What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-15 compared with 2023-02-21 · 146 added, 100 removed, 596 unchanged (29% of the section changed)

2 unchanged sentences

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

1 unchanged sentence

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

1 unchanged sentence

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Aurora Innovation, Inc.:

Opinions on the Financial Statements and Internal Control over Financial Reporting

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

and its subsidiaries (the “Company”) as of December 31, 2023, and the related consolidated statements of operations, of comprehensive loss, of stockholders’ equity and of cash flows for the year then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

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, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the consolidated financial statements 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.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Research and Development Costs

As described in Note 2 to the consolidated financial statements, 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.

The Company’s research and development expense for the year ended December 31, 2023 was $716 million.

The principal consideration for our determination that performing procedures relating to research and development costs is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s research and development costs.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to research and development costs.

These procedures also included, among others, testing the accuracy and completeness of research and development costs, on a sample basis, which included tracing relevant information to the underlying contract, purchase orders, invoices received, and information received from certain third-party service providers, where applicable.

/s/ Pricewaterhouse Coopers

Pittsburgh, Pennsylvania

February 14, 2024

We have served as the Company’s auditor since 2023.

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

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

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.

and subsidiaries (the Company) as of December 31, 2022, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the years in the two-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 the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

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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.

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We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2018.

We served as the Company’s auditor from 2018 to 2023.

Santa Clara, California

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Cash and cash equivalents

$ 262 $ 1,610

Short-term investments 699 839

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Acquisition related intangible assets

Long-term investments

Other assets 37 36

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$ ( 796 ) $ ( 1,723 ) $ ( 755 )

Other comprehensive loss:

Unrealized loss on investments

Other comprehensive loss

Other comprehensive income (loss):

Unrealized gain (loss) on investments

Other comprehensive income (loss)

Comprehensive loss

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Aurora Innovation, Inc.

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity

Consolidated Statements of Stockholders’ Equity

(in millions, except per share data)

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290 $ 763 279 $ — $ 59 $ — $ ( 336 ) $ ( 277 )

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

Comprehensive loss

— — — — — — ( 214 ) ( 214 )

Balance as of December 31, 2020

290 763 279 — 59 — ( 336 ) ( 277 )

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

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Stock-based compensation — — — — 222 — — 222

Comprehensive loss — — — — — — ( 755 ) ( 755 )

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

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Equity issued under incentive compensation plans — — 57 — 6 — — 6

Issuance of common stock in the Private Placement, net of issuance costs — — 222 — 584 — — 584

Issuance of common stock in the Public Offering, net of issuance costs — — 84 — 244 — — 244

Stock-based compensation

20 unchanged sentences

Change in deferred tax asset valuation allowance

Accretion of discount on investments

Other operating activities — ( 3 ) 12

1 unchanged sentence

Other current and non-current assets

47 ( 48 ) ( 26 )

Operating lease liabilities

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Other investing activities — — 4

Net cash (used in) provided by investing activities

Net cash provided by (used in) investing activities

8 ( 852 ) 250

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Net cash provided by financing activities

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

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

241 ( 1,349 ) 1,226

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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

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Actual results could differ from those estimates.

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.

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 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.

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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.

Short-term and Long-term Investments

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

Treasury securities and corporate bonds 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.

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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.

The Company’s short-term investments in 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

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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.

Acquired intangible assets primarily consist of one asset class 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.

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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):

Measurement of Credit Losses on Financial Instruments , that replaces the incurred loss impairment methodology in current GAAP.

The new impairment model requires immediate recognition of estimated credit losses expected to occur for most financial assets and certain other instruments.

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

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No.

2023-07, Segment Reporting, which expands disclosure requirements for reportable segments including enhanced disclosures about significant segment expenses.

The updated standard is effective for the Company’s fiscal 2024 annual period and interim periods beginning in the first quarter of fiscal 2025.

Early adoption is permitted.

The Company is currently evaluating the impact of this guidance and the timing of adoption.

In December 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid to enhance the transparency and decision usefulness of income tax disclosures.

The updated standard is effective for the Company’s fiscal 2025 annual period.

The Company is currently evaluating the impact of this guidance.

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

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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 Investments

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

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Cash and cash equivalents $ 501 $ 262

Restricted cash, long-term (a)

Restricted cash, current (a)

Restricted cash, long-term (b)

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):

(a) Included in other current assets on the consolidated balance sheets

(b) Included in other assets on the consolidated balance sheets

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

Fair value level December 31,

2023 December 31,

Cash equivalents:

Cash and cash equivalents:

Bank deposits Level 1 $ — $ 1

Money market funds

1 unchanged sentence

Treasury securities

Total cash equivalents

$ 261 $ 1,610

Short-term investments:

Level 2 251 57

Commercial Paper

Total cash and cash equivalents

Short-term and long-term investments:

Treasury securities

Level 2 $ 769 $ 839

Total short-term investments $ 839 $ —

Commercial Paper

Corporate Bonds and Notes

Total short-term and long-term investments

Available-for-sale debt securities classified as long-term investments mature after one year and through two years.

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, 2023

Amortized cost Unrealized gains

Treasury securities $ 768 $ 1 $ 769

Commercial Paper

Corporate Bonds and Notes

Total short-term and long-term investments

$ 846 $ 1 $ 847

As of December 31, 2022

Amortized cost Unrealized losses Fair value

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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.

In the twelve months ended December 31, 2023, 2022 and 2021, the Company received payments of $ — , $ 100 million and $ 50 million, respectively, under the collaboration project plan with Toyota.

As of December 31, 2022, the Company had recognized all revenue associated with cash payments received under the collaboration project plan with Toyota.

As a result, no revenue was recognized during the twelve months ended December 31, 2023 .

Stockholders' Equity

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The Company had 367 million and 412 million shares of Class B common stock issued and outstanding at December 31, 2023 and December 31, 2022, respectively.

Private Placement

On July 21, 2023, the Company completed a private placement (the “Private Placement”), in which the Company sold approximately 222 million shares of Class A common stock at a price of $ 2.70 per share, for proceeds to the Company of $ 584 million, net of transaction costs.

In connection with the Private Placement, the Company entered into a registration rights agreement, dated July 18, 2023 (“Private Placement Registration Rights Agreement”), with certain existing institutional and strategic investors, entities affiliated with two of its directors, and new institutional investors.

Pursuant to the Private Placement Registration Rights Agreement, on July 21, 2023, the Company filed a registration statement with the Securities and Exchange Commission for the registration for resale of the securities sold in the Private Placement.

Public Offering

On July 21, 2023, the Company completed a public offering (the “Public Offering”) of approximately 73 million shares of Class A common stock at a price of $ 3.00 per share, for proceeds of $ 212 million, net of transaction costs.

Following the Public Offering, the Company issued an additional 11 million shares of Class A common stock in connection with the exercise of the underwriters’ over-allotment option, for proceeds of $ 32 million, net of transaction costs.

Equity Incentive Plans

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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.

The Plan includes an annual increase in class A common shares available for issuance 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.

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

Twelve Months Ended

Twelve Months Ended December 31,

2023 2022 2021

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

Twelve Months Ended

Twelve Months Ended December 31,

2023 2022 2021

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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.

Stock-based compensation recognized for related party RSUs was $ — , $ 6 million and $ 128 million for the twelve months ended December 31, 2023, 2022 and 2021, respectively.

No unrecognized stock-based compensation remains for the related party RSUs as of December 31, 2023.

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

9 unchanged sentences

Derivative Liabilities

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 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 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.

No earnout shares subject to lock-up and price-based vesting have vested as of December 31, 2023.

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

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

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

Public warrants outstanding were 12 million as of December 31, 2023 and December 31, 2022.

Private placement warrants outstanding were 9 million as of December 31, 2023 and December 31, 2022.

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

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

Earnout shares outstanding were 5 million as of December 31, 2023 and December 31, 2022.

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

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Expected volatility 53.0 % 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):

1 unchanged sentence

2023 2022 2021

Change in fair value of derivative liabilities:

Common stock warrants

1 unchanged sentence

Earnout share liabilities

Total change in fair value of derivative liabilities

( 13 ) 51 ( 8 )

Common Stock Warrants

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.

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.

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.

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 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.

Change in fair value of derivative liabilities

$ ( 20 ) $ 114 $ ( 20 )

The Company leases its office facilities 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 $ 27 million and $ 28 million and $ 25 million in twelve months ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, the Company’s operating leases had a weighted average remaining lease term of 8.2 years and a weighted average discount rate of 7.0 %.

23 unchanged sentences

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 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

2023 December 31,

2022 December 31, 2021

Stock options

20 unchanged sentences

Liability classified financial instruments ( 0.5 ) 1.4 ( 0.7 )

Adjustments of prior years' taxes ( 2.7 ) — —

Goodwill impairment — ( 13.6 ) —

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Depreciation and amortization

( 47 ) ( 27 )

Right of use asset

23 unchanged sentences

Unrecognized tax benefits at beginning of period

$ 21 $ 18 $ 5

Increases related to tax positions taken during a prior year

23 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data