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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of report (Date of earliest event reported):
August 28, 2024
CANOO INC.
(Exact name of registrant as specified in its
charter)
Delaware
(State
or Other Jurisdiction
of Incorporation) |
001-38824
(Commission
File Number) |
83-1476189
(I.R.S. Employer
Identification Number) |
19951 Mariner Avenue
Torrance,
California |
90503 |
| (Address of principal executive offices) |
(Zip Code) |
(424) 271-2144
(Registrant’s telephone number,
including area code)
N/A
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
|
| ¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
|
| ¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
|
| ¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
| 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 Capital Market |
| |
|
|
|
|
| Warrants to purchase shares of Common Stock |
|
GOEVW |
|
The Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ¨
| Item 1.01 |
Entry into a Material Definitive Agreement. |
First Supplemental Agreement
On July 19, 2024, Canoo Inc. (the “Company”)
entered into a Prepaid Advance Agreement (as amended and supplemented from time to time, the “PPA”) with YA II
PN, Ltd., a Cayman Islands exempt limited company (“Yorkville”). In accordance with the terms of the PPA, the Company
may request advances of up to $15,000,000 in cash from Yorkville (or such greater amount that the parties may mutually agree) (each, a
“Prepaid Advance”) with an aggregate limitation on the Prepaid Advances of $100,000,000.
On August 28, 2024 (the “Effective Date”),
the Company entered into a Supplemental Agreement (the “First Supplemental Agreement”) with Yorkville to the PPA. Pursuant
to the First Supplemental Agreement, Yorkville agreed to advance $25,158,219.18 to the Company (the “First Supplemental Advance”).
As of the Effective Date, $15,000,000 in principal
amount and $158,219.18 of accrued and unpaid interest remained outstanding under that certain Prepaid Advance Agreement, dated June 13,
2024 (the “June PPA”), by and between the Company and Yorkville (such amounts, collectively, the “Outstanding
June PPA Amount”). Pursuant to the First Supplemental Agreement, the Company used a portion of the proceeds from the First Supplemental
Advance to repay all of the Outstanding June PPA Amount. After giving effect to the commitment fee and the purchase price discount provided
for in the PPA, as well as the repayment of the Outstanding June PPA Amount, net proceeds of the First Supplemental Advance to the Company
will be $9,400,000.
The First Supplemental Agreement provides that
solely with respect to the First Supplemental Advance, the Purchase Price (as such term is used in the PPA) will be equal to the lower
of (a) $1.7554 per share and (b) 95% of the lowest daily volume weighted average price of the Common Stock on The Nasdaq Capital Market
during five trading days immediately preceding the date on which Yorkville provides a Purchase Notice (as defined in the PPA) to the Company;
however, in no event shall the Purchase Price be less than $1.00 per share.
The First Supplemental Agreement requires that
the Company call and hold an annual meeting of its stockholders on or before November 13, 2024, for the purposes of, among other things,
obtaining the consent of the stockholders of the Company pursuant to Nasdaq Listing Rule 5635(d) for the issuance of all shares of its
Common Stock that could be issued pursuant to the PPA and obtaining the consent of the stockholders of the Company to amend each of the
PPA and the Pre-Paid Advance Agreement, dated July 20, 2022 (as amended and supplemented from time to time, the “2022 PPA”),
between the Company and Yorkville to provide for a Floor Price (as defined in each of the PPA and 2022 PPA) in each of the PPA and 2022
PPA not to exceed 20% of the lower of (i) $1.7554 and (ii) the Nasdaq Official Closing Price on the trading day immediately preceding
the date of the proxy statement for such meeting. The Company shall file its preliminary proxy statement relating to such proposals as
soon as practicable following receipt of board approval and in no event later than September 11, 2024.
The foregoing description of the First Supplemental
Agreement does not purport to be complete and is qualified in its entirety by reference to the First Supplemental Agreement, which is
filed hereto as Exhibit 10.1 and which is incorporated herein by reference.
The Company is attaching to this Current Report on Form 8-K as Exhibit 5.1 the opinion of Kirkland & Ellis LLP relating to the validity
of the shares to be offered pursuant to the Company's prospectus supplement dated August 29, 2024.
Warrant Agreement
On the Effective Date, pursuant to the terms of
the PPA and in connection with the First Supplemental Advance, the Company issued to Yorkville a warrant to purchase approximately 2.8
million shares of Common Stock each at an exercise price of $1.7554 per share, exercisable beginning
on February 28, 2025 and with an expiration date of August 28, 2029 (the “Warrants”). The Warrants include customary
adjustment provisions for stock splits, combinations and similar events.
The
foregoing description of the Warrants is qualified in its entirety by reference to the Warrants, which is filed hereto as Exhibit
4.1 and which is incorporated herein by reference.
| Item 3.02 |
Unregistered Sales of Equity Securities. |
The information contained
in Item 1.01 is incorporated herein by reference. The issuance of the Warrants is exempt from registration pursuant to Section 4(a)(2) of
the Securities Act of 1933, as amended (the “Securities Act”). Yorkville represented to the Company that it is an “accredited
investor” as defined in Rule 501 of the Securities Act and that the Warrants are being acquired for investment purposes
and not with a view to, or for sale in connection with, any distribution thereof.
| Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits
The following exhibits are filed herewith:
Forward-Looking Statements
This report contains forward-looking statements,
and any statements other than statements of historical fact could be deemed to be forward-looking statements. These forward-looking statements
include, among other things, statements regarding the amount of shares of Common Stock the Company may issue to Yorkville pursuant to
the First Supplemental Agreement, the amount of proceeds to be received by the Company from the sale of shares of common stock and the
uses thereof and related matters. These statements are subject to risks and uncertainties, and actual results may differ materially from
these statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of
this report. The Company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances
after the date hereof.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: August 29, 2024 |
CANOO INC. |
| |
|
|
| |
By: |
/s/ Hector Ruiz
|
| |
Name: |
Hector Ruiz |
| |
Title: |
General Counsel and Corporate Secretary |
Exhibit 4.1
WARRANT
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED
FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT
TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THIS WARRANT MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT.
