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Lordstown Motors is the subject of a federal investigation by the Securities and Exchange Commission (SEC) for falsifying the number of pre-orders and its merger with DiamondPeak Holdings, company officials said.
Earlier this month, the SEC released a # 2 post-employment amendment to an S-1 registration statement, requesting more information and documents that could prove the pre-order counts claimed by Lordstown.
“We have received two subpoenas from the SEC for production of documents and information, including regarding the merger between DiamondPeak and Legacy Lordstown and vehicle preorders, and we have been notified by the United States District Attorney’s office for the district. South New York that it is investigating these matters, ”Lordstown Motors said.
In February, CEO Steve Burns said Lordstown had racked up 100,000 pre-orders for the Endurance pickup. With specs like 250 miles of range, 600 horsepower, and 7,500 pounds of towing capacity for $ 52,500, 100,000 vehicle orders seemed high, especially with rivals like the Tesla Cybertruck, Rivian R1T, and Ford. F-150 Lightning offering very competitive all-electric pickup trucks with several variations.
However, a March report from Hindenburg Research indicated that this was an exaggeration. The report revealed several allegations regarding the 100,000 pre-orders claimed by Lordstown, including statements from companies that the orders were “non-binding.” Additionally, a review of documents and interviews with employees and business partners revealed that these statements were being used “as an accessory to raise capital and confer legitimacy,” said Hindenburg.
Pre-orders were valued at $ 1.4 billion, according to Reuters.
2021 hasn’t been a friendly year for the Ohio-based electric car startup. Earlier this year, the company revealed that it was struggling with cash flow and that there was “substantial doubt” that it would continue to operate over the next twelve months. CEO Burns and CFO Julio Rodriguez were ultimately relieved of their duties. The company has appointed Becky Roof as interim chief financial officer and Angela Strand as executive chairman.
Lordstown relieves CEO and CFO of duties after financial troubles, shares drop 16%
Lordstown Motors said in a statement:
Lordstown Motors Corp., a leader in electric light trucks focused on the commercial fleet market, today announced several changes to its management team as the company begins to move from the R&D and development phase. first production in the commercial production phase of its activity. . To this end, Angela Strand, Senior Independent Director of Lordstown Motors, has been appointed Executive Chairman of the company and will oversee the organization’s transition until a permanent CEO is identified, and Becky Roof will assume the role of Director. interim financial. Steve Burns has resigned as chief executive and board of directors of the company, and chief financial officer Julio Rodriguez has also resigned. All changes are effective immediately and the company has hired an executive search firm to identify a permanent CEO and CFO. “
During that statement, the company also revealed that it had not had any binding orders with any company, entity or individual, clarifying former CEO Burns’ statements in February.
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