Lordstown Motors Corp. (Nasdaq: RIDE “Lordstown Motors” or “LMC”),
an original equipment manufacturer (“OEM”) of electric light duty
vehicles focused on the commercial fleet market, today released its
fourth quarter and fiscal year 2022 financial results and provided
a business update.
Fourth Quarter and Recent Business
Highlights
- Foxconn Investment of up to $170 million, subject to certain
conditions; initial $52 million funded
- Progressed pre-development work on the new program in
collaboration with Foxconn EV Ecosystem
- Start of commercial sales of the EnduranceTM, an electric
full-size pickup truck
- Supplier quality and performance issues have limited production
and sales; corrective actions underway
- Ending cash and short-term investments of $221.7 million,
significantly in excess of previous outlook
- Reduced operating loss driven by spending discipline
Executive Commentary
In Q4 2022, we expanded and strengthened our partnership with
Foxconn. We converted our prior $100 million joint venture into a
direct investment in Lordstown Motors of up to $170 million, $52
million of which was funded in November 2022.
As previously announced, the initial Foxconn funding consisted
of $22 million of Lordstown Motors Class A common stock to be used
for general corporate purposes and $30 million of our Series A
preferred stock limited to funding development and design
activities for a new electric vehicle program in collaboration with
Foxconn and its EV ecosystem as well as related overhead. The
remaining investment of up to $117.3 million consists of $47.3
million in common stock and up to $70.0 in preferred stock. The
common stock will be purchased following receipt of applicable
regulatory approvals, including a review by the Committee on
Foreign Investment in the United States, and subject to other
conditions. The preferred stock will be purchased by Foxconn based
on achieving certain EV Program milestones to be agreed-upon by the
parties and subject to other conditions. Upon completion of the
investments, Foxconn is expected to hold all of LMC’s outstanding
preferred stock and nearly 18% of our common stock on a pro-forma
basis, and will have the right to designate two members to be added
to LMC’s board of directors.
We continue to work collaboratively with Foxconn and the
Mobility-in-Harmony (“MIH”) Consortium on the pre-development work
and vehicle development process (“VDP”) deliverables for our next
platform and vehicle program. The next platform and vehicle program
are key to Lordstown Motors’ long-term business strategy and are
becoming a greater portion of our Company’s focus.
The new vehicle will likely source key components and subsystems
from Foxconn and MIH Consortium members and be built in the Foxconn
EV Ohio assembly plant. “Our asset-light business model and
collaboration with the Foxconn EV ecosystem, including MIH, will
provide the opportunity for Lordstown Motors to create winning EVs
that are tailored to the needs of customers that use them for
various work applications, while gaining the cost benefits of
scale,” said Edward Hightower, Lordstown Motors’ CEO &
President.
Following full homologation and certification, we began
commercial sales of our Endurance BEV pick-up truck in the 4th
quarter of 2022. Shortly after our January production update, we
began to discover and experience several new performance and
quality issues with the vehicles coming off the production line and
vehicles in process. Some of these issues were discovered by
us or our suppliers, though some were experienced by our initial
customers. As our customers are our highest priority, we
decided to temporarily pause production as we worked with our
supplier network to root cause the issues, conduct additional
vehicle, component, and software testing, and as needed, make
updates to affected vehicle components and software. In this
regard, we filed paperwork with the National Highway Traffic Safety
Administration (“NHTSA”) to voluntarily recall the Endurance to
address supplier quality issues. Performance issues are
often discovered as an entirely new vehicle with several new
technologies begins operating in new and different environments by
customers. The Company is diligently working with suppliers on the
root cause analysis of each issue and potential solutions, which in
some cases may include part design modifications, retrofits and
software updates. As a result, through February 2023,
approximately 40 Endurance vehicles have been completed or are in
process and we have sold a total of six vehicles, of our planned
initial batch of up to 500 units. We now have line of sight to the
resolution of the issues that resulted in the production pause and
voluntary recalls, and in the upcoming weeks expect to announce
when we will resume production and deliveries.
This week, we will be displaying the Endurance at NTEA Work
Truck Week in Indianapolis. We will also display an Endurance with
commercial fleet-focused accessories from leading manufacturers and
suppliers of aftermarket equipment. To provide our customers with
aftermarket service and warranty support, we have entered into an
agreement with a third-party provider. We will work with the
provider to jointly provide service and warranty work for the
Endurance vehicles in key states, where allowed by law. We
plan to share more on the strategic rollout with our service
partner in the coming weeks.
