Archer Aviation : Q1'24 Shareholder Letter

UNLOCK THE SKIES™

Q1 2024

Shareholder

Letter

Q1 HIGHLIGHTS

Flight Test Campaign Accelerates

• Closing In On Transition Milestone

Key Systems Pass Rigorous Testing

Final Assembly of First

Conforming Aircraft Rapidly

Progressing

Multi-Hundred Million Dollar

Framework Agreement To

Accelerate UAE Launch

Continuing To Maintain Our Strong Liquidity Position

In Q1, Archer flew 100+ flights, keeping us on track to exceed our goal of 400 flights this year. Midnight is closing in on its transition milestone, meaning it would take off vertically, accelerate until it transitions from thrust-born to wing-borne flight and then land again vertically. From there, we intend to fly the aircraft as much as 10-15 times per day getting closer to our commercial mission tempo.

We are putting Midnight's systems and components through rigorous testing as part of its safety of flight readiness for our upcoming piloted flight tests later this year and in support of our ongoing FAA certification program.

We have made significant progress on final assembly and integration of the aircraft's components and systems and are on track to begin piloted flight tests of this aircraft later this year. Yesterday we announced the completion of our new battery pack manufacturing line. Here is abehind-the-scenesfirst look tour of our Integrated Test Lab and Manufacturing Facility where these aircraft are being built.

We recently announced that we signed a framework agreement with the Abu Dhabi Investment Office (ADIO) for multi-hundred-million dollars to accelerate commercial air taxi operations across the UAE. This positions Abu Dhabi as one of the world's leaders in promoting urban air mobility.

We have maintained greater than $520 million of liquidity at the end of each of our past four quarters while continuing to make investments across the aircraft development program in support of our planned commercial launch.

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100+ Flights in Q1

Midnight's Flight Test Campaign

Accelerates - Closing In

On Transition

In Q1 we flew 100+ flights keeping us on track to exceed our goal of 400 flights this year.

We continue to increase Midnight's flight envelope as we prepare to take it through a full transition flight -- meaning it would take off vertically, accelerate until it transitions from thrust-born to wing-borne flight and then land again vertically. We expect to achieve this milestone in the near future.

From there, we intend to fly the aircraft as much as 10-15 times per day getting closer to our commercial mission tempo while we prepare to fly our initial conforming aircraft with a pilot later this year and continue through the critical implementation phase of FAA certification.

To be

update

with pic of

Tom and

Tom quote

• Midnight is the eighth full-scale eVTOL aircraft that I've designed and built. The aircraft is a testament to our world class design and engineering teams. Designed for commercialization, we believe it will deliver on the key capabilities necessary make electric air taxis an everyday reality."
• • TOM MUNIZ ARCHER'S CHIEF TECHNOLOGY

OFFICER

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CERTIFICATION PROGRESS

Key Systems & Components Pass Rigorous Testing Ahead of "For Credit" Testing

Battery Pack

Drop Tests

This is one of the most challenging tests our aircraft will face as part of its FAA's Type Certification program. Midnight's battery packs were dropped from 50 feet at 100%, 30% and 0% state of charge at the National Institute for Aviation Research lab to simulate extreme impact scenarios. Not only did the batteries pass the test, they remarkably still functioned properly after each drop validating the safety and durability of Archer's proprietary battery pack design.

Main Landing Gear

Midnight has the unique and highly beneficial capability of landing both vertically, like a helicopter, and conventionally, like an airplane. This gives Midnight operational and safety advantages over other eVTOL aircraft that are designed to only take off and land vertically during normal operation. With our partner Mecaer, we recently successfully completed a multi-week test campaign where the landing gear was functionally tested to verify the design can withstand any possible landing scenario.

Flight Controls & Avionics

Midnight utilizes fly-by-wire technology and features two side sticks used to fly the aircraft with one managing vertical and directional movement and the other controlling longitudinal and lateral speed. These are sourced from a leading aerospace supplier, Crouzet, and have deep certification heritage as they feature a design that is derived from what is found on the Airbus A220. We've now successfully completed environmental qualification testing on the side sticks, flight guidance panel, display controller, WiFi & LTE data link, audio processor, navigation systems, transponder, and radio altimeter.

