Lordstown Motors Inc., an electric-vehicle startup that recently went public, said it may not have the cash to get its debut pickup truck to market -- and might not last as a company in the next 12 months if it can’t raise more capital.
The disclosure in a regulatory filing Tuesday comes after CEO Steve Burns said during the company’s first-quarter earnings call last month that his company needed to raise more money to fund the Endurance truck model’s development.
“The company’s ability to continue as a going concern is dependent on its ability to complete the development of its electric vehicles, obtain regulatory approval, begin commercial scale production and launch the sale of such vehicles,” the filing said. “The company believes that its current level of cash and cash equivalents are not sufficient to fund commercial scale production and the launch of sale of such vehicles.”
The announcement marks the latest setback for Lordstown, which in March disclosed a Securities and Exchange Commission probe into its operations. As recently as a year ago, the startup, which operates out of a shuttered General Motors plant in Ohio, was lauded by former President Donald Trump's administration as part of its drive to create manufacturing jobs.
After plunging 16 percent Tuesday to close at $11.22, the company's shares rallied 2.3 percent to $11.48 in late afternoon trading Wednesday after the company issued a statement saying it was in talks for additional funding.
"We are debt free, have significant tangible assets and multiple viable avenues to raise capital including asset-backed financing, equity, equity-related or debt financing, loans, as well as potential strategic investments over the longer term," the company said. "We are already in active conversations with multiple parties to do so."
Reuters contributed to this report.