CANOO INC.
Warrant To Purchase Common Stock
| Warrant No.: GOEV-10 |
Number of Shares: |
2,848,354 |
| |
Warrant Exercise Price: |
$1.7554 |
Date of Issuance: August 28, 2024
CANOO
INC., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, YA II PN, Ltd. (the “Holder”), the registered
holder hereof or its permitted assigns, is entitled, subject to the terms set forth below, to purchase from the Company upon surrender
of this Warrant, at any time or times on or after the first Business Day immediately following the 6-month anniversary of the Issuance
Date, but not after 11:59 P.M. Eastern Time on the Expiration Date (as defined herein) 2,848,354 fully paid and nonassessable
shares of Common Stock (as defined herein) of the Company (the “Warrant Shares”) at the exercise price per share provided
in Section 1(b) below or as subsequently adjusted; provided, however, that in no event shall the holder be entitled to
exercise this Warrant for a number of Warrant Shares in excess of that number of Warrant Shares which, upon giving effect to such exercise,
would cause the aggregate number of shares of Common Stock beneficially owned by the holder and its affiliates to exceed 4.99% of the
outstanding shares of the Common Stock following such exercise, except within sixty (60) days of the Expiration Date (however, such restriction
may be waived by Holder (but only as to itself and not to any other holder) upon not less than 65 days prior notice to the Company). For
purposes of the foregoing proviso, the aggregate number of shares of Common Stock beneficially owned by the holder and its affiliates
shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such
proviso is being made, but shall exclude shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised
Warrants beneficially owned by the holder and its affiliates and (ii) exercise or conversion of the unexercised or unconverted portion
of any other securities of the Company beneficially owned by the holder and its affiliates (including, without limitation, any convertible
notes or preferred stock) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set
forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended. For purposes of this Warrant, in determining the number of outstanding shares of Common
Stock a holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-Q
or Form 10-K, as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company
or its transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written request of any holder, the Company
shall promptly, but in no event later than one (1) Business Day following the receipt of such notice, confirm in writing to any such
holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the exercise of Warrants (as defined below) by such holder and its affiliates since the date as of which such number
of outstanding shares of Common Stock was reported.
Section 1.
(a) [Intentionally
Omitted].
(b) Definitions.
The following words and terms as used in this Warrant shall have the following meanings:
(i) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized
or required by law to remain closed.
(ii) “Closing
Bid Price” means the closing bid price of Common Stock as quoted on the Principal Market (as reported by Bloomberg Financial
Markets (“Bloomberg”) through its “Volume at Price” function).
(iii) “Common
Stock” means (i) the Company’s common stock, par value $0.001 per share, and (ii) any capital stock into which
such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.
(iv) “Expiration
Date” means August 28, 2029. If such date falls on a Saturday, Sunday or other day on which banks are required or authorized
to be closed in the City of New York or the State of New York or on which trading does not take place on the Principal Exchange or automated
quotation system on which the Common Stock is traded (a “Holiday”), the next date that is not a Holiday.
(v) “Issuance
Date” means the date hereof.
(vi) “Options”
means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.
(vii) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization
and a government or any department or agency thereof.
(viii) “Principal
Market” means on any of (a) the American Stock Exchange, (b) New York Stock Exchange, (c) the Nasdaq National
Market, or (d) the Nasdaq Capital Market.
(ix) “Securities
Act” means the Securities Act of 1933, as amended.
(x) “Warrant”
means this Warrant and all Warrants issued in exchange, transfer or replacement thereof.
(xi) “Warrant
Exercise Price” shall be $1.7554 or as subsequently adjusted as provided in Section 8 hereof.
(c) Other
Definitional Provisions.
(i) Except
as otherwise specified herein, all references herein (A) to the Company shall be deemed to include the Company’s successors
and (B) to any applicable law defined or referred to herein shall be deemed references to such applicable law as the same may have
been or may be amended or supplemented from time to time.
(ii) When
used in this Warrant, the words “herein”, “hereof”, and “hereunder” and
words of similar import, shall refer to this Warrant as a whole and not to any provision of this Warrant, and the words “Section”,
“Schedule”, and “Exhibit” shall refer to Sections of, and Schedules and Exhibits to, this Warrant
unless otherwise specified.
(iii) Whenever
the context so requires, the neuter gender includes the masculine or feminine, and the singular number includes the plural, and vice versa.
Section 2. Exercise
of Warrant.
(a) Subject
to the terms and conditions hereof, this Warrant may be exercised by the holder hereof then registered on the books of the Company, pro
rata as hereinafter provided, at any time on any Business Day on or after the opening of business on such Business Day, commencing with
the first Business Day immediately following the 6-month anniversary of the Issuance Date, and prior to 11:59 P.M. Eastern Time
on the Expiration Date (i) by delivery of a written notice, in the form of the subscription notice attached as Exhibit A
hereto (the “Exercise Notice”), of such holder’s election to exercise this Warrant, which notice shall specify
the number of Warrant Shares to be purchased, payment to the Company of an amount equal to the Warrant Exercise Price(s) applicable
to the Warrant Shares being purchased, multiplied by the number of Warrant Shares (at the applicable Warrant Exercise Price) as to
which this Warrant is being exercised (plus any applicable issue or transfer taxes) (the “Aggregate Exercise Price”)
in cash or wire transfer of immediately available funds and the surrender of this Warrant (or an indemnification undertaking with respect
to this Warrant in the case of its loss, theft or destruction) to a common carrier for overnight delivery to the Company as soon as practicable
following such date (“Cash Basis”) or (ii) if at the time of exercise, the Warrant Shares are not subject to an
effective registration statement, or can be sold without restriction or limitation pursuant to Rule 144 as promulgated under the
Securities Act by delivering an Exercise Notice and in lieu of making payment of the Aggregate Exercise Price in cash or wire transfer,
elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following
formula (the “Cashless Exercise”):
Net Number = (A x B) – (A x C)
B
For purposes of the foregoing formula:
A = the total number of Warrant Shares with respect to which
this Warrant is then being exercised.
