UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No.
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(State or other jurisdiction of |
(I.R.S. Employer |
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(Address of Principal Executive Offices, including zip code) | |
(Registrant’s telephone number, including area code)
N/A
(Former name and address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes
As of November 4, 2024, there were
EVE HOLDING, INC.
| September 30, | December 31, | ||||||||
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2024 |
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2023 |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
$ |
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| Financial investments |
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Related party receivables |
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| Related party loan receivable |
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Other current assets |
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Total current assets |
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| Non-current assets | |||||||||
| Property, plant & equipment, net |
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| Right-of-use assets, net |
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| Deferred income tax, net | |||||||||
| Other non-current assets |
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Total assets |
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$ |
$ |
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LIABILITIES AND EQUITY |
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Current liabilities |
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Accounts payable |
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$ |
$ |
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Related party payables |
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Derivative financial instruments |
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Other current payables |
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Total current liabilities |
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| Non-current liabilities | |||||||||
| Long-term debt |
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| Other non-current payables |
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Total liabilities |
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| Commitments and contingencies (Note 16) | |||||||||
| Equity |
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| Common stock, $ |
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| Additional paid-in capital | |||||||||
| Accumulated deficit | ( |
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| Total equity | |||||||||
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Total liabilities and equity |
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$ |
$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
Amounts may not add due to rounding.
EVE HOLDING, INC.
(Unaudited)
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2024 | 2023 | 2024 |
2023 |
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Operating expenses |
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Research and development expenses |
$ | $ | $ | $ | ||||||||||||
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Selling, general and administrative expenses |
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Operating loss |
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| Gain/(loss) from the change in fair value of derivative liabilities | ( |
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Financial investment income |
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| Related party loan interest income | ||||||||||||||||
| Interest expense | ( |
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Other (loss)/gain, net |
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Loss before income taxes |
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Income tax expense |
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Net loss |
$ | ( |
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| Weighted-average number of shares outstanding – basic and diluted | ||||||||||||||||
| Net loss per share –basic and diluted | $ | ( |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2024 | 2023 | 2024 | 2023 | ||||||||||||
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Net loss |
$ | ( |
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Total comprehensive loss |
$ | ( |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
Amounts may not add due to rounding.
| Common Stock | ||||||||||||||||||||
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Shares |
Amount |
Additional Paid-In Capital |
Accumulated Deficit |
Total Equity |
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| Balance at December 31, 2022 |
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$ | $ | $ | ( |
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| Net loss | - | - | - | ( |
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| Share-based compensation | - | - | - | |||||||||||||||||
| Warrant expenses | - | - | - | |||||||||||||||||
| Balance at March 31, 2023 | ( |
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| Net loss | - | - | - | ( |
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| Share-based compensation and issuance of stock | - | |||||||||||||||||||
| Balance at June 30, 2023 | ( |
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| Net loss | - | - | - | ( |
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| Warrants exercised for common stock | - | - | ||||||||||||||||||
| Share-based compensation and issuance of stock | - | |||||||||||||||||||
| Balance at September 30, 2023 | $ | $ | $ | ( |
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| Balance at December 31, 2023 | $ | $ | $ | ( |
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| Net loss | - | - | - | ( |
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| Share-based compensation and issuance for vested awards | - | |||||||||||||||||||
| Balance at March 31, 2024 | ( |
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| Net loss | - | - | - | ( |
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| Share-based compensation and issuance for vested awards | - | |||||||||||||||||||
| Balance at June 30, 2024 | ( |
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| Net loss | - | - | - | ( |
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| Issuance of common stock, net | - | |||||||||||||||||||
| Warrants exchanged for common stock | - | |||||||||||||||||||
| Warrants exercised for common stock | - | |||||||||||||||||||
| Share-based compensation | - | - | - | |||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | ( |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
Amounts may not add due to rounding.
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Nine Months Ended September 30, | ||||||
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2024 |
2023 |
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Cash flows from operating activities |
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Net loss |
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Adjustments to reconcile net loss to net cash used by operating activities |
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| Depreciation and amortization |
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| Non-cash lease expenses |
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Unrealized gain on the exchange rate changes |
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| Share-based compensation | ||||||||
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| Change in fair value of derivative financial instruments | ( |
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| Changes in operating assets and liabilities | ||||||||
| Accrued interest on financial investments, net |
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| Accrued interest on related party loan receivable, net |
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Other assets |
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Related party receivables |
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Accounts payable |
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Other payables |
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Net cash used by operating activities |
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| Redemptions of financial investments |
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| Purchases of financial investments | ( |
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| Collection of related party loan | ||||||||
| Expenditures for property, plant and equipment | ( |
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| Net cash (used) provided by investing activities | ( |
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| Cash flows from financing activities | ||||||||
| Proceeds from issuance of common stock, net of fees to investors | ||||||||
| Non-investor equity issuance costs | ( |
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| Proceeds from debt, net | ||||||||
| Non-creditor debt issuance costs |
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| Tax withholding on share-based compensation | ( |
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| Proceeds from exercised warrants | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( |
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| Decrease in cash and cash equivalents | ( |
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Cash and cash equivalents at the beginning of the period |
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Cash and cash equivalents at the end of the period |
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$ |
$ |
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Supplemental disclosure of cash information |
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| Cash paid for |
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| Income tax | $ |
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| Interest | $ | $ | ||||||
| Supplemental disclosure of other non-cash investing and financing activities | ||||||||
| Property, plant & equipment expenditures in accounts payable and other accruals | $ | $ | ||||||
| Right-of-use assets obtained in exchange for operating lease liabilities |
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| Issuance of common stock for vested restricted stock units |
$ |
$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
Amounts may not add due to rounding.
