Lordstown Motors CEO: SEC asks about 'fake order' allegations
Lordstown Motors briefly addressed allegations of "fake orders" and production hurdles during a meeting Wednesday afternoon with investors and financial media.
Last week, the company said it would be refuting claims outlined by Hindenberg Research, which focuses on short-selling investments.
During the virtual meeting discussing fourth quarter and full-year 2020 results, Founder, CEO and Chairman of Lordstown Motors Corporation, Steve Burns, said they are aware of Hindenberg's report.
Hindenberg alleged that Lordstown Motors' orders for nearly 100,000 pre-orders of its Endurance electric truck are "largely fictitious" and misled the public, government regulators and investors on the progress of its upcoming truck.
Burns said the company has received requests for information from the SEC (Security and Exchange Commission) and he said they are cooperating with that inquiry.
"In addition, the Board of Directors has formed a special committee to review these matters," said Burns.
Burns said he will not comment any further on the allegations until the committee has finished its review.
Lordstown Motors reported Wednesday the following financial results and an update on its production of the Endurance Pickup Truck, as well as the company's future endeavors.
The timeline to start production of the truck is still on track for September of this year, with the first beta vehicles to be ready by the end of March.
Reported full year 2020 net loss of $101 million and cash of $630 million at year-end 2020; warrant exercise in January 2021 resulted in an additional $82 million of cash.
Timeline to Start of Production (SoP) in September 2021 remains on track, with beta prototype build underway and the first beta vehicles to be ready by the end of March; vehicles to be sent for durability, crash, validation and lighting testing with various partners and to early initial customers for feedback.
Interest in the Lordstown Endurance all electric pickup truck remains robust; moving towards arrangements with fleet management companies to work to obtain purchase commitments from their clients, and direct sales to fleet customers.
Recently announced ARI/Holman as one of the first customers to engage with Lordstown Motors in a specific multi-year co-marketing, vehicle procurement and upfit agreement.
Announcing expected capital expenditure range for 2021 of $250 million to $275 million to (1) create plant capacity to be able to produce 60,000 vehicles per year in response to greater Endurance interest than originally expected, (2) accelerate development of the company’s second vehicle, and (3) build additional tools to insource componentry to create a 5-star crash-rated vehicle, and for certain higher supply chain costs related to COVID-19.
Accelerating the development of Lordstown Motors’ second vehicle, a van, with a goal of SoP in the second half of 2022; expect to unveil a demonstration vehicle in the summer of 2021.
Currently entering the due diligence phase, which the company hopes to complete in the second quarter of 2021, of an Advanced Technology Vehicle Manufacturing (“ATVM”) loan opportunity; if successful, Lordstown Motors could potentially enter negotiations for a term loan at that time.
“We are extremely excited and proud to be so close to delivering our first beta vehicles, which we believe should solidify and spur customer demand and commitments. Beta production reflects our innovative engineering, increasingly automated factory and unique hub wheel and battery pack capabilities,” said Burns. “Commercial fleet customers should begin to provide feedback on betas in 2Q21—around the time we unveil the first prototype of our second vehicle, a van, that leverages our Endurance skateboard."
During Monday’s tour of the Lordstown plant where LMC is gearing up to make electric light-duty trucks for the commercial fleet market, LMC CEO Steve Burns promised that his company would have beta versions of the Endurance truck in ten days.
"There are always haters...I quoted Taylor Swift to someone the other day, haters gonna hate, hate, hate...you gotta shake it off,” said Burns.
Following the release of the Hindenberg report on Friday, shares of LMV'S RIDE stock fell from $17.82 to $14.40 per share. Since then, the price as recovered slightly, closing Tuesday at $15.22.