Archer Aviation (ACHR)

Condensed Consolidated Balance Sheets 1 Condensed Consolidated Statements of Operations 2 Condensed Consolidated Statements of Comprehensive Loss 3 Condensed Consolidated Statements of Stockholders Equity 4 Condensed Consolidated Statements of Cash Flows 6 Notes to Condensed Consolidated Financial Statements 7 Item 2. Management s Discussion and Analysis of Financial Condition and Results of Operations 32 Item 3. Quantitative and Qualitative Disclosures About Market Risk 38 Item 4. Controls and Procedures 38 Part II Other Information Item 1. Legal Proceedings 40 Item 1A. Risk Factors 40 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 41 Item 3. Defaults Upon Senior Securities 41 Item 4. Mine Safety Disclosures 42 Item 5. Other Information 42 Item 6. Exhibits 42 Signatures 44 i Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report contains forward-looking statements. All statements, other than statements of present or historical fact, included or incorporated by reference in this Quarterly Report regarding our future financial performance, as well as our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, and objectives of management are forward-looking statements. When used in this Quarterly Report, the words anticipate, believe, continue, could, estimate, expect, future, intends, may, might, plan, possible, potential, predict, project, seek, should, will, would, the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on information available as of the date of this Quarterly Report, and current expectations, assumptions, hopes, beliefs, intentions and strategies regarding future events. Accordingly, forward-looking statements in this Quarterly Report and in any document incorporated herein by reference should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include those described in Part II, Item 1A, Risk Factors in this Quarterly Report and Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 2, 2026 (the Annual Report ). Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report, the Annual Report, and other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business. Moreover, new risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks and uncertainties, the future events and circumstances discussed in this Quarterly Report and the Annual Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. In addition, statements that we believe and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. As used herein, Archer, the Company, Registrant, we, us, our, and similar terms include Archer Aviation Inc. and its subsidiaries, unless the context indicates otherwise. Archer and our other registered and common law trade names and trademarks of ours appearing in this Quarterly Report are our property. This Quarterly Report contains additional trade names and trademarks of other companies. We do not intend our use or display of other companies trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies. ii Table of Contents Part I - Financial Information Item 1. Financial Statements Archer Aviation Inc. Condensed Consolidated Balance Sheets (In millions, except par value; unaudited) June 30, 2026December 31, 2025 Current assets Cash and cash equivalents$852.7 $1,021.5 Restricted cash7.3 7.3 Short-term investments707.9 943.2 Prepaid expenses55.7 47.3 Other current assets23.7 56.8 Total current assets1,647.3 2,076.1 Property and equipment, net326.7 253.6 Intangible assets, net94.5 80.2 Right-of-use assets43.8 40.8 Goodwill 80.5 0.1 Other long-term assets21.5 15.1 Total assets$2,214.3 $2,465.9 Liabilities and Stockholders Equity Current liabilities Accounts payable$32.1 $30.2 Current portion of lease liabilities6.8 5.3 Accrued expenses and other current liabilities120.3 68.1 Current portion of debt2.1 0.8 Total current liabilities161.3 104.4 Debt, net of current portion78.0 79.5 Lease liabilities, net of current portion38.7 36.3 Warrant liabilities3.0 29.9 Other long-term liabilities17.7 13.0 Total liabilities298.7 263.1 Commitments and contingencies (Note 9) Stockholders equity Preferred stock, $0.0001 par value; 10.0 shares authorized; no shares issued and outstanding as of June 30, 2026 and December 31, 2025. Class A common stock, $0.0001 par value; 1,400.0 shares authorized; 770.0 and 744.0 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 0.1 0.1 4,680.5 4,507.9 Accumulated deficit(2,784.7)(2,303.8) Accumulated other comprehensive loss(3.6)(1.4) Total stockholders equity1,892.3 2,202.8 Noncontrolling interest23.3 Total liabilities and stockholders equity $2,214.3 $2,465.9 See accompanying notes to condensed consolidated financial statements. 1 Table of Contents Archer Aviation Inc. Condensed Consolidated Statements of Operations (In millions, except per share data; unaudited) Six Months Ended June 30, 2026202520262025$5.0 $ $6.6 $ 4.3 5.6 186.0 122.4 357.7 226.1 93.9 53.7 177.1 94.0 284.2 176.1 540.4 320.1 (279.2)(176.1)(533.8)(320.1)1.8 (40.0)22.4 2.0 14.2 10.2 30.6 18.9 (263.2)(205.9)(480.8)(299.2) (0.1)(0.1)(0.2)(263.2)(206.0)(480.9)(299.4) $(263.2)$(206.0)$(480.9)$(299.4)$(0.34)$(0.36)$(0.62)$(0.53)781.7 579.2 774.3 559.9 Six Months Ended June 30, 2026202520262025$(263.2)$(206.0)$(480.9)$(299.4)(0.5) (2.3) 0.1 0.1 0.1 0.2 (0.4)0.1 (2.2)0.2 (263.6)(205.9)(483.1)(299.2) $(263.6)$(205.9)$(483.1)$(299.2)Additional Paid-in Capital Accumulated Other Comprehensive Loss Total Stockholders Equity Noncontrolling Interest Class A Total SharesAmount744,046,194 $0.1 4,507.9 $(2,303.8)$(1.4)$2,202.8 $ $2,202.8 Issuance of Class A common stock6,547,560 42.1 42.1 Issuance of RSU and restricted stock expense6,484,721 1.8 1.8 Exercise of stock options348,957 0.1 0.1 Issuance of warrants and warrant expense 1.8 1.8 Exercise of warrants, net142,450 341,984 2.9 2.9 Stock-based compensation 47.4 47.4 Net loss (217.7) (217.7) (217.7) Other comprehensive loss (1.8)(1.8) (1.8) Balance as of March 31, 2026757,911,866 $0.1 4,604.0 $(2,521.5)$(3.2)$2,079.4 $ $2,079.4 Issuance of Class A common stock4,546,337 28.5 28.5 Issuance of RSU and restricted stock expense4,797,429 Exercise of stock options180,733 Issuance of warrants and warrant expense 0.5 0.5 Exercise of warrants, net1,669,783 Common stock issued under employee stock purchase plan899,573 5.2 5.2 23.3 23.3 Stock-based compensation 42.3 42.3 Net loss (263.2) (263.2) (263.2) Other comprehensive loss (0.4)(0.4) (0.4) Balance as of June 30, 2026770,005,721 $0.1 4,680.5 $(2,784.7)$(3.6)$1,892.3 $23.3 $1,915.6 Additional Paid-in Capital Accumulated Other Comprehensive Loss Total Stockholders Equity Noncontrolling Interest Class A Total SharesAmount503,777,464 $0.1 2,438.4 $(1,685.6)$(0.3)$752.6 $752.6 Issuance of Class A common stock1,906,161 16.7 16.7 Issuance of RSU and restricted stock expense4,544,253 1.9 1.9 Exercise of stock options168,510 Issuance of warrants and warrant expense 0.8 0.8 Exercise of warrants3,000 2,982,089 9.6 9.6 Registered Direct Offering35,500,000 289.5 289.5 Stock-based compensation 33.5 33.5 Net loss (93.4) (93.4) (93.4) Other comprehensive income 0.1 0.1 0.1 Balance as of March 31, 2025548,881,477 $0.1 2,790.4 $(1,779.0)$(0.2)$1,011.3 $ $1,011.3 Issuance of Class A common stock2,425,223 23.5 23.5 Issuance of RSU and restricted stock expense3,613,804 0.5 0.5 Exercise of stock options97,967 Issuance of warrants and warrant expense 0.8 0.8 618,173 3.9 3.9 85,000,000 816.8 816.8 Stock-based compensation 30.0 30.0 Net loss (206.0) (206.0) (206.0) Other comprehensive income 0.1 0.1 0.1 Balance as of June 30, 2025640,636,644 $0.1 3,665.9 $(1,985.0)$(0.1)$1,680.9 $ $1,680.9 2025(480.9)$(299.4)8.9 81.9 (1.7)1.8 1.6 0.5 0.9 (1.3)5.4 4.0 (2.2)1.6 (198.0)(28.9) (5.2) (34.1) 10.0 1,151.8 3.8 (44.3)1,121.3 889.2 841.3 860.0 $1,730.5 23.0 $5.6 15.1 $ 2.9 $ $1.7 44.8 $ June 30, 2026December 31, 2025 Current portion of contract liabilities $1.3 $1.3 Contract liabilities, net of current portion 10.0 10.0 Total$11.3 $11.3 Current portion of contract liabilities is recorded in accrued expenses and other current liabilities and contract liabilities, net of current portion is recorded in other long-term liabilities in the Company s condensed consolidated balance sheets. As of June 30, 2026 and December 31, 2025, the Company s contract liabilities primarily included a $10.0 million pre-delivery payment received from United Airlines, Inc. ( United ) under the terms of the Amended United Purchase Agreement (defined below) (Refer to Note 12 - Warrants for additional information). No revenue related to these contract liabilities was recognized during the three and six months ended June 30, 2026 and 2025. Note 3 - Fair Value Measurements The Company applies the provisions of ASC 820, Fair Value Measurement, which defines a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurements. The provisions of ASC 820 relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price, representing the amount that would be 9 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The carrying amounts of the Company s cash, accounts payable, accrued compensation, and accrued liabilities approximate their fair values due to the short-term nature of these instruments. The following table presents information about the Company s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in millions): As of December 31, 2025 DescriptionLevel 1Level 2Level 3Level 2Level 3$712.6 $ $ 883.3 $ $ 499.9 208.0 239.4 44.8 $1,212.5 $208.0 $ 1,587.1 $239.4 $44.8 $2.1 $ $ 19.9 $ $ 0.9 10.0 $2.1 $ $0.9 19.9 $ $10.0 DescriptionAmortized CostUnrealized GainsUnrealized LossesFair Value Cash and cash equivalents: Money market funds$712.6 $ $ $712.6 Short-term investment U.S. Treasuries 502.9 (3.0)499.9 Corporate debt securities 209.3 (1.3)208.0 Total$1,424.8 $ $(4.3)$1,420.5 The following table presents a summary of the Company s cash equivalents and short-term investments as of December 31, 2025 (in millions): As of December 31, 2025 DescriptionAmortized CostUnrealized GainsUnrealized LossesFair Value Cash and cash equivalents: Money market funds$883.3 $ $ $883.3 Short-term investment U.S. Treasuries 704.6 (0.8)703.8 Corporate debt securities 239.9 (0.5)239.4 Total$1,827.8 $ $(1.3)$1,826.5 The unrealized losses related to the Company s short-term investments were primarily due to changes in interest rates and not due to increased credit risk or other valuation concerns. The Company had no other-than-temporary impairments for the three months ended June 30, 2026 and 2025. Public Warrants The measurement of the public warrants as of June 30, 2026 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker ACHR WS . The quoted price of the public warrants was $0.12 and $1.15 per warrant as of June 30, 2026 and December 31, 2025, respectively, with changes in fair value recognized in the condensed consolidated statements of operations. Private Placement Warrants The Company utilizes a Monte Carlo simulation model for the private placement warrants at each reporting period, with changes in fair value recognized in the condensed consolidated statements of operations. The estimated fair value of the private placement warrant liability is determined using Level 3 inputs. Inherent in a Monte Carlo simulation model are assumptions related to expected volatility, expected exercise term, risk-free interest rate, and dividend yield. The key inputs into the Monte Carlo simulation model for the private placement warrants