Eve Holding Inc
For the period ended Sep 30, 2024. Filed Nov 4, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 4, 2024
EVEX$1.85+17.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001554855-24-000621
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-04.
0001554855-24-000734
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 87 previous paragraphs and 93 current paragraphs.
48 unchanged; 25 reworded; 20 added; 14 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
BNDES Financing Agreement
Current report
On October 10, 2024, EVE Soluções de Mobilidade Aérea Urbana, Ltda. (“Eve Brazil”), a Brazilian limited liability company and a wholly owned subsidiary of the Company, and Embraer S.A., a Brazilian corporation, as intervening party (“Embraer”), entered into a financing agreement, dated as of October 7, 2024 (the “Financing Agreement”), with Banco Nacional de Desenvolvimento Econômico e Social – BNDES, Brazil’s National Development Bank (“BNDES”), pursuant to which BNDES has agreed to grant four lines of credit to Eve Brazil. The credit is intended for the deployment of a manufacturing unit for the production of eVTOLs, in Taubaté, State of São Paulo. The Financing Agreement provides that the availability of such lines of credit is subject to BNDES’s rules and regulations.
Current report
The first line of credit (“Sub-credit A”), in the amount of R$140 million (approximately $25.1 million) is to be provided from, among other sources, the resources of the Worker Support Fund – FAT and the resources originating from FAT – Special Deposits. The second line of credit (“Sub-credit B”), in the amount of R$60 million (approximately $10.8 million), is to be provided from funds raised by the BNDES System in foreign currency. The third line of credit (“Sub-credit C”), in the amount of R$210 million (approximately $37.6 million), is to be provided from, among other sources, the resources of the Worker Support Fund – FAT and the resources originating from FAT – Special Deposits. The fourth line of credit (“Sub-credit D”), in the amount of R$90 million (approximately $16.1 million), to be provided from funds raised by the BNDES System in foreign currency.
Current report
The principal amount of the debt arising from the Sub-credit A will bear an interest rate of 2.20% per annum (as remuneration), and that arising from the Sub-credit C will bear an interest rate of 2.75% per annum (as compensation) above the Reference Rate (TR) 226, published in the Time Series Management System - SGS of the Central Bank of Brazil, under code no. 226, or any other that may replace it. The principal amount of the debt owed under Sub-credit B will bear interest at the rate of 1.10% per annum and under Sub-credit D will bear interest at the rate of 1.65% per annum plus the fixed rate published by the BNDES System.
Current report
The debit balance from Sub-credit B and Sub-credit D, including the principal, compensatory and late payment interest, expenses, commissions and other agreed charges, will be updated daily according to the US dollar exchange rate fluctuation index (PTAX), sale quotation, published by the Central Bank of Brazil on the previous business day.
Current report
Such credit lines shall be used by Eve Brazil within 42 months from the date of the Financing Agreement. The principal of debt arising from each Sub-credit of this Instrument shall be paid to BNDES in 25 semiannual and successive installments starting in 2028.
Current report
The Financing Agreement can be early terminated, and payment of any outstanding amount can be accelerated, by BNDES in certain events provided for in the Financing Agreement.
Current report
Closing of 2024 Private Placement
Current report
Citibank Credit Agreement
Current report
On October 29, 2024, the Company entered into a credit agreement with Citibank, N.A. (“Citi”) (the “Credit Agreement”), pursuant to which on October 29, 2024, Citi advanced $50 million to support the Company’s production and sale of eVTOL aircraft. The loan is subject to an interest rate of 3.90% per year plus Term Secured Overnight Financing Rate (“SOFR”) and a term of four years, with $25 million due on October 29, 2027 and $25 million due on October 30, 2028. The Credit Agreement contains events of default; change in control provisions; affirmative and negative covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to incur additional indebtedness; create liens on assets; engage in mergers and consolidations; sell assets; pay dividends and distributions; engage in certain transactions with affiliates except in the ordinary course of business; and enter into sale and leaseback transactions. The Credit Agreement requires compliance with a minimum debt service coverage ratio. The ratio is tested on the last day of each fiscal quarter for the trailing four quarter period then ended, beginning June 30, 2027.
