TABLE OF CONTENTS

		Page
		~~Page~~
Part I		Financial Information
~~PART I – FINANCIAL INFORMATION~~
Item 1.		Financial Statements (Unaudited)		7
~~Item 1.~~	~~Financial Statements:~~
		Condensed Consolidated Balance Sheets		7
	~~Condensed Balance Sheets as of March 31, 2019 (unaudited) and December 31, 2018~~	1
		Condensed Consolidated Statements of Operations		8
	~~Condensed Statement of Operations for the three months ended March 31, 2019 (unaudited)~~	2
		Condensed Consolidated Statements of Stockholders’ Equity (Deficit)		9
	~~Condensed Statement of Changes in Stockholders’ Equity for the three months ended March 31, 2019 (unaudited)~~	3

	Condensed Consolidated Statements of Cash Flows ~~for the three months ended March 31, 2019 (unaudited)~~	4	11

		Notes to Condensed Consolidated Financial Statements ~~(unaudited)~~	5	12

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	14	24

Item 3.		Quantitative and Qualitative Disclosures ~~About~~about Market Risk	19	33

Item 4.		Controls and Procedures	19	34

~~PART~~ Part II ~~– OTHER INFORMATION~~		Other Information

Item 1.		Legal Proceedings	20	35

Item 1A.		Risk Factors	20	35

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	20	36

Item 3.		Defaults Upon Senior Securities	21	36

Item 4.		Mine Safety Disclosures	21	37

Item 5.		Other Information	21	37

Item 6.	~~Exhibits~~	21 Exhibits		38

Signatures		22		39

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. All statements, other than statements of present or historical fact included in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of such terms or other similar expressions. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. We caution you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control.

Forward-looking statements in this Quarterly Report on Form 10-Q may include, for example, statements about:

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our ability to recognize the anticipated benefits of the business combination and proceeds from the concurrent private placement, which may be affected by, among other things, competition and the ability of the combined business to grow and manage growth profitably;

●

our financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder;

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changes in our strategy, future operations, financial position, estimated revenue and losses, projected costs, prospects and plans;

●

our product development timeline and expected start of production;

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our manufacturing strategy, including with respect to a contract manufacturing partner and owned facilities;

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the implementation, market acceptance and success of our business model;

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our ability to scale in a cost-effective manner;

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developments and projections relating to our competitors and industry;

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the impact of health epidemics or pandemics, including the COVID-19 pandemic, on our business and the actions we may take in response thereto;

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our expectations regarding our ability to obtain and maintain intellectual property protection and not infringe on the rights of others;

●

our future capital requirements and sources and uses of cash;

●

our ability to obtain funding for our future operations;

●

our business, expansion plans and opportunities; and

●

the outcome of any known and unknown litigation and regulatory proceedings.

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These statements are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to differ materially from those projected or otherwise implied by the forward-looking statements. Below is a summary of certain material factors that may make an investment in our common stock speculative or risky.

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We are an early stage company with a history of losses and expect to incur significant expenses and continuing losses for the foreseeable future.

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We may be unable to adequately control the costs associated with our operations.

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We have yet to achieve positive operating cash flow and, given our projected funding needs, our ability to generate positive cash flow is uncertain.

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Our financial results may vary significantly from period to period due to fluctuations in our operating costs, product demand and other factors.

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Our business plans require a significant amount of capital. In addition, our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders’ equity or introduce covenants that may restrict our operations or our ability to pay dividends.

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Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of your investment.

●

We previously identified material weaknesses in our internal control over financial reporting. If we are unable to remediate the material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business and stock price.

●

If we fail to manage our growth effectively, we may not be able to design, develop, manufacture, market and launch our electric vehicles ("EVs") successfully.

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Our ability to develop and manufacture EVs of sufficient quality and appeal to customers on schedule and on a large scale is unproven and still evolving.

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We have no experience to date in high volume manufacture of our EVs, and when we manufacture, we will be manufacturing at least in part with a contract manufacturing partner with whom we have not previously worked.

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We will depend initially on revenue generated from a single EV model and in the foreseeable future will be significantly dependent on a limited number of models.

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We may fail to attract new customers in sufficient numbers or at sufficient rates or at all or to retain existing customers.

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We may experience significant delays in the design, production and launch of our EVs, which could harm our business, prospects, financial condition and operating results.

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Increases in costs, disruption of supply or shortage of materials, in particular for lithium-ion battery cells, could harm our business.

●

A consumer subscription model is different from the predominant current distribution model for automobile manufacturers, which makes evaluating the impact of a subscription model on our business, operating results

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and future prospects difficult. In addition, the novel approach of offering a subscription directly from an OEM may never achieve the level of market acceptance necessary to achieve profitability.

●

We face legal, regulatory and legislative uncertainty in how our go-to-market models will be interpreted under existing and future law and we may be required to adjust our consumer business model in certain jurisdictions as a result.

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We face risks and uncertainties related to litigation, regulatory actions and government investigations and inquiries.

●

The automotive market is highly competitive, and we may not be successful in competing in this industry.

Importantly, the summary above does not address all the risks and uncertainties that we face. Additional discussion of the risks and uncertainties summarized herein, as well as other risks and uncertainties that we face, can be found under Part II, Item IA, “Risk Factors” in this Quarterly Report on Form 10-Q and Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 31, 2021. The above summary is qualified in its entirety by those more complete discussions of such risks and uncertainties. Given such risks and uncertainties, you should not place undue reliance on forward-looking statements.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods.

Unless otherwise stated in this Quarterly Report on Form 10-Q or the context otherwise requires, and regardless of capitalization, references to:

●

“Business Combination” refers to the Company’s merger consummated on December 21, 2020 pursuant to that certain Merger Agreement and Plan of Reorganization, dated August 17, 2020, by and among HCAC, HCAC IV First Merger Sub, Ltd., an exempted company incorporated with limited liability in the Cayman Islands and a direct, a wholly owned subsidiary of HCAC, EV Global Holdco LLC (f/k/a HCAC IV Second Merger Sub, LLC), a Delaware limited liability company and a direct, wholly owned subsidiary of HCAC, and Canoo Holdings Ltd., an exempted company incorporated with limited liability in the Cayman Islands.

●

“common stock” are to our common stock, $0.0001 par value per share;

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“Company,” “our Company” “we” or “us” are to Canoo Inc. following completion of the Business Combination in December 2020;

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“HCAC” means the special purpose acquisition company, Hennessy Capital Acquisition Corp. IV;

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“Legacy Canoo” means Canoo Holdings Ltd. prior to completion of the Business Combination in December 2020;

●

“management” or our “management team” are to our officers and directors;

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●

“private placement warrants” are to warrants sold to certain initial purchasers as part of the private placement that occurred simultaneously with the completion of HCAC’s initial public offering, which are not-redeemable so long as they are held by the initial purchasers of the warrants or their permitted transferees; and

●

“public warrants” are to our redeemable warrants sold as part of the units in HCAC’s initial public offering (whether they were purchased in our initial public offering or thereafter in the open market) and to any private placement warrants that are sold to third parties that are not initial purchasers of the warrants or their permitted transferees or otherwise voluntarily converted by their holder.

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PART 1I – FINANCIAL INFORMATION

Item 1. Financial Statements

~~ITEM 1. FINANCIAL STATEMENTS~~CANOO INC.

Condensed Consolidated Balance Sheets
(in thousands, except par values) (unaudited)


	June 30,		December 31,
	2021		2020
Assets
Current assets
Cash and cash equivalents	$	563,565	$	702,422
Prepaids and other current assets		13,345		6,463
Total current assets		576,910		708,885
Property and equipment, net		88,767		30,426
Operating lease right-of-use assets		14,418		12,913
Other assets		31,429		1,246
Total assets	$	711,524	$	753,470

Liabilities and stockholders' equity
Liabilities
Current liabilities
Accounts payable	$	51,778	$	17,243
Accrued expenses and other current liabilities		64,468		10,625
Total current liabilities		116,246		27,868
Contingent earnout shares liability		58,101		133,503
Private placement warrants liability		—		6,613
Operating lease liabilities		13,941		13,262
Long-term debt		—		6,943
Other long-term liabilities		—		39
Total liabilities		188,288		188,228

Commitments and contingencies (Note 8)

Stockholders’ equity
Preferred stock, $0.0001 par value; 10,000 authorized, 0 shares issued and outstanding at June 30, 2021 and December 31, 2020		—		—
Common stock, $0.0001 par value; 500,000 authorized; 237,563 and 235,753 issued and outstanding at June 30, 2021 and December 31, 2020, respectively		24		24
Additional paid-in capital		996,354		910,579
Accumulated deficit		(473,142)		(345,361)
Total stockholders’ equity		523,236		565,242
Total liabilities and stockholders’ equity	$	711,524	$	753,470

~~HENNESSY CAPITAL ACQUISITION CORP. IV~~
~~CONDENSED BALANCE SHEETS~~

March 31, December 31,
2019 2018
(unaudited)
ASSETS
Current assets:
Cash $ 1,826,000 $ 6,000
Prepaid expenses 142,000 -
Total current assets 1,968,000 6,000
Deferred offering costs - 232,000
Cash and investments held in trust account 303,682,000 -

Total assets $ 305,650,000 $ 238,000

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Note payable to Sponsor $ - $ 90,000
Accounts payable 53,000 27,000
Accrued liabilities 91,000 99,000
Accrued income and franchise taxes 117,000 -
Total current liabilities 261,000 216,000
Other liabilities:
Deferred underwriting compensation 10,179,000 -
Total liabilities 10,440,000 216,000

Common stock subject to possible redemption; 28,733,635 and -0- shares at March 31, 2019 and December 31, 2018, respectively, (at value of approximately $10.10 per share) 290,210,000 -

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.0001 par value; 1,000,000 authorized shares; none issued or outstanding - -
Class A common stock, $0.0001 par value; 100,000,000 authorized shares; 1,281,365 and -0- shares, respectively, issued and outstanding (excluding 28,733,635 and -0- shares, respectively, subject to possible redemption) - -
Class B common stock, $0.0001 par value, 10,000,000 authorized shares 7,503,750 shares issued and outstanding 1,000 1,000
Additional paid-in-capital 4,684,000 24,000
Retained earnings (accumulated deficit) 315,000 (3,000 )
Total stockholders’ equity 5,000,000 22,000

Total liabilities and stockholders’ equity $ 305,650,000 $ 238,000

~~See~~The accompanying notes toare an integral part of these condensed consolidated financial ~~statements~~

~~HENNESSY CAPITAL ACQUISITION CORP. IV~~statements.

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CANOO INC.

Condensed Consolidated Statements of Operations (in thousands, except per share values)

~~CONDENSED STATEMENT OF OPERATIONS~~

Three and Six Months Ended June 30, 2021 and 2020 (unaudited)

Three Months Ended
March 31,
2019

Revenues $ -
General and administrative expenses 112,000
Loss from operations (112,000 )
Other income – Interest income on Trust Account 530,000
Income before provision for income tax 418,000
Provision for income tax 100,000
Net income $ 318,000

Two Class Method for Per Share Information:

Weighted average Class A common shares outstanding - basic and diluted 30,015,000
Net income per Class A common share – basic and diluted $ 0.01
Weighted average Class B common shares outstanding – basic and diluted 7,503,750
Net loss per Class B common share – basic and diluted $ (0.01 )


	Three months ended				Six months ended
	June 30,				June 30,
	2021		2020		2021		2020
Revenue	$	—	$	—	$	—	$	—

Costs and Operating Expenses
Cost of revenue, excluding depreciation		—		—		—		—
Research and development expenses, excluding depreciation		57,638		14,642		96,956		33,935
Selling, general and administrative expenses, excluding depreciation		44,625		3,411		100,252		7,492
Depreciation		2,083		1,756		4,207		3,441
Total costs and operating expenses		104,346		19,809		201,415		44,868
Loss from operations		(104,346)		(19,809)		(201,415)		(44,868)

Other (expense) income
Interest income (expense)		34		(3,545)		46		(9,371)
(Loss) gain on fair value change in contingent earnout shares liability		(8,157)		—		75,402		—
Loss on fair value change in private placement warrants liability		—		—		(1,639)		—
Other (expense) income, net		(85)		113		(174)		108
Loss before income taxes		(112,554)		(23,241)		(127,780)		(54,131)
Provision for income taxes		—		—		—		—
Net loss and comprehensive loss	$	(112,554)	$	(23,241)	$	(127,780)	$	(54,131)

Per Share Data:
Net loss per share, basic and diluted	$	(0.50)	$	(0.28)	$	(0.57)	$	(0.65)

Weighted-average shares outstanding, basic and diluted		226,928		83,740		225,885		82,845

~~See~~The accompanying notes toare an integral part of these condensed consolidated financial ~~statements~~

~~HENNESSY CAPITAL ACQUISITION CORP. IV~~statements.

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CANOO INC.

~~CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY~~Condensed Consolidated Statement of Stockholders’ Equity (in thousands)

~~For the three months ended March 31, 2019~~

Three and Six Months Ended June 30, 2021 (unaudited)

Common Stock Additional Retained Earnings Stockholders’
Class A Shares Amount Class B Shares Amount Paid-in Capital (Accumulated Deficit) Equity (Deficit)
Balances, December 31, 2018(1) - $ - 7,503,750 $ 1,000 $ 24,000 $ (3,000 ) $ 22,000
Sponsor forfeiture of shares - - (871,930 ) - - - -
Anchor Investor purchase of shares - - 871,930 - 3,000 - 3,000
Sale of Units to the public at $10.00 per Unit 30,015,000 3,000 - - 300,147,000 - 300,150,000
Underwriters’ discount and offering expenses - - - - (18,865,000 ) - (18,865,000 )
Sale of 13,581,500 Private Placement Warrants at $1.00 per warrant - - - - 13,582,000 - 13,582,000
Change in Class A common stock subject to possible redemption (28,733,635 ) (3,000 ) - - (290,207,000 ) - (290,210,000 )
Net income - - - - - 318,000 318,000
Balances, March 31, 2019 (unaudited) 1,281,365 $ - 7,503,750 $ 1,000 $ 4,684,000 $ 315,000 $ 5,000,000


				Additional				Total
	Common stock			paid-in		Accumulated		stockholders’
	Shares	Amount		capital		deficit		Equity
Balance as of December 31, 2020	235,753	$	24	$	910,579	$	(345,361)	$	565,242
Proceeds from exercise of public warrants	597		—		6,867		—		6,867
Repurchase of unvested shares – forfeitures	(118)		—		(2)		—		(2)
Issuance of shares for restricted stock units vested	1,230		—		—		—		—
Issuance of shares upon exercise of vested stock options	37		—		—		—		—
Stock-based compensation	—		—		45,146		—		45,146
Conversion of private placement warrants to public warrants	—		—		8,252		—		8,252
Net loss and comprehensive loss	—		—		—		(15,227)		(15,227)
Balance as of March 31, 2021	237,499	$	24	$	970,842	$	(360,588)	$	610,278
Repurchase of unvested shares – forfeitures	(56)		—		(2)		—		(2)
Issuance of shares for restricted stock units vested	114		—		—		—		—
Issuance of shares upon exercise of vested stock options	6		—		—		—		—
Stock-based compensation	—		—		25,514		—		25,514
Net loss and comprehensive loss	—		—		—		(112,554)		(112,554)
Balance as of June 30, 2021	237,563	$	24	$	996,354	$	(473,142)	$	523,236

~~(1)~~

~~Share amounts have been retroactively restated to reflect the stock dividend of approximately 0.05 share for the Company's shares of Class B common stock on February 28, 2019 (see Note 4).~~

~~See~~The accompanying notes toare an integral part of these condensed consolidated financial ~~statements~~

~~HENNESSY CAPITAL ACQUISITION CORP. IV~~statements.

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CANOO INC.

