0001558370-22-002265 | 10-K | XBRL Viewer

Year ended

Year ended

For the period from April 30, 2019

December 31, 2021

December 31, 2020

to December 31, 2019

Basic and diluted weighted average shares outstanding

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Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current Assets
Cash and cash equivalents	$ 244,016	$ 629,761
Accounts receivable		21
Prepaid expenses and other current assets	47,121	24,663
Total current assets	291,137	654,445
Property, plant and equipment	382,746	101,663
Intangible assets	1,000	11,111
Other non-current assets	13,900
Total Assets	688,783	767,219
Current Liabilities
Accounts payable	12,098	32,536
Accrued and other current liabilities	35,507	1,538
Purchase price down payment from Foxconn	100,000
Total current liabilities	147,605	34,074
Note payable		1,015
Warrant and other non-current liabilities	1,578	101,392
Total liabilities	149,183	136,481
Stockholders' equity
Class A common stock, $0.0001 par value, 300,000,000 shares authorized; 196,391,349 and 168,007,960 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively	19	17
Additional paid in capital	1,084,390	765,162
Accumulated deficit	(544,809)	(134,441)
Total stockholders' equity	539,600	630,738
Total liabilities and stockholder's equity	$ 688,783	$ 767,219

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2021	Dec. 31, 2020	Oct. 23, 2020	Dec. 31, 2019
Consolidated 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	196,391,349	168,007,960		68,300,000
Common stock, shares outstanding	196,391,349	168,007,960		68,300,000

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	8 Months Ended	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2021	Dec. 31, 2020
Operating expenses
Selling, general and administrative expenses	$ 4,526	$ 105,362	$ 31,316
Research and development expenses	5,865	284,016	70,967
Amortization of intangible assets		11,111
Total operating expenses	10,391	400,489	102,283
Loss from operations	(10,391)	(400,489)	(102,283)
Other (expense) income
Other expense		(10,079)	(20,866)
Interest income (expense)		200	(901)
Loss before income taxes	(10,391)	(410,368)	(124,050)
Income tax expense	0	0	0
Net loss	$ (10,391)	$ (410,368)	$ (124,050)
Loss per share attributable to common shareholders
Basic (in dollars per share)	$ (0.15)	$ (2.27)	$ (1.28)
Diluted (in dollars per share)	$ (0.15)	$ (2.27)	$ (1.28)
Weighted average number of common shares outstanding
Basic (in shares)	68,279	180,722	96,716
Diluted (in shares)	68,279	180,722	96,716

Consolidated Statements of Stockholders Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock Equity Funding Agreement With Y A [Member]	Common Stock Equity Funding Agreement With Foxconn [Member]	Common Stock	Additional Paid-In Capital Equity Funding Agreement With Y A [Member]	Additional Paid-In Capital Equity Funding Agreement With Foxconn [Member]	Additional Paid-In Capital	Accumulated Deficit	Equity Funding Agreement With Y A [Member]	Equity Funding Agreement With Foxconn [Member]	Total
Beginning balance at Apr. 29, 2019			$ 0			$ 0	$ 0			$ 0
Beginning balance (in shares) at Apr. 29, 2019			0
Issuance of common stock, value			$ 7			18,598				18,605
Issuance of common stock (in shares)			68,279
Stock compensation						342				342
Net loss							(10,391)			(10,391)
Ending balance at Dec. 31, 2019			$ 7			18,940	(10,391)			8,556
Ending balance (in shares) at Dec. 31, 2019			68,279
Issuance of common stock, value			$ 2			6,437				6,439
Issuance of common stock (in shares)			8,652
Common stock issued for conversion of notes payable						38,725				38,725
Common stock issued for conversion of notes payable (in shares)			4,032
Common stock issued for exercise of warrants						53,724				53,724
Common stock issued for exercise of warrants (in shares)			2,669
Common stock issued in recapitalization, net of redemptions and transaction costs			$ 8			644,581				644,589
Common stock issued in recapitalization (in shares)			84,376
Stock compensation						2,755				2,755
Net loss							(124,050)			(124,050)
Ending balance at Dec. 31, 2020			$ 17			765,162	(134,441)			630,738
Ending balance (in shares) at Dec. 31, 2020			168,008
Issuance of common stock, value	$ 1			$ 49,374	$ 50,000	6,368		$ 49,375	$ 50,000	6,368
Issuance of common stock (in shares)	9,592	7,248	3,559					9,600
Common stock issued for exercise of warrants			$ 1			194,797				194,798
Common stock issued for exercise of warrants (in shares)			7,984
Stock compensation						18,689				18,689
Net loss							(410,368)			(410,368)
Ending balance at Dec. 31, 2021			$ 19			$ 1,084,390	$ (544,809)			$ 539,600
Ending balance (in shares) at Dec. 31, 2021			196,391