are as follows: InputJune 30, 2026December 31, 2025 Stock price$4.73$7.52 Strike price$11.50$11.50 Term (in years)0.210.71 Risk-free rate3.8 %3.5 % Volatility127.7 %89.1 % Dividend yield0.0 %0.0 % 11 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) The following table presents the change in fair value of the Company s Level 3 private placement warrants liability during the six months ended June 30, 2026 (in millions): 10.0 Change in fair value(9.1) Balance as of June 30, 2026 $0.9 In connection with the change in fair value of the Company s private placement warrants liability, the Company recognized a gain of $1.3 million and $9.1 million during the three and six months ended June 30, 2026, respectively. During the three and six months ended June 30, 2025, the Company recognized a loss of $15.0 million and a gain of $2.0 million, respectively, within other income (expense), net in the condensed consolidated statements of operations. Refer to Note 12 - Warrants for additional information about the private placement warrants. Option to Acquire FBO In connection with the acquisition of Hawthorne Airport as defined below in Note 6 - Business Combinations, on December 8, 2025, the Company recorded an option to acquire a 75% ownership interest in the FBO business operating at the airport for an exercise price of $25.0 million. The option was classified within other current assets in the condensed consolidated balance sheets and was measured at fair value on a recurring basis using a Black-Scholes model with Level 3 inputs, with changes in fair value recognized in other income (expense), net in the condensed consolidated statements of operations. There was no material change in the fair value of the option from December 31, 2025 through the date of exercise. On April 1, 2026, the Company exercised the option and completed the acquisition of the FBO business. Upon exercise, the option s fair value of $44.8 million was included, together with the $25.0 million cash exercise price, in the total purchase consideration for the FBO acquisition. As a result, the Company held no such option as of June 30, 2026. Refer to Note 6 - Business Combinations for additional information. Financial Instruments Not Recorded at Fair Value on a Recurring Basis Certain financial instruments, including debt, are not measured at fair value on a recurring basis in the condensed consolidated balance sheets. The fair value of debt as of June 30, 2026 approximates its carrying value (Level 2). Refer to Note 8 - Debt for additional information. Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis Certain assets and liabilities are subject to measurement at fair value on a non-recurring basis if there are indicators of impairment or if they are deemed to be impaired as a result of an impairment review. No indicators of impairment were identified, and no impairment losses were recorded, during the three and six months ended June 30, 2026 and 2025. Note 4 - Property and Equipment, Net Property and equipment, net, consisted of the following (in millions): As of June 30, 2026December 31, 2025 Building$122.0 $118.4 Equipment 94.8 49.9 Computer hardware and software 13.0 9.9 Leasehold improvements 54.6 50.7 Construction in progress91.0 60.0 Total property and equipment375.4 288.9 Less: Accumulated depreciation(48.7)(35.3) Total property and equipment, net$326.7 $253.6 12 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) The following table presents depreciation expense included in each respective expense category in the condensed consolidated statements of operations (in millions): Six Months Ended June 30, 2026202520262025$0.4 $ $0.8 $ 6.8 4.1 12.2 7.7 0.3 0.1 0.4 0.2 $7.5 $4.2 $13.4 $7.9 December 31, 2025 Gross Additions Accumulated Amortization Net Gross Accumulated AmortizationNet Goodwill$0.1 $80.4 $ $80.5 $0.1 $ $0.1 Intangible assets: Domain name $0.5 $ $(0.2)$0.3 $0.5 $(0.2)$0.3 Patents 36.0 (2.6)33.4 36.0 (0.8)35.2 Developed Technology 2.8 (0.2)2.6 Operating rights 44.8 14.7 (1.3)58.2 44.8 (0.1)44.7 Total purchased intangible assets $81.3 $17.5 $(4.3)$94.5 $81.3 $(1.1)$80.2 Amortization expense related to intangible assets is as follows: Six Months Ended June 30, 2026202520262025$ $ $ $ 0.8 1.8 0.1 0.2 0.9 1.2 $1.8 $ $3.2 $ $4.1 20278.2 20288.2 20298.2 20308.2 Thereafter57.6 Total $94.5 Note 6 - Business Combinations Acquisition of Hawthorne Airport On December 8, 2025, the Company completed the acquisition of certain lease agreements, operating rights, and development rights related to Hawthorne Municipal Airport in Hawthorne, California ( Hawthorne Airport ). The acquisition included (i) the master ground lease agreement between Hawthorne Airport, LLC ( HAL ) and the City of Hawthorne covering the lease of the Hawthorne Airport; (ii) certain sublease agreements held by HAL; (iii) certain subleases held by 395 Park Place, LLC ( 395 Park Place ) with third parties; (iv) an option to purchase 75.0% of the FBO business operating at Hawthorne Airport from Advanced Air, LLC ( Advanced Air ) prior to December 31, 2026 for $25.0 million; and (v) rights to have 395 Park Place develop additional hangar space at the Hawthorne Airport for $20.4 million with payments to be made in installments based on construction progress. HAL, 395 Park Place and Advanced Air, are referred to herein collectively as the Sellers . The acquisition was completed to allow the Company to establish an operational hub to support the Company s planned Los Angeles air taxi operations and aviation technology development. The acquisition has been accounted for as a business combination under the acquisition method in accordance with ASC 805, as the acquired assets and activities included inputs and substantive processes capable of producing outputs. Accordingly, the purchase consideration was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective estimated fair values as of the acquisition date. The total purchase consideration for the acquisition was $127.1 million, which consisted of the following (in millions): Cash $125.9 1.2 Total purchase consideration $127.1 Further, the Company may be obligated to issue up to approximately $21.4 million in earn-out shares of the Company s Class A common stock to certain Seller employees and 395 Park Place upon the achievement of certain performance milestones to be achieved within three years of the acquisition date. Of this amount, approximately $3.75 million was accounted for as contingent consideration and included in the above table as part of total purchase consideration at its estimated fair value of $1.2 million as of the acquisition date. The remaining earn-out amounts are accounted for as post-combination expense, as the related earn-out targets are expected to be achieved through the ongoing efforts of the Sellers and such amounts will be recognized ratably over the various estimated completion dates presuming earn-out targets will be met. The assumed loan bears interest at a rate of 6.3% per annum and has an initial maturity date of April 2030, with an option to extend the maturity for an additional five years to April 2035 at an adjusted interest rate equal to the five-year U.S. Treasury rate plus 2.7%. The loan agreement contains provisions, representations, warranties, covenants, and indemnities that are customary for secured commercial real estate debt. Refer to Note 8 - Debt for additional information. 14 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Current assets $0.1 Option to purchase FBO (included in other current assets)44.8 Property and equipment, net 50.3 Right of Use asset15.6 Intangible assets44.8 Goodwill 0.1 Current liabilities (0.2) Lease liabilities(11.1) Other long-term liabilities (1.2) (16.1) Total $127.1 The acquired goodwill is tax deductible and represents the excess of the purchase consideration over the aggregate fair value of identifiable net assets acquired at the acquisition date. The goodwill is primarily attributable to the assembled workforce. During the measurement period, which may not be later than one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding net offset to goodwill. The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized: Preliminary Fair ValueUseful Life (in millions)(Years) $44.8 30 $44.8 Identifiable intangible assets recognized consist of operating rights, which represent contractual rights to operate and conduct aviation-related activities, including lease of hangar space at the Hawthorne Airport facilities. The operating rights are amortized on a straight-line basis over their estimated useful lives, which generally correspond to the remaining contractual terms of the master ground lease. As part of the acquisition, as described above, the Company acquired an option to purchase 75.0% of the FBO business operating at Hawthorne Airport for a fixed exercise price of $25.0 million, exercisable at any time prior to December 31, 2026. The option represents a contractual right and was recorded at its estimated fair value of $44.8 million as of the acquisition date. The option was subsequently exercised and the acquisition was closed on April 1, 2026. The fair value of the FBO business was estimated using an income-based valuation approach, which considers the expected future cash flows based on projected revenues, operating margins and discount rate. See Note 3 - Fair Value Measurements for fair value determination of the option to purchase FBO business. Unaudited pro forma financial information has not been presented, as the impact to the Company s consolidated financial statements was not material. The Company incurred $2.4 million in acquisition-related costs, which were expensed as incurred and recorded within general and administrative expenses in the condensed consolidated statements of operations for the six months ended June 30, 2026. Acquisition of Hawthorne FBO LLC On April 1, 2026, the Company acquired a 75% controlling interest in Hawthorne FBO LLC (the "Hawthorne FBO"), a fixed base operator providing aviation fueling, ground handling, and related services at Hawthorne Airport in Hawthorne, California. The acquisition was completed to allow the Company to expand operations at Hawthorne Airport. The acquisition 15 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) was accounted for as a business combination under the acquisition method in accordance with ASC 805, Business Combinations. The remaining 25% interest is recognized as a noncontrolling interest ("NCI") in the consolidated financial statements. The acquisition-date fair value of the NCI of $23.3 million was determined using the income approach. The option to purchase the FBO was obtained by the Company as part of the Hawthorne Airport acquisition that closed on December 8, 2025, and was carried as a financial asset on the Company s balance sheets, remeasured to fair value at each reporting date using a Black-Scholes valuation model (Level 3). The fair value of consideration transferred for the acquisition was $69.8 million, which consisted of the following (in millions): Cash $25.0 Fair value of Option to purchase FBO44.8 Total consideration transferred (75%) 69.8 Noncontrolling interest (25%) 23.3 Total value of the Hawthorne FBO$93.1 The following table summarizes the preliminary estimated fair values of the assets acquired at the acquisition date (in millions): Other current assets0.1 Property