~~CONDENSED STATEMENT OF CASH FLOWS~~Condensed Consolidated Statement of Stockholders’ Deficit (in thousands)

Three and Six Months Ended June 30, 2020 (unaudited)

For the Three Months Ended
March 31,
2019

Cash flows from operating activities:
Net income $ 318,000
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Interest income retained in Trust Account (530,000 )
Changes in operating assets and liabilities:
Increase in prepaid expenses (142,000 )
Increase in accounts payable 5,000
Increase in accrued liabilities 91,000
Increase in accrued income and franchise taxes 117,000
Net cash used in operating activities (141,000 )

Cash flows from investing activities: Cash deposited in Trust Account (303,152,000 )

Cash flows from financing activities:
Proceeds from sale of stock to Anchor Investor 3,000
Proceeds from Note payable to Sponsor 210,000
Proceeds from sale of Public Offering Units 300,150,000
Proceeds from sale of Private Placement Warrants 13,582,000
Payment of underwriting discounts (7,830,000 )
Payment of offering costs (702,000 )
Payment of Note payable to Sponsor (300,000 )
Net cash provided by financing activities 305,113,000

Net increase in cash 1,820,000
Cash at beginning of period 6,000
Cash at end of period $ 1,826,000

Supplemental disclosure of non-cash financing activities:
Deferred underwriters’ compensation $ 10,179,000
Offering costs included in accounts payable $ 48,000


				Additional				Total
	Common stock			paid-in		Accumulated		stockholders’
	Shares	Amount		capital		deficit		deficit
Balance as of December 31, 2019	108,838	$	11	$	202,796	$	(258,675)	$	(55,868)
Issuance of shares upon exercise of unvested share options	424		—		—		—		—
Gain on extinguishment of related party convertible debt	—		—		8,264		—		8,264
Stock-based compensation	—		—		389		—		389
Net loss and comprehensive loss	—		—		—		(30,890)		(30,890)
Balance as of March 31, 2020	109,262	$	11	$	211,449	$	(289,565)	$	(78,105)
Repurchase of ordinary shares – forfeitures	(3,127)		—		(25)		—		(25)
Stock-based compensation	—		—		351		—		351
Net loss and comprehensive loss	—		—		—		(23,241)		(23,241)
Balance as of June 30, 2020	106,135	$	11	$	211,775	$	(312,806)	$	(101,020)

~~See~~The accompanying notes toare an integral part of these condensed consolidated financial ~~statements~~statements.

~~HENNESSY CAPITAL ACQUISITION CORP. IV~~
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CANOO INC.

Condensed Consolidated Statements of Cash Flows (in thousands)

Six Months Ended June 30, 2021 and 2020 (unaudited)


	Six months ended
	June 30,
	2021		2020
Cash flows from operating activities:
Net loss		(127,780)		(54,131)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		4,207		3,441
Non-cash operating lease expense		235		312
Loss on the disposal of property and equipment		—		9
Debt discount amortization		—		2,638
Stock-based compensation		70,660		740
Gain on fair value in contingent earnout shares liability		(75,402)		—
Loss on fair value change in private placement warrants liability		1,639		—
Changes in operating assets and liabilities:
Prepaids and other current assets		(7,714)		(267)
Other assets		256		664
Accounts payable		1,165		(999)
Accrued interest expense		—		(671)
Accrued expenses and other current liabilities		23,916		6,160
Operating lease liabilities		—		(210)
Net cash used in operating activities		(108,818)		(42,314)

Cash flows from investing activities:
Purchases of property and equipment		(28,653)		(979)
Net cash used in investing activities		(28,653)		(979)

Cash flows from financing activities:
Proceeds from related party convertible debt		—		10,000
Proceeds from issuance of restricted ordinary shares		—		3
Proceeds from convertible debt		—		15,250
Loan advance		—		7,017
Repurchase of restricted ordinary shares		—		(25)
Proceeds from exercise of public warrants		6,867		—
Repurchase of unvested shares		(4)		—
Payment of offering costs		(1,306)		—
Repayment of PPP loan		(6,943)		—
Other		—		22
Net cash (used in) provided by financing activities		(1,386)		32,267
Net decrease in cash, cash equivalents, and restricted cash		(138,857)		(11,026)

Cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash, beginning of period		702,422		29,507
Cash, cash equivalents, and restricted cash, end of period		563,565		18,481

Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents at end of period		563,075		17,981
Restricted cash at end of period		490		500
Total cash, cash equivalents, and restricted cash at end of period shown in the condensed consolidated statements of cash flows		563,565		18,481

Supplemental non-cash investing and financing activities
Acquisition of property and equipment included in current liabilities	$	37,887	$	—
Offering costs included in accounts payable	$	12,001	$	—
Recognition of operating lease right-of-use asset	$	2,003	$	—
Conversion of private placement warrants to public warrants	$	8,252	$	—
Gain on extinguishment of convertible debt recorded in Additional paid-in capital	$	—	$	8,264

Supplemental disclosures of cash flow information
Cash paid for interest	$	60	$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CANOO INC.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, unless otherwise stated) (unaudited)

~~NOTE 1 – DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS~~

1. Organization and ~~General:~~Business

Canoo Inc. (“Canoo” or the “Company”) is a mobility technology company with a mission to bring EVs to everyone. The Company has developed a breakthrough EV platform that it believes will enable it to rapidly innovate, and bring new products addressing multiple use cases to market faster than its competition and at lower cost.

Business Combination

On December 21, 2020 (the “Closing Date”), Hennessy Capital Acquisition Corp. IV (“HCAC”) consummated the previously announced merger pursuant to that certain Merger Agreement and Plan of Reorganization, dated August 17, 2020 (the ~~“Company”~~“Merger Agreement”) ~~was~~, by and among HCAC, HCAC IV First Merger Sub, Ltd., an exempted company incorporated ~~in Delaware on August 6, 2018. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination~~ with one or more businesses (the “Business Combination”). The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the “Securities Act,” as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

At March 31, 2019, the Company had not commenced any operations. All activity for the period from August 6, 2018 (date of inception) to March 31, 2019 relates to the Company’s formation and the initial public offering (“Public Offering”) described below and, subsequent to the Public Offering, identifying and completing a suitable Business Combination. The Company will not generate any operating revenues until after completion of the Business Combination, at the earliest. The Company generates non-operating incomelimited liability in the ~~form~~Cayman Islands and a direct, a wholly owned subsidiary of ~~interest income on cash and cash equivalents from the proceeds derived from the Public Offering. All dollar amounts are rounded to the nearest thousand dollars.~~

~~Sponsor and Financing:~~

~~The Company’s sponsor is Hennessy Capital Partners~~HCAC (“First Merger Sub”), EV Global Holdco LLC (f/k/a HCAC IV ~~LLC,~~Second Merger Sub, LLC), a Delaware limited liability company ~~(the “Sponsor”~~and a direct, wholly owned subsidiary of HCAC (“Second Merger Sub”), and Canoo Holdings Ltd., an exempted company incorporated with limited liability in the Cayman Islands (“Legacy Canoo”). Pursuant to the terms of the Merger Agreement, a business combination between HCAC and Legacy Canoo was effected through the merger of (a) First Merger Sub with and into Legacy Canoo, with Legacy Canoo surviving as a wholly-owned subsidiary of HCAC (Legacy Canoo, in its capacity as the surviving corporation of the merger, the “Surviving Corporation”) and (b) the Surviving Corporation with and into Second Merger Sub, with Second Merger Sub being the surviving entity, which ultimately resulted in Legacy Canoo becoming a wholly-owned direct subsidiary of HCAC (all transactions collectively, the “Business Combination”).

On the Closing Date, and in connection with the closing of the Business Combination, HCAC changed its name to Canoo Inc. and the Company’s common stock began trading on The ~~registration statement~~Nasdaq Global Select Market under the ticker symbol GOEV.

The financial statements included in this report reflect (i) the historical operating results of Legacy Canoo prior to the Business Combination; (ii) the combined results of HCAC and Legacy Canoo following the closing of the Business Combination; (iii) the assets and liabilities of Legacy Canoo at their historical cost; and (iv) the Company’s equity structure for all periods presented.

2. Basis of Presentation and Summary of Significant Accounting Policies

These unaudited condensed consolidated financial statements have been prepared in accordance with the ~~Public Offering (as described in Note 3) was declared effective by~~rules and regulations of the ~~United States~~ Securities and Exchange Commission ~~(the “SEC”~~(“SEC”) ~~on February 28, 2019. The Company intends to finance a Business Combination with proceeds from the $300,150,000 Public Offering (Note 3)~~ and ~~a $13,581,500 Private Placement (as defined in Note 4). Upon the closing of the Public Offering and the Private Placement, $303,151,500 was deposited in a trust account (the “Trust Account”).~~

~~The Trust Account:~~

The funds in the Trust Account may be invested only in U.S. government treasury bills with a maturity of one hundred and eighty (180) days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940 which invest only in direct U.S. government obligations. Funds will remain in the Trust Account until the earlier of (i) the consummation of its initial Business Combination or (ii) the distribution of the Trust Account as described below. The remaining funds outside the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisition targets and continuing general and administrative expenses.

The Company’s amended and restated certificate of incorporation provides that, other than the withdrawal of interest to pay tax obligations, if any (less up to $100,000 interest to pay dissolution expenses), none of the funds held in trust will be released until the earliest of: (a) the completion of the Initial Business Combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (i) to modify the substance or timing of the Company’s obligation to redeem 100% of the public shares if the Company does not complete the initial Business Combination within 18 months from the closing of the Public Offering or (ii) with respect to any other provision relating to stockholders’ rights or pre-Business Combination activity, and (c) the redemption of the public shares if the Company is unable to complete the initial Business Combination within 18 months from the closing of the Public Offering, subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of creditors, if any, which could have priority over the claims of the public stockholders.

During March 2019, the Company invested approximately $303,120,000 of the funds in the Trust Account in U.S. government treasury bills maturing in September 2019, leaving approximately $32,000 in cash in the Trust Account.

~~Business Combination:~~

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a Target Business. As used herein, “Target Business” is one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (less the deferred underwriting commissions and taxes payable on interest earned) at the time of signing a definitive agreement in connection with the Company’s initial Business Combination. There is no assurance that the Company will be able to successfully effect a Business Combination.

The Company, after signing a definitive agreement for a Business Combination, will either (i) seek stockholder approval of the Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest but less taxes payable, or (ii) provide stockholders with the opportunity to have their shares redeemed by the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to commencement of the tender offer, including interest but less taxes payable. The decision as to whether the Company will seek stockholder approval of the Business Combination or will allow stockholders to sell their shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval unless a vote is required by the rules of the Nasdaq Capital Market. If the Company seeks stockholder approval, it will complete its Business Combination only if a majority of the outstanding shares of Class A and Class B common stock voted are voted in favor of the Business Combination. However, in no event will the Company redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001 upon consummation of a Business Combination. In such case, the Company would not proceed with the redemption of its public shares and the related Business Combination, and instead may search for an alternate Business Combination.

If the Company holds a stockholder vote or there is a tender offer for shares in connection with a Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest but less taxes payable. As a result, such shares of Class A common stock are recorded at redemption amount and classified as temporary equity upon the completion of the Public Offering, in accordance with FASB ASC 480, “Distinguishing Liabilities from Equity.” The amount in the Trust Account was initially $10.10 per public share, which equals the $303,151,500 held in the Trust Account divided by 30,015,000 public shares.

The Company will only have 18 months, or until September 5, 2020, from the closing date of the Public Offering to complete its initial Business Combination. If the Company does not complete a Business Combination within this period of time, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares of Class A common stock for a per share pro rata portion of the Trust Account, including interest, but less taxes payable (less up to $100,000 of such net interest to pay dissolution expenses) and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its creditors and remaining stockholders, as part of its plan of dissolution and liquidation. The initial stockholders have waived their rights to participate in any redemption with respect to their Founder Shares (as defined in Note 4); however, if the initial stockholders or any of the Company’s officers, directors or affiliates acquire shares of Class A common stock in or after the Public Offering, they will be entitled to a pro rata share of the Trust Account upon the Company’s redemption or liquidation in the event the Company does not complete a Business Combination within 18 months from the closing of the Public Offering.

In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the price per Unit in the Public Offering.

~~NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

~~Basis of Presentation:~~

~~The accompanying unaudited condensed interim financial statements of the Company are presented in U.S. dollars and in conformity with~~ accounting principles generally accepted in the United States ~~of America~~ (“GAAP”) ~~pursuant to the rules and regulations of the SEC and reflect all adjustments, consisting only of normal recurring adjustments, which~~for interim reporting. Accordingly, certain notes or other information that are in the opinion of management, necessary for a fair presentation of the financial position as of March 31, 2019, and the results of operations and cash flows for the period presented. Certain information and disclosures normally ~~included in financial statements prepared in accordance with~~required by GAAP have been omitted ~~pursuant to such rules~~if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements. Accordingly, the unaudited condensed consolidated financial statements should be read in connection with the Company’s audited financial statements and ~~regulations. Interim results~~related notes as of and for the year ended December 31, 2020 (“Annual Report on Form 10-K”). Results of operations reported for interim periods are not necessarily indicative of results for the entire year. In the opinion of management, the Company has made all adjustments necessary to present fairly its condensed consolidated financial statements for the periods presented. Such adjustments are of a ~~full year.~~normal, recurring nature. The Company’s financial statements have been prepared under the assumption that the Company will continue as a going concern, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future.

The accompanying unaudited condensed ~~interim~~consolidated financial statements ~~should be read in conjunction with~~include the Company’s audited financial statements and notes thereto included in the Company’s final prospectus dated February 28, 2019, as well as the Company’s audited balance sheet included in the Current Report on Form 8-K filed with the SEC on March 11, 2019.

~~Emerging Growth Company~~

~~Section 102(b)(1)~~results of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.Company and its subsidiaries. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

~~Net Income (Loss) per Share~~

Net income (loss) per common share is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding for the period. The Company has not considered the effect of the warrants sold in the Public Offering and Private Placement to purchase an aggregate of 36,092,750 Class A ordinary shares in the calculation of diluted income (loss) per share, since their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted income (loss) per common shareCompany’s comprehensive loss is the same as ~~basic loss per common share~~its net loss.

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Except for any updates below, no material changes have been made to the Company’s significant accounting policies disclosed in Note 2 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of the Annual Report on Form 10-K.

Retroactive Application of Recapitalization

The Business Combination on December 21, 2020 was accounted for as a recapitalization of equity structure. Pursuant to GAAP, the Company retrospectively recasted the weighted-average shares included within its condensed consolidated statements of operations for the ~~period.~~

three and six months ended June 30, 2020. Legacy Canoo redeemable convertible preference shares – Angel Series (“Angel Shares”) and Legacy Canoo redeemable convertible preference shares – Seed Series (“Seed Shares”) were converted to Legacy Canoo A series redeemable convertible preference shares and later were exchanged into Legacy Canoo ordinary shares. The ~~Company’s statement~~basic and diluted weighted-average Legacy Canoo ordinary shares are retroactively converted to shares of ~~operations include a presentation of income (loss) per share for~~the Company’s common stock ~~subject~~ to ~~redemption in a manner similar~~conform to the ~~two-class method~~recasted condensed consolidated statements of ~~income (loss) per share. Net income (loss) per share,~~stockholders' equity (deficit). The following table summarizes the weighted-average common stock of the Company, basic and diluted for ~~Class A common stock is calculated by dividing~~ the ~~interest income earned on the funds~~three and six months ended June 30, 2020 after factoring all retroactive application of recapitalization.


			12/21/20					Weighted
			Merger	Recapitalized	Days			Average
		As	Conversion	Common	Outstanding	% of		Common
Date	Description	Calculated	Ratio	Stock	in 2020	weighting		Shares
3 months ended 6/30/2020	Weighted-average shares, basic and diluted	8,235,927	1.24	10,207,895		100	%	10,207,895

12/31/2018	Angel Shares			51,316,627	91	100	%	51,316,627

3/4/2019	Seed Shares			11,107,496	91	100	%	11,107,496

5/6/2019	Seed Shares			11,107,495	91	100	%	11,107,495

								83,739,513


			12/21/20					Weighted
		As	Merger	Recapitalized	Days			Average
		Previously	Conversion	Common	Outstanding	% of		Common
Date	Description	Reported	Ratio	Stock	in 2020	weighting		Shares
6 months ended 6/30/2020	Weighted-average shares, basic and diluted	7,514,282	1.24	9,313,463		100	%	9,313,463

12/31/2018	Angel Shares			51,316,627	182	100	%	51,316,627

3/4/2019	Seed Shares			11,107,496	182	100	%	11,107,496

5/6/2019	Seed Shares			11,107,495	182	100	%	11,107,495

								82,845,081

COVID-19

Beginning in the ~~Trust Account, net~~first quarter of ~~income tax expense~~2021 and ~~franchise tax expense, by~~continuing in the ~~weighted average number~~second quarter of ~~shares~~2021, there has been increasing availability and administration of ~~Class A common stock outstanding since their original issuance. Net income (loss) per common share, basic~~vaccines against COVID-19 in many parts of the world, as well as an easing of restrictions on social, business, travel and ~~diluted,~~government activities and functions. On the other hand, virus variants, infection rates and regulations continue to fluctuate in various regions and there are ongoing global impacts resulting from the pandemic, including challenges and increases in costs for shares of Class B common stock is calculated by dividing the net income (loss), less income attributable to Class A common stock, by the weighted average number of shares of Class B common stock outstanding for the period. Net income (loss) available to each class of common stockholders is as follows for the three months ended March 31, 2019:

March 31,
2019

Net income available to Class A common stockholders:
Interest income $ 530,000
Less: Income and franchise taxes (117,000 )
Net income attributable to Class A common stockholders $ 413,000

Net income available to Class B common stockholders:
Net income $ 318,000
Less: amount attributable to Class A common stockholders (413,000 )
Net (loss) attributable to Class B common stockholders $ (95,000 )

~~Concentration of Credit Risk:~~

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000.logistics and supply chains and intermittent supplier delays. The Company has ~~not experienced losses on these accounts~~also previously been affected by temporary facility closures, employment and ~~management believes~~compensation adjustments, and impediments to administrative activities supporting its product research and development.

