Filing Overview
Source inconsistency: The request identifies Eve Holding, Inc., but the filing text is for Zanite Acquisition Corp., a Delaware special purpose acquisition company. The summary below reflects the filing text provided.
Reporting period: Quarterly period ended September 30, 2020; financial activity covers August 7, 2020, the date of incorporation, through September 30, 2020. The filing was signed December 23, 2020.
Business Context
Zanite Acquisition Corp. was formed on August 7, 2020 to pursue a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination. It had not commenced operations or generated operating revenue as of September 30, 2020.
The company is a shell company, smaller reporting company and emerging growth company. Its Class A common stock had not yet been issued as of September 30, 2020; 5,750,000 Class B founder shares were outstanding.
Financial Metrics
| Metric | September 30, 2020 / Period Presented |
|---|---|
| Total assets | $132,852, consisting entirely of deferred offering costs |
| Current liabilities | $108,852, including $47,852 of accrued offering costs, $60,000 of related-party promissory notes and $1,000 of accrued expenses |
| Stockholders’ equity | $24,000 |
| Revenue | None |
| Formation and operating costs | $1,000 |
| Net loss | $1,000 |
| Basic and diluted loss per share | $0.00, shown as $(0.00) in the filing |
| Cash and cash equivalents | $0 |
| Net cash used in operating activities | $0 |
| Debt | $60,000 related-party promissory note; no long-term debt |
No meaningful revenue, operating margin or profitability analysis is applicable because the company had no operating activities. There were no off-balance-sheet arrangements, market-risk exposures or long-term contractual obligations as of September 30, 2020.
Material Changes and Subsequent Events
- The filing provides no prior comparable operating period because the company was incorporated on August 7, 2020.
- On November 19, 2020, after the reporting date, the company completed its initial public offering of 23,000,000 units at $10.00 per unit, generating gross proceeds of $230.0 million.
- On the same date, the sponsor purchased 9,650,000 private-placement warrants for $9.65 million.
- Following the offering and private placement, $232.3 million was deposited into a trust account. Transaction costs totaled $13.143 million, including $8.050 million of deferred underwriting fees.
- The $60,000 promissory note reported at September 30, 2020 was subsequently increased to $93,093 and repaid on November 23, 2020.
- The underwriters exercised the full over-allotment option, so up to 750,000 founder shares were no longer subject to forfeiture.
Outlook, Risks and Unusual Items
- Management expects no operating revenue until completion of a business combination and expects to incur continuing legal, accounting, due diligence and public-company costs.
- The company must complete a business combination by May 19, 2021, subject to potential six-month extensions, up to May 19, 2022, if the sponsor purchases additional private-placement warrants and deposits the required proceeds into the trust account.
- If no business combination is completed within the applicable period, the company must cease operations, redeem the public shares from the trust account and liquidate. Public warrants would expire worthless.
- Management stated that failure to complete a business combination would result in mandatory liquidation and substantial doubt about the company’s ability to continue as a going concern.
- Public shareholders may redeem shares in connection with a business combination, potentially reducing available cash and increasing financing needs.
- The sponsor has agreed to protect the trust account against certain third-party claims, subject to stated limitations and waivers.
- COVID-19 could negatively affect the company’s financial position, operations or search for a target, but the specific impact was not determinable.
- Trust-account investments could potentially earn a negative interest rate, reducing the per-share redemption amount below $10.00.
- The sponsor will receive $10,000 per month for office, secretarial and administrative services beginning November 19, 2020 until the earlier of a business combination or liquidation.
Investor Verification Checklist
- Verify the issuer identity: the supplied filing is for Zanite Acquisition Corp., not Eve Holding, Inc.
- Confirm the November 19, 2020 IPO, private-placement warrant issuance and $232.3 million trust-account deposit.
- Review the applicable business-combination deadline, extension mechanics and redemption provisions.
- Assess dilution from founder shares, public warrants, private-placement warrants and any potential working-capital loans convertible into warrants.
- Confirm repayment of the related-party promissory note and review ongoing sponsor-related fees and conflicts of interest.
- Review the trust-account protections, deferred underwriting fee, liquidation terms and COVID-19-related uncertainties.