UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
( State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 1, 2024, the registrant had
Table of Contents
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Page |
PART I. |
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Item 1. |
4 |
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4 |
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5 |
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6 |
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8 |
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9 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
20 |
Item 3. |
26 |
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Item 4. |
26 |
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PART II. |
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Item 1. |
27 |
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Item 1A. |
27 |
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Item 2. |
27 |
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Item 3. |
27 |
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Item 4. |
27 |
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Item 5. |
27 |
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Item 6. |
28 |
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29 |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) regarding future events and our future results that are subject to the safe harbors created under the Securities Act and the Exchange Act. All statements contained in this report other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “goal,” “plan,” “intend,” “expect,” “seek”, and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 under the heading “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of these forward-looking statements after the date of this report or to conform these statements to actual results or revised expectations.
As used in this report, the terms “Aeva,” “we,” “us,” “our,” and “the Company” mean Aeva Technologies, Inc. and its subsidiaries unless the context indicates otherwise.
3
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
AEVA TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PAR VALUE)
(UNAUDITED)
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June 30, 2024 |
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December 31, 2023 |
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Assets |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Accounts receivable |
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Inventories |
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Other current assets |
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Total current assets |
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Operating lease right-of-use assets |
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Property, plant and equipment, net |
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Intangible assets, net |
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Other noncurrent assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders' equity |
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Accounts payable |
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$ |
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$ |
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Accrued liabilities |
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Accrued employee costs |
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Lease liability, current portion |
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Other current liabilities |
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Total current liabilities |
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Lease liability, noncurrent portion |
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Warrant liability |
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Total liabilities |
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Commitments and contingencies (Note 15) |
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Common stock $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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( |
) |
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( |
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Accumulated deficit |
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( |
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( |
) |
Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
4
AEVA TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Cost of revenue |
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Gross loss |
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( |
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( |
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( |
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( |
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Operating expenses: |
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Research and development expenses |
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General and administrative expenses |
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Selling and marketing expenses |
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Litigation settlement, net |
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Total operating expenses |
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Operating loss |
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( |
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( |
) |
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( |
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( |
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Interest income |
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Other income, net |
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Loss before income taxes |
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( |
) |
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( |
) |
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( |
) |
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( |
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Income tax provision |
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Net loss |
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$ |
( |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Unrealized gain (loss) on available-for-sale securities |
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( |
) |
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Total comprehensive loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
Net loss per share, basic and diluted |
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$ |
( |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Weighted-average shares used in computing net loss per share, basic and diluted |
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See accompanying notes to the unaudited condensed consolidated financial statements.
5
AEVA TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
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Accumulated |
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Common stock |
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Additional |
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other |
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Accumulated |
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Total stockholders' |
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Shares |
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Amount |
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capital |
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loss |
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deficit |
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equity |
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Balance at December 31, 2023 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Share-based compensation |
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— |
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— |
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— |
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— |
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Issuance of common stock upon exercise of stock |
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— |
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— |
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— |
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Issuance of common stock upon release of restricted |
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— |
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— |
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— |
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— |
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— |
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Shares withheld for the withholding tax on vesting of restricted |
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( |
) |
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— |
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( |
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— |
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— |
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( |
) |
Unrealized gain (loss) on available-for-sale securities |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Net loss |
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— |
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— |
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— |
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( |
) |
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( |
) |
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Balance as of March 31, 2024 |
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$ |
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$ |
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$ |
( |
) |
` |
$ |
( |
) |
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$ |
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Share-based compensation |
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— |
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— |
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— |
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— |
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Issuance of common stock upon exercise of stock |
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— |
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— |
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— |
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Issuance of common stock upon release of restricted |
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— |
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— |
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— |
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— |
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— |
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Shares withheld for the withholding tax on vesting of |
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( |
) |
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— |
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( |
) |
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— |
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— |
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( |
) |
Unrealized gain (loss) on available-for-sale securities |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance as of June 30, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
6
AEVA TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
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Accumulated |
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Common stock |
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Additional |
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other |
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Accumulated |
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Total stockholders' |
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Shares |
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Amount |
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capital |
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loss |
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deficit |
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equity |
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Balance at December 31, 2022 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Share-based compensation |
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— |
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— |
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Issuance of common stock upon exercise of stock |
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— |
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Issuance of common stock upon release of restricted |
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— |
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— |
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— |
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— |
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— |
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Shares withheld for the withholding tax on vesting of restricted |
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( |
) |
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— |
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( |
) |
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( |
) |
||
Unrealized gain (loss) on available-for-sale securities |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance as of March 31, 2023 |
|
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$ |
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$ |
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$ |
( |
) |
` |
$ |
( |
) |
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$ |
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Share-based compensation |
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— |
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— |
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— |
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— |
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Issuance of common stock upon exercise of stock |
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— |
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— |
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— |
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Issuance of common stock upon release of restricted |
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— |
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— |
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— |
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— |
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— |
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Unrealized gain (loss) on available-for-sale securities |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance as of June 30, 2023 |
|
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
7
AEVA TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
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Six Months Ended June 30, |
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2024 |
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2023 |
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Cash flows from operating activities: |
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Net loss |
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$ |
( |
) |
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$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Impairment of inventories |
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Change in fair value of warrant liability |
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( |
) |
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( |
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Stock-based compensation |
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Amortization of right-of-use assets |
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Amortization of premium and accretion of discount on available-for-sale securities, net |
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( |
) |
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( |
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Other |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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( |
) |
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Inventories |
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( |
) |
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Other current assets |
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( |
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( |
) |
Other noncurrent assets |
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( |
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Accounts payable |
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Accrued liabilities |
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( |
) |
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Accrued employee costs |
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( |
) |
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( |
) |
Lease liability |
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( |
) |
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( |
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Other current liabilities |
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Net cash used in operating activities |
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( |
) |
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( |
) |
Cash flows from investing activities: |
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Purchase of property, plant and equipment |
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( |
) |
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( |
) |
Purchase of available-for-sale securities |
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( |
) |
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( |
) |
Proceeds from maturities of available-for-sale securities |
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Net cash provided by investing activities |
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Cash flows from financing activities: |
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Payments of taxes withheld on net settled vesting of restricted stock units |
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( |
) |
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( |
) |
Proceeds from exercise of stock options |
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Net cash (used in) provided by financing activities |
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( |
) |
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Net decrease in cash and cash equivalents |
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( |
) |
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( |
) |
Beginning cash and cash equivalents |
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Ending cash and cash equivalents |
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$ |
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$ |
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Supplemental disclosures of cash flow information: |
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Cash paid for interest |
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$ |
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$ |
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Cash paid for income taxes |
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$ |
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$ |
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Supplemental disclosures of non-cash investing and financing activities: |
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Unpaid property, plant and equipment purchases |
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$ |
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$ |
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||
See accompanying notes to the unaudited condensed consolidated financial statements.
