Canoo CEO addresses ‘substantial doubt’ statement in earnings report

TULSA, Okla. — The CEO of electric vehicle maker Canoo spoke with FOX23 about what “substantial doubt” clause in his company’s latest earnings report.

“Substantial doubt” is an indicator companies are required to put in their earnings report if there is a chance they may not be able to meet their financial obligations in the next 12 months. Canoo is set to open up its mega microfactory in Pryor in 2024. FOX23 asked Canoo CEO Tony Aquila about the chance that financial problems in 2023 could impact the factory’s opening in 2024.

>>>RELATED: Canoo warns company could go out of business before a single car is made in Pryor

“To sit here and say for sure we can pay our bills in 12 months that depends on so many factors when it comes to pre-revenue and stuff,” Aquila said. “We just took the approach the accounting guy said, ‘Hey look. This is the conservative way to go. This is the way we should do it.’ We looked the precedence. Obviously, we get the market could take that a bunch of different ways, but really was interesting is that nobody picked up the other parts of the whole story which is we have access to capital. We just don’t want to access it until its the right time at the right costs.”

Aquila said they have access to capital and are moving ahead as planned with the entire vision of the company, including the Pryor factory because the current business model at its current trajectory is positive for the company.

“At the end of the day, you can’t do what we’re doing without raising capital. It would be ludicrous to think otherwise.

FOX23 has spoken with state lawmakers and other sources at the state capitol who expressed concern about Canoo’s finances, but Aquila said people need to understand that the risks being taken right now are only being done at the expense of his company and its investors. They have not received a single cent from the State of Oklahoma, and no tax dollars have driven off into the sunset.

“The first thing I want Oklahoma taxpayers to know is that one, we have not taken a cent from Oklahoma, and we will spend much money before we get any back,” he said.

Canoo and the Oklahoma Department of Commerce both have stated no taxpayer funds have been rewarded to Canoo yet because the company has not met the requirements to qualify for the rebates set up for them.

FOX23 asked Aquila about the fact that Canoo’s stock (GOEV) has plummeted recently and how shareholders should view that as an indicator to the health of the company. He said a tech company like his requires time for the vision to come to fruition before the stock market will allow it to climb to levels of great gains.

“If you are looking to invest in a company that you don’t need to believe in and wait for that will grow into something, then look for something that pays dividends,” he said.

“This is one that I’m all in on, and I believe in, and so do [our employees], and we’re going to be judicious about it, and the world is going EV. Let’s just face it,” Aquila said about his company’s future.

He said he believes Canoo is being dragged down by bad news coming from other EV makers like Rivian and Nikola, and EV makers across the board are being painted with a bad broad brush.

“Our cars work, they don’t just roll down hill,” Aquila said about Nikola.

FOX23 asked Aquila when the company could bring in actual revenue from the sale of a vehicle, and he said he hoped it could happen as soon as the end of this year or early next year.

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