We shared the story of Lordstown’s future and collaboration with
Foxconn and MIH earlier this year at CES. We also plan to discuss
our role in the growing Foxconn EV ecosystem later this month at
the upcoming SXSW (South-by-Southwest) event in Austin, TX, during
their mobility, electrification, and innovation track.
---------------
Fourth Quarter and Fiscal Year 2022 Results and First
Quarter 2023 Outlook
We began to sell the Endurance late in the fourth quarter,
recording sales of three vehicles and approximately $30 million in
cost of sales. Included in cost of sales were $0.6 million of
production costs, $8.3 million of depreciation on production
equipment and tooling we own, and $21 million of charges related to
inventory write-downs. Production costs consisted of direct
materials on the vehicles sold as well as manufacturing, warranty
accrual, delivery and launch related costs. The $21 million in
inventory charges primarily related to our adjustment for inventory
acquired during the period to net realizable value (“NRV”) and
another charge we took for excess inventory on hand.
Operating loss of $104.9 million included $46.8 million in
non-cash charges related to asset impairments and write-downs,
accelerated stock compensation (see attached schedules), the $21
million in inventory charges referred to above, the initiation of
depreciation on our assets and tooling after being placed in
service, totaling $8.5 million, along with a $1.2 million
litigation accrual.
Selling, general and administrative (“SG&A”) expenses were
$22.2 million for the quarter, including $7.6 million in non-cash
items for the write-off of a prepaid royalty and accelerated stock
compensation and $1.2 million of litigation accruals. The remaining
$13.3 million includes $8.3 million in personnel and professional
fees, $3.2 million in legal fees and insurance premiums, and $1.9
million in other services and marketing expenditures. Compared to
the fourth quarter of 2021, personnel and professional fees were
down 39%, primarily due to a significant reduction in consulting
support that has been declining since the start of 2022. Outside
legal costs also continue to decrease compared to the fourth
quarter of 2021, down $3.8 million. In late 2022 we renewed key
insurance policies at significantly lower rates, which led to a 23%
reduction in premiums. Other costs, primarily marketing spend, were
11% higher compared to the prior year as selling activity
increases.
Research and development (“R&D”) expenses were $15.6 million
in the quarter, including $1.8 million in accelerated stock
compensation, $10.6 million in personnel and consulting costs, and
$3.2 million in software, other services and overhead. In the
fourth quarter of 2021, non-plant related personnel and consulting
costs were $16.9 million, representing a 38% decrease, as Endurance
development and testing expenditures declined going into the launch
of commercial production and sales. Freight costs were down $1.4
million versus the same period in 2021.
For fiscal year 2022, SG&A expenses were $138.3 million,
including $33.9 million in litigation accruals, $25.6 million in
NRV charges for the first nine months of 2022 before reporting cost
of sales and $7.6 million for the write-off of a prepaid royalty
and accelerated stock compensation. The remaining SG&A includes
$40.5 million for personnel and professional fees, $11.4 million of
legal expenses, $11.8 million of insurance premiums and $7.2
million for other services and marketing expenditures. Compared to
2021, outside legal fees decreased $23.9, while professional fees
and consulting expenses were lower by $9.2 million, net of an
increase in personnel costs. Partially offsetting these items were
higher expenditures for services and marketing as we prepared to
launch the Endurance, along with higher insurance premiums
representing nearly a full year’s impact of higher premiums
incurred with renewals in late 2021.
For the fiscal year 2022, R&D expenses were $107.8 million,
including $1.8 million in accelerated stock compensation and an
$18.4 million reimbursement of operating expenses by Foxconn
related to the sale of the Lordstown, Ohio plant. Costs associated
with operating the plant of $33.3 million net of the reimbursement,
were incurred almost entirely prior to its sale in May 2022,
compared to $57.1 million for all of 2021. The remaining R&D
expenses in 2022 consist of $55.2 million of personnel and
consulting, $22.8 million of prototype components and $9.8 million
of software and other operational activities. Non-plant related
costs were down compared to 2021 as development, testing and other
R&D work related to the Endurance decreased as we approached
commercial production and sales. Relative to 2021, costs associated
with personnel and consulting were lower by approximately 47%,
prototype components were down 78% and freight declined 86%.
