

At the option of the holder, each share of redeemable convertible preferred stock was convertible, at any time after the date of issuance of such share, into the number of shares of common stock determined by dividing the original issue price for the redeemable convertible preferred stock by the applicable conversion price, determined at the time of conversion.

The original issue price and the conversion price would have been adjusted for any stock dividends, stock splits, combination of shares, reorganizations, recapitalizations, reclassifications, or other similar events.

The conversion price of each series of redeemable convertible preferred stock was also subject to broad-based weighted average anti-dilution adjustments in the event that the Company issued certain securities at a price per share less than the then applicable conversion price of such series of redeemable convertible preferred stock.

Each share of redeemable convertible preferred stock was automatically converted into common stock at the then effective conversion rate (i) immediately prior to the closing of a firm commitment underwritten initial public offering of common stock under the Securities Act of 1933, as amended, provided that the aggregate gross proceeds to the Company are not less than $100,000 or (ii) upon the written consent for such conversion from (A) the holders of a majority of the outstanding redeemable convertible preferred stock (voting together as a single class and on an as-converted basis) outstanding and (B) the holders of a majority off outstanding of Series B (voting as a separate class) outstanding.

(iii) Liquidation

In the event of any liquidation, dissolution, or winding up of the Company, the holders of then outstanding Senior Preferred Stock were entitled to be paid on a pari passu basis, and prior and in preference to any distribution on any share of Series B-1 and common stock, an amount per share equal to (1) the greater of (a) the sum of (i) the liquidation preference specified for such share of Senior Preferred Stock ($ 0.175 for Seed 1, $ 0.322 for Seed 2, $ 2.776 for Series A, and $ 9.240 for series B) and (ii) all declared but unpaid dividends on such share of Senior Preferred Stock or (b) the amount that would have been payable if such share of Senior Preferred Stock had converted to common stock immediately prior to such liquidation, dissolution or winding up, or (2) with respect to a particular series of Senior Preferred Stock, such lesser amount as may be approved by the holders of a majority of the outstanding shares of such series, voting as a separate series.

Subject to the prior liquidation rights of the Senior Preferred Stock, in the event of any liquidation, dissolution, or winding up of the Company, the holders of the then outstanding Series B-1, were entitled to be paid on a pari passu basis, and prior and in preference to any distribution on any share of common stock, an amount per share equal to (1) the greater of (a) the sum of (i) the liquidation preference specified for such share of Series B-1 (previously $ 9.240 ) and (ii) all declared but unpaid dividends on such share of Series B-1 or (b) the amount that would have been if such shares of series B-1 had converted to common stock immediately prior to such liquidation, dissolution or winding up, or (2) such lesser amount as may be approved by the holders of a majority of the outstanding shares of Series B-1, voting as a separate series.

After the payment of the full liquidation preference to the holders of preferred stock described above, the assets of the Company legally available for distribution, if any, would have been distributed pro rata to holders of the common stock of the Company in proportion to the number of shares of common stock held by them.

The liquidation preferences were deemed to be contingent redemption features exercisable on certain deemed liquidation events which includes a merger, change of control, or a sale of substantially all of the Company’s assets.

The deemed liquidation event would have constituted a redemption event not solely within the control of the Company.

Redeemable convertible preferred stock was presented outside of permanent equity in mezzanine equity on the balance sheets prior to conversion to common stock upon consummation of the Merger.

The holders of shares of redeemable convertible preferred stock were entitled to the number of votes equal to the number of shares of common stock into which the shares were then convertible.

As long as any shares of Seed 1 remained outstanding, the holders of Seed 1, voting as a separate class, were entitled to elect one member of the board of directors (the Series Seed Director).

As long as any shares of Series B preferred stock remained outstanding, the holders of Series B preferred stock, voting as a separate class, were entitled to elect one member of the board of directors.

The holders of Legacy Aurora common stock, voting as a separate class, were entitled to elect five members of the board of directors.

Any additional members of the board of directors were to be elected by the holders of common stock and redeemable convertible preferred stock.