8
AEVA TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Description of Business and Summary of Significant Accounting Policies
Description of Business
Aeva Technologies, Inc. (the “Company”), through its Frequency Modulated Continuous Wave (“FMCW”) sensing technology, designs a 4D LiDAR-on-chip that, along with its proprietary software applications, has the potential to enable the adoption of LiDAR across broad applications from automated driving to consumer electronics, consumer health, industrial automation and security application.
The Company’s common stock and warrants are listed on the New York Stock Exchange stock market under the symbols “AEVA” and "AEVA.WS".
Basis of Presentation and Unaudited Interim Financial Statements
The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The condensed consolidated financial statements include the accounts of the Company’s wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation.
The accompanying condensed consolidated financial statements are unaudited and have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations, comprehensive loss and cash flows for the periods presented, but are not necessarily indicative of the results of operations to be anticipated for any future annual or interim period.
These condensed consolidated financial statements and other information presented in this Form 10-Q should be read in conjunction with the consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC.
The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity. The Company did not issue fractional shares in connection with the Reverse Stock Split. Stockholders who were otherwise entitled to fractional shares of common stock were instead entitled to receive a proportional cash payment. The number of shares of common stock issuable under our equity incentive plans and exercisable under the outstanding warrants were also proportionately adjusted.
Principles of Consolidation and Liquidity
The condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The condensed consolidated financial statements include the accounts of the Company’s wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The Company has funded its operations primarily through the Business Combination (the “Business Combination”) with InterPrivate Acquisition Corp. (the Company’s predecessor, which was originally incorporated in Delaware as a special purpose acquisition company (“IPV”)) on March 12, 2021, and issuances of stock. As of June 30, 2024, the Company’s existing sources of liquidity included cash and cash equivalents and marketable securities of $
Significant Risks and Uncertainties
The Company is subject to those risks common in the technology industry and also those risks common to early stage companies, including, but not limited to, the possibility of not being able to successfully develop or market its products, technological obsolescence, competition, dependence on key personnel and key external alliances, the successful protection of its proprietary technologies, compliance with government regulations, and the possibility of not being able to obtain additional financing when needed.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities, and trade receivables. The Company maintains the majority of its cash and cash equivalents in accounts with large financial institutions. At times, balances in these accounts may exceed federally insured limits; however, to date, the Company has not incurred any losses on its deposits of cash and cash equivalents and believes the exposure to risk of loss is not material. Risks associated with the Company’s marketable securities is mitigated by investing in investment-grade rated securities when purchased.
The Company’s accounts receivable are derived from customers located in North America, Asia, and Europe. The Company mitigates its credit risks by performing ongoing credit evaluations of its customers’ financial conditions and requires customer advance payments in certain circumstances. The Company generally does not require collateral.
As of June 30, 2024,
Recent Accounting Pronouncements
In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740): Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our consolidated financial statements and related disclosures.
Note 2. Revenue
Disaggregation of Revenues
The Company disaggregates its revenue from contracts with customers by geographic region based on the primary billing address of the customer and timing of transfer of goods or services to customers (point-in-time or over time), as it believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.
|
|
Three Months Ended June 30, |
|
|||||||||||||
|
|
2024 |
|
|
2023 |
|
||||||||||
|
|
Revenue |
|
|
% of Revenue |
|
|
Revenue |
|
|
% of Revenue |
|
||||
Revenue by primary geographical market: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
North America |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Europe |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Asia |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue by timing of recognition: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Recognized at a point in time |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Recognized over time |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
10
Total revenue for the six months ended June 30, 2024 and 2023, based on the disaggregation criteria described above are as follows (in thousands):
|
|
Six Months Ended June 30, |
|
|||||||||||||
|
|
2024 |
|
|
2023 |
|
||||||||||
|
|
Revenue |
|
|
% of Revenue |
|
|
Revenue |
|
|
% of Revenue |
|
||||
Revenue by primary geographical market: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
North America |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Europe |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Asia |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue by timing of recognition: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Recognized at a point in time |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Recognized over time |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
The point in time revenue was primarily related to the product revenue and over time revenue was from non-recurring engineering services.
For the three months ended June 30, 2024,
For the six months ended June 30, 2024,
Contract Assets and Contract Liabilities
As of June 30, 2024, and December 31, 2023, the Company had contract assets of $
Note 3. Financial Instruments
The following tables summarize the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy:
|
|
June 30, 2024 |
|
|||||||||||||||||||||
|
|
Adjusted Cost |
|
|
Unrealized Gains |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Cash and Cash Equivalent |
|
|
Marketable Securities |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Level 1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Money market funds |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Level 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. agency securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
|||
U.S. Treasury securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Commercial paper |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Corporate bonds |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
||||
Subtotal |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Level 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Warrant liabilities |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Total liabilities |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
11
|
|
December 31, 2023 |
|
|||||||||||||||||||||
|
|
Adjusted Cost |
|
|
Unrealized Gain |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
Cash and Cash Equivalent |
|
|
Marketable Securities |
|
||||||
|
|
(in thousands) |
|
|||||||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Level 1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Money market funds |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Level 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. agency securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
||||
U.S. Treasury securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Commercial paper |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Corporate bonds |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
||||
Subtotal |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Level 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Warrant liabilities |
|
$ |
|
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|||
Total liabilities |
|
$ |
|
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|||
The fair value of the private placement and Series A warrant liabilities is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. In determining the fair value of the warrant liabilities, the Company used the Black-Scholes option-pricing model to estimate the fair value using unobservable inputs including the expected term, expected volatility, risk-free interest rate, and dividend yield.