B = the Closing Bid Price of the Common Stock on the date of
exercise of the Warrant.
C = the Warrant Exercise Price then in effect for the applicable
Warrant Shares at the time of such exercise.
(b) In
the event of any exercise of the rights represented by this Warrant in compliance with this Section 2, the Company shall on or before
the fifth (5th) Business Day following the date of receipt of the Exercise Notice, the Aggregate Exercise Price and this Warrant
(or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction) and the receipt of the
representations of the holder specified in Section 6 hereof, if requested by the Company (the “Exercise Delivery Documents”),
and if the Common Stock is DTC eligible, credit such aggregate number of shares of Common Stock to which the holder shall be entitled
to the holder’s or its designee’s balance account with The Depository Trust Company; provided, however, if the holder who
submitted the Exercise Notice requested physical delivery of any or all of the Warrant Shares, or, if the Common Stock is not DTC eligible
then the Company shall, on or before the fifth (5th) Business Day following receipt of the Exercise Delivery Documents,
issue and surrender to a common carrier for overnight delivery to the address specified in the Exercise Notice, a certificate, registered
in the name of the holder, for the number of shares of Common Stock to which the holder shall be entitled pursuant to such request. Upon
delivery of the Exercise Notice and Aggregate Exercise Price referred to in clause (i) or (ii) above the holder of this
Warrant shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this
Warrant has been exercised. In the case of a dispute as to the determination of the Warrant Exercise Price, the Closing Bid Price or the
arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the holder the number of Warrant Shares that is not
disputed and shall submit the disputed determinations or arithmetic calculations to the holder via facsimile within one (1) Business
Day of receipt of the holder’s Exercise Notice.
(c) Principal
Market Limitation. Notwithstanding anything in this Warrant to the contrary, the Company shall not issue any shares of Common Stock
pursuant to the terms of this Warrant if the issuance of such shares of Common Stock would exceed the aggregate number of shares of Common
Stock that the Company may in connection with any transaction aggregated with this Warrant in compliance with the Company’s obligations
under the rules or regulations of Nasdaq Stock Market (such amount of shares shall be referred to as the “Exchange Cap”),
except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required
by the applicable rules of the Nasdaq Stock Market for issuances of shares of Common Stock in excess of such amount or (B) obtains
a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory
to the Holder.
(d) If
the holder and the Company are unable to agree upon the determination of the Warrant Exercise Price or arithmetic calculation of the Warrant
Shares within one (1) day of such disputed determination or arithmetic calculation being submitted to the holder, then the Company
shall immediately submit via facsimile (i) the disputed determination of the Warrant Exercise Price or the Closing Bid Price to an
independent, reputable investment banking firm or (ii) the disputed arithmetic calculation of the Warrant Shares to its independent,
outside accountant. The Company shall cause the investment banking firm or the accountant, as the case may be, to perform the determinations
or calculations and notify the Company and the holder of the results no later than forty-eight (48) hours from the time it receives the
disputed determinations or calculations. Such investment banking firm’s or accountant’s determination or calculation, as the
case may be, shall be deemed conclusive absent manifest error.
(e) Unless
the rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, as soon as practicable
and in no event later than five (5) Business Days after any exercise and at its own expense, issue a new Warrant identical in all
respects to this Warrant exercised except it shall represent rights to purchase the number of Warrant Shares purchasable immediately prior
to such exercise under this Warrant exercised, less the number of Warrant Shares with respect to which such Warrant is exercised.
(f) No
fractional Warrant Shares are to be issued upon any pro rata exercise of this Warrant, but rather the number of Warrant Shares issued
upon such exercise of this Warrant shall be rounded up or down to the nearest whole number.
(g) If
the Company or its Transfer Agent shall fail for any reason or for no reason to issue to the holder within ten (10) days of
receipt of the Exercise Delivery Documents, a certificate for the number of Warrant Shares to which the holder is entitled or to credit
the holder’s balance account with The Depository Trust Company for such number of Warrant Shares to which the holder is entitled
upon the holder’s exercise of this Warrant, the Company shall, in addition to any other remedies under this Warrant, have any other
remedies otherwise available to such holder.
(h) If
within ten (10) days after the Company’s receipt of the Exercise Delivery Documents, the Company fails to deliver a new Warrant
to the holder for the number of Warrant Shares to which such holder is entitled pursuant to Section 2 hereof, then, in addition to
any other available remedies under this Warrant, have any other remedies otherwise available to such holder.
Section 3. Covenants
as to Common Stock. The Company hereby covenants and agrees as follows:
(a) This
Warrant is, and any Warrants issued in substitution for or replacement of this Warrant will upon issuance be, duly authorized and validly
issued.
(b) All
Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued,
fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof.
(c) Insufficient
Authorized Shares. At any time while this Warrant remains outstanding, if the Company does not have a sufficient number of authorized
and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant at least a number
shares of Common Stock equal to 100% of the number shares of Common Stock as shall from time to time be necessary to effect the exercise
of all of this Warrant then outstanding without regard to any limitation on exercise included herein (the “Required Reserve Amount”)
then the Company shall immediately take all action necessary to increase the Company's authorized shares of Common Stock to an amount
sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding.