Current report
Research and development expenses increased by $3.8 million and $24.2 million for thethree and nine months ended September 30, 2024, respect ively. The incr ease in research and development expense wasprimarily driven by the MSA with Embraer who performs several developmental activities for Eve. These efforts continue to intensify with increasing maturity of the development of our eVTOL, including increased engagement of the engineering team who, following the roll-out of our engineering prototype in July 2024, is in the process of performing a series of system and integration ground tests on the aircraft that must be conducted before its debut flight.
Current report
Selling, general and administrative expenses increased by $3.4 million and $2.5 million for thethree and nine months ended September 30, 2024, respectively, primarily due to a combination of higher outsourced services and payroll costs. The increase in payroll expenses reflect mostly an increase in Eve’s headcount, as well as industrialization and other costs associated with Eve’s Brazilian eVTOL manufacturing site, located in the city of Taubaté, São Paulo, Brazil. These increases offset savings on Director & Officers insurance expenses.
Current report
Interest expense
Current report
Interest expense increased for the three and nine months ended September 30, 2024, primarily related to the initial draw on the BNDES loan in September 2023.
Current report
Other (loss)/gain, net
Current report
Other loss, net increased $2.2 million for the three months ended September 30, 2024, primarily related to an increase in foreign currency losses of $1.6 million and fees and taxes associated with the BNDES loan of $0.6 million as compared to the three months ended September 30, 2023.
Current report
Other loss, net increased $1.6 million for the nine months ended September 30, 2024, primarily related to an increase in fees and taxes associated with the BNDES loan of $1.9 million, partially offset by foreign currency gains of $0.3 million as compared to the nine months ended September 30, 2023.
Current report
Future capital requirements include:
Current report
Net cash related to investing activities decreased $81.8 million for thenine months ended September 30, 2024, primarily related tonet purchases of financial investments of $139.0 million versus net redemptions of $20.0 million during the nine months ended September 30, 2023, and higher capital expenditures of $4.0 million, partially offset bycollection of the related party loan principal of $81.0 million.
Current report
Net Cash Provided by Financing Activities
Removed paragraphs (14)
Previous report
New Equity Financing
Previous report
Subsequent to the end of the second quarter of 2024, on July 12, 2024, the Company entered into a subscription agreement with Space Florida relating to a private placement for the issuance and sale of 400,000 newly issued shares of Common Stock for cash at a purchase price of $4.00 per share. See Note 18 – Subsequent Events to the condensed consolidated financial statements and the Company’s Current Report on Form 8-K filed with the SEC on July 18, 2024, for additional information.
Previous report
Research and development expenses increased by $14.5 million and $20.4 million for thethree and six months ended June 30, 2024, respectively. The increase in research and development expense was primarily driven by an increase in R&D’s team headcount, higher engineering expenses contemplated in MSA agreements with Embraer and Atech, and higher expenses related to the development of the prototype vehicles, including a full-scale model of the eVTOL.
Previous report
SG&A expenses decreased $1.2 million for the three months ended June 30, 2024, primarily related to lower payroll costs of $0.6 million, outsourced services of $0.4 million, and lower director & officer insurance expense of $0.3 million, partially offset by start up costs for the Taubaté manufacturing facility.
Previous report
SG&A expenses decreased by $0.9 million for the six months ended June 30, 2024, primarily related tolower director & officer insurance expense of $0.9 million, lower outsourced services of $0.4 million, and lower payroll costs of $0.1 million, partially offset by start up costs for the Taubaté manufacturing facility.
Previous report
Eve’sfuture capital requirements will depend on many factors, including:
Previous report
In the event that Eve requires additional financing but is unable to raise additional capital or generate cash flows necessary to continue its research and development and invest in continued innovation, Eve may not be able to compete successfully, which would harm its business, results of operations and financial condition. If adequate funds are not available, Eve may need to reconsider its expansion plans or limit its research and development activities, which could have a material adverse impact on our business prospects and results of operations.