Ultimately, the Company ~~is not exposed~~cannot predict the duration or severity of the COVID-19 pandemic or any variant thereof. The Company will continue to ~~significant risks on such accounts.~~

7monitor macroeconomic conditions to remain flexible and to optimize and evolve its business as appropriate, and the Company will have to project demand and infrastructure requirements globally and deploy its workforce and other resources accordingly.

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Fair Value of Financial ~~Instruments:~~

Instruments

The Company applies the provisions of ASC 820, Fair Value Measurements and Disclosures, which provides a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurement. Fair value represents the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company uses the following hierarchy in measuring the fair value of the Company’s assets and liabilities, ~~which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements~~focusing on the most observable inputs when available:

●

Level 1 Quoted prices in active markets for identical assets or liabilities.

●

Level 2 Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active for identical or similar assets and liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

●

Level 3 Valuations are based on inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

Valuation techniques used to measure fair value must maximize the use of observable inputs and ~~Disclosures,” approximates~~minimize the ~~carrying amounts represented in~~use of unobservable inputs. The following table summarizes the ~~financial statements.~~

~~Use of Estimates:~~

~~The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the~~ Company’s ~~management to make estimates and assumptions that affect the reported amounts of~~ assets and liabilities ~~and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.~~

~~Deferred Offering Costs:~~

The Company complies with the requirements of the FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (SAB) Topic 5A — “Expenses of Offering”. Costs incurred in connection with preparation for the Public Offering (approximately $18,865,000) including underwriters’ discount, have been charged to equity upon completion of the Public Offering.

~~Income Taxes:~~

The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the balance sheet carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilitiesthat are measured ~~using enacted tax rates expected to apply to taxable income in~~at fair value on a recurring basis as required by ASC 820, by level, within the ~~years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities~~fair value hierarchy as of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company’s currently taxable income consists of interest income on the Trust Account net of taxes. The Company’s general and administrative costs are generally considered start-up costs and are not currently deductible. During the three months ended March 31, 2019, the Company recorded income tax expense of approximately $100,000 primarily related to interest income earned on the Trust Account net of taxes. The Company’s effective tax rate for the three months ended March 31, 2019 was approximately 31% which differs from the expected income tax rate due to the start-up costs (discussed above) which are not currently deductible. At March 31, 2019June 30, 2021 and December 31, ~~2018,~~2020 (in thousands):


	June 30, 2021
	Fair Value		Level 1		Level 2		Level 3
Assets
Money Market Funds	$	563,565	$	563,565	$	—	$	—

Liability
Contingent earnout shares liability	$	58,101	$	—	$	—	$	58,101


	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	$	—

As described in Note 10, the Company has a ~~deferred tax asset of approximately $20,000 and $-0-, respectively, primarily related~~contingent obligation to ~~start-up costs. Management has determined that a full valuation allowance of the deferred tax asset is appropriate at this time.~~

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of March 31, 2019 or December 31, 2018. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at March 31, 2019 or December 31, 2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

~~Redeemable Common Stock:~~

~~As discussed in Note 3, all of the 30,015,000 public~~issue 15.0 million shares sold as part of Units in the Public Offering contain a redemption feature which allows for the redemption of public shares if the Company holds a stockholder vote or there is a tender offer for shares in connection with a Business Combination. In accordance with FASB ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of FASB ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that in no event will it redeem its public shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001 upon the closing of a Business Combination.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the securities at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by adjustments to additional paid-in capital. Accordingly, at March 31, 2019, 28,733,635 of the 30,015,000 public shares were classified outside of permanent equity.

~~Recent Accounting Pronouncements:~~

In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): Part I. Accounting for Certain Financial Instruments with Down Round Features; Part II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Also, entities must adjust their basic Earnings Per Share (“EPS”) calculation for the effect of the down round provision when triggered (that is, when the exercise price of the related equity-linked financial instrument is adjusted downward because of the down round feature). That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. An entity will also recognize the effect of the trigger within equity. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted this guidance during the three months ended March 31, 2019. The adoption of this guidance enabled the Company to record the warrants as equity instruments and is not expected to have a material impact on the Company’s financial position, results of operations, cash flows or disclosures until a trigger event occurs. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update are not expected to have an impact on the Company.

Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

~~Subsequent Events:~~

Management has evaluated subsequent events to determine if events or transactions occurring after the date of the financial statements but before the financial statements were issued, require potential adjustment to or disclosure in the financial statements and has concluded that all such events that would require adjustment or disclosure have been recognized or disclosed.

~~NOTE 3 – PUBLIC OFFERING~~

~~On March 5, 2019, the Company completed the Public Offering for the sale of 30,015,000 units at a price of $10.00 per unit (the “Units”). Each Unit consists of one share~~ of the Company’s ~~Class A~~ common stock ~~$0.0001 par value~~to certain stockholders and ~~three-quarters~~employees upon the achievement of ~~one redeemable warrant (the “Warrants”). Each whole Warrant offered in the Public Offering is exercisable to purchase one~~certain market share ~~of Class A common stock. Under the terms of the warrant agreement, the Company has agreed to use its best efforts to file a new registration statement under the Securities Act,~~price milestones within specified periods following the completion of the Company’s initial Business Combination. No fractional Warrants will be issued upon separation of the Units and only whole Warrants will trade. Accordingly, unless a holder purchases a multiple of four Units, the number of Warrants issuable to such holder upon separation of the Units will be rounded down to the nearest whole number of Warrants. Each Warrant will become exercisable on the later of 30 days after the completion of the Company’s initial Business Combination or 12 months from the closing of the Public Offering and will expire five years after the completion of the Company’s initial Business Combination or earlier upon redemption or liquidation. However, if the Company does not complete its initial Business Combination on or prior to the 18-month period allotted to complete the Business Combination (the “Earnout Shares”). Upon the ~~Warrants will expire at the end of such period. If the Company is unable to deliver registered shares of Class A common stock to the holder upon exercise~~occurrence of a ~~Warrant during~~bankruptcy or liquidation, any unissued Earnout Shares would be fully issued regardless of whether the ~~exercise period, there will be no net cash settlement~~share price target has been met.

The Earnout Shares are accounted for as a contingent liability and its fair value is determined using Level 3 inputs, since estimating the fair value of ~~these Warrants~~this contingent liability requires the use of significant and subjective inputs that may and are likely to change over the Warrants will expire worthless, unless they may be exercised on a cashless basis in the circumstances described in the warrant agreement. Once the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole and not in part at a price of $0.01 per Warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last reported sale priceduration of the ~~Company’s shares of Class A common stock equals or exceeds $18.00 per share for any 20 trading days within~~liability with related changes in internal and external market factors. The tranches were valued using the ~~30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Warrant holders.~~

In addition, if the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the initial stockholders or their affiliates, without taking into account any Founder Shares held by them, as applicable, prior to such issuance) (the “newly issued price”), the exercise price of the Warrants and the Private Placement Warrants (as defined below) will be adjusted (to the nearest cent) to be equal to 115% of the newly issued price.

The Company granted the underwriters a 45-day option to purchase up to 3,915,000 additional Units to cover any over-allotments, at the Public Offering price less the underwriting discounts and commissions. The underwriters exercised their over-allotment option in full and closed on the proceeds from the over-allotment option on March 5, 2019. The Warrants issued in connection with the 3,915,000 over-allotment units are identical to the public Warrants and have no net cash settlement provisions.

The Company paid an underwriting discount of 3.0% (or 0% in the case of Units sold to cover any over-allotments) of the per Unit price to the underwriters at the closing of the Public Offering ($7,830,000), with an additional fee (the “Deferred Discount”) of 3.0% (or 6.0% in the case of Units sold to cover any over-allotments) of the gross offering proceeds payable upon the consummation of the initial Business Combination ($10,179,000). The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes its initial Business Combination.

In connection with the Public Offering, an underwriter of the Public Offering entered into a forward purchase agreement with the Company, which provides for the purchase by that underwriter of public shares for an aggregate purchase price of $125 million through, other than as described below, open market purchases or privately negotiated transactions with one or more third parties. In lieu of purchasing an aggregate of $125 million of public shares in the open market or privately negotiated transactions, up to $75 million of such aggregate purchase price may instead be in the form of an investment in the Company’s equity securities on terms to be mutually agreed between that underwriter and the Company, to occur concurrently with the closing of Business Combination. The decision to make such an investment in other equity securities will not reduce the aggregate purchase price of the forward purchase agreement. However, that underwriter will be excused from its purchase obligation in connection with a specific Business Combination unless, within ten calendar days following written notice delivered by the Company of its intention to enter into such Business Combination, that underwriter notifies the Company that it has decided to proceed with the purchase in whole or in part. That underwriter may decide not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest.

~~NOTE 4 – RELATED PARTY TRANSACTIONS~~

~~Founder Shares~~

In September 2018, the Sponsor purchased 7,187,500 shares of Class B common stock (the “Founder Shares”) for $25,000, or approximately $0.003 per share. In October 2018, the Sponsor transferred 75,000 founder shares to each of the Company’s six independent directors, 300,000 shares to our Executive Vice President, Chief Financial Officer and Secretary, and 225,000 shares to our President and Chief Operating Officer. In January 2019, the Sponsor forfeited 871,930 shares of Class B common stock and certain funds and accounts managed by subsidiaries of BlackRock, Inc. (collectively, the “Anchor Investor”) purchased 871,930 shares of Class B common stock for an aggregate purchase price of approximately $3,000, or approximately $0.003 per share. On February 28, 2019, the Company effected a stock dividend for approximately 0.05 shares for each of the Company’s shares of Class B common stock, resulting in the Company’s initial stockholders holding an aggregate of 7,503,750 Founder Shares. The financial statements have been retroactively restated to reflect the issuanceMonte Carlo simulation of the stock ~~dividend in all periods presented. Following the stock dividend, the Company’s officers~~prices based on historical and ~~directors retransferred an aggregate~~implied market volatility of 48,823 Founder Shares to the Sponsor and the Anchor Investor waived its right to the stock dividend. The Founder Shares are identical to the Class A common stock included in the Units sold in the Public Offering except that the Founder Shares automatically convert into sharesa peer group of ~~Class A common stock at the time~~public companies.

Table of ~~the initial Business Combination and are subject to certain transfer restrictions,~~Contents

Additionally, as described in ~~more detail below.~~Note 12, the private placement warrants that were outstanding were converted to public warrants on March 2, 2021. The ~~Sponsor~~private placement warrants are accounted for as a liability and its fair value is determined using Level 2 inputs, since the Company’s public warrants are actively traded and the Anchor Investor had agreed to forfeit up to 978,750 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters. The over-allotment option was exercised in full and therefore no shares were forfeited.

~~The~~ Company’s initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier of (A) one year after the completion of the Company’s initial Business Combination, or (B), subsequent to the Company’s initial Business Combination, if (x) the last reported sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination or (y) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction after the initial Business Combination that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

~~Private Placement Warrants~~

~~The Sponsor and the Anchor Investor purchased from the Company an aggregate of 13,581,500 warrants at a price of $1.00 per warrant (an aggregate purchase price of $13,581,500), in a~~ private placement (the “Private Placement”) that occurred simultaneously with the completion of the Public Offering (the “Private Placement Warrants”). Each whole Private Placement Warrant entitles the holder to purchase one share of Class A common stock at $11.50 per share. A portion of the purchase price of the Private Placement Warrants was added to the proceeds from the Public Offering deposited in the Trust Account pending completion of the Company’s initial Business Combination. The Private Placement Warrants (including the Class A common stock issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until 30 days after the completion of the initial Business Combination and they will be non-redeemable so long as they are held by the Sponsor, the Anchor Investor or their permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor, the Anchor Investor or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the warrants ~~included in the Units sold in the Public Offering. Otherwise, the Private Placement Warrants~~ have terms and provisions that are identical to those of the public warrants.

Following is a summary of the change in fair value of contingent Earnout Shares liability and private placement warrants liability for the six months ended June 30, 2021 (in thousands).

Earnout Shares Liability


Beginning fair value at December 31, 2020	$	133,503
Change in fair value during the period		(75,402)
Ending fair value at June 30, 2021	$	58,101

Private Placement Warrants Liability


Beginning fair value at December 31, 2020	$	6,613
Change in fair value during the period		1,639
Conversion of private placement warrants to public warrants		(8,252)
Ending fair value at June 30, 2021	$	—

3. Immaterial correction of prior period financial statements

Subsequent to issuance of the Company’s Annual Report on Form 10-K for the year-ended December 31, 2020, on April 12, 2021, the SEC Division of Corporation of Finance released Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “Statement”). Upon review and analysis of the Statement, management determined that the Company’s private placement warrants issued in connection with HCAC's IPO on March 5, 2019 do not meet the scope exception from derivative accounting prescribed by ASC 815-40, Contracts in Entity’s Own Equity. Accordingly, the private placement warrants should have been recognized by the Company at fair value as of the Closing Date and classified as a liability, rather than equity in the Company’s previously reported consolidated balance sheet as of December 31, 2020. Thereafter, the change in fair value of the outstanding private placement warrants should have been recognized as a gain (loss) within other (expense) income each reporting period in the Company’s consolidated statement of operations. The fair value of the private placement warrants as of the Closing Date on December 21, 2020 and December 31, 2020 amounted to $9.7 million and $6.6 million, respectively. The change in fair value from the Closing Date through December 31, 2020 amounted to a gain of $3.1 million.

The impact of the misstatement as of December 31, 2020 resulted in an understatement of the private placement warrants liability of $6.6 million, and an overstatement of accumulated deficit and additional paid-in capital of $3.1 million and $9.7 million, respectively.

Accordingly, management is correcting the relevant financial statements and related footnotes as of December 31, 2020 within these condensed consolidated financial statements. Management has evaluated the materiality of these misstatements based on an analysis of quantitative and qualitative factors and concluded they were not material to the prior period financial statements, individually or in aggregate.

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The following tables reflect the impact of the immaterial correction on the Company’s previously reported consolidated balance sheet as of December 31, 2020 (in thousands):


	As of December 31, 2020
	As Previously	Warrants
	Reported	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

4. Recent Accounting Pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”), in the form of Accounting Standards Updates (“ASUs”), to the FASB’s Accounting Standards Codification.

The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have immaterial impact on the Company’s consolidated financial position, results of operations or cash flows.

Recently Issued Accounting Pronouncements Not Yet Adopted

In August 2020, the FASB issued ASU No. 2020-06 Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40). The objective of the amendments in this ASU is to address issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The amendments in this ASU reduce the number of accounting models for convertible debt instruments and redeemable convertible preference shares. For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, the embedded conversion features no longer are separated from the host contract. The amendments in the ASU are effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods therein. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating this guidance to determine the impact it may have on the consolidated financial statements.

In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt - Modifications and Extinguishments ( Subtopic 470-50 ), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging - Contracts in Entity’s Own Equity ( Subtopic 815-40 ): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options ("ASU No. 2021-04"). This ASU provides a principles-based framework for issuers to account for a modification or exchange of freestanding equity-classified written call options. The provisions of the ASU are effective for annual periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact it may have on the consolidated financial statements.