EVE HOLDING, INC.
Note 1 – Organization and Basis of Presentation
Eve Holding, Inc. (together with its subsidiaries, as applicable, “Eve,” the “Company,” “we,” “us,” or “our”), is an aerospace company that is dedicated to accelerating the urban air mobility (“UAM”) ecosystem. The Company is taking a holistic approach to progressing the UAM ecosystem with an advanced electric vertical take-off and landing (“eVTOL”) project, a comprehensive global services and support network, and a unique air traffic management solution. The Company is organized in Delaware with operations in Melbourne, Florida and São Paulo, Brazil.
Basis of Presentation
The condensed consolidated financial statements are presented in US Dollars, unless otherwise noted, and have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities Exchange Commission (“SEC”) for interim financial reporting.
Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. Additionally, operating results for interim periods are not necessarily indicative of the results that can be expected for a full year. The unaudited condensed consolidated financial statements herein should be read in conjunction with our audited consolidated financial statements and notes thereto included within our 2023 Form 10-K. These unaudited condensed consolidated financial statements reflect, in the opinion of management, all material adjustments (which include normal recurring adjustments) necessary to fairly state, in all material respects, the Company’s financial position, results of operations, and cash flows for the periods presented. All intercompany balances and transactions were eliminated in consolidation. Certain columns and rows may not add due to rounding.
Use of Estimates
The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires the Company’s management to make estimates and judgments that affected the reported amounts of assets and liabilities and allocations of expenses. These judgments were based on the historical experience, management’s evaluation of trends in the industry and other factors that were deemed relevant at that time. The estimates and assumptions were reviewed on a regular basis and the changes to accounting estimates were recognized in the period in which the estimates were revised. The Company’s management recognizes that the actual results could be materially different from the estimates.
Prior Period Reclassification
We have reclassified certain prior period amounts to conform to the current period presentation. These reclassifications had no effect on the reported results of operations.
Accounting Pronouncements Not Yet Adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This guidance is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this ASU are effective for our 2024 annual financial statements and interim periods beginning in 2025. The Company does not expect the adoption of this ASU will have a material impact on the consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740). This guidance establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing guidance. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024, although early adoption is permitted. The Company is currently evaluating the impact of adopting this new accounting guidance on our consolidated financial statements, but does not expect the adoption of this ASU will have a material impact on the consolidated financial statements and related disclosures.
Cash and cash equivalents include deposits in Bank Deposit Certificates (“CDBs”) issued by financial institutions in Brazil that are immediately available for redemption and fixed term deposits in US Dollars with original maturities of 90 days or less. Balances consisted of the following:
| September 30, |
December 31, |
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2023 |
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| Cash | $ | $ | ||||||
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| Fixed deposits | ||||||||
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$ | $ | ||||||
The financial investments are classified as held-to-maturity (“HTM”) because management has the intent and ability to hold the securities until maturity. These investments include time deposits with original maturities of one year or less, but greater than
| September 30, 2024 | ||||||||||||||||
| Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
| HTM securities, at cost: | ||||||||||||||||
| Time deposits | $ | $ | $ | $ | ||||||||||||
| December 31, 2023 | ||||||||||||||||
| Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
| HTM securities, at cost: | ||||||||||||||||
| Time deposits | $ | $ | $ | $ | ||||||||||||
Note 4 – Related Party Transactions
Relationship with Embraer
Embraer S.A., a Brazilian corporation (sociedade anônima) (“ERJ”), through one of its wholly owned subsidiaries Embraer Aircraft Holdings, Inc. (“EAH” and collectively “Embraer”), own approximately
In July and September 2024, the Company closed a private placement, which included investment from, among others, Embraer, pursuant to which the Company received aggregate gross proceeds of $
Master Service Agreements and Shared Service Agreement In December 2021, the Company and Embraer entered into the Master Service Agreement (“MSA”) and Shared Service Agreement (“SSA”), and as a result, Embraer began charging the Company for research and development (“R&D”) and selling, general and administrative (“SG&A”) services, respectively. The initial terms for the MSA and SSA are
Corporate Costs Embraer incurs corporate costs for services provided to the Company. These costs include, but are not limited to, expenses for information systems, accounting, treasury, purchasing, human resources, legal, and facilities. These costs benefit the Company, but are not covered under the MSA or SSA. The corporate costs are allocated between the “Research and development expenses” and “Selling, general and administrative expenses” line items of the condensed consolidated statements of operations as appropriate.
