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Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of the impact of immaterial correction

The following tables reflect the impact of the immaterial correction on the Company's previously reported consolidated balance sheet, consolidated statement of operations, consolidated statement of stockholders’ equity (deficit) and consolidated statement of cash flows (in thousands) as of and for the year ended December 31, 2020.


	As of December 31, 2020
	As Previously Reported		Warrants 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


	For the year ended December 31, 2020
	As Previously Reported		Warrants 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 Stockholders’ (Deficit) Equity (in thousands).


	For the year ended December 31, 2020
	As Previously Reported		Warrants Adjustments		As Corrected
Consolidated Statement of 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


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


Date	Description	Redeemable Convertible Preference Shares	08/16/20 Conversion Ratio	A /A-1 Shares And Ordinary Shares	12/21/20 Merger Recapitalization Conversion Ratio	Recapitalized Common Shares
Statement of Stockholders’ (Deficit) Equity

12/31/2018	Angel Shares	77,000,000	0.54	41,403,247	1.24	51,316,627

3/4/2019	Seed Shares	16,666,667	0.54	8,961,742	1.24	11,107,496

5/6/2019	Seed Shares	16,666,666	0.54	8,961,741	1.24	11,107,495

Statement of Stockholders’ (Deficit) Equity

12/31/2018	Convertible Debt			51,006,603	1.24	63,219,362


1)			Legacy Canoo redeemable convertible preference shares – Angel Series (“Angel Shares”) was outstanding at December 31, 2018 with 77.0 million shares, which were initially converted to 41.4 million shares of Legacy A series redeemable convertible preference shares on August 16, 2020 and later were exchanged into 41.4 million shares of Legacy Canoo ordinary shares on December 21, 2020 and converted again to 51.3 million shares of our Common Stock at the Business Combination on December 21, 2020.


2)			Legacy Canoo redeemable convertible preference shares – Seed Series (“Seed Shares”) was issued on March 4, 2019 and May 6, 2019 with 16.7 million shares and 16.7 million shares, respectively, which were initially converted to 17.9 million shares of Legacy A series redeemable convertible preference shares on August 16, 2020 and later were exchanged into 17.9 million shares of Legacy Canoo ordinary shares on December 21, 2020 and converted again to 22.2 million shares of our Common Stock at the Business Combination on December 21, 2020.


3)			Legacy Canoo convertible debt (“Convertible Debt”) – On August 16, 2020, all Convertible Debt was initially converted to 51.0 million shares of A/A-1 Shares, which were later exchanged into 51.0 million shares of Legacy Canoo ordinary shares on December 21, 2020 and converted again to 63.2 million shares of our Common Stock at the Business Combination on December 21, 2020. In the accompanying recasted consolidated statements of stockholders' (deficit) equity, the 51.0 million shares of A/A-1 Shares outstanding is converted and presented as 63.2 million shares of Common Stock issued during the year ended December 31, 2020.

Schedule of retroactive recapitalization


	As of December 31, 2020
	As Previously Reported		Warrants 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


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


	For the year ended December 31, 2020
	As Previously Reported		Warrants Adjustments		As Corrected
Consolidated Statement of 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


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


Date	Description	Redeemable Convertible Preference Shares	08/16/20 Conversion Ratio	A /A-1 Shares And Ordinary Shares	12/21/20 Merger Recapitalization Conversion Ratio	Recapitalized Common Shares
Statement of Stockholders’ (Deficit) Equity

12/31/2018	Angel Shares	77,000,000	0.54	41,403,247	1.24	51,316,627

3/4/2019	Seed Shares	16,666,667	0.54	8,961,742	1.24	11,107,496

5/6/2019	Seed Shares	16,666,666	0.54	8,961,741	1.24	11,107,495

Statement of Stockholders’ (Deficit) Equity

12/31/2018	Convertible Debt			51,006,603	1.24	63,219,362


1)			Legacy Canoo redeemable convertible preference shares – Angel Series (“Angel Shares”) was outstanding at December 31, 2018 with 77.0 million shares, which were initially converted to 41.4 million shares of Legacy A series redeemable convertible preference shares on August 16, 2020 and later were exchanged into 41.4 million shares of Legacy Canoo ordinary shares on December 21, 2020 and converted again to 51.3 million shares of our Common Stock at the Business Combination on December 21, 2020.


2)			Legacy Canoo redeemable convertible preference shares – Seed Series (“Seed Shares”) was issued on March 4, 2019 and May 6, 2019 with 16.7 million shares and 16.7 million shares, respectively, which were initially converted to 17.9 million shares of Legacy A series redeemable convertible preference shares on August 16, 2020 and later were exchanged into 17.9 million shares of Legacy Canoo ordinary shares on December 21, 2020 and converted again to 22.2 million shares of our Common Stock at the Business Combination on December 21, 2020.


3)			Legacy Canoo convertible debt (“Convertible Debt”) – On August 16, 2020, all Convertible Debt was initially converted to 51.0 million shares of A/A-1 Shares, which were later exchanged into 51.0 million shares of Legacy Canoo ordinary shares on December 21, 2020 and converted again to 63.2 million shares of our Common Stock at the Business Combination on December 21, 2020. In the accompanying recasted consolidated statements of stockholders' (deficit) equity, the 51.0 million shares of A/A-1 Shares outstanding is converted and presented as 63.2 million shares of Common Stock issued during the year ended December 31, 2020.

Schedule of useful lives by asset

Useful lives by asset category are as follows:


Assets category						Years
Leasehold improvements						Shorter of lease term or estimated useful life
Machinery and equipment						3 years
Furniture and fixtures						5 years
Computer hardware and software						3 years
Vehicles						3 years

Schedule of assets and liabilities measured at fair value on a recurring basis

The following table summarizes the Company’s assets and liabilities that are measured at fair value

on a recurring basis as required by ASC 820, by level, within the fair value hierarchy as of December 31, 2021 and 2020 (in thousands):


	December 31, 2021
	Fair Value		Level 1		Level 2		Level 3
Assets
Money Market Funds	$	227,492	$	227,492	$	—	$	—

Liability
Contingent earnout shares liability	$	29,057	$	—	$	—	$	29,057


	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		—

Summary of the change in fair value of contingent earnout shares liability and private placement warrants liability

Following is a summary of the change in fair value of contingent Earnout Shares liability and private placement warrants liability for the years ended December 31, 2021 and 2020 (in thousands).


	Year Ended December 31,
Earnout Shares Liability	2021		2020
Beginning fair value	$	133,503	$	—
Addition during the year	—		248,878
Change in fair value during the year	(104,446)		(115,375)
Ending fair value	$	29,057	$	133,503


	Year Ended December 31,
Private Placement Warrants Liability	2021		2020
Beginning fair value	$	6,613	$	9,745
Change in fair value during the year	1,639		(3,132)
Conversion of private placement warrants to public warrants	(8,252)		—
Ending fair value	$	—	$	6,613

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details