Previous report
Financing Activities
Previous report
BNDES Loan Agreement
Previous report
Private Placement
Previous report
Subsequent to the end of the second quarter of 2024, on July 12, 2024, the Company entered into a subscription agreement with Space Florida relating to a private placement for the issuance and sale of 400,000 newly issued shares of Common Stock for cash at a purchase price of $4.00 per share. See Note 18 – Subsequent Events to the condensed consolidated financial statements and the Company’s Current Report on Form 8-K filed with the SEC on July 18, 2024, for additional information.
Previous report
Net cash provided by investing activities decreased $12.6 million for thesix months ended June 30, 2024, primarily related toless net redemptions of financial investments of $12.0 million and higher capital expenditures of $0.6 million.
Previous report
Net Cash Provided (Used) by Financing Activities
Previous report
The Company also performs an ongoing evaluation of our counterparty, Embraer Aircraft Holdings, Inc., for the related party loan receivable. No allowance for credit loss has been deemed necessary.
Reworded paragraphs (25)
Previous wording
The following discussion and analysis provide information that Eve’s management believes is relevant to an assessment and understanding of Eve’s consolidated results of operations and financial condition. The following discussion should be read in conjunction with the Company’s 2023 Form-10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) and the unaudited condensed consolidated financial statementsfor thethree and six months ended June 30, 2024 and 2023, and the related notes that are included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. The Company’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those risk factors set forth under“Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in this Quarterly Report on Form 10-Qand in our other filings with the SEC. Capitalized terms not defined have the same meaning as in the notes to the unaudited condensed consolidated financial statements.
Current wording
The following discussion and analysis provide information we believe is relevant to an assessment and understanding of the condensed consolidated results of operations and financial condition. The following discussion should be read in conjunction with the Company’s most recent Annual Report on Form 10-K (the “2023 Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”) and the unaudited condensed consolidated financial statementsfor thethree and nine months ended September 30, 2024 and 2023, and the related notes that are included in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. The Company’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those factors set forth under“Cautionary Note Regarding Forward-Looking Statements” in Part I, Item 1 A. Risk Factors of our 2023 Form 10-Kand in our other filings with the SEC. Capitalized terms not defined have the same meaning as in the notes to the unaudited condensed consolidated financial statements.
Previous wording
On July 3, 2024, Eve unveiled its first full-scale eVTOL prototype. The Company currently expects to initiate flight-testing with this prototype in late 2024. As a non-conforming aircraft, this prototype does not have all the systems, subsystems and redundancies that will be present in the five prototypes that Eve plans to build for the certification campaign. This prototype will be piloted remotely, and the flight tests are expected to assess various characteristics of the motors and substantiate Eve’s thrust and lift expectations against sound, emission and energy consumption estimates, among other metrics.
Current wording
On July 3, 2024, Eve unveiled its first full-scale eVTOL prototype. The Company currently expectsto initiate flight-testing with this prototype in late 2024. As a non-conforming aircraft, this prototype does not have all the systems, subsystems and redundancies that will be present in thefive prototypes that Eve plans to build for the certification campaign. This prototype will be piloted remotely, and the flight tests are expected to assess various characteristics of the motors and substantiate Eve’s thrust and lift expectations against sound, emission and energy consumption estimates, among other metrics.
Previous wording
On June 28, 2024, the Company entered into subscription agreements, warrant agreements and warrant exchange agreements with certain investors relating to a private placement for the issuance and sale of 23,500,000 newly issued shares of common stock, par value $0.001 per share, (the “Common Stock”) for cash at a purchase price of $4.00 per share, for a total of $94,000,000 in new equity financing (ii) the issuance of 3,318,588 shares of Common Stock in exchange for the surrender and cancellation of certain Public Warrants and Market Warrants to acquire an aggregate of 8,296,470 shares of Common Stock, and (iii) the granting of certain Penny Warrants to acquire an aggregate of 2,500,000 shares of Common Stock to certain investors. Of this amount, $30 million in gross proceeds are expected to be received from EAH for 7,500,000 newly issued shares of Common Stock and warrants to acquire 1,500,000 shares of Common Stock as part of the Private Placement, the issuance of which was approved by a special committee of independent and disinterested directors of the Company, with the assistance of its independent financial and legal advisors. See Note 18 to the condensed consolidated financial statements and the Company’s Current Report on Form 8-K filed with the SEC on July 1, 2024, for additional information.
