8-K: Aeva Technologies Secures $100M in Convertible Notes

Aeva Technologies, Inc. has issued $100 million in 4.375% Convertible Senior Notes due 2032 to Apollo Funds for general corporate purposes.

Summary

• Aeva Technologies, Inc. (the Company) entered into a Securities Purchase Agreement with Apollo Global Securities, LLC affiliated funds (the Apollo Funds) for the sale of $100.0 million aggregate principal amount of 4.375% Convertible Senior Notes due 2032 (the Notes).
• The transaction closed on November 6, 2025, generating gross proceeds of approximately $100.0 million, before deducting fees and estimated offering expenses.
• The net proceeds from the sale are intended for general corporate purposes.
• The Notes are senior, unsecured obligations of the Company and are guaranteed by Aeva, Inc., a wholly owned subsidiary.
• Interest accrues at 4.375% per year, payable semi-annually in arrears on May 15 and November 15, commencing May 15, 2026.
• The Company has the option to pay interest in cash, shares of common stock (Share Interest), or a combination, provided shares are freely tradable upon issuance.
• The Notes mature on November 15, 2032, unless earlier redeemed, repurchased, or converted.
• Holders can convert Notes at an initial conversion rate of 63.0348 shares of Common Stock per $1,000 principal amount, equivalent to an initial conversion price of approximately $15.8643 per share.
• The Company can satisfy conversion obligations with cash, common stock, or a combination, at its election.
• The Company may redeem the Notes on or after November 20, 2028, if the Common Stock's Last Reported Sale Price exceeds 130% of the Conversion Price for at least 20 trading days within a 30-day period.
• The Company can also redeem all Notes if less than 10% of the initially issued aggregate principal amount remains outstanding.
• Holders have the right to require the Company to repurchase their Notes for cash upon a Fundamental Change at 100% of the principal amount plus accrued interest.

Sentiment

Score: 6

Explanation: The issuance of convertible notes provides significant capital for general corporate purposes, which is a positive for the company's liquidity and strategic initiatives. However, it also introduces debt obligations and potential future dilution, balancing the overall sentiment to moderately positive.

Positives

• Secured $100.0 million in financing, providing capital for general corporate purposes.
• The ability to pay interest in shares (Share Interest) offers flexibility and potential cash preservation for the Company.
• The Notes are guaranteed by a wholly-owned subsidiary, Aeva, Inc., adding a layer of security for holders.

Negatives

• The issuance of convertible notes introduces debt obligations and potential future dilution for existing shareholders upon conversion.
• The 4.375% interest rate represents a recurring cost to the Company.
• The Company's ability to pay interest in shares (Share Interest) could lead to increased dilution if elected.

Risks

• Default in payment of principal or premium on any Note when due.
• Default in interest payment for 10 days or fees/expenses for 30 days.
• Failure to convert Notes upon a Holder's exercise of conversion rights within three business days.
• Failure to provide required notices, such as Fundamental Change Company Notice or Make-Whole Fundamental Change notice, within four business days.
• Non-compliance with obligations regarding future guarantors, transactions with shareholders and affiliates, consolidation/merger, or guarantees.
• Default on other indebtedness exceeding $15.0 million, leading to acceleration or failure to pay.
• Bankruptcy, insolvency, dissolution, or reorganization events involving the Company or any Significant Subsidiary.
• Unsatisfied money judgments, writs, or warrants of attachment exceeding $10.0 million (not covered by insurance) for 60 days.
• Court order decreeing dissolution or split-up of the Company, Guarantor, or Significant Subsidiary remaining undischarged or unstayed for 30 days.

Future Outlook

The filing primarily details the terms and conditions of the convertible notes and does not provide specific forward-looking statements or guidance regarding the Company's operational or financial performance beyond the maturity date of the notes.

Industry Context

This issuance of convertible senior notes is a common financing strategy for technology companies, particularly those in growth phases, to raise capital while managing immediate cash outflow through the option of equity-based interest payments and conversion. It allows Aeva Technologies to secure funding for general corporate purposes, potentially supporting ongoing development or expansion in the LiDAR and autonomous vehicle technology sector, without immediately diluting existing shareholders or incurring high cash interest payments.

Comparison to Industry Standards

• The issuance of convertible senior notes is a common financing instrument used by growth-oriented technology companies to raise capital, similar to practices seen across the tech industry.
• The 4.375% interest rate and November 2032 maturity date are within typical ranges for convertible debt offerings, reflecting current market conditions and the Company's credit profile.
• The conversion features, including the initial conversion price and provisions for make-whole fundamental changes, are standard terms designed to balance investor returns with potential future equity dilution, consistent with comparable offerings in the high-tech sector.

Corporate Governance

Related Party Transactions

• The Securities Purchase Agreement was entered into with certain funds affiliated with Apollo Global Securities, LLC (the Apollo Funds).
• Schedule 4.11 lists existing affiliate transaction agreements, including with Sylebra Capital LTD and its affiliates, Apollo Global Securities, LLC and its affiliates, and LG Innotek Co., Ltd.

Stakeholder Impact

• **Shareholders**: Potential future dilution if Notes are converted into common stock, especially if the Company elects Share Interest payments. The capital raise could support growth, potentially benefiting long-term share value.
• **Noteholders (Apollo Funds)**: Receive a fixed interest rate (4.375%) and the option to convert into equity, providing both income and potential upside. Their investment is secured by a guarantee from a wholly-owned subsidiary.
• **Employees**: The capital infusion for general corporate purposes could support ongoing operations, R&D, and job stability.
• **Creditors**: The new convertible notes add to the Company's overall debt, potentially affecting its credit profile, though the notes are senior and unsecured.

Next Steps

• Semi-annual interest payments on May 15 and November 15, starting May 15, 2026.
• Potential optional redemption by the Company on or after November 20, 2028, subject to stock price conditions.
• Holders may convert Notes at their option prior to the Maturity Date of November 15, 2032.
• The Company will continue to comply with SEC filing requirements (Form 10-K, 10-Q) to avoid additional interest accrual on the Notes.

Key Dates

Keywords

Convertible Senior Notes, Debt Financing, Corporate Governance, SEC Filing, Aeva Technologies, Apollo Funds, Capital Raise, Dilution Risk, Interest Payments, Maturity Date, Conversion Rate, Optional Redemption, Fundamental Change