Beta Technologies Inc.

12/04/2025 | Press release | Distributed by Public on 12/04/2025 08:35

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes, and other financial information, included elsewhere in this Quarterly Report on Form 10-Q and our Prospectus filed with the SEC on November 4, 2025 in connection with our IPO. As discussed in the section titled "Special Note Regarding Forward-Looking Statements," the following discussion contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, including those discussed below and in the section titled "Risk Factors" included under Part II, Item 1A below, as well as in the Prospectus, all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We assume no obligation to update any of these forward-looking statements. Unless otherwise indicated or in the context otherwise requires, all references in this section to the "Company," "BETA," "we," "us" or "our" refer to BETA Technologies, Inc. and its consolidated subsidiaries.
Overview
We are redefining the aerospace industry. We have developed an electric aircraft platform and propulsion systems that are positioned to transform the aviation industry forward into a new phase of growth. We design, manufacture, and sell high-performance electric aircraft, advanced electric propulsion systems, charging systems, and components. Further, we have invested in the underlying infrastructure of this breakthrough technology, which is critical to bringing electric aviation to life. We believe we have developed a differentiated presence in North America and are well positioned to expand globally.
Our company was purpose-built to capture the significant, untapped market opportunity in sustainable, reliable and efficient electric aviation.
Vertical integration allows us to innovate rapidly and capture meaningful economic value throughout an aircraft's lifetime, by providing batteries and aftermarket services for BETA aircraft and other customers. Our focus is on theenablingtechnologies essential to electric aviation, including motors, inverters, batteries, flight controls, charging systems, and a nationwide electric charging network ("Enabling Technologies"). With proprietary control over these core technologies, we offer customers a complete platform to support their adoption of electric aircraft to enable both existing and new missions. This multilayered approach provides us with recurring, high margin opportunities.
We are developing highly scalable technologies that can be tailored to and deployed for cost-effective and safe missions across cargo and logistics, medical, defense and passenger end markets. Our simplified approach to designing electric aircraft allows us to service a variety of end markets and mission types leveraging the same core technologies. The portability of our technologies and systems across various aircraft also unlocks flexibility to innovate on future generations of aircraft.
Recent Developments
On November 5, 2025, we completed our IPO, in which we issued and sold an aggregate of 34,330,882shares of our Class A common stock at a price to the public of $34.00per share, inclusive of the exercise in full by the underwriters to purchase from the Company 4,477,941shares of Class A common stock. We received net proceeds from the IPO of approximately $1,103million after deducting the underwriting discounts and commissions payable by us.
On October 15, 2025, we completed an additional sale and issuance of 1,866,989 shares of our Series C-1 Preferred Stock to an entity affiliated with a board member of the Company, for proceeds of $33.5 million.
Components of Results of Operations
We use a variety of financial metrics to assess the performance of our operations, including: revenues; cost of revenues; research and development expenses; and general and administrative expenses.
Revenues
Our product revenue is primarily generated from the sale of tangible products such asground support equipment ("GSE") andEnabling Technologies for our aircraft. Our service revenue is primarily generated from engineering, consulting and other service arrangements for our customers. Service revenue also includes revenue associated with usage and priority access from our charge stations.
Costs of Revenues
Cost of product revenues and service revenues may include the direct cost of materials, labor, subcontractors, depreciation, and overhead costs (where allowable) depending on the nature of the agreement. Included within cost of product revenues are purchases made directly for contractual performance obligations primarily recognized over time, and as such no inventories are recorded in the consolidated balance sheet.
Research and Development Expenses
We have invested in research and development for our electric aircraft, electric propulsion systems and charging solutions and network. We have also invested in critical components of our enabling technology including batteries, motors and flight computers. We manage our expenses based on several factors, including industry conditions and expected demand for our services.
