1.Corporate Information

Lilium N.V. (“the Company”), together with its consolidated entities (“Lilium” or the “Group”), is a technology company in the field of urban air mobility and intends to make regional air mobility a reality. Since its founding, Lilium has primarily engaged in research and development of a proprietary electric Vertical Takeoff and Landing (eVTOL) jet (the “Lilium Jet”) for production and operation of a regional air mobility service as well as related services.

Lilium N.V. is a public company under Dutch law and is registered under the Dutch trade register number 82165874. Lilium N.V. has its activities exclusively in Germany. The registered headquarters is Claude-Dornier Str. 1, Geb. 335, 82234 Wessling, Germany. The Company is publicly listed and traded on Nasdaq under the symbols “LILM” for its Class A ordinary shares (“Class A shares”) and “LILMW” for its listed redeemable warrants (“Public Warrants”) since September 15, 2021.

The interim condensed consolidated financial statements of the Group, for the six month period ended June 30, 2023, were authorized for issue by the Company’s Board of Directors (“the Board”) on September 13, 2023.

2.Basis of Preparation and Changes to the Group’s Accounting Policies

The Group’s interim condensed consolidated financial statements for the six month periods ended June 30, 2023 and 2022 are prepared in accordance with IAS 34 Interim Financial Reporting.

The interim condensed consolidated financial statements have been prepared on a going concern basis, applying a historical cost convention, unless otherwise indicated. They are prepared and reported in thousands of Euro (“€ thousand”) except where otherwise stated. Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group’s audited annual consolidated financial statements as of December 31, 2022.

Consolidated entities are as follows:

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Going Concern

The financial statements have been prepared on a basis that assumes the Group will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. Management assessed the Group’s ability to continue as a going concern and evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Group’s ability to continue as a going concern using all information available about the future, focusing on the twelve-month period after the issuance date of the financial statements.

3.Significant Accounting Judgments, Estimates and Assumptions

The preparation of the Group’s interim condensed consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the interim condensed consolidated financial statements. In preparing these interim condensed consolidated financial statements, management exercises its best judgement based upon its experience and the circumstances prevailing at that time. The estimates and assumptions are based on available information and conditions at the end of the financial period presented and are reviewed on an ongoing basis. Actual results may differ from these estimates under different assumptions and conditions and may materially affect the financial results or the financial position reported in future periods.

Assumptions and estimates relating to the Group’s ability to continue as a going concern are described in note 2.

The Group operates its business as a single operating segment, which is also its reporting segment. An operating segment is defined as a component of an entity for which discrete financial information is available and whose results of operations are regularly reviewed by the chief operating decision maker. The Group’s chief operating decision maker is the Chief Executive Officer, who reviews results of operations to make decisions about allocating resources and assessing performance based on consolidated financial information.

4.Covid-19 Risks and Uncertainties, War in Ukraine and Geopolitical Conflicts

The Board is actively monitoring the impact on the Group from the uncertainty regarding the consequences and lingering impact of the COVID-19 pandemic. The Group had implemented logistical and organizational changes to bolster the Group’s resilience to the COVID-19 pandemic. The extent that COVID-19 continues to impact our business, prospects and results of operations will depend on future developments, which are highly uncertain and cannot be predicted. However, based on the latest developments, the Group expects business operations to continue with minimal to no ongoing impact from the COVID-19 pandemic for the foreseeable future.

The Board is also actively monitoring the impact on the Group from the war in Ukraine. The Group does not and does not intend to have any operations in Ukraine, Belarus or Russia, or engage with direct suppliers located in Ukraine, Belarus or Russia. There is currently no direct impact on the Group from the war in Ukraine and sanctions imposed on Russia and Belarus as the Group does not have any operations or direct suppliers located in these jurisdictions. The Group continues to closely monitor the impact on general economic factors from the war in Ukraine, including the impact of inflation, as such puts pressure on the Group’s costs for employees, raw materials and other parts provided by suppliers.

Finally, the Board is also actively monitoring geopolitical conflicts and tension, including the imposition of and changes in foreign investment, economic sanctions and trade control regulations that could adversely impact our business. There is currently no material impact on the Group’s operations from applicable foreign investment, economic sanctions and trade control regulations. However, the imposition of and changes in such regulations in the future could adversely impact our business.