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5. Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):


	June 30,		December 31,
	2021		2020
Machinery and equipment	$	14,293	$	15,292
Computer hardware		3,468		2,464
Computer software		6,868		5,159
Vehicles		223		63
Furniture and fixtures		692		519
Leasehold improvements		14,932		14,559
Construction-in-progress		65,411		5,283
		105,887		43,339
Less: Accumulated depreciation		(17,120)		(12,913)
Property and equipment, net	$	88,767	$	30,426

Construction-in-progress is primarily comprised of tooling necessary in the production of the Company’s vehicles. Completed tooling assets will be transferred to their respective asset classes and depreciation will begin when an asset is ready for its intended use. As of June 30, 2021, manufacturing has not begun and therefore no depreciation on tooling has been recognized to date.

Depreciation expense for property and equipment was $2.1 million and $4.2 million for the three and six months ended June 30, 2021, respectively. Depreciation expense for property and equipment was $1.8 million and $3.4 million for the three and six months ended June 30, 2020, respectively.

6. Accrued Expenses and Other Current Liabilities

Accrued expenses consisted of the following (in thousands):


	June 30,		December 31,
	2021		2020
Accrued property and equipment purchases	$	30,474	$	3,992
Accrued research and development purchases		14,707		2,420
Accrued professional fees		11,097		1,386
Other accrued expenses		8,190		2,827
Total accrued expenses	$	64,468	$	10,625

7. Long-term debt

On July 7, 2020, Legacy Canoo entered into a promissory note for loan proceeds under the Paycheck Protection Program (the “PPP”) (the “PPP Loan”) administered by the Small Business Administration (“SBA”) established under Division A, Title I of the CARES Act. Loan advance proceeds were received by the Company during the six months ended June 30, 2020, and therefore was accounted for as a financing cash inflow in the condensed consolidated statement of cash flows for the six months ended June 30, 2020.

The PPP provides for loans to qualifying businesses for amounts up to 2.5 times the average monthly payroll expenses of the business, subject to certain limitations. The Company used the PPP Loan proceeds for purposes consistent with the provisions of the PPP. As of May 14, 2021, the Company repaid its PPP Loan in full, which was accounted for as a financing cash outflow in the condensed consolidated statement of cash flows for the six months ended June 30, 2021.

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8. Commitments and Contingencies

Lease Commitments

Refer to Note 9 for information regarding operating lease commitments.

Legal Proceedings

From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. Some of these claims, lawsuits and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, non-monetary sanctions or relief.

On April 2, 2021 and April 9, 2021, the Company was named as a defendant in putative class action complaints filed in California on behalf of individuals who purchased or acquired shares of the Company’s stock during a specified period. Through the complaint, plaintiffs are seeking, among other things, compensatory damages. On June 25, 2021, the Company was named as a nominal defendant in a stockholder derivative complaint filed in Delaware. Through the stockholder derivative complaint, the plaintiff is asserting claims against certain of the Company’s current and former officers and directors and seeking, among other things, damages. However, the final determinations of liability arising from these litigation matters will only be made following comprehensive investigations and litigation processes.

In addition, on April 29, 2021, the SEC’s Division of Enforcement advised that it has opened an investigation related to, among other things, HCAC’s initial public offering, HCAC’s merger with the Company and the concurrent PIPE offering, historical movements in the Company, the Company’s operations, business model, revenues, revenue strategy, customer agreements, earnings, and other related topics, along with the recent departures of certain of the Company’s officers. The SEC has informed the Company that its current investigation is a fact-finding inquiry. The SEC has also informed the Company that the investigation does not mean that it has concluded that anyone has violated the law, and does not mean that it has a negative opinion of any person, entity or security. We are providing the requested information and cooperating fully with the SEC investigation.

At this time, the Company does not consider any such claims, lawsuits or proceedings that are currently pending, individually or in the aggregate, including the matters referenced above, to be material to the Company’s business or likely to result in a material adverse effect on its future operating results, financial condition or cash flows should such proceedings be resolved unfavorably.

Indemnifications

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to vendors, lessors, investors, directors, officers, employees and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third-parties. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The Company provided indemnifications to certain of its officers and employees with respect to claims filed by a former employer.

9. Related Party Transactions

On February 28, 2018, Legacy Canoo, via a wholly owned subsidiary, entered into a lease for an office facility in Torrance, California (“Torrance lease”) with an entity controlled by certain investors of Legacy Canoo, which was assigned to another entity controlled by certain investors of Legacy Canoo, on April 30, 2018. The original lease term is 15 years and commenced on April 30, 2018. During the first quarter of 2021, the Company entered into a separate lease for an office facility in Justin, Texas (“Justin lease”) with an entity controlled by the Executive Chairman and Chief Executive Officer of the Company. The original lease term is 5 years 3 months, commencing on January 1, 2021. The Torrance and Justin leases (collectively referred to herein as the “leases”) contain a 3% per annum escalation clause.

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The Torrance lease and Justin lease contain the option to extend the terms of the leases for 2 additional 60-month periods and 1 additional 60-month period, respectively, commencing when the prior term expires. At the inception of each of the leases, it was not reasonably certain we would exercise any of the options to extend the term of the leases. There were no changes to that assessment as of June 30, 2021.

The Company has determined that the leases do not effectively transfer control of the underlying facilities to the Company based on the lease terms and, accordingly, the Company has classified the leases as operating leases. As such, the rent and property taxes are expensed on a straight-line basis in the condensed consolidated statements of operations.

Related party lease expense related to these leases was $0.6 million and $1.1 million for the three and six months ended June 30, 2021, respectively. Related party lease expense related to these operating leases was $0.5 million and $0.9 million for the three and six months ended June 30, 2020, respectively.

In June 2021, the Torrance lease property was sold to a non-related party lessor. The change in lessor did not impact the terms and conditions of the Torrance lease. As such, payments made to the new landlord will not be considered as a related party lease expense.

The weighted average remaining lease term at June 30, 2021 and December 31, 2020 was 11.3 years and 12.3 years, respectively.

Maturities of the Company’s operating lease liabilities at June 30, 2021 were as follows (in thousands):


	Operating
	Lease
2021 (excluding the six months ended June 30, 2021)	$	893
2022		1,823
2023		1,878
2024		1,934
2025		1,992
Thereafter		14,167
Total lease payments		22,687
Less: imputed interest⁽¹⁾		8,075
Present value of operating lease liabilities		14,612
Current portion of operating lease liabilities		671
Operating lease liabilities, net of current portion	$	13,941

(1)	Calculated using the incremental borrowing rate

On November 25, 2020, Legacy Canoo entered into an agreement, which remains in effect, with Tony Aquila, Executive Chairman and Chief Executive Officer of the Company to reimburse Mr. Aquila for certain air travel expenses based on certain agreed upon criteria (“aircraft reimbursement”). The total aircraft reimbursement to Mr. Aquila for the use of an aircraft owned by Aquila Family Ventures, LLC (“AFV”), an entity controlled by Mr. Aquila, for the purposes related to the business of the Company for the three and six months ended June 30, 2021 was approximately $0.4 million and $1.0 million, respectively.

10. Contingent Earnout Shares Liability

As part of the ~~Units~~Business Combination, certain stockholders and employees are entitled to additional consideration in the ~~Public Offering~~form of Earnout Shares of the Company’s common stock to be issued when the Company’s common stock’s price achieves certain market share price milestones within specified periods following the Business Combination on

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December 21, 2020. The Earnout Shares do not have employment requirement and ~~have no net cash settlement provisions.~~will be issued in tranches based on the following conditions:

If the closing share price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within any consecutive 30-trading day period prior to the two-year anniversary of the Closing Date (“$18 Milestone”), then the Company is required to issue an aggregate of 5.0 million shares of its common stock to holders with the contingent right to receive Earnout Shares. These Earnout Shares may instead be issued in the event of a Change of Control (as defined in the Merger Agreement) prior to the two-year anniversary of the Closing Date if the per share consideration in such transaction is at least $18.

If the closing share price of the Company’s common stock equals or exceeds $25.00 per share for any 20 trading days within any consecutive 30-trading day period prior to the four-year anniversary of the Closing Date (“$25 Milestone”), then the Company is required to issue an aggregate of 5.0 million shares of its common stock to holders with the contingent right to receive Earnout Shares. These Earnout Shares may instead be issued in the event of a Change of Control (as defined in the Merger Agreement) prior to the four-year anniversary of the Closing Date if the per share consideration in such transaction is at least $25.

If the closing share price of the Company’s common stock equals or exceeds $30.00 per share for any 20 trading days within any consecutive 30-trading day period prior to the five-year anniversary of the Business Combination Closing Date (“$30 Milestone”), then the Company is required to issue an aggregate of 5.0 million shares of its common stock to holders with the contingent right to receive Earnout Shares. These Earnout Shares may instead be issued in the event of a Change of Control (as defined in the Merger Agreement) prior to the five-year anniversary of the Closing Date if the per share consideration in such transaction is at least $30.

Pursuant to the guidance under ASC 815, Derivatives and Hedging, the right to Earnout Shares was classified as a Level 3 fair value measurement liability, and the increase or decrease in the fair value during the reporting period is recognized as other expense or other income in the condensed consolidated statement of operations accordingly. The fair value of the Earnout Shares liability was estimated using the Monte Carlo simulation of the stock prices based on historical and implied market volatility of a peer group of public companies.

As of December 21, 2020, the initial fair value of the Earnout Shares liability was recognized at $248.9 million with a corresponding reduction from the additional paid-in capital in stockholders’ (deficit) equity. As of June 30, 2021 and December 31, 2020, the fair value of the Earnout Shares liability was estimated to be $58.1 million and $133.5 million, respectively. The Company recognized a gain (loss) on the fair value change in Earnout Shares liability of ($8.2) million and $75.4 million as other income (expense) in its condensed consolidated statement of operations for the three and six months ended June 30, 2021.

~~In addition, if~~

11. Stock-based Compensation

On the ~~Company issues~~Closing Date of the Business Combination, the Legacy Canoo 2018 Equity Plan was converted to the Company’s 2018 Equity Plan with the Legacy Canoo ordinary shares authorized for issuance pursuant to previously issued awards converted at the Exchange Ratio of 1.239434862 to the Company’s common stock and the exercise price per option and purchase price per restricted shares decreased proportionately by the same conversion ratio. See additional discussion on the retroactive application of recapitalization in Note 2 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of the Annual Report on Form 10-K.

Stock Options

All employees are eligible to be granted options to purchase shares of the Company’s common stock under the Company’s equity plans. All options granted will expire ten years from their date of issuance. Stock options granted generally vest 25% on the one-year anniversary of the date when vesting starts with the remaining balance vesting equally on a monthly basis over the subsequent three years. New shares are issued from authorized shares of common stock ~~or equity-linked securities~~upon the exercise of stock options.

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Under the Legacy Canoo 2018 Equity Plan, employees may exercise stock options prior to vesting. The Company has the right to repurchase any unvested (but issued) shares upon termination of service of an employee at the original exercise price. The consideration received for ~~capital raising purposes in connection~~the early exercise of an option is considered to be a deposit and the related amount is recorded as a liability.

Restricted Stock Awards (“RSAs”)

The Company’s RSAs consist of restricted shares. From November 4, 2018 to May 6, 2019, Legacy Canoo sold restricted shares to its founders, which include certain investors, for a converted purchase price of $0.008 per share (the “Founder Restricted Shares”), with the ~~closing~~following vesting conditions: 12.5% vest when the Legacy Canoo achieves $100 million in cumulative funding from inception (which condition was satisfied December 18, 2018, accordingly this portion of the 2019 awards was vested upon issuance); 37.5% vest ratably over a period of thirty-six months from December 18, 2018; and 50% vest on the date the Company starts commercial production of its ~~initial Business Combination at~~first vehicle (“SOP”), which the Company determined was not probable of being met as of December 31, 2020.

On December 18, 2020, Legacy Canoo approved an ~~issue price or effective issue price~~amendment to change the SOP vesting goal of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the initial stockholders or their affiliates, without taking into account anyall eligible Founder Restricted Shares held by ~~them, as applicable, prior~~Legacy Canoo’s executives to ~~such issuance) (the “newly issued price”), the exercise price~~time-based vesting with a merger trigger, which was satisfied on December 21, 2020. The investor-held Founder Restricted Shares’ SOP vesting goal was not amended. The amended time-based vesting of the ~~Private Placement Warrants will be adjusted (to the nearest cent) to be equal to 115%~~SOP portion has a cliff vesting of ~~the newly issued price.~~

If the Company does not complete a Business Combination, then the proceeds from the sale of the Private Placement Warrants will be part of the liquidating distribution to the public stockholders and the Private Placement Warrants issued to the Sponsor will expire worthless.

~~Registration Rights~~

~~The Company’s initial stockholders and the holders of the Private Placement Warrants are entitled to registration rights pursuant to a registration rights agreement signed~~25% on the date of the prospectus for the Public Offering. These holders are entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for sale under the Securities Act. In addition, these holders have “piggy-back” registration rights to include their securities in other registration statements filed by the Company. The Company will bear the expenses incurred in connectionMarch 18, 2020 with the ~~filing of any such registration statements. There will be no penalties associated with delays~~remaining shares vesting quarterly over 36 months thereafter. The amendment was accounted for as a grant modification in ~~registering the securities under the registration rights agreement.~~

~~Related Party Loans~~

In August 2018, the Sponsor agreed to loan the Company an aggregate of $300,000 by drawdowns of not less than $10,000 each against the issuance of an unsecured promissory note (the “Note”) to cover expenses related to the Public Offering. The Note was non-interest bearing and payable on the earlier of March 31, 2019 or the completion of the Public Offering.

In September 2018, the Company drew down $90,000 from the Note in order to fund expenses of the Public Offering. In January 2019, the Company drew down an additional $75,000 from the Note in order to fund expenses of the Public Offering. On February 27, 2019, the Company drew down on the remaining $135,000 of the Note leaving a balance on the Note at that date of $300,000. On March 5, 2019, the Note was repaid in full in connection with the closing of the Public Offering.

~~Administrative Support Agreement and Other Matters~~

December 2020.

The Company has ~~agreed~~an irrevocable, exclusive option to ~~pay $15,000 a month for office space, utilities and secretarial and administrative support to an affiliate~~repurchase all or any portion of the ~~Sponsor, Hennessy Capital LLC. Services commenced on~~unvested Founder Restricted Shares at the ~~date~~converted original per share purchase price for the ~~securities were first listed on~~shares upon termination or the ~~Nasdaq Capital Market and will terminate upon~~cessation of services provided by the ~~earlier~~stockholder.

Restricted Stock Units (“RSUs”)

Under the 2020 Equity Incentive Plan, employees are compensated through various forms of equity, including RSUs. Each RSU represents a contingent right to receive 1 share of the ~~consummation by the Company of an initial Business Combination or the liquidation of the Company. The financial statements for~~Company’s common stock. During the three months ended ~~March 31, 2019 include a charge for $15,000, for one month~~June 30, 2021, 4,876,563 RSUs were granted subject to time-based vesting. During the six months ended June 30, 2021, 6,985,548 RSUs were granted, of ~~such administrative support.~~which 998,994 vested immediately and the remainder subject to time-based vesting.

~~Also, commencing~~On May 14, 2021, the Company awarded 500,000 RSUs to the Company’s Executive Chairman and Chief Executive Officer (“CEO”). The RSUs vest in one-third increments on the first, second, and third anniversaries of the vesting commencement date, December 21, 2020, subject to continuous service.

Performance-Based Restricted Stock Units (“PSUs”)

PSUs represent the ~~securities were first listed on the Nasdaq Capital Market, the Company has agreed~~right to ~~compensate its Chief Financial Officer $29,000 per month for his services prior to the consummation~~receive a share of the Company’s ~~initial Business Combination,~~common stock if service, performance, and market conditions, or a combination thereof, are met over a defined period. PSUs that contain a market condition, such as stock price milestones, are subject to a Monte-Carlo simulation model to determine the grant date fair value by simulating a range of possible future stock prices for the Company over the performance period. The grant date fair value of the market condition PSUs is recognized as compensation expense over the greater of the Monte Carlo simulation model’s derived service period and the arrangement’s explicit service period, assuming both conditions must be met.