The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments (in thousand):
|
|
|
|
|
|
|
||
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
Fair value, beginning balance |
|
$ |
|
|
$ |
|
||
Fair value at issuance of Series A Warrants |
|
|
|
|
|
|
||
Change in the fair value of Series A warrants included in other income (expense), net |
|
|
( |
) |
|
|
|
|
Change in the fair value of private placement warrants included in other income (expense), net |
|
|
( |
) |
|
|
( |
) |
Fair value, closing balance |
|
$ |
|
|
$ |
|
||
The key inputs into the Black-Scholes option pricing model for the private placement warrants were as follows for the relevant periods:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
Expected term (years) |
|
|
|
|
|
|
||
Expected volatility |
|
|
% |
|
|
% |
||
Risk-free interest rate |
|
|
% |
|
|
% |
||
Dividend yield |
|
|
% |
|
|
% |
||
Exercise Price |
|
$ |
|
|
$ |
|
||
The key inputs into the Black-Scholes option pricing model for the Series A warrants were as follows for the relevant periods:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
Expected term (years) |
|
|
|
|
|
|
||
Expected volatility |
|
|
% |
|
|
% |
||
Risk-free interest rate |
|
|
% |
|
|
% |
||
Dividend yield |
|
|
% |
|
|
% |
||
Exercise Price |
|
$ |
|
|
$ |
|
||
12
Note 4. Acquisition of Intangible Assets
As of June 30, 2024, expected amortization expense relating to purchased intangible assets was as follows (in thousands):
|
|
|
|
|
Remainder of 2024 |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
Total future amortization |
|
$ |
|
|
The Company recorded amortization expense related to the acquired intangible assets of $
Note 5. Inventories
Inventories consisted of the following (in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Work-in-progress |
|
|
|
|
|
|
||
Finished goods |
|
|
|
|
|
|
||
Total inventories |
|
$ |
|
|
$ |
|
||
Note 6. Property, Plant and Equipment
Property, plant and equipment consisted of the following (in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
Computer equipment |
|
$ |
|
|
$ |
|
||
Lab equipment |
|
|
|
|
|
|
||
Leasehold improvements |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
Testing equipment |
|
|
|
|
|
|
||
Manufacturing equipment |
|
|
|
|
|
|
||
Furniture, fixtures and other equipment |
|
|
|
|
|
|
||
Total property, plant and equipment |
|
$ |
|
|
$ |
|
||
Less: accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Total property, plant and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation related to property, plant, and equipment was $
Note 7. Other current assets
Other current assets consisted of the following (in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
Prepaid expenses |
|
$ |
|
|
$ |
|
||
Contract assets |
|
|
|
|
|
|
||
Vendor deposits |
|
|
|
|
|
|
||
Other current assets |
|
|
|
|
|
|
||
Total other current assets |
|
$ |
|
|
$ |
|
||
13
Note 8. Other non-current assets
Other non-current assets consist of the following (in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
Non marketable equity investments |
|
$ |
|
|
$ |
|
||
Security deposit |
|
|
|
|
$ |
|
||
Other non-current assets |
|
|
|
|
|
|
||
Total other non-current assets |
|
$ |
|
|
$ |
|
||
In November 2023, the Company made an investment in
Note 9. Other current liabilities
Other current liabilities consisted of the following (in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
Litigation settlement |
|
$ |
|
|
$ |
|
||
Other current liabilities |
|
|
|
|
|
|
||
Total other current liabilities |
|
$ |
|
|
$ |
|
||
Note 10. Financing transaction
Private Investment
On November 8, 2023, the Company entered into Subscription Agreements (the “Subscription Agreements”) with entities affiliated with Sylebra Capital Limited (“Sylebra”) and Adage Capital Management, providing for the purchase of an aggregate of
Standby Equity Purchase Agreement
On November 8, 2023, the Company also entered into a Standby Equity Purchase Agreement (the “Facility Agreement”) with entities affiliated with Sylebra, pursuant to which the Company will have the right, but not the obligation to sell to Sylebra up to $
When and if issued, the preferred stock will be issued at a price per share of $
The preferred stock will be convertible at the option of the holders into the number of shares of Common Stock equal to $
14
being below $
The preferred stock issued in connection with the facility agreement ranks senior to common stock upon the Company’s liquidation, dissolution or winding up. The preferred stock is entitled to priority cumulative dividends which shall accrue daily from and after the original issue date of such share and shall compound on a quarterly basis on each dividend payment date. The accrued dividends shall in all cases be payable upon liquidation.
The Company shall pay dividends on each share of preferred stock in cash or in kind through issuance of shares of common stock with an aggregate value equal to the amount of the dividend to have been paid divided by the dividend conversion price. The board of directors of the Company may at its sole discretion elect to pay the dividends in cash in lieu of shares of common stock. The convertible redeemable preferred stock have no voting rights unless they are converted into shares of common stock.
Holders may, at their option, elect to convert some or all preferred stock held by such holder, at any time and from time to time prior to a change of control, into a number of shares of common stock per share of the preferred stock equal to (x) the quotient of the issuance price divided by the conversion price in effect at the time of conversion. At any time on or after the two-year anniversary of the issuance date, the Company shall have the right to redeem the preferred stock of any holder outstanding at such time at the issuance price plus three (3) years of dividend payment (“Redemption price”); provided, that (a) the closing price of a share of common stock exceeds
In connection with this financing, the Company also paid the entities affiliated with Sylebra, (a) a facility fee in the amount of $
In addition, upon receipt of stockholder approval in December 2023, the Company issued to Sylebra
As of June 30, 2024, the Company had
The exercise price and number of shares of common stock issuable upon exercise of the Series A Warrants may be adjusted in certain circumstances including in the event of a stock dividend or split, subsequent rights offerings, pro rata purchases, merger, reorganization, recapitalization, or spin-off. However, the Series A Warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. The Series A Warrants do not entitle the holders to any voting rights, dividends or other rights as a stockholder of the Company prior to being exercised for common stock.
