Eve (EVEX) - 2025 Q2 - Quarterly Report

PART I FINANCIAL INFORMATION (Unaudited) Presents Eve Holding, Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis for the periods ended June 30, 2025 Item 1. Financial Statements This section presents Eve Holding, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, equity, and cash flows, along with detailed notes explaining the company's organization, accounting policies, and specific financial components for the periods ended June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets Provides a snapshot of Eve Holding, Inc.'s financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | ASSETS/LIABILITIES AND EQUITY | June 30, 2025 | December 31, 2024 | | :------------------------------ | :------------ | :------------------ | | ASSETS | | | | Total current assets | $250,138 | $312,807 | | Total non-current assets | $10,854 | $5,435 | | Total assets | $260,992 | $318,242 | | LIABILITIES AND EQUITY | | | | Total current liabilities | $90,176 | $59,343 | | Total non-current liabilities | $157,381 | $134,977 | | Total liabilities | $247,557 | $194,320 | | Total equity | $13,435 | $123,922 | | Total liabilities and equity| $260,992 | $318,242 | Condensed Consolidated Statements of Operations Details Eve Holding, Inc.'s financial performance, including operating expenses, losses, and net loss for the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating expenses | $53,877 | $41,717 | $106,480 | $75,649 | | Operating loss | $(53,877) | $(41,717) | $(106,480) | $(75,649) | | (Loss) gain from derivative liabilities | $(9,471) | $2,066 | $(6,156) | $8,408 | | Financial investment income | $3,541 | $1,996 | $7,454 | $4,332 | | Related party loan interest income | $- | $1,222 | $- | $2,445 | | Interest expense | $(2,388) | $(613) | $(4,622) | $(1,025) | | Loss before income taxes | $(64,251) | $(35,993) | $(113,593) | $(60,666) | | Net loss | $(64,685) | $(36,388) | $(113,470) | $(61,684) | | Net loss per share – basic and diluted | $(0.21) | $(0.13) | $(0.37) | $(0.22) | Condensed Consolidated Statements of Comprehensive Loss Presents Eve Holding, Inc.'s total comprehensive loss, which equals its net loss, for the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(64,685) | $(36,388) | $(113,470) | $(61,684) |\n| Total comprehensive loss | $(64,685) | $(36,388) | $(113,470) | $(61,684) | Condensed Consolidated Statements of Equity Outlines changes in Eve Holding, Inc.'s equity, including common stock, additional paid-in capital, and accumulated deficit, for the six months ended June 30, 2025 Condensed Consolidated Statements of Equity (in thousands) | Metric | Balance at Dec 31, 2024 | Net Loss (Q1 2025) | Share-based compensation (Q1 2025) | Balance at Mar 31, 2025 | Net Loss (Q2 2025) | Share-based compensation (Q2 2025) | Balance at June 30, 2025 | | :----------------------- | :---------------------- | :----------------- | :--------------------------------- | :---------------------- | :----------------- | :--------------------------------- | :----------------------- | | Common Stock (Shares) | 297,644 | - | - | 297,644 | - | 242 | 297,886 | | Common Stock (Amount) | $298 | $- | $- | $298 | $- | $0 | $298 | | Additional Paid-In Capital | $606,460 | $- | $1,002 | $607,462 | $- | $1,980 | $609,442 | | Accumulated Deficit | $(482,835) | $(48,784) | $- | $(531,619) | $(64,685) | $- | $(596,304) | | Total Equity | $123,922 | $(48,784) | $1,002 | $76,141 | $(64,685) | $1,980 | $13,435 | Condensed Consolidated Statements of Cash Flows Summarizes Eve Holding, Inc.'s cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash used by operating activities | $(80,523) | $(66,568) | | Net cash provided by investing activities | $45,278 | $19,235 | | Net cash provided by financing activities | $20,479 | $28,993 | | Effect of exchange rate changes on cash and cash equivalents | $(65) | $(779) | | Decrease in cash and cash equivalents | $(14,832) | $(19,119) |\n| Cash and cash equivalents at beginning of period | $56,366 | $46,882 | | Cash and cash equivalents at end of period | $41,534 | $27,763 | Notes to the Condensed Consolidated Financial Statements Provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements, covering accounting policies and specific financial components Note 1 – Organization and Basis of Presentation Describes Eve Holding, Inc.'s business as an aerospace company focused on urban air mobility and the basis for preparing its unaudited interim financial statements - Eve Holding, Inc. is