CANOO INC.

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

 

To Be Held On October 5, 2023
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[TD]1.

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[TD]To approve an amendment to our Second Amended and Restated Certificate of Incorporation, as amended (the “Charter”) to increase the number of authorized shares our Common Stock (the “Share Authorization Proposal”).
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(shares of authorized common Stock from 1,000,000,000 to 2,000,000,000)
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[TD]2.

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[TD]To approve, pursuant to Nasdaq Rule 5635, the issuance of shares of the Company’s common stock (i) upon the conversion of certain convertible debentures that have been issued to YA II PN, Ltd. (“Yorkville”) pursuant to (a) our Securities Purchase Agreement entered into Yorkville on April 24, 2023 (the “April SPA”), (b) our Securities Purchase Agreement entered into with Yorkville on June 30, 2023 (the “June SPA”), and (c) our Securities Purchase Agreement entered into with Yorkville on August 2, 2023 (the “August SPA”), (ii) upon the exercise of warrants issued pursuant to the June SPA and the August SPA, and (iii) if Yorkville chooses to exercise one or both options to purchase additional convertible debentures and warrants under the June SPA and the August SPA, respectively, pursuant to the conversion of such convertible debentures and/or upon the exercise of such warrants that may be issued upon exercise of one or both options, in excess of 20% of the number of shares outstanding on April 24, 2023 (the “Yorkville Share Issuance Proposal”).
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(Consequences of Non-Approval

As previously disclosed, as of June 30, 2023, the Company concluded that there was substantial doubt about its ability to continue to operate as a going concern for the 12 months following the issuance of its consolidated financial statements. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to access additional sources of capital, including, but not limited to equity and/or debt financings and government loans or grants. If the Company is unable to raise additional capital, the Company may have to significantly delay, scale back or discontinue the development or commercialization of its product and/or consider a sale or other strategic transaction.


If we do not receive the Yorkville Share Issuance Approval, this will restrict our ability to sell shares of Common Stock to Yorkville, which Yorkville provides us with a reliable source of capital for general corporate purposes, unless we are able to sell shares to Yorkville at a price per share greater than the applicable Minimum Price under the Applicable Yorkville Agreements. Additionally, Yorkville can exercise (i) the June Option within 5 trading days and (ii) the August Option within 20 trading days, in each case following the date we receive stockholder approval for this Proposal 2 at the Special Meeting. Failure to approve this Proposal 2 may affect Yorkville’s decision of whether it will exercise one or both Options.)
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[TD]3.

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[TD]To approve an amendment to the Pre-Paid Advance Agreement dated July 20, 2022, as amended and supplemented from time to time, with Yorkville to lower the minimum floor price at which shares of Common Stock may be sold by us to $0.10 per share (the “Yorkville Floor Price Proposal”).
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(minimum floor price from $0.50 to $0.10; in Jan., this was amended from $1.00 to $0.50)
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[TD]4.

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[TD]To approve a proposal to adjourn the Special Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, one or more of the other proposals to be voted on at the Special Meeting (the “Adjournment Proposal”).
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