Canoo’s first-quarter results show a company burning cash, no near-term earnings and a warning that it may not have enough cash to stay in business.
Canoo’s shares, which fell 5% on Tuesday, fell another 17.5% in after-market trading following the earnings release. It has since recovered and is now down more than 11%.
Canoo has had a turbulent and short history. The company’s vehicle designs, the first of which debuted in spring 2019, have garnered praise, making it a buoyant EV startup. Just last month, Canoo was even selected by NASA to build the ground crew transport vehicles for the Artemis space exploration program.
But Canoo has also suffered from a long line of troubles and controversies, including internal drama, the exit of its co-founders, legal troubles, etc SEC investigation and production delays.
This latest earnings report paints an increasingly bleak picture for Canoo’s future.
The EV startup launched earlier this week filed a lawsuit against one of its major investors in an attempt to reclaim $61 million in profits from allegedly suspicious stock deals, ended the quarter with $104.9 million in cash and cash equivalents. That means the company, which currently has no revenue, has burned about $120 million since the fourth quarter.
Canoo’s net loss was $125.4 million compared to $15.2 million in the same quarter last year, with net cash used in operations totaling $120.3 million compared to $53.9 million US dollars in the first quarter of 2021.
“Our business plans require a significant amount of capital,” reads one regulatory filing by Canoo. “If we are unable to obtain adequate financing or have access to capital, we may be unable to execute our business plans and may be forced to cease or materially reduce our operations, and our outlook, financial condition and results of operations could be materially adversely affected.” .”
Canoo announced in August 2020 that it had reached an agreement on this Merger with a special purpose entity Hennessy Capital Acquisition Corp. with a market valuation of $2.4 billion. At the time, Canoo said it was able to raise $300 million in private investments in public equity, or PIPE, including investments from funds and accounts managed by BlackRock.
This PIPE investment does not appear to have materialized yet. Canoo said during a call with investors on Tuesday that it expects to make a $300 million private public equity investment (PIPE) related to its merger this week, and the company has a universal shelf in Submitted $300 million. That $600 million is necessary to get production up and running, said Tony Aquila, Canoo’s CEO.
Despite this impending money, Canoo still issued a “going concern” warning.
A going concern qualification means that the company may not have sufficient funds or revenue to meet its obligations when they come due. Among other things, production dates, including more than 17,500 pre-orders, threaten Canoo called It would deliver several custom models for NASA by June 2023 to be based on its lifestyle vehicle model. Canoo’s financial concerns call into question the EV maker’s ability to meet that commitment.
NASA did not immediately respond to requests for more information.
When an investor asked about production guidelines for the NASA vehicles, Aquila dodged, saying that the information was confidential but Canoo was heavily focused on building the Bentonville, Arkansas factory, which is expected to produce “20,000 vehicles” Canoo, said Aquila.
Canoo first announced the Plant in Bentonville in November last yearand said at the time that it would also delay the start of production of the lifestyle vehicle from early 2023 to the fourth quarter of 2022. That forecast was not updated during Tuesday’s conference call.
Perhaps the only bright spot in Canoo’s earnings was that it received $30.4 million as part of a settlement agreement with Dutch automaker VDL Nedcar. Canoo had prepaid the money to VDL Nedcar as part of a vehicle manufacturing contract to build its ‘lifestyle electric vehicle’. The partnership ended in December when Canoo was exploring a new contract with VDL Groep.
Canoo warns it may not have enough funds to bring EVs to market – TechCrunch Source link Canoo warns it may not have enough funds to bring EVs to market – TechCrunch