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What changed in Aurora Innovation, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Aurora Innovation, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+303 added−296 removedSource: 10-K (2024-02-15) vs 10-K (2023-02-21)

Top changes in Aurora Innovation, Inc.'s 2023 10-K

303 paragraphs added · 296 removed · 231 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe believe that autonomous trucks have the potential to materially reduce fuel consumption and greenhouse gas emissions meaningfully through eco-driving, off-peak deployment, and capping peak speeds. Employees As of December 31, 2022, we have approximately 1,700 employees. None of our employees are represented by a labor union, and we consider our employee relations to be in good standing.
Biggest changeLonger-term, we believe commercialization of our self-driving technology will contribute to a more sustainable future given the potential to materially reduce fuel consumption and greenhouse gas emissions. We believe that autonomous trucks have the potential to materially reduce fuel consumption and greenhouse gas emissions meaningfully through eco-driving, off-peak deployment, and capping peak speeds.
Chris led the Google self-driving car team and was technology director for Carnegie Mellon when it won the 2007 DARPA Urban Challenge; Sterling developed MIT’s Intelligent CoPilot, then launched Tesla’s Model X and Autopilot; Drew worked for two decades at the intersection of machine learning and robotics across industry and academia at Carnegie Mellon.
Chris led the Google self-driving car team and was technology director for Carnegie Mellon when it won the 2007 DARPA Urban Challenge. Sterling developed MIT’s Intelligent CoPilot, then launched Tesla’s Model X and Autopilot, and Drew worked for two decades at the intersection of machine learning and robotics across industry and academia at Carnegie Mellon.
Alongside these programs, we offer a competitive total rewards package including industry-benchmarked base salaries and a performance-based bonus plan, equity ownership, generous time off, paid parental leave, a 401(k) to help our employees plan for the future, and a wide selection of health and wellness benefits plans for employees and their dependents.
Alongside these programs, we offer a competitive total rewards package including industry-benchmarked base salaries and a performance-based bonus plan, equity ownership, generous time off, paid parental leave, a 401(k) plan to help our employees plan for the future, and a wide selection of health and wellness benefits plans for employees and their dependents.
These efforts will lay the foundation for the mass-production, launch, and support of these vehicles with Toyota on ride-hailing networks, including Uber’s. 10 Table of Contents Volvo Group Strategic Partnership In March 2021, Volvo selected us as its technology provider to develop and commercialize Level 4 Class 8 trucks in North America.
These efforts will lay the foundation for the mass-production, launch, and support of these vehicles with Toyota on ride-hailing networks, including Uber’s. 10 Table of Contents Volvo Group Strategic Partnership In March 2021, Volvo selected us as its technology provider to develop and jointly commercialize Level 4 Class 8 trucks in North America.
We believe that partnering with other industry leaders enables us to scale more efficiently, as it allows us to focus on what we do best – developing the Aurora Driver—while our partners handle activities such as vehicle manufacturing, fleet ownership, and operation. We are proud that these industry leaders have selected Aurora as their self-driving partner.
We believe that partnering with other industry leaders enables us to scale more efficiently, as it allows us to focus on what we do best – developing the Aurora Driver—while our partners handle activities such as vehicle and hardware manufacturing, fleet ownership, and operation. We are proud that these industry leaders have selected Aurora as their self-driving partner.
Local Goods Delivery Our third core market is local goods delivery, which spans several sub-segments, including last-mile parcel and post, prepared food, grocery, and business-to-business (“B2B”) delivery. The COVID-19 pandemic has highlighted the importance of local goods delivery, as well as the supply chain disruptions that can be experienced when consumer behavior changes abruptly.
Local Goods Delivery Our third core market is local goods delivery, which spans several sub-segments, including last-mile parcel and post, prepared food, grocery, and business-to-business (“B2B”) delivery. The COVID-19 pandemic highlighted the importance of local goods delivery, as well as the supply chain disruptions that can be experienced when consumer behavior changes abruptly.
Scalable approach to high-definition maps Proprietary Lidar technology Aurora’s long-range, multi-modal sensing suite consists of high-resolution, high dynamic range and long-range cameras, next-generation imaging radar, and our industry-leading proprietary FirstLight Lidar. FirstLight alone provides a number of meaningful performance advantages over traditional lidar sensors.
Scalable approach to high-definition maps Proprietary Lidar technology Aurora’s long-range, multi-modal sensing suite consists of high-resolution, high dynamic range and long-range cameras, next-generation imaging radar, and our industry-leading proprietary FirstLight Lidar. FirstLight alone provides a number of meaningful performance advantages over traditional lidar sensors for long-range sensing.
Our lidar can see nearly twice as far as a typical automotive AM lidar, because our coherent measurement enables single-photon sensitivity. The enhanced range of our FMCW lidar enables the detection and tracking of objects and actors at the very long ranges essential for high-speed driving. 2. Simultaneous Range and Velocity .
Our lidar can see nearly twice as far as a typical automotive lidar, because our coherent measurement enables single-photon sensitivity. The enhanced range of our FMCW lidar enables the detection and tracking of objects and actors at the very long ranges essential for high-speed driving. 2. Simultaneous Range and Velocity .
FirstLight instantaneously measures the radial velocity of the targets as well as distance. This allows quicker reaction times and better tracking of other objects on or near the road. 3. Interference Immunity . Each FirstLight sensor is primarily sensitive to only the signals it creates.
FirstLight instantaneously measures the radial velocity of the objects as well as distance. This allows quicker reaction times and better tracking of other objects on or near the road. 3. Interference Immunity . Each FirstLight sensor is primarily sensitive to only the signals it creates.
We believe such hurdles will be removed as we work with our government partners to highlight the benefits of self-driving technology. We work closely with state and local elected officials and regulatory bodies to ensure they continue to welcome the testing and deployment of self-driving vehicles on their roads.
We believe such hurdles will be removed in the future as we work with our government partners to highlight the benefits of self-driving technology. We work closely with state and local elected officials and regulatory bodies to ensure they continue to welcome the testing and deployment of self-driving vehicles on their roads.
Because all Aurora-Driver powered vehicles carry a common set of self-driving hardware and software, Aurora and its partners benefit from the collective scale of all participants on the platform. Significant Investments in Virtual Development Our Virtual Testing Suite is a major engineering accelerator.
Because all Aurora-Driver powered vehicles carry a common core of self-driving hardware and software, Aurora and its partners benefit from the collective scale of all participants on the platform. Significant Investments in Virtual Development Our Virtual Testing Suite is a major engineering accelerator.
Trucking We plan to launch Aurora Horizon, our driverless trucking subscription service, as our first commercial product. We have prioritized this segment as we believe it is an optimal first product for both commercial and technical reasons: • Commercial .
Trucking We plan to launch Aurora Horizon, our driverless trucking subscription service, as our first commercial product. We have prioritized this market as we believe it is an optimal first product for both commercial and technical reasons: • Commercial .
Therefore, it benefits from immunity to interference from ambient sunlight and to lidar-to-lidar interference, which will be important as self-driving fleets scale. 7 Table of Contents Leveraging the Best of Machine Learning and Engineered Approaches Aurora’s approach to designing the Aurora Driver software leverages our team’s expertise in both machine learning and fundamental engineering.
Therefore, it benefits from immunity to interference from ambient sunlight and to lidar-to-lidar interference, which will be important as self-driving fleets scale. Leveraging the Best of Machine Learning and Engineered Approaches Aurora’s approach to designing the Aurora Driver software leverages our team’s expertise in both machine learning and fundamental engineering.
We have made purposeful, foundational technological investments that we believe will enable us to move towards meaningful commercialization more safely, quickly, and broadly. Examples of this ‘self-driving 2.0’ approach, across both hardware & software, include: 1. Proprietary lidar technology to unlock highway speeds; 2.
We have made purposeful, foundational technological investments that we believe will enable us to move towards meaningful commercialization more safely, quickly, and broadly. Examples of this approach, across both hardware & software, include: 1. Proprietary lidar technology to unlock highway speeds; 2.
We also announced a strategic collaboration with Ryder Systems to pilot on-site fleet maintenance to support current autonomous freight pilot operations and prepare for commercial operation at scale. We plan to initially launch Aurora Horizon in Texas, which has the largest freight market in the US, a favorable business and regulatory environment, and moderate weather.
We also continued our strategic collaboration with Ryder Systems, piloting on-site fleet maintenance to support current autonomous freight pilot operations and prepare for commercial operation at scale. We plan to initially launch Aurora Horizon in Texas, which has the largest freight market in the US, a favorable business and regulatory environment, and moderate weather.
We encourage investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels. Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website. 13 Table of Contents
We encourage investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels. Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.
Competition Our main sources of competition fall into two categories: • Technology-focused companies building end-to-end technical capabilities for self-driving applications • Automotive players building internal self-driving development programs The principal competitive success factors in our market, in no particular order, include, but are not limited to: • Technology quality, reliability, and safety • Engineering capabilities • Business model and go-to-market approach • Commercial partnerships • Cost and efficiency • Patents and intellectual property portfolio 9 Table of Contents Because of the depth and breadth of our talent, fully integrated self-driving stack, differentiated go-to-market approach, and unique partnerships that drive commercialization at scale, we believe that we are able to compete favorably across these factors.
Competition Our main sources of competition fall into two categories: • Technology-focused companies building end-to-end technical capabilities for self-driving applications • Automotive players building internal self-driving development programs The principal competitive success factors in our market, in no particular order, include, but are not limited to: • Technology quality, reliability, and safety • Engineering capabilities • Business model and go-to-market approach • Commercial partnerships • Cost and efficiency • Patents and intellectual property portfolio Because of the depth and breadth of our talent, fully integrated self-driving stack, differentiated go-to-market approach, and unique partnerships that drive commercialization at scale, we believe that we are able to compete favorably across these factors. 9 Table of Contents Intellectual Property Our success and competitive advantage depend in part upon our ability to develop and protect our core technology and intellectual property.
The key distinctions between machine learning and engineering are that: • Engineered systems are built by humans and tend to be simpler and more introspectable (i.e. can understand ‘why’ an action is taken). • Machine-learned systems are tuned and developed by algorithms and trained on data.
The key distinctions between machine learning and engineering are that: • Engineered systems are built by humans and tend to be simpler and more introspectable (i.e. can understand ‘why’ an action is taken). 7 Table of Contents • Machine-learned systems are tuned and developed by algorithms and trained on data.
To date, we have not experienced any work stoppages. We have built a company culture which is anchored in our values: operating with integrity, focusing for impact, no jerks, celebrating our diversity, rising to the occasion, and winning together.
To date, we have not experienced any work stoppages. 12 Table of Contents We have built a company culture which is anchored in our values: operating with integrity, focusing for impact, no jerks, celebrating our diversity, rising to the occasion, and winning together.
We also proactively gather employee feedback through various channels, including surveys and focus groups to ensure changes to our employee experience are meaningful and relevant. 12 Table of Contents Corporate Information Our principal executive offices are located at 1654 Smallman St, Pittsburgh, Pennsylvania 15222.
We also proactively gather employee feedback through various channels, including surveys and focus groups to ensure changes to our employee experience are meaningful and relevant. Corporate Information Our principal executive offices are located at 1654 Smallman St, Pittsburgh, Pennsylvania 15222.
At Aurora, we work with the federal government to ensure it maintains its regulatory authority over the design, construction, and performance of vehicles and applies that same authority to the regulation of highly automated vehicles.
At Aurora, we work with the federal government to ensure it maintains its regulatory authority over the design, construction, and performance of vehicles and applies that same authority to the regulation of autonomous vehicles.
During 2022, we operated commercial trucking pilots with FedEx, Werner, Schneider, and Uber Freight in which we regularly and autonomously hauled loads under the supervision of vehicle operators, and also explored integrating access to Uber Freight’s digital freight network within our autonomous trucking subscription service.
During 2023, we operated commercial trucking pilots with FedEx, Werner, Schneider, Hirschbach and Uber Freight through which we regularly and autonomously hauled loads under the supervision of vehicle operators, and also explored integrating access to Uber Freight’s digital freight network within our autonomous trucking subscription service.
As of December 31, 2022, Aurora has assembled an approximately 1,700-person team, of whom approximately 1,500 focus on engineering and product. Our company consists of world-leaders in robotics, machine learning, hardware design, software engineering, systems engineering, and safety. Aurora has over 1,300 awarded and pending patents worldwide.
As of December 31, 2023, Aurora has assembled an approximately 1,800-person team, of whom approximately 1,600 focus on engineering and product. Our company consists of world-leaders in robotics, machine learning, hardware design, software engineering, systems engineering, and safety. Aurora has over 1,600 awarded and pending patents worldwide.
The Aurora Atlas is a map purpose-designed for these goals. It is broken into smaller maps that cover sub-areas, which are referred to as shards. Many classic maps have not been built for self-driving and thus prioritize global positioning accuracy at a substantial detriment to local accuracy.
It is broken into smaller maps that cover sub-areas, which are referred to as shards. Many classic maps have not been built for self-driving and thus prioritize global positioning accuracy at a substantial detriment to local accuracy.
Regulations governing these products are intended to protect the public from hazardous or unnecessary exposure. Manufacturers are required to certify in product labeling and in reports to the FDA that their products comply with applicable performance standards as well as maintain manufacturing, testing, and distribution records for their products.
Food and Drug Administration (“FDA”). Electronic product radiation includes laser technology. Regulations governing these products are intended to protect the public from hazardous or unnecessary exposure. Manufacturers are required to certify in product labeling and in reports to the FDA that their products comply with applicable performance standards as well as maintain manufacturing, testing, and distribution records for their products.
We also autonomously haul (under the supervision of vehicle operators) truck freight on behalf of our pilot customers in preparation for driverless commercialization. 1 Table of Contents Our first-principles approach, which we define as “Self-Driving 2.0,” underpins our technology development strategy for the Aurora Driver.
We also autonomously haul (under the supervision of vehicle operators) truck freight on behalf of our pilot customers in preparation for driverless commercialization. 1 Table of Contents Our first-principles approach underpins our technology development strategy for the Aurora Driver.