So long as the holders of Seed 1 were entitled to elect a director, the Series Seed Director was entitled to cast two votes on all matters that come before the board of directors.

All remaining directors were entitled to cast one vote on all matters.

(v) Protective Provision

As long as any shares of redeemable convertible preferred stock were issued and outstanding, the holders of a majority of outstanding shares of redeemable convertible preferred stock, voting together as a single class on

an as-converted basis, must have approved certain transactions.

Such actions included adversely amending the rights, preferences, privileges, or restrictions of preferred stock;

purchasing, redeeming, paying, or declaring any dividend or making any distribution on any shares of capital stock (subject to limited exceptions);

and creating or authorizing the issuance of any debt security or other indebtedness for borrowed money in excess of $ 250,000 (subject to limited exceptions);

and creating or holding capital stock in a subsidiary that is not wholly owned.

The Company had 754 million and 642 million shares of Class A common stock issued and outstanding at December 31, 2022 and December 31, 2021, respectively.

The Company had 412 million and 481 million shares of Class B common stock issued and outstanding at December 31, 2022 and December 31, 2021, respectively.

Equity Incentive Plans

We maintain four equity compensation plans:

the 2021 Equity Incentive Plan (the 2021 Plan), the 2017 Equity Incentive Plan (the 2017 Plan), the 2016 Blackmore Sensors & Analytics, Inc.

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

The Company assumed stock options under the Blackmore Plan in 2019 and the OURS Plan in 2021 to the extent such employees continued as employees of the Company.

In connection with the Merger, holders of Legacy Aurora options and restricted stock units received an equivalent award at the Exchange Ratio that vest in accordance with the original terms of the award.

2021 Equity Incentive Plan

On November 2 2021, shareholders of RTPY approved and adopted the Aurora Innovation, Inc 2021 Equity Incentive Plan.

The 2021 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.

Additionally, the 2021 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.

Under the 2021 Plan, equity-based compensation in the form of restricted stock units (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.

As of December 31, 2021, no awards were granted under the 2021 Plan.

122,487,648 shares of common stock were available for grant.

2017 Equity Incentive Plan

Under the Company’s 2017 Equity Incentive Plan (the 2017 Plan), equity-based compensation in the form of restricted stock units (RSUs), restricted stock awards, incentive stock options, and nonqualified stock options may be granted to employees, officers, directors, consultants, and others.

Stock Options

Stock options under the 2017 Plan may be outstanding for periods of up to 10 years following the grant date.

The exercise price of stock options for the purchase of shares of common stock under the 2017 Plan may not be less than 100 % of the fair value of the Company’s common stock on the date of the grant, as determined by the board of directors.

In the case of an incentive stock option granted to an employee who owns stock representing more than 10% of the voting shares, the price of each share will be at least 110 % of the fair value on the date of grant.

Stock options generally vest over 4 years starting on the vesting commencement date (with a one -year cliff) and expire, if not exercised, 10 years from the date of grant or, if earlier, 3 months after the option holder ceases to be a service provider of the Company.

Stock options granted to a stockholder that owns greater than 10% of the company expire, if not exercised, 5 years from the date of grant.

The fair value of each award granted to employees in 2021 and 2020 has been estimated on the date of grant using the Black-Scholes-Merton option pricing model with the following weighted average assumptions:

expected life of 5.93 years and 5.93 years, risk-free interest rate of 0.59 % and 0.87 %;

expected volatility of 55.00 % and 55.00 %;

and no dividends during the expected life.

Expected volatility is based on the Company’s review of historical volatilities of comparable public companies and an expected future volatility based upon this evidence over the expected term of the award.

The expected life of the options represents the period of time options are expected to be outstanding and is estimated considering vesting terms, employees’ historical exercise, and post vesting employment termination behavior.

The risk-free interest rate is based on

Treasury yield curve in effect at the time of grant.

The Company records forfeitures on the date occurred.

