0001558370-21-015655 | 10-Q | XBRL Viewer

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2021	Nov. 18, 2021
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	001-38821
Entity Registrant Name	Lordstown Motors Corp.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	83-2533239
Entity Address, Address Line One	2300 Hallock Young Road
Entity Address, City or Town	Lordstown
Entity Address State Or Province	OH
Entity Address, Postal Zip Code	44481
City Area Code	234
Local Phone Number	285-4001
Title of 12(b) Security	Class A Common Stock
Trading Symbol	RIDE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		192,230,903
Entity Central Index Key	0001759546
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current Assets
Cash and cash equivalents	$ 233,831	$ 629,761
Accounts receivable		21
Prepaid expenses and other current assets	22,916	24,663
Total current assets	256,747	654,445
Property, plant and equipment	362,391	101,663
Intangible assets		11,111
Other non-current assets	4,750
Total Assets	623,888	767,219
Current Liabilities
Accounts payable	48,666	32,536
Accrued and other current liabilities	39,187	1,538
Total current liabilities	87,853	34,074
Note payable		1,015
Warrant liability	3,529	101,392
Total liabilities	91,382	136,481
Stockholders' equity
Class A common stock, $0.0001 par value, 300,000,000 shares authorized; 182,074,899 and 168,007,960 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively	18	17
Additional paid in capital	996,146	765,162
Accumulated deficit	(463,658)	(134,441)
Total stockholders' equity	532,506	630,738
Total liabilities and stockholder's equity	$ 623,888	$ 767,219

Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020	Oct. 23, 2020
Balance Sheets
Common stock, par value	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	182,074,899	168,007,960
Common stock, shares outstanding	182,074,899	168,007,960

Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Operating expenses
Selling and administrative expenses	$ 31,281	$ 12,033	$ 79,468	$ 20,710
Research and development expenses	56,890	29,966	225,246	43,220
Amortization	11,111		11,111
Total operating expenses	99,282	41,999	315,825	63,930
Loss from operations	(99,282)	(41,999)	(315,825)	(63,930)
Other income (expense)
Other income (expense)	3,467	58	(13,788)	2,530
Interest income (expense)	9	(557)	396	(921)
Loss before income taxes	(95,806)	(42,498)	(329,217)	(62,321)
Net loss	$ (95,806)	$ (42,498)	$ (329,217)	$ (62,321)
Loss per share attributable to common shareholders
Basic & Diluted (in dollars per share)	$ (0.54)	$ (0.57)	$ (1.86)	$ (0.85)
Weighted average number of common shares outstanding
Basic & Diluted (in shares)	178,761	73,951	176,573	73,273

Statements of Stockholder's Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning balance at Dec. 31, 2019	$ 7	$ 18,940	$ (10,391)	$ 8,556
Beginning balance (in shares) at Dec. 31, 2019	68,279
Issuance of common stock, value	$ 1	6,403		6,404
Issuance of common stock (in shares)	4,701
Stock compensation		2,022		2,022
Net loss			(62,321)	(62,321)
Ending balance at Sep. 30, 2020	$ 8	27,365	(72,712)	(45,339)
Ending balance (in shares) at Sep. 30, 2020	72,980
Beginning balance at Jun. 30, 2020	$ 8	26,657	(30,214)	(3,549)
Beginning balance (in shares) at Jun. 30, 2020	72,980
Stock compensation		708		708
Net loss			(42,498)	(42,498)
Ending balance at Sep. 30, 2020	$ 8	27,365	(72,712)	(45,339)
Ending balance (in shares) at Sep. 30, 2020	72,980
Beginning balance at Dec. 31, 2020	$ 17	765,162	(134,441)	630,738
Beginning balance (in shares) at Dec. 31, 2020	168,008
Issuance of common stock, value		3,822		3,822
Issuance of common stock (in shares)	2,136
Common stock issued for exercise of warrants	$ 1	194,797		194,798
Common stock issued for exercise of warrants (in shares)	7,984
Common stock issued under Equity Purchase Agreement		20,000		20,000
Common stock issued under Equity Purchase Agreement (in shares)	3,947
Stock compensation		12,365		12,365
Net loss			(329,217)	(329,217)
Ending balance at Sep. 30, 2021	$ 18	996,146	(463,658)	532,506
Ending balance (in shares) at Sep. 30, 2021	182,075
Beginning balance at Jun. 30, 2021	$ 18	966,837	(367,852)	599,003
Beginning balance (in shares) at Jun. 30, 2021	176,606
Issuance of common stock, value		2,724		2,724
Issuance of common stock (in shares)	1,522
Common stock issued under Equity Purchase Agreement		20,000		20,000
Common stock issued under Equity Purchase Agreement (in shares)	3,947
Stock compensation		6,585		6,585
Net loss			(95,806)	(95,806)
Ending balance at Sep. 30, 2021	$ 18	$ 996,146	$ (463,658)	$ 532,506
Ending balance (in shares) at Sep. 30, 2021	182,075

Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
Statements of Cash Flows - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities
Net loss	$ (95,806)	$ (329,217)	$ (62,321)
Adjustments to reconcile net loss to cash used by operating activities:
Stock-based compensation		12,365	2,022
Non-cash charge related to change in fair value of warrants	(3,344)	14,918
Amortization	11,111	11,111
Forgiveness of note payable		(1,015)
Gain on disposal of fixed assets			(2,346)
Changes in assets and liabilities:
Accounts receivables		21	(20)
Prepaid expenses		(3,001)	(4,794)
Accounts payable		10,929	20,587
Accrued expenses and due to related party		37,649	11,267
Cash used by operating activities		(246,240)	(35,605)
Cash flows from investing activities
Purchases of capital assets		(255,528)
Proceeds from the sale of capital assets			2,396
Cash (used by) provided by investing activities		(255,528)	2,396
Cash flows from financing activities
Proceeds from notes payable			44,353
Proceeds from Equity Purchase Agreement		20,000
Cash proceeds from exercise of warrants		82,016
Issuance of common stock		3,822	6,404
Cash provided by financing activities		105,838	50,757
Decrease in cash and cash equivalents		(395,930)	17,548
Cash and cash equivalents, beginning balance		629,761	2,159
Cash and cash equivalents, ending balance	$ 233,831	$ 233,831	$ 19,707

ORGANIZATION AND DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2021

ORGANIZATION AND DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

ORGANIZATION AND DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Lordstown Description of Business

Lordstown Motors Corp., a Delaware corporation (“Lordstown” or the “Company”), is an electric vehicle (EV) innovator developing high-quality light duty commercial fleet vehicles, with the Endurance all electric pick-up truck as its first vehicle being launched in the Lordstown, Ohio facility. The Company is in its initial design and testing phase related to its production of the Endurance and has yet to bring a completed product to market.

On September 30, 2021, the Company, Lordstown EV Corporation, a Delaware corporation and wholly-owned subsidiary of the Company (“Lordstown EV”) and an affiliate of Hon Hai Technology Group (“Foxconn”) entered into an Agreement in Principle (the “Agreement in Principle”) to work jointly on electric vehicle programs in the Company’s facility in Lordstown, Ohio. Other than with respect to exclusivity and certain customary provisions, the Agreement in Principle was non-binding and subject to the negotiation and execution of definitive agreements.

The Agreement in Principle provided, among other things, as follows:

●

The Company and Foxconn would use commercially reasonable best efforts to negotiate a definitive agreement pursuant to which Foxconn would purchase the Lordstown facility, excluding the Company’s hub motor assembly line, battery module and packing line assets, certain intellectual property rights and other excluded assets, for $230 million.

●

The parties would also negotiate a contract manufacturing agreement, which would be a condition to closing of the facility purchase, whereby Foxconn would manufacture the Endurance at the Lordstown facility. The Company would also agree to provide Foxconn with certain rights with respect to future vehicle programs.

●

Concurrently with the closing under the definitive agreements, the Company would issue warrants to Foxconn that are exercisable until the third anniversary of the closing for 1.7 million shares of Class A common stock at an exercise price of $10.50 per share.

●

Following the closing under the definitive agreements, the Company would enter into a long-term lease for a portion of the existing facility for its Ohio-based employees, and Foxconn would offer employment to agreed upon Lordstown employees.

The parties agreed to a binding 60-day mutual exclusivity period with respect to the transactions contemplated by the Agreement in Principle and a fee of $50 million to be paid by any party who materially breaches this provision.

As further described in Note 9, on September 30, 2021, the Company also entered into a subscription agreement pursuant to which the Company agreed to issue and sell, and Foxconn agreed to purchase, 7.2 million shares of the Company’s Class A common stock (the “Subscription Agreement”) for approximately $50.0 million in total consideration. The closing of the Subscription Agreement occurred on October 12, 2021.

See Note 9 – Subsequent Events for a description of the Asset Purchase Agreement entered into with Foxconn EV Technology, Inc., an Ohio corporation and affiliate of Foxconn (“Foxconn Ohio”) on November 10, 2021 (the “Asset Purchase Agreement”).

Business Combination and Basis of Presentation

The unaudited condensed consolidated interim financial statements of Lordstown have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to these rules and regulations. Accordingly, these unaudited condensed consolidated interim financial statements should be read in conjunction with our audited consolidated financial statements and related notes included in our Form 10-K/A.

In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments necessary for a fair presentation of our interim financial results. All such adjustments are of a normal and recurring nature. The results of operations for any interim period are not indicative of results for the full fiscal year. The accompanying unaudited condensed consolidated interim financial statements include our accounts and those of our controlled subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the dates of the financial statements and the amounts of expenses during the reporting periods. Actual amounts realized or paid could differ from those estimates. The condensed consolidated financial statements include the accounts and operations of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated upon consolidation.