(d) If
at any time after the date hereof the Company shall file a registration statement (other than a registration statement on Form S-4,
S-8 or for which the underwriter for such offering refuses in writing to include the Warrant Shares), the Company shall include the Warrant
Shares issuable to the holder, pursuant to the terms of this Warrant and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all Warrant Shares from time to time issuable upon the exercise of this Warrant; and the Company shall so
list on each national securities exchange or automated quotation system, as the case may be, and shall maintain such listing of, any other
shares of capital stock of the Company issuable upon the exercise of this Warrant if and so long as any shares of the same class shall
be listed on such national securities exchange or automated quotation system.
(e) The
Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action (it being understood that filing a Certificate of Designation
or implementing a reverse split are not intended to be included in this provision), avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the holder of this Warrant in order
to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose
of this Warrant. The Company will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant
above the Warrant Exercise Price then in effect, and (ii) will take all such actions as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.
(f) This
Warrant will be binding upon any entity succeeding to the Company by merger, consolidation or acquisition of all or substantially all
of the Company’s assets.
Section 4. Taxes.
The Company shall pay any and all taxes, except any applicable withholding, which may be payable with respect to the issuance and delivery
of Warrant Shares upon exercise of this Warrant.
Section 5. Warrant
Holder Not Deemed a Stockholder. Except as otherwise specifically provided herein, no holder, as such, of this Warrant shall be entitled
to vote or receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor shall anything contained
in this Warrant be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right
to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance
to the holder of this Warrant of the Warrant Shares which he or she is then entitled to receive upon the due exercise of this Warrant.
In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on such holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 5, the Company will provide the holder of this Warrant with copies of
the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to
the stockholders.
Section 6. Representations
of Holder. The holder of this Warrant, by the acceptance hereof, represents that it is acquiring this Warrant and the Warrant Shares
for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution
of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act; provided, however, that
by making the representations herein, the holder does not agree to hold this Warrant or any of the Warrant Shares for any minimum or other
specific term and reserves the right to dispose of this Warrant and the Warrant Shares at any time in accordance with or pursuant to a
registration statement or an exemption under the Securities Act. The holder of this Warrant further represents, by acceptance hereof,
that, as of this date, such holder is an “accredited investor” as such term is defined in Rule 501(a)(1) of Regulation
D promulgated by the Securities and Exchange Commission under the Securities Act (an “Accredited Investor”). Upon exercise
of this Warrant the holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company, that the Warrant
Shares so purchased are being acquired solely for the holder’s own account and not as a nominee for any other party, for investment,
and not with a view toward distribution or resale and that such holder is an Accredited Investor. If such holder cannot make such representations
because they would be factually incorrect, it shall be a condition to such holder’s exercise of this Warrant that the Company receive
such other representations as the Company considers reasonably necessary to assure the Company that the issuance of its securities upon
exercise of this Warrant shall not violate any United States or state securities laws.
Section 7. Ownership
and Transfer. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the
person in whose name this Warrant has been issued, as well as the name and address of each transferee. The Company may treat the person
in whose name any Warrant is registered on the register as the owner and holder thereof for all purposes, notwithstanding any notice to
the contrary, but in all events recognizing any transfers made in accordance with the terms of this Warrant.
Section 8. Adjustment
of Warrant Exercise Price and Number of Shares. The Warrant Exercise Price and the number of shares of Common Stock issuable upon
exercise of this Warrant shall be adjusted from time to time as follows:
(a) Adjustment
of Warrant Exercise Price upon Subdivision or Combination of Common Stock. If the Company at any time after the date of issuance of
this Warrant subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares
of Common Stock into a greater number of shares, any Warrant Exercise Price in effect immediately prior to such subdivision will be proportionately
reduced and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately increased. If the Company
at any time after the date of issuance of this Warrant combines (by combination, reverse stock split or otherwise) one or more classes
of its outstanding shares of Common Stock into a smaller number of shares, any Warrant Exercise Price in effect immediately prior to such
combination will be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant will be proportionately
decreased. Any adjustment under this Section 8(a) shall become effective at the close of business on the date the subdivision
or combination becomes effective.
(b) Distribution
of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement or other similar transaction)
(a “Distribution”), at any time after the issuance of this Warrant, then, in each such case:
(i) any
Warrant Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders
of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a
price determined by multiplying such Warrant Exercise Price by a fraction of which (A) the numerator shall be the Closing Sale Price
of the Common Stock on the trading day immediately preceding such record date minus the value of the Distribution (as determined in good
faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (B) the denominator shall be the Closing
Sale Price of the Common Stock on the trading day immediately preceding such record date; and
(ii) either
(A) the number of Warrant Shares obtainable upon exercise of this Warrant shall be increased to a number of shares equal to the number
of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination of holders
of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding
clause (i), or (B) in the event that the Distribution is of common stock of a company whose common stock is traded on a national
securities exchange or a national automated quotation system, then the holder of this Warrant shall receive an additional warrant to purchase
Common Stock, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the amount
of the assets that would have been payable to the holder of this Warrant pursuant to the Distribution had the holder exercised this Warrant
immediately prior to such record date and with an exercise price equal to the amount by which the exercise price of this Warrant was decreased
with respect to the Distribution pursuant to the terms of the immediately preceding clause (i).
(c) Certain
Events. If any event occurs of the type contemplated by the provisions of this Section 8 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity
features other than to employees, officers, directors or consultants as compensation), then the Company’s Board of Directors will
make an appropriate adjustment in the Warrant Exercise Price and the number of shares of Common Stock obtainable upon exercise of this
Warrant so as to protect the rights of the holders of the Warrants; provided, except as set forth in Section 8(a), that no such adjustment
pursuant to this Section 8(c) will increase the Warrant Exercise Price or decrease the number of shares of Common Stock obtainable
as otherwise determined pursuant to this Section 8.
(d) Notices.
(i) Immediately
upon any adjustment of the Warrant Exercise Price, the Company will give written notice thereof to the holder of this Warrant, setting
forth in reasonable detail, and certifying, the calculation of such adjustment.
