Item 8.01 Other Events.
On December 21, 2020, Hennessy Capital Acquisition Corp. IV ("Hennessy
Capital"), the predecessor to Canoo Inc. (the "Company"), held a special meeting
of stockholders (the "Hennessy Capital Special Meeting") to approve certain
matters relating to the business combination between Hennessy Capital and Canoo
Holdings Ltd. ("Legacy Canoo"). One of these matters was a proposal to increase
the total number of authorized shares of the Company's common stock to
500,000,000 shares and authorized shares of preferred stock to 10,000,000 shares
(the "Share Authorization Proposal"). The Share Authorization Proposal was
approved by holders of a majority of the outstanding shares of Hennessy
Capital's common stock. After the Hennessy Capital Special Meeting, Hennessy
Capital and Legacy Canoo closed the business combination, and Hennessy Capital
changed its name to Canoo Inc.
As of September 30, 2022, and giving effect to shares issued pursuant to equity
financings in the fourth quarter of 2022, the Company had 354,825,899 shares of
common stock issued and outstanding, as well as a significant number of
additional shares of common stock issuable upon conversion, exercise, or
settlement of outstanding convertible notes, private placement warrants, stock
options, and restricted stock units.
A recent ruling by the Court of Chancery introduces uncertainty as to whether
Section 242(b)(2) of the Delaware General Corporation Law (the "DGCL") would
have required the Share Authorization Proposal to be approved by a separate vote
of the majority of Hennessy Capital's then-outstanding shares of Class A common
stock.
To date, no stockholder has given the Company notice of any allegations that the
Company's shares are unauthorized. However, to resolve potential uncertainty
with respect to the Company's capital structure, the Company intends to file a
petition in the Court of Chancery under Section 205 of the DGCL to seek
validation of the Share Authorization Proposal and the shares issued thereunder.
Section 205 of the DGCL permits the Court of Chancery, in its discretion, to
ratify and validate potentially defective corporate acts.
If the Company is not successful in the Section 205 proceeding, the uncertainty
with respect to the Company's capitalization resulting from the Court of
Chancery's ruling referenced above could have a material adverse impact on the
Company, including on the Company's ability to complete equity financing
transactions or issue stock-based compensation to its employees, directors and
officers until the underlying issues are definitively resolved. This uncertainty
could impair the Company's ability to execute its business plan, attract and
retain employees, management and directors and adversely affect its commercial
relationships.
Forward-Looking Statements
This report includes "forward-looking statements" within the meaning of the
"safe harbor" provisions of the United States Private Securities Litigation
Reform Act of 1995. Forward-looking statements may be identified by the use of
words such as "estimate," "plan," "project," "forecast," "intend," "will,"
"shall," "expect," "anticipate," "believe," "seek," "target," "continue,"
"could," "may," "might," "possible," "potential," "predict" or other similar
expressions that predict or indicate future events or trends or that are not
statements of historical matters. These forward-looking statements are not
intended to serve as, and must not be relied on by any investor as, a guarantee,
an assurance, or a definitive statement of fact or probability. Actual events
and circumstances are difficult or impossible to predict and may differ from
these forward-looking statements.
In particular, no assurances can be made regarding the outcome or the timing of
the Section 205 proceeding. If the Company is unsuccessful in the Section 205
proceeding, the uncertainty with respect to the Company's capitalization could
limit its ability to complete equity financing transactions or issue stock-based
compensation to its employees, directors and officers until the underlying
issues are definitively resolved. As described above, this uncertainty could
have a material adverse effect on the Company.
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