The Company has also reclassified the presentation of certain prior-year amounts to conform to the current presentation.

On October 23, 2020 (the “Closing Date”), Diamond Peak Holdings Corp. (“DiamondPeak”) consummated the transactions contemplated by the agreement and plan of merger (the “Merger Agreement”), dated August 1, 2020, among DiamondPeak, Lordstown EV Corporation (formerly known as Lordstown Motors Corp.), a Delaware corporation (“Legacy LMC”), and DPL Merger Sub Corp., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which Merger Sub merged with and into Legacy LMC with Legacy LMC surviving the merger (the “Merger” and, together with the other transactions contemplated by the Business Combination Agreement, the “Business Combination”). On the Closing Date, and in connection with the closing of the Business Combination (the “Closing”), DiamondPeak changed its name to Lordstown Motors Corp (the “Company”) and Legacy LMC became a wholly owned subsidiary of the Company.

Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each issued and outstanding share of common stock, par value $0.0001 per share, of Legacy LMC (“Legacy LMC Common Stock”) was converted into 55.8817 shares (the “Exchange Ratio”) of Class A common stock, par value $0.0001 per share, of the Company (“Class A common stock”), resulting in an aggregate of 75,918,063 shares of Class A common stock issued to Legacy LMC stockholders. At the Effective Time, each outstanding option to purchase Legacy LMC Common Stock (“Legacy LMC Options”), whether vested or unvested, was automatically converted into an option to purchase a number of shares of Class A common stock equal to the product of (x) the number of shares of Legacy LMC Common Stock subject to such Legacy LMC Option and (y) the Exchange Ratio, at an exercise price per share equal to (A) the exercise price per share of Legacy LMC Common Stock of such Legacy LMC Option immediately prior to the Effective Time divided by (B) the Exchange Ratio.

Pursuant to the Company’s Amended and Restated Certificate of Incorporation, as in effect prior to the Closing, each outstanding share of DiamondPeak’s Class B common stock, par value $0.0001 per share, was automatically converted into one share of the Company’s Class A common stock at the Closing, resulting in an issuance of 7 million shares of Class A common stock in the aggregate.

In connection with the Closing, the Company (a) issued and sold an aggregate of 50 million shares of Class A common stock for $10.00 per share at an aggregate purchase price of $500 million pursuant to previously announced subscription agreements with certain investors (the “PIPE Investors”), (b) issued an aggregate of approximately 4 million shares of Class A common stock to holders of $40 million in aggregate principal amount plus accrued interest, of Legacy LMC convertible promissory notes at a conversion price of $10.00 per share upon automatic conversion of such notes (the “Note Conversions”), and (c) issued warrants to purchase 1.6 million shares of Class A common stock (“BGL Warrants”) a purchase price of $10.00 per share to a third party. Additionally, the Company assumed 9.3 million Public Warrants (as defined below) and 5.1 million Private Warrants (as defined below) both of which were originally issued by DiamondPeak with an exercise price of $11.50. In December 2020, 2.7 million of the Public Warrants were exercised which resulted in $30.7 million in proceeds. In January 2021, a significant portion of the remaining Public Warrants and 0.6 million of the Private Warrants were exercised upon payment of the cash exercise price, which resulted in cash proceeds of $82.0 million. As of September 30, 2021, there were 2.3 million Private Warrants, 1.6 million BGL Warrants and no Public Warrants outstanding. See further discussion related to the accounting of the Public Warrants and Private Warrants in Note 3.

Pursuant to the Business Combination, the merger between a DiamondPeak and Legacy LMC was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”). Under this method of accounting, Legacy LMC was deemed to be the accounting acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Legacy LMC issuing stock for the net assets of DiamondPeak, accompanied by a recapitalization. The net assets of DiamondPeak are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Legacy LMC. The shares and corresponding capital amounts and earnings per share available for common stockholders, prior to the Business Combination, have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination.

As part of the Business Combination, we recorded $644.6 million in equity for the recapitalization, net of transaction costs and $100.9 million in liabilities related to the Public and Private Warrants described in Note 3. The Company received cash proceeds of $701.5 million as a result of the Business Combination which was net of the settlement of the $20.8 million related party note payable and $23.2 million in property purchased through equity both as described in Note 4. Additionally, a $5 million Convertible Note and the $5.9 million amount in Due to related party as described in Note 7 were also settled in conjunction with the Business Combination.

Liquidity and Going Concern

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern and in accordance with generally accepted accounting principles in the United States of America. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

Pursuant to the requirements of the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these financial statements are issued. This evaluation does not take into consideration the

potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

The Company had cash and cash equivalents of approximately $233.8 million and an accumulated deficit of $463.7 million at September 30, 2021 and a net loss of $329.2 million for the nine months ended September 30, 2021. Since inception, the Company has been developing its flagship vehicle, the Endurance, an electric full-size pickup truck. 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 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. These conditions raise substantial doubt regarding 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.

In an effort to alleviate these conditions, and as further described in Note 8, on July 23, 2021, the Company entered into an equity purchase agreement (the “Equity Purchase Agreement”) with YA II PN, LTD. (“YA”), pursuant to which YA has committed to purchase up to $400 million of our Class A common stock, at our direction from time to time, subject to the satisfaction of certain conditions. During the quarter ended September 30, 2021, we issued 3.9 million shares to YA and received $20 million cash. We also issued 2.8 million shares to YA in exchange for $15 million cash in October 2021. The actual amount that we raise under this facility will depend on market conditions and other financing alternatives that we are exploring, as well as limitations in the agreement

In connection with Subscription Agreement described in Note 9, the Company sold 7.2 million shares of Class A common stock to an affiliate of Foxconn for approximately $50.0 million in total consideration on October 12, 2021.

Management continues to seek to raise additional funds through the issuance of equity, mezzanine or debt securities, through arrangements with strategic partners or through obtaining credit from government or financial institutions. The Company has engaged an advisor to advise the Company on additional financing alternatives.

In addition, the Company and Lordstown EV entered into the Asset Purchase Agreement with Foxconn Ohio to leverage the value of our facility and technologies, with the goal of becoming a capital light engineering, design and development company focused on developing multiple all-electric vehicle programs, primarily for the North American commercial vehicle market.

As discussed further in Note 9, the Asset Purchase Agreement provides that Foxconn Ohio will purchase the Lordstown facility, excluding the Company’s hub motor assembly line, battery module and packing line assets, certain intellectual property rights and other excluded assets, for $230 million and a reimbursement payment for certain operating and expansion costs incurred during the period leading up to the closing of the transactions contemplated by the Asset Purchase Agreement. Pursuant to the Asset Purchase Agreement, Foxconn Ohio will pay the Company a down payment equal to $100 million no later than November 18, 2021 and thereafter will make additional down payments in the amount of $50 million on February 1, 2022 and $50 million no later than April 15, 2022, in each case subject to certain conditions. In exchange for the down

payments, we will be granting Foxconn Ohio a first priority security interest in substantially all of Lordstown EV’s assets, along with committing to maintain minimum cash balances of $100 million through January 1, 2022, $50 million through March 1, 2022 and $30 million thereafter.

If the Asset Purchase Agreement is terminated or if the transaction does not close prior to the later of (i) April 30, 2022 and (ii), if CFIUS clearance is still pending on April 30, 2022, 10 days after the transaction is cleared by the U.S. government’s Committee on Foreign Investment in the United States (“CFIUS”), the Company is obligated to repay the down payments to Foxconn Ohio plus accrued interest, and such potential repayment obligation is secured by a first priority security interest in substantially all of Lordstown EV’s assets. In connection with the closing, the parties would enter into (i) a contract manufacturing agreement whereby Foxconn Ohio or its affiliate would manufacture the Endurance at the Lordstown, Ohio facility for the Company (the “CMA”) and (ii) a long-term lease agreement whereby Foxconn Ohio would lease to Lordstown EV up to 30,000 square feet of space located at the Lordstown, Ohio facility for its Ohio-based employees (the “Lease”). In connection with the closing, the Company will issue warrants to Foxconn that are exercisable until the third anniversary of the closing for 1.7 million shares of Class A common stock at an exercise price of $10.50 per share.

The transactions with Foxconn are expected to provide the Company with near-term liquidity from the value of the facility and technologies, reduce the overall capital investment needed by the Company to reach commercial production, accelerate our ability to achieve scaled manufacturing, speed up future vehicle development and launch, provide more cost-effective access to certain raw material, components and other inputs and reduce overhead costs associated with the Lordstown facility borne by the Company.

Even if the Foxconn transaction is consummated in accordance with the current terms and on the anticipated timeline, we will need additional funding to continue our development efforts and maintain our current plans for our production timeline.

As we seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at all. Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our business and industry, as well as our pending transaction with Foxconn. As a result of these uncertainties, and notwithstanding management’s plans and efforts to date, there continues to be substantial doubt about our ability to continue as a going concern.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2021

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reclassifications

The Company reclassified $2.3 million of gain on sale of fixed assets to other income during the nine months ended September 30, 2020 in order to consistently present its condensed consolidated financial statements. The reclassification did not impact net loss.

Immaterial Correction of Error

The Company’s previously issued financial statements have been revised to reclassify certain expenses that were inappropriately presented within the consolidated statement of operations. This resulted in the reclassification of $2.7 million of research and development expenses to selling and administrative expenses for the nine months ended September 30, 2020. The error did not impact net loss.