(ii) The
Company will give written notice to the holder of this Warrant at least ten (10) days prior to the date on which the Company closes
its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any
pro rata subscription offer to holders of Common Stock or (C) for determining rights to vote with respect to any Organic Change (as
defined below), dissolution or liquidation, provided that such information shall be made known to the public prior to or in conjunction
with such notice being provided to such holder.
(iii) The
Company will also give written notice to the holder of this Warrant at least ten (10) days prior to the date on which any Organic
Change, dissolution or liquidation will take place, provided that such information shall be made known to the public prior to or in conjunction
with such notice being provided to such holder.
Section 9. Purchase
Rights; Reorganization, Reclassification, Consolidation, Merger or Sale.
(a) In
addition to any adjustments pursuant to Section 8 above, if at any time the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock
(the “Purchase Rights”), then the holder of this Warrant will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the number of shares
of Common Stock acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are
to be determined for the grant, issue or sale of such Purchase Rights. In the event the holder of this Warrant does not exercise any part
of this Warrant, the Purchase Rights allocable to such unexercised portion of the Warrant shall be automatically canceled.
(b) Any
recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s assets
to another Person or other transaction in each case which is effected in such a way that holders of Common Stock are entitled to receive
(either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock is referred
to herein as an “Organic Change.” Prior to the consummation of any (i) sale of all or substantially all of the
Company’s assets to an acquiring Person or (ii) other Organic Change following which the Company is not a surviving entity,
the Company will secure from the Person purchasing such assets or the successor resulting from such Organic Change (in each case, the
“Acquiring Entity”) a written agreement (in form and substance reasonably satisfactory to the holders of Warrants representing
at least two-thirds of the Warrant Shares issuable upon exercise of the Warrants then outstanding) to deliver to each holder of Warrants
in exchange for such Warrants, a security of the Acquiring Entity evidenced by a written instrument substantially similar in form and
substance to this Warrant and reasonably satisfactory to the holders of the Warrants (including an adjusted warrant exercise price equal
to the value for the Common Stock reflected by the terms of such consolidation, merger or sale, and exercisable for a corresponding number
of shares of Common Stock acquirable and receivable upon exercise of the Warrants without regard to any limitations on exercise, if the
value so reflected is less than any Applicable Warrant Exercise Price immediately prior to such consolidation, merger or sale). Prior
to the consummation of any other Organic Change, the Company shall make appropriate provision (in form and substance reasonably satisfactory
to the holders of Warrants representing a majority of the Warrant Shares issuable upon exercise of the Warrants then outstanding) to insure
that each of the holders of the Warrants will thereafter have the right to acquire and receive in lieu of or in addition to (as the case
may be) the Warrant Shares immediately theretofore issuable and receivable upon the exercise of such holder’s Warrants (without
regard to any limitations on exercise), such shares of stock, securities or assets that would have been issued or payable in such Organic
Change with respect to or in exchange for the number of Warrant Shares which would have been issuable and receivable upon the exercise
of such holder’s Warrant as of the date of such Organic Change (without taking into account any limitations or restrictions on the
exercisability of this Warrant).
Section 10. Lost,
Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly, on receipt
of an indemnification undertaking (or, in the case of a mutilated Warrant, the Warrant), issue a new Warrant of like denomination and
tenor as this Warrant so lost, stolen, mutilated or destroyed.
Section 11. Notice.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Warrant must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of receipt is received by the sending party transmission is mechanically or electronically generated and kept on
file by the sending party); or (iii) one Business Day after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:
| If to Holder: |
YA II PN, Ltd. |
| |
c/o Yorkville Advisors Global, LP
1012 Springfield Avenue |
| |
Mountainside, NJ 07092 |
| |
Attention: Mark Angelo |
| |
Telephone: [***] |
| |
Email: [***] |
| |
|
| With Copy to: |
Troy J. Rillo, Esq. |
| |
1012 Springfield Avenue |
| |
Mountainside, NJ 07092 |
| |
Telephone: [***] |
| |
Email:
[***] |
| |
|
| If to the Company, to: |
Canoo Inc. |
| |
15520 Highway 114 |
| |
Justin, TX 76247 |
| |
Attention: Hector Ruiz; Greg Ethridge
Email: [***] |
If to a holder of this Warrant, to it at the address
and facsimile number set forth on Exhibit C hereto, with copies to such holder’s representatives as set forth on Exhibit C,
or at such other address and facsimile as shall be delivered to the Company upon the issuance or transfer of this Warrant. Each party
shall provide five days’ prior written notice to the other party of any change in address or facsimile number. Written confirmation
of receipt (A) given by the recipient of such notice, consent, facsimile, waiver or other communication, (or (B) provided by
a nationally recognized overnight delivery service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from
a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.
Section 12. Date.
The date of this Warrant is set forth on page 1 hereof. This Warrant, in all events, shall be wholly-void and of no effect after
the close of business on the Expiration Date.
Section 13. Amendment
and Waiver. Except as otherwise provided herein, the provisions of the Warrants may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent
of the holders of Warrants representing at least two-thirds of the Warrant Shares issuable upon exercise of the Warrants then outstanding;
provided that, except for Section 8(a), no such action may increase the Warrant Exercise Price or decrease the number of shares or
class of stock obtainable upon exercise of any Warrant without the written consent of the holder of such Warrant.
Section 14. Descriptive
Headings; Governing Law. The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. The corporate laws of the State of Delaware shall govern all issues concerning the
relative rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws
of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in Union County and the United States District Court for the District of New York, for the adjudication of
any dispute hereunder or in connection herewith or therewith, or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
Section 15. Waiver
of Jury Trial. AS A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE PARTIES HERETO HEREBY WAIVE ANY RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH
THIS TRANSACTION.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed as of the date first set forth above.
| |
CANOO INC. |
| |
|
| |
By: |
/s/ Greg Ethridge |
| |
Name: |
Greg Ethridge |
| |
Title: |
Chief Financial Officer |
EXHIBIT A TO WARRANT
EXERCISE NOTICE
TO BE EXECUTED
BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT
CANOO INC.
