Aeva(US:AEVA)2025-08-06 00:12PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Unaudited financial statements for June 30, 2025, show increased revenue but a significant net loss due to non-cash charges, resulting in a shift from equity to deficit Condensed Consolidated Balance Sheets As of June 30, 2025, total assets decreased and liabilities surged due to warrant and share subscription liabilities, leading to a stockholders' deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $91,149 | $147,489 | | Cash and cash equivalents | $21,743 | $28,864 | | Marketable securities | $28,106 | $83,143 | | Total Liabilities | $209,330 | $48,137 | | Share subscription liability | $77,496 | $— | | Warrant liability | $102,136 | $8,258 | | Total stockholders' equity (deficit) | ($118,181) | $99,352 | Condensed Consolidated Statements of Operations and Comprehensive Loss Revenue significantly increased for the three and six months ended June 30, 2025, but net loss widened due to substantial non-cash fair value adjustments on liabilities Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $5,511 | $2,012 | $8,879 | $4,119 | | Gross loss | ($2,720) | ($848) | ($2,410) | ($2,240) | | Operating loss | ($34,923) | ($48,913) | ($65,341) | ($86,257) | | Change in fair value of warrant liability | ($88,478) | $3,517 | ($93,878) | $3,080 | | Fair value loss on share subscription liability | ($69,996) | $— | ($69,996) | $— | | Net loss | ($192,742) | ($43,393) | ($227,609) | ($78,719) | | Net loss per share | ($3.49) | ($0.82) | ($4.14) | ($1.49) | Condensed Consolidated Statements of Stockholders' Equity (Deficit) Stockholders' equity transitioned to a $118.2 million deficit by June 30, 2025, primarily driven by a $227.6 million net loss for the six-month period - Total stockholders' equity decreased from $99.4 million at December 31, 2024, to a deficit of $118.2 million at June 30, 202517 - The primary driver for the decrease in stockholders' equity was the net loss of $227.6 million for the six months ended June 30, 20251517 Condensed Consolidated Statements of Cash Flows Net cash used in operating activities remained stable for the six months ended June 30, 2025, with investing activities providing cash, resulting in a net decrease in cash and equivalents Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($60,616) | ($60,127) | | Net cash provided by investing activities | $53,955 | $45,441 | | Net cash used in financing activities | ($460) | ($239) | | Net decrease in cash and cash equivalents | ($7,121) | ($14,925) | | Ending cash and cash equivalents | $21,743 | $23,622 | - Significant non-cash charges reconciling net loss to operating cash flow included a $93.9 million change in fair value of warrant liability and a $70.0 million fair value loss on share subscription liability23 Notes to the Condensed Financial Statements (Unaudited) Notes detail the company's LiDAR technology, liquidity management despite a large accumulated deficit, revenue concentration, significant financing activities, and a litigation settlement - The company designs a 4D LiDAR-on-chip using Frequency Modulated Continuous Wave (FMCW) sensing technology for applications like automated driving and industrial automation25 - Despite an accumulated deficit of $839.5 million, management believes existing cash, marketable securities, and the Standby Equity Purchase Agreement will be sufficient to fund operations for at least the next 12 months3334 - In May 2025, Aeva entered into a strategic collaboration with LG Innotek (LGIT), including a Share Subscription Agreement for a $32.5 million investment and a Joint Development Agreement (JDA), resulting in a share subscription liability of $77.5 million and an expected loss from the JDA of $3.8 million777880 - The company has a Standby Equity Purchase Agreement with Sylebra, providing the right to sell up to $125 million of preferred stock, subject to conditions which were met as of June 30, 20256670 - A settlement was reached in the Delaware Stockholder Litigation for $14.0 million, with $2.8 million paid and an accrued contingent liability of $11.2 million as of June 30, 2025101 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses significant revenue growth, a widened net loss due to non-cash charges, decreased operating expenses, and sufficient liquidity for the next 12 months Results of Operations Revenue significantly increased for the three and six months ended June 30, 2025, while operating expenses decreased, but net loss substantially widened due to non-cash liability charges Comparison of Three Months Ended June 30 (in thousands) | Account | 2025 | 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenue | $5,511 | $2,012 | $3,499 | 174% | | Cost of revenue | $8,231 | $2,860 | $5,371 | 188% | | Research and development expenses | $22,841 | $26,196 | ($3,355) | (13)% | | Loss from operations | ($34,923) | ($48,913) | $13,990 | (29)% | | Net loss | ($192,742) | ($43,393) | ($149,349) | 344% | - The increase in cost of revenue for Q2 2025 was primarily due to a $3.8 million loss recognized on a joint development agreement139 - The significant net loss in Q2 2025 was driven by non-cash charges, including a $70.0 million fair value loss on share subscription liability and an $88.5 million change in fair value of warrant liability137144145 Liquidity and Capital Resources Despite a significant accumulated deficit and negative operating cash flows, the company asserts sufficient liquidity for the next 12 months, supported by existing funds and strategic financing agreements - The company has a Standby Equity Purchase Agreement with Sylebra, allowing it to sell up to $125.0 million of preferred stock until November 2026157 - A private placement with LGIT for aggregate gross proceeds of approximately $32.5 million is expected to close in August 2025159 - Management believes that current liquidity, including the Facility Agreement, will be sufficient to fund operations and capital expenditures for at least 12 months from the report's issuance date160 Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate fluctuations, with no material changes reported since the 2024 Form 10-K - The company's main market risk exposure is from fluctuations in interest rates176 - No material changes to market risks were reported since the Annual Report on Form 10-K for the year ended December 31, 2024176 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - As of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective177 - There were no material changes to the company's internal control over financial reporting during the quarter178 PART II. OTHER INFORMATION Legal Proceedings The company is involved in various legal proceedings, with details provided in Note 15 of the condensed consolidated financial statements - Information regarding legal proceedings is detailed in Note 15, "Commitments and Contingencies," of the financial statements182 Risk Factors No material changes to risk factors were reported since the 2024 Form 10-K, except for updated risks concerning strategic partnerships, internal controls, and ownership concentration - The company's growth is partly dependent on the success of strategic partnerships, such as the recent agreement with LG Innotek (LGIT)184185 - The company faces challenges in maintaining an effective system of internal controls, especially as it will be required to comply with the auditor attestation requirements of Sarbanes-Oxley Section 404 as of December 31, 2025187 - As of the report date, officers and directors beneficially own or control approximately 49.4% of the outstanding common stock, representing a significant concentration of ownership189 Unregistered Sales of Equity Securities and Use of Proceeds None - No unregistered sales of equity securities occurred during the period192 Defaults Upon Senior Securities None - No defaults upon senior securities occurred during the period193 Mine Safety Disclosures Not applicable - This section is not applicable to the company194 Other Information CFO Saurabh Sinha adopted a Rule 10b5-1 trading plan for the potential sale of common stock during the quarter ended June 30, 2025 - On May 18, 2025, CFO Saurabh Sinha adopted a Rule 10b5-1 Trading Plan for the sale of up to 268,086 shares of common stock195 Exhibits This section lists exhibits filed with the Form 10-Q, including amendments to the Standby Equity Purchase Agreement and SOX certifications - Key exhibits filed include the Second and Third Amendments to the Standby Equity Purchase Agreement with Sylebra Capital Limited198 - Certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included as exhibits198