References to the "company," "our," "us" or "we" refer to EVe Mobility
Acquisition Corp. The following discussion and analysis of the company's
financial condition and results of operations should be read in conjunction with
the audited financial statements and the notes related thereto which are
included in "Item 8. Financial Statements and Supplementary Data" of this Annual
Report on Form 10-K. Certain information contained in the discussion and
analysis set forth below includes forward-looking statements. Our actual results
may differ materially from those anticipated in these forward-looking statements
as a result of many factor. Certain information contained in the discussion and
analysis set forth below includes forward-looking statements. Our actual results
may differ materially from those anticipated in these forward-looking statements
as a result of many factors, including those set forth under "Cautionary Note
Regarding Forward-Looking Statements and Risk Factor Summary," "Item 1A. Risk
Factors" and elsewhere in this Annual Report on Form 10-K.
This Annual 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 Annual 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 "Cautionary Note Regarding
Forward-Looking Statements and Risk Factor Summary," "Item 1A. Risk Factors" and
elsewhere in this Annual Report on Form 10-K. 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.
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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
December 31, 2021 were organizational activities, those necessary to prepare for
the initial public offering, described below. 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.
For the period from March 23, 2021 (inception) through December 31, 2021, we had
net loss of $396,842, which resulted from operating and formation costs of
$397,450, partially offset by a unrealized gain on investments held in trust
account of $393 and a realized gain on investments held in trust account of
$215.
Liquidity and Capital Resources
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 period from March 23, 2021 (inception) through December 31, 2021, net
cash used in operating activities was $677,491, which was due to our net loss of
$396,842, changes in working capital of $280,041, a unrealized gain on
investments in the trust account of $393 and a realized gain on investments in
the trust account of $215.
For the period from March 23, 2021 (inception) through December 31, 2021, net
cash used in investing activities of $255,000,000 was the result of the amount
of net proceeds from our initial public offering and sale of private placement
units being deposited to the trust account.
For the period from March 23, 2021 (inception) through December 31, 2021 net
cash provided by financing activities of $256,427,784 was comprised of proceeds
from the issuance of units in our initial public offering net of underwriter's
discount paid of $245,600,000, proceeds from the issuance of units in a private
placement of $11,400,000 and proceeds from the issuance of the promissory note -
related party of $216,353, offset in part by the payment of offering costs
associated with the initial public offering of $572,216 and repayment of the
outstanding balance on the promissory note - related party of $216,353.
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As of December 31, 2021 we had cash of $750,293 held outside the trust account.
We intend 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.
We intend to use substantially all of the funds held in the trust account,
including any amounts representing interest earned on the funds held in the
trust account and not previously released to us to pay our taxes (which interest
shall be net of taxes payable and excluding deferred underwriting commissions)
to complete our initial business combination. We may withdraw interest to pay
our taxes, if any. Our annual income tax obligations will depend on the amount
of interest and other income earned on the amounts held in the trust account. We
expect the interest earned on the amount in the trust account will be sufficient
to pay our taxes. We expect the only taxes payable by us out of the funds in the
trust account will be income and franchise taxes, if any. To the extent that our
ordinary shares or debt is used, in whole or in part, as consideration to
complete our initial business combination, the remaining proceeds held in the
trust account will be used as working capital to finance the operations of the
target business or businesses, make other acquisitions and pursue our growth
strategies.
If our 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, we may have insufficient funds
available to operate our business prior to our initial business combination.
Moreover, we may need to obtain additional financing either to complete our
initial business combination or because we become obligated to redeem a
significant number of our public shares upon completion of our initial business
combination, in which case we may issue additional securities or incur debt in
connection with such business combination.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of December 31, 2021.