Note 11. Capital Structure
As of June 30, 2024, the Company had authorized to issue up to
Preferred Stock
The Company is authorized to issue up to
Warrants
As of June 30, 2024, the Company had
15
Note 12. Earnings (Loss) Per Share
The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders for the periods presented (in thousands, except per share data):
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to common stockholders |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares of common stock outstanding — Basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of potential common stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares of common stock outstanding — Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share attributable to common stockholders — Basic and Diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The following table presents the potential common shares outstanding that were excluded from the computation of diluted net loss per share of common stock as of the periods presented because including them would have been anti-dilutive:
|
|
Six Months Ended June 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Common stock options issued and outstanding |
|
|
|
|
|
|
||
Restricted stock units |
|
|
|
|
|
|
||
Performance-based restricted stock units |
|
|
|
|
|
|
||
Common stock warrants |
|
|
|
|
|
|
||
Series A warrants |
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
||
Note 13. Stock-based Compensation
Stock Options
The Company maintains the 2016 Stock Incentive Plan and the 2021 Incentive Award Plan (the “Stock Plans”) under which incentive stock options, non-qualified stock options and restricted stock units (“RSU”) may be granted to employees. Under the Stock Plans, the Company has
Under the terms of the Stock Plans, incentive stock options must have an exercise price at or above the fair market value of the stock on the date of the grant, while non-qualified stock options are permitted to be granted below fair market value of the stock on the date of grant. The majority of stock options granted have service-based vesting conditions only. The service-based vesting conditions vary, typically stock options vest over
A summary of the Company’s stock option activity, for the six months ended June 30, 2024, was as follows:
|
|
Number of |
|
|
Weighted- |
|
|
Weighted- |
|
|
Aggregate |
|
||||
Outstanding as of December 31, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Exercised |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
Outstanding as of June 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Vested and exercisable as of June 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Vested and expected to vest as of June 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Restricted Stock Units and Performance-based Restricted Stock Units (“PBRSU”)
In May 2023, the Company granted a total of
16
the expected performance achievement period of individual performance milestones when the achievement of each individual performance milestone becomes probable. If satisfaction of the performance condition is not probable, stock-based compensation cost recognition is deferred until it becomes probable. The Company reassesses the probability as to whether satisfaction of the performance condition is probable on a quarterly basis, and stock-based compensation cost is adjusted based on the portion of the requisite service provided. These PBRSUs neither carry rights to dividends nor voting rights until the shares are issued or transferred to the recipient. Awards are forfeited if an employee leaves the Company before the PBRSUs vest or the performance period lapses. The weighted-average grant date PBRSU fair value of $
In May 2023, the Company also granted a total of
|
|
June 30, 2024 |
|
|
Expected term (years) |
|
|
||
Expected volatility |
|
|
% |
|
Risk-free interest rate |
|
|
% |
|
Dividend yield |
|
|
% |
|
Share price |
|
$ |
|
|
As of June 30, 2024, the total unrecognized compensation expense related to the market-based PBRSUs was $
The following table summarizes our RSU activity for the six months ended June 30, 2024:
|
|
Shares |
|
|
Weighted Average |
|
||
Outstanding as of December 31, 2023 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Released |
|
|
( |
) |
|
|
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
Outstanding as of June 30, 2024 |
|
|
|
|
$ |
|
||
As of June 30, 2024, the Company had $
Compensation expense
Total stock-based compensation expense by function was as follows (in thousands):
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Cost of revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Research and development expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling and marketing expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
17
Note 14. Income Taxes
There has historically been
The federal and state net operating loss carryforwards may be subject to significant limitations under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, and similar provisions under state law. The Tax Reform Act of 1986 contains provisions that limit the federal net operating loss carryforwards that may be used in any given year in the event of special occurrences, including significant ownership changes. The Company has completed an analysis as of December 31, 2022 and doesn’t expect any net operating loss carryforwards or tax credit carryforwards to expire due to a limitation.
Note 15. Commitments and Contingencies
Leases
The weighted-average remaining lease terms were
The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of June 30, 2024 (in thousands):
|
|
Operating Leases |
|
|
Remainder of 2024 |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
Total minimum lease payments |
|
|
|
|
Less: imputed interest |
|
|
( |
) |
Total lease liability |
|
$ |
|
|
Litigation
From time to time, the Company is involved in actions, claims, suits, and other proceedings in the ordinary course of business, including assertions by third parties relating to intellectual property infringement, breaches of contract or warranties, or employment-related matters. When it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated, the Company records a liability for such loss contingencies. The Company’s estimates regarding potential losses and materiality are based on the Company’s judgment and assessment of the claims utilizing currently available information. Although the Company will continue to reassess its reserves and estimates based on future developments, the Company’s objective assessment of the legal merits of such claims may not always be predictive of the outcome and actual results may vary from the Company’s current estimates.
Litigation – other matters
On March 7, 2024, a putative class action lawsuit was filed in the Court of Chancery of the State of Delaware against InterPrivate Acquisition Management LLC, InterPrivate LLC, and former directors and officers of InterPrivate Acquisition Corp (“IPV”). The lawsuit is captioned Louis Smith v. Ahmed M. Fattouh, et al., (Del. Ch. 2024). On June 3, 2024, a second putative class action lawsuit was filed in the Court of Chancery of the State of Delaware against IPV and Soroush Salehian and Mina Rezk (collectively, the “Delaware Stockholder Litigation”). Among other remedies, the complaints seek damages and attorneys’ fees and costs. In connection with IPV’s March 12, 2021, business combination transaction with Aeva Inc., Aeva agreed to assume certain indemnification obligations to IPV’s former directors and officers.
On July 2, 2024, the Company and the parties to the Delaware Stockholder Litigation entered into a term sheet, which is being memorialized into a formal settlement agreement and which will be subject to court approval, to fully and finally resolve the Delaware Stockholder Litigation. In connection with the settlement, the Company has agreed to pay a total settlement cost of $
As of June 30, 2024, the Company has accrued a contingent liability of $
18
Indemnifications
In the ordinary course of business, the Company is not subject to potential obligations under guarantees that fall within the scope of FASB ASC Guarantees, (Topic 460), except for standard indemnification provisions that are contained within many of the Company’s customer agreements and give rise only to disclosure requirements prescribed by Topic 460. Indemnification provisions contained within the Company’s customer agreements are generally consistent with those prevalent in the Company’s industry. The Company has not incurred any obligations under customer indemnification provisions and does not expect to incur significant obligations in the future. Accordingly, the Company does not maintain accruals for potential customer indemnification obligations.