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	8 Months Ended	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities
Net loss	$ (10,391)	$ (410,368)	$ (124,050)
Adjustments to reconcile net loss to cash used by operating activities:
Stock-based compensation	342	18,689	2,755
Non-cash change in fair value related to warrants		11,873	23,493
Amortization of intangible assets		11,111
Forgiveness of note payable		(1,015)
Gain on disposal of fixed assets			(2,346)
Changes in assets and liabilities:
Accounts receivables		21	(21)
Prepaid expenses and other assets		(34,124)	(24,663)
Accounts payable	1,801	(17,008)	25,767
Accrued expenses and other liabilities	3,046	32,831	(531)
Cash used by operating activities	(5,202)	(387,990)	(99,596)
Cash flows from investing activities
Purchases of capital assets	(133)	(284,514)	(52,645)
Purchase of intangible assets		(1,000)
Proceeds from the sale of capital assets			2,396
Cash used by investing activities	(133)	(285,514)	(50,249)
Cash flows from financing activities
Down payment received from Foxconn		100,000
Cash proceeds from exercise of warrants		82,016	30,692
Proceeds from Equity Purchase Agreement, net of issuance costs		49,375
Cash received in recapitalization, net of transaction costs			701,520
Cash received from Foxconn Subscription Agreement		50,000
Issuance of common stock	7,494	6,368	6,439
Proceeds from notes payable			38,796
Cash provided by financing activities	7,494	287,759	777,447
(Decrease) increase in cash and cash equivalents	2,159	(385,745)	627,602
Cash and cash equivalents, beginning balance		629,761	2,159
Cash and cash equivalents, ending balance	2,159	244,016	629,761
Non cash items
Conversion of notes payable to equity			38,725
Capital assets acquired with payables	20,142	$ 2,162	5,592
Capital assets exchanged for equity			$ 23,200
Common stock issued in exchange for intangible assets	$ 11,111

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

12 Months Ended

Dec. 31, 2021

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Description of Business

Lordstown Motors Corp., a Delaware corporation (“Lordstown”, the “Company” or “we”), is an electric vehicle 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 final design and testing phase related to our production of the Endurance and has yet to bring a completed product to market.

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 (the “Subscription Agreement”) 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.

On November 10, 2021, we entered into the Asset Purchase Agreement with Foxconn Ohio. Pursuant to the APA, Foxconn Ohio would purchase the Lordstown facility for $230 million and a reimbursement payment for certain operating and expansion costs incurred by us from September 1, 2021 through the closing. We would continue to own our hub motor assembly line, as well as our battery module and packing line assets, certain intellectual property rights and other excluded assets. We expect to outsource all of the manufacturing of the Endurance to Foxconn with the sale of our Lordstown facility; Foxconn would also operate the assets we continue to own in the facility after closing. Foxconn Ohio has made down payments of the purchase price of $100 million on November 18, 2021 and $50 million on January 28, 2022. Foxconn Ohio is required to make an additional down payment of $50 million no later than April 15, 2022, subject to certain conditions. If the APA is terminated or if the transaction does not close prior to the later of (i) April 30, 2022 and (ii) 10 days after the transaction is cleared by CFIUS, we are obligated to repay the down payments to Foxconn. We have granted Foxconn a first priority security interest in substantially all of our assets to secure the repayment obligation. The APA is subject to several conditions and has not been consummated as of the date of the filing of this report.