PSUs subject to performance conditions, such as operational milestones, are measured on the grant date, the total fair value of which ~~60%~~ is ~~payable currently in cash and 40% is payable upon~~calculated as the ~~completion~~product of the ~~Company’s initial Business Combination.~~number of PSUs and the grant date stock price. Compensation expense for PSUs with a performance condition is recorded each period based upon a probability assessment of the expected outcome of the performance metric with a final adjustment upon measurement at the end of the performance period. The ~~financial statements for~~following PSUs were granted to the CEO during the three months ended ~~March 31, 2019 include an accrued liability for~~June 30, 2021, with a total grant date fair value of approximately ~~$12,000~~$15.9 million:

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●

During April 2021, in connection with the appointment of the CEO, the Company awarded 2,000,000 PSUs. The PSUs will vest in one-third increments based upon the achievement of certain stock price milestones during the performance period ending October 2025. In addition, the PSUs are subject to a service condition which requires continuous service through October 2023;

●

During May 2021, the Company awarded 1,703,828 PSUs. The PSUs vest based on the Company's achievement of certain specified stock price milestones over a three-year performance period ending May 2024, subject to continued service with the Company through the applicable vesting dates; and

●

During May 2021, the Company awarded 300,000 PSUs whereby vesting depends upon the occurrence of certain operational milestone events by May 2024. As of grant date, the Company’s analysis determined that these operational milestone events are probable of achievement and as such, compensation expense has been recognized for the three and six months ended June 30, 2021.

The following table summarizes the Company’s stock-based compensation expense by line item for the ~~deferred portion~~three- and six months ended periods presented in the condensed consolidated statements of ~~this~~operations (in thousands):


	Three months ended				Six months ended
	June 30,				June 30,
	2021		2020		2021		2020
Research and development	$	8,541	$	226	$	15,630	$	463
Selling, general and administrative		16,973		125		55,030		277
Total	$	25,514	$	351	$	70,660	$	740

The Company’s total unrecognized compensation ~~and the payment~~cost as of ~~approximately $17,000 for the cash portion.~~June 30, 2021 was $108.5 million.

~~Further, the Company’s President and Chief Operating Officer will be entitled to a $500,000 cash fee from~~12. Warrants

As of June 30, 2021, the Company ~~upon~~had 23,757,681 public warrants outstanding. Each public warrant entitles the ~~successful completion~~registered holder to purchase 1 share of the Company’s ~~initial Business Combination. No amounts have been accrued in~~common stock at a price of $11.50 per share, subject to adjustment. The public warrants will expire on the ~~March 31, 2019 financial statements for this fee as~~fifth anniversary of the ~~underlying event (completion~~Closing Date of the Business ~~Combination) that would trigger this payment is not certain.~~

~~NOTE 5 – TRUST ACCOUNT AND FAIR VALUE MEASUREMENT~~

Combination, or earlier upon redemption or liquidation.

The Company ~~complies with FASB ASC 820, Fair Value Measurements,~~may call the public warrants for ~~its financial assets~~redemption:

●

in whole and not in part;

●

at a price of $0.01 per warrant;

●

upon a minimum of 30 days prior written notice of redemption; and

●

if, and only if, the last reported closing price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

If the Company calls the public warrants for redemption, management will have the option to require all holders that wish to exercise the public warrants to do so on a “cashless basis,” as described in the warrant agreement.

The exercise price and ~~liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.~~

~~Upon the closing~~number of shares of common stock issuable upon exercise of the ~~Public Offering and the Private Placement, a total of approximately $303,151,500 was deposited into the Trust Account. The proceeds~~warrants may be adjusted in certain circumstances including in the ~~Trust Account may~~event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be ~~invested~~adjusted for issuance of common stock at a price below its exercise price.

On March 2, 2021, all of the private placement warrants were converted to public warrants. As noted in ~~either U.S. government treasury bills with~~Note 3, the private placement warrants were accounted for as a ~~maturity~~liability until the private placement warrants were converted to

Table of ~~180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under~~Contents

public warrants. Additionally, during the ~~Investment Company Act of 1940, as amended, and that invest solely in U.S. government treasury obligations.~~

Atquarter ended March 31, ~~2019 the~~2021, 597,114 public warrants were exercised for total proceeds of $6.9 million. NaN public warrants were exercised during the ~~Trust Account were invested primarily in U.S. government treasury bills maturing in September 2019 yielding interest~~three months ended June 30, 2021.

13. Net Loss per Share

The condensed consolidated statements of ~~approximately 2.45%~~operations include the basic and diluted net loss per year. The Company classifies its U.S. government treasury bills and equivalent securities as held-to-maturity in accordance with FASB ASC 320, “Investments – Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity U.S. government treasury bills are recorded at amortized cost on the accompanying March 31, 2019 condensed balance sheet and adjusted for the amortization of discounts.

share.

The following table presents ~~information about~~ the ~~Company’s~~potential shares that were excluded from the computation of diluted net loss per share, because their effect was anti-dilutive as follows (in thousands):


	June 30,
	2021	2020
Early exercise of unvested stock options	3,965	8,921
Options to purchase common stock	297	433
Restricted common stock shares	5,944	14,287
Restricted and performance stock units	15,808	—

14. Income Taxes

As the Company has not generated any taxable income since inception, the cumulative deferred tax assets ~~that are measured at fair value on~~remain fully offset by a ~~recurring basis as of March 31, 2019~~valuation allowance, and ~~indicates~~0 benefit from federal or state income taxes has been included in the ~~fair value hierarchy~~condensed consolidated financial statements.

15. Subsequent Events

Effective July 30, 2021, the Company amended its Justin lease to extend the leased square footage for the duration of the valuation techniques the Company utilized to determine such fair value. Since all of the Company’s permitted investments at March 31, 2019 consisted of U.S. government treasury bills and money market funds that invest only in U.S. government treasury bills, fair values of its investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets or liabilities as follows:arrangement term.

Description Carrying
value at
March 31,
2019 Gross
Unrealized
Holding
Gains Quoted
Price
Prices in
Active
Markets
(Level 1)
Assets:
Cash and money market funds $ 32,000 $ - $ 32,000
U.S. government treasury bills 303,650,000 40,000 303,690,000
Total $ 303,682,000 $ 40,000 $ 303,722,000

~~NOTE 6 – STOCKHOLDERS’ EQUITY~~

~~Common Stock~~

The authorized common stock of the Company is 110,000,000 shares, including 100,000,000 shares of Class A common stock, par value, $0.0001, and 10,000,000 shares of Class B common stock, par value, $0.0001. The Company may (depending on the terms of the Business Combination) be required to increase the authorized number of shares at the same time as its stockholders vote on the Business Combination to the extent the Company seeks stockholder approval in connection with its Business Combination. Holders of the Company’s Class A and Class B common stock vote together as a single class and are entitled to one vote for each share of Class A and Class B common stock they own. At March 31, 2019, there were 7,503,750 shares of Class B common stock issued and outstanding and 1,281,365 shares of Class A common stock issued and outstanding (excluding 28,733,635 shares subject to possible redemption).

~~Preferred Stock~~

The Company ~~is authorized~~has analyzed its operations subsequent to ~~issue 1,000,000 shares~~June 30, 2021 through the date these financial statements were issued, including the information disclosed in Note 8, and has determined that it does not have any additional material subsequent events to disclose.

Table of preferred stock, par value $0.0001, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At March 31, 2019, there were no shares of preferred stock issued or outstanding.Contents

~~ITEM~~Item 2. ~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of ~~the Company’s financial condition and~~our results of operations and financial condition. This discussion and analysis should be read in conjunction with ~~the~~our condensed consolidated interim financial statements and the related notes ~~thereto~~ contained elsewhere in this ~~report.~~

~~Special~~Quarterly Report on Form 10-Q. The statements in this discussion regarding industry trends, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2021 (the “Annual Report on Form 10-K”), Part II, Item IA. “Risk Factors” in this Quarterly Report on Form 10-Q and “Cautionary Note Regarding Forward-Looking ~~Statements~~Statements.” Our actual results may differ materially from those contained in or implied by any forward-looking statements.

~~All statements~~Certain figures, such as interest rates and other ~~than statements of historical fact~~percentages, included in this section ~~and elsewhere~~have been rounded for ease of presentation. Percentage figures included in this ~~Form 10-Q regarding~~section have not in all cases been calculated on the ~~Company’s financial position, business strategy and~~basis of such rounded figures but on the ~~plans and objectives~~basis of ~~management for future operations, are forward-looking statements. When used~~such amounts prior to rounding. For this reason, percentage amounts in this ~~Form 10-Q, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate~~section may vary slightly from those obtained by performing the same calculations using the figures in our financial statements or in the associated text. Certain other amounts that appear in this section may similarly not sum due to usrounding.

Overview

Canoo Inc. ("we," "us," "Canoo" or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC.

~~Overview~~

~~We are a blank check company incorporated on August 6, 2018 as~~"Company") is a Delaware corporation ~~and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar~~headquartered in Torrance, California. On December 21, 2020 (the “Closing Date”), Hennessy Capital Acquisition Corp. IV (“HCAC”) consummated its business combination with one or more businesses (the “Initial Business Combination”). We intend to effectuate our Initial Business Combination using cash from the proceeds of our initial public offering that was completed in March 2019 (the “Public Offering”) and the sale of warrants in a private placement (the “Private Placement”) that occurred simultaneouslyCanoo Holdings Ltd., an exempted company incorporated with ~~the completion of the Public Offering (the “Private Placement Warrants”), our capital stock, debt or a combination of cash, stock and debt.~~

~~The issuance of additional shares of our stock in an Initial Business Combination:~~

●

~~may significantly dilute the equity interest of our stockholders;~~

●

~~may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock;~~

●

could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

●

~~may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and~~

●

~~may adversely affect prevailing market prices for our Class A common stock and/or warrants.~~

~~Similarly, if we issue debt securities or incur other indebtedness to finance our Initial Business Combination, it could result in:~~

●

~~default and foreclosure on our assets if our operating revenues after an Initial Business Combination are insufficient to repay our debt obligations;~~

●

acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

●

~~our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;~~

●

our inability to obtain necessary additional financing if the debt security or other indebtedness contains covenants restricting our ability to obtain such financing while the debt security or other indebtedness is outstanding;

●

~~our inability to pay dividends on our common stock;~~

●

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, or limit our ability to pay expenses, make capital expenditures and acquisitions and fund other general corporate purposes;

●

~~limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;~~

●

~~increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;~~

●

~~limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and~~

●

~~other disadvantages compared to our competitors who have less debt.~~

~~At March 31, 2019, we had approximately $1,826,000 in cash outside of the Trust Account. We expect to incur significant costs~~limited liability in the ~~pursuit~~Cayman Islands (“Legacy Canoo”) contemplated pursuant to that certain Merger Agreement and Plan of Reorganization, dated as of August 17, 2020 (the “Merger Agreement”), by and among HCAC, HCAC IV First Merger Sub, Ltd., an ~~Initial Business Combination~~exempted company incorporated with limited liability in the Cayman Islands and ~~we cannot assure you that our plans to complete an Initial Business Combination will be successful.~~

~~Results~~a direct, a wholly owned subsidiary of ~~Operations~~

For the period from August 6, 2018 (date of inception) to March 31, 2019 our activities consisted of formation and preparation for the Public Offering and, subsequent to the Public Offering, identifying and completing HCAC, EV Global Holdco LLC (f/k/a ~~suitable Initial Business Combination. As such, we had no operations or significant operating expenses until March 2019.~~

Our normal operating costs include costs associated with our search for an Initial Business Combination, costs associated with our governance and public reporting, state franchise taxes of approximately $17,000 per month (see below)HCAC IV Second Merger Sub, LLC), a charge of $15,000 per month from our Sponsor for administrative services and approximately $29,000 per month ($11,600 of which is deferred as to payment until closing of our Initial Business Combination) for compensation to our Chief Financial Officer. In addition, since our operating costs are not expected to be deductible for federal income tax purposes, we are subject to federal income taxes on the income from the Trust Account less taxes. Such federal income taxes could approximate $1.5 million per year based on the level of interest income inherent in our current U.S. treasury bill investments. However, we are permitted to withdraw interest earned from the Trust Account for the payment of taxes. We expect our costs to increase from our costs in the three months ended March 31, 2019 due to professional and consulting fees and travel associated with evaluating various Initial Business Combination candidates subsequent to our Public Offering. Further, once we identify an Initial Business Combination candidate, our costs are expected to increase significantly in connection with negotiating and executing a merger agreement and related agreements as well as additional professional, due diligence and consulting fees and travel costs that will be required in connection with an Initial Business Combination.

Our Public Offering and Private Placement closed on March 5, 2019 as more fully described in “Liquidity and Capital Resources” below. The proceeds in the Trust Account were initially invested in a money market fund that invests solely in direct U.S. government obligations meeting the applicable conditions of Rule 2a-7 of the Investment Company Act of 1940. In March 2019, the money market fund was largely liquidated and the trust assets were invested in U.S. government treasury bills which mature in September 2019 and currently yield approximately 2.45% on a yearly basis. Interest on the Trust Account was approximately $530,000 for the three months ended March 31, 2019 consisting of interest earned since the closing of the Public Offering on March 5, 2019.

~~Liquidity and Capital Resources~~

On March 5, 2019, we consummated the Public Offering of an aggregate of 30,015,000 Units at a price of $10.00 per unit generating gross proceeds of approximately $300,150,000 before underwriting discounts and expenses. Simultaneously with the consummation of the Public Offering, we consummated the Private Placement of 13,581,500 Private Placement Warrants, each exercisable to purchase one share of our Class A common stock at $11.50 per share, to the Sponsor and certain funds and accounts managed by subsidiaries of BlackRock, Inc. (collectively, the “Anchor Investor”), at a price of $1.00 per Private Placement Warrant, generating gross proceeds, before expenses, of approximately $13,581,500.

The net proceeds from the Public Offering and Private Placement was approximately $305,056,000, net of the non-deferred portion of the underwriting commissions of $7,830,000 and offering costs and other expenses of approximately $856,000. $303,151,500 of the proceeds of the Public Offering and the Private Placement have been deposited in the Trust Account and are not available to us for operations (except amounts to pay taxes). At March 31, 2019, we had approximately $1,826,000 of cash available outside of the Trust Account, before unpaid costs of the Public Offering of approximately $48,000, to fund our activities until we consummate an Initial Business Combination.

~~Until the consummation of the Public Offering, the Company’s only sources of liquidity were an initial purchase of shares of our common stock for $28,000 by the Sponsor and the Anchor Investor,~~Delaware limited liability company and a ~~total~~direct, wholly owned subsidiary of ~~$300,000 loaned by the Sponsor against the issuance~~HCAC, and Legacy Canoo, which ultimately resulted in Legacy Canoo becoming a wholly-owned direct subsidiary of ~~an unsecured promissory note~~HCAC (the ~~“Note”~~"Business Combination"). ~~The Note was non-interest bearing and was paid in full on March 5, 2019 in~~In connection with the closing of the ~~Public Offering.~~Business Combination, HCAC changed its name to Canoo Inc. and we became a Nasdaq listed company.

We are a mobility technology company with a mission to bring EV’s to everyone. We have developed a technology platform, referred to as the Multi-Purpose Platform or platform, built to be highly modular and to enable us to rapidly innovate, and bring new products addressing multiple use cases to market faster than our competition and at lower cost.

Our Multi-Purpose Platform is a self-contained, fully-functional rolling chassis that directly houses all of the most critical components for operation of an EV. These include our in-house designed proprietary performance electric drivetrain, true steer-by-wire system, our low-profile suspension systems, our battery systems, our advanced vehicle control electronics and software and other critical components, which all have been optimized for functional integration and versatility.

Our initial near-term vehicle lineup currently includes our Lifestyle Vehicle which is expected to launch in the fourth quarter of 2022 with multiple use case variants and trim levels, our first Multi-Purpose Delivery Vehicle, the MPDV1, which will have a targeted limited production availability in 2023 and estimated serial production launch in 2023, and our Pickup with anticipated availability beginning as early as 2023. This vehicle lineup offers us the unique ability to meet the demands in multiple target markets for the benefit of a wide array of potential customers. All our vehicles are expected to offer competitive performance capabilities paired with class-leading cargo and passenger volume on a small footprint. Our vehicle architecture and design philosophy is aimed at driving productivity and returning capital to our customers. Each vehicle has been developed to be modular and customizable to enhance the long term value of the vehicles. In addition, we are developing a software ecosystem, which aims to deliver a one-stop customer experience with direct access to vehicle telematics and control of key functionality. We also envision the Canoo app having functionality to

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schedule mobile services and provide instant quotes for insurance, financing, and valuation via direct integration with 3^rd party providers.

Unlike most of our peers, which are at the early stages of their vehicle development cycle, prior to becoming a public company, we had already invested more than $250 million and passed critical milestones in developing and testing of our platform and product, including:

●

Developed first Beta prototype in just 19 months from our inception in November 2017.

