Aeva Technologies, Inc. quarterly report, Q1 FY2020

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

MetricThree months ended March 31, 2020 / March 31, 2020
Operating revenueNone
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 redemption23,707,833 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.