Archer Aviation Inc.

Good afternoon and thank you for attending today's Archer Aviation second quarter 2022 conference call. My name is Donyell and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to our host, Andy Minson, Chief Legal Officer. Please proceed.

Thank you, operator. Good afternoon, everyone, and thank you for joining us today to review Archer's second quarter 2022 financial results. My name is Andy Misson, the Chief Legal Officer of Archer Aviation, Inc. With us on the call today are Adam Goldstein, our CEO, Mark Messler, our CFO, and Tom Muniz, our COO. We posted a shareholder letter detailing our Q2 2022 financial results and business overview to our IR websites. This call is being recorded and an archive will be available on our IR website. Before we begin, I would like to remind everyone that during today's call, we will be making forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual events or actual future results to differ materially from those expressed or implied in the forward-looking statements. These risks and uncertainties are described in the risk factors section of our annual report on Form 10-K, Our 10Q for the quarterly period ended March 31, 2022, and other filings with the Securities and Exchange Commission available on the SEC's website and on our investor relations website. Except as required by law, Archer disclaims any obligation to update or make revisions to such forward-looking statements as a result of new information or future events. Also, please note on this call, certain financial measures are presented on a non-GAAP basis. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in our shareholder letter posted on our investor relations website. We will begin with commentary and then we'll open up the call to questions. And with that, I'd like to turn the call over to Adam Goldstein. Adam?

Thanks, Andy. We are excited to share with you all today the continued progress that we have made. We are now at an inflection point in the company where we are advancing our commercialization efforts. This includes the development and certification of our production aircraft, building out the supply chain and manufacturing infrastructure needed to produce the aircraft, and kicking off efforts to prepare for our initial launch markets and routes for commercial operations. The proof points and the confidence of our development can also be seen by the actions of our partners. As we announced earlier today, we have received a $10 million pre-delivery payment from United Airlines. on 100 aircraft as part of their purchase agreement for up to 200 aircraft. We believe this is the first such pre-delivery payment of its kind in the eVTOL space, and it reflects the maturity of our aircraft development program and the confidence United Airlines has in our commercialization efforts. The technical progress of the Maker aircraft has been outstanding. It is an important aircraft for us because it has validated many of the key capabilities of our 12-6 configuration, software, flight control, and other key design decisions. The advancements we have made with Maker have proven we have chosen the right aircraft configuration that can balance performance against complexity. Archer's goal has always been to develop an aircraft that can perform rapid back-to-back 10- to 50-mile flights while maintaining the lowest level of complexity possible to ensure the vehicle can be certified, mass manufactured, and operated in a cost-efficient manner. Its performance since its first hover flight in the summer of last year has demonstrated the engineering excellence of our team. I believe the progress we have made with Maker has been nothing short of incredible and industry-leading in terms of time to execution. It's important to remember that the purpose of Maker is to be a testbed to support the development of our pilot plus four passenger production aircraft that we are working to certify with the FAA. The advancements we have made in the maker program have enabled substantial progress in the development of our production aircraft, and we are now at the point where we will shift the focus of our discussions towards the production aircraft. Given this shift today, I'm excited to reveal the name of our production aircraft, Midnight. You can see a teaser silhouette rendering of Midnight on the cover of our shareholder letter, and we plan to do a more robust unveil of it in the near future. The design of Midnight was optimized around commercial operations, with key performance requirements like payload, range, and speed intended to yield the best possible operating economics for the business. Today, the vast majority of our 400-plus employees are working day-to-day on the development and certification of Midnight, as well as supporting go-to-market activities. This past week, we completed Midnight's Preliminary Design Review, or PDR, The PDR is where we review and freeze the key design elements of the aircraft. PDR is not just another development lifecycle milestone. It's about ensuring that we are on track from program development timing standpoint, maintaining vehicle performance characteristics around speed, range, and payload, and not introducing any design complexity that would cause unnecessary risk to the FAA certification process or to scale manufacturability. I'm extremely happy with where we are at this point in the program. The talent on the Archer team is truly exceptional. As the aircraft development has matured, we are also building our go-to-market team. We have recently onboarded two leaders that are key to our commercialization efforts. Tom Anderson as our Chief Operating Officer for Urban Air Mobility and Brian Bernhardt as Chief Growth and Infrastructure Officer. As Archer advances commercialization of our aircraft and launching our UAM network in major cities, Tom's deep experience in airline management, operations, and fleet maintenance will help us introduce and scale the UAM business utilizing Midnight. Tom has spent his career developing and scaling commercial airline operations, including taking JetBlue from concept to operation. Core to the build-out effort is ensuring the necessary infrastructure is in place. Brian will be here, responsible for building and scaling Archer's operational footprint across our target markets. He spent nine years at WeWork expanding their infrastructure footprint as global head of development. He was responsible for launching a majority of their key markets and has built hundreds of physical locations spanning across cities around the world. Brian brings to Archer expertise in not only scaling physical growth, but how to do so in accordance with all local and jurisdictional guidelines. We are looking forward to sharing more details on our go-to-market strategy with you on future calls. I now want to take a few minutes to update you on our progress against the key milestones we've highlighted in our shareholder letters since February. Our 2022 milestones are focused on both maker and midnight. There's one maker milestone and two midnight milestones. Our first milestone is a maker milestone, and that is to successfully complete the first full transition flight. The second milestone is a midnight milestone, and that is agreeing with the FAA on our means of compliance with the certification basis established in the G1 issue paper we finalized last fall. And the third milestone is also a midnight milestone, and that is to select and break ground on our initial manufacturing facility. Now let's take those in order. As we announced two weeks ago, we've completed the first two phases of our maker flight test program, hover and critical azimuth. We are regularly flying many times per week and sometimes multiple times per day. We are now shifting into the third phase of Maker's flight test program, during which we will evaluate its system performance at increasing forward speeds. We remain on track to complete our first full transition hover to fixed wing flight later this year. With respect to our second goal, we've continued to work closely with the FAA to facilitate agreement on our means compliance for our midnight production aircraft. We believe we remain on track to achieve that goal. Finally, To successfully commercialize midnight, we have to manufacture it at scale. That's why our other 2022 milestone is focused on manufacturing. We've evaluated over 200 sites across the U.S. in collaboration with Stellantis. We are on track to announce more details on our progress in this area later this year. With that, I'm going to hand it over to Tom Muniz, our COO, to share with you some further insights into how the team has transitioned from the maker to midnight program.