The Company, in consultation with the Audit Committee of the Board of Directors, evaluated the effect of these adjustments on the Company’s consolidated financial statements under ASC 250, Accounting Changes

and Error Corrections and Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements and determined it was not necessary to recall its consolidated condensed financial statements as the errors did not materially misstate those consolidated financial statements. The Company looked at both quantitative and qualitative characteristics of the required corrections.

Cash and cash equivalents

Cash includes cash equivalents which are highly liquid investments that are readily convertible to cash. The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. The Company presents cash and cash equivalents within Cash and cash equivalents on the Balance Sheet.

The Company maintains its cash in investment accounts as well as bank deposit accounts which, at times, exceed federally insured limits. Management believes it is not exposed to significant credit risk.

Property, plant and equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Determination of useful lives and depreciation will begin once the assets are ready for their intended use.

Upon retirement or sale, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is reflected in the statement of operations. Maintenance and repair expenditures are expensed as incurred, while major improvements that increase functionality of the asset are capitalized and depreciated ratably to expense over the identified useful life. Further, interest on any debt financing arrangement is capitalized to the purchased property, plant, and equipment if the requirements for capitalization are met.

Long-lived assets, such as property, plant, and equipment are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group.

Intangible assets other than goodwill

Intangible assets included patents, copyrights, trade secrets, know-how, software, and all other intellectual property and proprietary rights connected with the electric pickup truck and other electric vehicle technology owned by Workhorse and contributed in exchange for equity in the Company.

During the quarter ended September 30, 2021, we continued to refine the design of the Endurance and consider technologies we would use in future vehicles. Given the lack of Workhorse technology used in the Endurance and new management’s strategic direction of the Company, inclusive of the transactions contemplated with Foxconn as detailed in Note 9, we deemed it appropriate to change the useful life of the technology we acquired from Workhorse to zero months. As such, we recorded accelerated amortization of $11.1 million during the quarter ended September 30, 2021.

Research and development costs

The Company expenses research and development costs as they are incurred. Research and development costs consist primarily of personnel costs for engineering and research, prototyping costs, and contract and professional services.

Stock-based compensation

The Company has adopted ASC Topic 718, Accounting for Stock-Based Compensation (ASC 718), which establishes a fair value-based method of accounting for stock-based compensation plans. In accordance with ASC 718, the cost of stock-based awards issued to employees and non-employees over the awards' vest period is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model, which incorporates assumptions regarding the expected volatility, expected option life and risk-free interest rate.

The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. Further, pursuant to ASU 2016-09 – Compensation – Stock Compensation (Topic 718), the Company has elected to account for forfeitures as they occur.

Warrants

The Company accounts for its Public and Private Warrants as described in Note 3 in accordance with the guidance contained in ASC Topic 815-40-15-7D and 7F under which the Public Warrants and Private Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Public and Private Warrants as liabilities at their fair value and adjusts the Public and Private Warrants to fair value at each reporting period or at the time of settlement. Any change in fair value is recognized in the statement of operations as Other income/(expense).

Income taxes

Income taxes are recorded in accordance with ASC Topic 740, Income Taxes (ASC 740). Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has recorded a full valuation allowance against its deferred tax assets.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC Topic 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense. The Company does not have material uncertain tax positions.

Recent accounting pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases, and has subsequently issued several supplemental and/or clarifying ASUs (collectively ASC 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing

key information about leasing arrangements. ASC 842 is effective for the Company beginning after December 2021 and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the effect of the adoption of this guidance on the consolidated financial statements.

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2021

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 3 — FAIR VALUE MEASUREMENTS

The Company follows the accounting guidance in ASC Topic 820 for its fair value measurements of financial assets and liabilities measured at fair value on a recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The three-tiered fair value hierarchy, which prioritizes when inputs should be used in measuring fair value, is comprised of: (Level I) observable inputs such as quoted prices in active markets; (Level II) inputs other than quoted prices in active markets that are observable either directly or indirectly and (Level III) unobservable inputs for which there is little or no market data. The fair value hierarchy requires the use of observable market data when available in determining fair value.

The Public and Private Warrants are classified as a liability with any changes in the fair value recognized immediately in our condensed consolidated statements of operations. The following table summarizes the net gain (loss) on changes in fair value (in thousands) related to the Public and Private Warrants:


	Three months ended		Nine months ended
	September 30, 2021		September 30, 2021
Public Warrants	$	—	$	(27,180)
Private Warrants		3,344		12,263
Net gain (loss) on changes in fair value	$	3,344	$	(14,918)

Observed prices for the Public Warrants were used as Level 1 inputs as they were actively traded until being redeemed in January 2021. The Private Warrants are measured at fair value using Level 3 inputs. These instruments are not actively traded and are valued using a Monte Carlo option pricing model that uses observable and unobservable market data as inputs.

A Monte Carlo model was used to simulate a multitude of price paths to measure fair value of the Private Warrants. The Monte Carlo models two possible outcomes for the stock price each trading day – up or down – based on the prior day’s price. The calculations underlying the model specify the implied risk-neutral probability that the stock price will move up or down, and the magnitude of the movements, given the stock’s volatility and the risk-free rate. This analysis simulates possible paths for the stock price over the term of the Private Warrants. For each simulated price path, we evaluate the conditions under which the Company could redeem each Private Warrant for a fraction of whole shares of the underlying as detailed within the Warrant Agreement. If the conditions are met, we assume redemptions would occur, although the Private Warrant holders would have the option to immediately exercise if it were more advantageous to do so. For each simulated price path, if a redemption does not occur the holders are assumed to exercise the Private Warrants if the stock price exceeds the exercise price at the end of the term. Proceeds from either the redemption or the exercise of the Private Warrants are reduced to a present value amount at each measurement date using the risk-free rate for each simulated price path. Present value indications from iterated priced paths were averaged to derive an indication of value for the Private Warrants.

At each measurement date, we use a stock price volatility input of 50%. This assumption considers observed historical stock price volatility of other companies operating in the same or similar industry as the Company over a period similar to the remaining term of the Private Warrants, as well as the volatility implied by the traded

options of the Company. The risk-free rates utilized were 0.847% and 0.413% for the valuations as of September 30, 2021 and December 31, 2020, respectively.

The following tables summarize the valuation of our financial instruments (in thousands):


	Total		Quoted prices in active markets (Level 1)		Prices with observable inputs (Level 2)		Prices with unobservable inputs (Level 3)
September 30, 2021
Cash and cash equivalents	$	233,831	$	233,831	$	—	$	—
Public Warrants		—		—		—		—
Private Warrants		3,529		—		—		3,529

	Total		Quoted prices in active markets (Level 1)		Prices with observable inputs (Level 2)		Prices with unobservable inputs (Level 3)
December 31, 2020
Cash and cash equivalents	$	629,761	$	629,761	$	—	$	—
Public Warrants		57,515		57,515		—		—
Private Warrants		43,877		—		—		43,877

The following table summarizes the changes in our Level 3 financial instruments (in thousands):


	Balance at December 31, 2020		Additions		Settlements		Loss / (Gain) on fair value adjustments included in earnings		Balance at September 30, 2021
Private Warrants	$	43,877		—		(28,085)		(12,263)	$	3,529

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

PROPERTY, PLANT AND EQUIPMENT

9 Months Ended

Sep. 30, 2021

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

NOTE 4 — PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, net, consisted of the following:

(in thousands)


	September 30, 2021		December 31, 2020
Property, Plant & Equipment
Land	$	326	$	326
Buildings		6,223		6,223
Machinery and equipment		38,608		38,443
Vehicles		448		142
Construction in progress		316,786		56,529
	$	362,391	$	101,663
Less: Accumulated depreciation		—		—
Total	$	362,391	$	101,663

Construction in progress includes retooling and construction at the Company's facility in Lordstown, Ohio and tooling held at various supplier locations. The Company is currently finalizing its production process, bringing acquired assets up to the level needed for commercial production and evaluating assets that will be necessary in the commercial production of the Endurance pickup truck. Completed assets will be transferred to their respective asset classes and depreciation will begin when an asset is ready for its intended use. As of

September 30, 2021, commercial scale manufacturing has not begun and thus no depreciation was recognized in 2021 or 2020.

Property, plant and equipment also includes the manufacturing plant in Lordstown, Ohio which was purchased from GM in November 2019 for $20.0 million, recorded as a related party note payable. In early 2019, GM made the decision to halt manufacturing on its Chevrolet Cruze sedan which was manufactured at its Lordstown plant. The plant remained closed with no production until GM and the Company were able to agree on the terms of the asset purchase, which resulted in a purchase price significantly lower than the fair market value of the assets acquired. As of the date of the Business Combination, our related party note payable for the plant and interest totaled $20.8 million and was settled as part of the Business Combination.

During the quarter ended March 31, 2020, the Company also purchased property from GM for $1.2 million which was recorded to construction in progress. The corresponding due to related party balance was satisfied with equity at the consummation of the Business Combination as described in Note 1. See Note 7 for further details on the due to related party balance. During the quarter ended June 30, 2020, the Company sold equipment which it determined was not necessary for production which resulted in a gain on sale of the asset for $2.3 million.

During the fourth quarter of 2020, we also recognized an additional $23.2 million of property that was exchanged for common stock as part of the Business Combination.