Stock option activity under the 2017 Plan is as follows:

Options outstanding

Weighted average remaining contractual term (in years) Aggregate Intrinsic value (1)

Balance, December 31, 2019

69,990,959 $ 0.80

13,940,467 1.44

( 3,263,193 ) 0.89

( 5,584,769 ) 1.20

Balance, December 31, 2020

75,083,464 $ 0.88

19,480,375 3.67

( 8,210,529 ) 0.95

( 6,708,760 ) 2.28

Balance, December 31, 2021

79,644,550 $ 1.44

Exercisable at December 31, 2021 50,613,778 $ 0.95 6.93 $ 521,957

(1) Calculated as the closing stock price on December 31, 2021 of $ 11.26 less the option exercise price.multiplied by the number of options.

Stock-based compensation related to options granted to employees was $ 23,421 and $ 16,569 in 2021 and 2020, respectively.

The unrecognized deferred compensation expense for future years’ compensation expense related to unvested options was approximately $ 36,989 at December 31, 2021.

Unrecognized deferred compensation will be recognized over an estimated weighted average amortization period of approximately 2.07 years.

The Company has outstanding awards granted under four equity compensation plans:

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

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

The Company assumed awards under the 2017 Plan, 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 121 million shares plus any shares subject to awards assumed in the Merger that are forfeited or otherwise expire after the Closing Date.

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) 121 million, (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, RSUs or other awards from the 2017 Plan, the Blackmore Plan, or the OURS Plan that, on or after the Closing Date, expire or otherwise terminate without having been exercised or issued in full are added to the Plan up to a maximum of 121 million shares.

As of December 31, 2022, there were 78 million shares 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.

Restricted Stock Units

The vesting of the initial RSU grants was based on the satisfaction of 2 separate vesting requirements on or before the expiration date:

RSUs granted under the 2017 Plan generally are subject to two vesting requirements:

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

The liquidity event was the earlier of a (i) an initial public offering through a registration statement filed by the Company declared effective or the closing of a transaction with a special purpose acquisition company, or (ii) a change in control.

Generally, the time-based vesting requirement is four years starting on the vesting commencement date (with a one -year cliff).

Beginning in July 2021, 5,700,406 RSUs were granted which have only a time-based vesting requirement.

RSU activity under the Plan is as follows:

Unvested RSUs outstanding

grant date fair value

Balance, December 31, 2020

Generally, the time-based vesting requirement is quarterly over four years starting on the vesting commencement date, with a one-year cliff.

The liquidity event vesting requirement was satisfied with the Merger.

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

Generally, the time-based vesting requirement is quarterly over one to four years starting on the vesting commencement date, with a one-year cliff vesting for new hire awards.

RSUs granted under the Plan and the 2017 Plan were as follows:

Twelve Months Ended

2022 2021 2020

RSUs granted (in millions) 113 45 —

Weighted average grant date fair value $ 3.62 $ 4.56 $ —

RSU activity under the Plan and the 2017 Plan was as follows (in millions, except per share amounts):

shares Weighted-

average grant

date fair value

Unvested at December 31, 2021

Vested ( 27 ) 4.31

Unvested at December 31, 2022

The unrecognized stock-based compensation related to unvested RSUs was $ 310 million at December 31, 2022 and will be recognized over a weighted average period of 2.7 years.

The fair value of RSUs as of their respective vesting dates was $ 90 million, $ 10 million, and $ — million for the twelve months ended December 31, 2022, 2021, and 2020, respectively.

Stock Options

The exercise price of stock options granted under the Plan and the 2017 Plan may not be less than 100 % of the fair value of the Company’s common stock on the date of the grant.

Stock options generally vest over one to four years starting on the vesting commencement date and expire, if not exercised, 10 years from the date of grant or, if earlier, three months after the option holder ceases to be a service provider of the Company.

Stock options outstanding under the Blackmore Plan and the OURS Plan are not material.

Stock options granted under the Plan and the 2017 Plan were as follows:

Twelve Months Ended

2022 2021 2020

Stock options granted (in millions) 9 19 14

Weighted average grant date fair value $ 1.35 $ 1.90 $ 1.13

Weighted average grant date fair value assumptions:

Expected term

5.6 years 5.9 years 5.9 years

Risk-free interest rates

3.6 % 0.6 % 0.9 %

Balance, December 31, 2021

Expected volatility 55.0 % 55.0 % 55.0 %

Stock option activity under the Plan and the 2017 Plan was as follows (in millions, except per share amounts):

shares Weighted

exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value

Outstanding at December 31, 2021

Granted 9 2.46

Outstanding at December 31, 2022

63 $ 1.76 6.9 $ 15

The aggregate intrinsic value of outstanding RSUs at December 31, 2021 was $ 383,456 .