Other operating items for the year totaled $111.4 million,
representing impairment charges on our long-lived assets, of which
$75 million of the charge was in the third quarter of 2022. The
incremental impairment in the fourth quarter of 2022 was primarily
driven by a decrease in the Company’s stock price, which is a key
metric used in the analysis. An additional charge was taken to
write down the value of certain prepayments for inventory that are
for quantities we do not anticipate being consumed by the initial
production batch of the Endurance, including assets related to the
rights to access General Motors parts.
At the end of 2022, cash and short-term investments were $221.7
million, approximately $18 million higher than the third quarter of
2022. The change in cash includes $42.7 million in cash used for
operations, inclusive of a $21.1 million working capital
investment, $2.9 million in capital expenditures, net of $1.1
million in asset sale proceeds, and $63.7 million in cash proceeds
from the issuance of common and preferred stock, including $52
million purchased by Foxconn. Cash and short-term investments at
the end of 2022 was almost $57 million, or 34%, above the high end
of our previous outlook primarily due to $13 million in cost
containment, $12.4 million in stock sales under the ATM, $12
million related to the timing of capital expenditures that will
push into 2023, and $13 million in working capital, excluding
inventory. The purchase of less inventory than planned, together
with lower sales volume, provided approximately $3 million of the
benefit.
We expect to end the first quarter of 2023 with $150 to $170
million in cash and short-term investments, excluding any
additional Foxconn funding, other equity sales or contingent
liabilities. Relative to the fourth quarter of 2022, in the
aggregate, we anticipate first quarter of 2023 SG&A and R&D
to decline slightly, without the accelerated stock compensation,
litigation accruals and asset write-downs, as R&D modestly
increases with development activity, offsetting the larger decrease
in SG&A.
Please refer to “Forward Looking Statements” below.
Conference call Information
Lordstown Motors will host a conference call at 8:30 a.m.
Eastern Time today, March 6, 2023. The call can be accessed via a
live webcast that is accessible on the Events page of Lordstown
Motors’ Investor Relations website, as well as the investor
presentation deck, at https://investor.lordstownmotors.com/. An
archive of the webcast will be available shortly after the
call.
About Lordstown Motors Corp.
Lordstown Motors is an electric vehicle (EV) OEM developing
innovative light duty commercial fleet vehicles, with the Endurance
all electric pickup truck as its first vehicle and being launched
in the Foxconn EV plant in Lordstown, Ohio. Lordstown Motors has
corporate, engineering, research and development facilities in
Farmington Hills, Michigan and Irvine, California. For additional
information visit www.lordstownmotors.com.
Financial Results
Lordstown Motors
Corp.Condensed Consolidated Statements of
Operations(Amounts in thousands, except per share data --
Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Three months ended |
|
Twelve months ended |
|
Twelve months ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
Net sales |
$ |
|
194 |
|
|
$ |
|
— |
|
|
$ |
|
194 |
|
|
$ |
|
— |
|
Cost of sales: |
|
|
|
|
|
|
|
|
|
|
|
Production costs |
|
|
635 |
|
|
|
|
— |
|
|
|
|
635 |
