Canoo’s Desperate Measures, Electric vehicle startup, Electric vehicle, Canoo’s future remains
Electric vehicle startup Canoo, known for its ambitious plans and dwindling cash reserves, has taken another drastic step to keep the lights on. The company recently issued a whopping 7.2 million shares of common stock to appease its increasingly impatient suppliers.
This move, detailed in a recent SEC filing, comes hot on the heels of Canoo’s earlier announcement about negotiating with suppliers to accept stock as payment. The company’s cash balance had plummeted to a perilous level, forcing it to resort to such unconventional measures.
The newly issued shares, priced at $0.3992 each, generated approximately $2.87 million. While this may seem like a significant sum, it’s a mere drop in the bucket for a company struggling to gain traction in the highly competitive EV market.
Canoo’s financial woes have been compounded by its recent performance. The company’s third-quarter financial results revealed a meager $1.5 million in cash and cash equivalents. To make matters worse, the startup is seeking shareholder approval for yet another reverse stock split, a move that could further dilute existing shareholders’ holdings.
In a desperate bid to bolster its financial position, Canoo has also secured a $12 million revolving credit facility from AFV Management Advisors, LLC, a firm founded by the company’s CEO, Tony Aquila. This lifeline, however, may not be enough to save Canoo from its impending doom.
As the EV landscape continues to evolve, Canoo’s future remains uncertain. The company’s ability to navigate these turbulent waters will depend on its ability to secure additional funding, execute its product strategy, and ultimately, convince investors of its long-term viability