The intrinsic value was determined using the closing trading price of our common stock on December 31, 2021 of $ 11.26 .

Stock-based compensation related to RSUs granted to employees was $ 66,044 and $ 0 in 2021 and 2020, respectively.

The unrecognized deferred compensation expense for future years’ compensation expense related to unvested RSUs was approximately $ 99,652 at December 31, 2021.

Unrecognized deferred compensation will be recognized over an estimated weighted average amortization period of approximately 1.68 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.

Exercisable at December 31, 2022

43 $ 1.38 6.3 $ 15

The unrecognized stock-based compensation related to unvested stock options was $ 25 million as of December 31, 2022 and will be recognized over a weighted average period of 1.4 years.

The intrinsic value of stock options exercised was $ 62 million, $ 53 million and $ 5 million for the twelve months ended December 31, 2022, 2021, and 2020, respectively.

Related Party RSUs

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.

These awards are compensation for services provided to the Company and are accounted for as stock-based compensation.

Awards representing 2,928,854 shares were modified on the acquisition date.

537,576 shares were forfeited as of December 31, 2021.

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

$ 128,397 in stock-based compensation expense was recognized in the twelve months ended December 31, 2021.

The unrecognized deferred compensation expense for future years’ compensation expense is $ 6,232 as of December 31, 2021.

Unrecognized deferred compensation will be recognized over an estimated weighted average amortization period of approximately 0.05 years.

These awards are compensation for services provided to the Company and accounted for as stock-based compensation.

Awards representing 3 million shares were modified on the acquisition date and 1 million shares were forfeited before the final vesting in January 2022.

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 recognized for related party RSUs was $ 6 million, $ 128 million and $ — for the twelve months ended December 31, 2022, 2021 and 2020, respectively.

No unrecognized stock-based compensation remains for the related party RSUs as of December 31, 2022.

In December 2021 and January 2022, the Company made withholding tax payments associated with the related party RSUs and received a $ 13 million reimbursement during the twelve months ended December 31, 2022.

Stock-based Compensation Expense

1 unchanged sentence

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 December 31, 2022.

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

Twelve months ended December 31,

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

Twelve Months Ended

2022 2021 2020

Research and development

$ 137 $ 207 $ 14

General and Administrative

Selling, general, and administrative

$ 156 $ 220 $ 17

(11) Income Taxes

The Company only has operations in the United States.

Loss from operations before income taxes is categorized geographically as follows:

United States

Derivative Liabilities

The components of derivative liabilities measured at fair value on a recurring basis were as follows (in millions):

Fair value level December 31,

2022 December 31,

Public warrants

Level 1 $ 2 $ 38

Private placement warrants

Common stock warrants 3 66

Earnout share liabilities Level 3 1 52

Total derivative liabilities

The public and private placement warrants are measured at fair value on a recurring basis.

The public warrants were valued based on the closing price of the publicly traded instrument.

The private placement warrants were valued using observable inputs for similar publicly traded instruments.

The earnout share liabilities are measured at fair value on a recurring basis utilizing a Monte Carlo simulation analysis.

The expected volatility is determined based on the historical equity volatility of comparable companies over a period that matches the expected term of the instrument.

The risk-free interest rate is based on relevant U.S.

treasury rates for a period that matches the expected term of the instrument.

