UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission File Number: 001-38821

Lordstown Motors Corp.

(Exact name of registrant as specified in its charter)


Delaware (State or Other Jurisdiction of Incorporation or Organization)		83-2533239 (I.R.S. Employer Identification No.)
	2300 Hallock Young Road Lordstown, Ohio 44481 (Address of principal executive offices)

Registrant’s telephone number, including area code: (234) 285-4001

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading symbol	Name of each exchange on which registered
Class A Common Stock, $0.0001 Par Value	RIDE	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒	Accelerated filer☐		Non-accelerated filer ☐
Smaller reporting company ☐		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 1, 2022, 205,871,561 shares of the registrant’s Class A common stock were outstanding.

LORDSTOWN MOTORS CORP.

INDEX


		PAGE NUMBER
PART I FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	5

	Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	5

	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021	6

	Condensed Consolidated Statements of Stockholders’ Equity/(Deficit) for the three and six months ended June 30, 2022 and 2021	7

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	8

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4.	Controls and Procedures	34



PART II OTHER INFORMATION

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 5.	Other Information	37

Item 6.	Exhibits	38

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report, including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology, although not all forward-looking statements are accompanied by such terms. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate, and any other statements that are not statements of current or historical facts.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this report. In addition, even if our results of operations, financial condition and liquidity, and developments in the industry in which we operate, are consistent with the forward-looking statements contained in this report, those results or developments may not be indicative of results or developments in subsequent periods. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to those described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on February 28, 2022 (the “Form 10-K”), and in subsequent reports that we file with the Securities and Exchange Commission (the “SEC”), including this Form 10-Q for the quarter ended June 30, 2022, as well as the following:

●

our ability to continue as a going concern, which requires us to manage costs, obtain significant additional funding to execute our business plan, and achieve our production targets for the Endurance in 2022 and beyond, and our ability to raise such funding on a reasonable timeline and with suitable terms;

●

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 any future vehicles we may develop;

●

the cost and other impacts of contingent liabilities such as current and future litigation, claims, regulatory proceedings, investigations, complaints, product liability claims, stockholder demand letters, availability of insurance coverage and/or adverse publicity, which may have a material adverse effect, whether or not successful or valid, on our liquidity position, cash projections, business prospects and ability and timeframe to obtain financing (See Note 5 – Commitments and Contingencies);

●

our ability to realize the benefits from our recently completed transactions with Foxconn (as defined below) under the Asset Purchase Agreement (See Note 1 — Organization and Description of Business and Basis of Presentation), the Contract Manufacturing Agreement (as defined below) and the Foxconn Joint Venture Agreement (as defined below);

●

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 rollout of our business and the timing of expected business milestones, including the ability to complete the engineering of the Endurance, to ensure the completion of the retooling of the production facility, to establish appropriate supplier relationships, to successfully complete testing, homologation and certification and to start commercial production and delivery of the Endurance, in accordance with our projected timeline;

●

our ability to source and maintain suppliers for our critical components and the terms of such arrangements, and our ability to complete building out our supply chain;

●

the availability and cost of raw materials and components, particularly in light of current supply chain disruptions and labor concerns, inflation, and the consequences of such shortages on testing and other activities, which could present challenges that impact the timing of our commercial production;

●

our ability to successfully identify and implement actions that will lower the Endurance bill of materials cost, including sourcing benefits anticipated from our relationship with Foxconn;

●

our ability to obtain binding purchase orders and build customer relationships, including uncertainties as to whether and to what degree we are able to convert previously-reported nonbinding pre-orders and other indications of interest in our vehicle into binding orders and ultimately sales;

●

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 and support that they will require;

●

the risk that our technology, including our hub motors, do not perform as expected;

●

our ability to conduct business using a direct sales model, rather than through a dealer network used by most other OEMs;

●

our ability to remain in compliance with our debt covenants and the risks associated with having pledged significant assets as collateral for recently incurred indebtedness;

●

the effects of competition on our ability to market and sell vehicles;

●

our ability to attract and retain key personnel;

●

the pace and depth of electric vehicle adoption generally;

●

our expectations regarding 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, governmental incentives and fuel and energy prices;

●

the impact of health epidemics, including the COVID-19 pandemic, on our business, the other risks we face and the actions we may take in response thereto;

●

cybersecurity 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;

●

the possibility that we may be adversely affected by other economic, geopolitical, business and/or competitive factors, including the direct and indirect effects of the war in Ukraine.

