Aeva(AEVA) - 2020 Q4 - Annual Report

PART I Business InterPrivate Acquisition Corp is a SPAC formed in August 2019, which completed its IPO in February 2020, raising approximately $241.5 million and subsequently entering a definitive Business Combination Agreement with Aeva, Inc - The company is a blank check company, or SPAC, formed for the purpose of effecting a merger, share exchange, or similar business combination with a target business[14] - On November 2, 2020, the company entered into a Business Combination Agreement with Aeva, Inc The transaction values Aeva at approximately $1.7 billion The merger was approved by stockholders on March 11, 2021, with an expected closing date of March 12, 2021[21][22][23] - To support the business combination, the company secured approximately $320 million in Private Investment in Public Equity (PIPE) financing through two separate agreements in November and December 2020[28][29][30] IPO and Trust Account Summary | Description | Amount/Details (USD) | | :--- | :--- | | IPO Consummation Date | February 6, 2020 | | Total Units Sold (incl. over-allotment) | 24,150,000 | | Price Per Unit | $10.00 | | Total Gross Proceeds (IPO + Private Placement) | ~$273.6 million | | Amount Placed in Trust Account | $241,500,000 | - A Stockholders Agreement will be established at closing to govern post-combination board composition, initially set at seven members, with specific designation rights for the Aeva Founders, Lux, Canaan, and the Sponsor[31][33] Risk Factors This section is incorporated by reference from the company's definitive proxy statement/prospectus/consent solicitation statement dated February 12, 2021, which contains a detailed discussion of risks related to the company's operations and the proposed business combination - The discussion of risk factors is not included directly in this report but is incorporated by reference from the definitive proxy statement filed on February 12, 2021[34] Properties The company maintains its principal executive offices at 1350 Avenue of the Americas, New York, NY, with the cost covered by a $10,000 per-month fee paid to an affiliate of the Sponsor for general and administrative services - The company's office space is provided by an affiliate of the Sponsor for a monthly fee of $10,000, which covers general and administrative services[35] Legal Proceedings This section is incorporated by reference from the company's definitive proxy statement dated February 12, 2021, with notes to the financial statements disclosing two lawsuits filed by alleged stockholders related to the proposed business combination - Information regarding legal proceedings is incorporated by reference Note 7 and Note 11 of the financial statements detail lawsuits filed by stockholders concerning the proposed business combination[36][180][205] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's units, common stock, and warrants are listed on the NYSE under symbols IPV.U, IPV, and IPV WS, respectively, with no cash dividends paid or planned before business combination completion - The company's securities are listed on the NYSE: Units (IPV.U), Common Stock (IPV), and Warrants (IPV WS)[39] - No cash dividends have been paid to date, and none are intended to be paid prior to the completion of the Proposed Business Combination[40] Management's Discussion and Analysis of Financial Condition and Results of Operations As a pre-business combination SPAC, the company had no operations or revenues, reporting a net loss of $932,821 for 2020, with minimal liquidity and reliance on Sponsor loans, raising substantial doubt about its going concern ability if the business combination is not completed by November 6, 2021 Results of Operations | Period | Net Loss (USD) | Components | | :--- | :--- | :--- | | Year Ended Dec 31, 2020 | $932,821 | Operating costs of $2,523,015 and income taxes of $199,765, offset by interest income of $1,789,959 | | Aug 16, 2019 (Inception) to Dec 31, 2019 | $1,000 | Formation and operating costs | Liquidity and Capital Resources (as of Dec 31, 2020) | Item | Amount (USD) | | :--- | :--- | | Cash | $694 | | Marketable Securities in Trust Account | $243,129,959 | | Cash Used in Operating Activities (2020) | $1,408,976 | - The company relies on loans from its Sponsor to fund working capital deficiencies An affiliate of the Sponsor advanced $353,994 in 2020, which is part of a larger convertible promissory note of up to $1.5 million[52][53] - Management has expressed substantial doubt about the company's ability to continue as a going concern through November 6, 2021, if a business combination is not consummated[55] - The company has contractual obligations to pay a monthly fee of $10,000 to an affiliate for administrative support and a $10,000 monthly fee to its Vice President for services until a business combination is completed[58] Quantitative and Qualitative Disclosures About Market Risk The company's market risk exposure is minimal due to IPO proceeds in the trust account being invested in short-term U.S. government treasury bills, limiting interest rate risk - The net proceeds from the IPO held in the Trust Account are invested in short-term U.S. government treasury securities, resulting in no material exposure to interest rate risk[63] Controls and Procedures As of December 31, 2020, management, including the CEO and CFO, concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective, with no material changes reported - Management concluded that as of December 31, 2020, the company's disclosure controls and procedures were effective[66] - Based on the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2020[68][69] PART III Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters This section details the beneficial ownership of the company's common stock as of