Annual report pursuant to Section 13 and 15(d)

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

v3.22.0.1
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2021
Accounting Policies [Abstract]  
Schedule of the impact of immaterial correction
The following tables reflect the impact of the immaterial correction on the Company's previously reported consolidated balance sheet, consolidated statement of operations, consolidated statement of stockholders’ equity (deficit) and consolidated statement of cash flows (in thousands) as of and for the year ended December 31, 2020.

As of December 31, 2020
As Previously Reported Warrants Adjustments As Corrected
Consolidated Balance Sheet
Private placement warrants liability $ —  $ 6,613  $ 6,613 
Total liabilities 181,615  6,613  188,228 
Stockholders' equity (deficit)
Additional paid in capital 920,324  (9,745) 910,579 
Accumulated deficit (348,493) 3,132  (345,361)
Total stockholders' equity (deficit) 571,855  (6,613) 565,242 
For the year ended December 31, 2020
As Previously Reported Warrants Adjustments As Corrected
Consolidated Statement of Operations
Other (expense) income
Gain (loss) on fair value change in private placement warrants liability $ —  $ 3,132  $ 3,132 
Loss before income taxes (89,816) 3,132  (86,684)
Net loss and comprehensive loss (89,818) 3,132  (86,686)
Net loss per share, basic and diluted (0.81) 0.03  (0.78)
Other than changes made to reflect the impact of the recognition of the fair value of the private placement warrants liability at the Closing Date to additional paid-in capital and the subsequent remeasurement of the fair value of the warrant liability at December 31, 2020 to accumulated deficit, there have been no changes to the Consolidated Statement of Stockholders’ (Deficit) Equity (in thousands).
For the year ended December 31, 2020
As Previously Reported Warrants Adjustments As Corrected
Consolidated Statement of Stockholders' (Deficit) Equity
Additional paid-in Capital $ 920,324  $ (9,745) $ 910,579 
Accumulated Deficit (348,493) 3,132  (345,361)
    Net loss and comprehensive loss (89,818) 3,132  (86,686)
Total stockholders' (deficit) equity 571,855  (6,613) 565,242 
For the year ended December 31, 2020
As Previously Reported Warrants Adjustments As Corrected
Consolidated Statement of Cash Flows
Cash flows from operating activities
Net loss $ (89,818) $ 3,132  $ (86,686)
Gain on fair value change in private placement warrants liability —  (3,132) (3,132)
Supplemental non-cash investing and financing activities
 Recognition of private placement warrants liability —  9,745  9,745 
Date Description Redeemable
Convertible
Preference
Shares		 08/16/20
Conversion
Ratio		 A /A-1 Shares
And
Ordinary Shares		 12/21/20
Merger
Recapitalization
Conversion
Ratio		 Recapitalized
Common
Shares
Statement of Stockholders’
(Deficit) Equity
12/31/2018 Angel Shares 77,000,000 0.54 41,403,247 1.24 51,316,627
3/4/2019 Seed Shares 16,666,667 0.54 8,961,742 1.24 11,107,496
5/6/2019 Seed Shares 16,666,666 0.54 8,961,741 1.24 11,107,495
Statement of Stockholders’
(Deficit) Equity
12/31/2018 Convertible Debt 51,006,603 1.24 63,219,362
1)
Legacy Canoo redeemable convertible preference shares – Angel Series (“Angel Shares”) was outstanding at December 31, 2018 with 77.0 million shares, which were initially converted to 41.4 million shares of Legacy A series redeemable convertible preference shares on August 16, 2020 and later were exchanged into 41.4 million shares of Legacy Canoo ordinary shares on December 21, 2020 and converted again to 51.3 million shares of our Common Stock at the Business Combination on December 21, 2020.
2)
Legacy Canoo redeemable convertible preference shares – Seed Series (“Seed Shares”) was issued on March 4, 2019 and May 6, 2019 with 16.7 million shares and 16.7 million shares, respectively, which were initially converted to 17.9 million shares of Legacy A series redeemable convertible preference shares on August 16, 2020 and later were exchanged into 17.9 million shares of Legacy Canoo ordinary shares on December 21, 2020 and converted again to 22.2 million shares of our Common Stock at the Business Combination on December 21, 2020.
3)
Legacy Canoo convertible debt (“Convertible Debt”) – On August 16, 2020, all Convertible Debt was initially converted to 51.0 million shares of A/A-1 Shares, which were later exchanged into 51.0 million shares of Legacy Canoo ordinary shares on December 21, 2020 and converted again to 63.2 million shares of our Common Stock at the Business Combination on December 21, 2020. In the accompanying recasted consolidated statements of stockholders' (deficit) equity, the 51.0 million shares of A/A-1 Shares outstanding is converted and presented as 63.2 million shares of Common Stock issued during the year ended December 31, 2020.
Schedule of retroactive recapitalization
The following tables reflect the impact of the immaterial correction on the Company's previously reported consolidated balance sheet, consolidated statement of operations, consolidated statement of stockholders’ equity (deficit) and consolidated statement of cash flows (in thousands) as of and for the year ended December 31, 2020.

