LORDSTOWN — Lordstown Motors Corp. doesn’t find the money for to start out industrial manufacturing of its battery-powered pickup truck, the Endurance, and has expressed substantial doubt concerning its means to proceed as a going concern over the following 12 months.
The corporate additionally acquired two subpoenas from the U.S. Securities and Change Fee for info associated to its October merger with particular goal acquisition firm DiamondPeak Holdings Corp.
Lordstown Motors’ inventory tumbled 16.2 % to shut at $11.22 per share after the corporate launched the small print in its amended 2020 monetary report Tuesday. Shares, traded underneath the RIDE ticker on the Nasdaq change, continued to fall in after-hours buying and selling.
On the finish of 2020, Lordstown Motors had money and money equivalents of about $629.8 million, not sufficient to “fund industrial scale manufacturing and the launch of sale” of the corporate’s electrical automobiles, the submitting states.
Additionally for 2020, the corporate had collected a deficit of $134.4 million and reported a web lack of $124.1 million.
The entire monetary circumstances “elevate substantial doubt concerning our means to proceed as a going concern” over the following 12 months, in accordance with the submitting.
In widespread parlance, “going concern” is the corporate’s means to remain in enterprise.
Final month throughout its first-quarter financials name, CEO and founder Steve Burns mentioned the corporate would reduce in half its 2021 manufacturing estimate to about 1,000 items with out further capital.
Then, Burns cited higher-than-anticipated spending to finish a beta program, conduct automobile validation assessments, safe manufacturing components and tools and the necessity to use third-party engineering sources as causes for elevated analysis and growth bills and capital expenditures.
The corporate repeated the assertion in Tuesday’s submitting.
To alleviate the monetary stress, the corporate is evaluating numerous funding alternate options and may search to boost further funds by fairness financing, debt securities and dealing with strategic companions.
One other a part of the funding answer might embody a mortgage from a U.S. Division of Vitality program that helps the automotive sector develop extra environment friendly automobiles. The request, in accordance with the corporate’s 2020 year-end report in March from the Superior Know-how Automobile Manufacturing program, can be for at the least $250 million.
The corporate is focusing on September to launch preproduction of the truck.
The corporate additionally finds itself complying with a probe by the SEC, which on Feb. 17 requested from Lordstown Motors paperwork associated to the merger and knowledge associated to “Legacy Lordstown and preorders of automobiles,” in accordance with the submitting.
Lordstown Motors, nevertheless, didn’t disclose publicly the regulatory inquiry till March 17 on its first-ever earnings name.
The newest SEC submitting states the corporate is responding to the SEC’s requests and is cooperating with the inquiry. It’s the first time the corporate has mentioned the regulatory company has issued subpoenas. Earlier than, the corporate had mentioned the SEC had requested for the knowledge.
The corporate finds itself defending towards seven lawsuits filed after a scathing short-sellers report in mid-March characterised Lordstown Motors as a mirage with no sellable product.
The report claims the corporate misled buyers concerning its manufacturing functionality and preorders, that the greater than 100,000 it touted for the truck are “largely fictitious” and “used as a prop” to boost working capital and confer legitimacy.
Burns mentioned in Could a particular committee of the board of administrators fashioned to handle the short-sellers report is anticipated to report on the outcomes of the overview by the tip of the second quarter.
The corporate, nevertheless, has met entrance and aspect affect Federal Motor Security requirements in precise crash testing for the Endurance. Burns in Could mentioned the assessments “are the 2 most tough assessments for any automobile.”
“These are essential milestones for us and take away a number of the greatest technical limitations. This offers us a strong basis as we full our growth and validation work,” he mentioned then.
The take a look at exhibits how effectively a passenger automobile would shield occupants in a severe frontal crash.
Later this month, Lordstown Motors will host a weeklong occasion for buyers, auto analysts, prospects and companions to tour its manufacturing facility, the previous Common Motors meeting plant, take a look at drive the Endurance and have interaction firm executives.
For these unable to attend in particular person, the corporate is planning a digital recreation of the week with a stay question-and-answer session with firm officers. It will likely be out there on the corporate’s web site 2:30 p.m. June 25.