Canoo has agreed to sell 50 million shares at a steeply discounted price as the cash-strapped EV company seeks the money it needs to keep its operations running.

Canoo said Monday it would sell 50 million new shares to unnamed investors for $1.05 per share, a 16% discount from its closing price Friday. The shares will be sold together with warrants that give the investors an option to buy up to 50 million more. Each share comes with one warrant that can be exercised at $1.30 per share.

The gross proceeds from the offering are expected to be about $52.5 million, the company said.

Canoo has repeatedly warned that it’s low on cash and will likely need to issue more shares to raise capital. Still, the move was snubbed by investors who reacted to the discounted price and that their current holdings would be diluted.

Canoo shares opened Monday at $1, 20% lower than its closing price on Friday.

Canoo, which went public via a merger with a special purpose acquisition company, has struggled to produce its EV, an eye-catching design that is reconfigurable and based on a “skateboard” architecture that houses the batteries and the electric drivetrain in a chassis underneath the vehicle’s cabin.

Canoo has reported it has more than $1 billion in its sales pipeline, a figure largely attributable to a deal with Walmart to purchase 4,500 units, with an option to buy up to 10,000 units. The company has struggled to convert those sales into deliveries. The past several quarters have shown a pre-revenue company burning through cash.

Canoo had only $6.8 million on hand at the end of the third quarter. The company said the proceeds from the selling these new shares would be used for “general working capital purposes.”

EV SPAC Canoo agrees to sell $52M in stock to stay alive by Kirsten Korosec originally published on TechCrunch