●

Expanded our Beta fleet to 32 properties and 13 drivable units.

●

Completed over 70 physical crash tests on our chassis platform and the Lifestyle Vehicle configuration.

Recent Developments

After having completed over 500,000 testing miles, the team has now moved into Gamma development on the Lifestyle Vehicle, putting us one step closer to bringing our first product to market in the fourth quarter of 2022. Our first Gamma vehicles are expected to be produced beginning in the third quarter of 2021, and within the total Gamma phase, we expect to conduct 300-600 vehicle tests for crash testing and certification, along with 10 to 15 vehicles dedicated for durability validation. Most recently, in June 2021, we finalized the selection of VDL Nedcar B.V. as our planned contract manufacturing partner. VDL Nedcar is expected to manufacture the Lifestyle Vehicle for the US and EU markets, in addition to other Canoo vehicles or variants which will be built off of our initial platform. In June 2021, we also finalized the selection of Oklahoma as the location for our US manufacturing facility, after an intensive multi-state search process. This US mega microfactory, targeted to open in 2023, is expected to include a full commercialization facility with a paint, body shop and general assembly plant, along with a low-volume R&D and industrialization facility and administrative space.

In addition, in July 2021, we announced that Board member, Josette Sheeran, has also been appointed as President of Canoo. In her additional duties as President, Ms. Sheeran will work with our Chairman and CEO, Tony Aquila, to build a globally experienced team to drive market share and to partner with businesses and governments to advance Canoo’s environmental, sustainability, and governance (ESG) commitment to make electric vehicles and support sustainable infrastructure available to the masses.

Comparability of Financial Information

Our results of operations and statements of assets and liabilities may not be comparable to historical results as a result of the Business Combination, which was completed late in the fourth quarter of 2020.

Key Factors Affecting Operating Results

We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed below.

Successful Commercialization Our EVs

We expect to derive future revenue from our first vehicle offerings including through sales and subscription programs for our Lifestyle Vehicle, MPDV1, and/or Pickup which are not expected to launch until the fourth quarter of 2022 and 2023 or later. In order to reach commercialization, we must purchase and integrate related property and equipment, as well as achieve several research and development milestones.

We expect that both our capital and operating expenditures will increase significantly in connection with our ongoing activities, as we:

●

commercialize our EVs;

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●

invest in manufacturing capacity, via both our own owned facilities and contract manufacturing;

●

continue to invest in our technology, research and development efforts;

●

increase our investment in marketing, advertising, sales and distribution infrastructure for our EVs and services;

●

obtain, maintain and improve our operational, financial and management information systems;

●

hire additional personnel;

●

obtain, maintain, expand and protect our intellectual property portfolio; and

●

operate as a public company.

As a result, we will require substantial additional capital to develop our EVs and services and fund our operations for the foreseeable future. We will also require capital to identify and commit resources to investigate new areas of demand. Until we can generate sufficient revenue from vehicle sales, we expect to primarily finance our operations through commercialization and production with proceeds from the Business Combination, including the proceeds from the PIPE financing that took place concurrently with the Business Combination, and, as needed, secondary public offerings or debt financings. The amount and timing of our future funding requirements, will depend on many factors, including the pace and results of our research and development efforts and our ability to successfully manage and control costs.

COVID-19 Impact

On January 30, 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International Concern” and on March 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of COVID-19 include restrictions on travel, quarantines in certain areas and forced closures for certain types of public places and businesses. COVID-19 and actions taken to mitigate its spread have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which we operate. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act was enacted to, among other provisions, provide emergency assistance for individuals, families and businesses affected by the COVID-19 pandemic.

As the COVID-19 pandemic continues to evolve, the ultimate extent of the impact on our business, operating results, cash flows, liquidity and financial condition will be primarily driven by the severity and duration of the pandemic, the pandemic’s further impact on the U.S. and global economies and the timing, scope and effectiveness of federal, state and local governmental responses to the pandemic, including rollout of, and acceptance of vaccines, as well as emergence of virus variants.

The ~~Company believes~~measures taken to control the spread of the virus have adversely impacted our employees ability to collaborate in a discipline that requires a high degree of collaborative work. Our operations have had to change and adapt to meet these new demands. The operations of our suppliers, vendors and business partners have also been impacted and our sales and marketing activities for our vehicles and other services were made increasingly difficult as a result of the COVID-19 pandemic. Various aspects of our business cannot be conducted remotely, including the testing and manufacturing of our EVs. Further, as a growing company, the ability for us to hire, onboard and train new employees has been impacted and has required us to evaluate areas of our business that will not result in the best use of our human capital for long-term growth. The spread of COVID-19 has also caused us and many of our contractors and service providers to modify our business practices (including employee travel, recommending that all non-essential personnel work from home and cancellation or reduction of physical participation in testing activities, meetings, events and conferences), and collectively with our contractors and service providers, we have been and may further be required to take actions as required by government authorities or that we determine are in the best interests of our employees, customers, suppliers, vendors and

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business partners. There is no certainty that such actions will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities.

We are hopeful that in the coming months, with the expansion of vaccination efforts in the United States and elsewhere, and with this an anticipated loosening of certain governmental restrictions, businesses will be able to resume more normal operations in the second half of 2021. However, while the pandemic continues, if significant portions of our workforce or contractors and service providers are unable to work effectively, including due to illness, quarantines, social distancing, government actions or other restrictions in connection with the COVID-19 pandemic, our operations will be impacted. These factors related to COVID-19 are beyond our knowledge and control and, as a result, at this time, we are unable to predict the ultimate impact, both in terms of severity and duration, that the COVID-19 pandemic will have on our business, operating results, cash flows and financial condition, but it ~~has sufficient working capital at March 31, 2019~~could be material if the current circumstances continue to ~~fund its~~exist for a prolonged period of time. Although we have made our best estimates based upon current information, actual results could materially differ from the estimates and assumptions developed by management. Accordingly, it is reasonably possible that the estimates made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions, and if so, we may be subject to future impairment losses related to long-lived assets as well as changes to valuations.

Key Components of Statements of Operations

Basis of Presentation

Currently, we conduct business through one operating segment. We are an early stage-growth company with no commercial operations, and our activities to date have been limited and are conducted in the United States. For more information about our basis of presentation, refer to Note 2 of the notes to our accompanying financial statements for ~~more~~the three and six months ended June 30, 2021 and 2020.

Research and Development Expenses, excluding Depreciation

Research and development expenses, excluding depreciation consist of salaries, employee benefits and expenses for design and engineering personnel, stock-based compensation, as well as materials and supplies used in research and development activities. In addition, research and development expenses include fees for consulting and engineering services from third party vendors.

Selling, General and Administrative Expenses, excluding Depreciation

The principal components of our selling, general and administrative expenses are salaries, wages, benefits and bonuses paid to our employees; stock-based compensation; travel and other business expenses; professional services fees (including legal, audit and tax); and ordinary day-to-day business expenses.

Depreciation Expense

Depreciation is provided on property and equipment over the estimated useful lives on a straight-line basis. Upon retirement or disposal, the cost of the asset disposed of and the related accumulated depreciation are removed from the accounts and any gain or loss is reflected in the loss from operations. No depreciation expense is allocated to research and development, cost of revenue and selling, general and administrative expenses.

Interest Expense

Interest expense consists primarily of interest expenses and debt discount amortization.

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Results of Operations

Comparison of the Three and Six Months Ended June 30, 2021 and 2020

The following table sets forth our historical operating results for the periods indicated:


	Three months ended								Six months ended
	June 30,				$		%		June 30,				$		%
(in thousands)	2021		2020		Change		Change		2021		2020		Change		Change
Revenue	$	—	$	—	$	—	NM		$	—	$	—	$	—	NM
Costs and operating expenses
Cost of revenue, excluding depreciation		—		—		—	NM			—		—		—	NM
Research and development expenses, excluding depreciation		57,638		14,642		42,996	293.6	%		96,956		33,935		63,021	185.7	%
Selling, general and administrative expenses, excluding depreciation		44,625		3,411		41,214	NM			100,252		7,492		92,760	NM
Depreciation		2,083		1,756		327	18.6	%		4,207		3,441		766	22.3	%
Total costs and operating expenses		104,346		19,809		84,537	426.8	%		201,415		44,868		156,547	348.9	%
Loss from operations		(104,346)		(19,809)		(84,537)	426.8	%		(201,415)		(44,868)		(156,547)	348.9	%
Interest income (expense)		34		(3,545)		3,579	(101.0)	%		46		(9,371)		9,417	(100.5)	%
(Loss) gain on fair value change in contingent earnout shares liability		(8,157)		—		(8,157)	NM			75,402		—		75,402	NM
Loss on fair value change in private placement warrants liability		—		—		—	NM			(1,639)		—		(1,639)	NM
Other (expense) income, net		(85)		113		(198)	(175.2)	%		(174)		108		(282)	(261.1)	%
Loss before income taxes		(112,554)		(23,241)		(89,313)	384.3	%		(127,780)		(54,131)		(73,649)	136.1	%
(Provision for) income taxes		—		—		—	NM			—		—		—	NM
Net loss and comprehensive loss	$	(112,554)	$	(23,241)	$	(89,313)	384.3	%	$	(127,780)	$	(54,131)	$	(73,649)	136.1	%

Percentage changes greater than +/- 1000% are considered not meaningful and are presented as “NM.”

Research and Development Expenses, excluding Depreciation

Research and development expenses increased by $43.0 million, or 293.6%, to $57.6 million in the ~~next twelve months.~~three months ended June 30, 2021, compared to $14.6 million in the three months ended June 30, 2020. The increase was primarily due to increases in research and development costs of $23.1 million, stock-based compensation expense of $8.3 million, and salary and related benefits expense of $8.1 million, respectively. The increase in research and development costs primarily relates to our expenditures for the Gamma stage engineering design and development costs during the three months ended June 30, 2021.

Research and development expenses increased by $63.1 million, or 185.7%, to $97.0 million in the six months ended ended June 30, 2021, compared to $33.9 million in the six months ended ended June 30, 2020. The increase was primarily due to increases in research and development costs of $31.2 million, stock-based compensation expense of $15.1 million, and salary and related benefits expense of $11.7 million, respectively. The increase in research and development costs primarily relates to our expenditures for the Gamma stage engineering design and development costs during the six months ended ended June 30, 2021.

The increase in stock-based compensation expenses of $8.3 million and $15.1 million was primarily driven by the continued recognition of stock compensation expense during three and six months ended June 30, 2021, respectively, resulting from the issuance of awards to employees and board of directors along with the modification of certain performance restricted stock awards to become time-based vesting with a merger trigger, which was satisfied on December 21, 2020. See further discussion on the restricted stock awards in Note 11 of the notes to our accompanying financial statements.

Salary and related benefits expenses increased $8.1 million, from $11.2 million during the three months ended June 30, 2020 to $19.3 million during the three months ended June 30, 2021. Salary and related benefits increased $11.7 million from $22.6 million during the six months ended June 30, 2020 to $34.3 million during the six months ended

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June 30, 2021. Increases due primarily to our continuing investment in personnel and contract employees to drive and reach our research and development goals.

We expect to see an overall increase in research and development expenses to support our initiatives related to the Lifestyle Vehicle, Multi-Purpose Delivery Vehicles, and Pickup expected to launch as early as 2022 and 2023, respectively.

Selling, General and Administrative Expenses, excluding Depreciation

Selling, general and administrative expenses increased by $41.2 million, to $44.6 million in the three months ended June 30, 2021, compared to $3.4 million in the three months ended ended June 30, 2020. The increase was primarily due to increases of $16.9 million in stock-based compensation expenses, $10.2 million in professional fees, $4.8 million in marketing spend, $3.3 million in salary and related benefits, and $2.9 million in occupancy costs. Other factors affecting selling, general and administrative expenses were individually immaterial.

Selling, general and administrative expenses increased by $92.8 million, to $100.3 million in the six months ended June 30, 2021, compared to $7.5 million in the six months ended ended June 30, 2020. The increase was primarily due to increases of $54.7 million in stock-based compensation expenses, $16.1 million in professional fees, $5.9 million in occupancy costs, $5.6 million in marketing spend,and $5.0 million in salary and related benefits. Other factors affecting selling, general and administrative expenses were individually immaterial.

The increase in stock-based compensation expenses of $16.9 million and $54.7 million for the three and six months ended June 30, 2021, respectively, was primarily driven by certain awards granted during the periods subject to time-based vesting. The remaining increase was primarily driven by the continued recognition of stock compensation expense during three and six months ended June 30, 2021, resulting from the modification of certain performance restricted stock awards to become time-based vesting with a merger trigger, which was satisfied on December 21, 2020. See further discussion on the restricted stock awards in Note 11 of the notes to our accompanying financial statements. Other factors affecting stock-based compensation expenses were individually immaterial.

Professional fees increased by $10.2 million to $11.2 million in the three months ended June 30, 2021, compared to $1.0 million in the three months ended June 30, 2020. Professional fees increased by $16.1 million to $17.5 million in the six months ended June 30, 2021, compared to $1.4 million in the six months ended June 30, 2020. The increase was primarily due to activities related to our business development, legal fees and miscellaneous support activities.

Salary and related benefits expenses increased $3.3 million to $5.4 million in the three months ended June 30, 2021, compared to $2.1 million in the three months ended June 30, 2020. Salary and related benefits expenses increased $5.0 million to $10.1 million in the three months ended June 30, 2021, compared to $5.1 million in the three months ended June 30, 2020. Increases were due primarily to increase in headcount.

We expect to see an overall increase in selling, general and administrative expenses to support our initiatives related to the Lifestyle Vehicle, Multi-Purpose Delivery Vehicles, and Pickup expected to launch as early as 2022 and 2023, respectively.

Interest Expense

Interest expense decreased by $3.6 million and 9.4 million in the three and six months ended June 30, 2020. The decrease was primarily due to interest expense on related party convertible notes and the amortization of debt discount during three and six months ended June 30, 2020. The related party convertible notes were repaid during Business Combination.

(Loss) gain on Fair Value Change in Contingent Earnout Shares Liability

The Company has ~~only until September 5,~~a contingent obligation to issue 15.0 million of its common stock to certain stockholders and employees (the "Earnout Shares"). We recognized a non-cash loss on fair value change in contingent Earnout Shares

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liability of ($8.2) million and non-cash gain of $75.4 million in the three and six months ended June 30, 2021, respectively, which was a result of the periodic remeasurement of the fair value of our contingent Earnout Shares liability. See further discussion on the contingent Earnout Shares liability in Note 10 of the notes to our accompanying financial statements.

Loss on Fair Value Change of Private Placement Warrants Liability

We recognized a non-cash loss on fair value change of private placement warrants liability of $1.6 million in the six months ended June 30, 2021, which was a result of the periodic remeasurement of the fair value of our private placement warrants liability. See further discussion on the private placement warrants liability in Note 12 of the notes to our accompanying financial statements.

Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures are useful in evaluating our operational performance. We use the following non-GAAP measures to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors in assessing our operating performance.

EBITDA and Adjusted EBITDA

“EBITDA” is defined as net loss before interest expense, income tax expense or benefit, and depreciation and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for stock-based compensation, restructuring charges, asset impairments, and other costs associated with exit and disposal activities, acquisition and related costs, changes to the fair value of contingent earnout shares liability, and any other one-time non-recurring transaction amounts impacting the statement of operations during the year. Adjusted EBITDA is intended as a supplemental measure of our performance that is neither required by, nor presented in accordance with, GAAP. We believe Adjusted EBITDA, when combined with net loss, and EBITDA, are beneficial to an investor’s complete understanding of our operating performance. We believe that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that when evaluating EBITDA and Adjusted EBITDA we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate EBITDA and Adjusted EBITDA in the same fashion.

Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We manage our business utilizing EBITDA and Adjusted EBITDA as supplemental performance measures.

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The following table reconciles net loss to EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2021 and 2020, respectively:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2021		2020		2021		2020
Net loss	$	(112,554)	$	(23,241)	$	(127,780)	$	(54,131)
Interest (income) expense		(34)		3,545		(46)		9,371
Provision for income taxes		—		—		—		—
Depreciation		2,083		1,756		4,207		3,441
EBITDA		(110,505)		(17,940)		(123,619)		(41,319)
Adjustments:
Loss (gain) on fair value change in contingent earnout shares liability		8,157		—		(75,402)		—
Loss on fair value change in private placement warrants liability		—		—		1,639		—
Other expense (income), net		85		(113)		174		(108)
Stock-based compensation		25,514		351		70,660		740
Adjusted EBITDA	$	(76,749)	$	(17,702)	$	(126,548)	$	(40,687)

Liquidity and Capital Resources

As of June 30, 2021, our principal source of liquidity was our cash balance in the amount of $563.6 million, which was primarily invested in money market funds that consist of liquid debt securities issued by the U.S. government.

