Business context and reporting period
Filing identity: This is InterPrivate Acquisition Corp.’s unaudited Form 10-Q for the quarter ended September 30, 2020—not an operating-company filing by Aeva Technologies. InterPrivate was a shell company formed to pursue a business combination and had no operating revenue or business operations during the period. The filing discusses a proposed combination with Aeva, Inc.
Financial results and position
- Revenue: None; the company said it would not expect operating revenue before a business combination.
- Third-quarter 2020: Net loss of $108,000, comprising $177,000 of operating and formation costs and a $331,000 unrealized loss on trust investments, partly offset by $372,000 of trust interest income and a $29,000 income-tax benefit.
- Nine months ended September 30, 2020: Net income of $912,000, versus a $1,000 loss in the comparable 2019 inception period. Results primarily reflected $1.783 million of trust interest income, offset by $628,000 of costs and $242,000 of income-tax provision. The periods are not directly comparable: the 2019 period began at inception, and the IPO closed in February 2020.
- Cash flow: $731,000 used in operating activities in the first nine months of 2020. Cash at September 30 was $325,000, compared with none at December 31, 2019.
- Trust and liquidity: Trust investments were $243.1 million, primarily in money-market funds invested in U.S. Treasury securities. Total current assets were $387,000; current liabilities were $203,000. The trust balance is principally reserved for a business combination or public-share redemptions, not ordinary operating liquidity.
- Capital and debt: No long-term debt was reported. Stockholders’ equity was $5.0 million, alongside $238.3 million of common stock classified as subject to possible redemption. IPO and private-unit proceeds funded the trust; the company reported no off-balance-sheet arrangements.
Material developments, outlook, and risks
- On November 2, 2020, after quarter-end, InterPrivate agreed to combine with Aeva, Inc. The agreement set a $1.7 billion company value, subject to a reduction of up to $50 million based on a specified audited-versus-unaudited balance-sheet comparison. Aeva shareholders were expected to own a majority of the combined company’s common stock.
- Completion remained conditional, including shareholder approvals. Either party could terminate in certain circumstances, including if the transaction had not closed by March 31, 2021. Aeva could owe a $68 million termination fee in certain termination circumstances.
- Investors agreed to a conditional private placement of approximately 12 million shares at $10 per share, or about $120 million gross, contingent on closing. Aeva stockholders holding sufficient votes signed a support agreement.
- InterPrivate had until November 6, 2021 to complete a business combination, absent an approved extension; otherwise it would wind up and redeem public shares. Public shareholders could redeem shares in connection with a combination. Warrants could expire worthless if no combination is completed.
- Management said it did not expect to need additional funds for its planned expenditures, but noted that cost overruns, substantial redemptions, or transaction needs could require financing. It provided no operating guidance. The trust’s short-term government investments were described as carrying limited interest-rate risk, while the filing warned that negative rates could reduce per-share redemption proceeds.
- Related-party service arrangements cost $10,000 per month each for administrative support and business-combination assistance. A separate $8.45 million advisory fee was payable to EarlyBirdCapital upon a completed combination.
Important facts to verify
- Confirm the filing is InterPrivate Acquisition Corp.’s SPAC report and distinguish it from Aeva’s standalone financial disclosures.
- Review the final business-combination terms, the balance-sheet adjustment to the $1.7 billion value, closing conditions, and any termination-fee triggers.
- Verify the private placement’s final proceeds and closing status, and assess how public-share redemptions affect available transaction cash.
- Check the trust balance, redemption value, tax withdrawals, and potential dilution from warrants, founder shares, and transaction financing.
- Assess whether the SPAC’s outside-trust cash and any subsequent financing were sufficient to fund transaction costs through closing.