The undersigned holder hereby
exercises the right to purchase ______________ of the shares of Common Stock (“Warrant Shares”) of CANOO INC.
(the “Company”), evidenced by the attached Warrant (the “Warrant”). Capitalized terms used herein
and not otherwise defined shall have the respective meanings set forth in the Warrant.
Specify Method of exercise by check mark:
1.
_____Cash Exercise
(a) Payment of Warrant Exercise
Price. The holder shall pay the Aggregate Exercise Price of $______________ to the Company in accordance with the terms of the Warrant.
(b) Delivery of Warrant Shares.
The Company shall deliver to the holder _________ Warrant Shares in accordance with the terms of the Warrant.
2.
_____Cashless Exercise
(a) Payment of Warrant Exercise
Price. In lieu of making payment of the Aggregate Exercise Price, the holder elects to receive upon such exercise the Net Number of
shares of Common Stock determined in accordance with the terms of the Warrant.
(b) Delivery of Warrant Shares.
The Company shall deliver to the holder _________ Warrant Shares in accordance with the terms of the Warrant.
Date: _______________ __, ______
Name of Registered Holder
EXHIBIT B TO WARRANT
FORM OF WARRANT POWER
FOR
VALUE RECEIVED, the undersigned does hereby assign and transfer to ________________, Federal Identification No. __________,
a warrant to purchase ____________ shares of the capital stock of Canoo Inc. represented by warrant certificate no. _____, standing
in the name of the undersigned on the books of said corporation. The undersigned does hereby irrevocably constitute and appoint ______________,
attorney to transfer the warrants of said corporation, with full power of substitution in the premises.
| Dated: ________________________________________________ |
|
|
| |
|
|
| |
|
By: |
|
| |
|
Name: |
|
| |
|
Title: |
|
Exhibit 5.1
|
| |
333 West Wolf Point Plaza
Chicago, IL 60654
United States
+1 312 862 2000
www.kirkland.com |
Facsimile:
+1 312 862 2200 |
August 29, 2024
Canoo Inc.
19951 Mariner Avenue
Torrance, California 9050 |
Re: Registration Statement of Canoo Inc. on
Form S-3
Ladies and Gentlemen:
We are acting as special counsel
to Canoo Inc., a Delaware corporation (the “Company”), in connection with the registration by the Company of the offer and
sale of up to $25,158,219.18 of its common stock, par value $0.0001 per share (the “Common Stock”), consisting of up to 25,158,220
shares (the “Shares”) pursuant to the terms of the Pre-Paid Advance Agreement, dated July 19, 2024, between the Company
and YA II PN, Ltd., as modified by the Supplemental Agreement, dated August 28, 2024, between the Company and YA II PN, Ltd.
(as the same may be amended or supplemented from time to time, the “Agreement”). The Shares are being offered and sold pursuant
to a Registration Statement on Form S-3 (Registration No. 333-280962) filed by the Company with the Securities and Exchange
Commission (the “Commission”) on July 23, 2024 under the Securities Act of 1933, as amended (the “Act”)
(such Registration Statement, as amended or supplemented, is hereinafter referred to as the “Registration Statement”), including
a base prospectus dated July 31, 2024 (the “Base Prospectus”) and the prospectus supplement dated August 29, 2024
(together with the Base Prospectus, the “Prospectus”).
In that connection, we have examined originals,
or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have
deemed necessary for the purposes of this opinion, including (i) the corporate and organizational documents of the Company, including
the Second Amended and Restated Certificate of Incorporation of the Company, as amended through the date hereof, and the Amended and
Restated Bylaws of the Company; (ii) resolutions of the Board of Directors of the Company with respect to the issuance and sale
of the Shares; (iii) the Registration Statement and the exhibits thereto; and (iv) the Agreement.
For purposes of this opinion, we have assumed the
authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies
and the authenticity of the originals of all documents submitted to us as copies. We have also assumed the legal capacity of all natural
persons, the genuineness of the signatures of persons signing all documents in connection with which this opinion is rendered, the authority
of such persons signing on behalf of the parties thereto other than the Company and the due authorization, execution and delivery of
all documents by the parties thereto other than the Company. We relied upon statements and representations of officers and other representatives
of the Company and others as to factual matters.
Austin Bay
Area Beijing Boston Brussels Chicago Dallas Hong Kong Houston London Los Angeles Miami Munich New York Paris Salt
Lake City Riyadh Shanghai Washington, D.C.
 |
Canoo Inc.
August 29, 2024
Page 2 |
|
Based upon and subject to the foregoing qualifications,
assumptions and limitations and the further limitations set forth below, we are of the opinion that the Shares are duly authorized, and
when the Shares are registered by the Company’s transfer agent and delivered against payment of the agreed consideration therefor,
all in accordance with the Agreement, the Shares will be validly issued, fully paid and non-assessable.
Our opinion expressed above is subject to the qualifications
that we express no opinion as to the applicability of, compliance with, or effect of any laws except the General Corporation Law of the
State of Delaware (including the statutory provisions, all applicable provisions of the Delaware constitution and reported judicial decisions
interpreting the foregoing).
We hereby consent to the filing of this opinion
with the Commission as Exhibit 5.1 to the Company’s current report on Form 8-K. We also consent to the reference to our
firm under the heading “Legal Matters” in the Prospectus constituting part of the Registration Statement. In giving this
consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission.
We do not find it necessary for the purposes of
this opinion, and accordingly we do not purport to cover herein, the application of the securities or “Blue Sky” laws of
the various states to the issuance and sale of the Shares and the Rights.