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

Balance Sheets

(in thousands except for share data)

(Unaudited)




	June 30, 2022		December 31, 2021
ASSETS:
Current Assets
Cash and cash equivalents	$	235,686	$	244,016
Inventory, net		4,013		—
Prepaid expenses and other current assets		43,080		47,121
Total current assets	$	282,779	$	291,137
Property, plant and equipment		286,928		382,746
Intangible assets		1,000		1,000
Other non-current assets		27,487		13,900
Total Assets	$	598,194	$	688,783
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current Liabilities
Accounts payable	$	12,979	$	12,098
Accrued and other current liabilities		34,355		35,507
Purchase price down payment from Foxconn		—		100,000
Note payable to Foxconn		13,500		—
Total current liabilities	$	60,834	$	147,605
Warrant and other non-current liabilities		1,601		1,578
Total liabilities	$	62,435	$	149,183
Stockholders’ equity
Class A common stock, $0.0001 par value, 300,000,000 shares authorized; 205,871,561 and 196,391,349 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	$	21	$	19
Additional paid in capital		1,106,521		1,084,390
Accumulated deficit		(570,783)		(544,809)
Total stockholders’ equity	$	535,759	$	539,600
Total liabilities and stockholders' equity	$	598,194	$	688,783

See Notes to Condensed Consolidated Financial Statements

Lordstown Motors Corp.

Statements of Operations

(in thousands except for per share data)

(unaudited)


	Three months ended		Three months ended		Six months ended		Six months ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Net sales	$	—	$	—	$	—	$	—
Operating expenses
Selling, general and administrative expenses		29,941		33,793		55,960		48,187
Research and development expenses ¹		10,510		76,544		72,374		168,356
Gain on sale		(101,736)		—		(101,736)		—
Total operating (income) expenses	$	(61,285)	$	110,337	$	26,598	$	216,543
Income (loss) from operations		61,285		(110,337)	$	(26,598)	$	(216,543)
Other income (expense)
Other income (expense)		1,991		1,877		499		(17,255)
Interest income		383		260		125		387
Income (Loss) before income taxes	$	63,659	$	(108,200)	$	(25,974)	$	(233,411)
Income tax expense		—		—		—		—
Net income (loss)	$	63,659	$	(108,200)	$	(25,974)	$	(233,411)
Income (loss) per share attributable to common shareholders
Basic		0.32		(0.61)		(0.13)		(1.33)
Diluted		0.32		(0.61)		(0.13)		(1.33)
Weighted-average number of common shares outstanding
Basic		200,821		176,585		198,674		175,595
Diluted		201,015		176,585		198,674		175,595

1Research and development expenses for the three and six months ended June 30, 2022 are net of $18.4 million in operating expense reimbursements as described in Note 1

See Notes to Condensed Consolidated Financial Statements

Lordstown Motors Corp.

Statements of Stockholders’ Equity/(Deficit)

(in thousands)

(unaudited)


	Three Months Ended June 30, 2022
					Additional				Total
		Common Stock			Paid-In		Accumulated		Stockholders’
		Shares	Amount		Capital		Deficit		Equity
Balance at March 31, 2022		196,980	$	20	$	1,088,925	$	(634,442)	$	454,503
Issuance of common stock		642		—		1,237		—		1,237
RSU Vesting		1,687		—		—		—		—
Common stock issued to YA		6,562		1		13,733		—		13,734
Stock compensation		—		—		2,626		—		2,626
Net income		—		—		—		63,659		63,659
Balance at June 30, 2022		205,871	$	21	$	1,106,521	$	(570,783)	$	535,759

Three Months Ended June 30, 2021

Additional

Total

Common Stock

Paid-In

Accumulated

Stockholders’

Shares

SEC Form 10-Q filed by Lordstown Motors Corp.