Is Canoo Going Out Of Business?

Electric vehicle startup Canoo is facing financial difficulties and is at risk of insolvency due to high cash burn and a potential delistment from the stock exchange. The company reported a first-quarter 2024 loss of 111.54 million, more than the 90.72 million loss in the same quarter of 2023. Canoo has warned investors that it is running low on funds as it works toward bringing its products to market.

Canoo has issued a going concern warning, stating that it does not have enough cash to fund its operations over the coming 12 months. The company is hoping to produce 20,000 cars in all of 2023, with the goal of doubling that in 2024. However, even if it does hit these production targets, it will still be just a company.

Canoo has agreed to a 1.5 million settlement with the U.S. Securities and Exchange Commission, according to a regulatory filing. The company lost 125.4 million over the first three months of 2022 and has only 104.9 million in cash and cash equivalents as of March 31. The company is valued at 143 million, with the only source of income being stocks.

Canoo expects full-year 2024 revenue to be between 50 million and 100 million, below analysts’ expectations of 152.5 million. The company faces uncertainties about its ability to continue operations amid funding challenges. Canoo’s net loss widened to 110.7 million for the quarter ended March 31, from 90.7 million in the year-ago quarter.

Despite the risk of Canoo going bankrupt, there are some options available, with a Probability Of Bankruptcy of 81%, which is 95.7% higher than that of the Automobiles sector and 77.13% higher than that of the Automotive sector.