The closing of the transactions contemplated by the Asset Purchase Agreement are subject to certain conditions, including, but not limited to: (a) the parties entering into a contract manufacturing agreement (the “Contract Manufacturing Agreement”), pursuant to which Foxconn would manufacture the Endurance at the Lordstown facility, and a lease (“Lordstown Facility Lease”), under which we would lease up to 30,000 square feet of space located at the Lordstown, Ohio facility from Foxconn for our Ohio-based employees, and (b) receipt of a communication that the U.S. government’s Committee on Foreign Investment in the United States (“CFIUS”) has completed its review of the transaction and determined there are no national security concerns with the transaction. We are required to maintain minimum cash balances of $50 million through March 1, 2022 and $30 million thereafter. 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 Company and Foxconn have made significant progress negotiating the Contract Manufacturing Agreement and Lordstown Facility Lease, as well as supporting the review of the Foxconn Transactions by CFIUS. The parties have mutually agreed they no longer believe an operating agreement pursuant to which Lordstown would provide support to Foxconn, between signing and closing of the APA, for non-Endurance-specific investments was necessary.

The APA includes a commitment by Foxconn and the Company to use commercially reasonable efforts to enter into a joint venture agreement whereby, among other items, the parties would 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. The APA also includes a commitment by Foxconn and the Company to use commercially reasonable efforts to enter into a licensing agreement pursuant to which we would license to Foxconn our intellectual property relating to the Endurance frame, rolling chassis and other technologies, subject to reasonable royalties or licensing fees and other terms mutually agreed to by the parties. In the place of a joint venture and licensing agreement, the parties agreed to explore a joint product development agreement. We are actively discussing the establishment of such an agreement with Foxconn, under which we would seek to use the MIH platform to develop a portfolio of electric vehicles targeting our commercial fleet customers, built at the Lordstown, Ohio plant and to license to Foxconn certain of our intellectual property. If an agreement is reached, we anticipate that Foxconn would also supply certain vehicle components and subsystems for newly developed vehicles, enabling us to leverage Foxconn’s manufacturing experience, supply-chain network and extensive experience in software development and integration (key capabilities in the production of EVs) to complement our EV design, development, engineering and homologation contributions.

We believe that any joint product development agreement with Foxconn would also need to incorporate an appropriate funding structure that enables us to raise the additional capital necessary to bring the Endurance into production as well as fund new vehicle development. We continue to explore all financing alternatives as we will need substantial funding to execute our operating plan that is anticipated to use significant capital for the foreseeable future.

No assurance can be made that the transactions contemplated by the Asset Purchase Agreement, including the Contract Manufacturing Agreement and the Lordstown Facility Lease (collectively, the “Foxconn Transactions”), or a joint product development agreement, any additional funding arrangements or other agreements will ultimately be consummated on the terms contemplated, or at all, or that they will provide the anticipated benefits. Even if the Foxconn Transactions are 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 and timeline for commercial production.

Business Combination and Basis of Presentation

The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts and operations of the Company and its wholly owned subsidiary. 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 December 31, 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 10. Additionally, a $5 million Convertible Note and the $5.9 million amount in Due to related party as described in Note 10 were also settled in conjunction with the Business Combination.

Liquidity and Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these consolidated 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 consolidated 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 consolidated 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 consolidated 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 consolidated financial statements are issued.

The Company had cash and cash equivalents of approximately $244.0 million and an accumulated deficit of $544.8 million at December 31, 2021 and a net loss of $410.4 million for the year ended December 31, 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 Foxconn Transactions, raise substantial additional capital, complete the development of the Endurance, obtain regulatory approval, begin commercial scale production and launch the sale of the Endurance. 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 the Company’s ability to continue as a going concern for a period of at least one year from the date of issuance of these consolidated financial statements.

