BETA 10-K & 10-Q changes, risk factors and insider trading

There have been no material changes to the risk factors disclosed in “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2025.

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 Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 9, 2026. 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 Annual Report,Report on Form 10-K for the year ended December 31, 2025, 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 the context otherwise requires, all references in this section to the “Company,” “BETA,” “we,” “usus,” or “our” refer to BETA Technologies, Inc. and its consolidated subsidiaries.

We are redefiningcontinuing to redefine the aerospace industry. We have developed an electric aircraft platform and propulsion systems that are positioned to transform the aviation industry; entering into a new phase of growth. We design, manufacturemanufacture, and sell high-performance electric aircraft, advanced electric propulsion systems, charging systemssystems, and components.components that are positioned to transform the aviation industry. 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.

We are developingcontinuing to develop highly scalable technologies that can be tailored to and deployed for cost-effective and safe missions across cargo and logistics, medical, defensedefense, and passenger end markets. Our simplified approach to designing electric aircraft allows us to service a variety of end markets and mission types while 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.

Since inception, the Company has devoted substantially all of its time and efforts to performing research and development activities, raising capital, recruiting management and technical staff to support these operationsoperations, and designing manufacturing processes. During the three and six months ended MarchJune 31,30, 2026, the Company continued to make investments across facilities, equipmentequipment, and tooling needed to move toward manufacturing ofmanufacture its aircraft and charging systems.

Comparison of Results for the Three and Six Months Ended MarchJune 31,30, 2026 and 2025

Our product revenue is primarily generated from the sale of tangible products such as our batteries, motors,engines, flight control systemssystems, and an international network of electric charging and related equipment (“Enabling Technologies”). Our service revenue is primarily generated from engineering, consultingconsulting, and other service arrangements for our customers. Service revenue also includes revenue associated with usage of and priority access to our chargecharging stations.

Product revenues decreasedincreased by $1.5$0.7 million, or 61%,29%, during the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The decreaseincrease was attributable to the delivery of ground service equipment (“GSE”) to commercial and foreign government customers of $2.7 million during 2026, offset by the delivery of electric propulsion motorsengines and batteries to commercial customers totaling $2.3$2.0 million during 2025, offset by a new contract with a commercial customer to deliver GSE of $0.8 million during 2026.2025.

ServiceProduct revenues increaseddecreased by $2.1$0.8 million, or 29%,16%, during the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025. The increasedecrease was attributable to contractsthe withdelivery of electric propulsion engines and batteries to commercial customers oftotaling $6.2$4.3 million relatedduring to engineering and consulting services to support our customers’ research and development activities and $0.1 million related to priority access to the Company’s charging stations,2025, offset by $4.2the delivery of GSE to commercial and foreign government customers of $3.5 million related to completion of services for the U.S. government during 2025.2026.

Cost of product revenues and service revenues may include the direct cost of materials, labor, subcontractorssubcontractors, 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 condensed consolidated balance sheets.

Cost of product revenues increased by $0.1$1.6 million,million orand 12%,$1.7 million during the three and six months ended MarchJune 31,30, 2026 compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increase was attributable to labor and material costs to fulfill contracts with commercial and foreign government customers.

Cost of service revenues increased by $2.5$3.8 million and $6.3 million during the three and six months ended MarchJune 31,30, 2026 compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increase was attributable to an increase of $2.8 million in labor and material costs to fulfill contracts with commercial customers, partially offset by $0.3 million due to completion of services for theand U.S. government during 2025.customers.

Research and development expenses increased $33.9 million, or 59%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase wasare attributable to continued spend related to the development, testing, certification, and prototype production of our electric aircraft, electric propulsion systems, charging solutionssolutions, and network. AsThe partincreases ofto theseresearch efforts,and we incurred increaseddevelopment expenses forwere partsattributable and materials of $7.5 million, labor costs including stock-based compensation expense of $14.1 million, warrant expense of $5.6 million resulting fromto the collaborativefollowing arrangement(in with GE Aerospace and other expenses of $6.7 million.millions):

General and administrative expenses increased $19.0$17.7 million, or 68%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase was attributable to increased stock-based compensation expense of $10.3$5.9 million, salaries and benefits of $4.4$7.7 million due to increased headcount, $2.0 million of professional fees and $2.3$4.1 million of other administrative costs.