5.Research and Development Expenses

For the six month period ended June 30, 2023, research and development expenses consisted of €40,003 thousand (June 30, 2022: €38,686 thousand) in personnel expenses, including share-based payment expenses; €24,509 thousand (June 30, 2022: €20,047 thousand) expenses incurred by suppliers on behalf of the Group in preparation for certification and serial production of the Lilium Jet; €6,762 thousand (June 30, 2022: €11,549 thousand) of contractor and consulting expenses; €2,195 thousand (June 30, 2022: €4,594 thousand) in testing component and material costs; €3,912 thousand (June 30, 2022: €2,837 thousand) on amortization and depreciation expenses and €6,914 thousand (June 30, 2022: €5,315 thousand) on other miscellaneous expenses.

6.General and Administrative Expenses

For the six month period ended June 30, 2023, general and administrative expenses included €16,705 thousand (June 30, 2022: €16,895 thousand) of personnel expenses, including share-based payment expenses; €9,291 thousand (June 30, 2022: €14,921 thousand) of contractor and consulting expenses; €906 thousand success fee in relation to the fundraising activities (June 30, 2022: nil); €8,642 thousand (June 30, 2022: €7,653 thousand) of IT costs including a Cloud Subscription contract (see note 20); €1,667 thousand (June 30, 2022: €3,358 thousand) in insurance premiums primarily related to Directors and Officers’ Liability insurance; and €2,981 thousand (June 30, 2022: €4,160 thousand) of other miscellaneous expenses.

7.Selling Expenses

For the six month period ended June 30, 2023, selling expenses consisted of €3,100 thousand (June 30, 2022: €7,319 thousand) of personnel expenses, including share-based payment expenses, and €1,152 thousand (June 30, 2022: €2,255 thousand) miscellaneous other expenses.

8.Financial Result

Financial result is comprised of the following for the six month periods ended June 30, 2023 and 2022:

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Finance income in the current period resulted from foreign currency gain on warrant liabilities of €1,542 thousand (June 30, 2022: €1,019 thousand foreign currency expense) and other interest income of €1,479 thousand (June 30, 2022: nil) relating to interest on fixed-term deposits and cash at bank.
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Finance expenses in the current period mainly resulted from the fair value changes of the warrant revaluation of €258,337 thousand (June 30, 2022: €17,369 thousand gain in finance income). For further information please refer to note 17.

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9.Income Taxes

The Group calculated the period income tax expense, during the six month period ended June 30, 2023 for which the Group recorded consolidated income tax expense of €83 thousand (June 30, 2022: income tax benefit of €478 thousand). These income taxes mainly relate to foreign subsidiaries.

Major deferred income taxes have not been recorded. The netting of deferred tax liabilities and deferred tax assets results in a net deferred tax asset. The net deferred tax asset has been valued at zero. Deferred tax assets on the tax losses carried forward are not recognized either given the tax losses carried forward relate to entities with a history of losses.

10.Property, Plant and Equipment

During the six month period ended June 30, 2023, the Group acquired assets with a cost of €11,476 thousand (June 30, 2022: €4,320 thousand):

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No indicators of impairment were identified which would have required items of property, plant and equipment to be tested for impairment in the six month periods ended June 30, 2023 and 2022.

11.Investment in a Joint Venture

Investment in Ionblox

The movement in the investment in Ionblox, Inc (“Ionblox”) during the period was as follows:

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12.Other Financial Assets

Other financial assets are as follows:

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Lilium has placed part of its liquidity in fixed term deposits with a remaining term of more than 3 months to gain a better return on the surplus liquidity. During the period ended June 30, 2023, €20,139 thousand (June 30, 2022: €79,849 thousand) cash was received from matured deposits. The Group invested €60,000 thousand into new fixed-term deposits (December 31, 2022: €20,000 thousand). There was €338 thousand recognized from interest income (June 30, 2022: €359 thousand interest expense), while there was an increase in Expected Credit Losses of €92 thousand (June 30, 2022: decrease of €105 thousand). As of June 30, 2023, the Group held €60,094 thousand (December 31, 2022: €19,987 thousand) in fixed-term deposits.

13.Non-Financial Assets

Non-financial assets are as follows: