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Restatement Of Previously Issued Financial Statements
 9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Restatement Of Previously Issued Financial Statements [Abstract]    
Restatement Of Previously Issued Financial Statements
2. Restatement of Previously Reported Financial Statements
The Company previously restated its financial statements for the year ended December 31, 2021, and for the unaudited quarters ended March 31, 2022, and 2021, and June 30, 2022, and 2021, as discussed in its Quarterly Report on Form
10-Q/A
for the period ended June 30, 2022 and Current Report on Form
8-K/A,
each filed with the SEC on December 8, 2022.
As previously disclosed, the Company reviewed the accounting for Transaction Costs incurred in connection with the transaction with Zanite, which include among other things fees for financial, accounting and legal advisors
. The Transaction Costs were paid by ERJ and EAH and recognized by these entities without being pushed down to the Company. The Company concluded that the Transaction Costs that were directly related to the Company’s business should follow the guidance in SEC Staff Accounting Bulletin Topic
5
.T, Accounting for Expenses or Liabilities Paid By Principal Stockholder(s), and should be pushed down and recorded in the Company’s financial statements in
2022
and
2021
.
The adjus
tment related to the Transaction Costs resulted in an additional expense of $
0.4
 million and $
2.0
 million for the three and nine months ended September 
30
,
2021
, respectively. See more details in Note
14
.
The unaudited condensed combined financial statements as of September 30, 2021 and the three and nine months ended September 30, 2021 have been restated to conform with the prior 2021 quarters as follows:
UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS
 
   
Three Months Ended September 30, 2021
    
Nine Months Ended September 30, 2021
  
   
As Reported
    
Restatement
Adjustments
    
As Restated
    
As Reported
    
Restatement
Adjustments
    
As Restated
  
Operating expenses
                                                
Research and development
   $ (2,805,955 )    $ —       $ (2,805,955 )    $ (6,636,418 )    $ —       $ (6,636,418 ) 
General and administrative
     (515,354 )      (423,752 )      (939,106 )      (1,272,764 )      (1,992,848 )      (3,265,612 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Operating loss
  
 
(3,321,309
) 
  
 
(423,752
) 
  
 
(3,745,061
) 
  
 
(7,909,182
) 
  
 
(1,992,848
) 
  
 
(9,902,030
) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Financial and foreign exchange gain, net
     (14,041 )      —         (14,041 )      (57,914 )      —         (57,914 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Loss before income taxes
  
 
(3,335,350
) 
  
 
(423,752
) 
  
 
(3,759,102
) 
  
 
(7,967,096
) 
  
 
(1,992,848
) 
  
 
(9,959,944
) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Income tax benefit (expenses)
     —         —         —         —         —         —    
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net loss
  
$
(3,335,350
) 
  
$
(423,752
) 
  
$
(3,759,102
) 
  
$
(7,967,096
) 
  
$
(1,992,848
) 
  
$
(9,959,944
) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net loss per share basic and diluted
     (0.02 )      —         (0.02 )      (0.04 )      —         (0.05 ) 
Weighted-average number of shares outstanding – basic and diluted
     220,000,000       —         220,000,000       220,000,000       —         220,000,000  
 
UNAUDITED CONDENSED COMBINED STATEMENTS OF CASH FLOWS
 
    
Nine Months Ended September 30, 2021
  
    
As Reported
    
Restatement
Adjustments
    
As Restated
  
Cash flows from operating activities:
                         
Net loss
   
$
(7,967,096
) 
  
$
(1,992,848
) 
  
$
(9,959,944
) 
Adjustments to reconcile net loss to net cash used in operating activities:
                         
Amortization of capitalized software
      65,835       —         65,835  
Long-term incentive plan expense
      111,731       —         111,731  
Changes in operating assets and liabilities:
                         
Other assets
      (3,959 )      (2,979,062 )      (2,983,021 ) 
Accounts payable
      (586,231 )      —         (586,231 ) 
Related party payables
      —         4,971,910       4,971,910  
Other payables
      921,084       —         921,084  
    
 
 
    
 
 
    
 
 
  
Net cash used in operating activities
   
 
(7,458,636
) 
  
 
—  
 
  
 
(7,458,636
) 
    
 
 
    
 
 
    
 
 
  
Cash flows from financing activities:
                         
Transfer from Parent
      7,104,583       —         7,104,583  
Gross capital contribution
      15,000,000       —         15,000,000  
    
 
 
    
 
 
    
 
 
  
Net cash provided by financing activities
   
 
22,104,583
 
  
 
—  
 
  
 
22,104,583
 
    
 
 
    
 
 
    
 
 
  
Increase (decrease) in cash and cash equivalents
      14,645,947       —         14,645,947  
    
 
 
    
 
 
    
 
 
  
Cash and cash equivalents at the beginning of the period
   
 
—  
 
  
 
—  
 
  
 
—  
 
    
 
 
    
 
 
    
 
 
  
Cash and cash equivalents at the end of the period
   
$
14,645,947
 
  
$
—  
 
  
$
14,645,947
 
    
 
 
    
 
 
    
 
 
  
Supplemental disclosure of other noncash investing and financing activities
                         
Additions to capitalized software transferred by Parent
    $ 2,790,336     $ —       $ 2,790,336  
Note: The cash flow restatement related adjustments directly relate to the adjustment noted above that also impacted the statement of operations.
Please refer to the Audited Combined Financial Statements of the Urban Air Mobility Business of Embraer S.A. as of and for the years ended December 31, 2021 and 2020, as restated, filed on Form
8-K/A
on December 8, 2022, for restatement adjustments impacting the December 31, 2021 consolidated balance sheet.
2. Restatement of Previously Reported Financial Statements
The Combined Financial Statements for the year ended December 31, 2021 and related disclosures have been restated in accordance with the changes described below.
 
    
As of
December 31,
2021
    
Restatement
Adjustments
    
As of
December 31,
2021 As
Restated
  
Assets
       
Current:
       
Cash and equivalents
    $ 14,376,523     $ —       $ 14,376,523  
Related party receivable
      220,000       —         220,000  
Other current assets
      21,140       6,253,257       6,274,397  
  
 
 
    
 
 
    
 
 
  
Total current assets
      14,617,663       6,253,257       20,870,920  
  
 
 
    
 
 
    
 
 
  
Capitalized software, net
      699,753       —         699,753  
  
 
 
    
 
 
    
 
 
  
Total assets
   
$
15,317,416
 
  
$
6,253,257
 
  
$
21,570,673
 
  
 
 
    
 
 
    
 
 
  
Liabilities and Net Parent Equity
       
Current:
       
Accounts payable
    $ 877,641     $ —       $ 877,641  
Related party payable
(i)
     —         8,642,340       8,642,340  
Derivative financial instruments
      32,226       —         32,226  
Other payables
      616,156       —         616,156  
  
 
 
    
 
 
    
 
 
  
Total current liabilities
      1,526,023       8,642,340       10,168,363  
  
 
 
    
 
 
    
 
 
  
Other noncurrent payables
      702,921       —         702,921  
  
 
 
    
 
 
    
 
 
  
Total liabilities
      2,228,944       8,642,340       10,871,284  
  
 
 
    
 
 
    
 
 
  
Net parent equity
       
Net parent investment
      13,120,698       (2,389,083 )      10,731,615  
Accumulated other comprehensive income/ (loss)
      (32,226 )      —         (32,226 ) 
  
 
 
    
 
 
    
 
 
  
Total net parent equity
      13,088,472       (2,389,083 )      10,699,389  
  
 
 
    
 
 
    
 
 
  
Total liabilities and net parent equity
   
$
15,317,416
 
  
$
6,253,257
 
  
$
21,570,673
 
  
 
 
    
 
 
    
 
 
  
 
(i)
The Related party payable recognized will be paid to ERJ and EAH upon the Closing of the transaction with Zanite.
 
    
Year Ended December 31,
  
    
2021
     
Restatement
     
2021
  
    
As Reported
     
Adjustments
     
As Restated
  
Operating expenses
         
Research and development
    $ (13,279,780 )     $ —        $ (13,279,780 ) 
General and administrative
      (2,509,859 )       (2,389,083 )       (4,898,942 ) 
Operating loss
   
 
(15,789,639
) 
   
 
(2,389,083
) 
   
 
(18,178,722
) 
  
 
 
     
 
 
     
 
 
  
Financial and foreign exchange gain, net
      (77,147 )       —          (77,147 ) 
  
 
 
     
 
 
     
 
 
  
Loss before income taxes
   
 
(15,866,786
) 
   
 
(2,389,083
) 
   
 
(18,255,869
) 
  
 
 
     
 
 
     
 
 
  
Income tax benefit (expense)
      —        —          —  
  
 
 
     
 
 
     
 
 
  
Net loss
   
$
(15,866,786
) 
   
$
(2,389,083
) 
   
$
(18,255,869
) 
  
 
 
     
 
 
     
 
 
  
 
    
Year Ended December 31,
  
    
2021
     
Restatement
     
2021
  
    
As Reported
     
Adjustments
     
As Restated
  
Cash flows from operating activities:
         
Net loss
    $ (15,866,786 )     $ (2,389,083 )     $ (18,255,869 ) 
Adjustments to reconcile net loss to net cash used in operating activities:
         
Amortization of capitalized software
      107,931        —          107,931  
Long-term incentive plan expense
      150,099        —          150,099  
Changes in operating assets and liabilities:
         
Other assets
      (17,030 )       (6,253,257 )       (6,270,287 ) 
Related party receivable
      (220,000 )       —          (220,000 ) 
Accounts payable
      30,653        —          30,653  
Related party payable
      —          8,642,340        8,642,340  
Other payables
      929,123        —          929,123  
Net cash used in operating activities
   
 
(14,886,010
) 
   
 
—  
 
   
 
(14,886,010
) 
Cash flows from financing activities:
         
Transfer from Parent
      14,262,533        —          14,262,533  
Capital contribution
      15,000,000        —          15,000,000  
Net cash provided by financing activities
      29,262,533        —          29,262,533  
  
 
 
     
 
 
     
 
 
  
Increase (decrease) in cash and cash equivalents
   
 
14,376,523
 
   
 
—  
 
   
 
14,376,523
 
  
 
 
     
 
 
     
 
 
  
Cash and cash equivalents at the beginning of the period
   
 
—  
 
   
 
—  
 
   
 
—  
 
Cash and cash equivalents at the end of the period
   
$
14,376,523
 
   
$
—  
 
   
$
14,376,523
 
  
 
 
     
 
 
     
 
 
  
Supplemental disclosure of other noncash investing and financing activities
         
Additions to capitalized software transferred by Parent
    $ 784,241      $ —        $ 784,241  
Transaction Costs Adjustment
In November 2022, Eve Holding, Inc. reviewed its accounting for costs incurred (Transaction Costs) in connection with the transaction with Zanite, which include, among other things, fees for financial, accounting and legal advisors. These costs were paid by Embraer S.A. and Embraer Aircraft Holding, Inc. and recognized as expenses by these entities as the initial understanding was that these expenses were primarily benefiting those two entities. SEC SAB Topic 5.T. Accounting for Expenses or Liabilities Paid By Principal Stockholder(s) notes that in scenarios where a principal stockholder pays an expense which benefits the company, it is in substance a capital contribution to the company, unless the stockholder’s action is caused by a relationship or obligation completely unrelated to their position as a stockholder or such action clearly does not benefit the company. This aligns with SEC SAB Topic 1.B. Allocation of Expenses and Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity, which states the expectation of the
SEC staff is that the historical income statements of a registrant should reflect the costs of doing business, which would include fees for transaction-related costs such as accounting and legal services.
Management evaluated the transaction costs paid by the Embraer S.A. and Embraer Aircraft Holding, Inc for the benefit of the UAM Business of Embraer S.A. and concluded $2,389,083 should have been expensed in these
carve-out
financial statements during the year ended December 31, 2021. Such transaction costs included professional service fees for the preparation of the
carve-out
and audit fees for the combined Eve UAM Business. Further, management identified $6,253,257 of transaction costs paid by Embraer S.A. and Embraer Aircraft Holding, Inc. which were directly and incrementally beneficial to the Business Combination (as defined in Note 1) which were deferred in the Combined Financial Statements as Other Current Assets against and Related Parties Payables. Refer to Notes 5 and 6 for more details.