This opinion is limited to the specific issues addressed
herein, and no opinion may be inferred or implied beyond that expressly stated herein.
This opinion is furnished to you in connection with
the filing of the Prospectus and in accordance with the requirements of Item 601(b)(5) of Regulation S-K promulgated under the Act,
and is not to be used, circulated, quoted or otherwise relied upon for any other purpose.
| |
Sincerely, |
| |
|
| |
/s/ Kirkland &
Ellis LLP |
| |
|
| |
KIRKLAND &
ELLIS LLP |
Exhibit 10.1
SUPPLEMENTAL AGREEMENT
This Supplemental Agreement
(this “Agreement”), dated as of August 28, 2024, is entered into by and between YA II PN, LTD., a
Cayman Islands exempt limited company (the “Investor”), CANOO INC., a corporation organized and existing under
the laws of the State of Delaware (the “Company”). Capitalized terms not otherwise defined herein shall have the meanings
set forth in the July Prepaid Advance Agreement (as defined below).
BACKGROUND
| (A) | On June 13, 2024, the parties entered into that certain Pre-Paid Advance Agreement (as amended and
supplemented from time to time, the “June PPA”) pursuant to which Yorkville agreed to advance $15,000,000 to the
Company (the “June Prepaid Advance”) pursuant to the terms set forth in the June PPA. As of the date hereof,
$15,000,000 in principal amount and $158,219.18 of accrued and unpaid interest remains outstanding under the June Prepaid Advance
(collectively, the “Outstanding June PPA Amount”). |
| (B) | On July 19, 2024, the parties entered into that certain Pre-Paid Advance Agreement (as amended and
supplemented from time to time, including by this Agreement, the “July Prepaid Advance Agreement”) pursuant to
which the Company may, subject to conditions and limitations set forth in the July Prepaid Advance Agreement, request Prepaid Advances
from time to time in an aggregate amount not to exceed the Maximum Advance Amount from the Investor by providing a Request. On that same
day, the Company requested, and the Investor agreed to advance, $15,000,000 (the “First Prepaid Advance”) pursuant
to the terms set forth in the July Prepaid Advance Agreement. |
| (C) | On July 20, 2022, the parties entered into that certain Pre-Paid Advance Agreement (as amended and
supplemented from time to time, including by the March 2024 Supplemental Agreement (as defined below), the “2022 PPA”)
pursuant to which the Company could, subject to the conditions and limitations set forth in the 2022 PPA, request Pre-Paid Advances (as
defined in the 2022 PPA) in an amount not to exceed the Maximum Advance Amount (as defined in the 2022 PPA) not to exceed the Maximum
Advance Amount from the Investor by providing a written Request (as defined in the 2022 PPA). On March 12, 2024, the parties entered
into that certain Supplemental Agreement (the “March 2024 Supplemental Agreement”) pursuant to which the Company
requested, and the Investor agreed to advance to the Company, $62,032,000. |
| (D) | Pursuant to this Agreement, the parties desire to supplement the terms and conditions of the July Prepaid
Advance Agreement in respect of a second Request for a Prepaid Advance in the amount of $25,158,219.18 to be provided by the Company to
the Investor concurrently with the execution of this Agreement. This Agreement shall govern the Second Prepaid Advance (as defined below). |
NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:
1. Second
Prepaid Advance Amount
1.1. The
Company hereby requests, and the Investor hereby agrees to fund, a second Prepaid Advance in the amount of $25,158,219.18 (the “Second
Prepaid Advance”). The Second Prepaid Advance shall be governed by the terms and conditions of the July Prepaid Advance
Agreement, except as expressly set forth in this Agreement. Solely with respect to the Second Prepaid Advance, the parties hereby
agree that (i) the Purchase Price shall mean the lower of (a) $1.7554 per share (i.e., a price per share equal to 120%
of the VWAP on the Trading Day immediately prior to the Pre-Advance Date of the Second Prepaid Advance), or (b) 95% of the lowest
daily VWAP during five Trading Days immediately preceding each Purchase Notice Date, but not lower than the Floor Price and (ii) Section 2.01
(solely with respect to the Maximum Advance Amount) of the July Prepaid Advance Agreement shall not apply in respect of the Second
Prepaid Advance.
1.2 Additional
Agreements.
(a) For
the avoidance of doubt, any failure by the Company to observe or perform any material covenant, agreement or warranty contained in this
Agreement or any other agreement between the parties hereof shall be an Event of Default under the July Prepaid Advance Agreement.
(b) The
Company shall first use the necessary portion of the proceeds from the Second Prepaid Advance to repay the Outstanding June PPA Amount.
In connection with such repayment, the Investor waives (i) the Redemption Premium (as defined in the June PPA) on the Outstanding
June PPA Amount and (ii) any prior notice period required, in each case, pursuant to Section 2.03(d) of the June PPA.
Such proceeds shall not be transferred to the Company by the Investor in respect of the Second Prepaid Advance and shall be offset against
the Outstanding June PPA Amount. Following such offset, the Outstanding June PPA Amount shall be fully retired and no amounts
shall be due under the June PPA.
(c) Pursuant
to Section 2.02 of the July Prepaid Advance Agreement, in connection with the Second Prepaid Advance, the Company shall issue
to the Investor a warrant to purchase 2,848,354 shares of Common Shares each at an exercise price of $1.7554 per share, exercisable beginning
on February 28, 2025, and with an expiration date of August 28, 2029.