The valuation inputs utilized in determining the earnout share liability were as follows:

2022 December 31,

Risk-free interest rates

Expected term (in years)

Expected volatility 50.0 % 50.0 %

The following table summarizes the changes in Level 3 derivative liabilities measured at fair value on a recurring basis (in millions):

Earnout share liabilities

Fair value as of December 31, 2021

Change in fair value

Fair value as of December 31, 2022

The components of change in fair value of derivative liabilities were as follows (in millions):

Twelve Months Ended

2022 2021 2020

Total loss from operations before income taxes

Change in fair value of derivative liabilities:

Common stock warrants

$ 63 $ ( 12 ) $ —

The federal and state income tax provision is summarized as follows:

Current income tax expense:

Total current income tax expense

Deferred income tax benefit:

Earnout share liabilities

Total change in fair value of derivative liabilities

$ 114 $ ( 20 ) $ —

Common Stock Warrants

On the consummation of the Merger, 12 million public warrants for Class A common stock at an exercise price per share of $ 11.50 and 9 million private placement warrants held by the Sponsor with an exercise price per share of $ 11.50 converted into warrants of Aurora common stock.

The public and private placement warrants that remain unexercised will expire on November 3, 2026.

Public Warrants

Public warrants outstanding were 12 million as of December 31, 2022 and 2021.

Public warrants may be redeemed, in whole and not in part, when the last reported sales price of Class A common stock exceeds $ 10.00 or $ 18.00 per share for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the public warrant holders (the “Reference Value”).

If the Reference Value exceeds $ 18.00 per share, public warrants are redeemable at $ 0.01 per warrant upon not less than 30 days’ prior written notice of redemption to each warrant holder.

If the Reference Value exceeds $ 10.00 per share, public warrants are redeemable at $ 0.10 per warrant upon a minimum of 30 days’ prior written notice provided that the holders will be able to exercise their public warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the fair market value of Class A ordinary shares, which is defined as the volume-weighted average price of Class A ordinary shares for the 10 trading days following the date on which the notice of redemption is sent to the holders of public warrants.

In no event will the public warrants be exercisable in connection with this redemption feature for more than 0.361 Class A ordinary shares per warrant.

Private Placement Warrants

Private placement warrants outstanding were 9 million as of December 31, 2022 and 2021.

Private placement warrants are not redeemable by the Company as long as they are held by a Sponsor or its permitted transferees.

If the public warrants are redeemed by the Company when the Reference Value exceeds $ 18.00 per share, the Sponsor has agreed to exercise the private placement warrants for cash or on a cashless basis.

If the public warrants are redeemed by the Company when the Reference Value equals or exceeds $ 10.00 per share, the private placement warrants are also concurrently called for redemption on the same terms as of the public warrants.

Earnout Share Liabilities

In connection with the Merger, the Sponsor was issued earnout shares which were recorded as derivative liabilities due to lock-up and price-based vesting conditions as follows:

• 2 million shares vest when it has been at least 2 years since the Merger and the volume weighted average price (“VWAP”) of the Company’s class A common stock equals or exceeds $ 15.00 for 20 trading days of any consecutive 30 trading day period

• 2 million shares vest when it has been at least 3 years since the Merger and the VWAP equals or exceeds $ 17.50 for 20 trading days of any consecutive 30 trading day period;

• 2 million shares vest when it has been at least 4 years since the Merger 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 $ 1 million and $ 52 million at December 31, 2022 and 2021, respectively.

No earnout shares subject to lock-up and price-based vesting have vested as of December 31, 2022.

Earnout shares that remain unvested at November 3, 2031 are subject to forfeiture.

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

Rent expense under operating leases was $ 28 million, $ 25 million, and $ 14 million in twelve months ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022, the Company’s operating leases had a weighted average remaining lease term of 8.7 years and a weighted average discount rate of 6.5 %.

Future lease payments for leases that have not yet commenced were $ 32 million as of December 31, 2022.

Lease commencement will occur once the lessor substantially completes construction to make the underlying asset available for use.

As of December 31, 2022, future maturities of lease liabilities were as follows (in millions):

Year ending December 31,

Total lease payments

imputed interest ( 48 )

Total operating lease liabilities $ 136

Balance Sheet Details

Property and Equipment, Net

The components of property and equipment, net were as follows (in millions):

2022 December 31,

Buildings and Leasehold improvements

Less accumulated depreciation and amortization

( 39 ) ( 20 )

Total property and equipment, net

Other Current Liabilities

The components of other current liabilities were as follows (in millions):

2022 December 31,

Accrued compensation

Other accrued expenses

Total accrued expenses and other current liabilities

Earnings Per Share

The Company computes earnings per share of common stock using the two-class method required for participating securities.