Similar such reporting and regulatory requirements exist or are being developed in foreign markets. For example, markets such as the EU also continue to develop their respective standards to define deployment requirements for higher levels of autonomy. Germany, a leader in the automotive industry, recently approved legislation that would allow for the deployment of self-driving technology without a human driver.
For example, markets such as the EU also continue to develop their respective standards to define deployment requirements for higher levels of autonomy. Germany, a leader in the automotive industry, recently approved legislation that would allow for the deployment of self-driving technology without a human driver.
During 2022, we operated commercial trucking pilots with FedEx, Werner, Schneider, and Uber Freight in which we regularly and autonomously haul loads under the supervision of vehicle operators, and also explore integrating access to Uber Freight’s digital freight network within our autonomous trucking subscription service.
During 2023, we operated commercial trucking pilots with FedEx, Werner, Schneider, Hirschbach and Uber Freight through which we regularly and autonomously hauled loads under the supervision of vehicle operators, and also explored integrating access to Uber Freight’s digital freight network within our autonomous trucking subscription service.
Compliance with these rules may include permits, licenses and inspections of our facilities and products. Corporate Social Responsibility and Sustainability Achieving our mission—delivering the benefits of self-driving technology safely, quickly, and broadly—is how we aim to make a positive impact in communities.
Corporate Social Responsibility and Sustainability Achieving our mission—delivering the benefits of self-driving technology safely, quickly, and broadly—is how we aim to make a positive impact in communities.
By working with these officials to develop technology neutral policies that promote a diverse set of highly automated vehicle use cases and create a level playing field for the industry, we believe that Aurora will be able deliver the benefits of self-driving technology safely, quickly, and broadly.
By working with these officials to develop technology neutral policies that promote a diverse set of autonomous vehicle use cases and create a level playing field for the industry, we believe that Aurora will be able deliver the benefits of self-driving technology safely, quickly, and broadly. Similar such reporting and regulatory requirements exist or are being developed in foreign markets.
Deep strategic partnerships which support commercialization at scale We have developed strategic partnerships with industry leaders like PACCAR, Volvo, Toyota and Uber and will work together to develop and scale Aurora Driver-powered trucks and self-driving passenger vehicles. Our partners are industry leaders in their respective fields and we are able to leverage each of our respective strengths as we commercialize.
Deep strategic partnerships which support commercialization at scale We have developed strategic partnerships with industry leaders like PACCAR, Volvo, Toyota, Uber and Continental and will work together to develop and scale Aurora Driver-powered trucks and self-driving passenger vehicles.
In addition, we have 6 registered U.S. trademarks, 32 registered foreign trademarks and 11 pending trademark applications. Our patents and patent applications cover a broad range of technology relevant to self-driving vehicles.
As of December 31, 2023, we owned over 1,600 patents and pending applications, including U.S. and foreign. In addition, we have 7 registered U.S. trademarks, 35 registered foreign trademarks and 6 pending trademark applications. Our patents and patent applications cover a broad range of technology relevant to self-driving vehicles.
Aurora Beacon support, where trained specialists monitor Aurora Driver-powered vehicles and provide high level input when needed; and 5. Access to Aurora-certified third party services, including maintenance of the Aurora Driver, roadside assistance for the Aurora Driver, and insurance. Components of the offering such as maintenance, hardware financing, and insurance, will be delivered in partnership with our third-party partner network.
Access to Aurora-certified third party services, including maintenance of the Aurora Driver, roadside assistance for the Aurora Driver, and insurance. Components of the offering such as maintenance, hardware financing, and insurance, will be delivered in partnership with our third-party partner network.
The transfer agent and registrar for our common stock and the warrant agent for our warrants is American Stock Transfer & Trust Company. The transfer agent’s address is 6201 15th Avenue, Brooklyn, New York 11219, and its telephone number is (800) 937-5449. Available Information Our website address is www.aurora.tech.
The transfer agent and registrar for our common stock and the warrant agent for our warrants is Equiniti Trust Company, LLC. The transfer agent’s address is 48 Wall Street, Floor 23, New York, NY 10005, and its telephone number is (800) 937-5449. Available Information Our website address is www.aurora.tech.
Given the intense work in these areas, we expect a workable path forward in the near-term. We are subject to the Electronic Product Radiation Control Provisions of the Federal Food, Drug, and Cosmetic Act. These requirements are enforced by the U.S. Food and Drug Administration (“FDA”). Electronic product radiation includes laser technology.
Given the intense work in these areas, we expect several foreign markets to provide a workable path forward for autonomous vehicle operations in their respective jurisdictions in the near-term. 11 Table of Contents We are subject to the Electronic Product Radiation Control Provisions of the Federal Food, Drug, and Cosmetic Act. These requirements are enforced by the U.S.
This allows us to scale faster and more efficiently. Efficiency of development and operation We believe that our approach to technological development, coupled with our Driver as a Service business model, enables us to develop and scale our technology efficiently.
Efficiency of development and operation We believe that our approach to technological development, coupled with our Driver as a Service business model, enables us to develop and scale our technology efficiently. This is further enhanced by our collaboration with Uber, which allows us access to proprietary anonymized data related to trip demand and economics.
We believe that as the industry reaches the long tail of development, these investments will increasingly accelerate our path to market and scale relative to competitors. 8 Table of Contents Scalable Approach to High-definition Mapping Aurora’s approach to mapping aims to optimize for two factors: first, a map that is maximally relevant to the challenges of self-driving; and second, a map that can be maintained at scale.
Scalable Approach to High-definition Mapping Aurora’s approach to mapping aims to optimize for two factors: first, a map that is maximally relevant to the challenges of self-driving; and second, a map that can be maintained at scale. 8 Table of Contents The Aurora Atlas is a map purpose-designed for these goals.
From the beginning, we have invested in building a mission-driven company based on a set of values that drive who we are and how we operate. A strong, inclusive, and effective culture is fundamental for the long-term success of a business, and even more so when delivering a technology as complex and transformative as self-driving.
A strong, inclusive, and effective culture is fundamental for the long-term success of a business, and even more so when delivering a technology as complex and transformative as self-driving. We are building an enduring company and our culture and values represent an advantage in delivering and scaling our product.
Aurora has developed bipartisan support of self-driving technology in both chambers of the U.S. Congress as well as the U.S. Department of Transportation and its agencies.
Aurora’s Government Relations team regularly engages with our partners in government to further develop the relationships and regulations necessary to successfully deploy our technology. Aurora has developed bipartisan support of self-driving technology in both chambers of the U.S. Congress as well as the U.S. Department of Transportation and its agencies.
Aurora Driver hardware and software to enable safe and efficient autonomous operation of the self-driving fleet; 2. Updates to the Aurora Driver, including map and software updates; 3. Access to Aurora Beacon, which will interface with their systems and enable efficient dispatch, deployment, and fleet monitoring; 4.
Aurora Driver hardware and software to enable safe and efficient autonomous operation of the self-driving fleet; 2. Updates to the Aurora Driver, including map and software updates; 3. Access to Aurora Services, a suite of tools and infrastructure to seamlessly integrate the Aurora Driver into their business; 4.
The Aurora Driver is based on a common driver platform design that can integrate with vehicles of various makes, models, and classes to serve multiple commercial applications. To date, we have successfully integrated the Aurora Driver across numerous different vehicle platforms. The Aurora Driver is designed to deliver fully autonomous driving without the need for a human in the vehicle.
To date, we have successfully integrated the Aurora Driver across numerous different vehicle platforms. The Aurora Driver is designed to deliver fully autonomous driving without the need for a human in the vehicle.
Driver as a Service Business Model The Aurora Driver will be delivered as a service via Aurora Horizon, our driverless trucking subscription service, and Aurora Connect, our driverless ride hailing subscription service. We intend to partner with our ecosystem of OEMs, fleet operators, and mobility and logistics services, as well as other third parties, to commercialize and support Aurora-powered vehicles.
We intend to partner with our ecosystem of OEMs, Tier 1 automotive supplier, fleet operators, and mobility and logistics services, as well as other third parties, to commercialize and support Aurora Driver-powered vehicles.
We have strategic partnerships with: • PACCAR & Volvo, who together represent a significant share of US Class 8 truck sales. • Toyota, a leading vehicle manufacturer globally. • Uber, a leading ride hailing company globally. With these strategic partnerships, each party is making significant investments towards integrating the Aurora Driver into their vehicles and logistics and mobility networks.
We have strategic partnerships with: • PACCAR & Volvo, who together represent a significant share of US Class 8 truck sales. • Toyota, a leading vehicle manufacturer globally. • Uber, a leading ride hailing company globally. • Continental, a leading global technology manufacturer and Tier 1 automotive supplier.
We are subject to the requirements of the federal Occupational Safety and Health Act, as amended, and comparable state laws that protect and regulate employee health and safety. 11 Table of Contents Like all companies operating in similar industries, we are subject to environmental regulation, including water use; air emissions; use of recycled materials; energy sources; the storage, handling, treatment, transportation and disposal of hazardous materials; and the remediation of environmental contamination.
Like all companies operating in similar industries, we are subject to environmental regulation, including water use; air emissions; use of recycled materials; energy sources; the storage, handling, treatment, transportation and disposal of hazardous materials; and the remediation of environmental contamination. Compliance with these rules may include permits, licenses and inspections of our facilities and products.
Intellectual Property Our success and competitive advantage depend in part upon our ability to develop and protect our core technology and intellectual property. We own a portfolio of intellectual property, including patents and registered trademarks, confidential technical information, and expertise in the development of software and hardware for autonomous vehicles and lidar technology.
We own a portfolio of intellectual property, including patents and registered trademarks, confidential technical information, and expertise in the development of software and hardware for autonomous vehicles and lidar technology. We have filed patent and trademark applications in order to further secure these rights and strengthen our ability to defend against third parties who may infringe on our rights.
We expect the DaaS model to enable an asset-light and high-margin revenue stream for Aurora, while allowing us to scale more rapidly through partnerships. As of December 31, 2022, we have assembled an approximately 1,700-person team, consisting of leading experts in robotics, machine learning, hardware design, software engineering, systems engineering, and safety.
As of December 31, 2023, we have assembled an approximately 1,800-person team, consisting of leading experts in robotics, machine learning, hardware design, software engineering, systems engineering, and safety.
We will partner with automotive companies, fleet operators, and other third parties to commercialize and support Aurora-powered vehicles. We expect that these strategic partners will support activities such as vehicle manufacturing, financing and leasing, service and maintenance, parts replacement, facility ownership and operation, and other commercial and operational services as needed.
We expect that these strategic partners will support activities such as vehicle manufacturing, financing and leasing, service and maintenance, parts replacement, facility ownership and operation, and other commercial and operational services as needed. We expect the DaaS model to enable an asset-light and high-margin revenue stream for Aurora, while allowing us to scale more rapidly through partnerships.
Starting in 2019, we offset our estimated annual carbon emissions from our facilities, vehicles and air travel by purchasing carbon credits, and we expect to continue to do this in the future. Longer-term, we believe commercialization of our self-driving technology will contribute to a more sustainable future given the potential to materially reduce fuel consumption and greenhouse gas emissions.
Starting in 2019, we offset our estimated annual carbon emissions from our facilities, vehicles and air travel by purchasing carbon credits through 2021, and we expect to continue to do this in the future when we generate operating profit.
We expect to ultimately commercialize the Aurora Driver in a Driver as a Service (“DaaS”) business model, in which we will supply self-driving technology and earn revenue on a fee per mile basis. We do not intend to own nor operate large vehicle fleets ourselves.
Further, we continued our strategic collaboration with Ryder Systems, piloting on-site fleet maintenance to support current autonomous freight pilot operations and prepare for commercial operation at scale. We expect to ultimately commercialize the Aurora Driver in a Driver as a Service (“DaaS”) business model, in which we will supply self-driving technology and earn revenue on a fee per mile basis.
Government Regulation At both the federal and state level, the U.S. provides a positive regulatory environment to permit safe testing and development of autonomous vehicle functionality. Aurora’s Government Relations team regularly engages with our partners in government to further develop the relationships and regulations necessary to successfully deploy our technology.
We believe this long-term partnership is a crucial step to commercialize autonomous trucks at scale and achieve our profitability objectives. Government Regulation At both the federal and state level, the U.S. provides a positive regulatory environment to permit safe testing and development of autonomous vehicle functionality.
Additionally, we protect our proprietary rights through agreements with our commercial partners, supply-chain vendors, employees, and consultants, as well as close monitoring of the developments and products in the industry. As of December 31, 2022, we owned over 1,300 patents and pending applications, including U.S. and foreign.
We also rely on trade secrets, design and manufacturing know-how, continuing technological innovations, and licensing and exclusivity opportunities to maintain and improve our competitive position. Additionally, we protect our proprietary rights through agreements with our commercial partners, supply-chain vendors, employees, and consultants, as well as close monitoring of the developments and products in the industry.
This is further enhanced by our collaboration with Uber, which allows us access to proprietary anonymized data related to trip demand and economics. This data allows us to optimize our development roadmap to invest in the highest value markets and capabilities. 5 Table of Contents Mission-driven corporate culture.
This data allows us to optimize our development roadmap to invest in the highest value markets and capabilities. 5 Table of Contents Mission-driven corporate culture From the beginning, we have invested in building a mission-driven company based on a set of values that drive who we are and how we operate.
We are building an enduring company and our culture and values represent an advantage in delivering and scaling our product. Our Product The Aurora Driver We are building the Aurora Driver – the hardware, software, and services to enable safe, cost-efficient, and high-uptime autonomous driving service.
Our Product The Aurora Driver We are building the Aurora Driver – the hardware, software, and services to enable safe, cost-efficient, and high-uptime autonomous driving service. The Aurora Driver is based on a common driver platform design that can integrate with vehicles of various makes, models, and classes to serve multiple commercial applications.
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We also announced a strategic collaboration with Ryder Systems to pilot on-site fleet maintenance to support current autonomous freight pilot operations and prepare for commercial operation at scale.
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With these strategic partnerships, each party is making significant investments towards integrating the Aurora Driver into vehicles, logistics and mobility networks, and business models.
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We have filed patent and trademark applications in order to further secure these rights and strengthen our ability to defend against third parties who may infringe on our rights. We also rely on trade secrets, design and manufacturing know-how, continuing technological innovations, and licensing and exclusivity opportunities to maintain and improve our competitive position.
