Canoo lays out its financial problems

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Electric vehicle maker Canoo Inc., the Texas-based company with big plans for an EV plant in Pryor, Oklahoma laid out its money challenges on Tuesday as it released its first quarter 2022 financial results.

And it wasn’t pretty, in terms of raising optimism that the company might be able to go ahead with construction of its Oklahoma operation, even after the state pledged millions in aid.

“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,” stated the company.

Consider the money it lost during the quarter.

“GAAP net loss and comprehensive loss of $125.4 million for the three months ended March 31, 2022, compared to a GAAP net loss and comprehensive loss of $15.2 million for the three months ended March 31, 2021. The GAAP net loss and comprehensive loss for the three months ended March 31, 2022 and March 31, 2021 included a gain of $15.5 million and $83.6 million on the fair value change of the contingent earnout shares liability, respectively.”

“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. “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.”

Additional Recent Updates Include:

•       Since the end of the first quarter, we have more than doubled the Gamma builds to 39 vehicles

•       We now have more than 17,500 preorders with a projected value of $750 million and a growing pipeline

•       Selected by NASA for Artemis ground crew transportation vehicles, which is expected to be the longest lasting space exploration program in history

First Quarter Business Highlights:

•       17 Gamma vehicles on the road

•       Completed our second year of deep Winter Testing of more than 2,000 miles

•       Produced battery modules for 43 Gamma vehicles, a 156% increase from Q4’21

First Quarter Financial Highlights:

•       Cash and cash equivalents of $104.9 million as of March 31, 2022.

•       GAAP net loss and comprehensive loss of $125.4 million for the three months ended March 31, 2022, compared to a GAAP net loss and comprehensive loss of $15.2 million for the three months ended March 31, 2021. The GAAP net loss and comprehensive loss for the three months ended March 31, 2022 and March 31, 2021 included a gain of $15.5 million and $83.6 million on the fair value change of the contingent earnout shares liability, respectively.

•       Adjusted EBITDA of $(117.4) million for the three months ended March 31, 2022, compared to $(49.8) million for the three months ended March 31, 2021.

•       Net cash used in operating activities totaled $120.3 million for the three months ended March 31, 2022, compared to $53.9 million  for the three months ended March 31, 2021.

•       Net cash provided by investing activities was $2.0 million during the three months ended March 31, 2022, compared to net cash used in investing activities of $12.1 million during the three months ended March 31, 2021.

•       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.

Second Quarter 2022 Business Outlook

Based upon our current projections, Canoo expects:

•       Operating Expenses (excluding stock-based compensation and depreciation) of: $95 million to $115 million

•       Capital Expenditures of: $85 million to $105 million

Click here for full financial report