The participating securities did not impact the computation of earnings per share in the periods presented as no dividends were declared and the participating securities are not contractually obligated to share in losses.

Subsequent to the Merger, the Company has two classes of common stock with identical liquidation and dividend rights, Class A and Class B.

The net loss is allocated in a proportionate basis to each class of common stock and results in the same net loss per share.

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

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 (in millions):

December 31, 2022 December 31, 2021 December 31, 2020

Redeemable convertible preferred stock

Stock options

Public warrants 12 12 —

Private placement warrants 9 9 —

Earnout shares liability 5 5 —

The components of income tax benefit were as follows (in millions):

Twelve Months Ended

2022 2021 2020

Deferred income benefit:

$ — $ ( 4 ) $ —

Total deferred income tax benefit

Total tax benefit (expense)

Income tax benefit

$ — $ ( 5 ) $ —

The effective tax rate of the Company’s provision for income taxes differs from the federal statutory rate as follows:

Tax at federal statutory rate

The reconciliations of the effective tax rate from the federal statutory rate were as follows:

Twelve Months Ended

2022 2021 2020

Federal statutory tax rate

21.0 % 21.0 % 21.0 %

State income tax, net of federal tax benefit

3 unchanged sentences

Liability classified financial instruments 1.4 ( 0.7 ) —

Goodwill impairment ( 13.6 ) — —

( 0.1 ) ( 0.1 ) 0.2

Change in valuation allowance

( 10.0 ) ( 21.8 ) ( 23.2 )

Total provision for income taxes

The tax effects of significant items comprising the Company’s deferred taxes are as follows:

Effective tax rate

— % 0.6 % — %

The components of deferred tax assets and liabilities were as follows (in millions):

December 31, 2022 December 31, 2021

Deferred tax assets:

Net operating losses

$ 244,401 $ 70,125

44,610 21,461

Stock-based compensation

Accrued compensation and related expenses

Capitalized R&D 130 —

Lease liability

31,466 24,521

Total deferred tax assets

373,139 118,960

Deferred tax assets, gross

Valuation allowance

( 542 ) ( 331 )

Total deferred tax assets, net of valuation allowance

42,516 31,719

Deferred tax assets, net of valuation allowance

Deferred tax liabilities:

Depreciation and amortization

( 6,529 ) ( 11,040 )

Right of use asset

( 29 ) ( 32 )

( 7,720 ) ( 478 )

Total deferred tax liabilities

Deferred tax liabilities

( 59 ) ( 46 )

Total net deferred tax liabilities

Deferred tax liabilities, net

$ ( 4 ) $ ( 4 )

As of December 31, 2021, the Company had federal and state net operating losses of $ 913,578 and $ 728,261 , respectively.

As of December 31, 2022, federal and state net operating losses were $ 1,166 million and $ 1,116 million, respectively.

If not utilized, the federal and state net operating loss carryforwards will begin to expire starting in 2036 and 2029, respectively.

As of December 31, 2021, the Company had federal research and development credits of $ 41,623 , which will begin to expire in 2037 and state research and development credits of $ 21,358 , which will begin to expire in 2032.

Assessing the realizability of the Company’s deferred tax assets is dependent upon several factors, including the likelihood and amount, if any, of future taxable income in relevant jurisdictions during the periods in which those temporary differences become deductible.

The Company has evaluated the criteria for realization of deferred tax assets and, as a result, has determined that certain deferred tax assets are not realizable on a more likely than not basis.

The valuation allowance increased by $ 243,382 and $ 56,716 as of December 31, 2021 and 2020, respectively.

Internal Revenue Code Section 382 and similar state provisions limit the use of net operating losses and tax credit carryforwards in certain situations where changes occur in the stock ownership of a company.

In the event the Company has a change of ownership, utilization of net operating losses and tax credit carryforwards may be limited.