Current wording
As previously disclosed, 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 23,900,000 newly issued shares of common stock of the Company, par value $0.001 per share, for cash at a purchase price of $4.00 per share (of which, 7,500,000 shares were purchased and issued to Embraer), (ii) the issuance of 3,318,588 shares of common stock of the Company in exchange for the surrender and cancellation of certain warrants to acquire an aggregate of 8,296,470 shares of common stock of the Company, and (iii) the issuance of certain Penny Warrants to acquire an aggregate of 2,500,000 shares of common stock of the Company (of which, 1,500,000 were issued to Embraer). The transactions contemplated by the 2024 Private Placement closed on July 2, 2024, July 5, 2024, July 18, 2024, and September 4, 2024, respectively. The Company received aggregate gross proceeds of $95.6 million. For additional information, see Notes 7 and 8 to the accompanying condensed consolidated financial statements and the Company’s Current Reports on Form 8-K filed with the SEC on July 1, 2024 and July 18, 2024.
Previous wording
Subsequent to the end of the second quarter of 2024, on July 26, 2024, the Company filed a shelf registration statement on Form S-3 with the SEC, registering (i) the issuance by the Company of up to 45,548,481 shares of Common Stock underlying warrants, and the offer and sale of up to 317,715,214 shares of Common Stock and up to 14,250,000 private placement warrants by the selling securityholders named in that prospectus and (ii) the offer and sale from time to time in one or more offerings of up to $500,000,000 aggregate offering price of Common Stock, preferred stock and warrants. The Company may offer and sell such securities from time to time or to or through underwriters, brokers or dealers, directly to one or more purchasers, through a block trade, through agents on a best-efforts basis, through a combination of any of the above methods of sale or through other types of transactions described in the shelf registration statement. The Company has not sold any such securities under the shelf registration statement as of the date of this Quarterly Report on Form 10-Q.
Current wording
On July 26, 2024, the Company filed a shelf registration statement on Form S-3 with the SEC, registering (i) the issuance by the Company of up to 45,548,481 shares of Common Stock underlying warrants, and the offer and sale of up to 317,715,214 shares of Common Stock and up to 14,250,000 private placement warrants by the selling security holders named in that prospectus and (ii) the offer and sale from time to time inoneor more offerings of up to $500,000,000 aggregate offering price of Common Stock, preferred stock and warrants. The Company may offer and sell such securities from time to time or to or through underwriters, brokers or dealers, directly toone or more purchasers, through a block trade, through agents on a best-efforts basis, through a combination of any of the above methods of sale or through other types of transactions described in the shelf registration stat ement. The Company has not sold any such securities under the shelf registration statement as of the date of this Quarterly Report on Form 10-Q.
Previous wording
Serviceand Operations Solutions. Eve plansto offera full suiteof eVTOL serviceand support capabilities, including material services, maintenance, technical support, training, ground handlingand data services. Itsservices willbe offeredto UAMfleet operatorson an agnostic basis– supporting both itsown eVTOLand those producedby third parties.
Current wording
Serviceand Operations Solutions. Eve plansto offera full suiteof eVTOL serviceand support capabilities, including material services, maintenance, technical support, training, ground handlingand data services. Services willbe offeredto UAMfleet operatorson an agnostic basis– supporting both ourown eVTOL aircraftand those producedby third parties.
Previous wording
To date, Eve has not generated any revenue, as it continues to develop its eVTOL vehicles and other UAM solutions. As a result, Eve will require substantial additional capital to develop products and fund operations for the foreseeable future. Until Eve can generate any revenue from product sales and services, it expects to finance operations through a combination of existing cash on hand, public offerings, private placements, and debt financing. The amount and timing of future funding requirements will depend on many factors, including the pace and results of development efforts.
Current wording
To date, Eve has not generated any revenue, as it continues to develop its eVTOL aircraft and other UAM solutions. As a result, Eve will require substantial additional capital to develop products and fund operations for the foreseeable future. Until Eve can generate any revenue from product sales and services, it expects to finance operations through a combination of existing cash on hand, public offerings, private placements, and debt financing. The amount and timing of future funding requirements will depend on many factors, including the pace and results of development efforts.
