Item 7.01 Regulation FD
As previously announced on December 22, 2022, Lordstown Motors Corp. (the
"Company") will display its Endurance™ full-size battery-electric pickup truck
at the premier consumer electronics show, CES, and Edward Hightower, the
Company's Chief Executive Officer and President, will participate in the
Mobility in Harmony (MIH) Consortium Press Conference on Thursday, January 5,
2023 at 11 a.m. in the MIH Booth at CES in West Hall Booth 5274.
During the MIH Press Conference, Mr. Hightower will be providing certain
information concerning the Company. An outline of Mr. Hightower's prepared
remarks, all or a portion of which may be presented during the press conference,
are attached as Exhibit 99.1. The slides to be presented along with Mr.
Hightower's remarks are attached as Exhibit 99.2.
As previously disclosed by the Company, the Company began commercial production
of the Endurance™ during the third quarter of 2022 and in the fourth quarter of
2022, the Company achieved full homologation and received certification from
both the EPA and CARB to begin customer sales. The Company indicated that
production volume would ramp slowly and accelerate as it resolves supply chain
constraints. Through January 3, 2023, the Company has produced 31 vehicles for
sale, of which six have been delivered to customers. Of the remaining units, the
Company intends to use approximately fifteen for sales, demo drives, marketing
and service training purposes prior to sale and the balance will be sold
following completion of updates, final inspection and establishment of service
arrangements to meet customer specifications. The Company expects a slow rate of
production through the first quarter of 2023, with supply chain constraints,
particularly with respect to the availability of hub motor components,
continuing as the primary factor governing volume and timing.
The information in this Current Report on Form 8-K is being furnished pursuant
to Item 7.01 Regulation FD. In accordance with General Instruction B.2 of Form
8-K, the information in this report shall not be deemed "filed" for the purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended, or the Exchange Act, except as expressly stated by specific
reference in such filing.
Forward-Looking Statements
This report 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: the need to raise substantial additional capital to execute our
business plan, achieve our production targets for the Endurance, achieve scaled
production of the Endurance, develop additional vehicles, to continue ongoing
operations and remain a going concern, and our ability to raise such funding
including under current arrangements on a reasonable timeline and with suitable
terms; the cost and other impacts of contingent liabilities such as litigation,
regulatory proceedings, investigations, stockholder letters and claims 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 limited operating history and our ability to execute our business plan,
including through our expanding relationship with Foxconn; our ability to raise
sufficient capital in order to invest in the tooling that we expect will enable
us to eventually lower the Endurance bill of materials cost, continue design
enhancements of the Endurance and fund future vehicles that we may develop; the
rollout of our business and the timing of expected business milestones,
including the ability to ensure the completion of tooling, to establish and
maintain appropriate supplier relationships, and to ramp up commercial
production (which is currently expected to be slow) and complete sales and
deliver the Endurance in accordance with our projected timeline; our ability to
successfully identify and implement actions that will lower the Endurance bill
of materials cost; supply chain disruptions, inflation and the potential
inability to source essential components and raw materials, including on a
timely basis or at acceptable cost, and their consequences on production, sales
and other activities; our ability to obtain binding purchase orders and build
customer relationships; the risk that our technology, including our hub motors,
does not perform as expected and our overall ability to deliver on the
expectations of customers and investors with respect to the pricing,
performance, quality, reliability, safety and efficiency of the Endurance and to
provide the levels of warranty coverage, service and support that customers will
require; our ability to conduct business using a direct sales model, rather than
through a dealer network used by most other OEMs; the effects of competition on
our ability to market and sell vehicles; our inability to retain key personnel
and to hire additional personnel; the ability to protect our intellectual
property rights; the failure to obtain required regulatory approvals; changes in
laws or regulatory requirements or new or different interpretations of existing
law; changes in governmental incentives and fuel and energy prices; the impact
of health epidemics, including the COVID-19 pandemic, on our business;
cybersecurity breaches and threats and compliance with privacy and data
protection laws; failure to timely implement and maintain adequate financial,
information technology and management processes and controls and procedures; our
ability to remain in compliance with our existing financial obligations; 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.
In addition, the transactions we entered into with Foxconn and future vehicle
development plans involving the Foxconn EV ecosystem, including the Mobility In
Harmony (MIH) consortium, are subject to risks and uncertainties. No assurances
can be given that we will successfully implement or that we will realize the
anticipated benefits from these transactions or plans with Foxconn, including
the contract manufacturing agreement, funding arrangements and development
plans. The additional funding transactions under the Investment Agreement are
subject to closing conditions including CFIUS clearance and further negotiation
of EV program development plans and milestones. The EV program will require
additional funding and the establishment and implementation of the program
requirements, among other matters, and may not be consummated, sufficiently
implemented or provide the benefits we expect, which could have a material
adverse effect on our business, operating results, financial condition and
prospects. The success of the EV program depends on many variables, which could
include our ability to utilize the designs, engineering data and other
foundational work of Foxconn, its affiliates, other members of the MIH
consortium as well as other parties, achieve cost and development time
efficiencies, and address customer needs to 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 and
other factors that impact new vehicle development. If we are unable to close the
subsequent tranches of funding, successfully utilize the Foxconn EV ecosystem or
develop new vehicles for ourselves and potentially other customers, our business
prospects, results of operations and financial condition may be adversely
affected. If we are unable to maintain our relationship with Foxconn or
effectively manage outsourcing the production of the Endurance to Foxconn, we
may be unable to ensure continuity, quality, and compliance with our design
specifications or applicable laws and regulations, which may ultimately disrupt
and have a negative effect on our production and operations.
We will need additional funding and will seek strategic partnerships to execute
our business plan and to achieve scaled production of the Endurance and
development of other vehicles. There can be no assurance that such financing or
partnerships would be available to us on favorable terms or at all, due to
several factors, including market and economic conditions, the significant
amount of capital required, the fact that our bill of materials cost is
currently, and expected to continue to be, substantially higher than our
anticipated selling price, uncertainty surrounding regulatory approval and the
performance of the vehicle, meaningful exposure to material losses related to
ongoing litigation and the SEC investigation, our performance and investor
sentiment with respect to us and our business and industry. Additional
information on potential factors that could affect the financial results of the
Company 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 report.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
99.1 Prepared Remarks of Edward Hightower, Chief Executive Officer and
President of Lordstown Motors Corp., to be provided at CES on January
5, 2023
99.2 Slide Presentation to accompany remarks by Edward Hightower, Chief
Executive Officer and President of Lordstown Motors Corp., at CES on
January 5, 2023
104 Cover Page Interactive Data File (formatted as inline XBRL)
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