|
|
|
|
— |
|
Depreciation |
|
|
8,258 |
|
|
|
|
— |
|
|
|
|
8,258 |
|
|
|
|
— |
|
NRV & other adjustments |
|
|
21,130 |
|
|
|
|
— |
|
|
|
|
21,130 |
|
|
|
|
— |
|
Total cost of sales |
$ |
|
30,023 |
|
|
$ |
|
— |
|
|
$ |
|
30,023 |
|
|
$ |
|
— |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
22,165 |
|
|
|
|
25,894 |
|
|
|
|
138,270 |
|
|
|
|
105,362 |
|
Research and development expenses1 |
|
|
15,603 |
|
|
|
|
58,770 |
|
|
|
|
107,816 |
|
|
|
|
284,016 |
|
Impairment of property plant & equipment and intangibles |
|
|
36,524 |
|
|
|
|
— |
|
|
|
|
111,389 |
|
|
|
|
— |
|
Amortization of intangible assets |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
11,111 |
|
Total operating expenses |
$ |
|
74,292 |
|
|
$ |
|
84,665 |
|
|
$ |
|
357,475 |
|
|
$ |
|
400,489 |
|
Loss from operations |
$ |
|
(104,121 |
) |
|
$ |
|
(400,489 |
) |
|
$ |
|
(387,304 |
) |
|
$ |
|
(400,489 |
) |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
Gain/(loss) on sale of assets |
|
|
(830 |
) |
|
|
|
— |
|
|
|
|
100,906 |
|
|
|
|
— |
|
Other (expense) income |
|
|
931 |
|
|
|
|
3,709 |
|
|
|
|
788 |
|
|
|
|
(10,079 |
) |
Interest income |
|
|
2,019 |
|
|
|
|
(196 |
) |
|
|
|
3,206 |
|
|
|
|
200 |
|
Loss before income taxes |
$ |
|
(102,000 |
) |
|
$ |
|
(81,152 |
) |
|
$ |
|
(282,404 |
) |
|
$ |
|
(410,368 |
) |
Income tax expense |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Net loss |
$ |
|
(102,000 |
) |
|
$ |
|
(81,152 |
) |
|
$ |
|
(282,404 |
) |
|
$ |
|
(410,368 |
) |
Less preferred stock dividend |
|
|
261 |
|
|
|
|
— |
|
|
|
|
261 |
|
|
|
|
— |
|
Net loss attributable to common shareholders |
|
|
(102,261 |
) |
|
|
|
(81,152 |
) |
|
|
|
(282,665 |
) |
|
|
|
(410,368 |
) |
Net loss per share attributable to common shareholders |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
($0.45 |
) |
|
|
|
($0.42 |
) |
|
|
|
($1.35 |
) |
|
|
|
($2.27 |
) |
Diluted |
|
|
($0.45 |
) |
|
|
|
($0.42 |
) |
|
|
|
($1.35 |
) |
|
|
|
($2.27 |
) |
Weighted-average number of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
224,997 |
|
|
|
|
193,034 |
|
|
|
|
208,682 |
|
|
|
|
180,722 |
|
Diluted |
|
|
224,997 |
|
|
|
|
193,034 |
|
|
|
|
208,682 |
|
|
|
|
180,722 |
|
1 Research and development expenses for the year ended December
31, 2022 are net of $18.4 million in operating expense
reimbursements under the APA.
Lordstown Motors
Corp.Condensed Consolidated Statements of
Operations(Amounts in thousands, except per share data --
Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Three months ended |
|
Three months ended |
|
Three months ended |
|
March 31, 2022 |
|
June 30, 2022 |
|
September 30, 2022 |
|
December 31, 2022 |
Net sales |
$ |
|
— |
|
|
$ |
|
— |
|
|
$ |
|
— |
|
|
$ |
|
194 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
|
|
|
Production costs |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
635 |
|
Depreciation |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
8,258 |
|
NRV & other adjustments |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
21,130 |
|
Total cost of sales |
$ |
|
— |
|
|
$ |
|
— |
|
|
$ |
|
— |
|
|
$ |
|
30,023 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
26,019 |
|
|
|
|
29,941 |
|
|
|
|
60,145 |
|
|
|
|
22,165 |
|
Research and development expenses1 |
|
|
61,864 |
|
|
|
|
10,510 |
|
|
|
|
19,839 |
|
|
|
|
15,603 |
|
Impairment of property plant & equipment and intangibles |
|
|
|
|
|
— |
|
|
|
|
74,865 |
|
|
|
|
36,524 |
|
Total operating expenses |