NOTE PAYABLE

9 Months Ended

Sep. 30, 2021

NOTE PAYABLE

NOTE PAYABLE

NOTE 5 — NOTE PAYABLE

On April 17, 2020, LMC entered into a Promissory Note with The Huntington National Bank, which provides for a loan in the amount of $1 million (the “PPP Loan”) pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan had a two-year term and bears interest at a rate of 1.0% per annum. The Paycheck Protection Program provides that the PPP Loan may be partially or wholly forgiven if the funds are used for certain qualifying expenses as described in the CARES Act. During the quarter ended June 30, 2021, our $1.0 million loan was forgiven.

During the quarter ended September 30, 2020, the Company entered into “Placement Agency Agreements” with Maxim Group, LLC (“Maxim”) and existing shareholders. Pursuant to the terms of the Placement Agency Agreements, the Company issued “Convertible Promissory Notes” to a series of investors for proceeds worth $37.8 million net of transaction costs. In connection with the Closing described in Note 1, the Company issued an aggregate of approximately 4 million shares of Class A Common Stock in exchange for the Convertible Promissory Notes.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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-Name Accounting Standards Codification
-Topic 470
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-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
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-Publisher FASB
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+ Details

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2021

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 6 — COMMITMENTS AND CONTINGENCIES

The Company has entered into supply agreements with Samsung and LG Energy Solution to purchase lithium-ion cylindrical battery cells. The agreements provide for certain pricing and minimum quantity parameters, including our obligation to purchase such minimum amounts which totaled approximately $16.3 million, $139.4 million and $273.6 million in 2021, 2022, and 2023, respectively, subject to change for increases in raw material pricing. We are in the process of negotiating amendments to reduce the amounts of these obligations, but there is no assurance that we will reach such agreements.

The Company is subject to various pending and threatened legal proceedings arising in the ordinary course of business. The Company records a liability for loss contingencies in the consolidated financial statements when a loss is known or considered probable and the amount can be reasonably estimated. Our provisions are based on historical experience, current information and legal advice, and they may be adjusted in the

future based on new developments. Estimating probable losses requires the analysis of multiple forecasted factors that often depend on judgments and potential actions by third parties.

On October 30, 2020, the Company, together with executive officers Mr. Burns, Mr. LaFleur, Mr. Post and Mr. Schmidt, and certain of our employees, were named as defendants in a lawsuit filed by Karma Automotive LLC (“Karma”) in the United States District Court for the Central District of California (“District Court”). On November 6, 2020, the District Court denied Karma’s request for a temporary restraining order. On April 16, 2021, Karma filed an Amended Complaint that added additional defendants (two Company employees and two Company contractors that were previously employed by Karma) and a number of additional claims alleging generally that the Company unlawfully poached key Karma employees and misappropriated Karma’s trade secrets and other confidential information. The Amended Complaint contains a total of 28 counts, including: (i) alleged violations under federal law of the Computer Fraud and Abuse Act and the Defend Trade Secrets Act, (ii) alleged violations of California law for misappropriation of trade secrets and unfair competition; (iii) common law claims for breach of contract and tortious interference with contract; (iv) common law claims for breach of contract, including confidentiality agreements, employment agreements and the non-binding letter of intent; and (v) alleged common law claims for breach of duties of loyalty and fiduciary duties. The Amended Complaint also asserts claims for conspiracy, fraud, interstate racketeering activity, and violations of certain provisions of the California Penal Code relating to unauthorized computer access. Karma is seeking permanent injunctive relief and monetary damages.

After several months of discovery, Karma filed a motion for preliminary injunction on August 8, 2021, seeking to temporarily enjoin the Company from producing any vehicle that incorporated Karma’s alleged trade secrets. On August 16, 2021, Karma also moved for sanctions for spoliation of evidence. On September 16, 2021, the District Court denied Karma’s motion for a preliminary injunction, and denied, in part, and granted, in part, Karma’s motion for sanctions. As a result of its partial grant of Karma’s sanctions motion, the District Court awarded Karma a permissive adverse inference jury instruction, the scope of which will be determined at trial.

On September 20, 2021, the District Court granted the parties’ request to continue the trial date and other pretrial deadlines. Discovery is now set to close on March 1, 2022, and trial is scheduled to begin on August 8, 2022.The Company is continuing to evaluate the matters asserted in the lawsuit, and is vigorously defending against Karma’s claims. The Company continues to believe that there are strong defenses to the claims and the damages demanded. At this time, however, the Company cannot predict the outcome of this matter or estimate the possible loss or range of possible loss, if any. The proceedings are subject to uncertainties inherent in the litigation process.

Six related putative securities class action lawsuits were filed against the Company and certain of its current and former officers and directors and former DiamondPeak directors between March 18, 2021 and May 14, 2021 in the U.S. District Court for the Northern District of Ohio (Rico v. Lordstown Motors Corp., et al. (Case No. 21-cv-616); Palumbo v. Lordstown Motors Corp., et al. (Case No. 21-cv-633); Zuod v. Lordstown Motors Corp., et al. (Case No. 21-cv-720); Brury, et al. v. Lordstown Motors Corp., et al. (Case No. 21-cv-760)); Romano et al. v. Lordstown Motors Corp., et al., (Case No. 21-cv-994); and FNY Managed Accounts LLC, et al. v. Lordstown Motors Corp. et al., (Case No. 21-cv-1021). The matters have been consolidated and the Court appointed George Troicky as lead plaintiff and Labaton Sucharow LLP as lead plaintiff’s counsel. On September 10, 2021, lead plaintiff and several additional named plaintiffs filed their consolidated amended complaint, asserting violations of federal securities laws under Section 10(b), Section 14(a), Section 20(a), and Section 20A of the Exchange Act against the Company and certain of its current and former officers and directors. The complaint generally alleges that the Company and individual defendants made materially false and misleading statements relating to vehicle pre-orders and production timeline. Defendants filed their motion to dismiss on November 9, 2021. Plaintiffs’ response is due by January 17, 2022, and the motion to dismiss will be fully briefed by March 3, 2022. We intend to vigorously defend against the claims. The

proceedings are subject to uncertainties inherent in the litigation process. We cannot predict the outcome of these matters or estimate the possible loss or range of possible loss, if any.

Four related stockholder derivative lawsuits were filed against certain of the Company’s officers and directors, former DiamondPeak directors, and against the Company as a nominal defendant between April 28, 2021 and July 9, 2021 in the U.S. District Court for the District of Delaware (Cohen, et al. v. Burns, et al. (Case No. 21-cv-604); Kelley, et al. v. Burns, et al. (Case No. 12-cv-724); Patterson, et al. v. Burns, et al. (Case No. 21-cv-910); Sarabia v. Burns, et al. (Case No. 21-cv-1010)). The derivative actions in the District of Delaware have been consolidated. On August 27, 2021, plaintiffs filed a consolidated amended complaint, asserting violations of Section 10(b), Section 21D, Section 14(a) and Section 20(a) the Exchange Act and Rule 10b-5 thereunder, breach of fiduciary duties, insider selling, and unjust enrichment, all relating to vehicle pre-orders, production timeline, and the merger with DiamondPeak. On October 11, 2021, defendants filed a motion to stay this consolidated derivative action pending resolution on the motion to dismiss in the consolidated securities class action. Plaintiffs’ deadline to respond to the motion to stay is November 24, 2021, and the motion will be fully briefed by December 22, 2021. Another related stockholder derivative lawsuit was filed in U.S. District Court for the Northern District of Ohio on June 30, 2021 (Thai et al. v. Burns, et al. (Case No. 21-cv-1267)), asserting violations under Section 10(b), Section 14(a), Section 20, Section 21D of the Exchange Act and Rule 10b-5 thereunder, breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste, based on similar facts as the consolidated derivative action. On October 21, 2021, the court in the Northern District of Ohio derivative action entered a stipulated stay of the action and scheduling order relating to defendants’ anticipated motion to dismiss and/or subsequent motion to stay that is similarly conditioned on the resolution of the motion to dismiss in the consolidated securities class action. We intend to vigorously defend against the claims. The proceedings are subject to uncertainties inherent in the litigation process. We cannot predict the outcome of these matters or estimate the possible loss or range of possible loss, if any.

In addition, between approximately March 26, 2021 and September 23, 2021, LMC received eight demands for books and records pursuant to Section 220 of the Delaware General Corporation Law from stockholders who state they are investigating whether to file similar derivative lawsuits, among other purposes. Also, on or around July 26, 2021, the Company received a stockholder litigation demand that the Company’s board of directors investigate and commence legal proceedings against certain current and former officers and directors based on alleged breaches of fiduciary duties, corporate waste, and unjust enrichment. The proceedings are subject to uncertainties inherent in the litigation process. We cannot predict the outcome of these matters or estimate the possible loss or range of possible loss, if any.

The Company has also received two subpoenas from the SEC for the production of documents and information, including relating to the merger between DiamondPeak and Legacy Lordstown and pre-orders of vehicles, and the Company has been informed by the U.S. Attorney’s Office for the Southern District of New York that it is investigating these matters. The Company has cooperated, and will continue to cooperate, with these and any other regulatory or governmental investigations and inquiries.

Except as described above, the Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims. From time to time however, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities.

RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2021

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 7 — RELATED PARTY TRANSACTIONS

On November 7, 2019, the Company entered into an Asset Transfer Agreement, Operating Agreement and separate Mortgage Agreement (collectively, the “GM Agreements”) with GM. Pursuant to the GM Agreements, the Company incurred debt to GM recorded as a related party note payable in the principal amount of $20.0 million, secured by the real property described in Note 4. The Company had imputed interest of 5% on the related party note payable until February 1, 2020 when the stated interest rate of 7% began per

the terms of the GM Agreement. Interest for the three months ended March 31, 2020 totaled $0.3 million which was capitalized as part of PP&E as described in Note 4. This note which totaled $20.8 million as of the date of the Closing, was converted to equity during the Business Combination described in Note 1.

