References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to EVe Mobility Acquisition Corp. References to our "management"
or our "management team" refer to our officers and directors, and references to
the "Sponsor" refer to EVe Mobility Sponsor LLC. The following discussion and
analysis of the Company's financial condition and results of operations should
be read in conjunction with the unaudited condensed financial statements and the
notes thereto contained elsewhere in this Quarterly Report. Certain information
contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" that are not
historical facts and involve risks and uncertainties that could cause actual
results to differ materially from those expected and projected. All statements,
other than statements of historical fact included in this Quarterly Report
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"expect," "believe," "anticipate," "intend," "estimate," "seek" and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management's current beliefs, based on information
currently available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results
discussed in the forward-looking statements. For information identifying
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk
Factors section of the Company's Annual Report on Form 10-K as filed with the
SEC on April 14, 2022 and of the Company's Quarterly Report on Form 10-Q as
filed with the SEC on May 23, 2022. The Company's securities filings can be
accessed on the EDGAR section of the SEC's website at www.sec.gov. Except as
expressly required by applicable securities law, the Company disclaims any
intention or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company
on March 23, 2021 formed for the purpose of entering into a merger, share
exchange, asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses. We have not selected any business
combination target and we have not, nor has anyone on our behalf, initiated any
substantive discussions, directly or indirectly, with any business combination
target. We intend to effectuate our initial business combination using cash from
the proceeds of our initial public offering and the sale of the private
placement warrants, the proceeds of the sale of our shares in connection with
our initial business combination pursuant to the forward purchase agreements (or
backstop agreements we may enter into or otherwise), shares issued to the owners
of the target, debt issued to bank or other lenders or the owners of the target,
or a combination of the foregoing or other sources.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities for the period from March 23, 2021 (inception) through
September 30, 2022 were organizational activities, those necessary to prepare
for the initial public offering, described below, and since the closing of our
initial public offering, the search for a prospective initial business
combination. We do not expect to generate any operating revenues until after the
completion of our initial business combination. We generate non-operating income
in the form of interest income on cash and cash equivalents held after the
initial public offering. We incur expenses as a result of being a public company
(for legal, financial reporting, accounting and auditing compliance), as well as
due diligence expenses.
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For the three months ended September 30, 2022, we had net income of $961,767,
which resulted from interest income on investments held in Trust Account of
$1,158,662, partially offset by operating costs of $196,895.
For the three months ended September 30, 2021, we had no operations.
For the nine months ended September 30, 2022, we had a net income of $687,889,
which resulted from operating costs of $833,013, offset by interest income on
investments held in Trust Account of $1,520,902.
For the period from March 23, 2021 (inception) through September 30, 2021, we
had net loss of $7,603, which resulted entirely from operating and formation
costs.
Liquidity, Capital Resources, and Going Concern
On December 17, 2021, we consummated an initial public offering (the "initial
public offering") of 25,000,000 units, including the issuance of 3,000,000 units
as a result of the underwriter's partial exercise of its over-allotment option,
at a price of $10.00 per unit, generating gross proceeds of $250,000,000.
Simultaneously with the consummation of the Initial Public Offering, we
completed the private sale of 1,140,000 units (the "private placement units") to
EVe Mobility Sponsor LLC (the "sponsor"), Cantor Fitzgerald & Co. ("Cantor") and
Moelis & Company Group, LP ("Moelis LP"), at a purchase price of $10.00 per
unit, generating gross proceeds of $11,400,000. The proceeds from the sale of
the private placement units were added to the net proceeds from the initial
public offering held in a trust account (the "Trust Account"). If we do not
complete an initial business combination within 18 months from the closing of
the initial public offering, the proceeds from the sale of the private placement
units will be used to fund the redemption of the public shares (subject to the
requirements of applicable law) and the warrants included in the private
placement units will expire worthless.
