Aeva Technologies Inc

Previous wording

The following discussion of Aeva’s results of operations and financial condition should be read in conjunction with the information set forth in the financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion may contain forward-looking statements based upon Aeva’s current expectations, estimates, and projections that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”) under the heading “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Unless the context otherwise requires, all references in this section to “we,” “our,” “us” “the Company” or “Aeva” refer to the business of Aeva Technologies, Inc., a Delaware corporation, and its subsidiaries.

Current wording

The following discussion of Aeva’s results of operations and financial condition should be read in conjunction with the information set forth in the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion may contain forward-looking statements based upon Aeva’s current expectations, estimates, and projections that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”) under the heading “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Unless the context otherwise requires, all references in this section to “we,” “our,” “us” “the Company” or “Aeva” refer to the business of Aeva Technologies, Inc., a Delaware corporation, and its subsidiaries.

Previous wording

Cost of revenue principally includes direct material, direct labor and allocation of overhead associated with manufacturing operations, including inbound freight charges and depreciation expense. Cost of revenue also includes the direct cost and appropriate allocation of overhead involved in execution of non-recurring engineering services. Aeva’s gross profit (loss) equals total revenue less total cost of revenue.

Current wording

Cost of revenue principally includes direct material, direct labor and allocation of overhead associated with manufacturing operations, including inbound freight charges and depreciation expense. Cost of revenue also includes the direct cost and appropriate allocation of overhead involved in execution of non-recurring engineering services. Aeva’s gross profit equals total revenue less total cost of revenue.

Previous wording

General and administrative expenses consist of personnel and personnel-related expenses, including salaries, benefits, and stock-based compensation expense of Aeva’s executive, finance, information systems, human resources, and legal, as well as legal and accounting fees for professional and contract services.

Current wording

General and administrative expenses consist of personnel and personnel-related expenses, including salaries, benefits, and stock-based compensation expense of Aeva’s executive, finance, information systems, human resources, and legal teams, as well as legal and accounting fees for professional and contract services.

Previous wording

Other income and expense primarily consist of changes in the fair value of private placement warrants and Series A warrants, foreign currency transaction gains and losses, and realized gains and losses on marketable securities.

Current wording

Other income and expense primarily consist of changes in the fair value of Series A warrants fair value of private placement warrants and, foreign currency transaction gains and losses, and realized gains and losses on marketable securities.

Previous wording

Revenue increased by approximately $1.0 million or 84% during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The increase was primarily due to a $0.8 million increase in the sale of prototype units sold during the three months ended March 31, 2024 as compared to the three months ended March 31 2023. The revenue related to non-recurring engineering services, which is dependent upon the timing of the work performed for our customers also increased by $0.2 million for the three months ended March 31, 2024. This increase was partially offset by a decrease in average selling price per unit for the prototype units.

Current wording

Revenue increased by $1.3 million or 171% during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The increase was primarily due to an increase in the total number of units sold and non-recurring engineering services which is dependent upon the timing of the work performed for our customers. This increase was partially offset by a decrease in the per unit average selling price of the units sold.

Previous wording

Research and development expenses decreased by approximately $0.4 million, or 2%, to $25.0 million for the three months ended March 31, 2024, from $25.4 million for the three months ended March 31, 2023. Research and development expenses decreased primarily due to a decrease of $2.1 million in research material expenses related to product development, this was partially offset by a $0.8 million increase in payroll related expenses, a $0.5 million increase in service costs, and a $0.4 million increase in depreciation and amortization.

Current wording

Research and development expenses decreased by $0.9 million, or 3%, to $26.2 million for the three months ended June 30, 2024, from $27.1 million for the three months ended June 30, 2023. Research and development expenses decreased primarily due to a decrease of $1.6 million in material expenses related to product development and a $0.1 million decrease in employee related expenses, partially offset by a $0.4 million increase in software subscription expenses, a $0.3 million increase in consulting expenses, and a $0.1 million increase in facility related expenses.

Previous wording

Cost of revenue increased by approximately $1.0 million or 38%, during the three months ended March 31, 2024, from the three months ended March 31, 2023. The increase was primarily due to an increase in number of units sold during the three months ended March 31, 2024 as compared to the three months ended March 31 2023 and also due to increase in cost of revenue related to non-recurring engineering services.

Current wording

Cost of revenue increased by $1.2 million, or 23%, during the six months ended June 30, 2024, from the six months ended June 30, 2023. The increase was primarily due to an increase in the sale of the prototype units sold in 2024 as compared to 2023 and increase in cost of revenue related to the non-recurring services revenue.

Previous wording

Selling and marketing expenses decreased by approximately $0.1 million, or 3%, to $2.5 million for the three months ended March 31, 2024, from $2.6 million for the three months ended March 31, 2023. The decrease was primarily due to a decrease in payroll related expenses of $0.3 million, this was partially offset by an increase in marketing related expenses of $0.2 million.

Current wording

Selling and marketing expenses increased by $0.1 million, or 4%, to $4.2 million for the six months ended June 30, 2024, from $4.1 million for the six months ended June 30, 2023. The increase was primarily due to an increase in payroll related expenses.

Previous wording

Interest income increased by $0.4 million, or 19%, during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The increase was due to change in our investment portfolio, as the Company invested in higher interest bearing securities on the maturity of certain securities during three months ended March 31, 2024 as compared to the three months ended March 31, 2023. This was partially offset by change in the overall balance of marketable securities.