In conjunction with the Operating Agreement described above, the Company was also required to reimburse GM for expenditures related to general plant maintenance and compliance associated with the Lordstown facility. The Company recorded expenses of $2.1 million during the nine months ended September 30, 2020 on the Statement of Operations. Additionally, during the nine months ended September 30, 2020, the Company purchased property from GM for $1.2 million which was recorded to CIP. As of the date of the Closing described in Note 1, we had accrued a total of $5.9 million as a Due to Related Party liability which was converted to equity as part of the Business Combination.

On May 28, 2020, the Company entered into a Convertible Promissory Note (the “Convertible Note”) with GM that provided financing to the Company of up to $10.0 million secured by the Company’s property, plant and equipment and intangible assets. Pursuant to the terms of the Convertible Note, the Company had the ability to periodically draw down on the Convertible Note to meet its working capital needs. The Convertible Note had a $5.0 million balance at the closing of the Business Combination and was converted to equity as described in Note 1.

In August 2020, we entered into an emissions credit agreement with GM pursuant to which, and subject to the terms of which, during the first three annual production/model years wherein we produce vehicles at least ten months out of the production/model year, the counterparty will have the option to purchase such emissions credits as well as emissions credits from any other U.S. state, country or jurisdiction generated by vehicles produced by us not otherwise required by us to comply with emissions laws and regulations at a purchase price equal to 75% of the fair market value of such credits. While we plan for our first three annual production/model years for the purpose of this agreement to be 2022, 2023 and 2024, it is possible that this agreement could extend beyond these model years if we do not achieve ten or more months of production during those annual production/model years.

As of December 31, 2020, GM was no longer determined to be a related party.

On November 7, 2019, the Company entered into a transaction with Workhorse Group Inc., for the purpose of obtaining certain intellectual property. In connection with granting this license, Workhorse Group received 10% of the outstanding Legacy Lordstown common stock and was entitled to royalties of 1% of the gross sales price of the first 200,000 vehicle sales. In November 2020, we pre-paid a royalty payment to Workhorse Group in the amount of $4.75 million. The upfront royalty payment represents an advance on royalties due on 1% of the gross sales price of the first 200,000 vehicles sold, but only to the extent that the aggregate amount of such royalty fees exceeds the amount paid upfront. The upfront royalty payment was recorded as a prepaid expense as of December 31, 2020, but reclassified to other non-current assets as of September 30, 2021. These amounts will be amortized as a percent of each vehicle sold. As of September 30, 2021, Workhorse Group was no longer determined to be a related party.

CAPITAL STOCK AND LOSS PER SHARE

9 Months Ended

Sep. 30, 2021

BASIC AND DILUTED LOSS PER SHARE

CAPITAL STOCK AND LOSS PER SHARE

NOTE 8 — CAPITAL STOCK AND LOSS PER SHARE

Our Charter provides for 312 million authorized shares of capital stock, consisting of (i) 300 million shares of Class A common stock and (ii) 12 million shares of preferred stock each with a par value of $0.0001. We had 182.1 million and 168.0 million shares of common stock issued and outstanding as of September 30, 2021 and December 31, 2020, respectively.

FASB ASC Topic 260, Earnings Per Share, requires the presentation of basic and diluted earnings per share (EPS). Basic EPS is calculated based on the weighted average number of shares outstanding during the

period. Dilutive EPS is calculated to include any dilutive effect of our share equivalents. For the three months ended September 30, 2021, our share equivalent included 3.1 million options,1.6 million BGL Warrants, and 2.3 million Private Warrants outstanding. None of the stock options or warrants were included in the calculation of diluted EPS because we recorded a net loss for the three and nine months ended September 30, 2021 and September 30, 2020 as including these instruments would be anti-dilutive.

The weighted-average number of shares outstanding for basic and diluted loss per share is as follows:

(in thousands)



	Three months ended		Three months ended		Nine months ended	Nine months ended
	September 30, 2021		September 30, 2020		September 30, 2021	September 30, 2020
Basic and diluted weighted average shares outstanding		178,761		73,951	176,573	73,273

On July 23, 2021, the Company entered into an Equity Purchase Agreement with YA, pursuant to which YA has committed to purchase up to $400 million of our Class A common stock, at our direction from time to time, subject to the satisfaction of certain conditions. Such sales of Class A common stock, are subject to certain limitations, and may occur from time to time at our sole discretion, over the approximately 36-month period commencing on the date of the Equity Purchase Agreement, provided that a registration statement covering the resale by YA of the shares of Class A common stock purchased from us is declared effective by the SEC and the other conditions set forth in the Equity Purchase Agreement are satisfied. We filed the registration statement with the SEC on July 30, 2021, and it was declared effective on August 11, 2021.

Under applicable Nasdaq rules and the Equity Purchase Agreement, we will not sell to YA shares of our Class A common stock in excess of 35,144,690 shares (the “Exchange Cap”), which is 19.9% of the shares of Class A common stock outstanding immediately prior to the execution of the Equity Purchase Agreement, unless (i) we obtain stockholder approval to issue shares of Class A common stock in excess of the Exchange Cap or (ii) the average price of all applicable sales of shares of Class A common stock under the Equity Purchase Agreement (including the Commitment Shares described below in the number of shares sold for these purposes) equals or exceeds $7.48 per share (which represents the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the Equity Purchase Agreement; or (ii) the average Nasdaq Official Closing Price of the Common Shares (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the Equity Purchase Agreement). At current market prices of our shares of Class A common stock, without stockholder approval, the Exchange Cap would limit the amount of funds we are able to raise to significantly less than the $400 million commitment under the Equity Purchase Agreement.

We may direct YA to purchase amounts of our Class A common stock under the Equity Purchase Agreement that we specify from time to time in a written notice (an “Advance Notice”) delivered to YA on any trading day. The maximum amount that we may specify in an Advance Notice is equal to the lesser of: (i) an amount equal to thirty percent (30%) of the Daily Value Traded of the Class A common stock on the trading day immediately preceding an Advance Notice, or (ii) $30.0 million. For these purposes, “Daily Value Traded” is the product obtained by multiplying the daily trading volume of our Class A common stock by the volume weighted average price for that trading day. Subject to the satisfaction of the conditions under the Equity Purchase Agreement, we may deliver Advance Notices from time to time, provided that we have delivered all shares relating to all prior Advance Notices. The purchase price of the shares of Class A common stock will be equal to 97% of the simple average of the daily VWAPs for the three trading days following the Advance Notice as set forth in the Equity Purchase Agreement.

As consideration for YA’s irrevocable commitment to purchase shares of the Company’s Class A common stock upon the terms of and subject to satisfaction of the conditions set forth in the Equity Purchase Agreement, upon execution of the Equity Purchase Agreement, the Company issued 0.4 million shares of its Class A common stock to YA (the “Commitment Shares”).

During the quarter ended September 30, 2021, inclusive of the 0.4 million Commitment Shares, we issued 3.9 million shares to YA and received $20 million cash. We also issued 2.8 million shares to YA in exchange for $15 million cash in October 2021.

As of September 30, 2021, we were in compliance with the terms and conditions of the Equity Purchase Agreement and the remaining availability under the Equity Purchase Agreement was $380 million which is subject to certain limitations as described above.

SUBSEQUENT EVENT

9 Months Ended

Sep. 30, 2021

SUBSEQUENT EVENTS

SUBSEQUENT EVENT

NOTE 9 — SUBSEQUENT EVENT

On September 30, 2021, the Company entered into a subscription agreement pursuant to which the Company agreed to issue and sell, and Foxconn agreed to purchase, 7.2 million shares of the Company’s Class A common stock for $6.8983 per share in cash based on the simple average of the volume weighted average price for the 15 days immediately preceding the date of the subscription agreement, or approximately $50.0 million in total consideration. The stock issuance and corresponding receipt of approximately $50.0 million occurred in October 2021 and was recorded in the fourth quarter of 2021.

On November 10, 2021, the Company, Lordstown EV and Foxconn Ohio entered into the Asset Purchase Agreement, to establish certain of the definitive terms contemplated by the Agreement in Principle.

Pursuant to the Asset Purchase Agreement, among other items, Foxconn Ohio agreed to purchase the Lordstown, Ohio facility and certain related assets, including manufacturing equipment and related intellectual property rights, but excluding the hub motor assembly line, battery module and packing line assets, certain intellectual property rights and other excluded assets, and Foxconn Ohio agreed to assume certain contracts relating to the purchased assets and certain liabilities of the Company. As consideration for the asset purchase, Lordstown EV will be paid a purchase price of $230 million and a reimbursement payment for certain operating and expansion costs incurred by Lordstown EV during the period leading up to the closing of the transactions contemplated by the Asset Purchase Agreement. At or prior to the closing, it is expected that certain employees, primarily in the manufacturing and operational areas, will become employees of Foxconn Ohio.