Note 16. Segment Information
The Company operates as
Long-Lived Assets
The following table sets forth the Company’s property and equipment, net by geographic region (in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
North America |
|
$ |
|
|
$ |
|
||
Asia |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
19
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion of Aeva’s results of operations and financial condition should be read in conjunction with the information set forth in the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion may contain forward-looking statements based upon Aeva’s current expectations, estimates, and projections that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”) under the heading “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Unless the context otherwise requires, all references in this section to “we,” “our,” “us” “the Company” or “Aeva” refer to the business of Aeva Technologies, Inc., a Delaware corporation, and its subsidiaries.
On March 18, 2024, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the “Amendment”) with the Secretary of State of the State of Delaware to effect a 1-for-5 reverse stock split (the “Reverse Stock Split”) of the Company’s shares of common stock, $0.0001 par value (the “Common Stock”). Pursuant to the Reverse Stock Split, every five (5) shares of issued and outstanding shares of common stock were combined into one (1) share of common stock. All share and per share amounts and related stockholders’ equity balances presented herein have been retroactively adjusted to reflect the Reverse Stock Split. There was no change to the shares authorized or in the par value per share of common stock of $0.0001.
The Reverse Stock Split affected all stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity. The Company did not issue fractional shares in connection with the Reverse Stock Split. Stockholders who were otherwise entitled to fractional shares of common stock were instead entitled to receive a proportional cash payment. The number of shares of common stock issuable under our equity incentive plans and exercisable under the outstanding warrants were also proportionately adjusted.
Overview
Our vision is to bring perception to broad applications. Through our FMCW sensing technology, we believe we are introducing the world’s first 4D LiDAR-on-chip that, along with our proprietary software applications, has the potential to enable the adoption of LIDAR across broad applications.
Founded in 2017 by former Apple engineers Soroush Salehian and Mina Rezk and led by a multidisciplinary team of engineers and operators experienced in the field of sensing and perception, Aeva’s mission is to bring the next wave of perception technology to broad applications from automated driving to industrial automation, consumer device applications, and security. Our 4D LiDAR-on-chip combines silicon photonics technology that is proven in the telecom industry with precise instant velocity measurements and long-range performance for commercialization.
As a development stage company, we work closely with our customers on the development and commercialization of their programs and the utilization of our products in such programs. Thus far, our customers have purchased prototype products and engineering services from us for use in their research and development programs. We are expanding our manufacturing capacity through third-party manufacturers to meet our customers’ anticipated demand for the production of our products.
Unlike legacy 3D LiDAR, which relies on Time-of-Flight (“ToF”) technology and measures only depth and reflectivity, Aeva’s solution leverages a proprietary FMCW technology to measure velocity in addition to depth, reflectivity and inertial motion. We believe the ability of Aeva’s solution to measure instant velocity for every pixel is a major advantage over ToF-based sensing solutions. Furthermore, Aeva’s technology is free from interference from other LiDAR and sunlight, and our core innovations within FMCW are intended to enable autonomous vehicles to see at significantly higher distances of up to 500 meters.
We believe Aeva is uniquely positioned to provide a superior solution with the potential to enable higher level of automation for vehicles. Furthermore, we believe the advantages of our 4D LiDAR-on-chip allow us to provide the first LiDAR solution that is fully integrated onto a chip with superior performance at scale, with the potential to drive new categories of perception across industrial automation, consumer devices, and security markets.
Key Factors Affecting Aeva’s Operating Results
Aeva believes that its future performance and success depends to a substantial extent on its ability to capitalize opportunities, which in turn is subject to significant risks and challenges, including those discussed in Part I, Item 1A of the 2023 Form 10-K under the heading “Risk Factors.”
Pricing, Product Cost and Margins. Our pricing and margins will depend on the volumes and the features, as well as specific market applications of the solutions we provide to our customers. We have customers with technologies in various stages of development across different market segments. We anticipate that our prices will vary by market and application due to market-specific product and commercial requirements, supply and demand dynamics and product lifecycles.
Aeva’s future performance will depend on its ability to deliver on economies of scale. Our customers will require that our perception solutions be manufactured and sold at per-unit prices that are competitive. Our ability to compete in key markets will depend on the success of our efforts to efficiently and reliably produce cost-effective perception solutions that are competitively priced and affordable for our commercial-stage customers.
20
Additionally, the macroeconomic conditions in the industry, the growing emergence of competition in advanced assisted driving sensing and software technologies globally can negatively impact pricing, margins and market share. If Aeva does not generate the margins it expects upon commercialization of its perception solutions, Aeva may be required to raise additional debt or equity capital, which may not be available or may only be available on terms that are onerous to Aeva’s stockholders.
Commercialization of LiDAR-based Applications. We expect that our results of operations, including revenue and gross margins, will fluctuate on a quarterly basis for the foreseeable future as our customers continue on research and development projects and begin to commercialize advanced driver assist, autonomous and industrial automation solutions that rely on LiDAR technology. As more customers reach the commercialization phase and as the market for LiDAR solutions matures, these fluctuations in our operating results may become less pronounced.
Sales Volume. Each product program will have an expected range of sales volumes, depending on the end market demand for our customers’ products as well as market application. This can depend on several factors, including market penetration, product capabilities, size of the end market that the product addresses and our end customers’ ability to sell their products. In addition to end market demand, sales volumes also depend on whether our customer is in the development or production phase. In certain cases, we may provide volume discounts or strategic customer pricing on sales of our solutions, which may or may not be offset by lower manufacturing costs related to higher volumes which in turn could adversely impact our gross margins. Aeva’s ability to ultimately achieve profitability is dependent upon progression of existing relationships to production and our ability to meet required volumes and required cost targets and gross margins. Delays of our current and future customers’ programs could result in Aeva being unable to achieve its revenue targets and profitability in the time frame it anticipates. Such delays could result in Aeva requiring to raise additional debt or equity capital, which may not be available or may only be available on terms that are onerous to Aeva’s stockholders.
Basis of Presentation
Our condensed consolidated financial statements include the accounts of our wholly owned subsidiaries. We have eliminated intercompany accounts and transactions.
Components of Results of Operations
Revenue
Revenue consists of sales of perception solutions or sensing systems and non-recurring engineering services.