Current wording

Interest income increased by $0.3 million, or 6%, during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The increase was due to change in the interest rate during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, partially offset by a decrease in the overall balance of interest-bearing cash equivalents and marketable securities.

Previous wording

Other income decreased by $0.5 million for the three months ended March 31, 2024 primarily due to the change in the fair value of Series A warrant liability.

Current wording

Other income increased by $3.1 million for the six months ended June 30, 2024, primarily due to a change in in the fair value of Series A warrant liability.

Previous wording

Aeva’s capital requirements will depend on many factors, including sales volume, the timing and extent of spending to support research and development efforts, investments in information technology systems, the expansion of sales and marketing activities, and market adoption of new and enhanced products and features. As of March 31, 2024, Aeva had cash and cash equivalents and marketable securities totaling $189.3 million.

Current wording

Aeva’s capital requirements will depend on many factors, including sales volume, the timing and extent of spending to support research and development efforts, investments in information technology systems, the expansion of sales and marketing activities, and market adoption of new and enhanced products and features. As of June 30, 2024, Aeva had cash, cash equivalents and marketable securities totaling $160.2 million.

Previous wording

Aeva has incurred negative cash flows from operating activities and losses from operations in the past as reflected in its accumulated deficit of $494.9 million as of March 31, 2024. Aeva expects to continue to incur operating losses due to continued investments that it intends to make in its business, including development of products. Aeva believes that existing cash and cash equivalent and marketable securities will be sufficient to fund operating and capital expenditure requirements through at least 12 months from the date of issuance of these financial statements.

Current wording

Aeva has incurred negative cash flows from operating activities and losses from operations in the past as reflected in its accumulated deficit of $538.3 million as of June 30, 2024. Aeva expects to continue to incur operating losses due to continued investments that it intends to make in its business, including development of products. Aeva believes that existing cash and cash equivalent and marketable securities will be sufficient to fund operating and capital expenditure requirements through at least 12 months from the date of issuance of these financial statements.

Previous wording

For the three months ended March 31, 2024, net cash used in operating activities was $31.0 million, attributable to a net loss of $35.3 million and a net change in net operating assets and liabilities of $2.9 million, partially offset by non-cash charges of $7.3 million. Non-cash charges primarily consisted of $5.3 million in stock-based compensation, $1.3 million in depreciation and amortization expense, $0.9 million in amortization of right of use assets, $0.5 million in impairment of inventory and $0.4 million in change in the fair value of warrant liabilities partially offset by $1.1 million in amortization of premium and accretion of discount on available for sale securities. The increase in net operating assets and liabilities of $2.9 million was primarily due to a $3.6 million decrease in accrued employee costs, a $0.9 million decrease on lease liability, a $0.4 million increase in accounts receivable and a $0.3 million increase in inventory, this was offset by a $1.9 million increase in other current liabilities and a $0.4 million decrease in other current and non-current assets.

Current wording

For the six months ended June 30, 2024, net cash used in operating activities was $60.1 million, attributable to a net loss of $78.7 million and a net change in net operating assets and liabilities of $8.0 million, partially offset by non-cash charges of $10.6 million. Non-cash charges primarily consisted of $10.6 million in stock-based compensation, $2.8 million in depreciation and amortization expense, $1.7 million in amortization of right of use assets and $0.7 million in inventory reserves and others, partially offset by $3.1 million change in the fair value of warrant liability and by a $2.1 million in amortization of premium and accretion of discount on available for sale securities. The change in net operating assets and liabilities was primarily due to a $16.5 million increase in other current liabilities is primarily due to a $14.0 million accrual for litigation settlement cost, a $0.3 million decrease in other non-current assets, a $0.2 million increase in accounts payable and $0.3 million increase in accrued liabilities, partially offset by a $3.0 million decrease in accrued employee cost, a $3.2 million increase in other current assets, a $1.7 million decrease in lease liability, a $1.2 million increase in inventories and a $0.2 million increase in accounts receivable.

Previous wording

For the three months ended March 31, 2024, net cash provided by investing activities was $22.0 million, attributable to maturity of available-for-sale investments of $62.5 million, partially offset by purchase of investments of $38.9 million and purchase of property, plant and equipment of $1.6 million.

Current wording

For the six months ended June 30, 2024, net cash provided by investing activities was $45.4 million, attributable to maturity of available-for-sale investments of $99.9 million, partially offset by purchase of investments of $52.1 million and purchase of property, plant and equipment of $2.4 million.

Previous wording

For the three months ended March 31, 2024, net cash used by financing activities wasattributable to a $0.04 million proceeds from stock option exercises, offset by $0.06 million of payments of taxes withheld on net settled vesting of restricted stock units.

Current wording

For the six months ended June 30, 2024, net cash used in financing activities wasattributable to payment of taxes withheld on net settled vesting of restricted stock units.

Previous wording

For the three months ended March 31, 2024 there were no significant changes to our critical accounting policies and estimates. For a more detailed discussion of our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and Note 1 of the notes to condensed consolidated financial statements included in this Form 10-Q.

Current wording

For the six months ended June 30, 2024 there were no significant changes to our critical accounting policies and estimates. For a more detailed discussion of our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and Note 1 of the notes to condensed consolidated financial statements included in this Form 10-Q.

Previous wording

Note 1 to Aeva’s financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report on Form 10-Q.

Current wording

See Note 1 to Aeva’s financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report on Form 10-Q.