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We do not intend to own nor operate large vehicle fleets ourselves. We will partner with automotive companies, fleet operators, and other third parties to commercialize and support Aurora Driver-powered vehicles.
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Our partners are industry leaders in their respective fields and we are able to leverage each of our respective strengths as we commercialize. This allows us to scale faster and more efficiently.
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Driver as a Service Business Model The Aurora Driver will be delivered as a service via Aurora Horizon, our driverless trucking subscription service, and Aurora Connect, our driverless ride hailing subscription service.
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We believe that as the industry reaches the long tail of development, these investments will increasingly accelerate our path to market and scale relative to competitors.
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Continental Strategic Partnership In April 2023, we entered into an exclusive partnership with Continental to deliver the first commercially scalable future generation of the Aurora Driver. As part of this partnership, we work with Continental to jointly design, develop, validate, deliver, and service the scalable autonomous system for the industry.
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We will leverage Continental’s decades of experience in systems development for safer, more reliable automotive solutions to industrialize the Aurora Driver and deliver the entire hardware required. Additionally, Continental will manage the complete lifecycle of the supplied autonomous hardware kits for the Aurora Driver, from the manufacturing line to decommissioning.
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Continental will also develop a new industrialized fallback system as one of the redundancies in the event of a failure in the primary system of the Aurora Driver. Under the “Hardware-as-a-Service” business model, Aurora will pay for the hardware and related services on a per mile basis.
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We are subject to the requirements of the federal Occupational Safety and Health Act, as amended, and comparable state laws that protect and regulate employee health and safety.
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Employees As of December 31, 2023, we had approximately 1,800 employees. None of our employees are represented by a labor union, and we consider our employee relations to be in good standing.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeNone of the private placement warrants will be redeemable by us in such a case so long as they are held by the Sponsor or its permitted transferees, but the Sponsor has agreed to exercise all of its private placement warrants for cash or on a “cashless basis” on or prior to the redemption date, in the event that the Reference Value exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) and we elect to redeem the public warrants pursuant to the Warrant Agreement and notify the Sponsor of such election and the redemption date on or prior to the date we mail a notice of redemption to the holders of the public warrants. 44 Table of Contents In addition, we will have the ability to redeem the outstanding warrants (including the private placement warrants if the Reference Value is less than $18.00 per share) for shares of our common stock at any time prior to their expiration, at a price of $0.10 per warrant if, among other things, the Reference Value equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant).
Biggest changeNone of the private placement warrants will be redeemable by us in such a case so long as they are held by the Sponsor or its permitted transferees, but the Sponsor has agreed to exercise all of its private placement warrants for cash or on a “cashless basis” on or prior to the redemption date, in the event that the Reference Value exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) and we elect to redeem the public warrants pursuant to the Warrant Agreement and notify the Sponsor of such election and the redemption date on or prior to the date we mail a notice of redemption to the holders of the public warrants.
If one or more of our competitors broadly commercialize their self-driving technology before we do, develop superior technology, or are perceived to have better technology, our business prospects and financial performance would be adversely affected. • Our services and technology may not be accepted and adopted by the market at the pace we expect or at all. • We may require significantly more additional capital investment to run our business than previously expected. • It is possible that Aurora’s self-driving unit economics do not materialize as expected. • We are highly dependent on the services of our senior management team, without which we may not be able to successfully implement our business strategy. • Our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders. • We may experience difficulties in managing our growth and expanding our operations. • Our operating and financial results projections that were previously provided rely in large part upon assumptions and analyses developed by us.
If one or more of our competitors broadly commercialize their self-driving technology before we do, develop superior technology, or are perceived to have better technology, our business prospects and financial performance would be adversely affected. • Our services and technology may not be accepted and adopted by the market at the pace we expect or at all. • We may require significantly more capital investment to run our business than previously expected. • It is possible that Aurora’s self-driving unit economics do not materialize as expected. • We are highly dependent on the services of our senior management team, without which we may not be able to successfully implement our business strategy. • Our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders. • We may experience difficulties in managing our growth and expanding our operations. • Our operating and financial results projections that were previously provided rely in large part upon assumptions and analyses developed by us.
We expect that our business model will become less capital intensive as we transition our business to our Driver as a Service model and if that transition is delayed or does not occur, we will require significant additional capital investment to run our business. Our business plan envisions a two-phase process for ownership and operation of Aurora-powered self-driving vehicles.
We expect that our business model will become less capital intensive as we transition our business to our Driver as a Service model and if that transition is delayed or does not occur, we will require significant additional capital investment to run our business. Our business plan envisions a two-phase process for ownership and operation of Aurora Driver-powered self-driving vehicles.
However, hackers or unauthorized third parties may attempt to gain unauthorized access to modify, alter, and use such networks and systems to gain control of, or to change, our vehicles’ functionality, user interface and performance characteristics, or to access data stored in or generated by our products.
However, hackers or third parties may attempt to gain unauthorized access to modify, alter, and use such networks and systems to gain control of, or to change, our vehicles’ functionality, user interface and performance characteristics, or to access data stored in or generated by our products.
Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud, and a material weaknesses could result in us being unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors losing confidence in our financial reporting, our securities price declining or us facing litigation as a result of the foregoing.
Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud, and material weaknesses could result in us being unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors losing confidence in our financial reporting, our securities price declining or us facing litigation as a result of the foregoing.
These metrics are subject to inherent challenges in measurement; real or perceived inaccuracies in such metrics and metrics values that are below expectations could materially and adversely affect our business, prospects, financial condition and results of operations. We plan to publicly disclose a measure of our progress toward the commercial launch of Aurora Horizon (the “Autonomy Readiness Measure”).
These metrics are subject to inherent challenges in measurement; real or perceived inaccuracies in such metrics and metrics values that are below expectations could materially and adversely affect our business, prospects, financial condition and results of operations. We publicly disclose a measure of our progress toward the commercial launch of Aurora Horizon (the “Autonomy Readiness Measure”).
There have been reports of traditional, non-autonomous vehicles being “hacked” to grant access to and operation of those vehicles to unauthorized persons. Aurora-powered vehicles contain complex IT systems and are designed with built-in data connectivity. We are implementing security measures intended to prevent unauthorized access to the information technology networks and systems installed in our vehicles.
There have been reports of traditional, non-autonomous vehicles being “hacked” to grant access to and operation of those vehicles to unauthorized persons. Aurora Driver-powered vehicles contain complex IT systems and are designed with built-in data connectivity. We are implementing security measures intended to prevent unauthorized access to the information technology networks and systems installed in our vehicles.
Although we believe, based on partner discussions, that such a transition will be possible in our intended timeframes, there is no guarantee that third parties will be able or willing to own and operate Aurora-powered vehicles as soon or ramp as quickly as expected at desirable commercial terms.
Although we believe, based on partner discussions, that such a transition will be possible in our intended timeframes, there is no guarantee that third parties will be able or willing to own and operate Aurora Driver-powered vehicles as soon or ramp as quickly as expected at desirable commercial terms.
These factors include, without limitation: • assumptions around vehicle miles traveled (“VMT”); • the degree of utilization achieved by our self-driving technology; • the price our customers are willing to pay; • the timing and breadth of our technology’s operating domain and product models; • operational costs of our self-driving technology and their useful life; • growth in core development and operating expenses; 21 Table of Contents • which elements of service are delivered by Aurora versus our partners, and associated impact on expenses and capital requirements; • the extent to which our technology is successfully and efficiently operationalized by our fleet partners, and our market penetration more broadly; • the timing of when our partners and end-customers adopt our technology on a commercial basis which could be delayed for regulatory, safety or reliability issues unrelated to our technology; • the timing of future self-driving system hardware generations and vehicle platforms; • competitive pricing pressures, including from established and future competitors; • whether we can obtain sufficient capital to continue investing in core technology development and sustain and grow our business; • the overall strength and stability of domestic and international markets, including, but not limited to trucking, passenger mobility, and local goods delivery; and • other risk factors set forth in this Annual Report.
These factors include, without limitation: • assumptions around vehicle miles traveled (“VMT”); • the degree of utilization achieved by our self-driving technology; • the price our customers are willing to pay; • the timing and breadth of our technology’s operating domain and product models; • operational costs of our self-driving technology and their useful life; • growth in core development and operating expenses; • which elements of service are delivered by Aurora versus our partners, and associated impact on expenses and capital requirements; • the extent to which our technology is successfully and efficiently operationalized by our fleet partners, and our market penetration more broadly; • the timing of when our partners and end-customers adopt our technology on a commercial basis which could be delayed for regulatory, safety or reliability issues unrelated to our technology; • the timing of future self-driving system hardware generations and vehicle platforms; • competitive pricing pressures, including from established and future competitors; • whether we can obtain sufficient capital to continue investing in core technology development and sustain and grow our business; • the overall strength and stability of domestic and international markets, including, but not limited to trucking, passenger mobility, and local goods delivery; and • other risk factors set forth in this Annual Report.
Furthermore, if any issues in complying with those requirements are identified (for example, if the auditors identify a material weakness or significant deficiency in the internal control over financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could adversely affect our reputation or investor perceptions of it.
Furthermore, if any issues in complying with those requirements are identified (for example, if we identify a material weakness or significant deficiency in the internal control over financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could adversely affect our reputation or investor perceptions of it.
This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees.
This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, stockholders, officers or other employees, which may discourage lawsuits against us and our directors, stockholders, officers and other employees.
The market price and trading volume of our common stock may be volatile and could decline significantly. The stock markets, including Nasdaq on which we list our shares of Class A common stock, have from time to time experienced significant price and volume fluctuations. The market price of our Class A common stock may be volatile and could decline significantly.
The stock markets, including Nasdaq on which we list our shares of Class A common stock, have from time to time experienced significant price and volume fluctuations. The market price of our Class A common stock may be volatile and could decline significantly.
Any of these results could materially and adversely affect our business, financial condition and results of operations. 34 Table of Contents Our defense of intellectual property rights claims brought against us or our partners, suppliers and channel partners, with or without merit, could be time-consuming, expensive to litigate or settle, divert management resources and attention and force us to acquire intellectual property rights and licenses, which may involve substantial royalty or other payments and may not be available on acceptable terms or at all.
Any of these results could materially and adversely affect our business, financial condition and results of operations. 34 Table of Contents Our defense of intellectual property rights claims brought against us or our partners, suppliers and channel partners, with or without merit, could be time-consuming, expensive to litigate or settle, divert resources and management’s attention and force us to acquire intellectual property rights and licenses, which may involve substantial royalty or other payments and may not be available on acceptable terms or at all.
For more information, see below for more detailed descriptions of each risk factor. • Self-driving technology is an emerging technology, and we face significant technical challenges to commercialize our technology. • We are an early stage company with a history of losses, and we expect to incur significant expenses and continuing losses for the foreseeable future. • Our limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter. • Our progress and performance metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics and metrics and values that are below expectations could materially and adversely affect our business, prospects, financial condition and results. • We operate in a highly competitive market and some market participants have substantially greater resources.
For more information, see below for more detailed descriptions of each risk factor. 13 Table of Contents • Self-driving technology is an emerging technology, and we face significant technical challenges to commercialize our technology. • We are an early stage company with a history of losses, and we expect to incur significant expenses and continuing losses for the foreseeable future. • Our limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter. • Our progress and performance metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics and metrics and values that are below expectations could materially and adversely affect our business, prospects, financial condition and results. • We operate in a highly competitive market and some market participants have substantially greater resources.
Factors affecting the trading price of our securities may include: • the realization of any of the risk factors presented in this Annual Report; • our ability to bring our products to market on a timely basis, or at all; • any major change in our management or Board; • our ability to adhere to the anticipated timelines on our roadmap to commercial launch of Aurora Horizon and/or progress in the Autonomy Readiness Measure that does not meet the expectations of the market; • poor performance or fluctuations of the Autonomy Performance Indicator; • changes in the industries in which we and our customers operate; • developments involving, or successes of, our competitors; • changes in laws and regulations affecting our business; • actual or anticipated differences in our estimates, the estimates of analysts, or changes in the market’s expectations for our revenues, results of operations, level of indebtedness, liquidity or financial condition; • additions and departures of key personnel; • failure to comply with the requirements of Nasdaq; • failure to comply with the Sarbanes-Oxley Act or other laws or regulations; • future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases, of our securities; • the volume of shares of our Class A common stock available for public sale; 42 Table of Contents • publication of research reports, financial estimates and recommendations by securities analysts about us or our competitors or our industry; • the public’s reaction to our press releases, its other public announcements and its filings with the SEC; • actions by stockholders, including the sale by our directors, executive officers or significant investors of any of their shares of our common stock or the perception that such sales could occur; • the performance, financial results and market valuations of other companies that are, or are perceived to be, similar to us; • commencement of, or involvement in, litigation involving us; • broad disruptions in the financial markets, including sudden disruptions in the credit markets; • speculation in the press or investment community; • actual, potential or perceived control, accounting or reporting problems; • changes in accounting principles, policies and guidelines; • general economic and political conditions such as recessions, interest rates, fuel prices, and international currency fluctuations; and • other events or factors, including those resulting from infectious diseases, health epidemics and pandemics (including the ongoing COVID-19 pandemic), natural disasters, war (including Russia’s actions in Ukraine), acts of terrorism or responses to these events.
