Shares of electrical automobile startup Canoo have been sharply decrease in early buying and selling on Monday after the corporate mentioned that it has agreed to promote discounted shares to lift $52.5 million.

Canoo’s shares closed at $1.09 on Monday, down over 12%. The inventory has misplaced greater than 80% of its worth within the final 12 months.

Canoo mentioned in a press release that it has entered into agreements with institutional traders to promote 50 million new shares, along with warrants that give the traders an choice to purchase as much as 50 million extra. The traders are paying $1.05 per share, and every share comes with one warrant that may be exercised at $1.30 per share.

Canoo did not title the institutional traders concerned within the deal.

The deal value is a considerable low cost, as Canoo’s shares closed at $1.25 on Friday. For present shareholders, the deal additionally means vital dilution of their holdings, as it should add between 50 million and 100 million shares to the corporate’s present excellent share rely of 356 million.

Canoo mentioned in November that it was working low on money and that it anticipated to lift funds by issuing new shares. It had simply $6.8 million available as of the top of the third quarter.

Canoo mentioned Monday that it’s going to use the web proceeds of the providing for “basic working capital functions.” The corporate is anticipated to report its fourth-quarter outcomes later this month.