Net loss of $164 million, but $1 billion in sales portfolio

US electric vehicle startup Canoo shared its latest report outlining its results for the second quarter of 2022 as it continues to struggle to stay out of the red in a race to production. Canoe it is now reporting another big loss for the quarter. And, while it has $1 billion in its sales pipeline, only a minority percentage of those commitments are contractually binding.

Canoe ($GOVE) is a Los Angeles-based electric vehicle startup founded in 2017 by two former employees of Faraday’s future. The automaker has several EVs in the works, but plans to launch its Lifestyle Delivery Vehicle (LDV) first.

A modified version of the Canoo LDV was chosen to transport future astronauts on the Artemis Missions to the launch pad under contract. recently awarded by NASAand Walmart signed a contract in July to order up to 10,000 LDV starting with prioritized deliveries in the first quarter of 2023.

This was good news after Canoo’s Q1 report, which posted a net loss of $125 million and “substantial doubt” that the startup could continue. Canoo worked to improve this quarter, readjusting its production strategy while continuing to test its LDV for road certification as it moves towards SOP.

Three months after its worrying first quarter report, Canoo is still struggling and has some promising sales on its backlog, but the second quarter also includes another big net loss, leaving the startup with even less room to work.

Canoe Q2

Canoo reports a loss of $164.4 million in the second quarter of 2022

according to their Press release Coinciding with its second quarter 2022 investor filing, Canoo posted a net loss of $164.4, up from $112.6 million in second quarter 2021. Additionally, Canoo shared that it has cash and cash equivalents of $33.8 million as of June 30, 2022. Canoo President and CEO Tony Aquila spoke during the call:

We have over $1 billion in our sales pipeline which includes our recently announced trade order. We have successfully completed 90% of our structural crash tests in the quarter and are now moving into the final phase of Federal Motor Vehicle Safety Standard certification. We have endured a difficult global economic environment in the first half, and we will continue to take a disciplined, long-term, strategic and focused approach to delivering on our announced American-built vehicles, which are for and by America First with the intent to make make electric vehicles available to everyone. We have also introduced phase one of our just-in-time, milestone-based approach to accessing capital markets, which helps us as we continue to build on access to non-dilutive capital. We are moving towards the start of production in the fourth quarter and our product resonates with the most demanding customers.

The $1 billion in potential sales is encouraging, but according to Canoo, only 5,500 (17%) of the units discussed are committed sales under contract. The other 27,000 electric vehicles ordered are reimbursable and non-binding.

Still, the company remains optimistic based on these potential orders and goes on to say that it has access to more capital through the following methods:

  • Signed a $300 million Prepaid Advance Agreement (PPAA) with Yorkville Advisors
    • Canoo has secured its first $50 million advance
  • Introduced a $200 million At-The-Market (ATM) offering program
  • Featured an additional $300 million universal shelf record

In addition to the $33.8 million in cash and cash equivalents, the EV startup claims it has access to approximately $220 million of unused capacity from a standby Capital Purchase Agreement (SEPA). filed with the SEC last May.

Looking ahead, Canoo shares the following business outlook for the rest of 2022, as it still aims to start LDV production in the fourth quarter of 2022:

  • Operating expenses (excluding stock-based compensation and depreciation) from $200 million to $245 million
  • Capital expenditures totaling $100 million to $125 million

here is a link to Canoo’s full Q2 2022 filing.

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