Previous wording
Our revenue will be directly tied to the continued development and sale of eVTOL and related services. While we believe the market for UAM will be large, it remains undeveloped and there is no guarantee of future demand. We currently anticipate commercialization of our eVTOL services-and-support business beginning in 2025, followed by the commercialization and initial revenue generation from the sale of our eVTOLs beginning in the latter half of 2026, and our business will require significant investment leading up to launching passenger services, including, but not limited to, final engineering designs, prototyping and testing, manufacturing, software development, certification, pilot training, and commercialization.
Current wording
Our revenue will be directly tied to the continued development and sale of eVTOL and related services. While we believe the market for UAM will be large, it remains undeveloped and there is no guarantee of future demand. We currently anticipate commercialization of our eVTOL services-and-support business beginning in 2026, followed by the commercialization and initial revenue generation from the sale of our eVTOLs beginning in 2027. Our business will require significant investment leading up to launching passenger services including, but not limited to, final engineering designs, prototyping and testing, manufacturing, software development, certification, pilot training and commercialization.
Previous wording
In addition to our market development initiatives, Eve has signed non-binding letters of intent to sell over 2,900 of our eVTOL aircraft and we continue to seek additional opportunities for sales partnerships. In addition to these deals, Eve has been actively involved in the UAM ecosystem development by signing Memorandums of Understanding (“MOUs”) with more than 30 market-leading partners in segments spanning infrastructure, operations, platforms, utilities, and others. In the future, we plan to focus on implementation and ecosystem readiness with our existing partners while continuing to seek UATM and support-services partnerships in order to complement our business model and drive growth.
Current wording
In addition to our market development initiatives, Eve has signed non-binding letters of intent to sell over 2,870 of our eVTOL aircraft and we continue to seek additional opportunities for sales partnerships. In addition to these deals, Eve has been actively involved in the UAM ecosystem development by signing Memorandums of Understanding (“MOUs”) with more than 30 market-leading partners in segments spanning infrastructure, operations, platforms, utilities, and others. In the future, we plan to focus on implementation and ecosystem readiness with our existing partners while continuing to seek UATM and support-services partnerships in order to complement our business model and drive growth.
Previous wording
Research and development activities represent a significant part of the Company's expenses. Research and development efforts focus on the design and development of eVTOLs, the development of service and operations support for its vehicles and those manufactured by third parties, and the development of Vector, a UATM software platform. Research and development expenses consist of personnel-related costs (including salaries, bonuses, benefits and share-based compensation) for employees focused on research and development activities, fees incurred under the MSAs, equipment and materials, and an allocation of overhead, including rent, information technology costs and utilities. Research and development expenses are expected to increase significantly as the Company increases staffing to support eVTOL aircraft engineering and software development, builds aircraft prototypes, progresses towards the launch of its first eVTOL aircraft, and continues to explore and develop next generation aircraft and technologies.
Current wording
Research and development (“R&D”) activities represent a significant part of the Company’s expenses. Research and development efforts focus on the design and development of eVTOLs, the development of service and operations support for its vehicles and those manufactured by third parties, and the development of Vector, a UATM software platform. Research and development expenses consist of personnel-related costs (including salaries, bonuses, benefits and share-based compensation) for employees focused on research and development activities, fees incurred under the Master Service Agreement (MSA), equipment and materials, and an allocation of overhead, including rent, information technology costs and utilities. Research and development expenses are expected to increase significantly as the Company increases staffing to support eVTOL aircraft engineering and software development, builds aircraft prototypes, progresses towards the launch of its first eVTOL aircraft, and continues to explore and develop next generation aircraft and technologies.
Previous wording
Derivative liabilities relate to the Private Placement Warrants which are valued using the trading price of the Company’s Public Warrants. The gain from the change in fair value of derivative liabilities increased $8.9 million for the three months ended June 30, 2024, due to a $0.15 decrease in the Public Warrant trading price, whereas the trading price increased $0.48 for the three months ended June 30, 2023.
