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Electric vehicle startup Canoo has agreed to a $1.5 million settlement with the U.S. Securities and Exchange Commission, according to a regulatory filing<\/a>.<\/p>\n The SEC began investigating Canoo<\/a> in May 2021, just a few months after the company merged<\/a> with special purpose acquisition company Hennessy Capital Acquisition Corp. The investigation covered the Hennessy\u2019s IPO and merger with Canoo, Canoo\u2019s operations, business model, revenues, revenue strategy, customer agreements, earnings and more. It also delved into the departures of certain company officers, including co-founder and CEO Ulrich Kranz.<\/p>\n Canoo shared the news Thursday as part of its fourth quarter and full year 2022 earnings report. The company\u2019s stock price, which closed Thursday at $0.62, tumbled nearly 10% after hours on the news.<\/p>\n Canoo was one of several EV SPACs<\/a> that had incurred the investigative gaze of the SEC, including Lordstown Motors, Arrival, Nikola and Faraday Future.<\/p>\n Canoo didn\u2019t share many details about the SEC investigation, but the $1.5 million did show up on the company\u2019s balance sheet for the fourth quarter.<\/p>\n The EV SPAC is a pre-revenue company that has repeatedly warned<\/a> it was low on cash and needed to raise more capital to stay in the game. Canoo did deliver its first Light Tactical Vehicle<\/a> to the U.S. Army in the fourth quarter for a demonstration, but that contract is only worth $67,600 \u2014 not exactly a material amount given the company\u2019s losses. In February, Canoo agreed to sell 50 million shares<\/a> at a 16% discount, or $1.05 per share. The gross proceeds from the offering came in at around $52.5 million.<\/p>\n That infusion of cash seems to be inadequate to get Canoo into revenue-generating status. The company closed 2022 out with only $36.6 million in cash and cash equivalents. With a Q4 net loss of $80.2 million ($487.7 million for the full year), the company will likely need to raise more money to cover whatever expenses come in Q1 alone. By the way, on a quarterly basis, that loss is down from $138 million in Q4 2021. However, Canoo ended 2021 with a net loss of $346.8 million, so that\u2019s a year-over-year increase of over 40%.<\/p>\n Canoo said during Thursday\u2019s earnings call that it was exploring diversified funding sources that it will announce over the next couple of quarters. Canoo\u2019s CEO Tony Aquila noted that \u201clegacy matters\u201d like messy executive shakeups and the now-concluded SEC investigation made it difficult to file for funding from the Department of Energy\u2019s loan program, for example.<\/p>\n \u201cNow our opportunities are exponential to access capital as we start to establish this management team\u2019s track record,\u201d said Aquila.<\/p>\n Aquila is clearly trying to send a message to investors that Canoo\u2019s problems are due to issues from past management teams. Aquila took over as CEO in 2021, and since then says Canoo shifted from a company that offered a single product to one with a \u201cnew business strategy\u201d that includes on-shore manufacturing. Canoo also recently brought on Ken Magnet as a new chief financial officer and Tony Elias as the new EVP of operations.<\/p>\n Hopefully it\u2019ll be enough to turn this electric ship around.\u00a0Canoo reported negative $60 million in adjusted EBITDA for Q4 2022 and negative $408.6 million for the full year. Last year, those numbers were negative $120 million and negative $332.6 million for Q4 and full year 2021, respectively.<\/p>\n Canoo said it expects Q1 operating expenses (excluding stock-based compensation and depreciation) to be somewhere between $55 million to $70 million, with capital expenditures between $30 million to $45 million.<\/p>\n \u201cAs we move through 2023, we are focused on bringing our facilities online, scaling production and aligning with our strategic distribution partners for our global expansion,\u201d said Aquila in a statement.<\/p>\n Canoo said it is getting close to start of production in Pryor and Oklahoma City, where Canoo is building an EV battery module facility<\/a> and a vehicle manufacturing facility<\/a> to bring its Lifestyle Delivery Vehicle and Lifestyle Vehicle SUV to market in 2023.\u00a0Oklahoma provided Canoo with $400 million in incentives to build there and agreed in March to buy 1,000 Canoo EVs<\/a>, but the state can always pull out of that agreement.<\/p>\n Canoo in January also signed an exclusive distribution agreement with GCC Olayan for vehicles in Saudi Arabia, the company\u2019s first phase of international expansion.<\/p>\n Aquila said during Thursday\u2019s earnings call that Canoo thinks it can reach a 20,000 run rate exit for the year. The company claims it has had a 300% growth in orders this year with around $2.8 billion worth of total orders.<\/p>\n<\/p><\/div>\nCanoo\u2019s Q1 2023 outlook<\/h2>\n