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Lordstown Motors Corp. Announces Reverse Stock Split
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May 23, 2023
https://investor.lordstownmotors.com/news-releases/news-release-details/lordstown-motors-corp-announces-reverse-stock-split

LORDSTOWN, Ohio, May 23, 2023 (GLOBE NEWSWIRE) -- Lordstown Motors Corp. (Nasdaq: RIDE), (“Lordstown Motors,” “LMC” or the “Company”), an original equipment manufacturer (“OEM”) of electric vehicles focused on the commercial fleet market, today announced that it will effect a 1:15 reverse stock split (the “Reverse Stock Split”) of its Class A common stock, $0.0001 par value per share (the “Class A common stock”), that will become effective at 12:01 a.m. Eastern Time on May 24, 2023 (the “Effective Time”). Lordstown Motors’ Class A common stock will begin trading on a split-adjusted basis on the Nasdaq Global Select Market (“Nasdaq”), under its existing symbol, “RIDE”, when the market opens on May 24, 2023. The new CUSIP number for the Company’s Class A common stock will now be 54405Q 209.

The Reverse Stock Split was approved by the Company’s stockholders at its 2023 Annual Meeting of Stockholders, held on May 22, 2023, with the final ratio determined by the Company’s board of directors. The Company has filed an amendment to its Second Amended and Restated Certificate of Incorporation, as amended, to effect the Reverse Stock Split as of the Effective Time.

The Reverse Stock Split will automatically cause each 15 shares of the Company’s issued and outstanding Class A common stock to be combined into one issued and outstanding share of Class A common stock. Outstanding equity-based awards and other outstanding equity rights will be proportionately adjusted. No fractional shares will be issued in connection with the Reverse Stock Split. Stockholders who would otherwise be entitled to receive a fractional share of Class A common stock will instead receive cash in an amount equal to such fraction multiplied by the closing price of the Class A common stock on Nasdaq on May 23, 2023, as adjusted to account for the Reverse Stock Split. The Reverse Stock Split will not change the par value or authorized number of shares of Class A common stock and will not change the par value or the authorized or outstanding number of shares of the Company’s preferred stock, including its Series A Convertible Preferred Stock (the “Preferred Stock”).

The Reverse Stock Split is intended to improve the marketability and liquidity of the Class A common stock. A higher market price can make the Class A common stock more attractive to a broader range of institutional investors, professional investors, and other members of the investing public. In addition, the Reverse Stock Split is intended to increase the per share market price of the Class A common stock in order to satisfy Nasdaq’s $1.00 minimum bid price requirement (the “Bid Price Requirement”).

As previously disclosed, the Company and Foxconn (as defined below) have a dispute concerning whether the April 21, 2023 letter the Company received from Nasdaq regarding the Bid Price Requirement caused a failure of a condition to closing Foxconn’s purchase of approximately 10% of the Company’s common stock for $47.3 million. The Company believes that there was no failure of any closing condition, and the Company was ready, willing and able to close that transaction on May 8, 2023, as required by the Investment Agreement (the “Investment Agreement”) entered into by the Company on November 7, 2022 with Foxconn Ventures Pte. Ltd., an affiliate of global technology company Hon Hai Technology Group (“Foxconn”). Foxconn took a contrary position and refused to close. The Company reserves all rights against Foxconn, including rights arising out of its failure to timely close the stock purchase. If the reverse split causes the Class A common stock price to remain above $1.00 per share for 10 consecutive trading days and Nasdaq notifies the Company that the Bid Price Requirement has been satisfied, that may satisfy Foxconn’s (incorrect) interpretation of the closing condition and cause Foxconn to close the transaction. The Company remains ready, willing and able to close. No assurance can be given regarding the impact of the Reverse Stock Split on the stock price or that Foxconn will meet its obligation to close, even if the stock price remains above $1.00 for the 10 trading-day period. While the Company remains willing to negotiate with Foxconn in an effort to resolve its disputes, no agreement currently exists and the Company cannot predict whether such an agreement will be reached in the future.

Since start of commercial production, the Company has completed 56 Endurance vehicles and delivered 18 to customers, 12 since resuming deliveries in late April. The Endurance continues to improve with each software update, and our team is encouraged by the most recent customer feedback. In light of the Foxconn dispute and the uncertainty regarding whether or to what extent Foxconn will fulfill its funding obligations under the Investment Agreement, the Company has taken aggressive actions to reduce costs and preserve liquidity. As of April 30, 2023, the Company had cash, cash equivalents and short-term investments of approximately $165 million, a decrease of approximately $11 million from the quarter ended March 31, 2023.

Additional information on the Reverse Stock Split can be found in the Company’s definitive proxy statement filed with the Securities and Exchange Commission on April 11, 2023, which is available on the SEC’s website at www.sec.gov and on the Company’s website, www.lordstownmotors.com.

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 engineering, research and development facilities in Farmington Hills, Michigan and Irvine, California. For additional information visit www.lordstownmotors.com.