Development Costs The Company has entered into supply agreements with Embraer entities and joint ventures that Embraer is a party to for the purchase of components and other materials consumed in development activities.
Related Party Receivables and Payables Certain employees have transferred from Embraer to the Company. On the transfer date of each employee, all payroll related accruals for the employee are transferred to the Company. Embraer is responsible for payroll related costs prior to the transfer date. The Company recognizes a receivable from Embraer for payroll costs incurred prior to the transfer date in the “Related party receivables” line of the condensed consolidated balance sheets. Fees and expenses in connection with the MSA, SSA, and other costs are payable within
Royalty-Free Licenses Under the MSA and SSA, the Company has a royalty-free license to access Embraer’s intellectual property to be used within the UAM market.
Leases The Company has entered into agreements with Embraer to lease corporate office space and other facilities, including a site expected to be used to develop the Company's manufacturing facility for eVTOL production. Refer to Note 15 for more information.
Related Party Loan On August 1, 2022, the Company entered into a loan agreement with EAH in order to efficiently manage the Company’s cash at a rate of return that is favorable to the Company for an initial term of
Related Party Expenses
The following table summarizes the related party expenses for the presented periods:
| Three Months Ended | Nine Months Ended |
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| 2024 | 2023 | 2024 |
2023 |
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| Research and development expenses | $ | $ | $ | $ | ||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Total |
$ | $ | $ |
$ |
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Other Current Assets
Other current assets are comprised of the following items:
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2023 |
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| Advances to suppliers | $ |
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Total |
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Property Plant and Equipment
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2023 |
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Development mockups |
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$ |
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Total property, plant and equipment |
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| Less: Accumulated depreciation |
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| Total property, plant and equipment, net | $ |
$ |
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Construction in progress includes costs incurred for the Company’s manufacturing facility to be constructed in Taubaté, São Paulo, Brazil and tooling for eVTOL production that is under construction by vendors that will be owned by the Company.
Other Current Payables
Other current payables are comprised of the following items:
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2023 |
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| Accrued expenses |
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Income tax payable |
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| Other payables |
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Total |
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$ |
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$ |
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Other Non-Current Payables
Other non-current payables are comprised of the following items:
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2023 |
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Advances from customers |
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Total |
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$ |
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Advances from customers relate to customers who have signed non-binding Letters of Intent to purchase eVTOLs.
In January 2023, the Company entered into a loan agreement (the “BNDES Loan Agreement”) with Banco Nacional de Desenvolvimento Economico e Social (“BNDES”), pursuant to which BNDES extended
The first loan (“Sub-credit A”), in the amount of R$
The Company’s long-term debt outstanding included:
| September 30, | December 31, | |||||||||||
| Title | Type | Interest Rate | 2024 | 2023 | ||||||||
| Sub-credit A | Term Loan | $ | $ | |||||||||
| Sub-credit B | Term Loan | (a) | ||||||||||
| Long-term debt principal | $ | $ | ||||||||||
| Unamortized debt issuance costs (b) | ( |
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| Long-term debt | $ | $ |
| (a) | A fixed rate is determined for each draw on the loan, calculated as |
| (b) | Excludes $ |
The long-term debt principal as of September 30, 2024 matures as follows:
| Total | ||||
| 2024 | $ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Thereafter | ||||
| Total | $ |
As of September 30, 2024, Sub-credit A was fully drawn and approximately $
The Company’s common stock trades on the NYSE under the ticker EVEX. Pursuant to the terms of the Amended and Restated Certificate of Incorporation, the Company is authorized to issue the following shares and classes of capital stock, each with a par value of $
Preferred stock may be issued at the discretion of the Company’s Board of Directors, as may be permitted by the General Corporation Law of the State of Delaware and without further stockholder action. The shares of preferred stock would be issuable for any proper corporate purpose, including, among other things, future acquisitions, capital raising transactions consisting of equity or convertible debt, stock dividends, or issuances under current and any future stock incentive plans, pursuant to which the Company may provide equity incentives to employees, officers, and directors and in certain instances may be used as an anti-takeover defense. As of September 30, 2024 and December 31, 2023, there was
In the event of a voluntary or involuntary liquidation, dissolution, distribution of assets, or winding-up, subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of the Company’s common stock will be entitled to receive an equal amount per share of all of our assets of whatever kind available for distribution to stockholders, after the rights of the holders of any preferred stock have been satisfied, if any.
2024 Private Placement
On June 28, 2024 and July 12, 2024, the Company entered into subscription agreements, warrant agreements, and warrant exchange agreements with certain investors relating to a private placement (the “2024 Private Placement”) for (i) the issuance and sale of
Warrants Classified as Equity
Public Warrants
The Company has outstanding warrants that are publicly traded on the New York Stock Exchange (“NYSE”) (the “Public Warrants”) under the ticker EVEXW. Each Public Warrant entitles its holder to purchase