and equipment, net0.2 Intangible asset14.7 Goodwill78.1 $93.1 The acquired goodwill is tax deductible and represents the excess of the purchase consideration over the aggregate fair value of identifiable net assets acquired at the acquisition date. The goodwill is primarily attributable to the potential growth of Hawthorne Airport, including FBO operations and assembled workforce. During the measurement period, which may not be later than one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding net offset to goodwill. The following table shows the preliminary estimated fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized: Preliminary Fair ValueUseful Life (in millions)(Years) $14.7 5.5 $14.7 Identifiable intangible assets recognized consist of operating rights, which represent contractual rights to operate and to sell aviation fuel at the Hawthorne Airport facilities. The operating rights are amortized on a straight-line basis over their estimated useful lives, which generally correspond to the remaining contractual terms of the agreement with the City of Hawthorne. Unaudited pro forma financial information has not been presented, as the impact to the Company s consolidated financial statements was not material. Other acquisitions On January 21, 2026, the Company completed the acquisition of 100% of the outstanding shares of a privately-held company for total consideration of $6.1 million in a combination of cash and issuance of Class A common stock. The acquisition was accounted for as a business combination. Accordingly, the purchase consideration was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective estimated fair values as of the acquisition date. 16 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Cash and cash equivalents$2.2 Property and equipment, net0.4 Developed technology2.8 Goodwill2.3 Tangible net liabilities acquired(0.2) Deferred tax liabilities(1.4) Total $6.1 The acquired goodwill is not tax deductible and represents the excess of the purchase consideration over the aggregate fair value of identifiable net assets acquired at the acquisition date. The developed technology will be amortized on a straight-line basis over an estimated useful life of 10 years. Note 7 - Supplementary Financial Information Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the condensed consolidated balance sheets that sum to amounts reported on the condensed consolidated statements of cash flows (in millions): As of December 31, 2025 Cash and cash equivalents$852.7 $1,021.5 Restricted cash7.3 7.3 Total cash, cash equivalents, and restricted cash$860.0 $1,028.8 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in millions): As of June 30, 2026December 31, 2025 Accrued engineering services, parts and materials $22.9 $13.1 Accrued employee costs24.3 29.7 Accrued professional services 36.1 14.8 1.3 1.3 Other current liabilities35.7 9.2 Total$120.3 $68.1 17 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) Note 8 - Debt The following table provides information regarding the Company s debt (in millions): As of June 30, 2026December 31, 2025 Synovus Bank loan $65.0 $65.0 Less: unamortized discount and loan issuance costs(0.8)(0.8) Carrying amount64.2 64.2 Banc of California $15.9 $16.1 Less: unamortized discount and loan issuance costs Carrying amount15.9 16.1 Total carrying amount of debt 80.1 80.3 Less: Current portion of debt(2.1)(0.8) Debt, net of current portion $78.0 $79.5 During the three months ended June 30, 2026 and 2025, the Company recognized interest expense of $1.2 million and $1.0 million, respectively, and during the six months ended June 30, 2026 and 2025, the Company recognized interest expense of $2.4 million and $2.1 million, respectively, including an immaterial amount related to the amortization of issuance costs within interest income, net in the condensed consolidated statements of operations. Synovus Bank Loan On October 5, 2023, the Company entered into a credit agreement (the Credit Agreement ) with Synovus Bank, as administrative agent and lender, and the additional lenders from time to time (collectively, the Lenders ). Pursuant to the Credit Agreement, the Company may borrow up to an aggregate principal amount of up to $65.0 million through multiple term loan advances (together, the Synovus Loan ) to fund the construction and development of the Company s manufacturing facility in Covington, Georgia. The Company is required to make 120 monthly interest payments from November 14, 2023 until maturity, and 84 equal monthly principal installments of approximately $0.2 million from November 14, 2026 with remaining principal balance becoming due at maturity. The Credit Agreement matures on the earlier of October 5, 2033 or the date on which the outstanding Synovus Loan has been declared or automatically becomes due and payable pursuant to the terms of the Credit Agreement. The interest rate on the Synovus Loan is a floating rate per annum equal to secured overnight financing rate (as defined in the Credit Agreement) plus the applicable margin of 2.0%, which increases by 5.0% per annum upon the occurrence of an event of default. The Company s obligations under the Credit Agreement are collateralized by funds in a collateral account and the Credit Agreement is guaranteed by certain domestic subsidiaries of the Company. The Company may prepay with a certain premium that links to the passage of time, and in certain circumstances would be required to prepay the Loan under the Credit Agreement without payment of a premium. The Credit Agreement contains customary representations and warranties, customary affirmative and negative covenants, and customary events of default. As of June 30, 2026, the Company was in compliance with all the covenants of the Credit Agreement. The Company has fully drawn down the $65.0 million of the Synovus Loan as of June 30, 2026. The effective interest rate for the draw downs ranged from 5.9% to 6.4% and 6.0% to 6.5% as of June 30, 2026 and December 31, 2025, respectively. The Company incurred issuance costs of $1.0 million related to the loan outstanding as of June 30, 2026. The loan issuance costs will be amortized to interest expense over the contractual term of the Synovus Loan. Banc of California Loan In connection with the acquisition of Hawthorne Airport, the Company assumed the Sellers outstanding loan with a principal balance of $16.1 million with Banc of California (the Banc of California Loan ). The Banc of California Loan bears a fixed interest rate of 6.3% per annum and has an initial maturity date of April 2030, with an option to extend the maturity for 18 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) an additional five years to April 2035 at an adjusted interest rate equal to the five-year U.S. Treasury rate plus 2.7%. The Banc of California Loan is secured by a leasehold deed of trust on the properties and contains representations, warranties, covenants, and indemnities customary for collateral commercial real estate debt. As of June 30, 2026, the Company was in compliance with all the covenants of the Banc of California Loan. The future scheduled principal maturities of the debt as of June 30, 2026 are as follows (in millions): $0.7 20273.1 20283.1 20293.1 203016.8 Thereafter54.1 Total debt payable $80.9 Note 9 - Commitments and Contingencies Operating Leases The Company leases office, lab, hangar, master ground lease and storage facilities under various operating lease agreements with lease periods expiring between 2026 and 2055 and generally containing periodic rent increases and various renewal and termination options. The Company s lease costs were as follows (in millions): Six Months Ended June 30, 2026202520262025$3.5 $1.6 $6.7 $2.9 0.5 0.3 1.5 0.4 $4.0 $1.9 $8.2 $3.3 20262025 Weighted-average remaining lease term (in months)13048 Weighted-average discount rate14.1 %13.8 % The minimum aggregate future obligations under the Company s non-cancelable operating leases as of June 30, 2026 were as follows (in millions): Remaining 2026$9.0 202715.3 202811.4 202910.7 20309.5 20313.0 Thereafter57.8 Total future lease payments116.7 Less: leasehold improvement allowance(7.3) 109.4 Less: imputed interest(63.9) Present value of future lease payments$45.5 19 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) Supplemental cash flow information and non-cash activities related to right-of-use assets and lease liabilities were as follows (in millions): Six Months Ended June 30, 2026202520262025$4.1 $1.7 $5.9 $3.2 $6.7 $4.4 $6.7 $4.6 Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (In millions) 1,623,752 $0.14 4.8$12.0 Exercised(529,690)0.14 3.3 Expired/forfeited Outstanding as of June 30, 2026 1,094,062 0.14 4.35.0 1,094,062 0.14 4.35.0 Weighted Average Grant Fair Value 34,166,124 $7.36 Granted27,057,890 6.44 Performance based adjustment (1) (96,039)10.77 Vested(11,627,479)6.83 Forfeited (1,722,075)8.86 Outstanding as of June 30, 2026 47,778,421 6.92 (1) Represents units adjusted for the vesting of the PSUs (defined below) granted in 2024 and 2025. During the six months ended June 30, 2026, the Company granted 3,061,526 RSUs under the Amended and Restated 2021 Plan, representing the annual equity awards for 2025. The RSUs were fully vested on the date of grant and settled in Class A common stock on a one-for-one basis. The Company also granted 21,900,711 RSUs under the Amended and Restated 2021 Plan. These awards generally vest over a three- or four-year period with a one-year cliff, or as annual bonus and annual refresh awards without a cliff, and remain subject to forfeiture if vesting conditions are not met. Upon vesting, RSUs are settled in Class A common stock on a one-for-one basis. The shares of Class A common stock underlying RSU grants are not issued and outstanding until the applicable vesting date. During the six months ended June 30, 2026, the Company granted 2,095,653 RSUs under the Amended and Restated 2021 Plan to certain executives, which vest over a three-year period with a payout based on the Company s relative performance of total shareholder return ( TSR ) compared with the annualized TSR of certain peer companies for the service period (the PSUs ). The award payout can range from 0.0% to 200.0% of the initial grant and is measured on each anniversary of the grant date. Upon vesting, the PSUs are settled in Class A common stock on a one-for-one basis. If an executive s employment ends due to disability, death, termination without cause or resignation for good reason, the executive (or beneficiary) remains eligible under the award and, if the award is earned, will receive a proration of the PSUs based on active employment during the annual service periods. In all other cases, the award will not vest and all rights to the PSUs will terminate. The Company determined the fair value of the PSUs using a Monte Carlo simulation model on the grant date. The Company will recognize compensation expense for the PSUs on a straight-line basis over the three-year performance period. The following assumptions were used to estimate the fair value, using the Monte Carlo simulation, of the PSUs: May 15, 2026February 9, 2026 Stock price$6.05 $7.37 Term (in years)3.03.0 Risk-free interest rate4.1 %3.5 % Volatility85.1 %86.7 % Dividend yield0.0 %0.0 % 23 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) Immediately prior to closing of