Canoo has agreed to sell 50 million shares at a steeply discounted worth because the cash-strapped EV firm seeks the cash it wants to preserve its operations operating.
Canoo mentioned Monday it will sell 50 million new shares to unnamed buyers for $1.05 per share, a 16% low cost from its closing worth Friday. The shares will probably be bought along with warrants that give the buyers an possibility to purchase up to 50 million extra. Each share comes with one warrant that may be exercised at $1.30 per share.
The gross proceeds from the providing are anticipated to be about $52.5 million, the corporate mentioned.
Canoo has repeatedly warned that it’s low on money and can probably want to problem extra shares to increase capital. Still, the transfer was snubbed by buyers who reacted to the discounted worth and that their present holdings could be diluted.
Canoo shares opened Monday at $1, 20% decrease than its closing worth on Friday.
Canoo, which went public by way of a merger with a particular objective acquisition firm, has struggled to produce its EV, an eye catching design that’s reconfigurable and primarily based on a “skateboard” structure that homes the batteries and the electrical drivetrain in a chassis beneath the car’s cabin.
Canoo has reported it has greater than $1 billion in its gross sales pipeline, a determine largely attributable to a cope with Walmart to buy 4,500 models, with an possibility to purchase up to 10,000 models. The firm has struggled to convert these gross sales into deliveries. The previous a number of quarters have proven a pre-revenue firm burning via money.
Canoo had solely $6.8 million available on the finish of the third quarter. The firm mentioned the proceeds from the promoting these new shares could be used for “common working capital functions.”