Eve Holding, Inc. — 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. The company completed its business combination and began trading on the NYSE as EVEX on May 10, 2022. Eve is a pre-revenue aerospace developer focused on eVTOL aircraft and related services.
Business context and outlook
Eve is developing an electric vertical take-off and landing aircraft, maintenance and support services, partner-led fleet operations, and an urban air traffic management system. It expects eVTOL entry into service in 2026; it anticipates certain service, support, and fleet-operations revenue could begin in 2025. Neither Eve nor Embraer has delivered eVTOL aircraft to customers.
The company reports a pipeline of 2,770 aircraft valued at $8.3 billion from 26 launch customers. These agreements, including options and capacity deals, are non-binding and subject to change; they are not firm backlog or recognized revenue.
Financial performance and condition
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $51.9 million | $13.3 million |
| Selling, general and administrative expense | $32.9 million | $4.9 million |
| New warrant expense | $104.8 million | None |
| Loss from operations | $189.5 million | $18.2 million |
| Net loss | $174.0 million | $18.3 million |
| Basic and diluted loss per share | $0.68 | $0.08 |
| Operating cash used | $59.5 million | $14.9 million |
| Investing cash used | $258.5 million | None |
| Financing cash provided | $352.7 million | $29.3 million |
Operating cash use increased mainly with development spending. Investing outflows principally reflected purchases of marketable securities and an $81.0 million loan to majority stockholder Embraer Aircraft Holding (EAH); the year-end loan balance, including accrued interest, was $82.7 million. Financial and foreign-exchange results shifted from a $0.1 million loss in 2021 to a $6.8 million gain in 2022, supported by real depreciation and interest income. The $104.8 million warrant expense was a substantial non-cash item tied to warrants issued in connection with the business combination and strategic arrangements.
At December 31, 2022, Eve reported cash and cash equivalents of $49.1 million, financial investments of $178.8 million, and the $82.7 million related-party loan receivable. Management stated total liquidity of $310.6 million and expected it to fund the current operating plan for at least 12 months. Total assets were $312.9 million, total liabilities $26.0 million, and stockholders’ equity $286.9 million. The company reported no balance-sheet debt.
Cash from the business combination and PIPE totaled approximately $377.0 million gross; the filing reports approximately $337.7 million net proceeds after transaction costs. Eve spent $84.4 million to fund its 2022 operating plan and estimates approximately $540 million will be required through expected entry into service in 2026, excluding manufacturing capital expenditures.
Material changes and notable items
- Net loss rose by $155.8 million year over year, reflecting higher R&D and SG&A expenses and $104.8 million of new warrant expense.
- R&D increased by $38.6 million, principally from expanded engineering activity and development of the full-scale proof-of-concept vehicle and UATM system. SG&A increased by $28.0 million, including public-company, consulting, marketing, and shared-service costs.
- 2021 financial information is partly carve-out information from Embraer; Eve began accounting for its activities as an independent entity in 2022. The filing cautions that historical allocations may not represent future stand-alone costs.
- In January 2023, Eve Brazil entered into a BNDES agreement for two credit lines totaling R$490 million (approximately $95.3 million). Availability and borrowing are conditional, including on required approvals, guarantees, and other stated conditions; this was not year-end drawn debt.
Risks, contingencies, and management commentary
- Funding and dilution: Eve expects continuing losses and negative operating cash flow while developing its products. Management says existing resources may not cover the entire development and commercialization plan; additional equity or debt financing may be needed, may be unavailable on acceptable terms, and could dilute shareholders or impose restrictive covenants.
- Development and certification: The aircraft remains in development, and type, production, and operating approvals from ANAC, FAA, EASA, and other authorities are not assured. Delays, cost overruns, performance shortfalls, or safety incidents could defer or prevent commercialization.
- Commercial execution: The UAM market is unproven. Customer agreements and partner arrangements are generally non-binding, and infrastructure, consumer acceptance, affordability, operational capacity, and airspace rules remain uncertain.
- Dependence on Embraer: Eve relies on Embraer and affiliates for engineering, manufacturing support, administrative services, and other capabilities under long-term service agreements. The related-party loan to EAH also creates counterparty exposure.
- Financial reporting controls: Management concluded disclosure controls were not effective at year-end because of material weaknesses involving complex and unusual transactions, accrued expenses, share-based payments, financial presentation, risk assessment, and staffing. Prior-period statements were restated in 2022 following warrant-accounting reviews. Management was unable to complete an internal-control assessment without unreasonable effort or expense and is continuing remediation; the auditor did not provide an internal-control attestation.
- Other exposures: Risks include foreign-exchange and Brazilian economic conditions, supply-chain and workforce constraints, cybersecurity, competition, potential warrant dilution, and the Tax Receivable Agreement, which could require payments to EAH equal to 75% of certain realized tax savings. No material pending legal proceedings were identified in the filing.
The independent auditor expressed an unqualified opinion that the 2022 consolidated financial statements fairly present the company’s financial position, results, and cash flows in accordance with U.S. GAAP. This opinion does not resolve the separately disclosed material weaknesses in internal controls.
Important facts for investors to verify
- Whether the reported liquidity remains available and sufficient, including the collectability and repayment timing of the $82.7 million EAH loan.
- Whether the BNDES credit lines satisfy their conditions, are drawn, and provide usable funding on the stated terms.
- Progress toward eVTOL certification, prototype testing, production planning, and the 2025–2026 commercialization targets.
- Conversion of non-binding pipeline and partner arrangements into definitive, funded customer contracts.
- Cash burn and total funding needs compared with the company’s estimate of approximately $540 million, which excludes manufacturing capital expenditures.
- Remediation and independent validation of internal-control weaknesses, and any subsequent changes to financial reporting or warrant accounting.
- Potential dilution from outstanding and contingent warrants, stock awards, and resale-eligible shares.