Lordstown Motors to explore partnerships

Electric-truck maker reports loss of $108.2M in 2Q

LORDSTOWN -- Lordstown Motors Corp. has plans to commercialize its manufacturing plant, a move its top executive said opens the door for significant revenue opportunities as the cash-strapped electric-truck startup rolls toward the start of limited production next month.

Still, the company in its second-quarter financial report Wednesday reported a net loss of $108.2 million for the three-month period and anticipates third-quarter liquidity of $225 million to $275 million without additional financing.

It had $366 million cash on hand at end of the second quarter.

The company has pumped millions into the 6.2 million-square-foot former General Motors auto factory to upgrade it to produce battery-powered vehicles, the first of which is the light-duty, full-size Endurance pickup truck.

"Serious discussions are now underway with several potential partners, and we expect that many more will become attracted to the potential of our factory as word of our decision to unlock its full potential spreads through the marketplace," Lordstown Motors CEO Angela Strand said.

"This is a critical, strategic pivot for us, a decision that we believe will lead to significant new revenue opportunities for Lordstown at the same time as production of the Endurance is ramping up in the Endurance portion of the factory," she said. "Simply put, because of our factory and our campus, Lordstown is uniquely positioned to accelerate production both for our partners and for the Endurance."

Lordstown Motors is utilizing only 30 percent of the sprawling facility. The company also controls 650 acres at the plant.

"So we have ample room for potential partners to build vehicles, for us to build vehicles for others and for additional LMC vehicle platforms as well as other opportunities, such as selling batteries, hub motors and our complete skateboards to other companies," company President Rich Schmidt said.

Strand said the company is on track to start limited production at the end of September and complete vehicle validation and regulatory approval in December and January.

The truck will be deployed to select early customers in the first quarter of 2022 ahead of commercial deliveries in the second quarter of the year.

That process, Strand said, ensures fleet customers have ample time to build out their charging infrastructure, and it gives the company time to manage supply-chain challenges brought on the pandemic and fortify its financial position to support the commercial launch.

The company ended the first quarter with a net loss of $125 million. It expects capital expenditures of $375 million to $400 million, up from $250 million to $275 for 2021, largely related to prepayments for hard-tool purchases.

Also, it expects to spend $95 million to $105 million on operating expenses and $310 million to $320 million in research and development costs.

At the end of the first quarter, the company anticipated spending $55 million to $60 million in operating expenses and $280 million to $290 million for research and development.

Lordstown Motors last month announced an equity purchase agreement with a hedge fund operated by New Jersey-based Yorkville Global Advisors LP that has the potential to pump $400 million into company over three years.

However, they are taking other steps to raise new capital "to ensure Lordstown's ultimate success."

The company now is exploring other options, including non-dilutive private investments and debt. Also, the company continues to consider a loan from a U.S. Department of Energy program that helps the automotive sector develop more efficient vehicles.

It remains the subject of federal regulatory and law enforcement probes into its merger with special purpose acquisition company DiamondPeak Holdings Corp. in October and preorders for the Endurance, and the company is defending itself against multiple lawsuits that accuse the company of misleading investors regarding preorders.

It also has come under intense scrutiny after earlier this year it had to scale back early production without additional funding and over concern it had enough money to meet its financial obligations.

Earlier this week, Workhorse Group Inc. near Cincinnati, an early investor in and partner of Lordstown Motors, announced in a regulatory filing it sold nearly three-quarters of its stake in Lordstown Motors. In doing so, the company that makes last-mile electric delivery trucks and drones booked a $52.1 million loss.

Lordstown Motors stock closed trading Wednesday ahead of the financial report down 4.3 percent at $5.58 per share, but was inching upward in after-hours trading.