Losses continue for electric vehicle maker Canoo, stock sale announced

It’s a mystery as to how much longer Canoo – the electric vehicle maker that once planned to be based in Bentonville – can remain a going concern. The company on Tuesday (July 22) announced the sale of 13.719 million shares in an effort to raise cash.

The company said in Tuesday’s federal filing about the stock sale that it does not know how much cash the sale will provide.

The company, still based in Torrance, Calif., reported cash, cash equivalents and restricted cash of $18.2 million as of March 31. That’s close to being pocket change when considering the company continues to bleed money. Canoo reported a first-quarter 2024 loss of $111.54 million, more than the $90.72 million loss in the same quarter of 2023.

The first quarter loss followed a full-year 2023 loss of $302.02 million, or a loss of $1.13 per share, which was better than the $487.69 million loss in 2022. Despite the ongoing deep losses, the Canoo CEO continues to say brighter days are ahead.

“We are proud that our LDV190 vehicles have been delivered to the USPS South Atlanta Sorting and Delivery Center and are already delivering mail. These vehicles speak to the differentiation of our model where we deliver unique customized configurations to meet the needs of our large fleet customers and their associates. We continue to execute on our strategy of acquiring deeply discounted long-lead time assets as we prepare for step level manufacturing,” Tony Aquila, Canoo executive chairman and CEO, said in the first quarter report.

Canoo is set to post second quarter financials on Aug. 14. The consensus estimate among four analysts who follow the stock (NASDAQ: GOEV) is a 77 cents per share loss on revenue of just $910,000.

Tuesday’s prospectus filing with the U.S. Securities and Exchange Commission included five pages outlining risk factors to consider before investing with the company.

“We are an early stage company with a history of losses and expect to incur significant expenses and continuing losses for the foreseeable future. … Our current business plans require a significant amount of capital. If we are unable to obtain sufficient funding or do not have access to capital, we will be unable to execute our business plans and our prospects, financial condition and results of operations could be materially adversely affected,” noted the first few risk-factor bullet points in Canoo’s prospectus.

As of Tuesday, the company had 73,888,348 shares of common stock, 45,000 shares of Series B Cumulative Perpetual Redeemable Preferred Stock, and 16,500 shares of Series C Cumulative Perpetual Redeemable Preferred Stock issued and outstanding. The company on March 8, 2024, had a 1-for-23 reverse stock split.

The company announced in July 2022 that it secured a deal with Walmart for 4,500 electric delivery vehicles, with an option to boost the deal to 10,000 deliveries. But that deal never materialized. Also attracting dust are Canoo’s plans to build its headquarters and a manufacturing facility in Bentonville.

The company announced on July 3 that Go2 Delivery signed a deal to buy five electric vehicles from Canoo. Also, the company said it is now listed on the Russell 3000 Index, the small-cap Russell 2000 and the Russell Microcap Index. Such listings don’t secure revenue, and a company that reports having 651 employees will need more than $18 million in cash and other reserves if it continues to post such hefty quarterly losses while reporting no significant vehicle orders.

Company shares closed Tuesday at $2.12, down 0.03 cents. During the past 52 weeks the share price ranged between $15.96 and $1.22. The company’s market capitalization was $152.918 million as of Tuesday.

Attempts to contact Canoo for comment were unsuccessful.