The Asset Purchase Agreement provides, among other things, as follows:

●

Foxconn Ohio will pay Lordstown EV a down payment equal to $100 million by November 18, 2021 and thereafter will make additional down payments in the amount of $50 million on February 1, 2022 and $50 million no later than April 15, 2022, in each case subject to certain conditions, including without limitation, the maintenance of minimum cash balances of $100 million through January 1, 2022, $50 million through March 1, 2022 and $30 million thereafter. If the Asset Purchase Agreement is terminated or if the transaction does not close prior to the later of (i) April 30, 2022 and (ii) if CFIUS clearance is still pending on April 30, 2022, 10 days after the transaction is cleared by CFIUS, Lordstown EV and the Company are obligated to repay the down payments to Foxconn plus accrued interest, and Lordstown EV has granted Foxconn a first priority security interest in substantially all of its assets to secure this repayment obligation.

●

In connection with the closing, the Company will issue warrants to Foxconn that are exercisable until the third anniversary of the closing for 1.7 million shares of Class A common stock at an exercise price of $10.50 per share.

●

In connection with the closing, the parties would enter into (i) a contract manufacturing agreement whereby Foxconn Ohio or its affiliate would manufacture the Endurance at the Lordstown, Ohio facility for Lordstown EV (the “Contract Manufacturing Agreement”) and (ii) a long-term lease agreement whereby Foxconn Ohio would lease to Lordstown EV up to 30,000 square feet of space located at the Lordstown, Ohio facility for its Ohio-based employees (the “Lease”).

The closing of the transactions contemplated by the Asset Purchase Agreement is subject to certain conditions, including (a) the parties negotiating a mutually agreeable Contract Manufacturing Agreement, (b) the parties entering into the Contract Manufacturing Agreement and the Lease, (c) the expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and (d) receipt of a communication that the U.S. government’s Committee on Foreign Investment in the United States has concluded that the transaction is not a “covered transaction” or that CFIUS has completed its review of the transaction and determined there are no national security concerns with the transaction. In light of these conditions, many of which are beyond our control, there can be no assurance that the transactions contemplated by the Asset Purchase Agreement will be completed in a timely matter or at all. Further, there can be no assurance that the Company and Foxconn will enter into any of the definitive agreements described below.

Prior to the closing, the Company and Foxconn will also use commercially reasonable efforts to enter into:

●

a joint venture agreement whereby, among other items, the parties will allocate engineering resources to jointly design, engineer, develop, validate, industrialize and launch vehicle programs for the commercial vehicle market in North America and internationally, including the granting of certain rights for the parties to commercialize such programs;

●

a licensing agreement pursuant to which the Company would license to Foxconn the Company’s intellectual property relating to its frame, rolling chassis and other technologies, subject to reasonable royalties or licensing fees and other terms mutually agreed to by the parties; and

●

an agreement pursuant to which, during the period between signing and closing, the industrialization, facility and operations teams of the Company will provide support to Foxconn on homologation, industrial engineering, site preparation and other areas in support of Foxconn’s non-Company vehicles and non-Endurance-specific investments, new buildings and infrastructure maintenance and improvements on an open book basis at a cost-plus rate.

The foregoing summary of certain terms of the Asset Purchase Agreement do not purport to be complete and are subject to, and are qualified in their entirety by, the full text of the Asset Purchase Agreement, which the Company has filed as an exhibit to this report.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Sep. 30, 2021
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reclassifications and Immaterial Correction of Error	Reclassifications The Company reclassified $2.3 million of gain on sale of fixed assets to other income during the nine months ended September 30, 2020 in order to consistently present its condensed consolidated financial statements. The reclassification did not impact net loss. Immaterial Correction of Error The Company’s previously issued financial statements have been revised to reclassify certain expenses that were inappropriately presented within the consolidated statement of operations. This resulted in the reclassification of $2.7 million of research and development expenses to selling and administrative expenses for the nine months ended September 30, 2020. The error did not impact net loss. The Company, in consultation with the Audit Committee of the Board of Directors, evaluated the effect of these adjustments on the Company’s consolidated financial statements under ASC 250, Accounting Changes and Error Corrections and Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements and determined it was not necessary to recall its consolidated condensed financial statements as the errors did not materially misstate those consolidated financial statements. The Company looked at both quantitative and qualitative characteristics of the required corrections.
Cash and cash equivalents	Cash and cash equivalents Cash includes cash equivalents which are highly liquid investments that are readily convertible to cash. The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. The Company presents cash and cash equivalents within Cash and cash equivalents on the Balance Sheet. The Company maintains its cash in investment accounts as well as bank deposit accounts which, at times, exceed federally insured limits. Management believes it is not exposed to significant credit risk.
Property, plant and equipment	Property, plant and equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Determination of useful lives and depreciation will begin once the assets are ready for their intended use. Upon retirement or sale, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is reflected in the statement of operations. Maintenance and repair expenditures are expensed as incurred, while major improvements that increase functionality of the asset are capitalized and depreciated ratably to expense over the identified useful life. Further, interest on any debt financing arrangement is capitalized to the purchased property, plant, and equipment if the requirements for capitalization are met. Long-lived assets, such as property, plant, and equipment are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group.
Research and development costs	Research and development costs The Company expenses research and development costs as they are incurred. Research and development costs consist primarily of personnel costs for engineering and research, prototyping costs, and contract and professional services.
Stock-based compensation	Stock-based compensation The Company has adopted ASC Topic 718, Accounting for Stock-Based Compensation (ASC 718), which establishes a fair value-based method of accounting for stock-based compensation plans. In accordance with ASC 718, the cost of stock-based awards issued to employees and non-employees over the awards' vest period is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model, which incorporates assumptions regarding the expected volatility, expected option life and risk-free interest rate. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. Further, pursuant to ASU 2016-09 – Compensation – Stock Compensation (Topic 718), the Company has elected to account for forfeitures as they occur.
Warrants	Warrants The Company accounts for its Public and Private Warrants as described in Note 3 in accordance with the guidance contained in ASC Topic 815-40-15-7D and 7F under which the Public Warrants and Private Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Public and Private Warrants as liabilities at their fair value and adjusts the Public and Private Warrants to fair value at each reporting period or at the time of settlement. Any change in fair value is recognized in the statement of operations as Other income/(expense).
Income taxes	Income taxes Income taxes are recorded in accordance with ASC Topic 740, Income Taxes (ASC 740). Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has recorded a full valuation allowance against its deferred tax assets. The Company accounts for uncertain tax positions in accordance with the provisions of ASC Topic 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense. The Company does not have material uncertain tax positions.
Recent accounting pronouncements	Recent accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases, and has subsequently issued several supplemental and/or clarifying ASUs (collectively ASC 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASC 842 is effective for the Company beginning after December 2021 and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the effect of the adoption of this guidance on the consolidated financial statements.

- Definition

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

+ References + Details

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2021

FAIR VALUE MEASUREMENTS

Summary of the net gain on changes in fair value (in thousands) related to the Public and Private Warrants


	Three months ended		Nine months ended
	September 30, 2021		September 30, 2021
Public Warrants	$	—	$	(27,180)
Private Warrants		3,344		12,263
Net gain (loss) on changes in fair value	$	3,344	$	(14,918)

Summary of the valuation of financial instruments


	Total		Quoted prices in active markets (Level 1)		Prices with observable inputs (Level 2)		Prices with unobservable inputs (Level 3)
September 30, 2021
Cash and cash equivalents	$	233,831	$	233,831	$	—	$	—
Public Warrants		—		—		—		—
Private Warrants		3,529		—		—		3,529

	Total		Quoted prices in active markets (Level 1)		Prices with observable inputs (Level 2)		Prices with unobservable inputs (Level 3)
December 31, 2020
Cash and cash equivalents	$	629,761	$	629,761	$	—	$	—
Public Warrants		57,515		57,515		—		—
Private Warrants		43,877		—		—		43,877

Schedule of gain (loss) in fair value recognized in earnings


	Balance at December 31, 2020		Additions		Settlements		Loss / (Gain) on fair value adjustments included in earnings		Balance at September 30, 2021
Private Warrants	$	43,877		—		(28,085)		(12,263)	$	3,529

PROPERTY, PLANT AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2021

PROPERTY, PLANT AND EQUIPMENT

Summary of property, plant and equipment, net


	September 30, 2021		December 31, 2020
Property, Plant & Equipment
Land	$	326	$	326
Buildings		6,223		6,223
Machinery and equipment		38,608		38,443
Vehicles		448		142
Construction in progress		316,786		56,529
	$	362,391	$	101,663
Less: Accumulated depreciation		—		—
Total	$	362,391	$	101,663

CAPITAL STOCK AND EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2021

CAPITAL STOCK AND EARNINGS PER SHARE

Schedule of the weighted-average number of shares outstanding for basic and diluted loss per share



	Three months ended		Three months ended		Nine months ended	Nine months ended
	September 30, 2021		September 30, 2020		September 30, 2021	September 30, 2020
Basic and diluted weighted average shares outstanding		178,761		73,951	176,573	73,273