Federal and similar state provisions limit the use of net operating losses and tax credit carryforwards in certain situations where changes occur in the stock ownership of a company.

Certain acquired net operating losses and tax credits are subject to limitations.

The Company recorded cumulative unrecognized tax benefits pursuant to ASC Subtopic 740-30 in the amount of $ 17,834 and $ 5,256 , respectively, during the years ended December 31, 2021 and 2020.

The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits within the provision for income taxes.

Amounts accrued for interest and penalties were not significant during the years ended December 31, 2021 and 2020.

Changes in balances during 2021 and 2020 and ending balances as of December 31, 2021 and 2020 in gross unrecognized tax benefits were as follows:

Beginning balance

As of December 31, 2022, federal research and development credits were $ 76 million, which will begin to expire in 2037 and state research and development credits were $ 29 million, which will begin to expire in 2032.

Assessing the realizability of deferred tax assets is dependent upon several factors, including the likelihood and amount, if any, of future taxable income in relevant jurisdictions during the periods in which those temporary differences become deductible.

The Company has evaluated the criteria for realization of deferred tax assets and, as a result, has determined that certain deferred tax assets are not realizable.

The components of changes in the valuation allowance were as follows (in millions):

Twelve Months Ended

2022 2021 2020

Valuation allowance at beginning of period

$ 331 $ 87 $ 31

Change in deferred tax asset positions

Valuation allowance at end of period

$ 542 $ 331 $ 87

The components of changes in unrecognized tax benefits were as follows (in millions):

Twelve Months Ended

2022 2021 2020

Unrecognized tax benefits at beginning of period

Increases related to tax positions taken during a prior year

1 unchanged sentence

Decreases related to tax positions taken during a prior year

( 134 ) ( 78 )

Decreases related to tax settlements with taxing authorities

Ending balance

Unrecognized tax benefits at end of period

$ 21 $ 18 $ 5

The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits within the provision for income taxes.

Amounts accrued for interest and penalties were not significant during the twelve months ended December 31, 2022, 2021, and 2020.

The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease within the next 12 months.

4 unchanged sentences

All tax returns will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating losses or credits.

The Company leases office facilities in Palo Alto, California;

Mountain View, California;

San Francisco, California;

Pittsburgh, Pennsylvania;

Bozeman, Montana;

Coppell, Texas;

Wixom, Michigan;

Seattle, Washington;

and Louisville, Colorado under non cancelable operating lease agreements that expire between 2021 through 2035.

One acquired lease in Pittsburgh has renewal options the Company is reasonably certain to exercise which result in a lease term to 2042.

As of December 31, 2021, the Company’s operating leases had a weighted average remaining lease term of 9.32 years and a weighted average discount rate of 6.22 %.

Future minimum payments under non cancellable operating leases (with initial or remaining lease terms in excess of one year) and other contractual commitments as of December 31, 2021 were as follows:

Year ending December 31,

2022 $ 24,155

Rent expense under operating leases was $ 25,424 and $ 14,109 , respectively, in 2021 and 2020.

In March 2021, the Company remeasured the right of use asset for the Mountain View office which included reclassifying $ 16,998 from other current assets related to variable payments to construct landlord owned assets.

These payments were treated as variable payments as the total amount to be paid for these assets was unknown at the lease commencement date.

As the project was completed in March 2021 and the total amounts to be paid by the Company were known, the right of use asset was remeasured and the adjustment was recorded during the period ended March 31, 2021.

Commitments and Contingencies

Purchase Commitments

The Company has entered into a contract for cloud hosting services under which non-cancelable future minimum payments as of December 31, 2022 were as follows (in millions):

Year ending December 31,

Contingencies

From time to time the Company may be party to various claims in the normal course of business.

2 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 for 2021 and 2020.

Future minimum payments for contractual commitments related to purchase obligations as of December 31, 2021 were as follows:

Year ending December 31,

2022 $ 52,599

(14) Employee Benefit Plan

The Company sponsors the Aurora 401(k) plan.

All employees are eligible to participate in the plans after meeting eligibility requirements.