Contractual Obligations
Registration and Shareholder Rights Agreement
The holders of the founder shares, private placement units, private placement
shares and private placement warrants and the Class A ordinary shares underlying
such private placement warrants and private placement units that may be issued
upon conversion of working capital loans will be entitled to registration rights
pursuant to a registration rights agreement entered into on the effective date
of the initial public offering. The holders of these securities are entitled to
make up to three demands, excluding short form demands, that we register such
securities. In addition, the holders have certain "piggy-back" registration
rights with respect to registration statements filed subsequent to consummation
of a business combination. However, the registration rights agreement provides
that we will not permit any registration statement filed under the Securities
Act to become effective until termination of the applicable lockup period. We
will bear the expenses incurred in connection with the filing of any such
registration statements.
Promissory Note - Related Party
On April 6, 2021, we issued an unsecured promissory note to the sponsor, which
was amended and restated on September 3, 2021 (the "promissory note"), pursuant
to which we may 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 at the closing of the initial public
offering on December 17, 2021.
Underwriting Agreement
Simultaneously with the initial public offering, the underwriters partially
exercised the over-allotment option to purchase an additional 3,000,000 units at
an offering price of $10.00 per unit for an aggregate purchase price of
$30,000,000.
The underwriters were paid a cash underwriting discount of $0.20 per unit (not
including the over-allotment units), or $4,400,000 in the aggregate, upon the
closing of the Initial Public Offering. In addition, $0.35 per unit (and $0.55
per over-allotment unit), or $9,350,000 in the aggregate will be payable to the
underwriters for deferred underwriting commissions. The deferred fee will become
payable to the underwriters from the amounts held in the Trust Account solely in
the event that we complete a business combination, subject to the terms of the
underwriting agreement.
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Business Combination Marketing Agreement
On December 14, 2021, we entered into an agreement with the underwriter' as
advisors in connection with the initial business combination to assist us in
holding meetings with the shareholders to discuss the potential business
combination and the target business' attributes, introduce us to potential
investors that are interested in purchasing the securities, assist us in
obtaining shareholder approval for the business combination and assist us with
our press releases and public findings in connection with the business
combination. We will pay the underwriters a cash fee for such services upon the
consummation of the initial Business Combination of 1.5% (or $3,750,000 in the
aggregate, of the gross proceeds of the Initial Public Offering). As a result,
the underwriters will not be entitled to such fee unless we consummate the
initial business combination.
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:
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 25,000,000 Class A ordinary 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 our 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 our control require ordinary shares subject to redemption to be
classified outside of permanent equity. Therefore, all public shares have been
classified outside of permanent equity.
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 Loss Per Ordinary Share
Net loss per ordinary share is computed by dividing net 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 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 loss per share is the same for Class A and Class B ordinary
shares. We have 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 loss per share, since the exercise of the warrants is contingent upon
the occurrence of future events. As a result, diluted loss per share is the same
as basic loss per share for the periods presented.
Recent Accounting Standards
In August 2020, the FASB issued Accounting Standards Update ("ASU") 2020-06,
Debt - Debt with Conversion and Other Options (Subtopic 470-0) and Derivatives
and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) ("ASU 2020-06")
to simplify accounting for certain financial instruments. ASU 2020-06 eliminates
the current models that require separation of beneficial conversion and cash
conversion features from convertible instruments and simplifies the derivative
scope exception guidance pertaining to equity classification of contracts in an
entity's own equity. The new standard also introduces additional disclosures for
convertible debt and freestanding instruments that are indexed to and settled in
an entity's own equity. ASU 2020-06 amends the diluted earnings per share
guidance, including the requirement to use the if-convened method for all
convertible instruments. For smaller reporting companies, ASU 2020-06 is
effective for fiscal years beginning after December 15, 2023 and should be
applied on full or modified retrospective basis, with early adoption permitted
for fiscal years beginning after December 15, 2020. We adopted ASU 2020-06
effective January 1, 2021 using the modified retrospective method of transition.
The adoption of ASU 2020-06 did not have a material impact on the financial
statements for the period from March 23, 2021 (inception) through December 31,
2021.
We do not believe that any other recently issued, but not yet effective,
accounting standards, if currently adopted, would have a material effect on our
financial statements.
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