Research and development expenses consist primarily of personnel expenses, including salaries, benefits, and stock based compensation,expense related to the GE Warrants, costs of consulting, equipment and materials, temporary tooling, depreciation and amortization associated with long-lived assets, and certain overhead expenses, including rent, information technology costs and utilities. Research and development expenses are partially offset by tax credits for scientific research and development from the Revenue Authority of Canada and Revenu Québec, the provincial revenue authority of the Canadian province of Québec, and payments we receive in the form of government grants.
General and Administrative Expenses
General and administrative expenses consist of personnel expenses, including salaries, benefits, and stock based compensation, related to executive management, finance, legal, and human resource functions and other general corporate expenses, including rent, depreciation and amortization associated with long-lived assets, information technology costs, and utilities. General and administrative expenses are partially offset by payments we received in the form of government grants and other reimbursement agreements, including our agreement with the ARMI in which we are reimbursed for certain expenses incurred.
Other (Expense) Income
Other (expense) income consists of interest expense, interest income, and loss on issuance of convertible preferred stock. Interest expense consists primarily of interest on outstanding long-term debt under our Ex-Im Credit Facility and amortization of the associated deferred financing fees, and interest on our sale-leaseback transaction. Interest income consists of interest earned on cash and cash equivalent balances. The loss on issuance of convertible preferred stock relates to the difference between the fair value and aggregate proceeds received from the issuance of Series C and C-1 Preferred Stock.
Income Tax Expense
Our provision for income taxes consists of an estimate of federal, state, and foreign income taxes based on enacted federal, state, and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in tax law. Due to the level of historical losses, we maintain a valuation allowance against U.S. federal and state deferred tax assets as it has been concluded it is more likely than not that these deferred tax assets will not be realized.
Results of Operations
Comparison of Results for the Three and Nine Months Ended September 30, 2025 and 2024
The following table presents selected financial information for the periods presented (dollars in thousands):
Three Months Ended September 30,
Increase
(Decrease)
Increase
(Decrease)
Nine Months Ended September 30,
Increase
(Decrease)
Increase
(Decrease)
2025 2024
($)
(%)
2025 2024
($)
(%)
Revenues
Product revenue
$ 2,917 $ 799 2,118 * $ 7,993 $ 1,395 6,598 *
Service revenue
6,001 2,267 3,734 * 16,490 9,260 7,230 78 %
8,918 3,066 5,852 * 24,483 10,655 13,828 *
Cost of revenues
Product revenue
1,660 662 998 * 2,255 1,250 1,005 80 %
Service revenue
1,081 527 554 * 3,415 2,049 1,366 67 %
2,741 1,189 1,552 * 5,670 3,299 2,371 72 %
Gross margin
Product revenue
1,257 137 1,120 * 5,738 145 5,593
*
Service revenue
4,920 1,740 3,180 * 13,075 7,211 5,864 81 %
6,177 1,877 4,300 * 18,813 7,356 11,457 *
Operating Expenses
Research and development
56,371 54,043 2,328 4 % 170,484 146,152 24,332 17 %
General and administrative
30,380 20,834 9,546 46 % 86,241 57,399 28,842 50 %
Total operating expenses
86,751 74,877 11,874 16 % 256,725 203,551 53,174 26 %
Loss from operations
(80,574) (73,000) 7,574 10 % (237,912) (196,195) 41,717 21 %
Other (expense) income
Interest expense
(3,464) (2,908) 556 19 % (9,214) (8,502) 712 8 %
Interest income
2,628 1,035 1,593 * 7,348 5,740 1,608 28 %
Loss on issuance of convertible preferred stock
(355,551) - 355,551 * (355,551) - 355,551
Total other income (expense)
(356,387) (1,873) 354,514 * (357,417) (2,762) 354,655 *
Loss before income taxes
(436,961) (74,873) 362,088 * (595,329) (198,957) 396,372 *
Income tax expense
(253) (191) 62 32 % (580) (246) 334 *
Net loss
$ (437,214) $ (75,064) $ 362,150 * $ (595,909) $ (199,203) $ 396,706 *
*Percentage increase (decrease) is not meaningful
Revenues
Product revenues increased by $2.1 million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was attributable to new contracts with commercial customers to deliver electronic propulsion motors, batteries, flight control systems and GSE totaling $2.9 million, offset by $0.8 million due to a non-recurring contract for the forward operating base (the "FOB") completed in 2024, which did not repeat in 2025.