Current wording
Derivative liabilities relate to the Private Warrants which are valued using the trading price of the Company’s Public Warrants. The gain from the change in fair value of derivative liabilities increased by $4.8 million for thethree months ended September 30, 2024, due to a $0.28 decrease in the Public Warrant trading price, whereas the trading price increased $0.06 for the three months ended September 30, 2023.
Previous wording
The gain from the change in fair value of derivative liabilities increased $17.4 million for thesix months ended June 30, 2024, due to a $0.59 decrease in the Public Warrant trading price, whereas the trading price increased $0.63 for the six months ended June 30, 2023.
Current wording
The gain from the change in fair value of derivative liabilities increased $22.2 million for the nine months ended September 30, 2024 due to a $0.87 decrease in the Public Warrant trading price, whereas the trading price increased $0.69 for the nine months ended September 30, 2023.
Previous wording
The Company invests cash in short fixed-income instruments of low risk, mostly in US Dollar and high-quality financial institutions. Financial investment income decreased $1.0 millionin thethree months ended June 30, 2024, primarily related to a decrease in the average investment balance of $31.0 million as compared to the three months ended June 30, 2023.
Current wording
The Company invests cash in short fixed-income instruments of low risk, mostly in US Dollar and high-quality financial institutions. Financial investment income incre ased $0.8 million for thethree months ended September 30, 2024 primarily related to an increase in the average investment balanceof $57.3 million ascompared to thethree months ended September 30, 2023.
Previous wording
Financial investment income decreased $1.9 millionin thesix months ended June 30, 2024, primarily related to a decrease in the average investment balance of $62.6 million as compared to the six months ended June 30, 2023.
Current wording
Financial investment income decreased $1.1 millionfor thenine months ended September 30, 2024 primarily related to a decrease in the average investment balanceof $27.3 million as comparedto thenine months ended September 30, 2023.
Previous wording
Eve has incurred net losses since its inception and to date has not generated any revenue. We expect to continue to incur losses and negative operating cash flows for the foreseeable future until we successfully commence sustainable commercial operations.
Current wording
The Company has incurred net losses since inception and to date has not generated any revenue. We expect to continue to incur losses and negative operating cash flows for the foreseeable future until we successfully commence sustainable commercial operations.
Previous wording
Eve received proceeds from the business combination and PIPE Investment of approximately $357.3 million. In addition, in September 2022, Eve received $15.0 million from United Airlines Ventures, Ltd. (“United”), in connection with a subscription agreement pursuant to which United agreed to subscribe for an aggregate of 2,039,353 shares of common stock and a warrant agreement pursuant to which the Company issued to United new warrants to acquire up to 2,722,536 shares of common stock, each with an exercise price of $0.01 per share. On January 23, 2023, the Company secured loans from BNDES for a total borrowing availability of R$490 million (approximately $88.1 million, using the exchange rate on June 30, 2024).
Current wording
The Company received proceeds from the business combination and PIPE Investment of approximately $357.3 million. In addition, in September 2022, the Company received $15.0 million from United Airlines Ventures, Ltd. (“United”), in connection with a subscription agreement pursuant to which United agreed to subscribe for an aggregate of 2,039,353 shares of common stock and a warrant agreement pursuant to which the Company issued to United new warrants to acquire up to 2,722,536 shares of common stock, each with an exercise price of $0.01 per share.
Previous wording
As previously disclosed, on January 23, 2023, Eve Brazil entered into a loan agreement (the “Loan Agreement”) with BNDES, pursuant to which BNDES grantedtwo lines of credit to the Company, with an aggregate amount of R$490 million (approximately $88.1 million, using the exchange rate on June 30, 2024), to support the development of the eVTOL project. For additional information about the Loan Agreement, see the Company’s Current Report on Form 8-K filed with the SEC on January 30, 2023.
Current wording
As previously disclosed, on January 23, 2023, the Company entered into a loan agreement (the “Loan Agreement”) with BNDES, pursuant to which BNDES grantedtwo lines of credit to the Company, with an aggregate amount of R$490 million (approximately $94.9 million, using the exchange rate on September 30, 2024), to support the development of the eVTOL. For additional information about the Loan Agreement, see the Company’s Current Report on Form 8-K filed with the SEC on January 30, 2023.