the Business Combination, each of the Company s founders was granted 20,009,224 RSUs under the 2019 Plan (the Founder Grants ), which are subject to vest upon the achievement of the earlier to occur of (i) a price-based milestone or (ii) a performance-based milestone, with a different set of such price and performance-based milestones applying to each quarter of each Founder Grant and so long as the achievement occurs within seven years following the closing of the Business Combination. One-quarter of each Founder Grant, totaling 10,004,612 shares of Class B common stock, vested immediately prior to the Closing Date pursuant to the terms and conditions of the Business Combination Agreement. On April 14, 2022, the vested 5,002,306 shares of Class B common stock of the Company s former co-CEO were cancelled. On July 13, 2023, following the expiration of 15 months from the separation of the former co-CEO from the Company on April 13, 2022, the former officer s unvested 15,006,918 shares of Class B common stock for the remaining three tranches were forfeited. The Company then reversed the previously recognized stock-compensation expense of $59.1 million associated with these shares. During the year ended December 31, 2024, the Company s Board of Directors determined that the performance milestone for the second tranche of the outstanding Founder Grant, covering 5,002,306 shares of Class B common stock, was achieved. The Company accounts for the Founder Grants as four separate tranches, with each tranche consisting of two award conditions, a performance condition and market condition. Each tranche vests upon satisfaction of either condition (but not both). The fair value of the performance award was determined using the trading price on the closing date of the Business Combination ( Closing Date ). When achievement of the applicable performance milestone is deemed probable, the Company recognizes compensation expense for the portion earned to date over the requisite service period. For the market award, the fair value and derived service period were each determined using a Monte Carlo simulation model on the Closing Date, with compensation expense recognized on a straight-line basis over the derived service period. If achievement of the applicable performance condition is not considered probable, compensation cost for the value of the award is recognized based on the fair value of the award incorporating the market condition, until the requisite service is rendered. If the performance milestone subsequently becomes probable of being achieved, the full fair value of the award is recognized. As of June 30, 2026, 10,004,612 RSUs remain outstanding representing the remaining two tranches of the Founder Grant. The Company recognized stock-based compensation expense related to the remaining tranches of the outstanding Founder Grant of zero and $1.8 million for the three and six months ended June 30, 2026, respectively, and $0.7 million and $2.6 million for the three and six months ended June 30, 2025, respectively, which were recorded in general and administrative expenses in the condensed consolidated statements of operations. For the three and six months ended June 30, 2026, the Company recorded $40.7 million and $65.2 million of stock-based compensation expense, respectively, related to RSUs (excluding the Founder Grants). For the three and six months ended June 30, 2025, the Company recorded $28.4 million and $44.8 million of stock-based compensation expense, respectively, related to RSUs (excluding the Founder Grants). As of June 30, 2026, the total remaining stock-based compensation expense for unvested RSUs (including the remaining Founder Grant) was $248.3 million, which is expected to be recognized over a weighted-average period of 1.0 year. Employee Stock Purchase Plan In August 2021, the Company adopted the 2021 Employee Stock Purchase Plan (the ESPP ), which became effective immediately upon the closing of the Business Combination. The ESPP permits eligible employees to purchase shares of Class A common stock at a price equal to 85.0% of the lower of the fair market value of Class A common stock on the first day of an offering or on the date of purchase. Additionally, the number of shares of Class A common stock reserved for issuance under the ESPP will automatically increase on January 1st of each year, beginning on January 1, 2022 and continuing through and including January 1, 2031, by the lesser of (i) 1.0% of the total number of shares of Class A common stock outstanding on December 31 of the preceding year; (ii) 9,938,118 shares of Class A common stock; or (iii) a lesser number of shares of Class A common stock determined by the Board of Directors prior to the date of increase (the ESPP Evergreen Provision ). The ESPP Evergreen Provision is calculated using the number of legally outstanding shares of common stock and includes shares, such as unvested shares pursuant to early exercised stock options, that are not considered outstanding for accounting purposes. In accordance therewith, the number of shares of Class A common stock reserved for issuance under the ESPP increased by 7,440,457 on January 1, 2026. As of June 30, 2026, the maximum number of shares authorized for issuance under the ESPP was 23,203,452, of which 18,196,893 shares remained available under the ESPP. 24 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) The Company currently offers six-month offering periods, and at the end of each offering period, which occurs every six months on May 31 and November 30, employees can elect to purchase shares of the Company s Class A common stock with contributions of up to 15.0% of their base pay, accumulated via payroll deductions, subject to certain limitations. The Company uses the Black-Scholes option pricing model to calculate the grant date fair value of each award granted under the ESPP. The following table sets forth the key assumptions and fair value results for each award granted in the Company s six-month offering period: Stock price6.84 Term (in years) Risk-free interest rate% Volatility% Dividend yield% Grant date fair value per share2.50 During the three and six months ended June 30, 2026, the Company recognized stock-based compensation expense of $1.3 million and $2.6 million for the ESPP, respectively. During the three and six months ended June 30, 2025, the Company recognized stock-based compensation expense of $1.1 million and $2.0 million for the ESPP, respectively. As of June 30, 2026, the total remaining stock-based compensation expense was $1.8 million for the ESPP, which is expected to be recognized over the current six-month offering period until November 30, 2026. Vendor Share Issuances From time to time, the Company issues shares of Class A common stock to certain vendors in exchange for services rendered and/or goods purchased (collectively, the Vendor Share Issuances ). The Vendor Share Issuances are being consummated by the Company pursuant to the Company s shelf registration statements filed with the SEC and accompanying prospectuses. For the three and six months ended June 30, 2026, the Company recognized stock-based compensation expense of $32.0 million and $64.9 million for the Vendor Share Issuances, respectively. For the three and six months ended June 30, 2025, the Company recognized stock-based compensation expense of $15.9 million and $22.4 million for the Vendor Share Issuances, respectively. Acquisition-related Earn-out Stock-Based Compensation Expense In connection with the acquisitions, during the three and six months ended June 30, 2026, the Company recognized $3.5 million and $6.0 million of stock-based compensation expense related to earn-out shares payable in the Company s Class A common stock which have been accounted for as post-combination expense. The expense is recognized over the expected achievement period based on the estimated grant-date fair value of the awards, assuming the performance targets will be met. The expense is included within general and administrative expense in the condensed consolidated statements of operations. Additional Stock-based Compensation Information The Company records stock-based compensation expense for stock-based compensation awards based on the fair value on the date of grant. The stock-based compensation expense is recognized ratably over the course of the requisite service period. The Company has elected to account for forfeitures as they occur and will record stock-based compensation expense assuming all stockholders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse stock-based compensation expense previously recognized in the period the award is forfeited. 25 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) The following table presents stock-based compensation expense included in each respective expense category in the condensed consolidated statements of operations (in millions): Six Months Ended June 30, 202620252025$41.2 $22.9 73.3 $34.0 44.4 28.9 47.9 $85.6 $51.8 156.0 $81.9 Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (In millions) Outstanding as of December 31, 2025 19,340,138 $0.01 2.7$145.2 Warrants previously deemed expired1,671,202 Issued142,398 0.01 1.1 Exercised(1,813,600)0.01 10.9 Expired Outstanding as of June 30, 2026 19,340,138 0.01 2.291.3 Vested and exercisable as of June 30, 2026 16,265,880 $0.01 1.4$76.8 United Airlines, Inc. On January 29, 2021, the Company entered into the Purchase Agreement (the United Purchase Agreement ), Collaboration Agreement (the United Collaboration Agreement ), and Warrant to Purchase Shares Agreement (the United Warrant Agreement ) with United. Under the terms of the United Purchase Agreement, United has a conditional purchase order for up to 200 of the Company s aircraft, with an option to purchase an additional 100 aircraft. Those purchases are conditioned upon the Company meeting certain conditions that include, but are not limited to, the certification of the Company s aircraft by the Federal Aviation Administration ( FAA ) and further negotiation and reaching of mutual agreement on certain material terms related to the purchases. The Company issued 14,741,764 warrants to United to purchase shares of the Company s Class A common stock. Each warrant provides United with the right to purchase one share of the Company s Class A common stock at an exercise price of $0.01 per share. The warrants were initially expected to vest in four installments in accordance with the following milestones: the execution of the United Purchase Agreement and the United Collaboration Agreement, the completion of the Business Combination, the certification of the aircraft by the FAA, and the sale of aircraft to United. On August 9, 2022, the Company entered into Amendment No. 1 to the United Purchase Agreement (the Amended United Purchase Agreement ) and Amendment No. 1 to the United Warrant Agreement (the Amended United Warrant Agreement ). In association with the Amended United Purchase Agreement, the Company received a $10.0 million pre-delivery payment from United for 100 of the Company s aircraft (the Pre-Delivery Payment ), which was recognized as a contract liability in other long-term liabilities in the Company s consolidated balance sheets. Pursuant to the Amended United Warrant Agreement, the vesting condition of the fourth milestone of the United Warrant Agreement was modified, and the warrants now vest in four installments in accordance with the following sub-milestones: (i) 737,088 warrants vested upon receipt by the Company of the Pre-Delivery Payment on August 9, 2022; (ii) 2,211,264 warrants vested on February 9, 2023 upon the six-month anniversary of the amendment date; (iii) 3,685.45 warrants shall vest upon the acceptance and delivery of each of the Company s 160 aircraft; and (iv) 22,112.65 warrants shall vest upon the acceptance and delivery of each of the Company s 40 aircraft. 