As an early stage growth company in the pre-commercialization stage of development, the net losses and comprehensive losses we have incurred since inception are consistent with our strategy and budget. We will continue to incur net losses and comprehensive losses in accordance with our operating plan as we continue to expand our research and development activities to complete the development of our skateboard platform and EVs, establish our go-to-market model and scale our operations to meet anticipated demand. We expect that both our capital and operating expenditures will increase significantly in connection with our ongoing activities, as we:

●

commercialize our EVs;

●

continue to invest in our technology, research and development efforts;

●

increase our investment in marketing, advertising, sales and distribution infrastructure for our EVs and services;

●

obtain, maintain and improve our operational, financial and management information systems;

●

hire additional personnel;

●

obtain, maintain, expand and protect our intellectual property portfolio; and

●

operate as a public company.

As an ~~Initial Business Combination. If~~early stage growth company adjusting to the ~~Company does~~long-term implications of the COVID-19 pandemic, our ability to access capital is critical. Management plans to raise additional capital through a combination of debt financing, other non-dilutive financing and/or equity financing. Additional stock financing may not ~~complete an Initial Business Combination~~be available on favorable terms and could be dilutive to current stockholders. Debt financing and other non-dilutive financing, if available, may involve restrictive covenants and dilutive financing instruments. Our ability to access capital when needed is not assured and, if capital is not available to us when, and in the amounts needed, we will not be able to expand our operations beyond bringing the lifestyle vehicle to the point of production, and we could be required to delay, scale back, or abandon some

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or all of its development programs and other operations, which could materially harm our business, financial condition and results of operations.

The accompanying condensed consolidated financial statements have been prepared by ~~September 5, 2020,~~management assuming that we will continue as a going concern, which contemplates the ~~Company will (i) cease all~~realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of the date of this report, our existing cash resources are sufficient to support planned operations, ~~except~~which comprise bringing our lifestyle vehicle to the point of production, for the ~~purposes of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem~~next 12 months. As a result, management believes that our existing financial resources are sufficient to continue operating activities for at least one year past the ~~public shares for a per share price equal to a pro rata portion~~issuance date of the ~~Trust Account, including interest, but less taxes~~financial statements.

Cash Flows Summary

Presented below is a summary of our operating, investing and financing cash flows (in thousands):


	For the Six Months Ended
	June 30,
Consolidated Cash Flow Statements Data:	2021		2020
Net cash used in operating activities	$	(108,818)	$	(42,314)
Net cash used in investing activities		(28,653)		(979)
Net cash (used in) provided by financing activities		(1,386)		32,267

Cash Flows from Operating Activities

Our cash flows from operating activities are significantly affected by the growth of our business primarily related to research and development as well as selling, general, and administrative activities. Our operating cash flow is also affected by our working capital needs to support growth in personnel-related expenditures and fluctuations in accounts payable ~~(and less up~~and other current assets and liabilities.

Net cash used in operating activities was $108.8 million for the six months ended June 30, 2021. Our cash outflow from operating activities primarily consist of payments related to ~~$100,000~~our research and development and selling, general and administration expenses. The total expenditure as it relates to research and development excluding depreciation was $97.0 million during the six months ended June 30, 2021, of ~~interest~~which $15.6 million related to ~~pay dissolution expenses)~~stock-compensation expenses during the year. We also incurred selling, general and ~~(iii)~~administration expenses of $100.3 million for the six months ended June 30, 2021, of which $55.0 million related to stock-compensation expenses during the six months ended June 30, 2021. The expenses include salaries and benefits paid to employees as ~~promptly~~primarily all salaries and benefits are paid in cash during the six months ended June 30, 2021.

Net cash used in operating activities was $42.3 million for the six months ended June 30, 2020. Our cash outflow from operating activities primarily consist of payments related to our research and development and selling, general and administration expenses. The total expenditure as ~~reasonably possible following such redemption, dissolve~~it relates to research and ~~liquidate~~development excluding depreciation was $33.9 million during the ~~balance~~six months ended June 30, 2020, of which $0.5 million related to stock-compensation expenses during the six months ended June 30, 2020. We also incurred selling, general and administration expenses of $7.5 million for the six months ended June 30, 2020, of which $0.3 million related to stock-compensation expenses during the period. Primarily all of research and development and selling, general and administrative expenses were paid in cash. The expenses include salaries and benefits paid to employees as primarily all salaries and benefits are paid in cash during the six months ended June 30, 2020.

Cash Flows from Investing Activities

We continue to experience negative cash flows from investing activities as we expand our business and continue to build our infrastructure. Cash flows from investing activities primarily relate to capital expenditures to support our growth.

Net cash used in investing activities was approximately $28.7 million for the six months ended June 30, 2021, which primarily consisted of purchases of production tooling as well as machinery and equipment.

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Net cash used in investing activities was $1.0 million for the six months ended June 30, 2020, which primarily consisted of purchases of machinery and equipment, computer hardware and software and leasehold improvements.

Cash Flows from Financing Activities

Net cash used in financing activities was $1.4 million for the six months ended June 30, 2021, which was primarily due to proceeds of $6.9 million resulting from the exercise by certain public warrant holders, offset by the payment of the Company’s ~~net assets~~PPP loan.

Net cash provided by financing activities was $32.3 million for the six months ended June 30, 2020, which was primarily due to ~~its creditors~~the proceeds from convertible debt and ~~remaining stockholders,~~derivative liability as ~~part of its plan of dissolution and liquidation. The initial stockholders have waived their redemption rights with respect to their founder shares; however, if~~well as the initial stockholders or any of their affiliates acquire shares of Class A common stock in or after the Public Offering, they will be entitled to a pro rata share of the Trust Account upon the Company’s redemption or liquidation in the event the Company does not complete an Initial Business Combination within the required time period.loan advance.

In the event of such liquidation, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the price per unit in the Public Offering.

~~Off-balance sheet financing arrangements~~

Off-Balance Sheet Arrangements

We ~~have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do~~are not ~~participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred~~a party to ~~as variable interest entities, which would have been established for the purpose of facilitating~~any off-balance sheet arrangements.

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any agreements for non-financial assets.

~~Contractual obligations~~

At March 31, 2019, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. In connection with the Public Offering, we entered into an Administrative Support Agreement with Hennessy Capital LLC, an affiliate of our Sponsor, pursuant to which the Company pays Hennessy Capital LLC $15,000 per month for office space, utilities and secretarial and administrative support.

In addition, commencing on March 1, 2019 (the date the Company’s securities were first listed on the Nasdaq Capital Market), the Company has agreed to compensate its Chief Financial Officer $29,000 per month prior to the consummation of the Initial Business Combination, of which 60% is payable in cash currently and 40% in cash upon the successful completion of the Initial Business Combination. Approximately $12,000 has been included in accrued liabilities for the deferred compensation of the Chief Financial Officer at March 31, 2019. Further, the Company has entered into an agreement with its President and Chief Operating Officer to pay him a success fee of $500,000 in cash upon the closing of an Initial Business Combination.

~~Upon completion of the Initial Business Combination or the Company’s liquidation, the Company will cease paying or accruing these monthly fees.~~

In connection with identifying an Initial Business Combination candidate, the Company expects to enter into engagement letters or agreements with various consultants, advisors, professionals and others in connection with an Initial Business Combination. The services under these engagement letters and agreements are likely to be material in amount and in some instances include contingent or success fees. Contingent or success fees (but not deferred underwriting compensation) would be charged to operations in the quarter that an Initial Business Combination is consummated. In most instances (except with respect to our independent registered public accounting firm), these engagement letters and agreements are expected to specifically provide that such counterparties waive their rights to seek repayment from the funds in the Trust Account.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements (unaudited) have been prepared in accordance with GAAP. The preparation of these financial statements ~~and related disclosures in conformity with GAAP~~ requires ~~management~~us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities atas of the date of the financial statements, ~~and income and~~as well as the reported expenses incurred during the ~~periods reported.~~ reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Actual results ~~could materially~~may differ from ~~those~~these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. ~~The Company has identified the following as its~~

For a discussion of our critical accounting ~~policies:~~policies and estimates, see the section titled “Critical Accounting Policies and Estimates” included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations, each included in our Annual Report on Form 10-K.”

Emerging Growth Company and Smaller Reporting Company Status

We currently qualify as an “emerging growth company” as defined in Section ~~102(b)(1)~~2(a) of the ~~JOBS~~Securities Act, ~~exempts emerging growth companies from being required~~as amended, and have elected to ~~comply with~~take advantage of the benefits of the extended transition period for new or revised financial accounting standards ~~until private companies (that is, those that~~and certain other exemptions and reduced reporting requirements provided by the JOBS Act. Accordingly, we have not ~~had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are~~been required to ~~comply with the new or revised~~provide an auditor’s attestation report on our system of internal control over financial ~~accounting standards. The JOBS Act provides that a company can elect~~reporting pursuant to ~~opt out~~Section 404(b) of the ~~extended transition period~~Sarbanes-Oxley Act. Based on the Company’s aggregate worldwide market value of voting and ~~comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out~~non-voting common equity held by non-affiliates as of ~~such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies,~~June 30, 2021, the Company ~~as an~~expects that it will become a “large accelerated filer” and lose emerging growth company ~~can adopt the new or revised standard at the time private companies adopt the new or revised standard.~~

~~Net Income Per Share:~~

~~Net income (loss) per common share is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding~~status beginning with its Annual Report on Form 10-K for the ~~period. The Company has not considered~~year ending December 31, 2021. Therefore, our independent registered public accounting firm will be required to provide the ~~effect~~attestation report on our system of ~~the warrants sold~~internal control over financial reporting in such Annual Report.

We currently qualify as a “smaller reporting company” as defined in the Public Offering and Private Placement (see Note 4 to the condensed financial statements) to purchase an aggregate of 36,092,750 Class A ordinary shares in the calculation of diluted income (loss) per share, since their inclusion would be anti-dilutive under the treasury stock method.Exchange Act. As a result ~~diluted income (loss) per common share~~of becoming a “large accelerated filer”, we will no longer be a smaller reporting company even if our annual revenue is ~~the same as basic loss per common share~~less than $100.0 million for the ~~period.~~

~~The Company’s statement of operations include~~year ending December 31, 2021. As a ~~presentation of income (loss) per share for common stock subject~~result, starting with our first quarterly report in 2022, we will no longer be eligible to redemption in a manner similar to the two-class method of income (loss) per share. Net income (loss) per share, basic and diluted for Class A common stock is calculated by dividing the interest income earnedrely on the funds in the Trust Account, net of income tax expense and franchise tax expense, by the weighted average number of shares of Class A common stock outstanding since their original issuance. Net income (loss) per common share, basic and diluted, for Class B common stock is calculated by dividing the net income (loss), less income attributablescaled disclosure exemptions applicable to Class A common stock, by the weighted average number of shares of Class B common stock outstanding for the period. Net income (loss) available to each class of common stockholders is as follows for the three months ended March 31, 2019:smaller reporting companies.

March 31,
2019

Net income available to Class A common stockholders:
Interest income $ 530,000
Less: Income and franchise taxes (117,000 )
Net income available to Class A common stockholders $ 413,000

Net income available to Class B common stockholders:
Net income $ 318,000
Less: amount attributable to Class A common stockholders (413,000 )
Net (loss) available to Class B common stockholders $ (95,000 )

~~Financial Instruments~~

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying condensed financial statements.

~~Public Offering Costs~~

The Company complies with the requirements of FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (SAB) Topic 5A- “Expenses of Offering”. Public Offering costs of approximately $18,865,000 consist of underwriters’ discounts of approximately $18,009,000 (including approximately $10,719,000 of which payment is deferred) and approximately $856,000 of professional, printing, filing, regulatory and other costs associated with the Public Offering were charged to additional paid in capital upon completion of the Public Offering in March 2019.

~~Income Taxes:~~

The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the balance sheet carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company’s currently taxable income consists of interest income on the Trust Account net of taxes. The Company’s general and administrative costs are generally considered start-up costs and are not currently deductible. During the three months ended March 31, 2019, the Company recorded income tax expense of approximately $100,000 primarily related to interest income earned on the Trust Account net of taxes. The Company’s effective tax rate for the three months ended March 31, 2019 was approximately 31% which differs from the expected income tax rate due to the start-up costs (discussed above) which are not currently deductible. At March 31, 2019 and December 31, 2018, the Company has a deferred tax asset of approximately $20,000 and $-0-, respectively, primarily related to start-up costs. Management has determined that a full valuation allowance of the deferred tax asset is appropriate at this time.

~~Redeemable Common Stock~~

All of the 30,015,000 public shares sold as part of a Unit in the Public Offering contain a redemption feature which allows for the redemption of public shares under the Company’s Liquidation or Tender Offer/Stockholder Approval provisions. In accordance with Financial Accounting Standards Board (“FASB”) ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of FASB ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that in no event will it redeem its public shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001 upon the closing of a Business Combination.

~~Recent Accounting Pronouncements~~

In July 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): Part I. Accounting for Certain Financial Instruments with Down Round Features; Part II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Also, entities must adjust their basic Earnings Per Share (“EPS”) calculation for the effect of the down round provision when triggered (that is, when the exercise price of the related equity-linked financial instrument is adjusted downward because of the down round feature). That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. An entity will also recognize the effect of the trigger within equity. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted this guidance during the three months ended March 31, 2019. The adoption of this guidance enabled the Company to record the warrants as equity instruments and is not expected to have a material impact on the Company’s financial position, results of operations, cash flows or disclosures until a trigger event occurs. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update are not expected to have an impact on the Company.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~Not applicable.

~~We were incorporated in Delaware on August 6, 2018 for the purpose~~Table of effecting an Initial Business Combination. As of March 31, 2019, we had not commenced any operations or generated any revenues. All activity through March 31, 2019 relates to our formation and our Public Offering and subsequent to the Public Offering identifying and completing a suitable Initial Business Combination. $303,151,500 of the net proceeds of the Public Offering and the Private Placement that closed on March 5, 2019 were deposited into a Trust Account that invests solely in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940 which invest only in direct U. S. government obligations. In March 2019, the money market fund was largely liquidated and the trust assets were invested in U.S. government treasury bills which mature in September 2019 and currently yield approximately 2.45% on a yearly basis. At March 31, 2019, there was approximately $303,682,000 in the Trust Account.Contents

~~ITEM~~Item 4. ~~CONTROLS AND PROCEDURES~~

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

~~Disclosure~~The term “disclosure controls and ~~procedures are~~procedures”, as defined under Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in ~~our~~the reports ~~filed~~that it files or ~~submitted~~submits under the ~~Securities~~ Exchange Act ~~of 1934, as amended (the “Exchange Act”),~~ is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in ~~company~~the reports ~~filed~~that it files or ~~submitted~~submits under the Exchange Act is accumulated and communicated to the company’s management, including ~~our Chief Executive Officer~~its principal executive and ~~Chief Financial Officer,~~principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Because there are inherent limitations in all control systems, a control system, no matter how well conceived and operated, can provide only reasonable, as opposed to absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

~~As required by Rules 13a-15 and 15d-15 under~~While we have made meaningful progress on strengthening our internal controls relative to the ~~Exchange Act,~~previously identified material weaknesses, those material weaknesses have not yet been fully remediated.Our management, with the participation of our ~~Chief~~Principal Executive Officer and ~~Chief~~Principal Financial Officer, ~~carried out an evaluation of~~evaluated the effectiveness ~~of the design and operation~~ of our disclosure controls and procedures as of ~~March 31, 2019.~~the end of the period covered by this Quarterly Report on Form 10-Q. Based ~~upon their~~on that evaluation, our ~~Chief Executive Officer and Chief Financial Officer~~management concluded that our disclosure controls and procedures ~~(as defined~~were not effective, at the reasonable assurance level, as of the end of the period covered by this Quarterly Report on Form 10-Q, as a result of the ongoing remediation associated with the material weaknesses both discussed below and identified in ~~Rules 13a-15(e)~~our Annual Report on Form 10-K and ~~15d-15(e)~~Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.