an aerospace company dedicated to accelerating the urban air mobility (UAM) ecosystem through an advanced electric vertical take-off and landing (eVTOL) project, a global services and support network, and a unique air traffic management solution[20] - The unaudited condensed consolidated financial statements are presented in US Dollars, prepared in accordance with U.S. GAAP for interim financial reporting, and reflect management's material adjustments[21][22] - The Company is evaluating the impact of new FASB ASUs 2023-09 (Income Tax Disclosures, effective Dec 31, 2025) and 2024-03 (Expense Disaggregation Disclosures, effective Dec 31, 2027), but does not expect ASU 2023-09 to have a material impact on the consolidated financial statements[24][25] Note 2 – Cash and Cash Equivalents Details the composition of cash and cash equivalents and explains changes in these balances between December 31, 2024, and June 30, 2025 Cash and Cash Equivalents (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Cash | $40,717 | $11,763 | | CDBs | $817 | $4,453 | | Fixed deposits | $- | $40,151 | | Total | $41,534 | $56,366 | - Cash and cash equivalents decreased by $14,832 thousand from December 31, 2024, to June 30, 2025, primarily due to a significant reduction in fixed deposits[18][27] Note 3 – Financial Investments Explains the classification and valuation of the company's held-to-maturity financial investments, primarily time deposits, as of June 30, 2025, and December 31, 2024 - Financial investments are classified as held-to-maturity (HTM) and include time deposits with original maturities of one year or less but greater than 90 days, recorded at amortized cost[28] HTM Securities, at Cost (in thousands) | Category | June 30, 2025 Amortized Cost | June 30, 2025 Fair Value | December 31, 2024 Amortized Cost | December 31, 2024 Fair Value | | :---------- | :--------------------------- | :----------------------- | :------------------------------- | :--------------------------- | | Time deposits | $201,204 | $201,081 | $247,012 | $247,283 | Note 4 – Related Party Transactions Discloses significant transactions and relationships with Embraer S.A. and its subsidiaries, including service agreements and a matured related party loan - Embraer S.A., through one of its wholly owned subsidiaries Embraer Aircraft Holdings, Inc. (EAH), owns approximately 83% of the outstanding common stock of the Company, leading to significant related party transactions[30] - The Company has Master Service Agreements (MSA) and Shared Service Agreement (SSA) with Embraer and Atech for research and development (R&D), selling, general and administrative (SG&A) services, and air traffic management software development, with initial terms of 15 years[32] Related Party Expenses (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Research and development expenses | $30,675 | $24,094 | $60,407 | $44,983 | | Selling, general and administrative expenses | $1,212 | $838 | $2,211 | $1,588 | | Total | $31,887 | $24,932 | $62,618 | $46,571 | - A related party loan of $81.0 million to EAH matured on August 1, 2024, with principal and interest collected totaling $85.9 million, resulting in no related party loan interest income for the periods ended June 30, 2025[40][138] Note 5 – Other Balance Sheet Components Provides a breakdown of specific balance sheet items such as property, net, and other current payables as of June 30, 2025, and December 31, 2024 Property, net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | eVTOL mockups | $1,743 | $516 | | Leasehold improvement | $201 | $167 | | Construction in progress ("CIP") | $3,364 | $241 | | Computer hardware | $41 | $15 | | Total property | $5,348 | $939 | | Less: Accumulated depreciation | $(432) | $(328) | | Total property, net | $4,916 | $611 | Other Current Payables (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Accrued services | $25,300 | $8,393 | | Accrued payroll | $5,257 | $4,639 | | Accrued interest | $1,044 | $810 | | Other payables | $1,025 | $1,579 | | Total | $32,625 | $15,422 | Note 6 – Debt Details the company's outstanding term loans, debt issuance costs, and compliance with debt covenants, including available borrowing capacity Outstanding Debt (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Term loans outstanding | $156,298 | $133,615 | | Unamortized debt issuance costs | $(1,745) | $(1,604) | | Total debt, net | $154,553 | $132,011 | | Less: current portion of long-term debt | $(543) | $- | | Long-term