ORGANIZATION AND DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) $ / shares in Units, ft² in Thousands, $ in Thousands						1 Months Ended				3 Months Ended		9 Months Ended
	Nov. 10, 2021 USD ($) ft² $ / shares shares	Oct. 12, 2021 USD ($) shares	Sep. 30, 2021 USD ($) ft² $ / shares shares	Jul. 23, 2021 USD ($) shares	Oct. 23, 2020 USD ($) $ / shares shares	Oct. 31, 2021 USD ($) shares	Sep. 30, 2021 USD ($) ft² $ / shares shares	Jan. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($) $ / shares shares	Sep. 30, 2021 USD ($) ft² $ / shares shares	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) ft² $ / shares shares	Sep. 30, 2020 USD ($)
Business Acquisition [Line Items]
Warrants to purchase common stock \| shares					1,600,000
Warrant exercise price \| $ / shares					$ 11.50
Common stock, par value \| $ / shares			$ 0.0001		$ 0.0001		$ 0.0001		$ 0.0001	$ 0.0001		$ 0.0001
Exchange ratio					55.8817
Shares issued per share tendered in conversion \| shares					1
Shares issued in conversion \| shares					7,000,000
Common stock issued (in shares) \| shares					50,000,000
Shares issued price per share \| $ / shares					$ 10.00
Proceeds from stock issuance					$ 500,000							$ 3,822	$ 6,404
Shares issued upon notes conversion \| shares					4,000,000
Value of shares issued upon notes conversion					$ 40,000
Conversion price per share \| $ / shares					$ 10.00
Common stock issued for exercise of warrants (in shares) \| shares								600,000	2,700,000
Cash proceeds from exercise of warrants								$ 82,000	$ 30,700			82,016
Common stock issued in recapitalization, net of redemptions and transaction costs					$ 644,600
Warrant liability			$ 3,529		100,900		$ 3,529		101,392	$ 3,529		3,529
Cash received in recapitalization, net of transaction costs					701,500
Cash and cash equivalents			233,831				233,831		629,761	233,831		233,831
Accumulated deficit			463,658				$ 463,658		134,441	463,658		463,658
Net loss										95,806	$ 42,498	329,217	62,321
Issuance of common stock, value										$ 2,724		$ 3,822	$ 6,404
Substantial Doubt about Going Concern, within One Year [true false]												true
Equity Funding Agreement With Y A [Member]
Business Acquisition [Line Items]
Common stock issued (in shares) \| shares				400,000			3,900,000			3,900,000
Proceeds from stock issuance							$ 20,000
Issuance of common stock, value										$ 20,000
Scenario, Plan [Member]
Business Acquisition [Line Items]
Proceeds from sale of assets			$ 230,000
Warrants to purchase common stock \| shares			1,700,000				1,700,000			1,700,000		1,700,000
Warrant exercise price \| $ / shares			$ 10.50				$ 10.50			$ 10.50		$ 10.50
Fee for breach of contract			$ 50,000
Sale Of Assets, First Payment Receivable			100,000				$ 100,000			$ 100,000		$ 100,000
Sale Of Assets, Second Payment Receivable			50,000				50,000			50,000		50,000
Sale Of Assets, Third Payment Receivable			$ 50,000				$ 50,000			$ 50,000		$ 50,000
Area of Real Estate Property \| ft²			30				30			30		30
Sale Of Assets, Minimum Cash Balance, First Period			$ 100,000				$ 100,000			$ 100,000		$ 100,000
Sale Of Assets, Minimum Cash Balance, Second Period			50,000				50,000			50,000		50,000
Sale Of Assets, Minimum Cash Balance, Third Period			$ 30,000				$ 30,000			$ 30,000		30,000
Scenario, Plan [Member] \| Equity Funding Agreement With Y A [Member]
Business Acquisition [Line Items]
Common stock issued (in shares) \| shares				400,000,000
Issuance of common stock, value				$ 400,000								$ 380,000
Subsequent Event [Member]
Business Acquisition [Line Items]
Proceeds from sale of assets	$ 230,000
Warrants to purchase common stock \| shares	1,700,000
Warrant exercise price \| $ / shares	$ 10.50
Common stock issued (in shares) \| shares		7,200,000				7,200,000
Proceeds from stock issuance		$ 50,000
Issuance of common stock, value						$ 50,000
Sale Of Assets, First Payment Receivable	$ 100,000
Sale Of Assets, Second Payment Receivable	50,000
Sale Of Assets, Third Payment Receivable	$ 50,000
Area of Real Estate Property \| ft²	30
Sale Of Assets, Minimum Cash Balance, First Period	$ 100,000
Sale Of Assets, Minimum Cash Balance, Second Period	50,000
Sale Of Assets, Minimum Cash Balance, Third Period	$ 30,000
Subsequent Event [Member] \| Equity Funding Agreement With Y A [Member]
Business Acquisition [Line Items]
Common stock issued (in shares) \| shares						2,800,000
Proceeds from stock issuance						$ 15,000
Issuance of common stock, value						$ 15,000
GM
Business Acquisition [Line Items]
Due to related parties					$ 5,900
Merger Agreement With Diamond Peak Holdings Corp [Member]
Business Acquisition [Line Items]
Shares issued in merger \| shares					75,918,063
Property acquired in business combination					$ 23,200				$ 23,200
Merger Agreement With Diamond Peak Holdings Corp [Member] \| Convertible Note
Business Acquisition [Line Items]
Liabilities settled					5,000
Merger Agreement With Diamond Peak Holdings Corp [Member] \| GM \| Note Payable to GM
Business Acquisition [Line Items]
Liabilities settled					$ 20,800
B G L Warrants [Member]
Business Acquisition [Line Items]
Warrants outstanding \| shares			1,600,000				1,600,000			1,600,000		1,600,000
Public Warrants [Member]
Business Acquisition [Line Items]
Warrants outstanding \| shares			0		9,300,000		0			0		0
Private Placement Warrants [Member]
Business Acquisition [Line Items]
Warrants outstanding \| shares			2,300,000		5,100,000		2,300,000			2,300,000		2,300,000

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Cash Provided by (Used in) Financing Activities			$ 105,838	$ 50,757
Net Cash Provided by (Used in) Investing Activities			(255,528)	2,396
Net Cash Provided by (Used in) Operating Activities			(246,240)	(35,605)
Other income (expense)	$ 3,467	$ 58	(13,788)	2,530
Selling and administrative expenses	31,281	12,033	79,468	20,710
Research and development expenses	56,890	$ 29,966	225,246	43,220
Amortization	$ 11,111		$ 11,111
Revision of Prior Period, Reclassification, Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Gain on sale of assets				(2,300)
Other income (expense)				2,300
Selling and administrative expenses				2,700
Research and development expenses				$ (2,700)

FAIR VALUE MEASUREMENTS (Details) $ in Thousands	3 Months Ended	9 Months Ended
FAIR VALUE MEASUREMENTS (Details) $ in Thousands	Sep. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2020
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Net loss on fair value adjustment	$ 3,344	$ (14,918)
Private Placement Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Net loss on fair value adjustment	$ 3,344	12,263
Public Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Net loss on fair value adjustment		$ (27,180)
Measurement Input, Price Volatility [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative Liability, Measurement Input	0.50	0.50	0.50
Measurement Input, Risk Free Interest Rate [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative Liability, Measurement Input	0.00847	0.00847	0.00413

FAIR VALUE MEASUREMENTS - Assets, Liabilities, Rollforward (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021	Dec. 31, 2020
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Loss / (Gain) on fair value adjustments included in earnings	$ (3,344)	$ 14,918
Private Placement Warrants [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Loss / (Gain) on fair value adjustments included in earnings	(3,344)	(12,263)
Public Warrants [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Loss / (Gain) on fair value adjustments included in earnings		27,180
Fair Value, Inputs, Level 3 [Member] \| Private Placement Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	3,529	3,529	$ 43,877
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Derivative liability, beginning balance		43,877
Settlements		(28,085)
Loss / (Gain) on fair value adjustments included in earnings		(12,263)
Derivative liability, ending balance	3,529	3,529
Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure	233,831	233,831	629,761
Fair Value, Recurring [Member] \| Private Placement Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	3,529	3,529	43,877
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Derivative liability, beginning balance		43,877
Derivative liability, ending balance	3,529	3,529
Fair Value, Recurring [Member] \| Public Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability			57,515
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Derivative liability, beginning balance		57,515
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure	233,831	233,831	629,761
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 1 [Member] \| Public Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability			57,515
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Derivative liability, beginning balance		57,515
Fair Value, Recurring [Member] \| Fair Value, Inputs, Level 3 [Member] \| Private Placement Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	3,529	3,529	$ 43,877
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Derivative liability, beginning balance		43,877
Derivative liability, ending balance	$ 3,529	$ 3,529

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Nov. 30, 2019	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Oct. 23, 2020	Nov. 07, 2019
Property, Plant and Equipment
Property, Plant and Equipment, Gross				$ 362,391		$ 101,663
Total				362,391		101,663
Depreciation expense				0	$ 0
Purchase of property, plant and equipment	$ 20,000
Proceeds from the sale of capital assets					2,396
Gain on disposal of fixed assets		$ 2,300			2,346
Merger Agreement With Diamond Peak Holdings Corp [Member]
Property, Plant and Equipment
Property acquired in business combination						23,200	$ 23,200
GM
Property, Plant and Equipment
Purchase of property, plant and equipment					$ 1,200
GM \| Note Payable to GM
Property, Plant and Equipment
Note Payable issued								$ 20,000
Interest expense capitalized			$ 300
Amount outstanding							$ 20,800
Land
Property, Plant and Equipment
Property, Plant and Equipment, Gross				326		326
Buildings
Property, Plant and Equipment
Property, Plant and Equipment, Gross				6,223		6,223
Machinery and equipment
Property, Plant and Equipment
Property, Plant and Equipment, Gross				38,608		38,443
Vehicles
Property, Plant and Equipment
Property, Plant and Equipment, Gross				448		142
Construction in progress
Property, Plant and Equipment
Property, Plant and Equipment, Gross				$ 316,786		$ 56,529
Purchase of property, plant and equipment			$ 1,200