Factors affecting the trading price of our securities may include: • the realization of any of the risk factors presented in this Annual Report; • our ability to bring our products to market on a timely basis, or at all; • any major change in our management or Board; • our ability to adhere to the anticipated timelines on our product roadmap to commercial launch of Aurora Horizon and/or progress in the Autonomy Readiness Measure that does not meet the expectations of the market; • poor performance or fluctuations of the Autonomy Performance Indicator; • changes in the industries in which we and our customers operate; • developments involving, or successes of, our competitors; • changes in laws and regulations affecting our business; • actual or anticipated differences in our estimates, the estimates of analysts, or changes in the market’s expectations for our revenues, results of operations, level of indebtedness, liquidity or financial condition; • additions and departures of key personnel; • failure to comply with the requirements of Nasdaq; • failure to comply with the Sarbanes-Oxley Act or other laws or regulations; • future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases, of our securities; 42 Table of Contents • the volume of shares of our Class A common stock available for public sale; • publication of research reports, financial estimates and recommendations by securities analysts about us or our competitors or our industry; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • actions by stockholders, including the sale by our directors, executive officers or significant investors of any of their shares of our common stock or the perception that such sales could occur; • the performance, financial results and market valuations of other companies that are, or are perceived to be, similar to us; • commencement of, or involvement in, litigation involving us; • broad disruptions in the financial markets, including sudden disruptions in the credit markets; • speculation in the press or investment community; • actual, potential or perceived control, accounting or reporting problems; • changes in accounting principles, policies and guidelines; • cyber events involving us; • general economic and political conditions such as recessions, interest rates, fuel prices, bank failures and international currency fluctuations; and • other events or factors, including those resulting from infectious diseases, health epidemics and pandemics (such as the COVID-19 pandemic), natural disasters, war (including Russia’s actions in Ukraine and the Israel-Hamas war), acts of terrorism or responses to these events.
For instance, cyber criminals, insiders or unauthorized third parties may target us or third parties with which we have business relationships to obtain data, or in a manner that disrupts our operations or compromises our products or the systems into which our products are integrated. 25 Table of Contents We are assessing the continually evolving privacy and data security regimes and measures we believe are appropriate in response.
For instance, cyber criminals, insiders or unauthorized third parties may target us or third parties with which we have business relationships to obtain data, or in a manner that disrupts our operations or compromises our products or the systems into which our products are integrated. 24 Table of Contents We are assessing the continually evolving privacy and data security regimes and measures we believe are appropriate in response.
Urmson ceased to be involved with Aurora, this would adversely affect our business because his loss could make it more difficult to, among other things, compete with other market participants, manage our R&D activities and retain existing partners or cultivate new ones. Negative public perception of, or negative news related to, Mr.
Urmson ceased to be involved with Aurora, this would adversely affect our business because his departure could make it more difficult to, among other things, compete with other market participants, manage our R&D activities and retain existing partners or cultivate new ones. Negative public perception of, or negative news related to, Mr.
Any of these results could materially and adversely affect our business, financial condition and results of operations. 24 Table of Contents Unauthorized control or manipulation of systems in autonomous vehicles may cause them to operate improperly or not at all, or compromise their safety and data security, which could result in loss of confidence in us and our products and harm our business.
Any of these results could materially and adversely affect our business, financial condition and results of operations. 23 Table of Contents Unauthorized control or manipulation of systems in autonomous vehicles may cause them to operate improperly or not at all, or compromise their safety and data security, which could result in loss of confidence in us and our products and harm our business.
Risks Related to Our Legal and Regulatory Environment Burdensome regulations, inconsistent regulations, or a failure to receive regulatory approvals of our technology could have a material adverse effect on our business, financial condition and results of operation. There has been relatively little mandatory federal government regulation of the self-driving industry to date.
Risks Related to Our Legal and Regulatory Environment Burdensome regulations, inconsistent regulations, or a failure to receive regulatory approvals or exemptions for our technology could have a material adverse effect on our business, financial condition and results of operation. There has been relatively little mandatory federal government regulation of the self-driving industry to date.
Given the sustained flow of investment funds into passive strategies that seek to track certain indexes, exclusion from stock indexes would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.
Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.
Our future insurance coverage may not be adequate to protect us from all business risks or may be prohibitively expensive. We may be subject, in the ordinary course of business, to losses resulting from product liability, accidents, acts of God, and other claims against us, for which we may have no insurance coverage.
Our future insurance coverage may not be adequate to protect us from all business risks or may be prohibitively expensive. We may be subject, in the ordinary course of business, to losses resulting from automobile liability, product liability, accidents, acts of God, and other claims against us, for which we may have no or limited insurance coverage.
We utilize reputable third-party service providers or vendors for a substantial portion of our data and source code, and these providers could also be vulnerable to harms similar to those that could damage our systems, including sabotage and intentional acts of vandalism causing potential disruptions.
We utilize reputable third-party service providers or vendors for storage and hosting of a substantial portion of our data and source code, and these providers could also be vulnerable to harms similar to those that could damage our systems, including sabotage and intentional acts of vandalism causing potential disruptions.
Further, we utilize reputable third-party service providers or vendors for a substantial portion of our data and source code. We cannot be sure that the systems upon which we rely, including those of our third-party vendors or suppliers, will be effectively implemented, maintained or expanded as planned.
Further, we utilize reputable third-party service providers or vendors for storage and hosting of a substantial portion of our data and source code. We cannot be sure that the systems upon which we rely, including those of our third-party vendors or suppliers, will be effectively implemented, maintained or expanded as planned.
For example, the European Commission has adopted the General Data Protection Regulation and California enacted the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020, which went into effect January 1, 2023, both of which provide for potentially material penalties for non-compliance.
For example, the European Commission has adopted the General Data Protection Regulation and California has enacted the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020, which went into effect January 1, 2023, both of which provide for significant compliance obligations and potentially material penalties for non-compliance.
Additionally, we do not carry key man insurance for any of our management executives, and the loss of any key employee or our inability to recruit, develop and retain these individuals as needed, could materially and adversely affect our business, financial condition and results of operations.
Additionally, we do not carry key person insurance for any of our management executives, and the loss of any key employee or our inability to recruit, develop and retain these individuals as needed, could materially and adversely affect our business, financial condition and results of operations.
As of December 31, 2022, we had warrants to purchase an aggregate of 21 million shares of our Class A common stock outstanding, comprising 12 million public warrants and 9 million private placement warrants. These warrants became exercisable 30 days after the completion of the Merger.
As of December 31, 2023, we had warrants to purchase an aggregate of 21 million shares of our Class A common stock outstanding, comprising 12 million public warrants and 9 million private placement warrants. These warrants became exercisable 30 days after the completion of the Merger.
Once we commercialize our technology, we may be required to obtain specialized insurance, which may not be available to the capacity or on the terms that we require to achieve the economics we expect. Further, any insurance that we carry may not be sufficient or it may not apply to all situations.
Once we commercialize our technology, we may be required to obtain specialized insurance, which may not be available at the capacity level or on the terms that we require to achieve the economics we expect. Further, any insurance that we carry may not be sufficient or it may not apply to all situations.
We may be subject to securities litigation, which is expensive and could divert management attention. The market price of our common stock may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.
We may be subject to securities litigation, which is expensive and could divert management’s attention. The market price of our common stock may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.
Although we believe our income tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution by one or more taxing authorities could have a material impact on the results of our operations. Our ability to utilize our net operating loss carryforwards may be limited.
Although we believe our income tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution by one or more taxing authorities could have a material impact on the results of our operations. 26 Table of Contents Our ability to utilize our net operating loss carryforwards may be limited.
Risks Related to Ownership of Our Securities We have and will continue to incur significant increased expenses and administrative burdens as a public company, which could materially and adversely affect our business, prospects, financial condition and results of operations.
Risks Related to Ownership of Our Securities We have incurred and will continue to incur significant expenses and administrative burdens as a public company, which could materially and adversely affect our business, prospects, financial condition and results of operations.
These provisions include: • authorizing our Board of Directors to issue preferred stock with voting or other rights or preferences that could discourage a takeover attempt or delay changes in control; • certain of our shareholders, including our founders, hold sufficient voting power to control voting for election of directors and amend our Certificate of Incorporation; • prohibiting cumulative voting in the election of directors; • providing that vacancies on our Board of Directors may be filled only by a majority of directors then in office, even though less than a quorum; • limiting the liability of, and the indemnification of, our directors and officers; • prohibiting the adoption, amendment or repeal of our Bylaws or the repeal of the provisions of our Certificate of Incorporation regarding the election and removal of directors without the required approval of at least two-thirds of the shares entitled to vote at an election of directors; • enabling our Board of Directors to amend the Bylaws, which may allow our Board of Directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; and • prohibiting stockholder action by written consent; • limiting the persons who may call special meetings of stockholders; and • requiring advance notification of stockholder nominations and proposals, which could preclude Stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our Board of Directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of us.
These provisions include: • authorizing our Board of Directors to issue preferred stock with voting or other rights or preferences that could discourage a takeover attempt or delay changes in control; • certain of our shareholders, including our founders, hold sufficient voting power to control voting for election of directors and amend our Certificate of Incorporation; 39 Table of Contents • prohibiting cumulative voting in the election of directors; • providing that vacancies on our Board of Directors may be filled only by a majority of directors then in office, even though less than a quorum; • limiting the liability of, and providing for the indemnification of, our directors and officers; • prohibiting the adoption, amendment or repeal of our Bylaws or the repeal of the provisions of our Certificate of Incorporation regarding the election and removal of directors without the required approval of at least two-thirds of the shares entitled to vote at an election of directors; • enabling our Board of Directors to amend the Bylaws, which may allow our Board of Directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; and • prohibiting stockholder action by written consent; • limiting the persons who may call special meetings of stockholders; and • requiring advance notification of stockholder nominations and proposals, which could preclude Stockholders who do not comply with such requirements from bringing matters before annual or special meetings of stockholders and delay changes in our Board of Directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of us.
As such, this model may present unpredictable challenges associated with third-party dependency which could materially and adversely affect our business, financial condition and results of operations. 19 Table of Contents It is possible that Aurora’s self-driving unit economics do not materialize as expected, in particular as we transition to our Driver as a Service model.
As such, this model may present unpredictable challenges associated with third-party dependency which could materially and adversely affect our business, financial condition and results of operations. It is possible that Aurora’s self-driving unit economics do not materialize as expected, in particular as we transition to our Driver as a Service model.
Urmson may adversely affect our brand, relationship with partners or standing in the industry. Our success similarly hinges on the ability to attract, motivate, develop and retain a sufficient number of other highly skilled personnel, including software, hardware, systems engineering, automotive, safety, operations, design, finance, marketing, and support personnel.
Urmson may adversely affect our brand, relationship with partners or standing in the industry. 19 Table of Contents Our success similarly hinges on the ability to attract, motivate, develop and retain a sufficient number of other highly skilled personnel, including software, hardware, systems engineering, automotive, safety, operations, design, finance, marketing, and support personnel.
For example, the Aurora Driver relies on single source suppliers for several components including GPU microchips which we use for machine learning inference, vehicle gateway electronic control units, and automotive radar sensors.
For example, the Aurora Driver relies on single source suppliers for several components including GPU microchips which we use for machine learning inference, lidars, vehicle electronic control units, and automotive radar sensors.
If one or more of our competitors broadly commercialize their self-driving technology before we do, develop superior technology, or are perceived to have better technology, our business prospects and financial performance would be adversely affected. The market for self-driving technology is highly competitive and can be characterized by rapid technological change.
If one or more of our competitors broadly commercialize their self-driving technology before we do, develop superior technology, or are perceived to have better technology, our business prospects and financial performance would be adversely affected. The market for self-driving technology is highly competitive and can be easily influenced by rapid technological change.
Unfavorable changes in any of the above or other factors, including around the total addressable market and market opportunity, most of which are beyond our control, could materially and adversely affect our business, prospects, financial condition and results of operations. As part of growing our business, we have in the past and may in the future make acquisitions.
Unfavorable changes in any of the above or other factors, including around the total addressable market and market opportunity, most of which are beyond our control, could materially and adversely affect our business, prospects, financial condition and results of operations. 21 Table of Contents As part of growing our business, we have in the past and may in the future make acquisitions.
Moreover, others may independently develop technologies that are competitive to us or infringe our intellectual property rights. 33 Table of Contents The protection against unauthorized use of our intellectual property rights, products and other proprietary rights is expensive and difficult, particularly internationally. We believe that our patents are foundational in the area of self-driving technology.
Moreover, others may independently develop technologies that are competitive to us or infringe our intellectual property rights. 33 Table of Contents The protection against unauthorized use of our intellectual property rights, products and other proprietary rights is expensive and difficult, particularly internationally. We believe that our patent portfolio is foundational in the area of self-driving technology.
It is possible that there may be additional limitations in our operating capabilities depending upon a number of factors, including, for example, vehicle type (e.g. car, truck) and actor density (e.g. pedestrians, cyclists). If that is the case, we may be more restricted in our addressable market opportunities.
It is possible that there may be additional limitations in our operating capabilities that are dependent upon a number of factors, including, for example, vehicle type (e.g., car, truck) and actor density (e.g., pedestrians, cyclists). If that is the case, we may be more restricted in our addressable market opportunities.
Manufacturers are required to certify in product labeling and reports to the FDA that their products comply with applicable performance standards as well as maintain manufacturing, testing, and distribution records for their products.
Manufacturers are required to certify in product labeling and report to the FDA that their products comply with applicable performance standards as well as maintain manufacturing, testing, and distribution records for their products.
Our Bylaws provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation (the “Certificate of Incorporation”) or our Bylaws, or (iv) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware), in all cases subject to the court having jurisdiction over indispensable parties named as defendants.
Our Bylaws provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, stockholders, officers or other employees to us or our stockholders, (iii) any action arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation (the “Certificate of Incorporation”) or our Bylaws, or (iv) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware, in all cases subject to the court having jurisdiction over indispensable parties named as defendants.
A loss of key personnel or their work product could hamper or prevent our ability to commercialize our products, which could severely harm our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and demands on management resources.
A loss of key personnel or their work product could hamper or prevent our ability to commercialize our products, which could severely harm our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and demands on resources and management’s attention.
Our operating and financial results projections that were previously provided rely in large part upon assumptions and analyses developed by us. If these assumptions or analyses prove to be incorrect, our actual results of operations may be materially different from projections that we previously filed and our estimates of certain financial metrics may prove inaccurate.
Our operating and financial results projections that were previously provided rely in large part upon assumptions and analyses developed by us. If these assumptions or analyses prove to be incorrect, our actual results of operations may be materially different from our previous projections and our estimates of certain financial metrics may prove inaccurate.
We also plan to publicly disclose supplemental information regarding the on-road performance of the Aurora Driver (the “Autonomy Performance Indicator”). There are inherent challenges in calculating this metric.
We also publicly disclose supplemental information regarding the on-road performance of the Aurora Driver (the “Autonomy Performance Indicator”). There are inherent challenges in calculating this metric.