The Company’s business plan contemplates that it will build a limited number of pre-production vehicles in the first half of 2022 for testing, certifications and to demonstrate the capabilities of the Endurance to potential customers. The Company expects commercial production and sales to begin in the third quarter of 2022. While conducting these activities, and for the foreseeable future, the Company will incur significant operating expenses, capital expenditures and working capital funding that will deplete its cash on hand. Absent any material delays, the Company anticipates that it has sufficient funds to close the Foxconn Transactions and receive the proceeds as contemplated by the Asset Purchase Agreement. However, the Company will be required to raise additional capital in order to execute its business plan well in advance of reaching commercial production of the Endurance. The proceeds contemplated in the Asset Purchase Agreement will not be sufficient for these purposes. In addition, the closing of the APA remains subject to certain conditions, and if the transaction does not close, the Company will be required to repay the down payments made by Foxconn and it is unlikely the Company will have funding available to do so.

In 2021, the Company’s research and development expenses and capital expenditures increased significantly over 2020 levels to build capacity and invest in the development of the Endurance. The costs are significant due to spending needed for prototype components, vehicle validation tests, securing necessary parts/equipment, and utilizing in-house and third-party engineering services. Increased spending was also due in part to the stress that the COVID-19 pandemic put on the global automotive supply chain and a strategic decision to bring development of certain components, such as the frame of the Endurance, in-house. The Company expects continued supply chain constraints and pricing pressure that may negatively impact its cost structure and production timeline.

In an effort to alleviate these conditions, management continues to seek and evaluate opportunities to raise additional funds through the issuance of equity or debt securities, asset sales, through arrangements with strategic partners or through obtaining financing from government or financial institutions. The Company has engaged a financial advisor to advise the Company on additional financing alternatives.

As further described in Note 7, on July 23, 2021, the Company entered into the “Equity Purchase Agreement with YA II PN, LTD. (“YA”), pursuant to which YA has committed to purchase up to $400 million of its Class A common stock, at the Company’s direction from time to time, subject to the satisfaction of certain conditions. During the year ended December 31, 2021, the Company’s issued 9.6 million shares to YA and received $49.4 million, net of equity issuance costs. The actual amount that the Company raises under this agreement will depend on market conditions and other financing alternatives that the Company is exploring, as well as limitations in the agreement. In particular, at current market prices of its shares of Class A common stock, without stockholder approval, the Exchange Cap provision would limit the amount of shares the Company can issue up to 35.1 million shares, and therefore limit funds the Company is able to raise to significantly less than the $400 million commitment under the Equity Purchase Agreement. As of December 31, 2021, the Company was in compliance with the terms and conditions of the Equity Purchase Agreement and the remaining availability under the Equity Purchase Agreement was $350 million which is subject to certain limitations as described above.

On November 10, 2021, the Company entered into the APA with Foxconn, pursuant to which Foxconn would purchase the Lordstown facility for $230 million and a reimbursement payment for certain operating and expansion costs incurred by the Company from September 1, 2021 through the closing. The Company would continue to own its hub motor assembly line, as well as its battery module and packing line assets, certain intellectual property rights and other excluded assets. Foxconn has made down payments of the purchase price of $100 million in November 2021 and $50 million in January 2022. Foxconn is required to make an additional down payment of $50 million no later than April 15, 2022, subject to certain conditions. The balance of the purchase price, along with reimbursement of certain operating and expansion costs would be paid at closing. The Company is required to maintain minimum cash balances of $50 million through March 1, 2022 and $30 million thereafter.

If the APA is terminated or if the transaction does not close prior to the later of (i) April 30, 2022 and (ii) 10 days after the transaction is cleared by CFIUS, the Company is obligated to repay the down payments to Foxconn. The Company has granted Foxconn a first priority security interest in substantially all of its assets to secure the repayment obligation. The APA is subject to several conditions and has not been consummated as of the date of the filing of this report. No assurance can be made that it will ultimately be consummated on the terms contemplated, or at all.

