Canoo (US:GOEV)2024-05-15 20:18Part I - Financial Information Item 1. Financial Statements (Unaudited) The company's unaudited statements show no revenue, a net loss of $110.7 million, and substantial doubt about its ability to continue as a going concern - The company effected a 1-for-23 reverse stock split of its Common Stock on March 8, 202445 - Management has identified substantial doubt about the Company's ability to continue as a going concern for the next twelve months4749 Condensed Consolidated Balance Sheets The balance sheet reflects a significant increase in total liabilities to $360.4 million and a corresponding decrease in stockholders' equity to $184.3 million Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $3,656 | $6,394 | | Total current assets | $32,393 | $32,551 | | Total assets | $544,676 | $542,005 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $201,222 | $184,447 | | Total liabilities | $360,414 | $292,429 | | Total stockholders' equity | $184,262 | $249,576 | | Total liabilities, preferred stock and stockholders' equity | $544,676 | $542,005 | Condensed Consolidated Statements of Operations The company reported zero revenue and an increased net loss of $110.7 million for Q1 2024, driven by non-operating expenses Condensed Consolidated Statements of Operations (in thousands) | | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Revenue | $— | $— | | Total operating expenses | $62,648 | $81,528 | | Loss from operations | $(62,648) | $(81,528) | | Net loss | $(110,687) | $(90,732) | | Net loss per share, basic and diluted | $(2.20) | $(4.99) | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity declined to $184.3 million, primarily due to the quarterly net loss of $110.7 million - The company issued 21,935 thousand shares under the PPA and 4,672 thousand shares under Convertible Debentures during the three months ended March 31, 202429 - The net loss of $110.7 million was the primary driver for the reduction in total stockholders' equity during the quarter29 Condensed Consolidated Statements of Cash Flows Net cash from financing activities of $49.8 million funded operating and investing cash outflows, resulting in a $2.7 million decrease in total cash Condensed Consolidated Statements of Cash Flows (in thousands) | | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(47,519) | $(67,216) | | Net cash used in investing activities | $(4,923) | $(18,435) | | Net cash provided by financing activities | $49,785 | $56,076 | | Net decrease in cash, cash equivalents, and restricted cash | $(2,657) | $(29,575) | | Cash, cash equivalents, and restricted cash, end of period | $18,242 | $21,040 | Notes to Condensed Consolidated Financial Statements The notes detail significant accounting policies, financing agreements, legal proceedings, and the company's 'going concern' warning - The company is heavily reliant on financing from Yorkville through a Pre-Paid Advance Agreement (PPA) and convertible debentures, with a principal balance of $45.0 million outstanding8698 - The company is a defendant in several legal proceedings, which are not currently considered material to its business126128130 - New equity awards for the CEO resulted in an incremental stock-based compensation expense of $3.7 million in Q1 2024149 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management highlights the need for substantial additional capital and expresses doubt about the company's ability to continue as a going concern - Canoo positions itself as a technology equipment manufacturer focused on commercial, government, and military customers203207 - Management states that existing cash resources are not sufficient to support planned operations for the next 12 months, creating substantial doubt about its going concern status216259 Results of Operations Comparison (in thousands) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development expenses | $26,390 | $47,104 | $(20,714) | (44)% | | Selling, general and administrative expenses | $32,868 | $29,849 | $3,019 | 10% | | Loss from operations | $(62,648) | $(81,528) | $18,880 | (23)% | | Net loss | $(110,687) | $(90,732) | $(19,955) | 22% | - The decrease in R&D expenses by $20.7 million (44%) was primarily due to reduced spending as the company shifted focus to low-volume production initiatives234235 Item 3. Quantitative and Qualitative Disclosures about Market Risk The company's exposure to market risks, including interest rate and inflation risks, is not considered material at its current early stage - Interest rate risk is limited to the company's $3.7 million in cash and cash equivalents and is not considered material268 - Inflation has not had a material effect, but future increases in material costs could adversely affect operations268 Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of the end of the first quarter 2024 - Based on their evaluation, the CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2024271 - There were no material changes to the company's internal control over financial reporting during the first quarter of 2024272 Part II - Other Information Item 1. Legal Proceedings This section refers to Note 11 of the financial statements for details on pending legal proceedings, which are not deemed material - For a description of material pending legal proceedings, the report directs readers to Note 11 in the financial statements275 Item 1A. Risk Factors The company reports no material changes to the risk factors previously disclosed in its 2023 Annual Report on Form 10-K - There have been no material changes to the company's risk factors as disclosed in the most recent Annual Report on Form 10-K276 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company issued 94,673 shares of common stock to consultants during Q1 2024 through unregistered private placements - In Q1 2024, the company issued 94,673 shares of Common Stock to consultants through unregistered sales exempt from registration277 Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the reporting period - None279 Item 4. Mine Safety Disclosures This section is not applicable to the company's operations - Not applicable280 Item 5. Other Information No directors or officers adopted, modified, or terminated any Rule 10b5-1 trading arrangements during the first quarter - No director or officer made changes to any Rule 10b5-1 trading arrangements during the quarter281 Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including financing agreements and officer certifications - The report includes numerous exhibits, such as supplemental agreements with YA II PN, Ltd, warrant cancellation agreements, and certifications by the CEO and CFO282283