Electric vehicle startup Lordstown Motors is “evaluating strategic partners” as part of its search for funding needed to stay in operation, the company’s executive chair, Angela Strand, said Monday.
Lordstown Motors has warned it may not be able to continue as a “going concern” if it cannot raise more money to retool its factory in Lordstown, Ohio, for high-volume production.
Strand is acting as the company’s CEO while a search is underway to replace Steve Burns, who left the company earlier this month.
Since the “going concern” warning, the company has tried to allay worries by saying it was in talks with multiple parties to raise funds. Before his exit, Burns said on a conference call that Lordstown needed more capital and that production of the Endurance truck this year would be half of prior expectations of 2,200 vehicles.
Lordstown Motors executives opened their assembly plant — a former General Motors facility that made smaller sedans — to investors and reporters on Monday.
Lordstown, which went public last year through a reverse merger with a special-purpose acquisition company (SPAC), has struggled with the launch of its Endurance pickup truck, and with questions about governance.
Several EV startups over the past year have gone public via mergers with SPACs, bypassing the rigorous scrutiny of a traditional initial public offering process.
In March, Lordstown’s shares slumped after investment research firm Hindenburg Research disclosed it had taken a short position on the stock, saying the company had misled consumers and investors about its preorders for the Endurance truck that Lordstown initially said were worth $1.4 billion.
The Ohio company subsequently said the orders were not binding and on June 8, when it warned it was running out of cash, disclosed in a regulatory filing it had no binding orders or commitments from customers.
Last Monday, just days after Lordstown said it may not have enough money to stay in business over the next year, CEO Burns — who was also the company’s founder and largest shareholder — resigned, as did the CFO. Lordstown also acknowledged it had overstated the quality of preorders.
The following day, Lordstown President Rich Schmidt said the automaker had binding orders, but the company subsequently backtracked from that comment.
The U.S. Securities and Exchange Commission has asked the company for information related to the truck preorders.