These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with Aurora for a certain period of time without the consent of its Board of Directors.
These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with Aurora for a certain period of time without the consent of its Board of Directors unless certain provisions are met.
Any such litigation, whether initiated by us or a third party, could result in substantial costs and diversion of management resources, either of which could materially and adversely affect our business, financial condition and results of operations.
Any such litigation, whether initiated by us or a third party, could result in substantial costs and diversion of resources and management’s attention, either of which could materially and adversely affect our business, financial condition and results of operations.
Although we hold key patents related to our products, a number of companies, both within and outside of the self-driving vehicle industry, hold other patents covering aspects of self-driving technology. In addition to these patents, participants in this industry typically also protect their technology, especially embedded software, through copyrights and trade secrets.
Although we hold key patents related to our technology, a number of companies, organizations, or individuals, both within and outside of the self-driving vehicle industry, hold other patents covering aspects of self-driving technology. In addition to these patents, participants in this industry typically also protect their technology, especially embedded software, through copyrights and trade secrets.
If these assumptions or analyses prove to be incorrect, our actual results of operations may be materially different from our projections and our estimates of certain financial metrics may prove inaccurate. • We could fail to successfully select, execute or integrate past and future acquisitions. • Interruption or failure of Amazon Web Services or other information technology and communications systems that we rely upon could materially and adversely affect our business, financial condition and results of operations. • We are subject to cybersecurity risks to operational systems, security systems, infrastructure, integrated software and partners and end-customers data processed by us or third-party vendors or suppliers. • Unauthorized control or manipulation of systems in autonomous vehicles may cause them to operate improperly or not at all, or compromise their safety and data security. • Failures, or perceived failures, to comply with privacy, data protection, and information security requirements in the variety of jurisdictions in which we operate, or may operate, may adversely impact our business. 14 Table of Contents • Our future insurance coverage may not be adequate to protect us from all business risks or may be prohibitively expensive. • Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results. • If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results. • Unanticipated changes in effective tax rates, adverse outcomes resulting from examination of our income, changes in tax laws or regulations, changes in our ability to utilize our net operating loss, or other tax-related changes could materially and adversely affect our business, prospects, financial condition and results of operations. • Our success is contingent on our ability to successfully maintain, manage, execute and expand on our existing partnerships and obtain new partnerships. • We are dependent on our suppliers, some of which are single or limited source suppliers, and these suppliers may not produce and deliver necessary and industrialized components at prices and volumes and on terms acceptable to us. • Burdensome regulations, inconsistent regulations, or a failure to receive regulatory approvals of our technology could have a material adverse effect on our business, financial condition and results of operation. • We may become involved in legal and regulatory proceedings and commercial or contractual disputes. • We may be subject to product liability that could result in significant direct or indirect costs. • We may not be able to adequately protect or enforce our intellectual property rights, in which case our business and competitive position could be harmed. • We may need to defend ourselves against intellectual property rights infringement claims, which may be time-consuming and could cause us to incur substantial costs. • We could lose the ability to use certain intellectual property rights and technology or materials that we rely upon if the underlying license agreements are terminated or not renewed. • Our software contains third-party open-source software components, and failure to comply with the terms of the underlying open-source software licenses could restrict our ability to sell our products or give rise to disclosure obligations of proprietary software. • The market price of our common stock may be volatile and could decline significantly. • Our dual class structure has the effect of concentrating voting power with our founders, which limits an investor’s ability to influence the outcome of important transactions, including a change in control. 15 Table of Contents Risks Related to Our Technology, Business Model and Industry Self-driving technology is an emerging technology, and we face significant technical challenges to commercialize our technology.
If these assumptions or analyses prove to be incorrect, our actual results of operations may be materially different from our projections and our estimates of certain financial metrics may prove inaccurate. • We could fail to successfully select, execute or integrate past and future acquisitions. • Interruption or failure of Amazon Web Services or other information technology and communications systems that we rely upon could materially and adversely affect our business, financial condition and results of operations. • We are subject to cybersecurity risks to operational systems, security systems, infrastructure, integrated software and partners’ and end-customers’ data processed by us or third-party vendors or suppliers. • Unauthorized control or manipulation of systems in autonomous vehicles may cause them to operate improperly or not at all, or compromise their safety and data security. • Failures, or perceived failures, to comply with privacy, data protection, and information security requirements in the variety of jurisdictions in which we operate, or may operate, may adversely impact our business. • Our future insurance coverage may not be adequate to protect us from all business risks or may be prohibitively expensive. • Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results. • If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results. • Unanticipated changes in effective tax rates, adverse outcomes resulting from examination of our income, changes in tax laws or regulations, changes in our ability to utilize our net operating loss, or other tax-related changes could materially and adversely affect our business, prospects, financial condition and results of operations. • Our success is contingent on our ability to successfully maintain, manage, execute and expand on our existing partnerships and obtain new partnerships. 14 Table of Contents • We are dependent on our suppliers, some of which are single or limited source suppliers (including one partner for the production, provision, and full lifecycle support of the future generation of our Aurora Driver hardware system), and these suppliers may not produce and deliver necessary and industrialized components at prices and volumes and on terms acceptable to us. • Burdensome regulations, inconsistent regulations, or a failure to receive regulatory approvals or exemptions for our technology could have a material adverse effect on our business, financial condition and results of operation. • We may become involved in legal and regulatory proceedings and commercial or contractual disputes. • We may be subject to product liability that could result in significant direct or indirect costs. • We may not be able to adequately protect or enforce our intellectual property rights, in which case our business and competitive position could be harmed. • We may need to defend ourselves against intellectual property rights infringement claims, which may be time-consuming and could cause us to incur substantial costs. • We could lose the ability to use certain intellectual property rights and technology or materials that we rely upon if the underlying license agreements are terminated or not renewed. • Our software contains third-party open-source software components, and failure to comply with the terms of the underlying open-source software licenses could restrict our ability to sell our products or give rise to disclosure obligations of proprietary software. • The market price of our common stock may be volatile and could decline significantly. • Our dual class structure has the effect of concentrating voting power with our founders, which limits an investor’s ability to influence the outcome of important transactions, including a change in control.
In addition, we may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in revenues, which would further increase our losses. 16 Table of Contents Our limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.
In addition, we may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in revenues, which would further increase our losses. Our limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.
The claims under any patents that issue from our patent applications may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to ours. The intellectual property rights of others could also bar us from licensing and exploiting any patents that issue from our pending applications.
The claims under any patents that issue from our patent applications may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to ours. The intellectual property rights of others could also bar us and third-party licensees from exploiting any patents that issue from our pending applications.
A significant natural disaster, such as an earthquake, fire, flood, hurricane or significant power outage or other similar events, such as infectious disease outbreaks or pandemic events, including the COVID-19 pandemic and its aftermath, could materially and adversely affect our business, financial condition and results of operations.
A significant natural disaster, such as an earthquake, fire, flood, hurricane or significant power outage or other similar events, such as infectious disease outbreaks or pandemic events (such as the outbreak of the COVID-19 pandemic), could materially and adversely affect our business, financial condition and results of operations.
These improvements may take us longer than expected which would increase our capital requirements for technology development, delay our timeline to commercialization, and reduce the potential financial returns that may be expected from the business. 17 Table of Contents We plan to publicly disclose certain progress and performance metrics, including the Autonomy Readiness Measure and the Autonomy Performance Indicator.
These improvements may take us longer than expected which would increase our capital requirements for technology development, delay our timeline to commercialization, and reduce the potential financial returns that may be expected from the business. We publicly disclose certain progress and performance metrics, including the Autonomy Readiness Measure and the Autonomy Performance Indicator.
Any problems with our third-party cloud hosting providers could result in lengthy interruptions in our business. 23 Table of Contents We are subject to cybersecurity risks to operational systems, security systems, infrastructure, integrated software and partners and end-customers data processed by us or third-party vendors or suppliers and any material failure, weakness, interruption, cyber event, incident or breach of security could prevent us from effectively operating our business.
Any problems with our third-party cloud hosting providers could result in lengthy interruptions in our business. 22 Table of Contents We are subject to cybersecurity risks to operational systems, security systems, infrastructure, integrated software and partners’ and end-customers’ data processed by us or third-party vendors or suppliers and any material failure, weakness, interruption, cyber event, incident or breach of security could prevent us from effectively operating our business.
In addition, each share of our Class B common stock will convert automatically into one share of our Class A common stock upon (i) the date specified by affirmative written election of the holders of two-thirds of the then-outstanding shares of our Class B common stock, (ii) the date set by our board of directors that is no less than 61 days and no more than 180 days following the date on which the shares of our Class B common stock held by the Aurora Founders and their permitted entities and permitted transferees represent less than 20% of our Class B common stock held by the Aurora Founders and their permitted entities as of immediately following the closing of the Merger or (iii) nine months after the death or total disability of the last to die or become disabled of the Aurora Founders, or such later date not to exceed a total period of 18 months after such death or disability as may be approved by a majority of our independent directors. 43 Table of Contents We cannot predict the impact our dual class structure may have on our stock price.
In addition, each share of our Class B common stock will convert automatically into one share of our Class A common stock upon (i) the date specified by affirmative written election of the holders of two-thirds of the then-outstanding shares of our Class B common stock, (ii) the date set by our board of directors that is no less than 61 days and no more than 180 days following the date on which the shares of our Class B common stock held by the Aurora Founders and their permitted entities and permitted transferees represent less than 20% of our Class B common stock held by the Aurora Founders and their permitted entities as of immediately following the closing of the Merger or (iii) nine months after the death or total disability of the last to die or become disabled of the Aurora Founders, or such later date not to exceed a total period of 18 months after such death or disability as may be approved by a majority of our independent directors.
Our Bylaws further provide that the federal district courts of the United States will be the exclusive forum for resolving any complaints asserting a cause of action arising under the Securities Act. 39 Table of Contents Any person or entity purchasing or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to this provision.
Our Bylaws further provide that the federal district courts of the United States will be the exclusive forum for resolving any claims asserting a cause of action arising under the Securities Act. Any person or entity purchasing, holding or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to this provision.
The failure to pass these safety tests or receive appropriate regulatory approvals for commercialization would adversely impact our ability to generate revenue at the rate we anticipate. 29 Table of Contents It is also possible that future self-driving regulations are not standardized, and our technology becomes subject to differing regulations across jurisdictions (e.g. federal, state, local, and international).
The failure to pass these safety tests or receive appropriate regulatory approvals for commercialization would adversely impact our ability to generate revenue at the rate we anticipate. It is also possible that future autonomous regulations are not standardized, and our technology becomes subject to differing regulations across jurisdictions (e.g., federal, state, local, and international).
Numerous other jurisdictions have proposed or enacted legislation addressing these matters, including state laws similar to the California Consumer Privacy Act that have taken, or will take, effect in 2023.
Numerous other jurisdictions have proposed or enacted legislation addressing these matters, including state laws similar to the California Consumer Privacy Act that have taken, or will take, effect between 2023 and 2026.
In order for this business model to be successful, we will need to enter into definitive long-term contracts and commercial arrangements with partners such as PACCAR, Uber, Toyota and Volvo, which expand upon the current agreements and historic working relationships we have in place.
In order for this business model to be successful, we will need to enter into definitive long-term contracts and commercial arrangements with partners, which expand upon the current agreements and historic working relationships we have in place.
You may be unable to sell your securities unless a market can be established or sustained. 45 Table of Contents Item 1B. Unresolved Staff Comments. None.
You may be unable to sell your securities unless a market can be established or sustained. Item 1B. Unresolved Staff Comments None.
In recent years, the United States and global economies suffered dramatic downturns as the result of the COVID-19 pandemic, a deterioration in the credit markets and related financial crisis as well as a variety of other factors including, among other things, extreme volatility in security prices, severely diminished liquidity and credit availability, ratings downgrades of certain investments and declining valuations of others.
In recent years, the United States and global economies suffered dramatic downturns as the result of the COVID-19 pandemic, a deterioration in the credit markets and related financial crisis as well as a variety of other factors including, among other things, extreme volatility in security prices, severely diminished liquidity and credit availability, financial distress caused by recent or potential bank failures and the associated banking crisis, ratings downgrades of certain investments and declining valuations of others.
Since the COVID-19 pandemic, more of our and our service providers’ personnel are working remotely, which increases the risks of security breaches and cyberattacks.
Since the COVID-19 pandemic, more of our service providers’ personnel are working remotely, which increases the risks of cyber-attacks, security breaches and incidents.
Securities litigation against the Company could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm its business. 41 Table of Contents Future resales of common stock may cause the market price of our securities to drop significantly, even if our business is doing well.
We may be the target of this type of litigation in the future. Securities litigation against the Company could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm its business. Future resales of common stock may cause the market price of our securities to drop significantly, even if our business is doing well.
We are subject to governmental export and import control laws and regulations and trade and economic sanctions. Our failure to comply with these laws and regulations could materially and adversely affect our business, prospects, financial condition and results of operations. Our products and solutions are subject to export control and import laws and regulations, including the U.S.
Our failure to comply with these laws and regulations could materially and adversely affect our business, prospects, financial condition and results of operations. Our products and solutions are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations and various economic and trade sanctions regulations administered by the U.S.
As of December 31, 2022, we had estimated U.S. federal and state net operating loss carryforwards of $1,166 million and $1,116 million, respectively. Our U.S. federal and state net operating loss carryforwards subject to expiration will begin to expire in 2036 and 2029, respectively.
As of December 31, 2023, we had estimated U.S. federal and state net operating loss carryforwards of $1,548 million and $1,459 million, respectively. Our U.S. federal and state net operating loss carryforwards subject to expiration will begin to expire in 2036 and 2029, respectively.
Our future success will depend on our ability to develop and commercialize in a sufficiently timely manner in order to maintain competitiveness. Several companies, including, but not limited to, Waymo, GM Cruise, TuSimple, Tesla, Zoox/Amazon, Apple, Motional, Pony.ai, Intel Mobileye, and Embark are investing heavily in building this technology.