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Tracking Our Progress On Certification & Testing

As our focus is now on the last phase of Midnight's Type Certification program, which the FAA calls the "Implementation Phase" as outlined in FAA Order 8110.4c, we use the chart below to explain the phase more simply and provide updates on our progress.

FAA Language:

Plain Language:

Compliance Data Generation	Compliance	Compliance
Substantiation	Findings
Write test		Submit test	FAA audits
plans; build	For credit	and confirms
and analysis
conforming	testing	design
reports
hardware		compliance

COMPONENT &	CERT				KEY
SYSTEM LEVEL	HERITAGE*				UPDATES
FLIGHT CONTROL				-	Completed flight control
SYSTEM					computer, RTOS and software
	In Progress	In Progress	In Progress	In Progress	SOI-2 audit with FAA and
	Safran
				- Completed side stick testing
					w/Crouzet
FLIGHT DECK				-	Completed environmental
					testing of flight guidance
					panel, display controller, WiFi
	In Progress	In Progress	In Progress		& LTE data link, audio
					processor, navigation
					systems, transponder, and
					radio altimeter
LANDING GEAR				-	Completed landing gear
	In Progress	In Progress	In Progress	In Progress	safety of flight test campaign
				-	Wheel TSO received

AIRFRAME & MATERIALS

			- Completed 60% of our "for
			credit" airframe materials
In Progress	In Progress	In Progress	testing campaign as well as
			several safety of flight
			structural assembly tests

ENVIRONMENTAL
CONTROL	In Progress	In Progress	In Progress	- Completed SOI-2 software
In Progress	audit
PROPULSION
SYSTEMS	Scheduled for			- Completed battery pack drop
In Progress	H2 2024			test campaign
AIRCRAFT
LEVEL				- We believe that the FAA is on
3 conforming	Planning			track to issue Midnight's final
		airworthiness criteria in the
multiple Type
aircraft in			near future
Inspection
progress,
Authorizations
6 planned
(TIAs)

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Our Integrated Test Labs Support Our Rapid Builds & Certification Program Testing

Certification Flight Simulator

This simulator includes all of Midnight's conforming flight deck and flight computer hardware to enable hardware and software in the loop integration testing.

The representative flight deck and high fidelity graphics from a 180 degree screen and augmented reality headset also provides accurate feedback for handling quality evaluations and pilot training.

Ironbird

The Ironbird is a complete set of aircraft systems integrated together just as they are on a flying aircraft, but instead of being installed in our airframe, they are installed in a lab on the ground. This lab is used to test all of Midnight's components and systems, software, and hardware-in-the-loop working together both in normal operation and in failure conditions.

This allows us to test failure conditions that would not be flown intentionally to ensure our aircraft systems respond properly and enable continued safe operation to support our company and certification testing.

Propulsion

Test Lab

In this lab, we put our fully assembled electric engines and propellers through rigorous end of line testing to ensure they are operating properly before they are installed on our aircraft. Every engine and propeller we build is balanced and tested before it is installed on our aircraft.

LEARN MORE

6

Completed Installation Of Our High-Volume Battery Pack Manufacturing Line

We chose our battery cell and designed our proprietary battery pack for high volume manufacturing. This is an "automotive style" manufacturing line for the production of Midnight's battery packs that is designed for high-volume production from day one with the final phase of the facility set to be capable of producing up to 15,000 battery packs per year

This facility will produce the battery packs needed to support the ramp of our aircraft production at our high-volume aircraft manufacturing facility in Covington, GA which remains on track be completed later this year.

We have applied automation to the key areas of our battery pack manufacturing process that impact quality, operator safety, and data traceability, including cell test and load, adhesive dispensing, laser cleaning, laser welding, and end of line testing.