The Company has taken the following remediation actions to date in relation to the previously identified material weaknesses described under Part II, Item 9A, “Disclosure Controls and Procedures,” of our Annual Report on Form 10-K and Part I, Item 4, “Controls and Procedures,” of our Quarterly Report on Form 10-Q for the ~~Exchange Act) were effective.~~quarter ended March 31, 2021:

a.Hired experienced executives and personnel within our accounting and IT functions to strengthen the Company's expertise in financial close, technical accounting and reporting and IT capabilities;

b.Hired experienced personnel to enhance and operate our internal control program and execute related remediation efforts, including co-sourcing our internal audit function to an experienced, nationally recognized Big Four public accounting firm;

c.Implemented a formal financial reporting risk assessment with the assistance of third-party specialists;

d.Designed additional internal reporting processes and controls, including those intended to add rigor to our financial close processes;

e.Designed controls as it relates to segregation of duties, user access rights and privileges and change management;

f.Designed and implemented controls over account reconciliations and review of journal entries; and

g.Engaged third-party assistance by an experienced, nationally recognized Big Four accounting firm to aid in our evaluation of the accounting for complex transactions as they arise;

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We will not be able to conclude whether the material weaknesses have been remediated until sufficient time has elapsed to provide evidence that the newly designed and implemented or enhanced controls are operating effectively.

Changes in Internal Control over Financial Reporting

During the ~~three months ended March 31, 2019,~~second quarter of 2021, we implemented a new employee stock plan administration system. Accordingly, we are modifying the design and documentation of certain processes and internal controls related to the system implementation. We do not believe that the system implementation is likely to materially affect our internal control over financial reporting.

Other than as discussed above, there ~~has been~~were no ~~change~~changes in our internal control over financial reporting (as that ~~has~~term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended June 30, 2021 that have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

~~ITEM 1. LEGAL PROCEEDINGS~~For a description of any material pending legal proceedings, please see Note 8, Commitments and Contingencies, of the notes to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

~~None.~~

Item 1A. Risk Factors

~~ITEM 1A. RISK FACTORS~~

~~As of the date of this Quarterly Report on Form 10-Q,~~Except as stated below, there have been no material changes to our risk factors as previously disclosed our Annual Report on Form 10-K. Any of the risk factors ~~disclosed~~included in ~~our Prospectus filed with~~ the ~~SEC~~Annual Report on ~~March 4, 2019. Any of these factors~~Form 10-K or enumerated below could result in a significant or material adverse effect on our results of operations, financial condition or ~~financial condition.~~cash flows. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

We currently qualify as an “emerging growth company” and a “smaller reporting company” within the meaning of the Securities Act; however, we will cease to qualify as an “emerging growth company” beginning with our Annual Report on Form 10-K for the year ending December 31, 2021, and at such time, will be required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.

We currently qualify as an “emerging growth company” as defined in Section 2(a) of the Securities Act, as amended, and have elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards and certain other exemptions and reduced reporting requirements provided by the JOBS Act. Accordingly, we have not been required to provide an auditor’s attestation report on our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. Based on the Company’s aggregate worldwide market value of voting and non-voting common equity held by non-affiliates as of June 30, 2021, the Company expects that it will become a “large accelerated filer” and lose emerging growth company status beginning with its Annual Report on Form 10-K for the year ending December 31, 2021. Therefore, our independent registered public accounting firm will be required to provide the attestation report on our system of internal control over financial reporting in such Annual Report. If we are unable to assert that our internal control over financial reporting is effective, as a result of not having remediated the material weaknesses described herein, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, or expresses an adverse opinion, investors may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to the capital markets or other sources of funds and our stock price may be adversely affected.

We currently qualify as a “smaller reporting company” as defined in the Exchange Act. As a result of becoming a “large accelerated filer”, we will no longer be a smaller reporting company even if our annual revenue is less than $100.0 million for the year ending December 31, 2021. However, we will continue to be able to take advantage of certain of the scaled disclosures available to smaller reporting companies in our Annual Report on Form 10-K for the year ending

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December 31, 2021 and our 2022 proxy statement. These scaled disclosures include presenting only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and reduced disclosure obligations regarding executive compensation in our proxy statement. This may make comparison of our disclosures with another public company, which is not a smaller reporting company difficult because of the differences in the extent of such disclosure.

We face risks and uncertainties related to litigation, regulatory actions and government investigations and inquiries.

We are, and may in the future become, subject to various litigation, other claims, suits, regulatory actions and government investigations and inquiries. See the description of certain current legal proceedings described under Note 8, Commitments and Contingencies, of the notes to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

In addition, from time to time, we may be involved in other legal proceedings arising in the ordinary course of business, including those relating to employment matters, relationships with collaboration partners, intellectual property disputes, and other business matters. Any such claims or investigations may be time-consuming, costly, divert management resources, or otherwise have a material adverse effect on our business or result of operations.

The results of the current legal proceedings and any future legal proceedings cannot be predicted with certainty and adverse judgments or settlements in some or all of these legal proceedings may result in materially adverse monetary damages or injunctive relief against us. Any such payments or settlement arrangements in current or future litigation, could have a material adverse effect on our business, operating results or financial condition. Even if the plaintiffs’ claims are not successful, current or future litigation could result in substantial costs and significantly and adversely impact our reputation and divert management’s attention and resources, which could have a material adverse effect on our business, operating results and financial condition, and negatively affect the price of our common stock. In addition, such legal proceedings may make it more difficult to finance our operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~Unregistered Sales of Equity Securities

None.

~~Private Placement~~

~~On March 5, 2019, we consummated a private placement~~Purchases of an aggregate 13,581,500 warrants (“Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant, generating total proceeds of approximately $13,581,500. The Private Placement Warrants, which were purchased by our sponsor Hennessy Capital Partners IV, LLC and by our Anchor investor, are substantially similar to the warrants included in the units issued in our Public Offering (the “Public Warrants”), except that if heldEquity Securities by the ~~original holder or their permitted assigns, they (i) may be exercised for cash or on a cashless basis, (ii) are not subject~~Issuer and Affiliated Purchasers

The table below provides information with respect to ~~being called for redemption and (iii) are subject to certain limited exceptions, will be subject to transfer restrictions until 30 days following the consummation~~recent repurchases of unvested shares of our initial business combination. If the Private Placement Warrants are held by holders other than its initial holders, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants. The sale of the Private Placement Warrants was made pursuant to an exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (“Securities Act”).common stock:


				Total Number of	Maximum Number
				Shares Purchased as	of Shares that May
	Total Number of			part of Publicly	Yet Be Purchased
	Shares Purchased	Average Price		Announced Plans or	Under the Plans or
Period	(1)	Paid per Share		Programs	Programs
April 1 - April 30, 2021	36,143	$	0.01	—	—
May 1 - May 31, 2021	61,915	$	0.01	—	—
June 1 - June 30, 2021	60,584	$	0.01	—	—

(1)

Certain of our shares of common stock held by employees and service providers are subject to vesting. Unvested shares are subject to a right of repurchase by us in the event the holder of such shares is no longer employed by or providing services for us. All shares in the above table were shares repurchased as a result of our exercising this right and not pursuant to a publicly announced plan or program.

~~Use of Proceeds from the Initial Public Offering~~

On March 5, 2019, we consummated our Public Offering of 30,015,000 units, with each unit consisting of one share of Class A common stock and three-quarters of one warrant. Each whole warrant is exercisable to purchase one share of common stock at an exercise price of $11.50 per whole share. The warrants will become exercisable on the later of (i) 30 days after the completion of the initial business combination and (ii) 12 months from the closing of the Public Offering. The warrants expire five years after the completion of the initial business combination or earlier upon redemption or liquidation. Once the warrants become exercisable, the warrants will be redeemable in whole and not in part at a price of $0.01 per warrant upon a minimum of 30 days’ notice if, and only if, the last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period. The Units in the Public Offering were sold at an offering price of $10.00 per unit, generating total gross proceeds of approximately $300,150,000. Nomura Securities International, Inc.and Stifel Nicolaus & Company acted as joint book-runner managers for the Public Offering. The securities sold in the Public Offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-229608). The SEC declared the registration statement effective on February 28, 2019.

We paid a total of approximately $7,830,000 in underwriting discounts and commissions and approximately $856,000 for other costs and expenses related to the Public Offering. In addition, the underwriters for the Public Offering agreed to defer payment of approximately $10,179,000 in underwriting discounts and commissions, which amount will be payable upon consummation of our initial business combination, if consummated. We also repaid the promissory note to our Sponsor from the proceeds of the Public Offering.

After deducting the underwriting discounts and commissions (excluding the deferred portion of approximately $10,179,000 in underwriting discounts and commissions, which amount will be payable upon consummation of our Business Combination, if consummated) and the offering expenses, the total net proceeds from our Public Offering and the private placement of the Private Placement Warrants was approximately $305,056,000 of which approximately $303,151,500 (or $10.10 per unit sold in the Public Offering) was placed in the Trust Account. As of March 31, 2019, approximately $1.8 million was held outside the Trust Account and will be used to fund (a) the unpaid offering costs aggregating approximately $48,000 and (b) the Company’s operating expenses. The proceeds held in the trust account may be invested by the trustee only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. See also the Current Reports on Forms 8-K filed by the Company on March 6, 2019 and March 11, 2019.

In connection with the closing of the Public Offering a stock dividend of 316,250 shares was made to the holders of 7,187,500 shares of Class B common stock (increasing the total number of shares of Class B common stocks outstanding to 7,503,750) so that the initial stockholders of the Company would collectively own 20.0% of the issued and outstanding shares of common stock of the Company after the Public Offering.

~~ITEM~~Item 3. ~~DEFAULTS UPON SENIOR SECURITIES~~

Defaults Upon Senior Securities

None.

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Item 4. Mine Safety Disclosures

~~ITEM 4. MINE SAFETY DISCLOSURES~~Not applicable.

~~None.~~

Item 5. Other Information

~~ITEM 5. OTHER INFORMATION~~Corrected Financial Information

The following tables showing the correction of prior period amounts should be read in conjunction with Note 3 to our condensed consolidated unaudited financial statements in this Quarterly Report on Form 10-Q. This correction affected our consolidated balance sheet, consolidated statement of operations, consolidated statement of redeemable convertible preference shares and stockholders’ (deficit) equity and consolidated statement of cash flows for year ended December 31, 2020.

~~None.~~This correction was not material to any of our previously issued financial statements. The following tables show the affected line items within the consolidated financial statements (in thousands):


	As of December 31, 2020
	As Previously	Warrants
	Reported	adjustments	As Restated
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	Warrants
	Reported	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 Redeemable Convertible Preference Shares and Stockholders’ (Deficit) Equity (in thousands).


	For the year ended December 31, 2020
	As Previously	Warrants
	Reported	adjustments	As Corrected
Consolidated Statement of Redeemable Convertible Preference Shares and 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

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	For the year ended December 31, 2020
	As Previously	Warrants
	Reported	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

Item 6. Exhibits

~~ITEM 6. EXHIBITS~~

~~Exhibit~~ ~~Number~~		~~Description~~
1.1** Exhibit No.		~~Underwriting Agreement, dated February 28, 2019, by and among the Company and Nomura Securities International, Inc., and Stifel Nicholas & Company, Incorporated~~ Description
3.1** 3.1		Second Amended and Restated Certificate of Incorporation of the Company, dated December 21, 2020 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 22, 2020).
4.1** 3.2		~~Warrant Agreement, dated February 28, 2019, between Continental Stock Transfer& Trust Company~~Amended and Restated Bylaws of the Company, dated December 21, 2020 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on December 22, 2020).
10.1** 10.1		~~Investment Management Trust Account Agreement,~~Binding Term Sheet for Vehicle Contract Manufacturing, dated ~~March 5, 2019,~~June 16, 2021, by and between ~~Continental Stock Transfer & Trust Company~~Canoo Technologies Inc. and VDL Nedcar B.V. (incorporated by reference to Exhibit 10.1 to the ~~Company~~Company’s Current Report on Form 8-K filed with the SEC on June 22, 2021).
10.2**		~~Registration Rights~~CEO RSU Award Agreement ~~dated February 28, 2019, among the Company and certain security holders~~
10.3**		~~Letter Agreement, dated March 5, 2019, by and~~ between the Company and ~~certain security holders~~Anthony Aquila, dated April 21, 2021.
10.4** 10.3		~~Administrative Support Agreement,~~Offer letter, dated ~~February 28, 2019,~~July 22, 2021, by and between Canoo Technologies Inc. and Josette Sheeran (incorporated by reference to Exhibit 10.1 to the ~~Company and Hennessy Capital LLC~~Company's Current Report on Form 8-K filed with the SEC on July 26, 2021).
10.5** 10.4*		~~Private Placement Warrants Purchase~~Separation Agreement and Release between Canoo Technologies Inc. and Andrew Wolstan, dated ~~February 28, 2019, by and between the Company and the Sponsor~~May 3, 2021.
10.6** 10.5*		~~Forward Purchase~~Service Agreement between Canoo Technologies Inc. and Andrew Wolstan, dated ~~February 28, 2019, by and between the Company and Nomura Securities International, Inc.~~May 3, 2021.
10.7*** 31.1*		~~Form of Subscription Agreement by and between the Company, Hennessy Capital Partners IV, LLC and the anchor investor~~
~~31.1~~		Certification of the Principal Executive Officer ~~pursuant to~~required by Rule 13a-14(a) ~~and~~or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
~~31.2~~ 31.2*		Certification of the Principal Financial Officer ~~pursuant to~~required by Rule 13a-14(a) ~~and~~or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
32.1**		Certification of ~~the~~ Principal Executive Officer ~~pursuant~~Pursuant to 18 U.S.C. ~~Section~~ 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
32.2**		Certification of ~~the~~ Principal Financial Officer ~~pursuant~~Pursuant to 18 U.S.C. ~~Section~~ 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
101.INS
~~101.INS~~		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

~~Furnished herewith~~

	**	~~Incorporated by reference to the Current Report on Form 8-K filed by the Company on March 6, 2019.~~
104	~~***~~	~~Incorporated by reference to the Registration Statement on Form S-1 filed by the Company on February 11, 2019.~~ Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

** The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

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SIGNATURES

~~In accordance with~~Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~registrant~~Registrant has duly caused this report to be signed on its behalf by the undersigned, ~~thereunto~~ duly authorized.

	~~HENNESSY CAPITAL ACQUISITION CORP. IV~~
Date: August 16, 2021
~~Dated: May 15, 2019~~	~~/s/ Daniel J. Hennessy~~
	CANOO INC.

	By:	/s/ Tony Aquila
	Name: ~~Daniel J. Hennessy~~	Tony Aquila
	Title:	Executive Chairman ~~of the Board of Directors~~ and Chief Executive Officer
		(Principal Executive Officer)

~~Dated: May 15, 2019~~	By:	/s/ ~~Nicholas A. Petruska~~Renato Giger
	Name: ~~Nicholas A. Petruska~~	Renato Giger
	Title: ~~Executive~~	Senior Vice President, Interim Chief Financial Officer
		(Principal Financial Officer and ~~Secretary~~ (Principal ~~Financial and~~ Accounting Officer)

2239

~~Delaware~~		~~83-1476189~~
Delaware	83-1476189
(State or ~~other jurisdiction~~Oher Jurisdiction of ~~incorporation~~ Incorporation or ~~organization)~~Organization)		(I.R.S. Employer Identification ~~Number)~~

~~3485 N. Pines Way, Suite 110~~ ~~Wilson, WY~~		~~83014~~

19951 Mariner Avenue, Torrance, California	90503
(Address of ~~principal executive offices)~~Principal Executive Offices)		(Zip ~~Code)~~code)


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, $0.0001 par value per share	GOEV	The Nasdaq Global Select Market
Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 per share	GOEVW	The Nasdaq Global Select Market



Large accelerated filer ☐	◻	Accelerated filer	☐

Non-accelerated filer ☒	☒	Smaller reporting company ☐
	☒	Emerging growth company	☒

~~Title of each class~~	~~Trading~~ ~~Symbol(s)~~	~~Name of each exchange on which registered~~
~~Class A Common Stock, par value $0.0001 per share~~	~~HCAC~~	~~The NASDAQ Stock Market LLC~~
~~Redeemable Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50~~	~~HCACW~~	~~The NASDAQ Stock Market LLC~~
~~Units, each consisting of one share of Class A Common Stock and three-quarters of one Redeemable Warrant~~	~~HCACU~~	~~The NASDAQ Stock Market LLC~~