Our future success will depend on our ability to develop and commercialize in a sufficiently timely manner in order to maintain competitiveness. Several companies, including, but not limited to, Waymo, GM Cruise, Tesla, Zoox/Amazon, Motional, Torc Robotics, Kodiak Robotics, Stack AV and Intel Mobileye are investing heavily in building this technology.
Under the announced policies, our dual class capital structure would make us ineligible for inclusion in certain indices, and as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track those indices will not be investing in our stock.
Under such announced policies, the dual-class structure of our common stock would make us ineligible for inclusion in certain indices and, as a result, mutual funds, exchange-traded funds, and other investment vehicles that attempt to track those indices would not invest in our Class A common stock.
The successful development of our self-driving systems and related technology involves many challenges and uncertainties, including: • achieving sufficiently safe self-driving system performance as determined by us, government & regulatory agencies, our partners, customers, and the general public; • finalizing self-driving system design, specification, and vehicle integration; • successfully completing system testing, validation, and safety approvals; • obtaining additional approvals, licenses or certifications from regulatory agencies, if required, and maintaining current approvals, licenses or certifications; • receiving performance by third parties that supports our R&D and commercial activities; • preserving core intellectual property rights, while obtaining intellectual property rights, technology or materials from third parties that may be critical to our R&D activities; and • continuing to fund and maintain our current technology development activities.
The successful development of our self-driving systems and related technology involves many challenges and uncertainties, including: • achieving sufficiently safe self-driving system performance as determined by us, government & regulatory agencies, our partners, customers, and the general public; • finalizing self-driving system design, specification, and vehicle integration; • successfully completing system testing, validation, and safety approvals; • obtaining additional approvals, licenses or certifications from regulatory agencies, if required, and maintaining current approvals, licenses or certifications; • receiving performance by third parties that supports our R&D and commercial activities; • preserving core intellectual property rights, while obtaining intellectual property rights, technology or materials from third parties that may be critical to our R&D activities; and • continuing to fund and maintain our current technology development activities. 15 Table of Contents We are an early stage company with a history of losses, and we expect to incur significant expenses and continuing losses for the foreseeable future.
Supply of these components world-wide may be adversely affected by the COVID-19 pandemic as well as industry consolidation and geopolitical conditions such as international trade wars like the U.S. trade war with China, Russia’s actions in Ukraine and increased political tensions in Russia, Europe or Asia.
Supply of these components world-wide may be adversely affected by the business disruptions as well as industry consolidation and geopolitical conditions such as international trade wars like the U.S. trade war with China, Russia’s actions in Ukraine, the Israel-Hamas war and other hostilities in the Middle East and increased political tensions in Russia, Europe or Asia.
If we are not able to implement the additional requirements of Section 404(a) in a timely manner or with adequate compliance, we may not be able to assess whether our internal controls over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of our securities.
If we are not able to adequately comply with the requirements of Section 404, we may not be able to assess whether our internal controls over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of our securities.
These laws and regulations vary from one jurisdiction to another and future legislative and regulatory action, court decisions or other governmental action, which may be affected by, among other things, political pressures, attitudes and climates, as well as personal biases, may have a material impact on our operations and financial results.
These laws and regulations vary from one jurisdiction to another and future legislative and regulatory action, court decisions or other governmental action, which may be affected by, among other things, political pressures, attitudes and climates, as well as personal biases, may have a material impact on our operations and financial results. 29 Table of Contents We are subject to governmental export and import control laws and regulations and trade and economic sanctions.
If we are unable to raise sufficient funds, we will have to significantly reduce our spending, delay or cancel our planned activities, or substantially change our corporate structure, which could have an adverse impact on our business and financial prospects. We may experience difficulties in managing our growth and expanding our operations.
If we are unable to raise sufficient funds or access our existing funds, we will have to significantly reduce our spending, delay or cancel our planned activities, or substantially change our corporate structure, which could have an adverse impact on our business and financial prospects.
We may be unable to enter into agreements with manufacturers on terms and conditions acceptable to us and therefore we may need to contract with other third parties or significantly add to our own production capacity.
If Continental is unable to perform under the Strategic Partnership Agreement, we may be unable to enter into agreements with manufacturers on terms and conditions acceptable to us and therefore we may need to contract with other third parties or significantly add to our own production capacity.
The Securities Exchange Act of 1934, as amended (the “Exchange Act”), Sarbanes-Oxley Act, including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board and the securities exchanges, impose additional reporting and other obligations on public companies.
The Securities Exchange Act of 1934, as amended (the “Exchange Act”), Sarbanes-Oxley Act, including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board and the securities exchanges, impose additional reporting and other obligations on public companies. 37 Table of Contents Compliance with evolving public company requirements may continue to increase costs and make certain activities more time-consuming.
As a result, our future capital requirements are uncertain and actual capital requirements may be different from those we currently anticipate. We expect to continue investing in research and development to improve our self-driving technology. We expect we will need to seek equity or debt financing to fund a portion of our future expenditures.
As a result, our future capital requirements are uncertain and actual capital requirements may be different from those we currently anticipate. We expect to continue investing in research and development to improve our self-driving technology.
Under the Lockup Agreements we entered into in connection with the Merger (the “Lockup Agreements”), such lock-up restrictions began at the closing of the Merger (the “Closing”) and end in tranches of 25% of the Lock-Up Parties’ Lock-up Shares at each of (i) November 3, 2022, (ii) November 3, 2023, (iii) November 3, 2024 and (iv) November 3, 2025.
Under the Lockup Agreements, such lock-up restrictions began at the closing of the Merger (the “Closing”) and end in tranches of 25% of the Lock-Up Parties’ Lock-up Shares at each of (i) November 3, 2022, (ii) November 3, 2023, (iii) November 3, 2024 and (iv) November 3, 2025. Notwithstanding the foregoing, (i) each of Mr. Urmson, Mr. Anderson and Mr.
While we believe that we may be able to establish alternate supply relationships and can obtain or engineer replacement components for our single source and other components, we may be unable to do so in the short term (or at all) at prices or quality levels and/or on terms that are favorable to us and we may experience significant delays while re-engineering our system to accept any replacement parts.
While we believe that the Strategic Partnership Agreement contains provisions that adequately disincentivize non-performance by the parties, and while even in the event of non-performance we believe we may be able to establish alternate supply relationships and can obtain or engineer replacement components, we may be unable to do so in the short term (or at all) at prices or quality levels and/or on terms that are favorable to us and we may experience significant delays while re-engineering our system to accept any replacement parts.
If our competitors, including those previously mentioned, broadly commercialize their technology before we do, develop superior technology, or are perceived to have better technology, they may capture market opportunities and establish relationships with customers and partners that might otherwise have been available to us. 18 Table of Contents Material commercialization of self-driving technology first involves pilot deployments, which we and other competitors are currently performing.
If our competitors, including those previously mentioned, broadly commercialize their technology before we do, develop superior technology, or are perceived to have better technology, they may capture market opportunities and establish relationships with customers and partners that might otherwise have been available to us.
Our management team may not successfully or effectively manage our continuing transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws.
Our management team has limited experience in operating a public company. Our executive officers have limited experience in the management of a publicly traded company. Our management team may not successfully or effectively manage our continuing transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws.
Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on these financial instruments each reporting period and that the amount of such gains or losses could be material.
Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on these financial instruments each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our securities.
The impact of changes in fair value on earnings may have an adverse effect on the market price of our securities. 26 Table of Contents If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
In order for these suppliers to undertake the investment needed to produce these components, they may require us to commit to terms, pricing or purchase volumes that are not acceptable to us.
In order for these suppliers to undertake the investment needed to produce these components, they may require us to commit to terms, pricing or purchase volumes that are not acceptable to us. 28 Table of Contents Manufacturing in collaboration with partners is subject to risks.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease other office and industrial facilities in San Francisco, California; Bozeman, Montana; Dallas/Fort Worth, Texas; El Paso, Texas; Houston, Texas; Seattle, Washington; Livonia, Michigan and Louisville, Colorado. We believe our facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations.
Biggest changeWe lease other office and industrial facilities in San Francisco, California; Bozeman, Montana; Dallas/Fort Worth, Texas; El Paso, Texas; Houston, Texas; Seattle, Washington; Livonia, Michigan and Louisville, Colorado.
Item 2. Properties. Our corporate headquarters is located in Pittsburgh, Pennsylvania, where we lease approximately 590,000 square feet of office and industrial space pursuant to leases that expire between 2023 and 2035. Our Pittsburgh facilities contain research and development and general and administrative functions.
Item 2. Properties Our corporate headquarters is located in Pittsburgh, Pennsylvania, where we lease approximately 590,000 square feet of office and industrial space pursuant to leases that expire between 2024 and 2035. Our Pittsburgh facilities contain research and development and general and administrative functions.
Added
We believe our facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations. 47 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeHowever, we do not consider any such claims, lawsuits or proceedings that are currently pending, individually or in the aggregate, to be material to our business or likely or result in a material adverse effect on our future operating results, financial condition or cash flows. Item 4. Mine Safety Disclosures. Not applicable. 46 Table of Contents PART II
Biggest changeHowever, we do not consider any such claims, lawsuits or proceedings that are currently pending, individually or in the aggregate, to be material to our business or likely or result in a material adverse effect on our future operating results, financial condition or cash flows. Item 4. Mine Safety Disclosures Not applicable. 48 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders As of February 10, 2023 there were 101 holders of record of our Class A common stock and 25 holders of record of our Class B common stock.
Biggest changeHolders As of February 2, 2024 there were 95 holders of record of our Class A common stock and 24 holders of record of our Class B common stock.
The following graph compares (i) the cumulative total stockholder return on our Class A common stock from May 10, 2021, the day on which our Class A common stock commenced trading on Nasdaq (which, prior to our domestication to a Delaware corporation in connection with the Merger, were referred to Class A ordinary shares), through December 31, 2022 with (ii) the cumulative total return of the S&P 500 Index and the Nasdaq Composite Index over the same period, assuming the investment of $100 in our common stock and in both of the other indices on May 10, 2021 and the reinvestment of dividends.
The following graph compares (i) the cumulative total stockholder return on our Class A common stock from May 10, 2021, the day on which our Class A common stock commenced trading on Nasdaq (which, prior to our domestication to a Delaware corporation in connection with the Merger, were referred to Class A ordinary shares), through December 31, 2023 with (ii) the cumulative total return of the S&P 500 Index and the Nasdaq Composite Index over the same period, assuming the investment of $100 in our common stock and in both of the other indices on May 10, 2021 and the reinvestment of dividends.
Issuer Purchases of Equity Securities None. 47 Table of Contents Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, or the SEC, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Act.
Issuer Purchases of Equity Securities None. 49 Table of Contents Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, or the SEC, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Act.
As of February 10, 2023, there were 2 holders of record of warrants exercisable for shares of Class A common stock at a price of $11.50 per share. Recent Sales of Unregistered Equity Securities; Use of Proceeds from Registered Offerings None.
As of February 2, 2024, there were 2 holders of record of warrants exercisable for shares of Class A common stock at a price of $11.50 per share. Recent Sales of Unregistered Equity Securities; Use of Proceeds from Registered Offerings None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIncome tax benefit An income tax benefit was recognized in the twelve months ended December 31, 2021 due to the release of a deferred tax asset valuation allowance as a result of deferred tax liabilities incurred from the acquisition of OURS Technology, Inc. 51 Table of Contents Comparison of the Twelve Months Ended December 31, 2021 to the Twelve Months Ended December 31, 2020 Twelve Months Ended December 31, $ Change % Change (in millions, except for percentages) 2021 2020 Collaboration revenue $ 82 $ — $ 82 n/m (1) Operating expenses: Research and development 697 179 518 289 % Selling, general and administrative 116 39 77 197 % Goodwill impairment — — — n/m (1) Total operating expenses 813 218 595 273 % Loss from operations (731) (218) (513) 235 % Other income (expense): Change in fair value of derivative liabilities (20) — (20) n/m (1) Other income (expense), net (9) 4 (13) n/m (1) Loss before income taxes (760) (214) (546) 255 % Income tax benefit (5) — (5) n/m (1) Net loss $ (755) $ (214) $ (541) 253 % (1) Not meaningful.
Biggest changeOur operating results could be materially impacted by these changes and other changes in the overall macroeconomic environment and other economic factors. 52 Table of Contents Comparison of the Twelve Months Ended December 31, 2023 to the Twelve Months Ended December 31, 2022 Twelve Months Ended December 31, $ Change % Change (in millions, except for percentages) 2023 2022 Collaboration revenue $ — $ 68 $ (68) n/m (1) Operating expenses: Research and development 716 677 39 6 % Selling, general and administrative 119 129 (10) (8) % Goodwill impairment — 1,114 (1,114) n/m (1) Total operating expenses 835 1,920 (1,085) (57) % Loss from operations (835) (1,852) 1,017 (55) % Other income (expense): Change in fair value of derivative liabilities (20) 114 (134) (118) % Other income, net 59 15 44 293% Loss before income taxes (796) (1,723) 927 (54) % Income tax expense — — — n/m (1) Net loss $ (796) $ (1,723) $ 927 (54) % (1) Not meaningful.
Selling, general and administrative increased by $13 million, or 11%, to $129 million in the twelve months ended December 31, 2022 from $116 million in the twelve months ended December 31, 2021, primarily driven by an increase in payroll, stock-based compensation and insurance costs, partially offset by a decrease in professional services costs.
Selling, general and administrative increased by $13 million, or 11%, to $129 million in the twelve months ended December 31, 2022 from $116 million in the twelve months ended December 31, 2021, primarily driven by an increase in payroll, stock-based compensation and insurance costs, partially offset by a decrease in and professional services costs.
Other income, net was $15 million in the twelve months ended December 31, 2022, primarily due to interest income earned on short-term investments. Other expense, net was $9 million in the twelve months ended December 31, 2021, primarily due to transaction costs and losses on the disposal of IT equipment.
Other income, net was $15 million in the twelve months ended December 31, 2022, primarily due to transaction costs and losses on the disposal of IT equipment. Other expense, net was $9 million in the twelve months ended December 31, 2021, primarily related to interest income earned on short-term investments.
