Canoo learned of the investigation on April 29, according to quarterly results released Monday. The investigation is broad – and includes the US Securities and Exchange Commission and the Federal Deposit Insurance Corporation (FDIC).
The SEC has also informed the Company that the investigation does not mean that it has concluded that anyone has violated the law, nor does it mean that the SEC has a negative opinion of any person, entity or security. We intend to provide all the information requested and cooperate fully with the SEC’s investigation, “the regulatory statement said. Canoo’s share price fell more than 3% on Monday after the announcement, according to the New York Stock Exchange (NYSE: COOO).
Canoo added that it did not consider this to be essential to its business and that this was only the activity of the first year. The SEC investigation follows a series of investigations by the Securities and Exchange Commission and the Federal Bureau of Investigation, and Canoo has faced investigations and other legal proceedings in the United States, Canada, Australia, New Zealand and South Africa.
In 2017, Canoo launched as Evelozcity, which was founded by co-founders Stefan Zwolinski and Peter Kowalski. The first vehicle debuted a few months later and was offered only as a subscription, attracting the attention of investors, the company and the media. It was renamed Kanu in spring 2019 and changed its name to Kanu in summer 2018.
Krause, the company’s first CEO, stepped down in August 2019, and Canoo has seen numerous departures from the board, including co-founders Andrew Kowalski and Stefan Zwolinski, and CEO and CFO Andrew Krause. Last year, Hyundai announced an agreement to develop an electric vehicle with Hyundai, but the agreement fell apart after the companies changed their business models and decided not to offer engineering services to other automakers. Hyundai Motor Co. chief executive officer and chairman of the board, said at an investor conference in March.
Last month, shareholders also named Canoo as defendants in two class actions brought by shareholders. Despite the management reshuffles and departures, the company has managed to reduce its quarterly losses despite increased spending and revenues on research and development. The company posted a net loss of $1.2 million, or $0.01 per share, in the first quarter of 2019, compared with a loss of $2.5 million in 2016 and $3.1 million in 2015. It said it closed its first-quarter earnings conference call with analysts on Tuesday and said it has closed more than $4.6 million of its $7.3 million debt.