Service revenues increased by $3.7 million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was attributable to new and ongoing contracts with commercial customers of $3.7 million related to engineering and consulting services to support our customers' research and development activities, $0.3 million related to priority access to the Company's charging stations, offset by a reduction of revenue of $0.3 million related to completion of a project for the U.S. government during 2024.
Product revenues increased by $6.6 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was attributable to new and ongoing contracts with commercial customers to deliver electronic propulsion motors, batteries, flight control systems, GSE totaling $7.7 million offset by $1.1 million due to a non-recurring contract for the FOB completed in 2024, which did not repeat in 2025.
Service revenues increased by $7.2 million, or 78%, during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was attributable to new and ongoing contracts with commercial customers of $4.1million related to engineering and consulting services to support our customers' research and development activities, $0.9 million related to priority access to the Company's charging stations, and a net increase of $2.2 million from U.S. government customers during 2025.
Cost of Revenues
Cost of product revenues increased by $1.0 million during the three months ended September 30, 2025 compared to the three months ended September 30, 2025 due to an increase in labor and material costs to fulfill contracts with commercial customers of $1.5 million, partially offset by a decrease in labor and material costs due to completion of the FOB during 2024 of $0.5 million.
Cost of service revenues increased by $0.6 million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was attributable to an increase of $0.7 million in labor and material costs to fulfill contracts with commercial customers, partially offset by a decrease in labor and material costs of $0.1 million due to completion of service agreements with the U.S. government during 2024.
Cost of product revenues increased by $1.0million, or 80%, during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 due to an increase in labor and material costs to fulfill contracts with commercial customers of $2.1 million, partially offset by a decrease in labor and material costs due to completion of the FOB during 2024 of $1.1 million.
Cost of service revenues increased by $1.4 million, or 67%, during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was attributable to an increase of $2.3 million in labor and material costs to fulfill contracts with commercial and U.S. government customers, partially offset by a decrease in labor and material costs of $0.9 million due to completion of service agreements with the U.S. government during 2024.
Gross Margin
Product revenue gross margin increased by $1.1million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was attributable to increased product revenue of $2.1 million, offset by an increase of $1.0 million of cost of product revenue. Product revenue gross margin as a percentage of product revenue increased due toa more favorable mix of customer contracts during 2025.
Service revenue gross margin increased by $3.2 million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was attributableto higher service revenue of $3.7 million, partially offset by an increase in cost of service revenue. Service revenue gross margin as a percentage of service revenue increased due to a more favorable mix of customer contracts during 2025.
Product revenue gross margin increased by $5.6 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was attributableto increased product revenue of $6.6 million as well as a more favorable mix of customer contracts during 2025.
Service revenue gross margin increased by $5.9 million, or 81%, during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was attributable to higher service revenue of $7.2 million, partially offset by an increase in cost of service revenue. Service revenue gross margin as a percentage of service revenue increased due to a more favorable mix of customer contracts during 2025.
Research and Development Expenses
Research and development expenses increased $2.3 million, or 4%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was attributable to continued spend related to the development, testing, certification, and prototype production of our electric aircraft. As part of these efforts, we incurred increased professional fees of $1.9 million, labor costs of $0.5 million, and depreciation expense of $1.1 million resulting from our investment in our production facility, offset by a decrease in expenses for parts, materials, and other expenses of $1.2 million based on timing of prototype production related purchases.
