Lordstown Motors, a longstanding manufacturer of battery-powered trucks, said in a profile told the US Securities and Exchange Commission on Monday that it has yet to finalize a $230 million deal with Foxconn by the May 14 deadline, which would allow it to continue to be a concern. .
Under the terms of the agreement, the Taiwanese technology supplier Foxconn will buy back the old GM assembly plant for $230 million where Lordstown intended to build its first car, All-electric Endurance pickup truckand reimburse Lordstown for operating and expansion costs incurred as of September 1.
Lordstown said in the filing that its ability to continue operating as a company and meet production targets for Endurance depends on the agreement with Foxconn.
If the deal is not finalized by May 14 and Foxconn does not allow an extension, Lordstown will need to return the $200 million it has received in payments from the company since November, including $50 million in the quarter just ended.
Despite the challenges, the company said it hopes to build a limited number of pre-production vehicles by July for testing, certification, validation and regulatory approval, and demonstrate capabilities. Endurance’s potential for potential customers.
Under the terms of the agreement, Lordstown will continue to own the central motor assembly line, as well as the battery module and packaging line assets, certain intellectual property rights, and disclaimed assets. except other.
“We will outsource all Endurance production to Foxconn with the sale of our Lordstown facility,” Lordstown wrote in the SEC filing. “Foxconn will also operate assets that we continue to own in the facility after the closure.”
The electric truck maker, which went public in October 2020 through a $1.6 billion SPAC merger with DiamondPeak Holdings, has yet to produce a single vehicle. The company reported a loss of $90 million for the three months ended March 31 and was trading at $1.91 per share Monday morning.
Meanwhile, the company is investigation by both the SEC and the US Department of Justice for allegedly deceiving investors by exaggerating production capacity and the demand they saw. Six months after Lordstown debuted on NASDAQ, Hindenburg Research, a New York-based short-selling activist, publish a report warned of bogus orders, such as $735 million in sales of 14,000 trucks for E Squared Energy, a company based in a small Texas residential apartment that doesn’t operate a fleet of vehicles.
Its CEO, Steve Burns, resignation in June 2021 after an internal investigation discredited his claim that the company had received 100,000 legitimate pre-orders for its pickup.
Lordstown said it will continue to incur high legal costs as the SEC investigation continues.