26 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) The Company accounts for the Amended United Purchase Agreement and the United Collaboration Agreement under ASC 606, Revenue from Contracts with Customers. The Company identified the sale of each aircraft ordered by United as a separate performance obligation in the contract. As the performance obligations have not been satisfied, the Company has not recognized any revenue as of June 30, 2026. With respect to the warrant vesting milestones outlined above, the Company accounts for them as consideration payable to a customer under ASC 606 related to the future purchase of aircraft by United. The Company determined that the warrants are classified as equity awards based on the criteria of ASC 480, Distinguishing Liabilities from Equity and ASC 718, Compensation Stock Compensation. Pursuant to ASC 718, the Company measured the grant date fair value of the warrants to be recognized upon the achievement of each of the original four milestones and the vesting of the related warrants, which was determined to be $13.35, based on a valuation of the Company s Class A common stock on January 29, 2021. For the first milestone, issuance of the warrants in conjunction with the execution of the United Purchase Agreement and the United Collaboration Agreement, the Company recorded the grant date fair value of the respective warrant tranche at the vesting date upon satisfaction of the milestone, and the related costs were recorded in other warrant expense due to the absence of historical or probable future revenue. For the second milestone, the completion of the Business Combination transaction, the related costs were also recorded in other warrant expense due to the absence of historical or probable future revenue. A total of 8,845,058 warrants vested from achievement of the first two milestones and were exercised. For the third milestone, the certification of the aircraft by the FAA, the Company will assess whether it is probable that the award will vest at the end of every reporting period. If and when the award is deemed probable of vesting, the Company will begin capitalizing the grant date fair value of the associated warrants as an asset through the vesting date and subsequently amortize the asset as a reduction to revenue as it sells the new aircraft to United. For the original fourth milestone, the sale of aircraft to United, the Company was initially expected to record the cost associated with the vesting of each portion of warrants within this milestone as a reduction of the transaction price as revenue is recognized for each sale of the aircraft. In connection with the Amended United Warrant Agreement, the Company evaluated the accounting implications associated with the amendment to the fourth milestone in accordance with ASC 606 and ASC 718. For the first sub-milestone, the receipt of the Pre-Delivery Payment, the Company accounted for it as a modification under ASC 718 and recorded the modification date fair value of the associated warrants in other warrant expense upon satisfaction of the sub-milestone on August 9, 2022. For the second sub-milestone, the vesting of warrants on February 9, 2023, the Company accounted for it as a modification under ASC 718 and recorded the modification date fair value of the associated warrants in other warrant expense on a straight-line basis over six months following the amendment date. The modification date fair value of each warrant associated with the first and second sub-milestones was determined to be $4.37, which was the closing price of the Company s Class A common stock on the modification date. A total of 2,948,352 warrants vested from achievement of the first two sub-milestones under the fourth milestone and were exercised. For the third and fourth sub-milestones, the sale of 160 aircraft and 40 aircraft, respectively, the Company determined that the amendment does not represent a modification under ASC 718. The Company will record the cost associated with the vesting of each portion of the associated warrants as a reduction of the transaction price based on the original grant date fair value as revenue is recognized for each sale of the aircraft. There was no other warrant expense recognized for the three and six months ended June 30, 2026 and 2025. Stellantis N.V. On January 3, 2023, the Company entered into a manufacturing and collaboration agreement with Stellantis, pursuant to which the Company and Stellantis will collaborate on the development and implementation of the Company s manufacturing operations for the production of its eVTOL aircraft products (the Stellantis Collaboration Agreement ). In connection with the Stellantis Collaboration Agreement, the Company entered into a forward purchase agreement (as amended, the Stellantis Forward Purchase Agreement ) and a warrant agreement (the Stellantis Warrant Agreement ) with Stellantis on January 3, 2023. Under the terms of the Stellantis Forward Purchase Agreement, the Company agreed to issue and sell to Stellantis up to $150.0 million of shares of the Company s Class A common stock pursuant to terms and conditions of the Stellantis Forward Purchase Agreement. The shares pursuant to the Stellantis Forward Purchase Agreement were fully issued in July 2024. Under the terms of the Stellantis Warrant Agreement, Stellantis is entitled to purchase up to 15.0 million shares of the Company s Class A common stock, at an exercise price of $0.01 per share (the Stellantis Warrant ). The Stellantis Warrant will vest and become exercisable in three equal tranches upon 12, 24 and 36 months of the grant date, provided that (i) Stellantis has performed certain undertakings set forth in the Stellantis Collaboration Agreement and/or (ii) the VWAP (as defined in the Stellantis Warrant Agreement) for the Class A common stock exceeding certain specified amounts. Pursuant to 27 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) the terms and conditions of the Stellantis Collaboration Agreement, Stellantis is deemed to have performed the undertakings if the Stellantis Collaboration Agreement has not been terminated by the Company as of the specified vesting date for each tranche. As the Company has not generated any revenue from the Stellantis Collaboration Agreement, all costs incurred with third parties are recorded based on the nature of the costs incurred. The Company accounts for the warrant in accordance with the provisions of ASC 718. The grant date fair value of each warrant was $1.93, equal to the closing price of the Company s Class A common stock on the grant date of January 3, 2023. For each tranche of the warrant, the Company recognized compensation costs as the related services are received from Stellantis on a straight-line basis over the associated service period. During the six months ended June 30, 2026, the Company recorded less than $0.1 million in research and development expense in the condensed consolidated statements of operations in connection with the Stellantis Collaboration Agreement. During the three and six months ended June 30, 2025, the Company recorded $0.8 million and $1.6 million, respectively, of research and development expense in the condensed consolidated statements of operations in connection with the Stellantis Collaboration Agreement. As of June 30, 2026, the Stellantis Warrant is fully vested. FCA US LLC, a wholly-owned subsidiary of Stellantis, transferred to Stellantis a fully vested warrant to purchase 1,671,202 shares of the Company s Class A common stock at an exercise price of $0.01 per share. This warrant automatically net exercised prior to December 31, 2025 pursuant to the terms of the warrant. The issuance of shares was initially subject to potential regulatory clearance. Following confirmation that no regulatory clearance was required, 1,669,783 shares of Class A common stock were issued on April 27, 2026 on a net exercise basis. Liability Classified Warrants During the six months ended June 30, 2026, 52 public warrants were exercised and as of June 30, 2026, there were 17,394,945 public warrants that remained outstanding. Public warrants may only be exercised for a whole number of shares. No fractional shares are issued upon exercise of the public warrants. The public warrants became exercisable on October 30, 2021, 12 months after the closing of the initial public offering of Atlas. The public warrants will expire on September 16, 2026 or earlier upon redemption or liquidation. Once the public warrants become exercisable, the Company may redeem the public warrants: in whole and not in part; at a price of $0.01 per public warrant; upon not less than 30 days prior written notice of redemption to each warrant holder; and if, and only if, the closing price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing after the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Each public warrant entitles the registered holder to purchase one share of Class A common stock at a price of $11.50 per share. The exercise price and number of Class A common stock issuable upon exercise of the public warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger, or consolidation. The public warrants will not be adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the public warrants. As of June 30, 2026, there were 8,000,000 private placement warrants outstanding. The private placement warrants are identical to the public warrants underlying the shares sold in the initial public offering of Atlas, except that the private placement warrants and the shares of Class A common stock issuable upon the exercise of the private placement warrants became transferable, assignable, and salable on October 16, 2021, 30 days after the completion of the Business Combination, subject to certain limited exceptions. Additionally, the private placement warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the private placement warrants are held by someone other than the initial purchasers or their permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants. 28 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) The warrants are remeasured to fair value at each reporting date, with changes in fair value recognized in other income (expense), net in the condensed consolidated statements of operations. During the three and six months ended June 30, 2026, the Company recognized a gain of $4.1 million and $26.9 million, respectively. During the three and six months ended June 30, 2025, the Company recognized a loss of $40.0 million and a gain of $1.7 million, respectively. Note 13 - Income Taxes The Company recognized foreign current income tax provision of zero and $0.1 million during the three months ended June 30, 2026 and 2025. The Company recognized foreign current income tax provision of $0.1 million and $0.2 million during the six months ended June 30, 2026 and 2025. The Company did not record any deferred income tax provision for the three and six months ended June 30, 2026 and 2025. For the three and six months ended June 30, 2026 and 2025, the provision for income taxes differed from the United States federal statutory rate primarily due to foreign taxes currently payable. The Company realized no benefit for the current period losses due to a full valuation allowance against the United States and foreign net deferred tax assets. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Based upon the analysis of federal and state deferred tax balances, future tax projections, and the Company s lack of taxable income in the carryback period, the Company did not believe it is more-likely-than-not that the net deferred tax assets will be realizable. Accordingly, the Company had provided a full valuation allowance against the entire domestic and the majority of the foreign net deferred tax assets as of June 30, 2026 and December 31, 2025. The Company intends to maintain the full valuation allowance against the United States net deferred tax assets until sufficient positive evidence exists to support a reversal of, or decrease in, the valuation allowance. Note 14 - Net loss per share Basic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding, which includes fully vested and exercisable warrants with a nominal exercise price of $0.01 per share in the weighted-average share count as if outstanding. For all periods presented, the calculation of basic net loss per share excludes shares issued upon the early exercise of stock options where the vesting conditions have not been satisfied. Common stock purchased pursuant to an early exercise of stock options is not deemed to be outstanding for accounting purposes until those shares vest. The Company also excludes unvested shares subject to repurchase in the number of shares outstanding in the consolidated balance sheets and statements of stockholders equity. Because the Company reported net losses for all periods presented, diluted loss per share is the same as basic loss per share and all potentially dilutive common stock equivalents are antidilutive and have been excluded from the calculation of net loss per share. Contingently issuable shares, including equity awards with performance conditions, are considered outstanding common shares and included in the computation of basic net loss per share as of the date that all necessary conditions to earn the awards have been satisfied. Prior to the end of the contingency period, the number of contingently issuable shares included in diluted net loss per share is based on the number of shares, if any, that would be issuable under the terms of the arrangement at the end of the reporting period. 29 Table of Contents Archer Aviation Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) The following table presents the number of antidilutive shares excluded from the calculation of diluted net loss per share (in millions): 202620251.1 1.8 47.8 36.3 28.5 33.3 1.3 0.6 78.7 72.0 Six Months Ended June 30, 2026202520262025$5.0 $ $6.6 $ 10.1 4.8 17.9 8.9 0.8 1.6 85.6 51.8 156.0 81.9 1.1 3.3 4.2 136.9 94.6 270.2 182.8 48.3 24.1 91.0 44.9 284.2 176.1 540.4 320.1 (279.2)(176.1)(533.8)(320.1)1.8 (40.0)22.4 2.0 14.2 10.2 30.6 18.9 (263.2)(205.9)(480.8)(299.2) (0.1)(0.1)(0.2)$(263.2)$(206.0)$(480.9)$(299.4)Six Months Ended June 30, 20262025Change $Change %20262025Change $Change % (In millions except percentages) Revenue $5.0 $ $5.0 100.0 %$6.6 $ $6.6 100.0 % Operating expenses: Cost of revenue 4.3 4.3 100.0 %5.6 5.6 100.0 % Research and development (1) 186.0 122.4 63.6 52.0 %357.7 226.1 131.6 58.2 % General and administrative (1) 93.9 53.7 40.2 74.9 %177.1 94.0 83.1 88.4 % 284.2 176.1 108.1 61.4 %540.4 320.1 220.3 68.8 % Loss from operations(279.2)(176.1)(103.1)58.5 %(533.8)(320.1)(213.7)66.8 % Other income (expense), net1.8 (40.0)41.8 (104.5)%22.4 2.0 20.4 1020.0 % Interest income, net14.2 10.2 4.0 39.2 %30.6 18.9 11.7 61.9 % Loss before income taxes(263.2)(205.9)(57.3)27.8 %(480.8)(299.2)(181.6)60.7 % Income tax expense (0.1)0.1 (100.0)%(0.1)(0.2)0.1 (50.0)% Net loss$(263.2)$(206.0)$(57.2)27.8 %$(480.9)$(299.4)$(181.5)60.6 % (1) Includes stock-based compensation expense as follows: Three Months Ended June 30,Six Months Ended June 30, 2026202520262025 (In millions) Research and development$41.2 $22.9 $73.3 $34.0 General and administrative44.4 28.9 82.7 47.9 Total stock-based compensation expense$85.6 $51.8 $156.0 $81.9 34 Table of Contents Comparison of the Three and Six Months Ended June 30, 2026 and 2025 Revenue Revenue increased by $5.0 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025 as we generated $3.0 million revenue from FBO operations, $1.0 million revenue from the lease of space at Hawthorne Airport and $1.0 million revenue from other sources. Revenue increased by $6.6 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025 as we generated $3.0 million revenue from FBO operations, $2.0 million revenue from the lease of space at Hawthorne Airport and $1.6 million from other sources. Cost of Revenue Cost of revenue increased by $4.3 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. This increase primarily consisted of fuel and supplies costs associated with FBO operations, amortization of operating rights and master ground lease expense, depreciation, utilities, property taxes, and insurance associated with the leased spaces. Cost of revenue increased by $5.6 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This increase primarily consisted of fuel and supplies costs associated with FBO operations, amortization of operating rights and master ground lease expense, depreciation, utilities, property taxes, and insurance associated with the leased spaces. Research and Development Research and development expenses increased by $63.6 million, or 52.0%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily due to increased investment in people and materials to advance technology development. The increase consisted of $27.8 million in personnel-related expenses driven by workforce expansion, $18.3 million in stock-based compensation expense, $12.7 million in engineering services and tools and materials to support our increased research and development activities, and $4.7 million in facilities, travel, and other operating costs. Research and development expenses increased by $131.6 million, or 58.2%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to increased investment in people and materials to advance technology development. The increase consisted of $50.5 million in personnel-related expenses driven by workforce expansion, $39.3 million in stock-based compensation expense, $29.9 million in engineering services and tools and materials to support our increased research and development activities, and $11.8 million in facilities, travel, and other operating costs. General and Administrative General and administrative expenses increased by $40.2 million, or 74.9%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily due to an increase of $15.5 million in stock-based compensation expense, an increase of $9.3 million in professional services and IT infrastructure expenses, an increase of $6.0 million for litigation settlement-related expense, an increase of $5.3 million in personnel-related expenses, driven by an increase in our workforce, and an increase of $4.1 million in facilities, travel, and other operating costs. General and administrative expenses increased by $83.1 million, or 88.4%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily due to an increase of $34.8 million in stock-based compensation expense, an increase of $11.7 million in personnel-related expenses, driven by an increase in our workforce, an increase of $22.1 million in professional services and IT infrastructure expenses, an increase of $8.4 million in facilities, travel, and other operating costs and an increase of $6.0 million for litigation settlement-related expense. Other Income (Expense), Net Other income (expense), net increased by $41.8 million, or 104.5%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily due to non-cash changes in fair value of our warrant 35 Table of Contents liabilities. Refer to Note 12 - Warrants in the accompanying notes to our condensed consolidated financial statements for further details. Other income (expense), net increased by $20.4 million, or 1020.0%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily due to non-cash changes in fair value of our warrant liabilities. Interest Income, Net Interest income, net increased by $4.0 million, or 39.2%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily due to higher interest income from higher average cash, cash equivalents and short-term investments. Interest income, net increased by $11.7 million, or 61.9%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily due to higher interest income from higher average cash, cash equivalents and short-term investments. Liquidity and Capital Resources As of June 30, 2026, our principal sources of liquidity were cash, cash equivalents, and short-term investments of $1,560.6 million. We have incurred net losses since inception and have not generated any significant revenues to date. We expect to incur additional losses and higher operating expenses for the foreseeable future. We believe that our existing cash, cash equivalents, and short-term investments will be sufficient to fund our operations for at least the next 12 months, including meeting our working capital and capital expenditure requirements. Debt On October 5, 2023, we entered into a $65.0 million credit agreement with Synovus Bank to fund the construction of our Covington, Georgia facility (the Synovus Loan ). The loan bears interest at secured overnight financing rate ( SOFR ), plus 2.0% subject to a SOFR floor of 0.0% and requires interest-only payments for 36 months or through October 2026, followed by monthly principal and interest payments until maturity on October 5, 2033. The obligations are collateralized by specified cash and financial assets and are guaranteed by certain of our domestic subsidiaries. As of June 30, 2026, the facility was fully drawn at $65.0 million. In connection with the Hawthorne Airport acquisition, we assumed a $16.1 million loan with Banc of California. The loan bears a fixed interest rate of 6.3% and matures in April 2030, with an option to extend to April 2035 at a rate of the five-year U.S. Treasury plus 2.7%. The loan is collateralized by a leasehold deed of trust on the properties. Registered Direct Offerings On February 12, 2025, we closed a registered direct offering in which pursuant to the securities purchase agreement dated February 11, 2025, by and between us and certain institutional investors, we issued and sold 35,500,000 shares of our Class A common stock for gross proceeds of $301.8 million. On June 16, 2025, we closed a registered direct offering in which pursuant to the securities purchase agreement dated June 12, 2025, by and between us and certain institutional investors, we issued and sold 85,000,000 shares of our Class A common stock for gross proceeds of $850.0 million. On November 10, 2025, we closed a registered direct offering in which pursuant to the securities purchase agreement dated November 6, 2025, by and between us and certain institutional