Canoo (NASDAQ:GOEV) stock is plunging lower by about 30% after the electric vehicle (EV) company filed its 2023 Form 10-K, revealing its fourth-quarter and full-year results. For the year, revenue tallied in at just $886,000 compared to $0 in 2022. That was driven by the completion of 22 vehicles, 17 of which were completed in Q4. Cost of revenue was $2.37 million for the year, resulting in a negative gross margin of $1.48 million.
According to TechCrunch, Canoo spent $1.7 million reimbursing Aquila Family Ventures for CEO Tony Aquila to use his private jet. That’s about double the revenue it generated last year. It spent $1.3 million in 2022 and $1.8 million in 2021 for the same purpose.
Meanwhile, the company remains extremely unprofitable with a net loss of $302.62 million. On the bright side, that improved from a loss of $487.69 million in 2022.
Still, Canoo has a major problem on its hands.
GOEV Stock: Canoo Discloses Going Concern Warning
In its 10-K, Canoo warned that there is substantial doubt about its ability to continue as a going concern.
“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,” said the company.
Canoo now has less cash on hand to sustain its business operations for the next 12 months. As the company stated, it will likely need to raise capital very soon. As of Dec. 31, its cash and cash equivalents totaled $6.39 million while its expected quarterly cash outflow for 2024 is between $45 million and $75 million. In 2023, the company used $318 million for operating and investing activities.
Of course, revenue from vehicle sales could alleviate this issue. Canoo has guided for 2024 revenue between $50 million and $100 million. That’s a wide range and likely reflects the uncertainty of the company, especially when revenue for 2023 was less than $1 million.
Canoo remains an extremely speculative investment that just got even riskier with the going concern warning.
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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.
