Lordstown Deathwatch: Another Unflattering SEC Filing Emerges

Matt Posky
by Matt Posky
lordstown deathwatch another unflattering sec filing emerges

We’ve got more bad news about Lordstown Motors. Following several volleys of bad mojo ending with the departure of its upper management, the EV startup has informed the Securities and Exchange Commission (SEC) on Thursday that it doesn’t have any binding purchase orders or commitments.

That’s not what the company was saying several months ago. Hell, that wasn’t even what it said earlier this week when President Rich Schmidt told the Automotive Press Association the company had enough orders to support two years of production. Since the ability to sell automobiles is a somewhat relevant factor in an automaker’s long-term success, we’re getting concerned that Lordstown isn’t long for this world.

While we cannot say if the company will break its promise of delivering its all-electric Endurance pickup by September, automakers (including the well-established ones) have a habit of delaying debuts. This is especially true of EV startups and basically unavoidable among those that are never going to get off the ground — which seems to be the direction Lordstown is heading.

Despite Schmidt trying to smooth things over with investors, these SEC filings have been incredibly damning. Last week, a filing revealed that the aspiring automaker probably didn’t have sufficient capital to commence production as planned. There were even claims it might not have enough dough to remain operational. But the company specifically merged with DiamondPeak Holdings (a special purpose acquisition company) to get on NASDAQ and goose its IPO.

Thursday’s SEC documents offered more unsettling information. After explaining the importance of marketing strategy in regard to fleet management companies, it noted that it had entered into purchasing agreements that would “establish the terms and conditions of potential future purchases and other cooperation.”

It then explained the general rules they were operating under:

·Term of 3 to 5 years;

·Designation of Lordstown Motors as a preferred supplier;

·Order procedures, including forecasting, confirmation, statusing, and cancellation procedures;

·Down payment terms, which are generally 5 [percent] down 90 days prior to the requested delivery date;

·Invoicing, delivery and payment terms; and

·Other customary terms, including warranties, indemnification, intellectual property use, insurance and confidentiality terms.

These vehicle purchase agreements generally include a projected buyer order schedule over the 3 to 5 year life of the agreement, and may be terminated by either party at will on 30 days’ notice. They do not commit the counterparties to purchase vehicles, but we believe that they provide us with a significant indicator of demand for the Endurance.

To clarify recent remarks by company executives at the Automotive Press Association online media event on June 15, although these vehicle purchase agreements provide us with a significant indicator of demand for the Endurance, these agreements do not represent binding purchase orders or other firm purchase commitments.

That last paragraph is the most important because it’s the one where the company effectively admits to lying. Though I suppose the term “binding” could be used as a semantic defense. But this remains a bad situation since the automaker really doesn’t have anything to show for itself. There apparently aren’t any binding orders, it’s leasing the intellectual property required for the pickup from Workhorse, one of its prototypes recently burned down, and GM has an option to repurchase the facility and all transferred assets of the factory if the company cannot repay the $40 million loan and has to abandon ship.

Meanwhile, Lordstown has invited investors, analysts, and journalists to its factory next week (which had a massive solar array installed outside this year) to tour the grounds and talk about the truck. But the SEC filing stated that the company would be postponing its annual shareholder’s meeting until August 19th — which is a full month behind schedule and likely a bad omen.

[Images: Lordstown Motors]

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  • Wolfwagen Wolfwagen on Jun 21, 2021

    Latest news: Executives sold millions of dollars worth of stock in February before Lordstown earning report. Fecal matter meet air moving device Stick a fork in Lordstown, they are finished (the company and the area)

  • Mustangfast Mustangfast on Jun 21, 2021

    I don’t think much could be less flattering than that grill…also for solar panels, they are typically leased and offset electricity costs, so probably wasn’t a capital expense no matter who installed them

  • IH_Fever Another day, more bloviating between the poor downtrodden union leeches and the corporate thieves. But at least pantsuit guy got a nice new shirt.
  • IH_Fever I can't wait to see an Escalade on 24"s blow the brakes off of the competition!
  • Redapple2 Why does anyone have to get permission to join? Shouldnt the rules to race in a league be straight forward like. Build the car to the specs. Pay the race entry fee. Set the starting grid base on time trials.?Why all the BS?I cant watch F1 any more. No refuel. Must use 2 different types of tires. Rare passing. Same team wins every week. DRS only is you are this close and on and on with more BS. Add in the skysports announcer that sounds he is yelling for the whole 90 minutes at super fast speed. I m done. IMSA only for me.
  • Redapple2 Barra at evil GM is not worth 20 mill/ yr but dozens (hundreds) of sports players are. Got it. OK.
  • Dusterdude @SCE to AUX , agree CEO pay would equate to a nominal amount if split amongst all UAW members . My point was optics are bad , both total compensation and % increases . IE for example if Mary Barra was paid $10 million including merit bonuses , is that really underpaid ?