For the nine months ended September 30, 2022, net cash used in operating
activities was $514,716, which was due to our net income of $687,889, and
changes in working capital of $318,297, offset by interest income on investments
held in the Trust Account of $1,520,902.
For the period from March 23, 2021 (inception) through September 30, 2021, net
cash used in operating activities was $0, which was due to a net loss of $7,603,
offset by formation costs paid by Sponsor in exchange for issuance of Class B
ordinary shares of $7,603.
There were no cash flows from financing activities and investing activities for
the nine months ended September 30, 2022 and for the period from March 23, 2021
(inception) through September 30, 2021.
As of September 30, 2022 and December 31, 2021, the Company had $235,577 and
$750,293 in cash held outside of the Trust Account and working capital of
$121,118 and $699,592. Upon the completion of the Initial Public Offering,
capital in excess of the funds deposited in the Trust Account and/or used to
fund offering expenses was released to the Company for general working capital
purposes. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
The Company intends to use the funds held outside the Trust Account primarily to
identify and evaluate target businesses, perform business due diligence on
prospective target businesses, travel to and from the offices, plants or similar
locations of prospective target businesses or their representatives or owners,
review corporate documents and material agreements of prospective target
businesses, and structure, negotiate and complete a Business Combination.
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If the Company's estimates of the costs of identifying a target business,
undertaking in-depth due diligence and negotiating an initial Business
Combination are less than the actual amount necessary to do so, the Company may
have insufficient funds available to operate its business prior to an initial
Business Combination. Moreover, the Company may need to obtain additional
financing either to complete an initial Business Combination or because the
Company becomes obligated to redeem a significant number of its public shares
upon completion of an initial Business Combination, in which case the Company
may issue additional securities or incur debt in connection with such Business
Combination.
In connection with the Company's assessment of going concern considerations in
accordance with ASC Subtopic 205-40, Presentation of Financial Statements -
Going Concern, pursuant to its Amended and Restated Memorandum and Articles of
Association, the Company has until June 17, 2023 to consummate a Business
Combination. If a Business Combination is not consummated by this date, or the
Company's shareholders have not approved an extension, there will be a mandatory
liquidation and subsequent dissolution of the Company. Although the Company
intends to consummate a Business Combination on or before June 17, 2023, and may
seek an extension, it is uncertain that the Company will be able to consummate a
Business Combination, or obtain an extension, by this time. This, as well as its
liquidity condition, raise substantial doubt about the Company's ability to
continue as a going concern. No adjustments have been made to the carrying
amounts of assets or liabilities should the Company be required to liquidate
after June 17, 2023.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of September 30, 2022 and
December 31, 2021.
Contractual Obligations
Founder Shares
On April 7, 2021, the Sponsor paid $25,000 in consideration for 7,187,500 shares
of Class B ordinary shares (the "Founder Shares"). On September 3, 2021, the
Company effected a share capitalization of an additional 2,395,833 Class B
ordinary shares, resulting in an aggregate of 9,583,333 Class B ordinary shares
outstanding. On September 27, 2021, the Company surrendered 1,916,666 Class B
ordinary shares for no consideration, resulting in an aggregate of 7,666,667
Class B ordinary shares. On December 14, 2021, the Company effected a share
capitalization of 766,666 Class B ordinary shares, resulting in the initial
shareholders holding an aggregate of 8,433,333 Founder Shares. The Founder
Shares include an aggregate of up to 1,100,000 Class B ordinary shares subject
to forfeiture by the Sponsor to the extent that the underwriters' over-allotment
option is not exercised in full or in part, so that the Sponsor and its
permitted transferees will own, on an as-converted basis, 25% of the Company's
issued and outstanding shares after the Initial Public Offering. On December 17,
2021, with the partial exercise of the underwriters' over-allotment option,
1,000,000 Class B ordinary shares were no longer subject to forfeiture, leaving
100,000 Class B ordinary shares subject to forfeiture. On January 14, 2022, the
Company forfeited the remaining portion of the over-allotment option, thus,
100,000 Class B ordinary shares were forfeited.
