Air taxi builder Lilium has doubts about its financial figures

The electric air taxi manufacturer Lilium reports progress with the flight tests with its new boss. However, the figures in the financial reports should be viewed with caution. In a document to the US Securities and Exchange Commission, the start-up now admits “significant weaknesses in the internal control of financial reporting”.

The company is working to fix it. A Lilium spokesman downplayed the warning. It's a "usual notice" after Lilium used a publicly traded financial vehicle (SPAC) for its IPO last fall. Therefore, the figures must now be examined particularly intensively.

Lilium also announced that the 2021 balance sheet could not yet be approved at the general meeting at the end of October with the appointment of the new boss and ex-Airbus manager Klaus Roewe for an initial period of six years. There will be a separate shareholders' meeting for this. Lilium attributes this shift primarily to pandemic-related capacity restrictions among auditors in the Netherlands. Lilium has its legal seat there, although production takes place near Munich and the company is listed on the US technology exchange Nasdaq.

The confession of weaknesses in internal financial control and delays in the annual financial statements occupies Lilium in a phase in which the start-up does not need any uncertainties. Investors should deposit new money. To do this, they certainly want to see technical successes, but they also need approved balance sheets. So far, Lilium only has costs and announcements, but practically no income. After all, there are purchase intentions for 483 electric high-flyers, which are to be gradually converted into firm orders including down payments starting next year.

Lilium is currently still presenting the loss balance typical of a start-up - in huge dimensions. The half-year balance sheet for 2022 shows no sales, but a loss of 123.7 million euros. A total loss of 841 million euros has accumulated since the company was founded. Red figures are expected for years to come. At the middle of the year there were still almost 230 million euros in cash. That's enough for about a year. In the risk report, Lilium again emphasizes that without fresh money, continued existence is at risk.

Lilium has long been aware of the weaknesses in internal control of the numbers. The balance sheet for 2019 was also corrected before the US IPO. A June document sent to the US Securities and Exchange Commission details shortcomings in financial controls. Ultimately, this could mean that "material misstatements" in annual or interim financial statements are not recognized or prevented, it says. However, reference is also made to the many rules and regulations that a company listed on US stock exchanges must comply with. Lilium's auditors are PricewaterhouseCoopers.

Without addressing the issue of number control, the new Lilium boss Roewe just presented himself to analysts for the first time. He was very confident about the prospects. Roewe believes that from a technical point of view Lilium has the best concept in the electric air taxi market and will be successful.

But the market with many competitors is difficult and a selection process has already started. Google co-founder and ex-boss Larry Page recently announced the discontinuation of his Kitty Hawk air taxi project. Lilium's share price fell from ten to around two dollars within a year.

But the approximately 800 Lilium employees are working hard to ensure that the market entry planned for 2025 succeeds and that the model is approved by the aviation safety authority EASA. Another technical milestone has just been reached.

In Andalusia, Spain, German start-up Lilium is testing its electric flying taxi. For the first time since 2019, the company has now allowed journalists to follow a test flight. WORLD was there.

Source: WELT/Gerhard Hegmann

It was also possible to swivel the engines on the front wings of the electric vertical take-off aircraft in flight and then to generate lift with the wings at high speed. According to Roewe, the new Lilium boss and Airbus A320 industry veteran has not yet discovered any nasty surprises at the start-up.

However, there are changes in marketing. First of all, wealthy customers from the premium segment are to be addressed. Only then will the version for six passengers plus pilot be delivered.

The previous Lilium boss and co-founder, 37-year-old Daniel Wiegand, will in future be responsible for innovations on the board. Roewe explained that he could imagine a model family within ten years and that Lilium would become a pioneer in vertically starting electric models.

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