Research and development expenses increased $24.3million, or 17%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was attributable to continued spend related to the development, testing, certification, and prototype production of our electric aircraft. As part of these efforts, we incurred increased expenses for parts and materials of $11.5 million, labor costs including stock based compensation of $7.5 million, depreciation and amortization of $4.2 million resulting from our investment in our production facility, and other expenses of $1.1 million.
General and Administrative Expenses
General and administrative expenses increased $9.5 million, or 46%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was attributable to an increase in labor costs of $4.1 million due to increased headcount, and $2.4 million of professional fees, and $3.0 million of other administrative costs.
General and administrative expenses increased $28.8million, or 50%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was attributable to increased stock based compensation expense of $6.7 million, salaries and benefits of $8.3 million due to increased headcount and bonus expense, $7.1 million of professional fees, and $6.7 million of other administrative costs.
Other (Expense) Income
Interest expense increased $0.6 million, or 19%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was attributable to the timing of the last borrowing under our Ex-Im Credit Facility which occurred during September 2024 and sale-leaseback transaction which occurred during July 2025.
Interest expense increased $0.7million, or 8%,for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was attributable to the timing of the last borrowing under our Ex-Im Credit Facility which occurred during September 2024 and sale-leaseback transaction which occurred during July 2025.
Interest income increased $1.6 million for the threeand nine months ended September 30, 2025 compared to the threeand nine months ended September 30, 2024. The increase was primarily due to market fluctuation and the associated increase in our higher average cash and cash equivalents balances held in interest-earning accounts, comparatively.
Loss on issuance of convertible preferred stockis$355.6 million and $0for the three and nine months ended September 30, 2025 and September 30, 2024 due to the difference between the fair value and aggregate proceeds received from the issuance of Series C and C-1 Preferred Stockin the three months ended September 30, 2025.
Income Tax Expense
Income tax expense increased by less than $0.1 million, or 32%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to an increase in the foreign provision on foreign earnings.
Income tax expense increased $0.3 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to an increase in the foreign provision on foreign earnings.
Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
Wedefine EBITDA as net loss, adjusted for interest income, interest expense, income tax expense, and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for loss on issuance of convertible preferred stock, stock based compensation expense, warrant expense, loss on disposal of property and equipment, and IPO readiness costs.
In addition to traditional financial metrics, we use EBITDA and Adjusted EBITDA to help us evaluate our business. We believe that these non-GAAP measures provide useful information to investors because they allow for greater transparency into what measures we use in operating our business and measuring our performance and enable comparison of financial trends and results between periods where items may vary independent of business performance. These non-GAAP measures are presented for supplemental informational purposes and should not be considered as substitutes for or superior to financial information presented in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude certain expenses that are required by GAAP to be recorded in our financial statements, and they are subject to inherent limitations as they reflect the exercise of judgment by our management about which expenses are excluded or included in determining these non-GAAP financial measures. Further, non-GAAP financial measures are not standardized. It may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. In addition, investors are encouraged to review our interim condensed consolidated financial statements and the notes thereto in their entirety and not to rely on any single financial measure.
A reconciliation between net loss, the most directly comparable GAAP financial measure, and the non-GAAP financial measures is as follows (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2025 2024 2025 2024
Net loss $ (437,214) $ (75,064) $ (595,909) $ (199,203)
Increase (decrease) as adjusted for :
Interest income (2,628) (1,035) (7,348) (5,740)
Interest expense 3,464 2,908 9,214 8,502
Income tax expense 253 191 580 246
Depreciation and amortization expense 5,794 3,888 16,314 11,313
EBITDA $ (430,331) $ (69,112) $ (577,149) $ (184,882)
Loss on issuance of convertible preferred stock 355,551 - 355,551 -
Stock based compensation expense
5,205 4,567 16,819 9,172
Warrant expense
308 - 308 -
Loss on disposal of property and equipment
932 351 2,473 591
IPO readiness costs(1)
760 - 1,310 -
Adjusted EBITDA $ (67,575) $ (64,194) $ (200,688) $ (175,119)
(1)Represents legal and accounting related expenses incurred in connection with becoming a public company.
Liquidity and Capital Resources
We have incurred net losses and negative operating cash flows from operations since we were formed and began designing our electric aircraft in 2018, and we expect to continue to incur losses and negative operating cash flows for the foreseeable future until we successfully commence sustainable commercial operations. Historically, our primary sources of liquidity have been borrowings under our Ex-Im Credit Facility, equity financings, government funding and consideration from contracts with customers as well as the proceeds from our IPO and the sale-leaseback transaction. To date, our primary use of capital has been for contractual obligations and the development of our electric aircraft, GSE and Enabling Technologies.
As of September 30, 2025, we had cash and cash equivalents of $687.6million. Until we generate sufficient operating cash flow to fully cover our operating expenses, working capital needs and planned capital expenditures, or if circumstances evolve differently than anticipated, we expect to utilize a combination of equity and debt financings to fund any future remaining capital needs. If we raise funds by issuing equity securities, dilution to stockholders may result. Any equity securities issued may also provide for rights, preferences, or privileges senior to those of holders ofcommonstock. If we raise funds by issuing debt securities, these debt securities may have rights, preferences, and privileges senior to those of preferred and common stockholders. The terms of debt securities or borrowings could impose significant restrictions on our operations. The capital markets have in the past, and may in the future, experience periods of volatility that could impact the availability and cost of equity and debt financing. We can give no assurances that we will be able to secure such additional sources of funds to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs. See Note 1 "Nature of Operations and Liquidity" to the Company's unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, audited annual consolidated financial statements included in the Prospectus, and "Risk factors-Our business plan requires a significant amount of capital. We expect to require additional future funding to support our operations and implementation of our growth plans and we may be unable to access the capital and credit markets or borrow on affordable terms to obtain additional capital that we may require" included in "Risk Factors" in the Prospectus.
Our principal uses of cash in recent periods were to fund our research and development activities, personnel cost and support services, including our battery, motor and charging services. Near-term cash requirements will also include spending on research and development of emerging technologies, strategic growth initiatives, including obtaining certifications and manufacturing our aircraft, commercial and go-to market infrastructure. We do not have material cash requirements related to current contractual obligations. As such, our cash requirements are highly dependent upon management's decisions about the pace and focus of both our short and long-term spending.
Cash requirements can fluctuate based on business decisions that could accelerate or defer spending, including the timing or pace of certification, investments, infrastructure and production of electric aircraft, GSE and Enabling Technologies. Our future capital requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash or grants received from our customers or governmental entities, respectively, the expansion of sales and marketing activities, and the timing and extent of spending to support development efforts, including collaboration agreements.
Capital Expenditures
During the nine months ended September 30, 2025 and 2024, we used $24.4 million and $51.3million in cash, respectively, to fund capital expenditures. We anticipate incurring additional capital expenditures during the remaining portion of the year ending December 31, 2025, primarily related to the purchase of aircraft, production tooling, facility improvements, and buildings.
Sources of Cash
The following table sets forth our cash flows for the periods indicated (in thousands):
For the Nine Months Ended
September,
2025
2024
Net cash (used in) provided by:
Operating activities
(183,386) (165,262)
Investing activities
(24,367) (51,301)
Financing activities
598,380 15,328
Effect of currency translation on cash, cash equivalents and restricted cash
(20) (24)
Net increase (decrease) in cash, cash equivalents and restricted cash
$ 390,607 (201,259)
Operating Activities
We continue to experience negative cash flows from operations as we develop our electric aircraft, GSE and Enabling Technologies and prepare for the future commercialization of our products and services. Our cash flows from operating activities are significantly affected by our expenditures in research and development and overhead manufacturing related to the scaling of our operations. Our operating cash flows are also affected by our working capital needs to support growth, personnel related expenditures, accounts payable and other current assets and liabilities.