The risk-free interest rate is based on relevant U.S. treasury rates for a period that matches the expected term of the instrument. 54 Table of Contents Recently Adopted and Issued Accounting Pronouncements See Note 2 – Summary of Significant Accounting Policies to the consolidated financial statements included elsewhere in this Annual Report for recently adopted accounting pronouncements.
The risk-free interest rate is based on relevant U.S. treasury rates for a period that matches the expected term of the instrument. 56 Table of Contents Recently Adopted and Issued Accounting Pronouncements See Note 2 – Summary of Significant Accounting Policies to the consolidated financial statements included elsewhere in this Annual Report for recently adopted accounting pronouncements.
Operating expenses Research and development decreased by $20 million, or 3%, to $677 million in the twelve months ended December 31, 2022 from $697 million in the twelve months ended December 31, 2021, primarily driven by a decrease in stock-based compensation and severance expense, partially offset by an increase in payroll costs and hardware developments costs.
Operating expenses Research and development decreased by $20 million, or 3%, to $677 million in the twelve months ended December 31, 2022 from $697 million in the twelve months ended December 31, 2021, primarily driven by a decrease in stock-based compensation and severance expense, partially offset by an increase in payroll costs, stock-based compensation and other software and hardware developments costs.
Other income (expense) The change in fair value of derivative liabilities resulted in a gain of $114 million in the twelve months ended December 31, 2022 from a loss of $20 million in the twelve months ended December 31, 2021 primarily due to the change in the market price for the underlying instrument.
Other income (expense), net The change in fair value of derivative liabilities resulted in income of $114 million in the twelve months ended December 31, 2022 from a loss of $20 million in the twelve months ended December 31, 2021 primarily due to the change in the market price for the underlying instrument.
No material losses were recorded in the twelve months ended December 31, 2022, 2021 and 2020. The Company has entered into a contract for cloud hosting services under which non-cancelable future minimum payments as of December 31, 2022 are: $61 million for 2023, $61 million for 2024, $64 million for 2025, and $38 million for 2026.
No material losses were recorded in the twelve months ended December 31, 2023, 2022 and 2021. The Company has entered into a contract for cloud hosting services under which non-cancelable future minimum payments as of December 31, 2023 are: $61 million for 2024, $64 million for 2025, $38 million for 2026, and $0 million for 2027.
Cash used for purchases of property and equipment were $15 million, $48 million and $7 million in the twelve months ended December 31, 2022, 2021 and 2020, respectively.
Cash used for purchases of property and equipment were $15 million, $15 million and $48 million in the twelve months ended December 31, 2023,2022 and 2021, respectively.
The Company recognized a goodwill impairment of $1,114 million during the twelve months ended December 31, 2022 as a result of goodwill impairment assessments performed due to significant declines in the market price of the Company’s Class A common stock and its market capitalization during the second and fourth quarters.
The Company recognized goodwill impairment of $1,114 million during the twelve months ended December 31, 2022 as a result of goodwill impairment assessments performed due to significant declines in the market price of the Company’s Class A common stock and its market capitalization. No goodwill impairment was recorded during the twelve months ended December 31, 2023.
Cash and cash equivalents primarily consist of money market funds and U.S. Treasury securities. Short-term investments consist of U.S. Treasury securities. We have incurred negative cash flows from operating activities and significant losses from operations in the past.
Cash and cash equivalents primarily consist of money market funds and U.S. Treasury securities as well as commercial paper. Short-term and long-term investments consist of primarily U.S. Treasury securities as well as corporate bonds. We have incurred negative cash flows from operating activities and significant losses from operations in the past.
Valuation of Derivative Liabilities The Company accounts for shares held by Reinvent Sponsor Y LLC (the “Sponsor”) not forfeited under the terms of the Merger Agreement and subject to price based vesting terms (the “Earnout Shares”) as a derivative liabilities.
The carrying value of goodwill was $- as of December 31, 2023 and December 31, 2022. Valuation of Derivative Liabilities The Company accounts for shares held by Reinvent Sponsor Y LLC (the “Sponsor”) not forfeited under the terms of the Merger Agreement and subject to price based vesting terms (the “Earnout Shares”) as a derivative liabilities.
Cash Flows (Used in) Provided by Investing Activities Net cash used in investing activities increased by $1,102 million in the twelve months ended December 31, 2022 from the twelve months ended December 31, 2021, primarily due to the net purchases of short-term investments of $837 million, and the comparative period including $294 million in net cash acquired through the acquisitions of businesses.
Net cash used in investing activities decreased by $1,102 million in the twelve months ended December 31, 2022 from $250 million of net cash provided in the twelve months ended December 31, 2021 primarily due to net purchases of short-term investments, partially offset by net cash acquired through the acquisitions of businesses in the comparative period.
Income tax benefit An income tax benefit was recognized in the twelve months ended December 31, 2021 due to the release of a deferred tax asset valuation allowance as a result of deferred tax liabilities incurred from the acquisition of OURS Technology, Inc. 52 Table of Contents Liquidity and Capital Resources As of December 31, 2022, our principal sources of liquidity were $262 million of cash and cash equivalents and $839 million of short-term investments, exclusive of restricted cash of $15 million.
Income tax benefit An income tax benefit was recognized in the twelve months ended December 31, 2022 due to the release of a deferred tax asset valuation allowance as a result of deferred tax liabilities incurred from the acquisition of OURS Technology, Inc. 54 Table of Contents Liquidity and Capital Resources As of December 31, 2023, our principal sources of liquidity were $501 million of cash and cash equivalents, $699 million of short-term investments, and $148 million of long-term investments with maturities within 2 years, exclusive of restricted cash of $17 million.
Other income (expense), net The change in fair value of derivative liabilities resulted in a loss of $20 million in the twelve months ended December 31, 2021 primarily due to the change in the market price for the underlying instrument.
Other income (expense) The change in fair value of derivative liabilities resulted in an expense of $20 million and income of $114 million in the twelve months ended December 31, 2023 and 2022, respectively, primarily due to the change in the market price for the underlying instrument.
For this reason, percentage amounts in this Annual Report may vary from those obtained by performing the same calculations using the figures in our consolidated financial statements included elsewhere in this Annual Report. Certain other amounts that appear in this Annual Report may not sum due to rounding.
For this reason, percentage amounts may vary from those obtained by performing the same calculations using the figures in our consolidated financial statements included elsewhere in this Annual Report. Certain other amounts that appear in this Annual Report may not sum due to rounding. Corporate History and Background On November 3, 2021 (the “Closing Date”), Aurora Innovation, Inc.
If economic conditions decline, our future cost of equity or debt capital and access to the capital markets could be adversely affected. 50 Table of Contents Results of Operations Comparison of the Twelve Months Ended December 31, 2022 to the Twelve Months Ended December 31, 2021 Twelve Months Ended December 31, $ Change % Change (in millions, except for percentages) 2022 2021 Collaboration revenue $ 68 $ 82 $ (14) (17) % Operating expenses: Research and development 677 697 (20) (3) % Selling, general and administrative 129 116 13 11 % Goodwill impairment 1,114 — 1,114 n/m (1) Total operating expenses 1,920 813 1,107 136 % Loss from operations (1,852) (731) (1,121) 153 % Other income (expense): Change in fair value of derivative liabilities 114 (20) 134 (670) % Other income (expense), net 15 (9) 24 (267) % Loss before income taxes (1,723) (760) (963) 127 % Income tax benefit — (5) 5 n/m (1) Net loss $ (1,723) $ (755) $ (968) 128 % (1) Not meaningful.
Other income, net was $59 million in the twelve months ended December 31, 2023, compared to $15 million in the twelve months ended December 31, 2022, primarily due to an increase in interest income earned on cash equivalents and investments. 53 Table of Contents Comparison of the Twelve Months Ended December 31, 2022 to the Twelve Months Ended December 31, 2021 Twelve Months Ended December 31, $ Change % Change (in millions, except for percentages) 2022 2021 Collaboration revenue $ 68 $ 82 $ (14) (17) % Operating expenses: Research and development 677 697 (20) (3) % Selling, general and administrative 129 116 13 11 % Goodwill impairment 1,114 — 1,114 n/m (1) Total operating expenses 1,920 813 1,107 136 % Loss from operations (1,852) (731) (1,121) 153 % Other income (expense): Change in fair value of derivative liabilities 114 (20) 134 (670) % Other income (expense), net 15 (9) 24 -267% Loss before income taxes (1,723) (760) (963) 127 % Income tax benefit — (5) 5 n/m (1) Net loss $ (1,723) $ (755) $ (968) 128 % (1) Not meaningful.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of the financial condition and results of operations of Aurora should be read together with Aurora’s Consolidated Financial Statements, included elsewhere in this Annual Report. The following discussion contains forward-looking statements that reflect future plans, estimates, beliefs and expected performance.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of the financial condition and results of operations should be read together with the consolidated financial statements included elsewhere in this Annual Report. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties.
Cash Flows Provided by Financing Activities Net cash provided by financing activities in the twelve months ended December 31, 2021 included net proceeds from the Merger of $1,134 million and net proceeds from the issuance of Series U-2 preferred stock of $398 million. 53 Table of Contents Contractual Obligations, Commitments and Contingencies Aurora may be party to various claims within the normal course of business.
Cash Flows Provided by Financing Activities Net cash provided by financing activities increased by $820 million in the twelve months ended December 31, 2023 from $11 million for the twelve months ended December 31, 2022 due to net proceeds received from the Private Placement and Public Offering, Net cash provided by financing activities decreased by $1,529 million in the twelve months ended December 31, 2022 from $1,540 million for the twelve months ended December 31, 2022 due to the comparative period including net proceeds from the Merger and net proceeds from the issuance of Series U-2 preferred stock. 55 Table of Contents Contractual Obligations, Commitments and Contingencies Aurora may be party to various claims within the normal course of business.
Valuation of Goodwill Goodwill represents the excess purchase consideration of acquired businesses over the estimated fair value of the net assets acquired. Goodwill is not amortized but is evaluated for impairment annually on December 31, or whenever events or circumstances indicate that the carrying amount may not be recoverable.
Goodwill is not amortized but is evaluated for impairment annually on December 31, or whenever events or circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of goodwill exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of goodwill over its implied fair value.
Cash Flows Cash flows for the periods were as follows (in millions): Twelve Months Ended December 31, 2022 2021 2020 Net cash used in operating activities $ (508) $ (564) $ (192) Net cash (used in) provided by investing activities (852) 250 343 Net cash provided by financing activities 11 1,540 2 Net (decrease) increase (1,349) 1,226 153 Cash, cash equivalents, and restricted cash at beginning of the period 1,626 400 247 Cash, cash equivalents, and restricted cash at end of the period $ 277 $ 1,626 $ 400 Cash Flows Used in Operating Activities Net cash used in operating activities was $508 million for the twelve months ended December 31, 2022, a decrease of $56 million from $564 million for the twelve months ended December 31, 2021.
Cash Flows Cash flows for the periods were as follows (in millions): Twelve Months Ended December 31, 2023 2022 2021 Net cash used in operating activities $ (598) $ (508) $ (564) Net cash provided by (used in) investing activities 8 (852) 250 Net cash provided by financing activities 831 11 1,540 Net increase (decrease) 241 (1,349) 1,226 Cash, cash equivalents, and restricted cash at beginning of the period 277 1,626 400 Cash, cash equivalents, and restricted cash at end of the period $ 518 $ 277 $ 1,626 Cash Flows Used in Operating Activities Net cash used in operating activities increased by $90 million in the twelve months ended December 31, 2023 from $508 million for the twelve months ended December 31, 2022 primarily due to receipts in the comparative period of the final payments under the collaboration project plan with Toyota.
Aurora’s Business Aurora is developing the Aurora Driver based on what it believes to be the most advanced and scalable suite of self-driving hardware, software, and data services in the world to fundamentally transform the global transportation market. The Aurora Driver is designed as a platform to adapt and interoperate amongst vehicle types and applications.
On the Closing Date, the Company changed its name from Reinvent Technology Partners Y to Aurora Innovation, Inc. Aurora’s Business Aurora is developing the Aurora Driver based on what we believe to be the most advanced and scalable suite of self-driving hardware, software, and data services in the world to fundamentally transform the global transportation market.
As a result, the Company determined that triggering events had occurred and goodwill impairment assessments were performed. The Company utilized a market approach valuation method utilizing the observable market price of the Company’s Class A common stock as it represented the best evidence of the fair value of its reporting unit.
During the second and fourth quarters of 2022, the market price of the Company’s Class A common stock and its market capitalization declined significantly. As a result, the Company determined that triggering events had occurred and goodwill impairment assessments were performed.
Significant estimates and assumptions utilized in the valuation of certain intangible assets include, but are not limited to, estimated replacement cost, profit margin, opportunity cost, useful lives, and discount rates. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
If indicators of impairment exist, the Company calculates the value of the assets with significant estimates and assumptions utilized in the valuation of certain intangible assets include, but are not limited to, estimated replacement cost, profit margin, opportunity cost, useful lives, and discount rates.
The change in operating cash flows was primarily due to an increase of cash received under the collaboration project plan with Toyota Motor Corporation and a decrease of professional expenses and other expenses paid in connection with the acquisition of ATG which did not recur during the most recent period partially offset by increased incentive compensation payments.
Net cash used in operating activities decreased by $56 million in the twelve months ended December 31, 2022 from $564 million for the twelve months ended December 31, 2021 primarily due to an increase of cash received under the collaboration project plan with Toyota and a decrease of professional expenses and other non-recurring expenses paid in connection with the acquisition of ATG partially offset by increased incentive compensation payments.
Operating expenses Research and development increased by $518 million, or 289%, to $697 million in the twelve months ended December 31, 2021 from $179 million in the twelve months ended December 31, 2020, primarily driven by an increase in payroll costs, stock-based compensation and other software and hardware developments costs.
Operating expenses Research and development expenses increased by $39 million, or 6%, to $716 million in the twelve months ended December 31, 2023 from $677 million in the twelve months ended December 31, 2022, primarily driven by an increase in personnel and software development costs, partially offset by a decrease in hardware development costs.
We expect that the Aurora Driver will ultimately be commercialized in a Driver as a Service (“DaaS”) business model, in which we will supply self-driving technology. We do not intend to own nor operate a large number of vehicles ourselves. Throughout commercialization, we expect to earn revenue on a fee per mile basis.