investors, we issued and sold 81,250,000 shares of our Class A common stock for gross proceeds of $650.0 million. Vendor Share Issuances During the six months ended June 30, 2026 and 2025, we issued 11,093,897 and 4,331,384 shares of Class A common stock, respectively, to certain vendors to satisfy $70.6 million and $40.2 million of current and future obligations. In the long term, our ability to support our working capital and capital expenditure requirements will depend on many factors, including: the level of research and development expenses we incur as we continue to develop our aircraft, technologies and services to be provided in our planned business lines; capital expenditures needed to bring up our aircraft manufacturing capabilities, including for both the build out of our manufacturing facilities, component purchases necessary to build our aircraft and support the development of our airline operations, vertiport infrastructure, UAM networks, and development of Hawthorne Airport; general and administrative expenses as we scale our operations; and 36 Table of Contents sales, marketing and distribution expenses as we build, brand and market our business lines, products and services. Until such time as we can generate significant revenue from our business operations, we expect to finance our cash requirements primarily through existing cash and cash equivalents, pre-delivery payments, equity issuances, and debt financings. The following includes our short-term and long-term material cash requirements from known contractual obligations as of June 30, 2026: Leases We lease office, lab, hangar, manufacturing and storage facilities in the normal course of business. Under our operating leases as noted in Note 9 - Commitments and Contingencies in the accompanying notes to our condensed consolidated financial statements, we have current obligations of $17.1 million and long-term obligations of $99.6 million. Cash Flows The following table summarizes our cash flows for the periods indicated: Six Months Ended June 30, 20262025 (In millions) Net cash provided by (used in): Operating activities $(305.5)$(198.0) Investing activities 131.6 (34.1) Financing activities 5.1 1,121.3 Cash Flows From Operating Activities We continue to experience negative cash flows from operations as we are still working to design, develop, certify, and bring up manufacturing of our aircraft and thus have not generated any significant revenues from either of our planned lines of business. Our cash flows from operating activities primarily reflect our continued investments to support the growth of our research and development activities and related general and administrative functions. Our operating cash flows are also impacted by the working capital requirements to support growth and fluctuations in personnel-related expenditures, accounts payable, accrued interest and other current liabilities, and other current assets. Net cash used in operating activities during the six months ended June 30, 2026 was $305.5 million, resulting from a net loss of $480.9 million, reflecting our continued investment in our research and development activities. The net loss adjustment for non-cash items consists primarily of $156.0 million in stock-based compensation expense, a gain of $26.9 million due to a change in fair value of our warrant liabilities, and $17.9 million in depreciation and amortization. The net cash from changes in our net operating assets and liabilities was $19.4 million. Net cash used in operating activities during the six months ended June 30, 2025 was $198.0 million, resulting from a net loss of $299.4 million, adjusted for non-cash items consisting primarily of $81.9 million in stock-based compensation, and $8.9 million in depreciation and amortization. The net cash provided by changes in our net operating assets and liabilities was $8.9 million. Cash Flows From Investing Activities Net cash provided by investing activities during the six months ended June 30, 2026 was $131.6 million, driven by proceeds from maturities of short-term investments of $230.0 million, partially offset by purchases of property and equipment of $69.7 million and business acquisition of $28.7 million. Net cash used in investing activities during the six months ended June 30, 2025 was $34.1 million, driven by purchases of property and equipment of $28.9 million and acquisition of intangible assets of $5.2 million within the period. Cash Flows From Financing Activities Net cash provided by financing activities during the six months ended June 30, 2026 was $5.1 million, driven by $5.3 million of net proceeds from employee stock option exercises and purchases under our employee stock purchase plan, partially offset by $0.2 million of principal repayments on debt. Net cash provided by financing activities during the six months ended June 30, 2025 was $1,121.3 million, driven by gross proceeds from the registered direct offering of $1,151.8 million, gross proceeds from the First 2024 PIPE Financing of $10.0 million, partially offset by payments of offering costs in connection with financing activities for $44.3 million. 37 Table of Contents Critical Accounting Policies and Estimates Our condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected. For a discussion of our critical accounting policies and estimates, see Critical Accounting Policies and Estimates included under Part II, Item 7, Management s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report. There have been no material changes in our policies from those previously discussed in our Annual Report. Recent Accounting Pronouncements Refer to Note 1 - Description of Business and Basis of Presentation in the accompanying notes to our condensed consolidated financial statements for a discussion about accounting pronouncements recently adopted and recently issued and not yet adopted. Item 3. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk We are exposed to market risk for changes in interest rates applicable to our borrowings and investments in money market funds. The Synovus Loan accrues interest from and including the date the applicable advance is made but excluding the repayment date at a rate of the SOFR, plus 2.0% subject to a SOFR floor of 0.0%. As of June 30, 2026, we held cash, cash equivalents, and short-term investments totaling $1,560.6 million, primarily in money market funds, U.S. treasuries and corporate bonds. Our investment objectives are to preserve principal and maintain liquidity; we do not invest for trading or speculative purposes. A hypothetical 100 basis point change in interest rates applicable to the Synovus bank loan or with respect to our investment portfolio would not have had a material impact on the fair value of our portfolio for the periods presented and our future interest income and expense. Credit Risk Financial instruments, which subject us to concentrations of credit risk, consist primarily of cash, cash equivalents and short-term investments. Our cash, cash equivalents and short-term investments are held at several long-standing financial institutions located in the United States. At times, cash account balances with any one financial institution may exceed Federal Deposit Insurance Corporation insurance limits ($250 thousand per depositor per institution). We have not experienced any losses due to these excess deposits and believe this risk is not significant. We have established guidelines regarding diversification of our investments and their maturities that are designed to preserve principal and achieve liquidity requirements. We review these guidelines and modify them as necessary based on updated liquidity needs and changes in our operations and financial position. Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act )) as required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2026, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Limitations on Effectiveness of Controls and Procedures In designing and evaluating our disclosure controls and procedures, management, including the Chief Executive Officer and Chief Financial Officer, recognizes that our disclosure controls and procedures or our internal control over financial 38 Table of Contents reporting cannot prevent or detect all possible instances of errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 39 Table of Contents Part II - Other Information Item 1. Legal Proceedings For a description of our material pending legal proceedings, refer to Note 9 - Commitments and Contingencies of the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report, which is incorporated herein by reference. From time to time, we may bring or be subject to other legal proceedings and claims in the ordinary course of business. While management currently believes that resolving claims against us, individually or in aggregate, will not have a material adverse impact on our financial position, results of operations or statement of cash flows, these matters are subject to inherent uncertainties and management s view of these matters may change in the future. If an unfavorable final outcome were to occur, it may have a material adverse impact on our financial position, results of operations or cash flows for the period in which the effect can be reasonably estimated. Item 1A. Risk Factors Investing in our securities involves risks. Risk factors describing the major risks to our business can be found under Part I, Item 1A, Risk Factors in our Annual Report. You should consider carefully the risks and uncertainties described therein, together with all of the other information in this Quarterly Report, including Part I, Item 2, Management s Discussion and Analysis of Financial Condition and Results of Operations and our condensed consolidated financial statements and related notes, before deciding whether to purchase any of our securities. Our business, results of operations, financial condition, and prospects could also be harmed by risks and uncertainties that are not presently known to us or that we currently believe are not material. If any of these risks actually occur, our business, results of operations, financial condition, and prospects could be materially and adversely affected. Unless otherwise indicated, references in these risk factors to our business being harmed will include harm to our business, reputation, brand, financial condition, results of operations, and prospects. In any such event, the market price of our securities could decline, and you could lose all or part of your investment. Risks Related to the Proposed Acquisition of the Target Companies The Acquisition may not be completed on the anticipated timeline, or at all, and the Purchase Agreement may be terminated in accordance with its terms. Completion of the Acquisition is subject to the satisfaction or waiver of certain agreed-upon closing conditions, a number of which are not within our control, including receipt of required regulatory approvals and the satisfaction of other conditions specified in the Purchase Agreement. There can be no assurance that all required conditions will be satisfied (or waived) on a timely basis or at all, or that the Acquisition will be completed on the currently anticipated timeline. Delays in obtaining regulatory approvals, including foreign regulatory and export approvals, litigation relating to the