In addition to providing the Company near term funding, the Foxconn Transactions should provide the benefits of scaled manufacturing, more cost-effective access to certain raw materials, components and inputs, and reduced overhead costs associated with the Lordstown facility borne by the Company. The Company is also exploring other potential agreements with Foxconn that would establish a joint product development agreement for future MIH-based vehicles and an appropriate funding structure. No assurance can be made that the joint product development agreement, an appropriate funding structure or other potential agreements would ultimately be entered or consummated on the terms contemplated, or at all.

Even if the Foxconn Transactions are consummated in accordance with the current terms and on the anticipated timeline, the Company will need additional funding to continue its development efforts and maintain current plans for its production timeline.

As the Company seeks additional sources of financing, there can be no assurance that such financing would be available to it on favorable terms or at all. The Company’s ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, the significant amount of capital required, the fact that its bill of materials cost is currently, and expected to

continue to be, substantially higher than the anticipated selling price of the Endurance, uncertainty surrounding regulatory approval and the performance of the vehicle, meaningful exposure to material losses related to ongoing litigation, its performance and investor sentiment with respect to the Company and its business and industry, as well as its 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 the Company’s ability to continue as a going concern. If the Company is unable to raise substantial additional capital in the near term, its operations and production plans will be scaled back or curtailed and, if any funds raised are insufficient to provide a bridge to full commercial production, its operations could be severely curtailed or cease entirely. The Company will be materially adversely affected if the Foxconn Transactions do not close. If the APA does not close, including because the Company is unable to fulfill its obligations to maintain its minimum cash balance commitments under the APA, the Company is unlikely to have sufficient available cash to repay Foxconn’s down payments. As a result, Foxconn may exercise its rights under the APA, including, but not limited to foreclosing on its liens on some or substantially all of the Company’s assets. Under such circumstances, the Company would not likely be able to continue as a going concern or realize any value from its assets.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 year ended December 31, 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 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.

Use of Estimates in Financial Statement Preparation

The preparation of ﬁnancial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, if any, at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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 bank deposit accounts which, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts and 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 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

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 Topic 718”), which establishes a fair value-based method of accounting for stock-based compensation plans. In accordance with ASC Topic 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. The Company accounts for BGL Warrants as equity as these warrants qualify as share-based compensation under ASC Topic 718.

Income taxes

Income taxes are recorded in accordance with ASC Topic 740, Income Taxes (ASC Topic 740). Deferred tax assets and liabilities are determined based on the difference between the consolidated 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.

Recent accounting pronouncements

In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 extends the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 amendments were effective for the Company beginning January 1, 2020 and interim periods within fiscal years beginning after December 15, 2020. The Company adopted this guidance in 2020 but determined that there was no material impact on the consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases, and has subsequently issued several supplemental and/or clarifying ASUs (collectively “ASC Topic 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. The Company adopted ASC 842 effective January 1, 2021 using the alternative transition method and elected to apply the new guidance at the adoption date without adjusting comparative periods presented. Comparative information has not been restated and will continue to be reported under accounting standards in effect for those periods. In adopting the new guidance, the Company elected to apply the package of transition practical expedients, which allows the Company not to reassess: (1) whether any expired or existing contracts contain leases under the new definition of a lease; (2) lease classification for any expired or existing leases; and (3) whether previously capitalized initial direct costs would qualify for capitalization under ASC 842. In addition, the Company has elected to apply the practical expedient to combine lease and related non-lease components, for all classes of underlying assets, and accounts for the combined contract as a lease component, as well as the election was made to apply the short-term lease recognition exemption. In transition, the Company did not elect to apply the hindsight practical expedient, which permits entities to use hindsight in determining the lease term and assessing impairment of right-of-use assets.