The Sponsor has agreed that, subject to certain limited exceptions, the Founder
Shares will not be transferred, assigned, or sold until the earlier of (i) one
year after the completion of a Business Combination or (ii) subsequent to an
initial Business Combination, (x) if the closing price of Class A ordinary
shares equals or exceeds $12.00 per share (as adjusted for share subdivisions,
share capitalizations, reorganizations, recapitalizations and the like) for any
20 trading days within any 30-trading day period commencing at least 150 days
after an initial Business Combination, or (y) the date on which the Company
completes a liquidation, merger, share exchange or other similar transaction
that results in all of the public shareholders having the right to exchange
their ordinary shares for cash, securities or other property. The Founder Shares
will automatically convert into Class A ordinary shares at the time of the
initial business combination, or earlier at the option of the holder, on a
one-for-one basis.
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Promissory Note - Related Party
On April 6, 2021, the Company issued an unsecured promissory note to the
Sponsor, which was amended and restated on September 3, 2021 (the "Promissory
Note"), pursuant to which the Company had the option to borrow up to an
aggregate principal amount of $300,000 to cover expenses related to the Initial
Public Offering. The Promissory Note was non-interest bearing and was payable on
the earlier of December 31, 2021 or the completion of the Initial Public
Offering. The outstanding balance under the Promissory Note of $216,353 was
repaid and the Promissory Note was terminated at the closing of the Initial
Public Offering on December 17, 2021.
Due from Sponsor
Due from Sponsor consists of operating costs associated with EVe Mobility
Sponsor LLC that were paid by the Company, and are reimbursable by the Sponsor
on demand. As of September 30, 2022 and December 31, 2021, $2,826 and $25,000
were outstanding.
Administrative Support Agreement
On December 14, 2021, the Company entered into an agreement to pay the Sponsor a
total of $10,000 per month for office space, secretarial and administrative
services. Upon completion of the Business Combination or the Company's
liquidation, the Company will cease paying these monthly fees. Under this
agreement $30,000 and $0 of expenses were incurred for the three months ended
September 30, 2022 and 2021, respectively, and $90,000 and $0 for the nine
months ended September 30, 2022 and for the period from March 23, 2021
(inception) through September 30, 2021, respectively. As of September 30, 2022
and December 31, 2021, $10,000 and $0 related to this agreement were owed to the
Sponsor, respectively.
Related Party Loans
In addition, in order to finance transaction costs in connection with a Business
Combination, the Sponsor or an affiliate of the Sponsor, or certain of the
Company's officers and directors may, but are not obligated to, loan the Company
funds as may be required ("Working Capital Loans"). If the Company completes a
Business Combination, the Company would repay the Working Capital Loans out of
the proceeds held in the Trust Account released to the Company. Otherwise, the
Working Capital Loans would be repaid only out of funds held outside the Trust
Account. In the event that a Business Combination is not completed, the Company
may use a portion of the proceeds held outside the Trust Account to repay the
Working Capital Loans but no proceeds held in the Trust Account would be used to
repay the Working Capital Loans. Except for the foregoing, the terms of such
Working Capital Loans, if any, have not been determined and no written
agreements exist with respect to such loans. The Working Capital Loans would
either be repaid upon consummation of a Business Combination, without interest,
or, at the lender's discretion, up to $1,500,000 of such Working Capital Loans
may be convertible into units at a price of $10.00 per unit at the option of the
lender. The units would be identical to the Private Placement Units. There are
no Working Capital Loans outstanding as of September 30, 2022 and December 31,
2021.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have identified the following critical accounting policies:
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Offering Costs associated with the Initial Public Offering
The Company complies with the requirements of ASC Topic 340, Other Assets and
Deferred Costs ("ASC 340") and SEC Staff Accounting Bulletin Topic 5A - Expenses
of Offering. Offering costs directly attributable to the issuance of an equity
contract to be classified in equity are recorded as a reduction in equity.