transaction, the imposition of conditions, limitations, divestiture requirements or other remedies by governmental authorities, or the failure to satisfy other closing conditions could delay or prevent completion of the Acquisition. In addition, the Purchase Agreement may be terminated in accordance with its terms. The Purchase Agreement also places certain restrictions around equity capital financings prior to the completion of the Acquisition, including by limiting our ability to issue Class A Common Stock below a specified price prior to a specified date, subject to customary exceptions, and by conditioning whether shares issued in an equity financing will be excluded from the calculation of Consideration Shares. These restrictions could limit our financing flexibility prior to the completion of the Acquisition. If the Acquisition is delayed or not completed, we may not realize the anticipated strategic, operational and financial benefits of the transaction, and our business, financial condition, results of operations and stock price could be adversely affected. Consummation of the Acquisition will cause immediate dilution to our existing stockholders. We will also face further dilution if we exercise our right to require Boeing to participate in a future equity offering. On the Acquisition Closing Date, we will issue Boeing a number of shares of Class A Common Stock equal to 19.75% of our shares outstanding immediately prior to Closing, subject to a downward adjustment tied to the Target Companies' estimated cash, indebtedness, and unpaid transaction expenses on the Acquisition Closing Date. If such estimated cash, net of indebtedness and unpaid transaction expenses, is below an agreed target amount, the number of shares issued will be reduced by a number of shares equal in value to such shortfall, based on the volume-weighted average price ("VWAP") of our Class A Common Stock for the five trading days ending on the trading day immediately prior to the Acquisition Closing Date. If such amount instead exceeds the target cash amount, the excess will be provided to Boeing. We will also issue two warrants, each covering $100.0 million of our Class A Common Stock. The number of shares covered by the warrants is determined based on the 5-day VWAP on the trading day immediately prior to the Acquisition Closing Date, with exercise prices of $13.00 and $17.88 per share, respectively. The issuance of the warrants may depress our stock price in anticipation of exercise and will 40 Table of Contents cause further dilution if and when exercised. If we do not obtain stockholder approval of the issuance of the shares underlying the warrants before the warrants are exercisable, we may be required to settle the warrants, in cash rather than shares of our Class A Common Stock, based on the value of our Class A Common Stock at the time of settlement, which could require a significant cash outlay and adversely affect our liquidity and financial condition. In addition, the Company and Boeing have entered into a Forward Equity Purchase Agreement, pursuant to which the Company may require Boeing to participate in an equity offering for up to $55.0 million, at the lowest price per share as other purchasers in such offering. Any issuances under the Forward Equity Purchase Agreement would result in further dilution to our stockholders. Upon consummation of the Acquisition, Boeing will continue to have influence over the Company causing potential conflicts of interest. Following the Acquisition Closing Date, Boeing is expected to hold approximately 16.5% of our outstanding Class A Common Stock (without giving effect to the exercise of any warrants held by Boeing), and will have the right to designate one individual for nomination to our board of directors for so long as it holds at least the number of shares equal to 10% of our outstanding shares immediately prior to the Acquisition Closing Date. Boeing s interests, including in matters that come before our board, may differ from those of our other stockholders, which could result in stockholder litigation, heightened regulatory or proxy advisor scrutiny, or the need for additional governance safeguards. We have and will incur significant costs in connection with the Acquisition and integration of the Target Companies, which may be in excess of those anticipated by us. We have incurred and expect to continue to incur costs associated with negotiating and completing the Acquisition and integrating the operations of the Target Companies. These costs have been, and will continue to be, substantial. The majority of costs will consist of transaction costs related to the Acquisition and include, among others, fees paid to financial, legal and accounting advisors, filing fees, employee retention costs and other employment-related costs. Many of these costs will be borne by us even if the Acquisition is not completed. If the Acquisition is completed, we will also incur transaction costs, some of which may be unanticipated, related to integrating the Target Companies, including facilities, systems and service contract consolidation costs and employment related costs. Additionally, securities or derivative litigation is common following the announcement of transactions like this one and, even if without merit, could result in substantial defense costs or other unanticipated liabilities. The costs described above, as well as other unanticipated costs and expenses, could adversely affect our results of operations and financial condition. We may not successfully integrate the Target Companies or realize the anticipated benefits of the Acquisition on the anticipated timeline or at all. Even if the Acquisition is completed, we may not successfully integrate the Target Companies or realize the expected benefits of the Acquisition on the anticipated timeline or at all. For example, the Target Companies technologies and businesses and our existing business operate under different regulatory and customer regimes, and integrating them successfully, including retaining key and security-cleared personnel, may take longer or cost more than expected, or may not succeed at all. In particular, our management team has limited experience operating a business of the type conducted by Insitu, particularly its defense contracting and unmanned systems operations, and may encounter unanticipated operational, regulatory, or customer-relationship challenges in managing that business following Closing. Additionally, we will be newly subject to U.S. and foreign government-contracting and export-control regimes applicable to the combined business, which will require additional compliance investment. The integration may be complex and time-consuming. For these and other reasons, it is possible that the integration process could result in the diversion of management s attention, the disruption of our ongoing business or inconsistencies in operations, controls, policies and procedures, any of which could adversely affect our business, financial condition and results of operations. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds On May 14, 2026, the Company issued 3,266,870 shares of Class A common stock pursuant to certain stock purchase agreements entered into by and between the Company and certain vendors in satisfaction of payment to such vendors for services rendered. These shares were issued in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the Securities Act ). The Company did not receive any cash proceeds from this issuance. Except as previously reported by the Company on its current reports on Form 8-K, the Company did not sell any securities during the three months ended June 30, 2026 that were not registered under the Securities Act. Item 3. Defaults Upon Senior Securities Not applicable. 41 Table of Contents Item 4. Mine Safety Disclosures Not applicable. Item 5. Other Information Rule 10b5-1 Trading Plans. During the three months ended June 30, 2026, none of our directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement , in each case as defined in Item 408 of Regulation S-K, except as described below. On May 22, 2026, Eric Lentell, Chief Strategy & Legal Officer of the Company, adopted a trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c), which expires on August 18, 2027 and provides for the sale of up to 90,000 shares of Class A common stock pursuant to the terms of the plan. On May 21, 2026, Benjamin Lyon, President of Aircraft OEM of the Company, adopted a trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c), which expires on June 25, 2027 and provides for the sale of up to 328,100 shares of Class A common stock pursuant to the terms of the plan. Update On Relationship with Stellantis The Company and Stellantis N.V. and its subsidiaries (together, Stellantis ) have agreed to supersede the collaboration framework previously contemplated under the November 2024 Memorandum of Understanding (the MOU ), as disclosed on a Current Report on Form 8-K filed on November 4, 2024. On August 9, 2026, the Company and Stellantis entered into several definitive agreements setting forth the terms under which Stellantis will continue to provide certain manufacturing support resources to the Company for a specified period of time. In consideration of Stellantis providing those services since February 2025, the parties agreed to, among other things: (i) the termination of each party s obligations under the subscription agreement they entered into in December 2024; (ii) the issuance by the Company of a warrant to Stellantis for 1,539,154 shares of the Company s Class A common stock at an exercise price of $0.01 per share (the Warrant ), which are fully vested and will expire on the fifth anniversary of the warrant issuance date; and (iii) the extension of the lock-up restriction that applies to the shares of the Company s common stock held by Stellantis and its affiliates, through the earlier of: (x) the third trading day following the filing of the Company s Annual Report on Form 10-K for the fiscal year ending December 31, 2026, (y) March 31, 2027, and (z) the first date on which Stellantis and all of its affiliates are no longer required to file a Schedule 13D or Schedule 13G (or any amendment thereto) with the SEC. The foregoing description of the Warrant does not purport to be complete and is qualified in its entirety by the full text of the form of Warrant, a copy of which is filed herewith as Exhibit 4.1. Scheduled Public Warrants Expiration The Company's outstanding public warrants (NYSE: ACHR WS), each exercisable for one share of the Company's Class A common stock at an exercise price of $11.50 per share, are scheduled to expire at 5:00 p.m., New York City time, on September 16, 2026, in accordance with the terms of the warrant agreement, dated October 27, 2020, between the Company (as successor to Atlas Crest Investment Corp.) and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 to Atlas Crest Investment Corp. s Current Report on Form 8-K filed with the SEC on November 2, 2020). As of June 30, 2026, there were approximately 25.4 million shares of Class A common stock issuable upon exercise of the Company's outstanding public and private warrants, with an exercise price of $11.50 per share. Any public warrants not exercised prior to their expiration will thereafter be void and of no further force or effect.