$ |
|
87,883 |
|
|
$ |
|
40,451 |
|
|
$ |
|
154,849 |
|
|
$ |
|
74,292 |
|
Loss from operations |
$ |
|
(87,883 |
) |
|
$ |
|
(40,451 |
) |
|
$ |
|
(154,849 |
) |
|
$ |
|
(104,121 |
) |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
Gain/(loss) on sale of assets |
|
|
|
|
|
|
— |
|
|
|
|
(830 |
) |
Other (expense) income |
|
|
(1,492 |
) |
|
|
|
1,991 |
|
|
|
|
(643 |
) |
|
|
|
931 |
|
Interest income |
|
|
(258 |
) |
|
|
|
383 |
|
|
|
|
1,062 |
|
|
|
|
2,019 |
|
Loss before income taxes |
$ |
|
(89,633 |
) |
|
$ |
|
63,659 |
|
|
$ |
|
(154,430 |
) |
|
$ |
|
(102,000 |
) |
Income tax expense |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Net loss |
$ |
|
(89,633 |
) |
|
$ |
|
63,659 |
|
|
$ |
|
(154,430 |
) |
|
$ |
|
(102,000 |
) |
Less preferred stock dividend |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
261 |
|
Net loss attributable to common shareholders |
|
|
(89,633 |
) |
|
|
|
63,659 |
|
|
|
|
(154,430 |
) |
|
|
|
(102,261 |
) |
Net loss per share attributable to common shareholders |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
($0.46 |
) |
|
|
|
($0.32 |
) |
|
|
|
($0.73 |
) |
|
|
|
($0.45 |
) |
Diluted |
|
|
($0.46 |
) |
|
|
|
($0.32 |
) |
|
|
|
($0.73 |
) |
|
|
|
($0.45 |
) |
Weighted-average number of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
196,503 |
|
|
|
|
200,821 |
|
|
|
|
211,946 |
|
|
|
|
224,997 |
|
Diluted |
|
|
196,503 |
|
|
|
|
206,682 |
|
|
|
|
211,946 |
|
|
|
|
224,997 |
|
Lordstown Motors
Corp.Condensed Consolidated Balance
Sheets(Amounts in thousands except share data --
Unaudited)
|
|
December 31, 2022 |
|
December 31, 2021 |
ASSETS: |
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
121,358 |
|
|
$ |
244,016 |
|
Short-term investments |
|
|
100,297 |
|
|
|
— |
|
Inventory, net |
|
|
13,672 |
|
|
|
— |
|
Prepaid expenses and other current assets |
|
|
20,548 |
|
|
|
47,121 |
|
Total current assets |
|
$ |
255,875 |
|
|
$ |
291,137 |
|
Property, plant and equipment,
net |
|
|
193,780 |
|
|
|
382,746 |
|
Intangible assets |
|
|
— |
|
|
|
1,000 |
|
Other non-current assets |
|
|
2,657 |
|
|
|
13,900 |
|
Total Assets |
|
$ |
452,312 |
|
|
$ |
688,783 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
12,801 |
|
|
$ |
12,098 |
|
Accrued and other current liabilities |
|
|
56,033 |
|
|
|
35,507 |
|
Purchase price down payment from Foxconn |
|
|
— |
|
|
|
100,000 |
|
Total current liabilities |
|
$ |
68,834 |
|
|
$ |
147,605 |
|
Warrant and other non-current
liabilities |
|
|
1,446 |
|
|
|
1,578 |
|
Total liabilities |
|
$ |
70,280 |
|
|
$ |
149,183 |
|
Mezzanine equity |
|
|
|
|
|
|
Convertible Preferred stock, $0.0001 par value, 12,000,000 shares
authorized; 300,000 and 0 shares issued and outstanding as of
December 31, 2022 and December 31, 2021,
respectively |
|
$ |
30,261 |
|
|
$ |
— |
|
Stockholders’ equity |
|
|
|
|
|
|
Class A common stock, $0.0001 par value, 450,000,000 shares
authorized; 238,924,486 and 196,391,349 shares issued and
outstanding as of December 31, 2022 and
December 31, 2021, respectively |
|
$ |
24 |
|
|
$ |
19 |
|
Additional paid in capital |
|
|
1,178,960 |
|
|
|
1,084,390 |
|
Accumulated deficit |
|
|
(827,213 |
) |
|
|
(544,809 |
) |
Total stockholders’ equity |
|
$ |
351,771 |
|
|
$ |
539,600 |
|
Total liabilities and stockholders’ equity |
|
$ |
452,312 |
|
|
$ |
688,783 |
|
Lordstown Motors
Corp.Condensed Consolidated Statements of Cash
Flow(Amounts in thousands -- Unaudited)
|
|
Twelve Months Ended |
|
