The Lordstown Motors plant is where GM once operated, in Lordstown, Ohio, on October 16, 2020.
Megan Jelinger | AFP | Getty Images
US electric truck maker Lordstown Motors said on Tuesday there was “substantial doubt” about its ability to continue as a continuity, causing its shares to fall 16%.
“The company believes that the current level of cash and cash equivalents is not sufficient to fund the commercial-scale production and launch of sales of such vehicles,” Lordstown said in a quarterly filing with the U.S. Securities and Exchange Commission.
“These terms cast significant doubt on our ability to continue as a going concern for a period of at least one year from the date of issuance of these unaudited condensed consolidated financial statements,” the company added.
A spokesman for Lordstown was not immediately available for additional comment.
Lordstown, which went public last year through a reverse merger with a special acquisition company (SPAC), is struggling to launch its Endurance pickup. The truck is being built in a former General Motors factory in northeast Ohio.
Last month, Lordstown said its Endurance production this year would be half its previous expectations and it would need additional capital to execute on its plans.
In March, Lordstown’s shares collapsed after Hindenburg Research revealed it had taken a short position in the stock because the company had misled consumers and investors.
Short sellers bet that the price of a stock will fall by borrowing shares in hopes of buying them back at a lower price and pocketing the difference.
GM, a minority shareholder in Lordstown, declined to comment on the Lordstown filing.
Lordstown reported a net loss of $125.2 million for the quarter ended March 31 and had cash and cash equivalents of approximately $587 million and a cumulative deficit of $259.7 million as of March 31.