The Company has leases which primarily consist of our Farmington Hills, Michigan and Irvine, California locations. The adoption of ASC 842 resulted in the recognition of a new right-of-use assets and lease liabilities on the balance sheet for all operating leases. As a result of the Company’s adoption on January 1, 2021, the Company recorded operating right-of-use assets and lease liabilities of $3.3 million. As of December 31, 2021, the Company had a right-of use asset and liability totaling $2.2 million.

FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 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 Company has the following warrants: (i) warrants (the “Public Warrants”) to purchase shares of Class A common stock, originally issued in our initial public offering (“Initial Public Offering”), (ii) warrants (the “Private Placement Warrants” and together with the Public Warrants and the BGL Warrants, the “Warrants”) to purchase Class A common stock issued in a private placement to our sponsor and anchor investor at the time of the Initial Public Offering, and (iii) the BGL Warrants. The rights of holders of the Warrants are governed by warrant agreements between American Stock Transfer & Trust Company, as warrant agent, and the Company (the “Warrant Agreements”). The BGL Warrants are classified as equity as they qualify as share-based compensation under ASC Topic 718.

The Public and Private Warrants were recorded in the Company’s consolidated financial statements as a result of the Business Combination between DiamondPeak and Lordstown EV Corporation (formerly known as Lordstown Motors Corp.) and the reverse recapitalization that occurred on October 23, 2020 and did not impact any reporting periods prior to the Business Combination. The Company determined that the fair value of the Public and Private Warrants was $100.9 million as of the date of the Business Combination. The Public and Private Warrants are classified as a liability with any changes in the fair value recognized immediately in our consolidated statements of operations. During the quarter ended March 31, 2021, we received cash proceeds of approximately $82.0 million for the redemption of the remaining Public Warrants.

The following table summarizes the net gain (loss) on changes in fair value (in thousands) related to the Public and Private Warrants:


	Year ended		Year ended
	December 31, 2021		December 31, 2020
Public Warrants	$	(27,180)	$	(17,920)
Private Warrants		15,307		(5,573)
Net loss on changes in fair value	$	(11,873)	$	(23,493)

As of December 31, 2021 and 2020, we had 3.9 million and 13.4 million Warrants outstanding, respectively.

Observed prices for the Public Warrants are 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% for the Monte Carlo model. 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 0.458%, 0.413%, and 1.123% for the valuations as of October 23, 2020 and December 31, 2020 and 2021, 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)
December 31, 2021
Cash and cash equivalents	$	244,016	$	244,016	$	—	$	—
Public Warrants		—		—		—		—
Private Warrants		485		—		—		485

	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 December 31, 2021
Private Warrants	$	43,877		—		(28,085)		(15,307)	$	485

- 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

12 Months Ended

Dec. 31, 2021

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

NOTE 4 — PROPERTY, PLANT AND EQUIPMENT

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


	December 31, 2021		December 31, 2020
Property, Plant & Equipment
Land	$	326	$	326
Buildings		6,223		6,223
Machinery and equipment		38,608		38,443
Vehicles		465		142
Construction in progress		337,124		56,529
	$	382,746	$	101,663
Less: Accumulated depreciation		—		—
Total	$	382,746	$	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 December 31, 2021, commercial scale manufacturing has not begun and thus no depreciation was recognized in 2021, 2020 or 2019.

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 10. 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 Class A common stock as part of the Business Combination.

NOTE PAYABLE

12 Months Ended

Dec. 31, 2021

NOTE PAYABLE

NOTE PAYABLE

NOTE 5— NOTE PAYABLE

On April 17, 2020, Lordstown 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 which we reflected as a noncash transaction on the statement of cash flow.

- 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

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2021

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE 6— STOCK-BASED COMPENSATION

Legacy LMC’s 2019 Stock Option Plan (the “2019 Plan”) provides for the grant of incentive stock options (“ISO”) or non-qualified stock options (“NQSO) to purchase Legacy LMC common stock to officers, employees, directors, and consultants of Legacy LMC.