debt, net | $154,010 | $132,011 | - The Company has secured multiple loan agreements with BNDES and Citibank to support eVTOL development and manufacturing, totaling approximately $156.3 million in outstanding term loans as of June 30, 2025[46][47][49][50] - As of June 30, 2025, approximately $116.2 million is available to be drawn under existing debt arrangements, and the Company was in compliance with all debt covenants[52][53] Note 7 – Equity Describes the company's common stock, the impact of the 2024 Private Placement, and its dividend policy - As of June 30, 2025, there were 297,886,723 shares of common stock issued and outstanding, with no preferred stock issued[54][55] - The 2024 Private Placement, closed in July and September 2024, generated aggregate gross proceeds of $95.6 million from the issuance of 23,900,000 new common shares and certain warrant exchanges[57][58] - The Company does not expect to pay dividends on common stock in the foreseeable future[54] Note 8 – Common Stock Warrants Explains the different types of equity-classified and liability-classified common stock warrants, their outstanding amounts, and vesting conditions - The Company has three types of equity-classified warrants: Public Warrants (8,203,407 outstanding as of June 30, 2025), Penny Warrants (21,022,536 outstanding, 6,000,000 vested), and Market Warrants (12,000,000 outstanding)[59][61][64][69][70][72] - Private Warrants (14,250,000 outstanding as of June 30, 2025) are liability-classified due to a $0.01 cash redemption feature if transferred to a non-permitted transferee, which affects the settlement amount[73][74] - Penny Warrants are often contingent on future conditions or milestones, such as eVTOL purchase commitments or type certification, and are recognized as expense or a reduction of revenue upon vesting[66][67] Note 9 – Derivative Financial Instruments Details the company's derivative financial instrument liabilities and the impact of changes in warrant trading prices on recognized losses Derivative Financial Instrument Liabilities (in thousands) | Date | Amount | | :---------------- | :------ | | June 30, 2025 | $13,139 | | December 31, 2024 | $6,983 | - The increase in derivative liabilities is primarily due to a $0.66 increase in the Public Warrant trading price for the three months ended June 30, 2025[75][76][134] - A loss of $6.2 million and $9.5 million was recognized from derivative liabilities for the six and three months ended June 30, 2025, respectively, compared to gains in the prior year[11][76] Note 10 – Fair Value Measurements Explains the fair value hierarchy used for financial liabilities, specifically Private Warrants and debt, and their carrying and fair values - The Company uses a three-level fair value hierarchy based on input reliability, with Private Warrants and debt classified as Level 2 due to estimation using observable inputs[77][78] Financial Liabilities by Fair Value Hierarchy (in thousands) | Liability | June 30, 2025 Carrying Amount | June 30, 2025 Fair Value (Level 2) | December 31, 2024 Carrying Amount | December 31, 2024 Fair Value (Level 2) | | :--------------- | :------------------------------ | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Private Warrants | $13,139 | $13,139 | $6,983 | $6,983 | | Debt | $156,298 | $163,522 | $132,011 | $132,488 | Note 11 – Earnings Per Share Presents the calculation of basic and diluted net loss per share and identifies potentially dilutive securities excluded due to their anti-dilutive effect Net Loss Per Share (Basic and Diluted) | Period | Net Loss (in thousands) | Weighted-average shares outstanding | Net Loss per share | | :--------------------------- | :---------------------- | :---------------------------------- | :----------------- | | 3 Months Ended June 30, 2025 | $(64,685) | 303,727 | $(0.21) | | 3 Months Ended June 30, 2024 | $(36,388) | 276,355 | $(0.13) | | 6 Months Ended June 30, 2025 | $(113,470) | 303,686 | $(0.37) | | 6 Months Ended June 30, 2024 | $(61,684) | 276,309 | $(0.22) | - For both periods, basic and diluted weighted-average shares outstanding were equal as no securities had a dilutive effect on earnings per share[82] Potentially Dilutive Securities Excluded (Six Months Ended June 30, in thousands) | Category | 2025 | 2024 | | :-------------------------------- | :------ | :------ | | Unvested restricted stock units | 2,213 | 1,569 | | Penny warrants subject to unmet contingencies | 15,023 | 13,523 | | Warrants "out-of-the-money" | 34,453 | 42,750 | | Total | 51,689| 57,841| Note 12 – Research and Development Expenses Provides a breakdown of R&D expenses by category and explains the significant increase due to intensified eVTOL development activities Research and Development Expenses (in thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Outsourced services | $42,750 | $33,445 | $84,956 | $58,123 | | Payroll costs | $2,720 | $2,617 | $5,059 | $5,224 | | Other expenses | $203 | $255 | $368 | $426 | | Total | $45,672 | $36,317 | $90,383 | $63,772 | - R&D expenses increased by $9.4 million (26%) for the three months and $26.6 million (42%) for the six months ended June 30, 2025, primarily due to intensified development activities for eVTOL, including parts purchase, prototype assembly, and increased engineering engagement with Embraer[130][131] Note 13 – Selling, General and Administrative Expenses Details SG&A expenses by category and explains the increase driven by workforce expansion, RSU recognition, and pre-operating expenses Selling, General and Administrative Expenses (in thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Outsourced services | $3,998 | $2,506 | $6,877 | $4,603 | | Payroll costs | $3,847 | $1,787 | $8,186 | $5,060 | | Director and officers insurance | $256 | $266 | $512 | $645 | | Other expenses | $104 | $841 | $523 | $1,569 | | Total | $8,205 | $5,400 | $16,097 | $11,877 | - SG&A expenses increased by $2.8 million (52%) for the three months and $4.2 million (36%) for the six months ended June 30, 2025, driven by an increase in direct workforce, Restricted Stock Units recognition, higher outsourced services, and pre-operating expenses for the Taubaté production site[132][133] Note 14 – Income Taxes Discusses the income tax expense and benefit recognized, primarily influenced by operations in the Brazilian tax jurisdiction - The Company recognized income tax expense of $0.4 million for both three-month periods ended June 30, 2025 and 2024, due to operations in the Brazilian tax jurisdiction[89] - For the six months ended June 30, 2025, the Company recognized an income tax benefit of $0.1 million, a decrease of $1.1 million compared to an expense of $1.0 million in the prior year, primarily due to Eve Brazil's standalone operations[89][141] Note 15 – Commitments and Contingencies Discloses a shareholder derivative action and an economic grant agreement for an eVTOL project, outlining potential impacts and funding details - A shareholder derivative action was filed on March 3, 2025, alleging breach of fiduciary duty related to the 2024 Private Placement, with proceedings currently stayed pending resolution of constitutional questions in an unrelated case[91][92] - The Company cannot predict the ultimate outcome or estimate the range of possible loss from the derivative action due to its early stage[93] - On May 14, 2025, the Company entered into an Economic Grant Agreement with Finep for up to R$90.0 million (approximately $16.5 million) in economic subsidy funding for an eVTOL project in Brazil, with no funding received as of June 30, 2025[95][96] Note 16 – Segments Describes the company's three reportable segments (eVTOL, Service and Operations Solutions, UATM) and their respective research and development expenses - The Company operates in three reportable segments: eVTOL (designing and certifying eVTOLs), Service and Operations Solutions – Tech Care (offering eVTOL service and support), and Urban Air Traffic Management (UATM) (developing Vector software for eVTOL operations)[97][98][99] - As a pre-revenue company, the primary measure of profit or loss by segment is research and development expenses, which are used by the CEO (CODM) for resource allocation[97][100] Research and Development Expenses by Segment (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | eVTOL | $43,235 | $33,439 | $85,658 | $58,082 | | Service and Operations Solutions | $1,532 | $1,679 | $2,866 | $3,272 | | UATM | $905 | $1,199 | $1,859 | $2,418 | | Total segment expenses | $45,672 | $36,317 | $90,383 | $63,772 | Note 17 – Subsequent Events Reports on events occurring after the balance sheet date, including new tax legislation and the exercise of Penny Warrants - The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, amending U.S. tax law, but the Company does not expect it will have a material effect on its consolidated financial statements[102] - In July 2025, warrant holders exercised 3,000,000 Penny Warrants for 2,962,181 shares of the Company's common stock