Previous wording
On December 21, 2023, the Company announced that Bradesco Bank had concluded that the first line of credit under the Loan Agreement aligned with the 2023 Green Loans Principles, which is a set of guidelines issued for structuring loan operations for sustainable purposes. As of June 30, 2024, a total of R$278.6 million (approximately $53.5 million) had been issued to the Company pursuant to the Loan Agreement.
Current wording
On December 21, 2023, the Company announced that Bradesco Bank had concluded that the first line of credit under the Loan Agreement aligned with the 2023 Green Loans Principles, which is a set of guidelines issued for structuring loan operations for sustainable purposes. As of September 30, 2024, a total of R$360.7 million (approximately $69.6 million) had been issued to the Company pursuant to the Loan Agreement.
Previous wording
On June 28, 2024, the Company entered into subscription agreements, warrant agreements and warrant exchange agreements with certain investors relating to a private placement for the issuance and sale of 23,500,000 newly issued shares of common stock, par value $0.001 per share, for cash at a purchase price of $4.00 per share, for a total of $94,000,000 in new equity financing, the exchange of certain Public Warrants and Market Warrants for shares of common stock, and the granting of certain Penny Warrants to certain investors. Of this amount, $30 million in gross proceeds are expected to be received from Embraer Aircraft Holding, Inc. (“EAH”) for 7,500,000 newly issued shares of Common Stock and warrants to acquire 1,500,000 shares of Common Stock as part of the Private Placement, the issuance of which was approved by a special committee of independent and disinterested directors of the Company, with the assistance of its independent financial and legal advisors. SeeLiquidity and Capital Resources—Financing Activities and the Company’s Current Report on Form 8-K filed with the SEC on July 1, 2024, for additional information.
Current wording
In July and September 2024, the Company closed on subscription agreements, warrant agreements and warrant exchange agreements with certain investors relating to the 2024 Private Placement for the issuance and sale of 23,900,000 newly issued shares of common stock for cash at a purchase price of $4.00 per share, for a total of $95.6 millionin new equity financing, the exchange of certain Public Warrants and Market Warrants for shares of common stock, and the issuance of certain Penny Warrants to certain investors. Refer to Note 7 and Note 8 of the accompanying condensed consolidated financial statements andthe Company’s Current Reports on Form 8-K filed with the SEC on July 1, 2024 and July 18, 2024 for additional information.
Previous wording
As of June 30, 2024, Eve had cash of $27.8 million, financial investments of$93.2 million, a related party loan receivable of $85.5 million from EAH and$38.0 million available to be drawn on the BNDES loans, which amounts toapproximately $244.5 million of total liquidity. The total liquidity is expected to be sufficient to fund Eve’s current operating plan for at least the next twelve months. In addition, Eve will receive the proceeds from any exercise of any warrants in cash, other than a cashless exercise effected in accordance with the terms of such warrants.
Current wording
As of September 30, 2024, the Company has cash and cash equivalents of $24.6 million, financial investments of$255.3 millionand available debt to be drawn from the original BNDES loan of$25.3 million, which amounts to approximately $305.2 million of liquidity. Additionally, the new loans were secured in October 2024 from BNDES of approximately $89.6 million and Citibank of $50.0 million, as described in the “Recent Developments” section of this MD&A. Total liquidity is expected to be sufficient to fund our operating plan for at least the next twelve months.
Previous wording
Eve intends to continue to use its liquidity primarily to fund its research and development activities and other personnel costs, which are our business’ principal uses of cash. In light of the significant number of redemptions that occurred during the business combination, the current trading price for shares of our common stock and the unlikelihood that we will receive significant proceeds from exercises of the warrants because of the disparity between the exercise price of the warrants and the current trading price of the common stock, these funds will likely not be sufficient to enable Eve to complete all necessary development of and commercially launch its eVTOL aircraft. Our future capital requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash received from our customers, the expansion of sales and marketing activities and the timing and extent of spending to support development efforts. Until Eve generates sufficient operating cash flow to cover its operating expenses, working capital needs and planned capital expenditures, or if circumstances evolve differently than anticipated, Eve expects to utilize a combination of equity and debt financing to fund any future capital needs. Currently, no decision has been made as to specific sources of additional funding and Eve may explore different potential funding opportunities including potential long-term debt finance lines with private and public banks, advances and pre-delivery down payments from customers as well as equity and convertible lines. Eve may be unable to raise additional funds when needed on favorable terms or at all. The sale of securities by selling securityholders pursuant to the Prospectus could result in a significant decline in the public trading price of the common stock and could further decrease the likelihood of raising additional funds successfully. If Eve raises funds by issuing equity securities, dilution to stockholders may result. Any equity securities issued may also provide for rights, preferences, or privileges senior to those of holders of common stock. If Eve raises funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of preferred and 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 upheaval that could impact the availability and cost of equity and debt financing.