Twelve Months Ended |
|
|
December 31, 2022 |
|
December 31, 2021 |
Cash flows from operating
activities |
|
|
|
|
|
|
Net loss |
|
$ |
(282,404 |
) |
|
$ |
(410,368 |
) |
Adjustments to reconcile net
loss to cash used by operating activities: |
|
|
|
|
|
|
Stock-based compensation |
|
|
18,826 |
|
|
|
18,869 |
|
Gain on disposal of fixed
assets |
|
|
(100,906 |
) |
|
|
— |
|
Impairment of property plant
and equipment and intangible assets |
|
|
111,389 |
|
|
|
— |
|
Write-off of prepaid
royalty |
|
|
4,728 |
|
|
|
— |
|
Amortization of intangible
assets |
|
|
— |
|
|
|
11,111 |
|
Depreciation of property plant
& equipment |
|
|
8,476 |
|
|
|
— |
|
Write down of inventory and
prepaid inventory |
|
|
48,529 |
|
|
|
— |
|
Other non-cash changes |
|
|
(384 |
) |
|
|
10,858 |
|
Changes in assets and
liabilities: |
|
|
|
|
|
|
Accounts receivables |
|
|
(203 |
) |
|
|
21 |
|
Inventory |
|
|
(54,646 |
) |
|
|
— |
|
Prepaid expenses and other
assets |
|
|
10,648 |
|
|
|
(34,124 |
) |
Accounts payable |
|
|
2,527 |
|
|
|
(17,008 |
) |
Accrued expenses and other
liabilities |
|
|
19,657 |
|
|
|
32,831 |
|
Net Cash used by operating
activities |
|
$ |
(213,764 |
) |
|
$ |
(387,990 |
) |
Cash flows from investing
activities |
|
|
|
|
|
|
Purchases of capital
assets |
|
$ |
(54,567 |
) |
|
$ |
(284,514 |
) |
Purchases of short-term
investments |
|
|
(100,297 |
) |
|
|
(1,000 |
) |
Investment in Foxconn Joint
Venture |
|
|
(13,500 |
) |
|
$ |
— |
|
Return of Investment in
Foxconn Joint Venture |
|
|
13,500 |
|
|
|
— |
|
Proceeds from the sale of
capital assets |
|
|
39,960 |
|
|
|
— |
|
Net Cash used by investing
activities |
|
$ |
(114,904 |
) |
|
$ |
(285,514 |
) |
Cash flows from financing
activities |
|
|
|
|
|
|
Proceeds from notes payable
for Foxconn Joint Venture |
|
$ |
13,500 |
|
|
$ |
— |
|
Settlement of notes payable
for Foxconn Joint Venture |
|
|
(13,500 |
) |
|
|
— |
|
Down payments received from
Foxconn |
|
|
100,000 |
|
|
|
100,000 |
|
Issuance of common stock |
|
|
2,114 |
|
|
|
6,368 |
|
Tax withholding payments
related to net settled restricted stock compensation |
|
|
(684 |
) |
|
|
— |
|
Cash proceeds from exercise of
warrants |
|
|
— |
|
|
|
82,016 |
|
Cash received from Foxconn
Investment Transactions Class A stock |
|
|
21,724 |
|
|
|
— |
|
Cash received from Foxconn
Investment Transactions Preferred stock |
|
|
30,000 |
|
|
|
— |
|
Cash received from Foxconn
Subscription Agreement |
|
|
— |
|
|
|
50,000 |
|
Proceeds from Equity Purchase
Agreement, net of issuance costs |
|
|
40,438 |
|
|
|
49,375 |
|
Proceeds from ATM Offering,
net of issuance costs |
|
|
12,418 |
|
|
|
— |
|
Net Cash provided by financing
activities |
|
$ |
206,010 |
|
|
$ |
287,759 |
|
(Decrease) / Increase in cash
and cash equivalents |
|
$ |
(122,658 |
) |
|
$ |
(385,745 |
) |
Cash and cash equivalents,
beginning balance |
|
|
244,016 |
|
|
|
629,761 |
|
Cash and cash equivalents,
ending balance |
|
$ |
121,358 |
|
|
$ |
244,016 |
|
|
|
|
|
|
|
|
Non-cash items |
|
|
|
|
|
|
Derecognition of Foxconn down payments for sale of capital
assets |
|
$ |
200,000 |
|
|
$ |
— |
|
Capital assets acquired with payables |
|
$ |
339 |
|
|
$ |
2,162 |
|
Lordstown Motors
Corp.Detailed Research and Development (R&D)
Expenses(Amounts in thousands -- Unaudited)
|
|
Three months ended |
|
|
Three months ended |
|
|
Three months ended |
|
|
Three months ended |
|
|
March 31, 2022 |
|
|
June 30, 2022 |
|
|
September 30, 2022 |
|
|
December 31, 2022 |
