RIDE - Lordstown Motors looks at legal options as impasse with Foxconn extends

2023-05-11 09:52:07 ET

Lordstown Motors ( NASDAQ: RIDE ) disclosed on Thursday that it is at an impasse with discussions with Foxconn ( OTCPK:FXCOF ) on seeingk a resolution regarding terms of an investment agreement.

The electric vehicle maker noted Foxconn did not provide its approval of the electric vehicle program budget and EV program milestones by May 7. Lordstown ( RIDE ) said that mean that no assurances can be given that the parties will reach a resolution of the matters or that any such resolution will allow the closing of the funding to occur on a timely basis.

"If the Subsequent Common Closing is further delayed or such fundings do not occur, the Company will be deprived of critical funding necessary for its operations. The Company is evaluating its legal and financial alternatives in the event a resolution is not reached."

Under the terms of the original deal, Foxconn ( OTCPK:FXCOF ) was supposed to invest $47M within 10 days of regulatory approval by the Committee on Foreign Investment in the United States. Since the approval was secured on April 25, Lordstown ( RIDE ) has had the position that Foxconn was due to make the investment by May 8. Foxconn has pointed to a Nasdaq listing deficiency notice as its rationale for not making the investment.

Shares of RIDE fell 4.55% in early trading on Thursday.

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