Aeva is engaged in design, manufacturing and sale of LiDAR sensing systems and related perception and autonomy-enabling software solutions serving customers in automotive, industrial, and other markets. Under the customer agreements, Aeva delivers a specified number of sensing systems at a fixed price under customary terms and conditions. The sensing system units sold under these agreements are typically prototypes that are used by the customer for its research, development, evaluation, pilot, or testing purposes. Aeva also enters into non-recurring engineering service arrangements with certain of its customers to customize Aeva’s perception solution to meet customer specific requirements.
Cost of revenue and gross profit
Cost of revenue principally includes direct material, direct labor and allocation of overhead associated with manufacturing operations, including inbound freight charges and depreciation expense. Cost of revenue also includes the direct cost and appropriate allocation of overhead involved in execution of non-recurring engineering services. Aeva’s gross profit equals total revenue less total cost of revenue.
Operating expenses
Research and development expenses
Aeva’s research and development efforts are focused on enhancing and developing additional functionality for its existing products and on new product development. Research and development expenses consist primarily of:
Aeva recognizes research and development expenses as incurred.
General and administrative expenses
General and administrative expenses consist of personnel and personnel-related expenses, including salaries, benefits, and stock-based compensation expense of Aeva’s executive, finance, information systems, human resources, and legal teams, as well as legal and accounting fees for professional and contract services.
21
Selling and marketing expenses
Selling and marketing expenses consist of personnel and personnel-related expenses, including salaries, benefits, and stock-based compensation expense of Aeva’s business development team as well as advertising and marketing expenses. These include the cost of trade shows, promotional materials, and public relations.
Interest income and Interest expense
Interest income consists primarily of income earned on Aeva’s cash equivalents and investments in marketable securities. Interest income will vary based on Aeva’s cash equivalents and marketable securities balance and changes in the interest rates.
Other income and expense
Other income and expense primarily consist of changes in the fair value of Series A warrants fair value of private placement warrants and, foreign currency transaction gains and losses, and realized gains and losses on marketable securities.
Results of Operations
Comparison of the Three Months Ended June 30, 2024, and 2023
The results of operations presented below should be reviewed in conjunction with the financial statements and notes included elsewhere in this quarterly statement. The following table sets forth Aeva’s results of operations data for the periods presented:
|
|
Three Months Ended |
|
|
|
|
|
|
|
|||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
Change |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
Revenue |
|
$ |
2,012 |
|
|
$ |
743 |
|
|
|
1,269 |
|
|
|
171 |
% |
Cost of revenue |
|
|
2,860 |
|
|
|
2,661 |
|
|
|
199 |
|
|
|
7 |
% |
Gross loss |
|
|
(848 |
) |
|
|
(1,918 |
) |
|
|
1,070 |
|
|
|
(56 |
)% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development expenses |
|
|
26,196 |
|
|
|
27,065 |
|
|
|
(869 |
) |
|
|
(3 |
)% |
General and administrative expenses |
|
|
8,663 |
|
|
|
7,713 |
|
|
|
950 |
|
|
|
12 |
% |
Selling and marketing expenses |
|
|
1,706 |
|
|
|
1,485 |
|
|
|
221 |
|
|
|
15 |
% |
Litigation settlement, net |
|
|
11,500 |
|
|
|
— |
|
|
|
11,500 |
|
|
|
100 |
% |
Total operating expenses |
|
|
48,065 |
|
|
|
36,263 |
|
|
|
11,802 |
|
|
|
33 |
% |
Loss from operations |
|
|
(48,913 |
) |
|
|
(38,181 |
) |
|
|
(10,732 |
) |
|
|
28 |
% |
Interest income |
|
|
2,099 |
|
|
|
2,225 |
|
|
|
(126 |
) |
|
|
(6 |
)% |
Other income, net |
|
|
3,544 |
|
|
|
1 |
|
|
|
3,543 |
|
|
|
354,294 |
% |
Net loss before taxes |
|
|
(43,270 |
) |
|
|
(35,955 |
) |
|
|
(7,315 |
) |
|
|
20 |
% |
Income tax provision |
|
|
123 |
|
|
|
— |
|
|
|
123 |
|
|
|
100 |
% |
Net loss |
|
$ |
(43,393 |
) |
|
$ |
(35,955 |
) |
|
|
(7,438 |
) |
|
|
21 |
% |
Revenue
Revenue increased by $1.3 million or 171% during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The increase was primarily due to an increase in the total number of units sold and non-recurring engineering services which is dependent upon the timing of the work performed for our customers. This increase was partially offset by a decrease in the per unit average selling price of the units sold.
Cost of revenue
Cost of revenue increased by $0.2 million or 7%, during the three months ended June 30, 2024, from the three months ended June 30, 2023. The increase was primarily due to an increase in non-recurring services during the current period as compared to the prior period.
Operating expenses
Research and development expenses
Research and development expenses decreased by $0.9 million, or 3%, to $26.2 million for the three months ended June 30, 2024, from $27.1 million for the three months ended June 30, 2023. Research and development expenses decreased primarily due to a decrease of $1.6 million in material expenses related to product development and a $0.1 million decrease in employee related expenses, partially offset by a $0.4 million increase in software subscription expenses, a $0.3 million increase in consulting expenses, and a $0.1 million increase in facility related expenses.
22
General and administrative expenses
General and administrative expenses increased by $1.0 million, or 12%, to $8.7 million for the three months ended June 30, 2024, from $7.7 million for the three months ended June 30, 2023. Legal expenses increased by $0.6 million, payroll expenses increased by $0.7 million, facility related expenses increased by $0.3 million and travel expenses increased by $0.1 million, partially offset by a decrease in insurance expenses by $0.2 million, a decrease in stock-based compensation expenses by $0.3 million, and a decrease in recruiting expenses by $0.2 million.
Selling and marketing expenses
Selling and marketing expenses increased by $0.2 million, or 15%, to $1.7 million for the three months ended June 30, 2024, from $1.5 million for the three months ended June 30, 2023. The increase was primarily due to an increase in payroll related expense.
Litigation settlement, net
During the three months ended June 30, 2024, the Company recorded a litigation settlement expense (net) of $11.5 million, related to the Delaware Stockholder Litigation (See Note 15 to our condensed consolidated financial statements).