Participants may elect to have a portion of their salary deferred and contributed to the plan up to the limit allowed by applicable income tax regulations.

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

The Company recognized $ 0 and $ 0 in 2021 and 2020, respectively, in matching contributions.

(15) Supplemental Cash Flow Information

Cash paid for income taxes was $ 2 and $ 7 in 2021 and 2020, respectively.

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

Noncash investing and financing activities:

Property and equipment included in accounts payable

$ 4,532 $ 1,454

Vesting of early exercised stock options

Non-cash acquisition

Cash, cash equivalents, and restricted cash at end of year:

Cash and cash equivalents

$ 1,610,135 $ 387,346

Restricted cash

16,112 12,482

Total cash, cash equivalents, and restricted cash

$ 1,626,247 $ 399,828

(16) Earnings Per Share

The Company computes earnings per share of common stock using the two-class method required for participating securities and does not apply the two-class method in periods of net loss.

Basic earnings per share is computed using the two-class method required for participating securities but is not applied in fiscal periods with a net loss.

The computation of basic and diluted earnings per share is the same as the inclusion of all potential common stock would have been anti-dilutive in a period of net loss.

The Company has two classes of common stock subsequent to the Merger:

Class A and Class B.

As both classes have identical liquidation and dividend rights, the net loss is allocated to the classes on a proportionate basis and results in an identical net loss per share for each class under the two class method.

Redeemable convertible preferred stock, unvested Restricted Stock Awards (RSAs), unvested Restricted Stock Units (RSUs) and unvested early exercised stock options are participating securities in periods of income as the securities participate in undistributed earnings.

The securities do not share in losses.

Share amounts and net loss per share have been retrospectively restated to reflect the Exchange Ratio from the Merger.

Class A Class B Class A Class B

$ ( 354,415 ) $ ( 401,038 ) $ ( 9,041 ) $ ( 205,408 )

Net loss per share:

Basic and diluted

$ ( 1.22 ) $ ( 1.22 ) $ ( 0.79 ) $ ( 0.79 )

Weighted average common shares outstanding -

basic and diluted

291,251,127 329,565,292 11,423,175 259,517,022

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:

Class A Class B Class A Class B

Redeemable Convertible Preferred Stock

— — 68,709,583 221,591,059

Stock Options

81,478,914 — 77,417,673 —

Restricted stock

35,140,985 — 2,382,969 —

Private placement warrants 8,900,000 — — —

Public warrants 12,218,420 — — —

Earnout Shares 5,162,314 — — —

142,900,633 — 148,510,225 221,591,059

(17) Related Parties

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.

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

No amounts were due as of December 31, 2021.

In November 2021, the Company paid $ 34,200 relating to financial advisory fees to this former related party for services in the RTPY merger.

The Company assumed a net liability of $ 46,970 from the ATG acquisition for an obligation due to the former owner of ATG who is a related party of the Company subsequent to the acquisition.

The net obligation was a $ 54,776 related party payable offset by a $ 7,806 related party receivable for certain services performed by the former owner of ATG on behalf of ATG, and vice versa, prior to the closing of the acquisition.

The services include administering an employee equity incentive plan, shared personnel, and other centralized services.

No amounts were due as of December 31, 2021.

In January 2021, the former owner of ATG made payment of $ 7,873 in severance to former employees of ATG which was reimbursed by the Company.

Expense of $ 6,321 was recognized in research and development expenses and $ 1,552 was recognized in selling, general, and administrative expenses in the consolidated statement of operations.

No amounts were due as of December 31, 2021.

The Company recognized $ 5,662 in the consolidated statement of operations in selling, general, and administrative expenses for the transition service agreement with the former owner of ATG.

As of December 31, 2021, $ 540 of related party payables was recorded on the consolidated balance sheet.

In December 2021, the Company made withholding tax payments for equity compensation for former employees of ATG and recorded a $ 10,726 receivable as of December 31, 2021 for amounts to be reimbursed by the former owner of ATG.

No material loss contingencies were recorded in the twelve months ended December 31, 2022, 2021, and 2020.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosures.

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 8. Financial Statements and Supplementary Data