Business context and reporting period
This Form 10-Q covers the three months ended March 31, 2021. The registrant is Reinvent Technology Partners (RTP), a special purpose acquisition company, not Joby Aviation on a standalone basis. RTP reported no operating revenue; its activity was seeking and negotiating a business combination. On February 23, 2021, RTP agreed to combine with Joby Aero, Inc. The proposed transaction remained subject to closing conditions.
Key financial metrics
| Metric | Q1 2021 / March 31, 2021 |
|---|---|
| Operating revenue | None |
| General and administrative expense | $1.292 million |
| Net income | $40.606 million, primarily from a noncash $41.819 million gain as warrant liabilities declined in fair value |
| Trust investment income | $79,847 unrealized gain |
| Operating cash flow | $(1.052) million |
| Cash outside the trust account | $873,032 |
| Trust account | $690.021 million |
| Working capital | Approximately $719,000 |
| Total liabilities | $83.089 million, including $58.119 million in warrant liabilities and $24.150 million in deferred underwriting commissions |
| Debt | No long-term debt and no outstanding working capital loans |
| Redeemable Class A shares | 60.323 million shares classified as temporary equity, recorded at $603.231 million |
The $40.606 million net income is not indicative of operating performance or cash generation: it was principally a noncash warrant remeasurement gain. The filing presents Class A basic and diluted earnings per share as a dash and Class B earnings per share of $2.35.
Material changes versus the prior comparable period
The filing does not provide a prior-year quarterly income statement or cash-flow comparison; RTP was formed in July 2020. Between December 31, 2020 and March 31, 2021, cash outside the trust declined from $1.695 million to $873,032, while warrant liabilities fell from $99.938 million to $58.119 million. The decline in warrant liabilities drove the quarter’s reported gain. The amount of Class A shares subject to possible redemption increased to 60.323 million from 56.262 million.
Transaction, outlook, and risks
- Proposed Joby combination: The agreement provided for $5.0 billion of aggregate equity consideration for Joby shares, plus 7.5 million RTP shares in connection with conversion of the Uber note. RTP also arranged a PIPE subscription for 83.5 million shares for $835 million, including $115 million expected from Reinvent-affiliated investors. Completion was conditional; these were proposed, not completed, terms.
- Liquidity outlook: Management believed available working capital and potential, but uncommitted, sponsor or insider borrowing capacity would cover needs through the earlier of a business combination or one year from the filing. Trust funds were generally restricted pending a combination or liquidation. The company reported a $1.875 million annual support-services fee arrangement with Reinvent Capital, plus expense reimbursements.
- Combination deadline: RTP generally had 24 months from its September 2020 IPO to complete a combination, potentially 27 months if it entered into a qualifying agreement within the first 24 months. Failure to complete would generally require redemption of public shares and liquidation.
- Legal contingency: A shareholder filed suit on April 19, 2021 alleging fiduciary-duty breaches and misleading or incomplete merger disclosures, and seeking to enjoin or unwind the proposed combination or obtain damages. The filing does not quantify any potential loss.
- Controls and accounting: Management concluded disclosure controls were ineffective due to a material weakness involving accounting for IPO warrants. RTP had restated prior financial statements in its May 2021 Form 10-K/A. The filing says no material change in internal control occurred during the quarter.
- Other uncertainty: Management said the financial and transaction effects of COVID-19 were not readily determinable. The filing also cautions that warrant-liability fair values rely in part on estimates and market inputs. No material changes to previously disclosed risk factors were reported.
Important facts for investors to verify
- Confirm the status and final terms of the proposed Joby transaction and $835 million PIPE, including redemptions, financing conditions, and closing approvals.
- Review Joby’s own operating results, cash needs, certification and commercialization plans; RTP’s reported earnings and cash flows do not represent Joby’s business performance.
- Assess the warrant accounting material weakness, prior-period restatement, and any remediation or subsequent control findings.
- Monitor the shareholder litigation, its potential effect on the transaction, and any resulting costs or settlement exposure.
- Distinguish the $690.021 million held in trust from RTP’s $873,032 of operating cash and approximately $719,000 of working capital.
- Verify the potential dilution from public and private warrants, founder shares, PIPE shares, and any share redemptions; warrant liabilities are fair-value-sensitive and the warrants may expire worthless if no combination occurs.