For the nine months endedSeptember 30, 2025, net cash used in operating activities was $183.4million, primarily due toa net loss of $595.9 million, offset by non-cash charges including $16.3 million related to depreciation and amortization, $16.8 million related to stock based compensation, $355.6 million related to loss on issuance of convertible preferred stock, and $4.5 million of other non-cash charges, partially offset by $19.4 million of cash provided by changes in operating assets and liabilities. For the nine months ended September 30, 2025, cash provided by changes in operating assets and liabilities of $19.4million was primarily attributable toan increase in accounts payable, accruedexpenses, and current liabilities of $18.0million.
For the nine months ended September 30, 2024, net cash used in operating activities was $165.3million, primarily due to a net loss of $199.2 million, partially offset by non-cash charges including $11.3 million related to depreciation and amortization, $9.2 million related to stock based compensation, and $2.5 million of other non-cash charges, partially offset by $10.9 million of cash provided by changes to operating assets and liabilities. For the nine months ended September 30, 2024, cash provided by changes in operating assets and liabilities of $10.9million was primarily attributable toan increase in accounts payable, accrued expenses, and current liabilities of $7.6 million.
Investing Activities
We continue to experience negative cash flows from investing activities as we build our infrastructure and purchase equipment to support the development and commercialization of our electric aircraft and charging network. Cash flows used in investing activities primarily relate to capital expenditures to support our growth in operations, including expenditures related to the construction and expansion of our charging and production facilities, acquisitions of machinery and equipment, tooling and technology infrastructure, partially offset by proceeds from sales of property and equipment, customer funding from GSE installation and governmental grants.
For the nine months ended September 30, 2025, net cash used in investing activities was $24.4 million, primarily due to net purchases of property and equipment of $25.7million.
For the nine months ended September 30, 2024, net cash used in investing activities was $51.3million, primarily due to net purchases of property and equipment of $51.7 million.
Financing Activities
For the nine months ended September 30, 2025, net cash provided by financing activities was $598.4million, primarily due to the proceeds received from issuances of our Series C and Series C-1 Preferred Stockof$150.4 million and $422.4 million, respectively, and proceeds received from the sale-leaseback transaction of $32.7 million.
For the nine months ended September 30, 2024, net cash provided by financing activities was $15.3million, primarily due tothe proceeds from the issuance of our promissory note of $15.5million.
Ex-Im Credit Facility
On December 13, 2023, we entered into ourEx-Im Credit Facility, which provided commitments in an aggregate amount equal to $170.1 million to, among other things, finance certain of our goods and services costs related to the design, planning, permitting, and construction of the Final Assembly Facility. Our Ex-Im Credit Facility matures on December 20, 2038. As of September 30, 2025, we have fully drawn down theEx-Im Credit Facility in an aggregate principal amount equal to $151.2 million, net of exposure fees of $18.9 million.
The Company's obligations under the Ex-Im Credit Agreement are secured by the "Collateral" (as defined in the Ex-Im Credit Agreement), which generally consists of the Final Assembly Facility.
The Company is no longer able to draw down further funds under our Ex-Im Credit Facility given that each of (a) the commitment availability period for drawing funds thereunder has expired in accordance with its terms and (b) the commitments under ourEx-Im Credit Facility have been fully drawn.
Each disbursement under ourEx-Im Credit Facilityaccrues interest at a fixed interest rate of 5.52%per annum, which per annum interest rate is subject to increase in accordance with the terms of theEx-Im Credit Agreement upon the occurrence of a "Payment Default" and/or a "Trigger Event" (each such term as defined in theEx-Im Credit Agreement). Inclusive of the timing of drawdowns, exposure fees, and debt issuance costs, the effective per annum interest rate on outstanding borrowings under ourEx-Im Credit Facility was 7.32%. Interest under ourEx-Im Credit Facility is payable quarterly in arrears on each March 20, June 20, September 20, and December 20 of each year.