Research & development (R&D) expenses |
|
|
|
|
|
|
|
|
|
|
|
Operating expense reimbursement |
$ |
— |
|
|
(18,355 |
) |
|
|
— |
|
|
— |
|
Accelerated stock compensation |
|
— |
|
|
— |
|
|
|
— |
|
|
(1,847 |
) |
Manufacturing |
|
21,038 |
|
|
11,411 |
|
|
|
840 |
|
|
— |
|
Personnel, consulting and professional fees |
|
16,990 |
|
|
11,626 |
|
|
|
14,211 |
|
|
12,403 |
|
Freight |
|
454 |
|
|
188 |
|
|
|
137 |
|
|
170 |
|
Prototype components |
|
19,679 |
|
|
1,458 |
|
|
|
1,694 |
|
|
— |
|
All other |
|
3,702 |
|
|
4,180 |
|
|
|
2,957 |
|
|
4,877 |
|
Total research & development expenses |
$ |
61,863 |
|
|
10,509 |
|
|
|
19,839 |
|
|
15,603 |
|
Lordstown Motors
Corp.Detailed Research and Development (R&D)
Expenses(Amounts in thousands -- Unaudited)
|
|
|
|
|
|
|
|
Twelve months ended |
|
|
Twelve months ended |
|
|
December 31, 2021 |
|
|
December 31, 2022 |
Research & development expenses |
|
|
|
|
|
Operating expense reimbursement |
$ |
— |
|
|
(18,355 |
) |
Accelerated stock compensation |
|
— |
|
|
(1,847 |
) |
Manufacturing |
|
57,109 |
|
|
33,290 |
|
Personnel, consulting and professional fees |
|
103,652 |
|
|
55,230 |
|
Freight |
|
6,996 |
|
|
949 |
|
Prototype components |
|
104,481 |
|
|
22,831 |
|
All other |
|
11,778 |
|
|
15,717 |
|
Total research & development expenses |
$ |
284,016 |
|
|
107,815 |
|
Lordstown Motors
Corp.Detailed Selling, General and Administrative
(SG&A) Expenses(Amounts in thousands -- Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Three months ended |
|
|
Three months ended |
|
|
Three months ended |
|
|
March 31, 2022 |
|
|
June 30, 2022 |
|
|
September 30, 2022 |
|
|
December 31, 2022 |
Selling, general & administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
Legal accruals |
$ |
213 |
|
|
1,787 |
|
|
30,717 |
|
|
1,200 |
Net realizable value charge to inventory |
|
2,900 |
|
|
6,500 |
|
|
16,224 |
|
|
— |
Prepaid royalty write off |
|
— |
|
|
— |
|
|
— |
|
|
4,728 |
Accelerated stock compensation |
|
— |
|
|
— |
|
|
— |
|
|
2,908 |
Personnel & consulting |
|
12,354 |
|
|
12,204 |
|
|
7,707 |
|
|
8,283 |
Legal expenses |
|
6,060 |
|
|
4,101 |
|
|
359 |
|
|
962 |
Insurance |
|
3,108 |
|
|
3,117 |
|
|
3,386 |
|
|
2,199 |
All other |
|
1,384 |
|
|
2,231 |
|
|
1,751 |
|
|
1,885 |
Total selling, general & administrative expenses |
$ |
26,019 |
|
|
29,941 |
|
|
60,145 |
|
|
22,165 |
Lordstown Motors
Corp.Detailed Selling, General and Administrative
(SG&A) Expenses(Amounts in thousands -- Unaudited)
|
|
|
|
|
|
|
|
Twelve months ended |
|
|
Twelve months ended |
|
|
December 31, 2021 |
|
|
December 31, 2022 |
Selling, general & administrative expenses |
|
|
|
|
|
Legal accruals |
$ |
4,522 |
|
|
33,917 |
Net realizable value charge to inventory |
|
— |
|
|
25,624 |
Prepaid royalty write off |
|
— |
|
|
4,728 |
Accelerated stock compensation |
|
— |
|
|
2,908 |
Personnel & consulting |
|
49,768 |
|
|
40,549 |
Legal expenses |
|
35,425 |
|
|
11,482 |
Insurance |
|
8,642 |
|
|
11,810 |
All other |
|
7,007 |
|
|
7,251 |
Total selling, general & administrative expenses |
$ |
105,363 |
|
|
138,270 |
Forward Looking Statements
This release includes forward looking statements. These
statements are made under the “safe harbor” provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These statements
may be identified by words such as “feel,” “believes,” expects,”
“estimates,” “projects,” “intends,” “should,” “is to be,” or the
negative of such terms, or other comparable terminology.
