Business context and reporting period
This is Zanite Acquisition Corp.’s Form 10-K for the fiscal year ended December 31, 2021, filed February 14, 2022. Although the request identifies Eve Holding, Inc., the filing is for Zanite, a pre-combination SPAC—not an operating-company 10-K for Eve. Zanite reported no operating revenue or business operations.
On December 21, 2021, Zanite agreed to combine with Embraer’s urban air mobility business, Eve. At closing, Zanite was to acquire Eve for 220 million Zanite shares issued to Embraer Aircraft Holding. The proposed transaction also included a $315 million PIPE at $10 per share. Completion remained subject to closing conditions, including a stated minimum of $350 million of available cash from the trust and PIPE before transaction expenses and deferred underwriting fees.
Financial results and liquidity
| Metric | FY 2021 / December 31, 2021 | Prior comparable period |
|---|---|---|
| Revenue | None | None; 2020 covers inception on August 7 through year-end |
| Net income (loss) | $14.5 million | $(16.7) million |
| General and administrative expense | $6.1 million | $0.4 million |
| Interest income on trust investments | $23,403 | $2,673 |
| Net cash used in operating activities | $1.5 million | $0.3 million |
| Cash outside trust | $475,339 | $2.0 million |
| Trust investments and cash | $236.9 million | $232.3 million |
| Current liabilities | $4.7 million | $0.4 million |
| Total liabilities | $36.4 million | $48.5 million |
| Working capital | Deficit of approximately $4.17 million | Not clearly stated for comparison |
The 2021 net income was not operating profit: it included a $20.6 million non-cash gain from changes in the fair value of derivative liabilities, chiefly warrants. The filing provides no operating margins because Zanite had no revenue. It reported no long-term debt; liabilities included $23.6 million of derivative liabilities and an $8.05 million deferred underwriting fee payable if a business combination closes.
Material changes, outlook, and risks
- Trust assets rose to $236.9 million, including $4.6 million of additional Sponsor warrant proceeds associated with two six-month deadline extensions. Outside-trust cash fell to $475,339, while accrued expenses and accounts payable increased substantially.
- The company expected to complete the Eve transaction before its combination deadline. The filing states a May 19, 2022 deadline in multiple places, but one passage refers to May 21, 2022; confirm the controlling deadline in subsequent filings and governing documents.
- Management and the auditor reported substantial doubt about Zanite’s ability to continue as a going concern if it failed to complete a business combination or obtain additional capital by the deadline. If no transaction closed, public shares were to be redeemed from the trust, while warrants would expire worthless.
- The PIPE subscriptions totaled $315 million, including $175 million from EAH and $25 million from the Sponsor, but remained conditional on transaction closing. The filing also describes strategic warrants for up to 31.15 million shares at exercise prices of $0.01, $11.50, and $15.00, some tied to business milestones. EAH had offered certain strategic investors up to $30 million in price protection through cash or credits for parts and services.
- Key risks included shareholder redemptions preventing the cash condition from being met, financing and transaction completion risk, conflicts of interest, dilution from founder-share anti-dilution protections and warrants, creditor claims against trust assets, and COVID-19 or market disruption. The company had no off-balance-sheet arrangements.
- Management concluded disclosure controls were effective; its internal-control assessment was not attested to by the auditor because of emerging-growth-company status. The financial statements received an unmodified audit opinion, with a separate going-concern emphasis.
Important facts for investors to verify
- Confirm the transaction’s eventual closing status, the final cash condition, actual redemptions, and net cash available after fees and expenses.
- Reconcile the May 19 versus May 21, 2022 deadline references and confirm any subsequent extension or liquidation outcome.
- Verify that the $315 million PIPE and each investor commitment funded, and review the final terms and potential dilution from strategic warrants and founder-share adjustments.
- Review updated liquidity, accrued expenses, deferred underwriting and contingent transaction fees, and any Sponsor borrowing or claims affecting trust proceeds.
- Use Eve’s own subsequent filings for operating results, cash needs, aircraft-development milestones, and forward-looking forecasts; these are not provided as Eve operating-company results in this Zanite filing.