(d) The
Company shall call and hold an annual meeting of its shareholders on or before November 13, 2024, and shall obtain board of director
approval to file any proxy statement for such meeting on or before September 9, 2024, for the purposes (among others) of obtaining
the consent of the shareholders of the Company (i) in accordance with Nasdaq Listing Rule 5635(d), for the issuance of all shares
of its Common Shares that could be issued pursuant to the July Prepaid Advance Agreement, including in excess of the Exchange Cap
and (ii) the reduction of the Floor Price in respect of the July Prepaid Advance Agreement and the 2022 PPA (as “Floor
Price” is defined therein) to an amount not to exceed 20% of the lower of (i) $1.7554 and (ii) the Nasdaq Official Closing
Price on the Trading Day immediately preceding that date the proxy statement for such meeting is mailed (collectively, the matters set
forth in the preceding clauses (i) and (ii), the “Proposals”). The Company’s board of directors shall recommend
that the Company’s shareholders vote in favor of the Proposals, and the Company shall solicit proxies from its shareholders in connection
therewith and management-appointed proxyholders shall vote their proxies in favor of the Proposals. The Company shall file the preliminary
proxy relating to such proposal as soon as practicable following receipt of the aforementioned board approval and in no event later than
September 11, 2024.
(e) If
at any time following the date hereof and prior to the repayment of all amounts due under the July Prepaid Advance Agreement and
the 2022 PPA (i) the daily VWAP is less than the Floor Price then in effect for five (5) Trading Days during a period of seven
(7) consecutive Trading Days, (ii) the Company has issued in excess of 99% of the Common Shares available under the Exchange
Cap (to the extent the Exchange Cap remains applicable at any time of determination) or (iii) any of the Common Shares to be issued
under either the July Prepaid Advance Agreement or the 2022 PPA are not eligible to be sold pursuant to a Registration Statement
for a period of ten (10) consecutive Trading Days (each of the events set forth in the foregoing clauses (i), (ii) and (iii),
a “Trigger Event”), the Company shall immediately begin drawing on its “at-the-market” facility and making
minimum payments equal to $3,000,000 per week and $15,000,000 per month until all amounts owed under the July Prepaid Advance Agreement
and the 2022 PPA have been repaid in full.
2. Representations,
Warranties and Covenants.
2.1 Representations
and Warranties. Each party represents and warrants to the other as of the date of this Agreement that:
| (a) | it has the requisite corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement; |
| (b) | it has taken all necessary corporate actions to authorize the execution, delivery and performance of this
Agreement and no further action is required by the it, its Board of Directors or managers or members in connection therewith; and |
| (c) | the obligations assumed by it in this Agreement are legal, valid, and enforceable obligations binding
on it in accordance with its terms. |
2.2 The
Company represents and warrants that as of August 27, 2024, the authorized capital of the Company consists of 2,010,000,000 shares
of capital stock, of which 2,000,000,000 shares are designated Common Shares, and 10,000,000 shares are preferred stock. As of the date
hereof, the Company had 77,976,863 shares of Common Shares outstanding and 61,500 shares of preferred stock outstanding.
2.3 Cleansing
Disclosures. As soon as possible (and prior to the open of business on August 29, 2024) the Company shall file with the SEC a
report on Form 8-K or such other appropriate form as determined by counsel to the Company, relating to the transactions contemplated
by this Agreement disclosing all information relating to the transaction contemplated hereby required to be disclosed therein, disclosing
all information relating to the closing of the Second Prepaid Advance required to be disclosed therein (collectively, the “Cleansing
Disclosure”). From and after the issuance of the Cleansing Disclosure, the Company represents to the Investor that it shall
have publicly disclosed all material, non-public information delivered to the Investor by the Company in connection with the transactions
contemplated by this Agreement and the July Prepaid Advance Agreement. The Company promptly shall prepare and file with the SEC a
preliminary Prospectus Supplement pursuant to Rule 424(b) of the Securities Act and an updated Plan of Distribution, necessary
to register the transactions contemplated herein, including, without limitation, all shares of Common Shares issuable pursuant to the
Second Prepaid Advance, and any other filings, reports, supplements, or amendments that may be required to keep the Registration Statement
and related Prospectus Supplements used in connection with such Registration Statement updated and effective, including, without limitation,
the continued use of the Prospectus in connection with the Second Prepaid Advance.
2.5 The
Company shall at all times reserve 110,000,000 shares of Common Stock for issuance to the Investor in connection with the July Prepaid
Advance Agreement.
3. Counterparts
and delivery. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party,
it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
4. Choice
of Law/Jurisdiction. This Agreement, and any and all claims, proceedings or causes of action relating to this Agreement or arising
from this Agreement or the transactions contemplated herein, including, without limitation, tort claims, statutory claims and contract
claims, shall be interpreted, construed, governed and enforced under and solely in accordance with the substantive and procedural laws
of the State of New York, in each case as in effect from time to time and as the same may be amended from time to time, and as applied
to agreements performed wholly within the State of New York. The Parties further agree that any action between them shall be heard in
New York County, New York, and expressly consent to the jurisdiction and venue of the Supreme Court of New York, sitting in New York County,
New York and the United States District Court of the Southern District of New York, sitting in New York, New York, for the adjudication
of any civil action asserted pursuant to this Agreement. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREIN, THE PERFORMANCE THEREOF OR THE FINANCINGS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS PARAGRAPH.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF,
the parties hereto have caused this Supplemental Agreement to be executed by the undersigned, thereunto duly authorized, as of the date
first set forth above.
| |
COMPANY: |
| |
CANOO INC. |
| |
|
| |
By: |
/s/ Greg Ethridge |
| |
Name: |
Greg Ethridge |
| |
Title: |
Chief Financial Officer |
| |
|
| |
INVESTOR: |
| |
YA II PN, LTD. |
| |
|
| |
By: |
Yorkville Advisors Global, LP |
| |
Its: |
Investment Manager |
| |
|
| |
|
By: |
Yorkville Advisors Global II, LLC |
| |
|
Its: |
General Partner |
| |
|
| |
By: |
/s/ Matt Beckman |
| |
Name: |
Matt Beckman |
| |
Title: |
Manager |
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