Business context and reporting period
Entity mismatch: The supplied filing is for InterPrivate Acquisition Corp., not Aeva Technologies, Inc. It is a blank-check company (SPAC), identified as a shell company, and had not begun operations by June 30, 2020. Its purpose was to complete a business combination; this filing does not identify a target.
This unaudited Form 10-Q covers the quarter and six months ended June 30, 2020. The company completed its IPO in February 2020, so the filing provides no prior-year comparable operating period.
Financial results and position
| Metric | Three months ended June 30, 2020 | Six months ended June 30, 2020 |
|---|---|---|
| Operating revenue | None | None |
| Operating costs / loss from operations | $312,325 | $451,079 |
| Interest income from Trust Account | $894,683 | $1,410,903 |
| Unrealized gain (loss) on Trust Account securities | $(842,406) | $331,245 |
| Net income (loss) | $(205,437) | $1,019,945 |
| Basic and diluted loss per share | $(0.04) | $(0.05) |
| Net cash used in operating activities | Not separately reported | $(319,359) |
Margins are not meaningful because the company had no operating revenue. The quarterly loss reflected operating costs and an unrealized loss on Trust investments, partly offset by interest income and a tax benefit. Six-month net income primarily reflected Trust interest and unrealized gains, rather than operating activity.
At June 30, 2020, total assets were $243.9 million, including $243.2 million of marketable securities in the Trust Account and $576,317 of cash outside the Trust. Current liabilities were $410,246; total liabilities were $479,807. The company reported no long-term debt. Shares subject to possible redemption were recorded as temporary equity of $238.4 million; stockholders’ equity was $5.0 million. The Trust held primarily U.S. Treasury bills.
The company raised $241.5 million for the Trust through public offering proceeds and had $576,317 in outside cash available for working capital. Six-month financing cash flow was $242.4 million, while investing cash flow was $(241.5) million, principally reflecting the Trust deposit.
Material changes, outlook, and risks
- The IPO and full exercise of the underwriters’ over-allotment option were completed in February 2020; $241.5 million was placed in the Trust Account. Compared with December 31, 2019, cash increased from zero to $576,317 and Trust securities increased from zero to $243.2 million. These changes reflect the IPO, not growth in an operating business.
- Management stated that substantially all Trust funds were intended for a business combination and that outside cash would fund target identification, diligence, and transaction costs. Management did not expect to need additional funds for planned expenditures, but warned that costs could exceed estimates and additional financing might be needed to complete a transaction or address redemptions.
- The company had until November 6, 2021 to complete a business combination, absent an approved extension. If it failed, it generally would have to redeem public shares and liquidate. Public shareholders could redeem shares in connection with a transaction; warrants would receive no Trust distribution if the company liquidated and could expire worthless.
- Notable transaction obligations include a $10,000 monthly administrative-support fee, a separate $10,000 monthly fee to the Vice President for transaction assistance, and an $8.45 million business-combination advisory fee payable to EarlyBirdCapital upon closing, subject to the filing’s stated terms.
- The filing identifies a risk that negative yields on Trust investments could reduce public shareholders’ per-share redemption proceeds below $10. It also cites the possibility of insufficient outside cash, substantial redemptions, and failure to complete a business combination. Management reported no off-balance-sheet arrangements and no material change in internal control during the quarter.
Important facts for investors to verify
- Confirm the intended issuer: this filing is for InterPrivate Acquisition Corp., not Aeva Technologies, Inc.
- Verify whether a business combination was later announced or completed, and whether the November 6, 2021 deadline was extended.
- Review redemption terms, Trust balances, and any subsequent financing or share issuance before assessing value or dilution.
- Check the potential impact of the advisory fee, related-party monthly fees, and other transaction costs.
- Assess the risk that Trust investment returns, taxes, creditor claims, or negative rates could affect redemption proceeds.