Canoo ($GOEV) Investor Settlement

The parties have reached an agreement to settle the case, but the terms are still being finalized. You can submit your application now, and it will be processed once claims filing opens.

C.D. California

Court

2:21-CV-02873

Case number

08/18/2020

Class period Start

03/29/2021

Class period End

Canoo has reached a tentative settlement to resolve investor claims that it misled the market about its engineering-services business, subscription model, and Hyundai-related commercial prospects.

Outline:

On August 18, 2020, Canoo promoted engineering services, subscriptions, and future commercial sales as its core revenue plan. Through September 2020, December 2020, and January 2021, it kept saying engineering services could drive near-term revenue and that Hyundai validated its technology. On March 29, 2021, Canoo reversed course, deemphasized engineering services, and moved away from the subscription model. The case has now moved to a tentative settlement.

Timeline:
August 18, 2020: Hennessy announced its merger agreement with Canoo and promoted Canoo’s three planned revenue streams.
September 18, 2020: Canoo filed merger materials stating that engineering services supported projected 2021 revenue of $120 million.
December 21, 2020: Hennessy shareholders approved the merger, and the combined company became Canoo.
January 13, 2021: Canoo filed a shelf registration repeating its claims about engineering-services revenue, the subscription model, and Hyundai.
March 29, 2021: Canoo announced fourth-quarter and full-year 2020 results and said it would deemphasize engineering services and move away from the originally promoted subscription strategy.
March 31, 2021: Canoo disclosed that its 2020 revenue came from consulting services tied to a single performance obligation that had been satisfied in July 2020.
April 5, 2021: Canoo shares fell further, reaching a low of $8.05.
April 2026: Canoo reached a tentative settlement to resolve investor claims
Background:

Canoo came to market through a SPAC merger while promoting an electric-vehicle business built on its modular skateboard platform. The company told investors it had a differentiated model with three revenue streams, including engineering services for other companies, a subscription-based consumer vehicle program, and future commercial sales.

A major part of that story was engineering services. Canoo said this business could generate immediate revenue before its own vehicles reached market, projected $120 million of engineering-services revenue in 2021, and pointed to Hyundai as outside validation of its technology and commercial prospects.

The company also heavily promoted its subscription model. Canoo described it as more profitable and resilient than a traditional sale or lease model and told investors it would reduce barriers for consumers while producing attractive margins and recurring cash flow.

Investors say that picture was misleading. According to the source, the engineering-services revenue was tied to a single performance obligation that had already been completed in July 2020, the subscription model carried a major cash burden that made it less sustainable than presented, and the Hyundai relationship did not support the significance Canoo had attached to it.

The market learned more in late March 2021, when Canoo abruptly changed course. The company said it would deemphasize engineering services, back away from the originally promoted subscription strategy, and focus more directly on its own products and commercial opportunities. The matter has now moved to a tentative settlement.

What Can Investors Expect Now?

Canoo has reached a tentative settlement to resolve investor claims that it misled the market about its engineering-services business, subscription model, and Hyundai-related commercial prospects.

If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section.

Case Type

US Securities Class Action

Case Status

Tentative Settlement

Alleged Offence

Misleading Statements,

Financial Misrepresentation,

Fraud,

Failure to Disclose,

Omissions

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Long

Filing date

04/02/2021

Plaintiffs

Vladi Shaulov

Attorneys

Pomerantz LLP

Defendants

Tony Aquila ; Ulrich Kranz ; Paul Balciunas ; Hennessy Capital Acquisition Corp. IV

Trades matching type

FIFO

Frequently Asked Questions

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