Forward-looking statements are statements that are not historical
facts. Such forward-looking statements are not guarantees of future
performance and are subject to risks and uncertainties, which could
cause actual results to differ materially from the forward-looking
statements contained herein due to many factors, including, but not
limited to: our ability to continue as a going concern, which
requires us to manage costs, obtain significant additional funding
to execute our business plan, and our ability to raise such funding
on a reasonable timeline and with suitable terms; our ability to
obtain a strategic partner for the Endurance and to raise
sufficient capital, including under the financing arrangements we
have established, in order to invest in tooling, continue design
enhancements of the Endurance to enable scaled production and fund
any future vehicles we may develop; the cost and other impacts of
contingent liabilities and availability of insurance coverage
and/or adverse publicity with respect to these matters, which may
have a material adverse effect, whether or not successful or valid,
on our liquidity position, market price of our stock, cash
projections, business prospects and ability and timeframe to obtain
financing; our ability to effectively implement and realize the
benefits from our recently completed and pending transactions and
agreements with Foxconn, including the additional funding
transactions under the Investment Agreement, dated November 7,
2022, which are subject to closing conditions, our ability to
utilize the designs, engineering data and other foundational work
of Foxconn, its affiliates, and other members of the
Mobility-in-Harmony (MIH) consortium as well as other parties, and
all such parties adhering to timelines to develop, commercialize,
industrialize, homologate and certify a vehicle in North America,
along with variables that are out of the parties’ control, such as
technology, innovation, adequate funding, supply chain and other
economic conditions, competitors, customer demand, regulatory
approval and other factors; our ability to execute our business
plan, expansion plans, strategic alliances and other opportunities,
including development and market acceptance of our planned
products; risks related to our limited operating history, the
execution of our business plan and the timing of expected business
milestones; our ability to successfully address known and unknown
performance, quality, supply chain and other launch-related issues,
some of which are or may be material and have or could give rise to
a recall of our vehicles, and resume commercial production and
sales of the Endurance on a reasonable timeline and in accordance
with our business plan; our ability to establish appropriate
supplier relationships to support new vehicle programs; our ongoing
ability to obtain vehicle components from our supply chain in
sufficient quantities and of acceptable quality to meet vehicle
requirements; the availability and cost of raw materials and
components; our ability to successfully identify and implement
actions that will lower the Endurance bill of materials cost,
including identifying a strategic partner to scale the Endurance;
our ability to obtain binding purchase orders and build customer
relationships; our ability to deliver on the expectations of
customers with respect to the pricing, performance, quality,
reliability, safety and efficiency of the Endurance and to provide
the levels of after sale service, support and warranty coverage
that they will require; the risk that our technology, including our
hub motors, do not perform as expected; the effects of competition
on our ability to market and sell vehicles; our ability to attract
and retain key personnel and hire additional personnel; the pace
and depth of electric vehicle adoption generally; our ability to
obtain and maintain intellectual property protection and not
infringe on the rights of others; our ability to obtain required
regulatory approvals and changes in laws, regulatory requirements,
interpretations of existing law, governmental incentives and fuel
and energy prices; and the possibility that we may be adversely
affected by other economic, geopolitical, business and/or
competitive factors, including rising interest rates and the direct
and indirect effects of the war in Ukraine.
Additional information on potential factors that could affect
the financial results of Lordstown Motors Corp. and its
forward-looking statements is included in its most recent Form 10-K
and subsequent filings with the Securities and Exchange Commission.
All forward-looking statements are qualified in their entirety by
this cautionary statement. Any forward-looking statements speak
only as of the date on which they are made, and Lordstown Motors
undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date of this release.
Contacts:
Investors
Carter W. Driscoll, CFA
IR@lordstownmotors.com
Media
Colleen Robar
crobar@robarpr.com
313-207-5960
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