The Company may, from time to time, prepay all or any part of the outstanding principal balance of the disbursements made pursuant to ourEx-Im Credit Facility, subject to a prepayment premium in an amount equal to: the amount by which (a) the amount of the prepaid principal is less than (b) the sum of the present values, discounted in accordance with the terms of the Ex-Im Credit Agreement, of (x) the installments of principal being prepaid, plus (y) the amounts of interest which would otherwise have accrued on such principal to the remaining interest payment dates.
TheEx-Im Credit Agreement provides for mandatory amortization payments with respect to the principal amount of funds disbursed pursuant to ourEx-Im Credit Facility, in the amounts and on the terms set forth in the Credit Agreement, such that such principal amount is repaid in fifty-four (54) successive quarterly installments. Such amortization payments are required to be made by the Company on each March 20, June 20, September 20, and December 20 of each year, commencing on September 20, 2025. Furthermore, theEx-Im Credit Agreement includes mandatory prepayments in connection with certain sanctions-related events, events of loss, and collateral destruction events.
Our Ex-Im Credit Facility documents contain affirmative and negative covenants, including, among other things, delivery of annual audited financial statements and Make More in America Initiative annual reports, maintenance of certain governmental consents, licenses, permits, authorizations, and approvals, compliance with laws (including sanctions) and the "MMIA Compliance Plan" (as defined in theEx-Im Credit Agreement), and maintenance of insurance, along with restrictions on the incurrence of liens, asset dispositions, acquisitions, changes in nature of business, mergers, consolidations, dissolutions, and sales, and other customary covenants, in each case, subject to customary exceptions. TheEx-Im Credit Agreement also includes events of default relating to customary matters (and customary notice and cure periods), including, among other things, nonpayment of principal, interest, or other amounts, violation of covenants, incorrectnessof representations and warranties in any material respect, cross-default with respect to material indebtedness and other Ex-Im indebtedness, bankruptcy, material judgments, and certain ERISA events.
Contractual Obligations and Commercial Commitments
Our contractual obligations and commercial commitments consist primarily of long-term debt obligation and operating leases. These contractual obligations impact our short-term and long-term liquidity and capital needs. As of September 30, 2025, there were no material changes to our contractual obligations and commercial commitments from those described in Note 5 "Notes Payable" and Note 6 "Leases" in the audited consolidated financial statements included within our Prospectus, other than as disclosed in Note 6 "Leases" to the interim condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with GAAP. In connection with preparing our consolidated financial statements and interim condensed consolidated financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expense and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time we prepare our consolidated financial statements. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ materially from our assumptions and estimates. There have been no changes to our critical accounting estimates as disclosed in the audited consolidated financial statements included in the Prospectus.
Recently Issued Accounting Pronouncements
See Note 2 "Basis of Presentation and Accounting Policies" in the Notes to our audited historical consolidated financial statements in the Prospectus and interim condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, for a discussion of recent accounting pronouncements.
Emerging Growth Company Status
Under the JOBS Act, we are an "emerging growth company," which allows us to have an extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period to comply with new or revised accounting standards. Electing to use the phase-in periods permitted by this election may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the longer phase-in periods under Section 107 of the JOBS Act and who will comply with new or revised financial accounting standards.
We will remain an emerging growth company until the earliest of (i) the last day of our first fiscal year in which we have total annual gross revenues of $1.235 billion or more, (ii) the last day of the first fiscal year in which we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, with at least $700 million of equity securities held by non-affiliates as of the end of the last business day of the second quarter of that fiscal year, (iii) the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities, or (iv) the last day of our fiscal year after the fifth anniversary of the date of the completion of the IPO.
Off-Balance Sheet Arrangements
We have no material off-balance sheet arrangements.
Beta Technologies Inc. published this content on December 04, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on December 04, 2025 at 14:36 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]