March 10, 2021, with the Sponsor, InterPrivate Acquisition Management LLC, as the largest owner at 21.1%, and two institutional investors holding over 5% Beneficial Ownership as of March 10, 2021 | Beneficial Owner | Shares Owned | Percentage of Outstanding Shares (%) | | :--- | :--- | :--- | | Ahmed M. Fattouh (via Sponsor) | 6,538,581 | 21.1% | | All directors and executive officers as a group | 6,538,581 | 21.1% | | Entities affiliated with Sylebra Capital Limited | 1,883,561 | 6.1% | | Entities affiliated with Alyeska Investment Group, L.P. | 2,222,444 | 7.6% | - Founder shares are held in escrow and are subject to lock-up periods tied to the completion of the initial business combination, with 50% releasing after one year or if the stock price reaches $12.50, and the remaining 50% releasing after one year[78] Principal Accountant Fees and Services Marcum LLP served as the company's independent registered public accounting firm, with audit fees totaling $64,375 for FY 2020 and $42,555 for the inception period through FY 2019, and no other fees paid Auditor Fees Paid to Marcum LLP | Fee Category | FY 2020 (USD) | Inception to FY 2019 (USD) | | :--- | :--- | :--- | | Audit Fees | $64,375 | $42,555 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | PART IV Exhibits, Financial Statement Schedules This section lists the documents filed as part of the Form 10-K, including the Business Combination Agreement with Aeva, Inc., the company's Amended and Restated Certificate of Incorporation, and various IPO and private placement agreements - Key exhibits filed with this report include the Business Combination Agreement (Exhibit 2.1), Warrant Agreement (Exhibit 4.4), and various subscription and support agreements related to the proposed merger with Aeva, Inc[90] Financial Statements Report of Independent Registered Public Accounting Firm The auditor, Marcum LLP, issued an unqualified opinion on the consolidated financial statements for the year ended December 31, 2020, and the period from inception to December 31, 2019, including an explanatory paragraph on going concern uncertainty - The auditor's opinion states that the financial statements are presented fairly, in all material respects, in conformity with U.S. GAAP[97] - The report contains an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern due to its business plan being dependent on completing a business combination and having insufficient working capital[98] Consolidated Financial Statements The consolidated financial statements reflect the company's position as a non-operating SPAC, with the Balance Sheet showing total assets of $243.1 million primarily in the trust account, and the Statement of Operations for 2020 showing a net loss of $932,821 Consolidated Balance Sheet Highlights (As of Dec 31, 2020) | Account | Amount (USD) | | :--- | :--- | | Cash | $694 | | Marketable securities held in Trust Account | $243,129,959 | | Total Assets | $243,142,511 | | Total Liabilities | $1,680,631 | | Common stock subject to possible redemption | $236,461,872 | | Total Stockholders' Equity | $5,000,008 | Consolidated Statement of Operations (Year Ended Dec 31, 2020) | Account | Amount (USD) | | :--- | :--- | | Loss from operations | $(2,523,015) | | Interest earned on marketable securities | $1,789,959 | | Provision for income taxes | $(199,765) | | Net loss | $(932,821) | Notes to Consolidated Financial Statements The notes provide detailed explanations of the company's accounting policies and financial position, including going concern status, related party transactions, commitments for the Aeva business combination, and stockholder lawsuits Note 2. Liquidity and Going Concern This note details the company's working capital deficit and its ability to continue as a going concern - As of December 31, 2020, the company had a working capital deficit of $1,114,270 and only $694 in its operating bank account These conditions raise substantial doubt about the company's ability to continue as a going concern if a Business Combination is not consummated by its deadline[130][131] Note 6. Related Party Transactions This note outlines transactions with related parties, including founder share purchases and sponsor loans - The Sponsor purchased 6,037,500 Founder Shares for an aggregate price of $25,000[156] - The company may borrow up to $1.5 million from an affiliate of the Sponsor under a convertible promissory note to fund working capital As of December 31, 2020, $353,994 had been advanced[161][162] Note 7. Commitments and Contingencies This note describes the company's contractual obligations, PIPE investments, and ongoing stockholder lawsuits - The company has a marketing agreement with EarlyBirdCapital, which entitles them to a fee of 3.5% of the gross proceeds of the IPO ($8,452,500) upon consummation of a business combination[168] - The company entered into subscription agreements for PIPE investments, including the November 2020 PIPE for ~$120 million and the December 2020 PIPE for ~$200 million, to support the business combination[177][178] - A lawsuit was filed on December 23, 2020, by an alleged stockholder, Brian Quarles, against the company and its directors, alleging materially misleading and incomplete information related to the proposed business combination[180] Note 11. Subsequent Events This note discloses significant events occurring after the reporting period, including additional lawsuits and loan drawdowns - On January 20, 2021, a second lawsuit was filed by another alleged stockholder, Michael Anello, with similar allegations of incomplete and misleading information in the Form S-4 registration statement[205] - Subsequent to December 31, 2020, the company drew down the remaining available amount under the convertible promissory note from its Sponsor's affiliate[207]