Offering costs for equity contracts that are classified as assets and
liabilities are expensed immediately. The Company incurred offering costs
amounting to $14,355,310 as a result of the Initial Public Offering (consisting
of a $4,400,000 underwriting discount, $9,350,000 of deferred offering costs,
and $605,310 of other offering costs). The Company recorded $14,071,008 of
offering costs as a reduction of temporary equity and $284,302 of offering costs
as a reduction of permanent equity.
Warrants
We account for warrants as either equity-classified or liability-classified
instruments based on an assessment of the warrant's specific terms and
applicable authoritative guidance in Accounting Standards Codification ("ASC")
Topic 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815,
Derivatives and Hedging ("ASC 815"). The assessment considers whether the
warrants are freestanding financial instruments pursuant to ASC 480, meet the
definition of a liability pursuant to ASC 480, and whether the warrants meet all
of the requirements for equity classification under ASC 815, including whether
the warrants are indexed to the Company's own common stock, among other
conditions for equity classification. This assessment, which requires the use of
professional judgment, is conducted at the time of warrant issuance and as of
each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of
additional paid-in capital at the time of issuance. For issued or modified
warrants that do not meet all the criteria for equity classification, the
warrants are required to be recorded at their initial fair value on the date of
issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of the warrants are recognized as a non-cash gain or loss on the
statements of operations. The public warrants and private placement warrants are
equity classified.
Ordinary Shares Subject to Possible Redemption
All of the 25,000,000Public Shares sold as part of the Units in the Initial
Public Offering and the partial exercise of the over-allotment option contain a
redemption feature which allows for the redemption of such Public Shares in
connection with the Company's liquidation, if there is a shareholder vote or
tender offer in connection with the Business Combination and in connection with
certain amendments to the Amended and Restated Memorandum and Articles of
Association. In accordance with ASC 480-10-S99, redemption provisions not solely
within the control of the Company require ordinary shares subject to redemption
to be classified outside of permanent equity. Therefore, all Public Shares have
been classified outside of permanent equity. The redemption value of the
redeemable ordinary shares as of September 30, 2022 increased as the income
earned on the Trust Account exceeds the Company's expected dissolution expenses
(up to $100,000). As such, the Company recorded an increase in the carrying
amount of the redeemable ordinary shares of $1,521,510 as of September 30, 2022.
We recognize changes in redemption value immediately as they occur and adjusts
the carrying value of redeemable ordinary shares to equal the redemption value
at the end of each reporting period. Increases or decreases in the carrying
amount of redeemable ordinary shares are affected by charges against additional
paid-in capital and accumulated deficit.
Net Income (Loss) Per Ordinary Share
We comply with accounting and disclosure requirements of ASC 260, Earnings Per
Share. Net income (loss) per ordinary share is computed by dividing net income
(loss) by the weighted-average number of ordinary shares outstanding during the
period. Re-measurement associated with the redeemable Class A ordinary shares is
excluded from net income (loss) per share as the redemption value approximates
fair value. Therefore, the per share calculation allocates income and losses
shared pro rata between Class A and Class B ordinary shares. As a result, the
calculated net income (loss) per share is the same for Class A and Class B
ordinary shares. The Company has not considered the effect of the warrants sold
in the Initial Public Offering, the partial exercise of the over-allotment
option, and private placement to purchase an aggregate of 13,070,000 shares in
the calculation of diluted income (loss) per share, since the exercise of the
warrants is contingent upon the occurrence of future events. As a result,
diluted per share is the same as basic loss per share for the periods presented.
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Recent Accounting Standards
We do not believe that any recently issued, but not yet effective, accounting
standards, if currently adopted, would have a material effect on our financial
statements.
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EVE MOBILITY ACQUISITION CORP 