We expect that the Aurora Driver will ultimately be commercialized in a Driver as a Service (“DaaS”) business model, in which customers or third parties will purchase, manage, and maintain fleets directly, while subscribing to the Aurora Driver and a suite of related services. We do not intend to own nor operate a large number of vehicles ourselves.
Net cash provided by investing activities for the twelve months ended December 31, 2021 decreased by $93 million from $343 million for the twelve months ended December 31, 2020 primarily due net maturities of short-term investments in the comparative period, partially offset by net cash acquired through the acquisitions of businesses.
Cash Flows Provided by (Used in) Investing Activities Net cash provided by investing activities increased by $860 million in the twelve months ended December 31, 2023 from $852 million of net cash used in the twelve months ended December 31, 2022, primarily due to the net purchases of short-term investments in the comparative period.
Unless otherwise indicated or the context otherwise requires, references in this Management’s Discussion and Analysis of Financial Condition and Results of Operations section to “Aurora,” “we,” “us,” “our” and other similar terms refer to Legacy Aurora prior to the Merger and to Aurora and its consolidated subsidiaries after giving effect to the Merger.
Unless otherwise indicated or the context otherwise requires, references to “Aurora,” “we,” “us,” “our” and other similar terms in this section refer to Aurora Innovation, Inc. and its consolidated subsidiaries. Percentage amounts have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding.
Based on the results of the goodwill impairment assessment, the Company recognized a $1,114 million goodwill impairment during the twelve months ended December 31, 2022.
The Company utilized a market approach valuation method utilizing the observable market price of the Company’s Class A common stock as it represented the best evidence of the fair value of its reporting unit. Based on the results of the goodwill impairment assessment, the Company recognized a $1,114 million goodwill impairment during the twelve months ended December 31, 2022.
We intend to partner with OEMs, fleet operators, and other third parties to commercialize and support Aurora-powered vehicles. We expect that these strategic partners will support activities such as vehicle manufacturing, financing and leasing, service and maintenance, parts replacement, facility ownership and operation, and other commercial and operational services as needed.
We expect that these strategic partners will support activities such as vehicle and hardware manufacturing, financing and leasing, service and maintenance, parts replacement, facility ownership and operation, and other commercial and operational services as needed. We expect this DaaS model to enable an asset-light and high margin revenue stream for Aurora, while allowing us to scale more rapidly through partnerships.
From there, we plan to leverage the extensibility of the Aurora Driver to deploy and scale into the passenger mobility market with Aurora Connect, our driverless ride hailing subscription service, and in the longer-term the local goods delivery market. 49 Table of Contents Significant Events and Transactions The Merger On November 3, 2021, the Company consummated a business combination with Legacy Aurora pursuant to the terms of the Merger Agreement.
From there, we plan to leverage the extensibility of the Aurora Driver to deploy and scale into the passenger mobility market with Aurora Connect, our driverless ride hailing subscription service, and in the longer-term the local goods delivery market. 51 Table of Contents Significant Events and Transactions Private Placement On July 21, 2023, we completed a private placement (the “Private Placement”), in which we sold approximately 222 million shares of Class A common stock at a price of $2.70 per share, for proceeds of $584 million, net of transaction costs.
For example, highway driving capabilities developed for trucking will carry to highway segments driven by passenger vehicles in ride hailing applications. We believe this approach will enable us to target and transform multiple massive markets, including trucking, passenger mobility, and local goods delivery market.
We believe this approach will enable us to target and transform the transportation landscape, including trucking, passenger mobility, and local goods delivery market.
We expect this DaaS model to enable an asset-light and high margin revenue stream for Aurora, while allowing us to scale more rapidly through partnerships. During the start of commercialization, though, we expect to briefly operate our own logistics and mobility services, where we own and operate a small fleet of vehicles equipped with our Aurora Driver.
During the start of commercialization, though, we expect to briefly operate our own logistics and mobility services, where we own or lease and operate a small fleet of vehicles equipped with our Aurora Driver. This level of control is useful during early commercialization as we define operational processes and playbooks for our partners.
To date, it has been successfully integrated into numerous different vehicle platforms: from passenger vehicles to light commercial vehicles to Class 8 trucks. By creating one driver system for multiple vehicle types and use cases, Aurora’s capabilities in one market reinforce and strengthen its competitive advantages in others.
By creating one driver system for multiple vehicle types and use cases, Aurora’s capabilities in one market reinforce and strengthen its competitive advantages in others. For example, highway driving capabilities developed for trucking will carry over to highway segments driven by passenger vehicles in ride-hailing applications.
Our significant accounting policies are described in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report. Business Combinations We allocate the fair value of the purchase consideration to the assets acquired and liabilities assumed based on their estimated fair values.
Our significant accounting policies are described in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report. Acquisition Related Intangible Assets Acquired intangible assets primarily consist of in-process research and development (“IPR&D”) from the Company’s historical acquisitions.
Selling, general and administrative increased by $77 million, or 197%, to $116 million in the twelve months ended December 31, 2021 from $39 million in the twelve months ended December 31, 2020, primarily driven by an increase in payroll and professional services costs.
Selling, general and administrative expenses decreased by $10 million, or 8%, to $119 million in the twelve months ended December 31, 2023 from $129 million in the twelve months ended December 31, 2022 primarily driven by a decrease in insurance costs.
Collaboration revenue Collaboration revenue increased by $82 million in the twelve months ended December 31, 2021 due to hours incurred under the collaboration project plan with Toyota Motor Corporation.
Collaboration revenue Collaboration revenue was $68 million in the twelve months ended December 31, 2022 under the collaboration project plan with Toyota Motor Corporation. As of December 31, 2022, the Company had recognized all revenue associated with cash payments received under the collaboration project plan and.
The excess of the fair value of purchase consideration over the net assets acquired is recorded as goodwill. Such fair values require significant estimates and assumptions, especially with respect to the valuation of acquired intangible assets.
Estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Valuation of Goodwill Goodwill represents the excess purchase consideration of acquired businesses over the estimated fair value of the net assets acquired.
Removed
The forward-looking statements are dependent upon events, risks and uncertainties that may be outside of Aurora’s control and actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those discussed in “Part I, Item 1A.
Added
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth in “Part I, Item 1A. Risk Factors” and under the heading “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Annual Report.
Removed
Risk Factors” of this Annual Report and under the heading “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Annual Report. Percentage amounts included in this Annual Report have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding.
Added
(f/k/a Reinvent Technology Partners Y and referred to herein as the “Company”), consummated a business combination with Aurora Innovation Holdings, Inc., a Delaware corporation (f/k/a Aurora Innovation, Inc. and referred to herein as “Legacy Aurora”), and RTPY Merger Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub”), pursuant to an Agreement and Plan of Merger dated July 14, 2021 (the “Merger Agreement” and the transactions contemplated thereby, the “Merger”), by and among the Company, Legacy Aurora and Merger Sub.
Removed
This level of control is useful during early commercialization as we will define operational processes and playbooks for our partners.
Added
Pursuant to the terms of the Merger Agreement, a business combination between the Company and Legacy Aurora was effected through the merger of Merger Sub with and into Legacy Aurora, with Legacy Aurora continuing as the surviving company and as a wholly-owned subsidiary of the Company.
Removed
The Merger was accounted for as a reverse recapitalization. Under this method of accounting, Legacy Aurora was treated as the acquirer while the Company was treated as the acquired company for financial statement reporting purposes.
Added
The Aurora Driver is designed as a platform to adapt and interoperate amongst vehicle types and applications. To date, it has been successfully integrated into numerous different vehicle platforms: from passenger vehicles to light commercial vehicles to Class 8 trucks.
Removed
The Merger provided an increase in cash and cash equivalents of $1,134 million including $1,000 million in proceeds from the private investment in public equity (“PIPE”) transaction that was consummated with the Merger. Transaction costs incurred by both parties to the Merger totaled $88 million.
Added
Throughout commercialization, we expect to earn revenue on a fee per mile basis. We intend to partner with OEMs, Tier 1 automotive supplier, fleet operators, and other third parties to commercialize and support Aurora Driver-powered vehicles.
Removed
As a result of the Merger, we became the successor to a SEC-registered and Nasdaq-listed company which required us to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices.
Added
In connection with the Private Placement, we entered into a registration rights agreement, dated July 18, 2023 (“Private Placement Registration Rights Agreement”), with certain existing institutional and strategic investors, entities affiliated with two of our directors, and new institutional investors.
Removed
We expect to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting and legal and administrative resources, including increased audit and legal fees.
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Pursuant to the Private Placement Registration Rights Agreement, on July 21, 2023, we filed a registration statement with the Securities and Exchange Commission (the “SEC”) for the registration for resale of the securities sold in the Private Placement.
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ATG Business Combination On January 19, 2021, Aurora acquired 100% of the voting interests of ATG, the self-driving technology division of Uber. The acquisition date fair value of the consideration transferred was $1,916 million, which consisted of both preferred and common stock issued to the shareholders of ATG.
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Public Offering On July 21, 2023, we completed a public offering (the “Public Offering”) of approximately 73 million shares of Class A common stock at a price of $3.00 per share, for proceeds of $212 million, net of transaction costs.
Removed
Aurora accounted for the acquisition as a business combination and recognized the assets acquired and liabilities assumed at fair value on the date of acquisition. The excess of purchase consideration over the fair value of the assets acquired was recorded as goodwill.
Added
Following the Public Offering, we issued an additional 11 million shares of our Class A common stock in connection with the exercise of the underwriters’ over-allotment option, for proceeds of $32 million, net of transaction costs.
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Global Economic Conditions The COVID-19 pandemic that began in late 2019 introduced significant volatility to the global economy, disrupted supply chains and had a widespread adverse effect on the financial markets.
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Continental Strategic Partnership Agreement On April 26, 2023, we entered into a Strategic Partnership Agreement with Continental Automotive Technologies GmbH and its wholly owned subsidiary, Continental Autonomous Mobility Germany GmbH (collectively, “Continental”), which was amended on August 30, 2023 to memorialize a short term extension of the finalization period.
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Additionally, changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, the conflict in Ukraine, and steps taken by governments and central banks, particularly in response to the COVID-19 pandemic as well as other stimulus and spending programs, have led to higher inflation, which has led to an increase in costs and has caused changes in fiscal and monetary policy, including increased interest rates.
Added
On September 27, 2023, the parties further amended and restated the Strategic Partnership Agreement in its entirety, which among other things, marked the completion of such finalization period, memorialized the achievement of a milestone contemplated therein, aligned on additional parameters, including certain additional details related to development costs and costs of Aurora’s future generation of its Aurora Driver hardware system, finalized certain appendices in accordance therewith, and extended the term of the agreement for an additional three months.
Removed
Our operating results could be materially impacted by these changes and other changes in the overall macroeconomic environment and other economic factors. Worldwide economic conditions remain uncertain, particularly due to the effects of the COVID-19 pandemic and increased inflation. The general economic and capital market conditions both in the U.S. and worldwide, have been volatile in the past.
Added
Pursuant to the Strategic Partnership Agreement, Continental will, among other things, act as our “Hardware-as-a-Service” partner for the production, provision, and full lifecycle support of the future generation of the Aurora Driver system.
Removed
The capital and credit markets may not be available to support future capital raising activity on favorable terms.
Added
The Strategic Partnership Agreement provides that we will pay Continental on a per-mile basis for vehicles operated by the Aurora Driver using the future generation of our Aurora Driver hardware system. The term of the Strategic Partnership Agreement continues until March 31, 2031.
Removed
Through December 31, 2022, the Company has recognized all $150 million of collaboration revenue provided under the collaboration project plan.
Added
Pursuant to the Strategic Partnership Agreement, Aurora and Continental are each subject to defined and limited exclusivity periods, subject to various exclusions and early termination triggers. Global Economic Conditions Unfavorable conditions in the economy in the United States and abroad may negatively affect the growth of our business and our results of operations.
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Other expense, net was $9 million in the twelve months ended December 31, 2021, primarily due to transaction costs and losses on the disposal of IT equipment. Other income, net was $4 million in the twelve months ended December 31, 2020, primarily related to interest income earned on short-term investments.
Added
For example, macroeconomic events, including rising inflation, tensions in U.S.-China relations, the COVID-19 pandemic, the U.S. Federal Reserve raising interest rates, recent and potential future disruptions in access to bank deposits and lending commitments due to bank failures, the Russia-Ukraine war, and the Israel-Hamas war have led to economic uncertainty and volatility globally.
Removed
Net cash used in operating activities for the twelve months ended December 31, 2021 increased $372 million from $192 million for the twelve months ended December 31, 2020 primarily due to increased payroll costs due to an increased headcount resulting from acquisitions.
Added
The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods. Moreover, negative macroeconomic conditions could adversely impact our ability to obtain financing in the future on terms acceptable to us, or at all.
Removed
Measurement period adjustments are reflected at the time identified, up through the conclusion of the measurement period, which is the time at which all necessary information is received, and is not to exceed one year from the acquisition date.
Added
In addition, the geopolitical instability and related sanctions could continue to have significant ramifications on global financial markets, including volatility in the United States.
Removed
If the carrying amount of goodwill exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of goodwill over its implied fair value. During the second and fourth quarters of 2022, the market price of the Company’s Class A common stock and its market capitalization declined significantly.
Added
As a result, no revenue was recognized during the twelve months ended December 31, 2023.
Removed
Emerging Growth Company Status Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards.
Added
Research and development expenses included non-cash stock-based compensation of $139 million and $137 million in the twelve months ended December 31, 2023 and 2022, respectively.
Removed
The JOBS Act provides that a company can elect not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable.
Added
Selling, general and administrative expenses included non-cash stock-based compensation of $21 million and $19 million in the twelve months ended December 31, 2023 and 2022, respectively.
Removed
We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, and have elected to take advantage of the benefits of this extended transition period.
Added
IPR&D assets are reviewed for impairment considerations annually on December 31, or whenever events or circumstances indicate that the carrying amounts may not be recoverable.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeNonetheless, if our costs were to become subject to inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations. 55 Table of Contents
Biggest changeNonetheless, if our costs were to become subject to inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations. 57 Table of Contents

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