Canoo's electric pickup truck
Electric vehicle startup Canoo Inc. (Nasdaq: GOEV), which plans to move its headquarters to Bentonville, announced an agreement Monday to sell $52.5 million worth of discounted stock to raise money.
Canoo, which has been burning through cash, said the funds will be used for “general working capital purposes.”
The sale price of $1.05 per share was 20 cents lower than the closing price Friday. Shares have since fallen below the discounted price.
The stock is being sold to “certain institutional investors” whom the company did not identify in Securities & Exchange Commission filings. As part of the deal, Canoo is issuing 50 million new shares and giving those investors the option to purchase 50 million more.
The deal is expected to close Wednesday.
Canoo warned investors last year that it was low on cash and there was “substantial doubt about the company’s ability to continue as a going concern.” The company started the year with $224.7 million in cash and cash equivalents and finished the third quarter with just $6.8 million.
Canoo has accessed additional capital through what CEO Tony Aquila calls a “just-in-time, milestone-based” approach, one that he acknowledged can be “painful” for stakeholders but has repeatedly said will pay off in the long run.
The company has reported a sales pipeline of more than $2 billion, boosted by big orders from Walmart and fleet providers Kingbee Rentals LLC of West Valley City, Utah and Zeeba Co. Inc. of Los Angeles in 2022.
Last month, Canoo announced an exclusive agreement with GCC Olayan for the sale, service and distribution of Canoo fleet vehicles in Saudi Arabia.
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