Interest income increased $11.8$11.3 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 and $23.1 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was attributable to interest on the proceeds from convertible preferred stock offerings and the IPO.

Interest expense increased $0.8 million, or 26%,27%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 and $1.5 million, or 27%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was attributable to a sale-leaseback transaction that occurred during 2025.

Provision for income taxes increased by less than $0.1 millionmillion, or 17%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. Provision for income taxes increased by $0.2 million, or 48%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to an increase in tax on foreign earnings.

We define EBITDA as net loss adjusted for interest income, interest expense, provision for income taxestaxes, and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted for stock-based compensationcompensation, warrant expense, warrantacquisition-related expense, loss on disposal of property and equipmentequipment, and IPO costs.

We have incurred net losses and negative operating cash flows from operations since we were formed and began designing our electric aircraft in 20182018, 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 fundingfunding, 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 the development of our electric aircraft and Enabling Technologies. As of MarchJune 31,30, 2026, we had cash and cash equivalents of $1,589$1,479 million. Until we generate sufficient operating cash flow to fully cover our operating expenses, working capital needsneeds, 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, preferencespreferences, or privileges senior to those of holders of common stock. If we raise funds by issuing debt securities, these debt securities may have rights, preferencespreferences, and privileges senior to those of 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 the heading “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” in Part I, Item 1A. “Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2025.

Our principal uses of cash in recent periods were to fund our research and development activities, personnel costcost, and support services, including our battery, motorengine, 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, infrastructureinfrastructure, and production of electric aircraft 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 activitiesactivities, and the timing and extent of spending to support development efforts, including collaborative arrangements.

During the threesix months ended MarchJune 31,30, 2026 and 2025, we used $24.2$65.3 million and $6.3$11.8 million in cash, respectively, to fund capital expenditures. We anticipate incurring additional capital expenditures during the remaining portion of the year ending December 31, 2026, primarily related to the investment in machinery and equipment, buildingsbuildings, and our charging network.

For the threesix months ended MarchJune 31,30, 2025,2026, net cash used in operating activities was $58.3$170.2 million, primarily due to a net loss of $78.3$271.1 million, offset by non-cash charges includingof $5.1$80.2 million related to depreciationmillion, and amortization, $7.3 million related to stock-based compensation, $1.5 million of other non-cash charges and $6.1 million of cash providedadjusted by changesa tochange operating assets and liabilities. For the three months ended March 31, 2025, cash provided by changes toin operating assets and liabilities that provided a net source of $6.1cash millionof was$20.7 million. This source of cash primarily attributable toreflected an increase in accounts payable, accrued expenses and current liabilitiesliabilities, ofan $4.5increase million.in deferred revenue, and a decrease in prepaid expenses and other current assets.

WeFor continuethe tosix experiencemonths negativeended cashJune flows30, from investing activities as we build our infrastructure2026 and purchase2025, equipmentnet to support the development and commercialization of our electric aircraft and charging network. Cash flowscash used in investing activities primarilywas relaterelated to capitalpurchases expendituresof property and equipment to support our growth in operations, including expenditures related to the construction and expansion of our chargingproduction and productioncharging facilities, acquisitionsand ofinvestment machineryin machinery, equipment, tooling, and technology infrastructure. For the six months ended June 30, 2025, net cash used to purchase property and equipment and tooling and technology infrastructure,was partially offset by proceeds from salesthe sale of property and equipment.

For the threesix months ended MarchJune 31,30, 2026,2026 and 2025, net cash usedprovided inby financing activities was $1.2 million, primarily duefrom tothe exercise of stock options, offset by repayment of borrowings of $1.4 million, offset byand other financing activities.

As of MarchJune 31,30, 2026, 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 Annual Report on Form 10-K for the year ended December 31, 2025.

In connection with preparing our 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, expenseexpense, and the related disclosures. We base our assumptions, estimatesestimates, and judgments on historical experience, current trendstrends, and other factors that management believes to be relevant at the time we prepare our consolidated financial statements. However, because future events and their effects cannot be determined with certainty, actual results could differ materially from our assumptions and estimates. During the threesix months ended MarchJune 31,30, 2026, there have been no material changes to our critical accounting estimates included in the Annual Report on Form 10-K for the year ended December 31, 2025, other than as described below.