We chose to vertically integrate our design and manufacturing of the battery pack itself to ensure it meets the rigorous levels of safety, performance and reliability necessary for its aviation use case. Our battery pack implements a proprietary and robust thermal runaway containment strategy. The battery packs use cylindrical cells as those, relative to other cell form factors, have a track record of safety, performance and scalability.

LEARN MORE

7

Rapidly Progressing

Assembly of First, Piloted

Conforming Midnight

Aircraft

Piloted flight test of this aircraft is on track to begin later this year. As a reminder, we have chosen to build the aircraft that will be used as part of our FAA certification program at our San Jose, California facility because it is just around the corner from our HQ thus allowing us to leverage the proximity to our design, engineering, certification and manufacturing teams.

Key components and systems of the this aircraft will conform to the intended type design for FAA certification.

We intend to build a total fleet of 6 conforming aircraft that can be used in piloted "for credit" testing with the FAA as we progress through the implementation phase with the FAA.

LEARN MORE

8

Nearing Completion

of Phase 2 of 4 On

Construction Of Our

High-Volume

Manufacturing Facility

In Covington, GA

We remain on track to complete construction of our high volume manufacturing facility in Georgia later this year. We have now completed two of the most challenging phases of construction: grading and pouring of the foundations. Because of the topography of the site we had to move ~450,000 cubic yards of dirt to balance the site, which required us to navigate through large deposits of rock that required blasting.

We were recently awarded "Project of the Year" for Newton County thanks to the project's impact, community partnerships, education investment, and leadership commitment.

Now that the foundations are complete, our team is focused on erecting the exterior walls. We are on track to complete the build of the exterior walls in June.

As a reminder, this first phase of our factory build out is a ~350,000 square foot facility on our ~100 acre site designed to support production of up to 650 aircraft annually, which would make it one of the largest manufacturing facilities by volume in the aircraft industry.

Our objective with this facility remains to establish a factory that can support our planned commercial ramp while allowing us to take a phased approach to bringing on Stellantis as our contract manufacturer. Underpinning all of this is our focus on minimizing the capital expenditures we must incur to achieve volume manufacturing capabilities prior to generating significant revenue from our operations.

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"Abu Dhabi is leading the way in accelerating the launch of electric air taxis globally, and ADIO is proud to partner with Archer as one of the world's most innovative companies. We are excited to support Archer toward establishing its international headquarters in Abu Dhabi, and to develop a comprehensive investment framework that will accelerate its progress towards manufacturing and operating its Midnight aircraft in the UAE."

• BADR AL-OLAMA ACTING DIRECTOR

GENERAL ABU DHABI

INVESTMENT OFFICE

"

Multi-Hundred Million Dollar

Framework Agreement To Build the

Future Of Air Travel in the UAE

We recently announced the signing of a framework agreement with ADIO at the DRIFTx mobility event held at the Yas Marina Circuit in Abu Dhabi showcasing the latest in advanced urban mobility, driving discussions, collaboration, and innovation across the sector.1 This agreement covers multi-hundred-million dollar investments to accelerate our planned commercial air taxi operations in the UAE, slated to launch as soon as next year, including in-country manufacturing, operations and training across the region. This comprehensive agreement positions Abu Dhabi as one of the world's leaders in promoting urban air mobility.

Key components of our collaboration with ADIO include vertiport construction, operational enablement for air taxi operations in the UAE, and in-country manufacturing of our Midnight aircraft. ADIO will also help ensure that local workforce development programs for Emirati talent are in place and facilitate the establishment of our international headquarters and Centre of Excellence in Abu Dhabi.

We first announced our planned collaboration with ADIO at the 2023 launch of ADIO's Smart and Autonomous Vehicles Industry cluster, which aims to transform the future of urban mobility globally by supporting the innovation and commercialization of smart and autonomous vehicles across land, sea, and air. The framework agreement announced at DRIFTx represents the culmination of six months of close collaboration between us.

1. The framework agreement discussed above is conditioned on the future execution by the parties of additional binding definitive agreements incorporating the terms outlined in the framework agreement, which definitive agreements may

10not be completed or may contain different terms than those set forth in the framework agreement.