Canoo’s settlement signals the SEC’s increasing concern with electric vehicle startups, as they grapple with regulatory uncertainties and costly technological challenges. Despite this, Canoo appears to be thriving in the face of these challenges, evidenced by its recent $1.5 million dollars investment.
The SEC’s investigation into Canoo suggests that the company is rife with potential issues and requires further scrutiny. The investigation covers a wide range of topics, including the Hennessy merger and IPO, Canoo’s operations, business model, revenue streams, customer agreements and more – all of which raise a number of questions. Among the officers who departed shortly after the Hennessy merger were co-founder and CEO Ulrich Kranz, casting doubt on whether Canoo was able to effectively manage its own affairs.
The sudden drop in stock prices may have been caused by Canoo’s announcement that they will be discontinuing their product line in the near future. This news could lead to a steep decline in sales, as many potential customers may be forced to switch brands or invest in different types of boats.
The SEC is investigating several EV SPACs for possible securities fraud. Canoo was one of the companies under scrutiny. The company has yet to release any information about what may have caused the SEC’s investigation, but it is likely that they are looking into allegations of fraudulent accounting practices.
Cooool, can you believe it? Incredibly, the $1.5 million in SEC fines that Canoo copped up for stock manipulation appears on its balance sheet as a period-end expense. This raises a lot of questions about just how closely the company is scrutinizing its own books and whether or not it’ll be able to avoid any other SEC fines in the future.
The announcement of the offering appears to be premature given that Canoo has yet to deliver a Light Tactical Vehicle to the U.S. Army and its contract with that customer is only worth $67,600. The company has also warned repeatedly it was low on cash and needed more capital to stay in business. It’s possible that this new round of fundraising could provide Canoo with the additional funds it needs but it’s also likely that investors will demand greater returns given these shaky financial conditions.
Looking ahead, Canoo will likely need to raise more money in order to cover the costs associated with the company’s operations. In Q4, Canoo lost $80.2 million, which is down from $138 million in Q4 of last year. However, Canoo ended 2021 with a net loss of $346.8 million, so this indicates that the company has been struggling to generate revenue as of late. Additionally, even if Canoo were able to generate more revenue in upcoming quarters, it would still need additional capital to cover its expenses and support its overall growth plans.
Canoo said that it was exploring a number of different funding options, including sources outside of traditional VC and angel investment. This announcement comes as Canoo is experiencing some challenges, namely the fallout from messy executive shakeups and the now-concluded SEC investigation. The company is hoping to find alternatives to traditional funding that will allow it to continue growing its business.
In order to solidify their management team’s track record and access capital, Aquila is focusing on increasing their opportunities for growth. By expanding their reach and creating new partnerships, the company hopes to increase its revenue and equity value
Aquila is clearly trying to send a message to investors that Canoo’s problems are due to the past management teams, which were not up to par. With Aquila taking over as CEO and bringing in new executives with experience in manufacturing and operations, the company seems poised for success moving forward.
Canoo has been struggling financially in recent years, posting negative EBITDA for each of the last four quarters. Hopefully the electric ship will be able to turn things around for the company.
Canoo’s Q1 2023 outlook
In March of 2017, Canoo announced that it had raised a total of $128 million in funding from DFINITY Ventures, Upfront Ventures, and Northzone. This infusion of capital has helped the company expand its product offerings and capacity. The company is now expecting to report first quarter operating expenses (excluding stock-based compensation and depreciation) somewhere between $55 million to $70 million, with capital expenditures between $30 million to $45 million. Canoo’s goal is to continue scaling while maintaining its operational excellence so that it can become a leading provider of ride-sharing services globally.
Aquila’s global expansion is expected to intensify in the coming years as the company strives to bring its facilities online and scale production. This will allow Aquila to better align with its strategic distribution partners, and continue to offer high-quality marijuana products to consumers around the world.
The close of Canoo’s production facilities in Oklahoma City and Pryor should mark the beginning of an exciting new era for this company as it expands into additional markets and products. As one of the earliest companies to bring an electric vehicle to market, Canoo is well positioned to capitalize on the growing demand for electric vehicles and grow its customer base.
Canoo in January also announced an exclusive distribution agreement with GCC Olayan for vehicles in Saudi Arabia, the company’s first phase of international expansion. The agreement allows Canoo to provide its online and mobile shopping platforms to GCC Olayan customers across the country.
Aquila is one of the most popular online retailers on the planet and they are looking to keep up their status with a strong exit rate in 2018. The company seems confident in their targets and claims that they have seen a 300% growth in orders this year. This is great news for their customers who can expect even more selection, affordability, and convenience when shopping on Canoo.