Interest income
Interest income decreased by $0.1 million, or 6%, during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The decrease was due to a decrease in the overall balance of interest-bearing cash equivalents and marketable securities for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, due to net cash used in operating activities, partially offset by higher yield on interest bearing securities.
Other income, net
Other income increased by $3.5 million for the three months ended June 30, 2024 primarily due to changes in the fair value of Series A warrants.
Results of Operations
Comparison of the Six Months Ended June 30, 2024, and 2023
The results of operations presented below should be reviewed in conjunction with the financial statements and notes included elsewhere in this quarterly statement. The following table sets forth Aeva’s results of operations data for the periods presented:
|
|
Six Months Ended |
|
|
|
|
|
|
|
|||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
Change |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
Revenue |
|
$ |
4,119 |
|
|
$ |
1,891 |
|
|
|
2,228 |
|
|
|
118 |
% |
Cost of revenue |
|
|
6,359 |
|
|
|
5,190 |
|
|
|
1,169 |
|
|
|
23 |
% |
Gross loss |
|
|
(2,240 |
) |
|
|
(3,299 |
) |
|
|
1,059 |
|
|
|
(32 |
)% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development expenses |
|
|
51,208 |
|
|
|
52,519 |
|
|
|
(1,311 |
) |
|
|
(2 |
)% |
General and administrative expenses |
|
|
17,074 |
|
|
|
15,546 |
|
|
|
1,528 |
|
|
|
10 |
% |
Selling and marketing expenses |
|
|
4,235 |
|
|
|
4,083 |
|
|
|
152 |
|
|
|
4 |
% |
Litigation settlement, net |
|
|
11,500 |
|
|
|
— |
|
|
|
11,500 |
|
|
|
100 |
% |
Total operating expenses |
|
|
84,017 |
|
|
|
72,148 |
|
|
|
11,869 |
|
|
|
16 |
% |
Loss from operations |
|
|
(86,257 |
) |
|
|
(75,447 |
) |
|
|
(10,810 |
) |
|
|
14 |
% |
Interest income |
|
|
4,557 |
|
|
|
4,289 |
|
|
|
268 |
|
|
|
6 |
% |
Other income, net |
|
|
3,104 |
|
|
|
29 |
|
|
|
3,075 |
|
|
|
10,602 |
% |
Net loss before taxes |
|
|
(78,596 |
) |
|
|
(71,129 |
) |
|
|
(7,467 |
) |
|
|
10 |
% |
Income tax provision |
|
|
123 |
|
|
|
— |
|
|
|
123 |
|
|
|
100 |
% |
Net loss |
|
$ |
(78,719 |
) |
|
$ |
(71,129 |
) |
|
$ |
(7,590 |
) |
|
|
11 |
% |
Revenue
Revenue increased by $2.2 million, or 118% during the six months June 30, 2024, as compared to the six months ended June 30, 2023. The increase was primarily due to an increase in units sold and non-recurring engineering services, which is dependent upon the timing of the work performed for our customers as compared to the prior period. The increase was partially offset by a decrease in per unit average selling price of the units sold.
23
Cost of revenue
Cost of revenue increased by $1.2 million, or 23%, during the six months ended June 30, 2024, from the six months ended June 30, 2023. The increase was primarily due to an increase in the sale of the prototype units sold in 2024 as compared to 2023 and increase in cost of revenue related to the non-recurring services revenue.
Operating expenses
Research and development expenses
Research and development expenses decreased by $1.3 million, or 2%, to $51.2 million for the six months ended June 30, 2024, from $52.5 million for the six months ended June 30, 2023. Research and development expenses decreased primarily due to a lower material cost related to research and development. Research material cost decreased by $3.9 million, stock-based compensation expenses decreased by $1.4 million, legal expenses decreased by $0.2 million and other employee related expenses decreased by $0.2 million. This was partially offset by a $2.3 million increase in payroll related expenses, a $0.9 million increase in research and development service expenses, a $0.4 million increase in depreciation, a $0.5 million increase in software subscription expense, and a $0.3 million increase in facility and other expenses.
General and administrative expenses
General and administrative expenses increased by $1.6 million, or 10%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. General and administrative expenses increased primarily due to an increase in employees related expenses of $1.4 million, legal expense increase by $0.7 million, professional fees increased by $0.4 and travel expenses increased by $0.1 million, partially offset by a $0.6 million decrease in insurance expense, a $0.3 million decrease in depreciation and a $0.1 million decrease in recruiting expenses.
Selling and marketing expenses
Selling and marketing expenses increased by $0.1 million, or 4%, to $4.2 million for the six months ended June 30, 2024, from $4.1 million for the six months ended June 30, 2023. The increase was primarily due to an increase in payroll related expenses.
Litigation settlement, net
During the six months ended June 30, 2024, the Company recorded a litigation settlement expense (net) of $11.5 million, related to the Delaware Stockholder Litigation (See Note 15 to our condensed consolidated financial statements).
Interest income
Interest income increased by $0.3 million, or 6%, during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The increase was due to change in the interest rate during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, partially offset by a decrease in the overall balance of interest-bearing cash equivalents and marketable securities.
Other income, net
Other income increased by $3.1 million for the six months ended June 30, 2024, primarily due to a change in in the fair value of Series A warrant liability.
Liquidity and Capital Resources
Sources of Liquidity
Aeva’s capital requirements will depend on many factors, including sales volume, the timing and extent of spending to support research and development efforts, investments in information technology systems, the expansion of sales and marketing activities, and market adoption of new and enhanced products and features. As of June 30, 2024, Aeva had cash, cash equivalents and marketable securities totaling $160.2 million.
On November 8, 2023, the Company entered into Subscription Agreements providing for the purchase of common stock resulting in net proceeds of $20.6 million (“November PIPE”). Also on November 8, 2023, the Company entered into a Standby Equity Purchase Agreement (the “Facility Agreement”) with entities affiliated with Sylebra. Pursuant to the Facility Agreement, the Company will have the right, but not the obligation, to sell to Sylebra up to $125.0 million shares of its preferred stock, at the Company’s request until November 8, 2026. Each sale the Company requests under the Facility Agreement may be for a number of shares of preferred stock with an aggregate value of at least $25.0 million but not more than $50.0 million (except with Sylebra’s consent). The Company paid Sylebra a facility fee in the amount of $2.5 million, an origination fee in the amount of $0.6 million, and an administrative fee in the amount of $0.3 million and reimbursed $0.4 million to Sylebra for its fees and expenses. In addition, the Company issued to Sylebra a Series A Warrants to purchase 3,000,000 shares of Common Stock at an exercise price of $5.00.
