Filed pursuant to Rule 424(b)(5)
Registration No. 333-266666
(To Prospectus Dated August 18, 2022)
We are offering $39,365,500 of our common stock, par value $0.0001 per share (our “Common Stock”), by this prospectus supplement and the accompanying prospectus, directly to YA II PN, Ltd., a Cayman Islands exempt limited partnership (“YA”), an affiliate of Yorkville Advisors Global, LP (“Yorkville”), in connection with (i) the Pre-Paid Advance Agreement that we entered into with YA on July 20, 2022 (as amended to date, the “PPA”), (ii) the Supplemental Agreement to the PPA that we entered into with YA on November 9, 2022 (the “First Supplemental Agreement”), and (iii) the Supplemental Agreement to the PPA that we entered into with YA on December 31, 2022 (the “Second Supplemental Agreement” and, together with the First Supplemental Agreement, the “Supplemental Agreements”). In accordance with the terms of the PPA and the Supplemental Agreements, Canoo Inc. (the “Company”) may request advances of up to $50,000,000 from YA (or such greater amount that the parties may mutually agree) (the “Pre-Paid Advance”) per advance and up to an aggregate of $300,000,000 (the “Commitment Amount”), subject to the terms and conditions contained therein. On July 21, 2022, we requested an initial Pre-Paid Advance of $50,000,000 from YA under the PPA, on August 23, 2022, we requested a second Pre-Paid Advance of $40,000,000 from YA under the PPA, and on November 9, 2022, we requested a third Pre-Paid Advance of $21,300,000 from YA. None of the initial Pre-Paid Advance or the second Pre-Paid Advance remain outstanding as of the date of this Prospectus Supplement. $21,300,000 of the third Pre-Paid Advance, plus accrued and unpaid interest thereon in the amount of $213,000, remains outstanding as of the date of this Prospectus Supplement.
Pursuant to the Second Supplemental Agreement, we requested a fourth Pre-Paid Advance of $34,045,500 (the “Second Supplemental Advance”) and YA waived certain terms and conditions set forth in the PPA with respect to such Second Supplemental Advance, including the requirement that the Company shall have the capacity to issues shares of the Company’s Common Stock with a market value equal to at least 150% of the Second Supplemental Advance without breaching the Exchange Cap (as defined in the PPA). The Second Supplemental Advance amount may, at the sole option of YA, be increased by up to an additional $8,514,500 (the “Option”). Such Option shall be subject to the same terms as the initial Second Supplemental Advance. On January 13, 2023, YA partially exercised the Option, increasing the Second Supplemental Advance by $5,320,000 to $39,365,500. YA may exercise the remaining $3,194,500 of the Option through January 31, 2023. The Second Supplemental Agreement provides that solely with respect to the Second Supplemental Advance, the Second Supplemental Advance will be offset upon the issuance of our Common Stock to YA at a price per share equal to the lower of (a) 110% of the daily volume weighted average price (the “VWAP”) of our Common Stock on The Nasdaq Global Select Market (“Nasdaq”) as of the trading day immediately prior to the date of the Second Supplemental Advance (the “Fixed Price”), or (b) 95% of the lowest daily VWAP of our Common Stock on Nasdaq during the five (5) trading days immediately preceding the date on which YA provides the purchase notice to us (the “Variable Price,” and the lower of the Fixed Price and the Variable Price shall be referred to as the “Purchase Price”); however, in no event shall the Purchase Price be less than $1.00 per share (the “Floor Price”).
In order to comply with Nasdaq rules, the PPA restricts us from issuing greater than 48,043,111 shares of Common Stock to YA (the “Exchange Cap”) unless: (i) we obtain stockholder approval to issue a greater number of shares (the “YA Share Issuance Approval”), or (ii) we sell Common Stock at a price equal to at least $3.81 per share. As of January 19, 2023, we had issued 48,042,221 shares of Common Stock to YA at prices below $3.81 per share; accordingly, we cannot issue additional shares to YA unless we obtain the YA Share Issuance Approval or if we are able to sell shares at prices greater than or equal to $3.81. The Supplemental Agreements require that we call and hold an annual or special meeting of our stockholders on or before February 1, 2023 for the purposes of: (i) obtaining the YA Share Issuance Approval and (ii) obtaining the consent of the stockholders to amend the PPA to provide for a Floor Price of $0.50 per share. The Company filed its definitive proxy statement on December 7, 2022, a proxy statement supplement on January 13, 2023 and will hold the special meeting on January 24, 2023.
This prospectus supplement relates to the offering of Common Stock in connection with a $34,045,500 Supplemental Advance requested by Canoo under the PPA and the Second Supplemental Agreement on December 31, 2022, and a partial exercise of the Option by YA on January 13, 2023, which increased the Second Supplemental Advance by $5,320,000 to $39,365,500. Interest shall accrue on the outstanding balance of the Second Supplemental Advance at a rate equal to 5% per annum, subject to an increase to 15% upon events of default described in the PPA, as supplemented by the Second Supplemental Agreement. The PPA is the second equity investment made by YA, which was also party to the Standby Equity Purchase Agreement, an agreement entered into with the Company on May 10, 2022 (the “SEPA”). As disclosed in our Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on August 26, 2022, we delivered a notice to terminate the SEPA to YA on August 25, 2022, which became effective on August 26, 2022.
This prospectus supplement and the accompanying prospectus also cover the sale of these shares of our Common Stock by YA to the public. Though we have been advised by YA, and YA represents in the PPA that YA is purchasing the shares of our Common Stock for its own account, for investment purposes in which it takes investment risk (including, without limitation, the risk of loss), and without any view or intention to distribute such shares in violation of the Securities Act of 1933, as amended (the “Securities Act”), or any other applicable securities laws, the SEC may take the position that YA is deemed an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act and any profits on the sales of shares of our Common Stock by YA and any discounts, commissions or concessions received by YA is deemed to be underwriting discounts and commissions under the Securities Act. For additional information on the methods of sale that may be used by YA, see “Plan of Distribution.”
Our Common Stock and public warrants are traded on Nasdaq under the symbol “GOEV” and “GOEVW,” respectively. On January 19, 2023, the last reported sale price on Nasdaq of our Common Stock was $1.27 per share and the last reported sale price of our public warrants was $0.23 per warrant.
Our principal executive office is located at 19951 Mariner Avenue, Torrance, California 90503, and our telephone number is (424) 271-2144.
Investing in our Common Stock involves significant risks. See “Risk Factors” beginning on page S-7 of this prospectus supplement and the risk factors that are incorporated by reference into this prospectus supplement and the accompanying prospectus from our filings made with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for a discussion of the factors you should carefully consider before deciding to invest in our Common Stock.
Neither the SEC nor any state securities commission has approved or disapproved of our Common Stock or determined if this prospectus supplement or the accompanying prospectus is accurate, truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is January 20, 2023.