UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): September 29, 2023

CANOO INC.

(Exact name of registrant as specified in its charter)

(424) 271-2144

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Purchase Agreement, Preferred Stock and Warrants

Purchase Agreement

On September 29, 2023 (the “Agreement Date”), Canoo Inc., a Delaware corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional investor (the “Purchaser”), in connection with the issuance, sale and delivery by the Company of an aggregate of 45,000 shares (the “Preferred Shares”) of the Company’s 7.5% Series B Cumulative Perpetual Redeemable Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), which is convertible into shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), and pursuant to which the Company issued warrants (the “Warrants”) to purchase 22,959,184 shares of Common Stock, for a total purchase price of $45,000,000. The closing and sale to the Purchaser of the Preferred Shares and Warrants is expected to occur as promptly as practicable, subject to customary closing conditions.

Pursuant to the Purchase Agreement, the Company and the Purchaser agreed to work together in good faith to negotiate one or more additional agreements pursuant to which the Purchaser or its affiliates may purchase additional shares of Preferred Stock for a total aggregate liquidation preference of up to $150.0 million (inclusive of the Preferred Shares issued under the Purchase Agreement), subject to agreed-upon terms and conditions. In addition, the Company agreed that if it reasonably determines that the issuance of (i) any shares of Common Stock underlying the Preferred Shares or the Warrants (the “Underlying Reserved Shares”) and (ii) any shares of Common Stock that may be issued, at the option of the Purchaser, for the payment of dividends on the Preferred Stock pursuant to the certificate of designation (the “Certificate of Designation”) for the Preferred Stock (the “Dividend Shares,” and together with the Underlying Reserved Shares, the “Underlying Shares”) would exceed 19.99% of the aggregate number of shares of the Common Stock issued and outstanding as of September 29, 2023 (the “Exchange Cap”), then, the Company will hold as promptly as reasonably possible a special meeting of its stockholders to approve the issuance of the shares of Common Stock to the Purchaser in excess of the Exchange Cap and the Company’s Board of Directors (the “Board of Directors”) will recommend such approval. In addition, the Company agreed that neither it nor the Board of Directors will modify the recommendation or take action inconsistent with its recommendation that the Company’s stockholders, at the special meeting of the Company scheduled to be held on October 5, 2023, approve a proposal to increase the number of authorized shares of Common Stock, as discussed in the Company’s proxy statement initially filed on August 15, 2023.

Under the Purchase Agreement, the Company is required to file a shelf registration statement registering the resale by the Purchaser of the Underlying Reserved Shares and an aggregate number of 25,000,000 Dividend Shares. Additionally, if the number of shares of Common Stock registered on such registration statement is insufficient for the number of Underlying Shares to be issued upon the conversion of Preferred Shares, the payment of the Preferred Stock dividend in Dividend Shares and/or the exercise of the Warrants (a “Subsequent Issuance”), the Company is required to file a separate registration statement within 30 days of such Subsequent Issuance. Except as contemplated by the Purchase Agreement, the Preferred Shares, Warrants and Underlying Shares (collectively, the “Securities”) have not been, and will not be, registered and cannot be sold absent registration of the Securities, under an exemption from registration under the Securities Act of 1933, as amended.

The Purchase Agreement contains customary representations, warranties and covenants of the Company and the Purchaser.

Designation of Preferred Stock

The following is a brief summary of the terms of the Preferred Stock to be issued under the Purchase Agreement. The shares of Preferred Stock will be issued upon the closing of the transactions contemplated by the Purchase Agreement and the filing of the Certificate of Designation with the Delaware Secretary of State.

Ranking and Dividend

The Preferred Stock will rank senior to the Common Stock with respect to dividends and distributions on liquidation, winding-up and dissolution. Each share of Preferred Stock has a stated value of $1,000 (the “Stated Value”). Dividends on the Preferred Stock may be paid in either cash, in kind or, at the option of the holders of the Preferred Stock (the “Holders”), in shares of Common Stock. The Company will pay, subject to certain adjustments, dividends at a rate per annum (the “Dividend Rate”) equal to 7.50% of the Liquidation Preference (as defined below) per Preferred Share from the original issuance date of such Preferred Share through the fifth anniversary of such issuance (the “First Reset Date”). On and after the First Reset Date, the Company will pay a Dividend Rate equal to the Dividend Rate applicable to the prior payment period plus 1.50%. If the Holders elect to receive a cash dividend payment and the Company fails to make a corresponding cash dividend payment (a “Dividend Nonpayment”) for three or more payment periods, the Dividend Rate will increase by an additional 0.25% per annum commencing immediately following the third payment period for which there has been a Dividend Nonpayment and will increase an additional 0.25% per annum every third succeeding Dividend Nonpayment (whether the payment periods to which such Dividend Nonpayments relate are consecutive or non-consecutive); provided, however, the maximum Dividend Rate on the Preferred Stock shall be capped at 12.0% per annum.