through a cashless exercise[103] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Eve Holding, Inc.'s financial condition and operational results for the three and six months ended June 30, 2025, compared to 2024. It highlights the company's pre-revenue status, significant R&D investments in eVTOL and UAM solutions, and the need for substantial future capital. Key factors affecting operations include the Brazilian economic environment, UAM market development, competition, and government certification processes Overview Provides a high-level summary of Eve Holding, Inc.'s business focus on urban air mobility, its pre-revenue status, and strategic relationship with Embraer - Eve Holding, Inc. is an aerospace company focused on urban air mobility (UAM), developing eVTOLs, a portfolio of maintenance and support services (TechCare), and new air traffic management software (Vector)[109][110][111][112][113] - The Company has not generated revenue to date and expects to finance operations through existing cash, public/private offerings, and debt financing, requiring substantial additional capital for the foreseeable future[114] - Eve plans to leverage its strategic relationship with Embraer to de-risk and accelerate its development plans, while saving costs by utilizing Embraer's extensive resources[110] Services Agreements Details the Master Services Agreements (MSAs) and Shared Services Agreement (SSA) with Embraer and Atech, crucial for product development and operational support - Eve has Master Services Agreements (MSAs) with Embraer and Atech, and a Shared Services Agreement (SSA) with Embraer and EAH, for product development, services development, and administrative support[115] - These agreements allow Eve to collaborate with Embraer and leverage their expertise as an aircraft producer to design and manufacture eVTOLs, develop maintenance systems, pilot training programs, and establish operations[116] Key Factors Affecting Operations Identifies critical external and internal factors influencing the company's operations, including economic conditions, market development, competition, and regulatory certifications - Operations are significantly affected by the Brazilian economic environment, including government intervention, inflation, and exchange rate variations, which can impact the Company's financial condition and results[118][119][120][121] - The UAM market is undeveloped, with commercialization of eVTOL services-and-support anticipated in 2026 and eVTOL sales in 2027, requiring significant investment and facing uncertainties in demand and adoption drivers[122][123] - The Company faces competition from focused UAM developers and established aerospace/automotive conglomerates, with risks of competitors reaching market first or benefiting from Eve's development efforts[124] - Obtaining government certifications (ANAC, FAA, EASA) for eVTOLs and related services is critical, with potential delays or failures adversely impacting business launch timelines[125] - Eve has signed non-binding letters of intent to sell approximately 2,800 eVTOL aircraft and Memorandums of Understanding (MOUs) with about 30 market-leading partners, focusing on implementation and ecosystem readiness[127] Results of Operations (unaudited, in thousands) Analyzes the company's financial performance, detailing changes in key expense categories, operating loss, and net loss for the reported periods Key Financial Results (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change (Unfavorable)/Favorable | % Change | | :-------------------------------------- | :---------- | :---------- | :----------------------------- | :------- | | Research and development expenses | $45,672 | $36,317 | $(9,355) | (26)% | | Selling, general and administrative expenses | $8,205 | $5,400 | $(2,805) | (52)% | | Operating loss | $(53,877) | $(41,717) | $(12,160) | (29)% | | (Loss) gain from derivative liabilities | $(9,471) | $2,066 | $(11,537) | n.m. | | Financial investment income | $3,541 | $1,996 | $1,545 | 77% | | Related party loan interest income | $- | $1,222 | $(1,222) | n.m. | | Interest expense | $(2,388) | $(613) | $(1,775) | (289)% | | Net loss | $(64,685) | $(36,388) | $(28,297) | 78% | Key Financial Results (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change (Unfavorable)/Favorable | % Change | | :-------------------------------------- | :----------- | :---------- | :----------------------------- | :------- | | Research and development expenses | $90,383 | $63,772 | $(26,610) | (42)% |\n| Selling, general and administrative expenses | $16,097 | $11,877 | $(4,220) | (36)% | | Operating loss | $(106,480) | $(75,649) | $(30,831) | (41)% | | (Loss) gain from derivative liabilities | $(6,156) | $8,408 | $(14,564) | n.m. | | Financial investment income | $7,454 | $4,332 | $3,122 | 72% | | Related party loan interest income | $- | $2,445 | $(2,445) | n.m. | | Interest expense | $(4,622) | $(1,025) | $(3,597) | (351)% | | Net loss | $(113,470) | $(61,684) | $(51,785) | 84% | - Net loss significantly increased by 78% for the three months and 84% for the six months ended June 30, 2025, primarily driven by higher R&D and SG&A expenses, a loss from derivative liabilities, and increased interest expense[129] Liquidity and Capital Resources Discusses the company's current financial position, future capital needs, and strategies for funding operations and growth initiatives - As of June 30, 2025, total liquidity is approximately $358.9 million ($41.5 million cash, $201.2 million financial investments, $116.2 million available debt), expected to fund operations for at least the next twelve months[143] - Future capital requirements include research and development expenses, capital expenditures for manufacturing expansion, raw material procurement, general and administrative expenses, interest expense, and selling and distribution expenses[143][152] - The Company expects to utilize a combination of equity and debt financing for future capital needs, exploring long-term debt, customer advances, and convertible debt or equity issuances[144] Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | Change | | :-------------------------------------- | :---------- | :---------- | :-------- | | Net cash used by operating activities | $(80,523) | $(66,568) | $(13,955) |\n| Net cash provided by investing activities | $45,278 | $19,235 | $26,043 | | Net cash provided by financing activities | $20,479 | $28,993 | $(8,514) | - Net cash used by operating activities increased by $14.0 million, while net cash provided by investing activities increased by $26.0 million due to higher redemptions of financial investments. Net cash provided by financing activities decreased by $8.5 million due to lower debt borrowings[146][147][148] - The Company secured a grant of up to $16.5 million from Finep for an eVTOL project, with a total project investment of up to $35.0 million including Eve's required company contribution[154] Critical Accounting Estimates Explains that financial statement preparation involves management estimates and assumptions based on historical experience and other reasonable factors - The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts, which are based on historical experience and various other reasonable factors[157] Credit Risk Addresses the company's exposure to concentrations of credit risk from cash, cash equivalents, and financial investments held at major financial institutions - The Company's cash, cash equivalents, and financial investments are held at major financial institutions in the US and Brazil, exposing it to concentrations of credit risk, though management believes these institutions are financially sound[158] Emerging Growth Company Status Details the company's status as an "emerging growth company" under the JOBS Act and the implications for accounting standards and disclosure requirements - Eve is an "emerging growth company" and has elected to use the extended transition period for new accounting standards and reduced disclosure requirements under the JOBS Act[159][160] - The Company will lose its emerging growth company status by December 31, 2025, and will then be subject to SEC's internal control over financial reporting auditor attestation requirements (Sarbanes-Oxley Act Section 404(b))[161] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section details Eve Holding, Inc.'s exposure to market risks, specifically interest rate risk and foreign currency risk. It outlines the impact of fluctuations in Brazilian interest rates (CDI) on cash equivalents and variable interest rates (SOFR) on debt, as well as the effects of Brazilian real exchange rate variations on assets and liabilities Interest Rate Risk Analyzes the company's exposure to interest rate fluctuations, particularly concerning Brazilian CDI-indexed cash equivalents and variable-rate debt tied to SOFR - The Company is exposed to interest rate risk from Brazilian CDI-indexed cash equivalents and variable-rate debt (SOFR)[162][166] - As of June 30, 2025, approximately $0.8 million (0.3%) of consolidated cash and financial investments were indexed to the CDI rate; a hypothetical 100 basis point change would impact annual interest income by approximately $8 thousand[163] - Variable-rate debt, primarily from Citibank, represented 32% ($50.0 million) of total long-term debt as of June 30, 2025; a hypothetical 100 basis point increase in interest rates would increase annual interest expense by approximately $0.5 million[166] Foreign Currency Risk Examines the company's exposure to foreign exchange gains and losses, particularly from assets and liabilities denominated in Brazilian reais - The Company's operations are exposed to foreign exchange gains and losses, particularly those denominated in Brazilian reais (labor costs, taxes, local expenses, financial investments)[167] - As of June 30, 2025, less than 1% of total assets and 14% of total liabilities were denominated in Brazilian reais, which has experienced frequent and substantial variations against the US Dollar[167][168] Item 4. Controls and Procedures Management evaluated the effectiveness of Eve Holding, Inc.'s disclosure controls and procedures as of June 30, 2025, concluding they were effective. There were no material changes in internal control over financial reporting during the three months ended June 30, 2025 Management's Evaluation of Disclosure Control and Procedures Reports on management's assessment of the effectiveness of the company's disclosure controls and procedures as of the end of the reporting period - Management, including the principal executive officer and principal financial officer, concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[171] Changes in Internal Control over Financial Reporting States whether there have been any material changes in the company's internal control over financial reporting during the most recent fiscal quarter - There were no changes in internal control over financial reporting during the three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[172] PART II OTHER INFORMATION Presents additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits Item 1. Legal Proceedings Eve Holding, Inc. is generally subject to various claims in the ordinary course of business, none of which are currently expected to have a material adverse effect. However, a shareholder derivative action was filed on March 3, 2025, alleging breach of fiduciary duty related to the 2024 Private Placement, with proceedings currently stayed - A shareholder derivative action was filed on March 3, 2025, against EAH, directors, and officers, with Eve Holding as a nominal defendant, asserting breach of fiduciary duty claims related to the 2024 Private Placement[173] - The proceedings are stayed pending the Delaware Supreme Court's resolution of overlapping constitutional questions regarding recent amendments to 8 Del. C. § 144 in an unrelated action[174] Item 1A. Risk Factors There have been no material changes to the Risk Factors previously disclosed in the Company's 2024 Form 10-K, but additional factors or changes to existing ones could still materially affect the business - There have been no material changes to the Risk Factors disclosed in the Company's 2024 Form 10-K[175] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities and use of proceeds to report[176] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities to report for the period - No defaults upon senior securities to report[177] Item 4. Mine Safety Disclosures This item is not applicable to the Company's operations - Mine Safety Disclosures are not applicable to the Company[178] Item 5. Other Information There is no other information to report for the period - No other information to report[179] Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, economic grant agreements, amendments to service and supply agreements, and certifications - Includes Second Amended and Restated Certificate of Incorporation and Bylaws[181] - Economic Grant Agreement with Finep (May 14, 2025) and amendments to Master Services Agreement and Supply Agreement are filed[181] - Certifications of CEO and CFO pursuant to Sarbanes-Oxley Act Sections 302 and 906 are included[181] Signatures The report is signed by Johann Bordais, Chief Executive Officer, and Eduardo Couto, Chief Financial Officer, on August 6, 2025 - Report signed by Johann Bordais (Chief Executive Officer) and Eduardo Couto (Chief Financial Officer) on August 6, 2025[185]