NOTE PAYABLE (Details) - USD ($) $ in Thousands, shares in Millions		3 Months Ended		9 Months Ended
	Oct. 23, 2020	Jun. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Apr. 17, 2020
Debt Instrument [Line Items]
Loan amount						$ 1,015
Debt forgiven				$ 1,015
Proceeds from Convertible Promissory Notes			$ 37,800		$ 44,353
Shares issued upon notes conversion	4
PPP Loan
Debt Instrument [Line Items]
Loan amount							$ 1,000
Loan term							2 years
Debt forgiven		$ 1,000

COMMITMENTS AND CONTINGENCIES (Details) $ in Millions				9 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions	Sep. 23, 2021 item	Jul. 09, 2021 item	May 14, 2021 item	Sep. 30, 2021 USD ($) item	Apr. 16, 2021 employee item
Loss Contingency, Information about Litigation Matters [Abstract]
Number of demands for books and records	8
Lawsuit Alleging Misappropriation Of Trade Secrets [Member]
Loss Contingency, Information about Litigation Matters [Abstract]
Number of employees \| employee					2
Number of company contractors					2
Number of counts in amended complaint					28
Class Action Lawsuits Alleging Securities Laws Violations [Member]
Loss Contingency, Information about Litigation Matters [Abstract]
Number of suits or actions filed			6
Stockholder Derivative Complaints [Member]
Loss Contingency, Information about Litigation Matters [Abstract]
Number of suits or actions filed		4
S E C Inquiry Relating To Merger [Member]
Loss Contingency, Information about Litigation Matters [Abstract]
Number of subpoenas received				2
Supply Agreement with Samsung and LG Energy Solution
Supply Commitment [Line Items]
2021 \| $				$ 16.3
2022, before amendment \| $				139.4
2023 \| $				$ 273.6

RELATED PARTY TRANSACTIONS (Details) $ in Thousands		1 Months Ended			3 Months Ended	9 Months Ended
RELATED PARTY TRANSACTIONS (Details) $ in Thousands	Nov. 07, 2019 USD ($) item	Nov. 30, 2020 USD ($) item	Aug. 31, 2020	Nov. 30, 2019 USD ($)	Mar. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021	Oct. 23, 2020 USD ($)	May 28, 2020 USD ($)	Feb. 01, 2020
Related Party Transaction [Line Items]
Purchase of property, plant and equipment				$ 20,000
GM
Related Party Transaction [Line Items]
Related party expense						$ 2,100
Purchase of property, plant and equipment						$ 1,200
Due to related parties								$ 5,900
Agreement Term			3 years
Agreement Term Qualifier Period			10 months
Percentage of market price			75.00%
GM \| Convertible Note
Related Party Transaction [Line Items]
Amount outstanding								5,000
Maximum borrowing capacity									$ 10,000
GM \| Note Payable to GM
Related Party Transaction [Line Items]
Principal amount	$ 20,000
Interest rate stated percentage							7.00%			5.00%
Interest cost capitalized as part of PPE					$ 300
Amount outstanding								$ 20,800
Transaction with Workhorse Group Inc
Related Party Transaction [Line Items]
Percentage ownership conveyed in connection with license agreement	10.00%
Royalty percentage	1.00%	1.00%
Prepaid Royalties		$ 4,750
Number of vehicles subject to royalty \| item	200,000	200,000

CAPITAL STOCK AND LOSS PER SHARE (Details) - $ / shares	3 Months Ended		9 Months Ended
CAPITAL STOCK AND LOSS PER SHARE (Details) - $ / shares	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Oct. 23, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares authorized per Charter	312,000,000		312,000,000
Common Stock, Shares Authorized	300,000,000		300,000,000		300,000,000
Common Stock, Par or Stated Value Per Share	$ 0.0001		$ 0.0001		$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	12,000,000		12,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.0001		$ 0.0001
Common stock, shares issued	182,074,899		182,074,899		168,007,960
Common stock, shares outstanding	182,074,899		182,074,899		168,007,960
BASIC AND DILUTED LOSS PER SHARE
Basic and diluted weighted average shares outstanding	178,761,000	73,951,000	176,573,000	73,273,000
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share equivalents	3,100,000
B G L Warrants [Member] \| Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share equivalents	1,600,000
Private Placement Warrants [Member] \| Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share equivalents	2,300,000

CAPITAL STOCK AND LOSS PER SHARE - Purchase Agreements (Details) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended		3 Months Ended	9 Months Ended
	Oct. 12, 2021	Jul. 23, 2021	Oct. 23, 2020	Oct. 31, 2021	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2020
Subsidiary, Sale of Stock [Line Items]
Issuance of common stock, value						$ 2,724	$ 3,822	$ 6,404
Common stock issued (in shares)			50,000,000
Subsequent Event [Member]
Subsidiary, Sale of Stock [Line Items]
Issuance of common stock, value				$ 50,000
Common stock issued (in shares)	7,200,000			7,200,000
Equity Funding Agreement With Y A [Member]
Subsidiary, Sale of Stock [Line Items]
Issuance of common stock, value						$ 20,000
Exchange cap (in shares)		35,144,690
Exchange cap, as percentage of outstanding shares		19.90%
Minimum share price		$ 7.48
Advance Notice maximum percentage		30.00%
Advance Notice maximum requirement		$ 30,000
Advance Notice share price, as percentage of VWAP		97.00%
Common stock issued (in shares)		400,000			3,900,000	3,900,000
Equity Funding Agreement With Y A [Member] \| Subsequent Event [Member]
Subsidiary, Sale of Stock [Line Items]
Issuance of common stock, value				$ 15,000
Common stock issued (in shares)				2,800,000
Equity Funding Agreement With Y A [Member] \| Scenario, Plan [Member]
Subsidiary, Sale of Stock [Line Items]
Issuance of common stock, value		$ 400,000					$ 380,000
Agreement Term		36 months
Common stock issued (in shares)		400,000,000

SUBSEQUENT EVENT (Details) $ / shares in Units, ft² in Thousands, $ in Thousands						1 Months Ended		3 Months Ended	9 Months Ended
	Nov. 10, 2021 USD ($) ft² $ / shares shares	Oct. 12, 2021 shares	Sep. 30, 2021 USD ($) ft² $ / shares shares	Jul. 23, 2021 USD ($) $ / shares shares	Oct. 23, 2020 $ / shares shares	Oct. 31, 2021 USD ($) $ / shares shares	Sep. 30, 2021 USD ($) ft² $ / shares shares	Sep. 30, 2021 USD ($) ft² $ / shares shares	Sep. 30, 2021 USD ($) ft² $ / shares shares	Sep. 30, 2020 USD ($)
Subsequent Event [Line Items]
Common stock issued (in shares) \| shares					50,000,000
Issuance of common stock, value								$ 2,724	$ 3,822	$ 6,404
Warrants to purchase common stock \| shares					1,600,000
Warrant exercise price \| $ / shares					$ 11.50
Scenario, Plan [Member]
Subsequent Event [Line Items]
Proceeds from sale of assets			$ 230,000
Sale Of Assets, First Payment Receivable			100,000				$ 100,000	100,000	100,000
Sale Of Assets, Second Payment Receivable			50,000				50,000	50,000	50,000
Sale Of Assets, Third Payment Receivable			50,000				50,000	50,000	50,000
Sale Of Assets, Minimum Cash Balance, First Period			100,000				100,000	100,000	100,000
Sale Of Assets, Minimum Cash Balance, Second Period			50,000				50,000	50,000	50,000
Sale Of Assets, Minimum Cash Balance, Third Period			$ 30,000				$ 30,000	$ 30,000	$ 30,000
Warrants to purchase common stock \| shares			1,700,000				1,700,000	1,700,000	1,700,000
Warrant exercise price \| $ / shares			$ 10.50				$ 10.50	$ 10.50	$ 10.50
Area of Real Estate Property \| ft²			30				30	30	30
Equity Funding Agreement With Y A [Member]
Subsequent Event [Line Items]
Common stock issued (in shares) \| shares				400,000			3,900,000	3,900,000
Issuance of common stock, value								$ 20,000
Exchange cap (in shares) \| shares				35,144,690
Exchange cap, as percentage of outstanding shares				19.90%
Minimum share price \| $ / shares				$ 7.48
Advance Notice maximum percentage				30.00%
Advance Notice maximum requirement				$ 30,000
Advance Notice share price, as percentage of VWAP				97.00%
Equity Funding Agreement With Y A [Member] \| Scenario, Plan [Member]
Subsequent Event [Line Items]
Common stock issued (in shares) \| shares				400,000,000
Issuance of common stock, value				$ 400,000					$ 380,000
Agreement Term				36 months
Subsequent Event [Member]
Subsequent Event [Line Items]
Common stock issued (in shares) \| shares		7,200,000				7,200,000
Share Price \| $ / shares						$ 6.8983
Issuance of common stock, value						$ 50,000
Proceeds from sale of assets	$ 230,000
Sale Of Assets, First Payment Receivable	100,000
Sale Of Assets, Second Payment Receivable	50,000
Sale Of Assets, Third Payment Receivable	50,000
Sale Of Assets, Minimum Cash Balance, First Period	100,000
Sale Of Assets, Minimum Cash Balance, Second Period	50,000
Sale Of Assets, Minimum Cash Balance, Third Period	$ 30,000
Warrants to purchase common stock \| shares	1,700,000
Warrant exercise price \| $ / shares	$ 10.50
Area of Real Estate Property \| ft²	30
Subsequent Event [Member] \| Equity Funding Agreement With Y A [Member]
Subsequent Event [Line Items]
Common stock issued (in shares) \| shares						2,800,000
Issuance of common stock, value						$ 15,000