{"id":203453,"date":"2021-06-09T11:32:54","date_gmt":"2021-06-09T15:32:54","guid":{"rendered":"https:\/\/www.thedetroitbureau.com\/?p=203453"},"modified":"2021-06-09T11:32:57","modified_gmt":"2021-06-09T15:32:57","slug":"lordstown-motors-could-run-out-of-cash-may-delay-truck-production","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2021\/06\/lordstown-motors-could-run-out-of-cash-may-delay-truck-production\/","title":{"rendered":"Lordstown Motors Could Run Out of Cash, May Delay Truck Production"},"content":{"rendered":"\n

Lordstown Motors, which is attempting to launch an electric pickup truck, is on the brink of running out of money, the company warned in a filing with the Securities Exchange Commission. <\/p>\n\n\n\n

The company spelled out its plight in its delayed 10Q filing this week, for which it was sanctioned by the SEC<\/a><\/u><\/strong>. Company officials will get a chance to further explain it all at the company\u2019s Investor Day June 25.<\/p>\n\n\n\n

\"\"
Lordstown Motors CEO Steve Burns painted a brighter picture of the company’s outlook during the earnings call last month.<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cWe had cash and cash equivalents of approximately $587.0 million and an accumulated deficit of $259.7 million at March 31, 2021 and a net loss of $125.2 million for the quarter ended March 31, 2021,\u201d the company said in its filing. <\/p>\n\n\n\n

\u201cOur ability to continue as a going concern is dependent on our ability to complete the development of our electric vehicles, obtain regulatory approval, begin commercial scale production and launch the sale of such vehicles.<\/p>\n\n\n\n

Cash crunch ripples across company<\/h2>\n\n\n\n

\u201cWe believe that our current level of cash and cash equivalents are not sufficient to fund commercial scale production and the launch of sale of such vehicles. These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of the unaudited condensed consolidated financial statements included in this report,\u201d the filing said. <\/p>\n\n\n\n

The filing said the company\u2019s management is currently evaluating various funding alternatives and may seek to raise additional funds through the issuance of equity, mezzanine or debt securities, through arrangements with strategic partners or through obtaining credit from government or financial institutions. <\/p>\n\n\n\n

\"Lordstown
Lordstown is engaged in beta testing its production line with the first of 57 pre-production models.<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cAs we seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at all.\u201d<\/p>\n\n\n\n

In the filing, Lordstown Motors also acknowledged it is facing serious challenges<\/a><\/u><\/strong>, including rising costs and the slower-than-anticipated development of its battery-electric truck, the Endurance. The pickup is still undergoing testing and may not be ready for production in September as the company promised earlier. <\/p>\n\n\n\n

Darker message than Q1 earnings call<\/h2>\n\n\n\n

CEO Steve Burns already doled out much of the bad news<\/a><\/u><\/strong>, putting a better spin on it during the company\u2019s earnings call last month. He warned the company would likely produce fewer trucks. <\/p>\n\n\n\n

\u201cCapital may limit our ability to make as many vehicles as we would like,\u201d said Steve Burns, Lordstown\u2019s chief executive, on a call with analysts. \u201cWe wanted to make sure everybody knew the worst, worst case.\u201d <\/p>\n\n\n\n

He noted that if additional funding doesn\u2019t come, it will leave the EV startup dangerously low on cash \u2014 between $50 million and $75 million instead of the $200 million expected \u2014 by the end of the year. <\/p>\n\n\n\n

The company is reportedly in talks to secure additional funding through a federal loan program specifically for nascent electric vehicle companies. Additionally, Burns said they are looking to secure some asset-based financing, but declined to say how much funding they would be seeking. He felt optimistic that the company would be able to get the financing.<\/p>\n\n\n\n

\"\"
Burns said he believed his company may have to lower the production numbers for year one. Now the 10Q filing says production may have be delayed.<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cWe have zero debt, and we have a lot of assets,\u201d Burns said, according to the Wall Street Journal. \u201cThere\u2019s folks that want to finance that.\u201d<\/p>\n\n\n\n

Financial issues angering shareholders<\/h2>\n\n\n\n

Since the beginning of the year, Lordstown has dealt adverse reports from analysts and lawsuits from disgruntled shareholders, who have accused the company\u2019s management of withholding critical information about development vehicles that had burned during testing this past winter. <\/p>\n\n\n\n

The multiple lawsuits were filed by shareholders who, in the wake of a devastating research report<\/strong><\/a><\/u><\/strong> by noted short-seller research firm Hindenburg Research, want to be compensated out of the funds the company now says it will be short on by the end of the year.<\/p>\n\n\n\n

Hindenburg Research claimed the EV truckmaker either faked or overstated claims that it has advance orders for 100,000 of the electric pickups it plans to launch later this year.<\/p>\n\n\n\n

\u201cLordstown is an electric vehicle SPAC with no revenue and no sellable product, which we believe has misled investors on both its demand and production capabilities,\u201d Hindenburg said in the report.<\/p>\n\n\n\n

Lordstown has promised to pump new life into the old General Motors Co. assembly plant next to the Ohio Turnpike in Lordstown, Ohio. GM closed the iconic plant in 2019 and then sold it to Lordstown Motors with the hope that it could bring new jobs to economically depressed northeast Ohio.<\/p>\n","protected":false},"excerpt":{"rendered":"

Lordstown Motors is on the brink of running out of money, the company warned in its 10Q filing with the SEC. While acknowledging it faced significant cash issues last month, CEO Steve Burns said the company was confident it could secure additional financing as well as federal assistance. However, the new filing paints a darker picture than Burns did last month, reports TheDetroitBureau.com.<\/p>\n","protected":false},"author":20009,"featured_media":161352,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[7,5,10],"tags":[738,953,952,954,344],"make":[],"post-state":[335],"category_old":[],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/203453"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/20009"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=203453"}],"version-history":[{"count":2,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/203453\/revisions"}],"predecessor-version":[{"id":203455,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/203453\/revisions\/203455"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/161352"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=203453"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=203453"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=203453"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=203453"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=203453"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=203453"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}