Lordstown warns of bankruptcy if Foxconn pulls investment

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Lordstown's investment deal with Foxconn may fall through because of the startup's shrinking share price.

Electric vehicle startup Lordstown Motors in an SEC filing made on Monday warned of potential bankruptcy should an investment deal with Foxconn fall through.

The deal, made last November, requires Foxconn investing up to $170 million in Lordstown in return for shares in the startup. However, in its latest filing, Lordstown alleged that Foxconn in a letter sent on April 21 had claimed Lordstown was in breach of the original agreement due to its share price dropping below the $1 threshold required for listing on the Nasdaq Global Select Market, and was threatening to cancel the agreement if the issue wasn't rectified within 30 days.

, a deal in which Foxconn would invest an additional $70 million. However, without the investment of the previous deal, Lordstown warned that it will be deprived of “critical” funding necessary for its operations.

, but the trucks continue to be built in very small numbers. Lordstown in its filing said the bill of materials for the Endurance was “substantially” higher than the selling price of the truck, and is expected to remain that way.

 

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Lordstown Motors warns it is in danger of going out of businessLordstown Motors warned that it is in danger of failing as the electronics company Foxconn wavers on a $170 million investment in the commercial electric vehicle startup.
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