During the period, the Company has accrued a contingent liability of $14.0 million connection with the settlement of the Delaware Stockholder Litigation, and a $2.5 million insurance recovery (See Note 15 to our condensed consolidated financial statements).
24
Aeva expects current cash, cash equivalents, and marketable securities will be sufficient to fund its near term cash needs but will be required to raise additional capital or draw on the Facility Agreement (see Note 10 to our condensed consolidated financial statements) unless Aeva is able to generate sufficient revenue from the sale of its products to cover operating expense, working capital and capital expenditures.
Aeva has incurred negative cash flows from operating activities and losses from operations in the past as reflected in its accumulated deficit of $538.3 million as of June 30, 2024. Aeva expects to continue to incur operating losses due to continued investments that it intends to make in its business, including development of products. Aeva believes that existing cash and cash equivalent and marketable securities will be sufficient to fund operating and capital expenditure requirements through at least 12 months from the date of issuance of these financial statements.
Cash Flow Summary
The following table summarizes our cash flows for the periods presented:
|
|
Six Months Ended June 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(in thousands) |
|
|||||
Cash used in operating activities |
|
$ |
(60,127 |
) |
|
$ |
(63,419 |
) |
Cash provided by investing activities |
|
|
45,441 |
|
|
|
30,580 |
|
Net cash (used in) provided by financing activities |
|
|
(239 |
) |
|
|
96 |
|
Net decrease in cash and cash equivalents |
|
$ |
(14,925 |
) |
|
$ |
(32,743 |
) |
Operating Activities
For the six months ended June 30, 2024, net cash used in operating activities was $60.1 million, attributable to a net loss of $78.7 million and a net change in net operating assets and liabilities of $8.0 million, partially offset by non-cash charges of $10.6 million. Non-cash charges primarily consisted of $10.6 million in stock-based compensation, $2.8 million in depreciation and amortization expense, $1.7 million in amortization of right of use assets and $0.7 million in inventory reserves and others, partially offset by $3.1 million change in the fair value of warrant liability and by a $2.1 million in amortization of premium and accretion of discount on available for sale securities. The change in net operating assets and liabilities was primarily due to a $16.5 million increase in other current liabilities is primarily due to a $14.0 million accrual for litigation settlement cost, a $0.3 million decrease in other non-current assets, a $0.2 million increase in accounts payable and $0.3 million increase in accrued liabilities, partially offset by a $3.0 million decrease in accrued employee cost, a $3.2 million increase in other current assets, a $1.7 million decrease in lease liability, a $1.2 million increase in inventories and a $0.2 million increase in accounts receivable.
Investing Activities
For the six months ended June 30, 2024, net cash provided by investing activities was $45.4 million, attributable to maturity of available-for-sale investments of $99.9 million, partially offset by purchase of investments of $52.1 million and purchase of property, plant and equipment of $2.4 million.
Financing Activities
For the six months ended June 30, 2024, net cash used in financing activities was attributable to payment of taxes withheld on net settled vesting of restricted stock units.
Off-Balance Sheet Arrangements
As of June 30, 2024, Aeva has not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Critical Accounting Policies and Estimates
Aeva prepares its financial statements in accordance with U.S. GAAP. The preparation of these financial statements requires the Company to make estimates, assumptions and judgments that can significantly impact the amounts Aeva reports as assets, liabilities, revenue, costs and expenses and the related disclosures. Aeva bases its estimates on historical experience and other assumptions that it believes are reasonable under the circumstances. Aeva’s actual results could differ significantly from these estimates under different assumptions and conditions. Aeva believes that the accounting policies discussed below are critical to understanding its historical and future performance as these policies involve a greater degree of judgment and complexity.
For the six months ended June 30, 2024 there were no significant changes to our critical accounting policies and estimates. For a more detailed discussion of our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and Note 1 of the notes to condensed consolidated financial statements included in this Form 10-Q.
Recent Accounting Pronouncements
See Note 1 to Aeva’s financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report on Form 10-Q.
25
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Aeva is exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in interest rates. There has been no material change in our exposure to market risks from that discussed in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of the 2023 Form 10-K.
Item 4. Controls and Procedures.
Evaluation of disclosure controls and procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as of June 30, 2024, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in internal control over financial reporting
There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent limitation on the effectiveness of internal control
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
26
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, the Company may be involved in actions, claims, suits and other proceedings in the ordinary course of business, including assertions by third parties relating to intellectual property infringement, breaches of contract or warranties or employment-related matters. Information regarding legal proceedings is provided in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 15 Commitments and Contingencies.”
Item 1A. Risk Factors.
The Company’s business, reputation, results of operations and financial condition, as well as the price of the Company’s stock, can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A of the 2023 Form 10-K under the heading “Risk Factors.” When any one or more of these risks materialize from time to time, the Company’s business, reputation, results of operations and financial condition, as well as the price of the Company’s stock, can be materially and adversely affected. There have been no material changes to the Company’s risk factors since the 2023 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceed
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
10b5-1 Trading Plans
During the fiscal quarter ended June 30, 2024, no Section 16 director or officer
On
There were no “non-Rule 10b5-1 trading arrangements” (as defined in Item 408 of Regulation S-K of the Exchange Act)
27
Item 6. Exhibits.
Exhibit Number |
|
Description |
3.1 |
|
|
3.2 |
|
|
31.1* |
|
|
31.2* |
|
|
32.1* |
|
|
32.2* |
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
# Indicates a management contract or any compensatory plan, contract or arrangement.
† Schedules and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(2). The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
28
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
AEVA TECHNOLOGIES, INC. |
|
|
|
|
|
Date: August 8, 2024 |
|
By: |
/s/Soroush Salehian Dardashti |
|
|
|
Soroush Salehian Dardashti |
|
|
|
Chief Executive Officer |
|
|
|
|
Date: August 8, 2024 |
|
By: |
/s/ Saurabh Sinha |
|
|
|
Saurabh Sinha |
|
|
|
Chief Financial Officer |
29