Liquidation Preference

Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, each Holder will be entitled to payment out of the assets of the Company, prior and in preference to holders of Common Stock, in an amount per share equal to the Stated Value (the “Liquidation Preference”) plus any accumulated and unpaid dividends.

Conversion

Each Holder will have the right, at its option, to convert its Preferred Stock, in whole or in part, into fully paid and non-assessable shares of Common Stock at a conversion price equal to 120% of the average of the closing sale prices per share of the Common Stock for the ten consecutive trading days immediately preceding September 30, 2023, which price is equal to $0.5612 (the “Conversion Price”). The Conversion Price is subject to customary adjustments, including in the event of any stock split, stock dividend, recapitalization or similar events. The Preferred Stock cannot be converted if such conversion would result in an issuance of Common Stock above the Exchange Cap. In addition, no Holder can convert its Preferred Stock if such conversion would result in the Holders and their affiliates, in the aggregate, owning greater than 4.99% of the Company’s total outstanding Common Stock immediately following such conversion. Additionally, the Preferred Stock cannot be converted until the Company has obtained the approval of its stockholders to increase the number of authorized shares of Common Stock, as discussed in the Company’s proxy statement initially filed on August 15, 2023, and filed the corresponding certificate of amendment to the Company’s Second Amended and Restated Certificate of Incorporation, as amended from time to time (the “Certificate of Incorporation”).

Voting

As long as any shares of Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the Holders of a majority of the then outstanding shares of Preferred Stock, (i) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend the Certificate of Designation, (ii) amend or repeal any provision of, or add any provision to, the Company’s Certificate of Incorporation or Amended and Restated Bylaws, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of preferred stock, if such action would materially and adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Preferred Stock, or (iii) declare or pay any junior dividends or repurchase any junior securities during any time that all accrued dividends on the Preferred Stock have not been paid in full in cash or, at the option of the Holder, in shares of Common Stock. Except for in the case of clauses (i) through (iii) above, the Preferred Stock has no voting rights prior to conversion into Common Stock, except as may be required by law.

Optional and Special Optional Redemptions

On or after the fifth anniversary of the original issuance date, or in connection with certain change of control events, the Company may redeem the Preferred Stock for cash at a redemption price equal to 103% of the Liquidation Preference, plus any accumulated and unpaid dividends thereon.

Change of Control

Upon the occurrence of certain change of control events, each Holder will have the right (subject to the Company’s special optional redemption right discussed in the paragraph above) to convert some or all of the shares of Preferred Stock held by such Holder into a number of shares of Common Stock per share of the Preferred Stock to be converted equal to (x) the Liquidation Preference of such Preferred Stock plus any accumulated and unpaid dividends thereon divided by (y) the Conversion Price.

Warrants

In addition, in connection with the Purchase Agreement, the Company will issue to the Purchaser Warrants to purchase 22,959,184 shares of Common Stock at an exercise price of $0.5612. The warrants will be immediately exercisable upon issuance and will expire five years from such issuance. The Warrants include customary adjustment provisions for stock splits, combinations and similar events.

The foregoing descriptions of the Purchase Agreement, Certificate of Designation and Warrants do not purport to be complete and are qualified in their entirety by reference to the full text of such documents, which are filed herewith as Exhibits 10.1 and 4.1, respectively, and are incorporated herein by reference.

The information contained in Item 1.01 is incorporated herein by reference. The issuance of the Preferred Shares and Warrants are exempt from registration pursuant to Section 4(a)(2) of the Securities Act. The Purchaser represented to the Company that they are each an “accredited investor” as defined in Rule 501 of the Securities Act and that each of the Preferred Shares and Warrants are being acquired for investment purposes and not with a view to, or for sale in connection with, any distribution thereof.

The Company issued a press release announcing the entry into the Securities Purchase Agreement. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The Company is attaching to this Current Report on Form 8-K as Exhibit 5.1 the opinion of Kirkland & Ellis LLP relating to the validity of additional shares to be offered pursuant to the Company's prospectus supplement dated September 13, 2023 in connection with the transactions described in the Company's Current Report on Form 8-K filed on September 13, 2023.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.