EV Startup Canoo Running Out of Cash, Says ‘Substantial Doubt’ it Can Continue
Justin, Texas-based electric vehicle startup Canoo announced its Q1 earnings on Tuesday, and the company says it’s running out of cash and may not be able to continue.
“We have been clear about our philosophy of raising capital judiciously and will continue with this disciplined approach,” said Tony Aquila, Investor, Chairman & CEO at Canoo, in a statement. “We have more than $600 million in accessible capital to support Start of Production (SOP). As operators and investors, we have significant experience raising capital in challenging markets – and the best way to raise capital is to achieve your goals. We will continue to raise when needed, bridge to milestones and be in a position to take advantage of improving market conditions. We are focused on long term value creation for our customers and shareholders.”
Canoo says it has $104.9 million in cash and equivalents as of March 31, 2022. The company lost $125.4 million in Q1, versus a loss of just $15.2 million year-over-year.
The company says they have more than doubled their Gamma vehicle builds to 39, while there are 17,500 pre-orders worth $750 million.
“Due to the timing of our announced funding, and the 2014 FASB accounting rule, as of the date of this announcement, we are reporting that there is substantial doubt about the Company’s ability to continue as a going concern,” acknowledged Canoo.
Canoo’s Q2 outlook expects operating expenses of $95 to $115 million (excluding stock-based compensation) and capital expenditures of $85 to $105 million.
The company recently filed a lawsuit against one of its biggest shareholders with ties to China, alleging questionable share sales. Canoo wants DD Global Holdings Ltd. to repay over $61 million dollars.
Canoo has electric offerings in the form of its Lifestyle Vehicle that says will debut this year, a Multi-Purpose Delivery Vehicle (MPDV) and Pickup Truck slated for 2023.
It remains unclear if and when Canoo can even deliver on its lofty goals, and right now the company’s stock is down nearly 12% in after-hours trading, at $3.19 per share. Canoo’s stock price has dropped 57.48% in the past six months.