Source: shutterstock.com/rafapress
Canoo (NASDAQ:GOEV) has witnessed a significant downturn of around 30% following the release of its 2023 Form 10-K. This filing unveiled the company’s performance for the fourth quarter and the full year. Notably, the revenue for the year stood at a mere $886,000, a noticeable increase from the previous year’s zero revenue. The completion of 22 vehicles, with 17 in Q4 alone, was the driving force behind this revenue. However, the cost of revenue amounted to $2.37 million, resulting in a negative gross margin of $1.48 million.
According to TechCrunch, Canoo disbursed $1.7 million to reimburse Aquila Family Ventures for the use of CEO Tony Aquila’s private jet. This amount exceeds the company’s entire revenue from the previous year. It’s worth noting that similar reimbursements in 2022 and 2021 amounted to $1.3 million and $1.8 million, respectively.
Despite some improvements, with the net loss narrowing from $487.69 million in 2022 to $302.62 million in 2023, Canoo faces a critical challenge.
GOEV Stock: Canoo Warns of Financial Uncertainty
The recently filed 10-K by Canoo included a stark warning about the company’s ability to continue as a going concern.
Management expressed doubts, stating, “Based on their assessment, our management has raised concerns about our ability to continue as a going concern. Management continues to explore raising additional capital through a combination of debt financing, other non-dilutive financing and/or equity financing to supplement the Company’s capitalization and liquidity.”
With cash reserves dwindling, Canoo faces a pressing need to secure funding in the next 12 months. As of December 31, the company only had $6.39 million in cash and cash equivalents, while its projected quarterly cash outflow for 2024 ranges between $45 million and $75 million. In 2023 alone, operating and investing activities absorbed $318 million.
While revenue from vehicle sales could offer some relief, Canoo’s forecasted revenue for 2024 falls within the wide range of $50 million to $100 million. This substantial variability underscores the uncertainty surrounding the company, especially considering the meager revenue of less than $1 million in 2023.
Investing in Canoo remains highly speculative, and the recent going concern warning only amplifies the existing risks.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