Current wording
Our liquidity plans are subject to a number of risks and uncertainties, including those described in the “Cautionary Note Regarding Forward-Looking Statements” section of this MD&A and Part I, Item 1 A. Risk Factors of our 2023 Form 10-K, some of which are out of our control. Until we generate sufficient operating cash flow to cover operating expenses, working capital requirements and planned capital expenditures, we expect to utilize a combination of equity and debt financing to fund any future capital needs. Currently, no decision has been made as to specific sources of additional funding and the Company may explore different funding opportunities including long-term debt finance lines with private and public banks, advances and pre-delivery down payments from customers, aswell as convertible debt. Any equity securities issued may also provide for rights, preferences, or privileges senior to those of holders of common stock. If the Company raises funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of preferred and common stockholders. The terms of debt securities or borrowings could impose significant restrictions on our operations. The capital markets have experienced in the past, and may in the future experience, periods of upheaval that could impact the availability and cost of equity and debt financing.
Previous wording
Net cash used by operating activities increased $19.0 million for thesix months ended June 30, 2024, primarily related to increased research and development expenses of $21.0 million, increased interest and taxes paid of $2.1 million, partially offset by a net increase in working capital of $4.3 million.
Current wording
Net cash used by operating activities increased $27.3 million for thenine months ended September 30, 2024, primarily related to increased expenditures for R&D of $20.5 million, SG&A of $4.0 million, interest and taxes of $3.2 million, partially offset by an increase in interest income collected of $0.4 million.
Previous wording
Net Cash Provided by Investing Activities
Current wording
Net Cash (Used) Provided by Investing Activities
Previous wording
Net cash related to financing activities increased $29.3 million for thesix months ended June 30, 2024, primarily related to the proceeds from BNDES loan borrowings.
Current wording
Net cash provided by financing activities increased $127.1 million for thenine months ended September 30, 2024, primarily related to the proceeds from the 2024 Private Placement and BNDES loan borrowings.
Previous wording
The preparation of thecondensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent liabilities and the reported amounts of expenses during the reporting period. Eve’s estimates are based on our historical experience and on various other factors that Eve believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. The critical accounting estimates that affect the condensed consolidated financial statements and the judgments and assumptions used are described in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2023 Form 10-K.
Current wording
The preparation of thecondensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses during the reporting period. The estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. The critical accounting estimates that affect the condensed consolidated financial statements and the judgments and assumptions used are described in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2023 Form 10-K.
Previous wording
Financial instruments, which subjects Eve to concentrations of credit risk, consist primarily of cash, cash equivalents, financial investments, and a related party loan receivable. Eve’s cash and cash equivalents and financial investments are held at major financial institutions located in the United States of America and Brazil. At times, cash account balances with anyone financial institution may exceed Federal Deposit Insurance Corporation insurance limits ($250,000 per depositor per institution). Management believes the financial institutions that hold Eve’s cash and cash equivalents and financial investments are financially sound and, accordingly, minimal credit risk exists with respect to cash and cash equivalents and financial investments.
Current wording
Our cash, cash equivalents and financial investments held subject us to concentrations of credit risk. These financial instrumentsare held at major financial institutions located in the USA and Brazil. At times, cash balances with anyone financial institution may exceed USA’s Federal Deposit Insurance Corporation insurance limits ($250,000 per depositor per institution). We believe the financial institutions that hold our cash, cash equivalents and financial investments are financially sound and, accordingly, minimize credit risk.