Business context and reporting period
Entity mismatch: The supplied filing is InterPrivate Acquisition Corp.’s Form 10-Q for the quarter ended March 31, 2020; it does not identify Aeva Technologies, Inc. The filing describes InterPrivate as a shell company formed to pursue a business combination. It had not begun operating activities or generated operating revenue by quarter-end.
Financial results and position
| Metric | Three months ended March 31, 2020 / March 31, 2020 |
|---|---|
| Operating revenue | None |
| Operating costs | $138,754 |
| Trust interest and unrealized gains | $1,689,871 combined: $516,220 interest and $1,173,651 unrealized gain |
| Net income | $1,225,382, after $325,735 income tax provision |
| Basic and diluted EPS | $(0.01); adjusted net loss attributable to shares not subject to possible redemption was $73,786 |
| Operating cash flow | $(179,553) |
| Cash outside trust | $716,123 |
| Trust securities | $243,189,871, principally U.S. Treasury bills |
| Total liabilities | $391,453; no long-term debt reported |
| Shares subject to possible redemption | 23,707,833 shares, recorded at $238,620,078 |
Material changes versus prior period
InterPrivate completed its IPO and full over-allotment exercise in February 2020, raising gross proceeds of $241.5 million from public units and $6.18 million from private units. It placed $241.5 million in the trust account. Compared with December 31, 2019, trust investments and cash increased from zero to $243.2 million and $716,123, respectively; the company also repaid its related-party promissory note. The filing provides no comparable first-quarter 2019 results; the company was formed in August 2019.
Outlook, risks, and unusual items
Management provided no earnings or revenue guidance. It intended to use trust assets, less taxes payable, to complete a business combination and reported $716,123 of cash outside the trust for search and transaction costs. The company had until November 6, 2021 to complete a business combination, subject to a possible extension. Management said it did not expect to need additional funds for planned expenditures, but warned that higher-than-expected search or diligence costs, significant redemptions, or insufficient financing could prevent a transaction.
Key risks include failure to find or complete a business combination, redemption of public shares, and warrants expiring worthless if no transaction is completed. Potential insider working-capital loans were not committed; up to $1.5 million could be convertible into units. The company also disclosed a contingent $8.45 million business-combination advisory fee payable upon completion. Management was evaluating the CARES Act’s potential tax effects. It reported no off-balance-sheet arrangements, no material market or interest-rate exposure, and effective disclosure controls at quarter-end.
Important facts for investors to verify
- Confirm the intended issuer: this filing is for InterPrivate Acquisition Corp., not Aeva Technologies, Inc.
- Verify the IPO proceeds, trust balance, redemption terms, and business-combination deadline against the underlying filing.
- Assess liquidity outside the trust and potential financing needs, given operating cash use and transaction costs.
- Understand the EPS presentation: trust earnings attributable to redeemable shares exceeded reported net income, producing adjusted loss per non-redeemable share.
- Review the contingent advisory fee, insider-loan terms, warrant dilution and expiration provisions, and risks of failing to complete a business combination.