As of December 31, 2020
As Previously Reported Warrants Adjustments As Corrected
Consolidated Balance Sheet
Private placement warrants liability $ —  $ 6,613  $ 6,613 
Total liabilities 181,615  6,613  188,228 
Stockholders' equity (deficit)
Additional paid in capital 920,324  (9,745) 910,579 
Accumulated deficit (348,493) 3,132  (345,361)
Total stockholders' equity (deficit) 571,855  (6,613) 565,242 
For the year ended December 31, 2020
As Previously Reported Warrants Adjustments As Corrected
Consolidated Statement of Operations
Other (expense) income
Gain (loss) on fair value change in private placement warrants liability $ —  $ 3,132  $ 3,132 
Loss before income taxes (89,816) 3,132  (86,684)
Net loss and comprehensive loss (89,818) 3,132  (86,686)
Net loss per share, basic and diluted (0.81) 0.03  (0.78)
Other than changes made to reflect the impact of the recognition of the fair value of the private placement warrants liability at the Closing Date to additional paid-in capital and the subsequent remeasurement of the fair value of the warrant liability at December 31, 2020 to accumulated deficit, there have been no changes to the Consolidated Statement of Stockholders’ (Deficit) Equity (in thousands).
For the year ended December 31, 2020
As Previously Reported Warrants Adjustments As Corrected
Consolidated Statement of Stockholders' (Deficit) Equity
Additional paid-in Capital $ 920,324  $ (9,745) $ 910,579 
Accumulated Deficit (348,493) 3,132  (345,361)
    Net loss and comprehensive loss (89,818) 3,132  (86,686)
Total stockholders' (deficit) equity 571,855  (6,613) 565,242 
For the year ended December 31, 2020
As Previously Reported Warrants Adjustments As Corrected
Consolidated Statement of Cash Flows
Cash flows from operating activities
Net loss $ (89,818) $ 3,132  $ (86,686)
Gain on fair value change in private placement warrants liability —  (3,132) (3,132)
Supplemental non-cash investing and financing activities
 Recognition of private placement warrants liability —  9,745  9,745 
Date Description Redeemable
Convertible
Preference
Shares		 08/16/20
Conversion
Ratio		 A /A-1 Shares
And
Ordinary Shares		 12/21/20
Merger
Recapitalization
Conversion
Ratio		 Recapitalized
Common
Shares
Statement of Stockholders’
(Deficit) Equity
12/31/2018 Angel Shares 77,000,000 0.54 41,403,247 1.24 51,316,627
3/4/2019 Seed Shares 16,666,667 0.54 8,961,742 1.24 11,107,496
5/6/2019 Seed Shares 16,666,666 0.54 8,961,741 1.24 11,107,495
Statement of Stockholders’
(Deficit) Equity
12/31/2018 Convertible Debt 51,006,603 1.24 63,219,362
1)
Legacy Canoo redeemable convertible preference shares – Angel Series (“Angel Shares”) was outstanding at December 31, 2018 with 77.0 million shares, which were initially converted to 41.4 million shares of Legacy A series redeemable convertible preference shares on August 16, 2020 and later were exchanged into 41.4 million shares of Legacy Canoo ordinary shares on December 21, 2020 and converted again to 51.3 million shares of our Common Stock at the Business Combination on December 21, 2020.
2)
Legacy Canoo redeemable convertible preference shares – Seed Series (“Seed Shares”) was issued on March 4, 2019 and May 6, 2019 with 16.7 million shares and 16.7 million shares, respectively, which were initially converted to 17.9 million shares of Legacy A series redeemable convertible preference shares on August 16, 2020 and later were exchanged into 17.9 million shares of Legacy Canoo ordinary shares on December 21, 2020 and converted again to 22.2 million shares of our Common Stock at the Business Combination on December 21, 2020.
3)
Legacy Canoo convertible debt (“Convertible Debt”) – On August 16, 2020, all Convertible Debt was initially converted to 51.0 million shares of A/A-1 Shares, which were later exchanged into 51.0 million shares of Legacy Canoo ordinary shares on December 21, 2020 and converted again to 63.2 million shares of our Common Stock at the Business Combination on December 21, 2020. In the accompanying recasted consolidated statements of stockholders' (deficit) equity, the 51.0 million shares of A/A-1 Shares outstanding is converted and presented as 63.2 million shares of Common Stock issued during the year ended December 31, 2020.
Schedule of useful lives by asset Useful lives by asset category are as follows:
Assets category Years
Leasehold improvements Shorter of lease term or estimated useful life
Machinery and equipment 3 years
Furniture and fixtures 5 years
Computer hardware and software 3 years
Vehicles 3 years
Schedule of assets and liabilities measured at fair value on a recurring basis The following table summarizes the Company’s assets and liabilities that are measured at fair value
on a recurring basis as required by ASC 820, by level, within the fair value hierarchy as of December 31, 2021 and 2020 (in thousands):
December 31, 2021
Fair Value Level 1 Level 2 Level 3
Assets
Money Market Funds $ 227,492  $ 227,492  $ —  $ — 
Liability
Contingent earnout shares liability $ 29,057  $ —  $ —  $ 29,057 
December 31, 2020
Fair Value Level 1 Level 2 Level 3
Assets
Money Market Funds $ 702,422  $ 702,422  $ —  $ — 
Liability
Contingent earnout shares liability $ 133,503  $ —  $ —  $ 133,503 
Private placement warrants liability 6,613  —  6,613  — 
Summary of the change in fair value of contingent earnout shares liability and private placement warrants liability
Following is a summary of the change in fair value of contingent Earnout Shares liability and private placement warrants liability for the years ended December 31, 2021 and 2020 (in thousands).
Year Ended December 31,
Earnout Shares Liability 2021 2020
Beginning fair value $ 133,503  $ — 
Addition during the year —  248,878 
Change in fair value during the year (104,446) (115,375)
Ending fair value $ 29,057  $ 133,503 
Year Ended December 31,
Private Placement Warrants Liability 2021 2020
Beginning fair value $ 6,613  $ 9,745 
Change in fair value during the year 1,639  (3,132)
Conversion of private placement warrants to public warrants (8,252) — 
Ending fair value $ —  $ 6,613