Each Legacy LMC option from the 2019 Plan that was outstanding immediately prior to the Business Combination, whether vested or unvested, was converted into an option under the 2020 Plan (defined below) to purchase a number of shares of Class A common stock (each such option, an “Exchanged Option”) equal to the product (rounded down to the nearest whole number) of (i) the number of shares of Legacy LMC common stock subject to such Legacy LMC option immediately prior to the Business Combination and (ii) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such Legacy LMC option immediately prior to the consummation of the Business Combination, divided by (B) the Exchange Ratio. Except as specifically provided in the Business Combination Agreement, following the Business Combination, each Exchanged Option will continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to

the corresponding former Legacy LMC option immediately prior to the consummation of the Business Combination. All stock option activity was retroactively restated to reflect the exchanged options.

At the Company’s special meeting of stockholders held on October 22, 2020, the stockholders approved the 2020 Equity Incentive Plan (the “2020 Plan”). The aggregate number of additional shares authorized for issuance under the 2020 plan will not exceed 13 million. The 2020 Plan provides for the grant of stock options, restricted stock, restricted stock units (RSUs), stock appreciation rights, and performance units and performance shares intended to attract, retain, incentivize and reward employees, directors or consultants.

Options

The options are time-based and vest over the defined period in each individual grant agreement. The date at which the options are exercisable is defined in each agreement. The Board establishes the exercise price of the shares subject to an option at the time of the grant, provided, however, that (i) the exercise price of an ISO and NQSO shall not be less than 100% of the estimated fair value of the shares on the date of grant, and (ii) the exercise price of an ISO granted to a 10% shareholder shall not be less than 110% of the estimated fair value of the shares on the date of grant. Options generally become exercisable between one and four years after the date of grant and expire ten years from the date of the grant.

The Company recognizes compensation expense for the shares equal to the fair value of the option at the time of grant. The expense is recognized on a straight-line basis over the vesting period of the awards. The weighted-average grant date fair value of stock options granted to employees in 2021, 2020, and 2019 was $5.76 per share, $1.08 per share, and $1.09 per share, respectively. The estimated fair value of each stock option grant was computed using the following weighted average assumptions:


	December 31,		December 31,		December 31,
	2021		2020		2019
Risk-free interest rate	0.39	%	1.59	%	1.73-1.93	%
Expected term (life) of options (in years)	3.86		10.0		10.0
Expected dividends	—	%	—	%	—	%
Expected volatility	50	%	50	%	50	%

The expected volatility was estimated by management based on results from public companies in the industry. The expected life of options granted in 2021 was estimated based on historical option exercise data as compared to previous years when the expected term of the awards granted was assumed to be the contract life of the option. The risk-free rate of return was based on market yields in effect on the date of each grant for United States Treasury debt securities with a maturity equal to the expected term of the award. The expected dividends are zero as the Company has not historically paid dividends.

The activities of stock options are summarized as follows:

(in thousands except for per option values and years)


		Weighted Average					Aggregate
	Number of	Exercise		Weighted Average			Intrinsic Value
	Options	Price		Term (Years)			($000's)
Outstanding, April 30, 2019	—	$	—		—	$	—
Granted	4,436		1.79
Exercised	—		—
Forfeited	(84)		1.79
Expired	—		—
Outstanding, December 31, 2019	4,352	$	1.79		8.9	$
Granted	1,021		1.79
Exercised	—		—
Forfeited	—		—
Expired	—		—
Outstanding, December 31, 2020	5,373	$	1.79		9.0	$
Granted	5,545		14.90
Exercised	(3,559)		1.79
Forfeited	(618)		22.60
Outstanding, December 31, 2021	6,741	$	10.67		7.8	$	2,967
Exercisable, December 31, 2021	1,340	$	1.79		3.2	$	2,224

*The aggregate intrinsic value is calculated as the difference between the market value of our Class A common stock as of December 31, 2021 and the respective exercise prices of the options. The market value as of December 31, 2021 was $3.45 per share, which is the closing sale price of our Class A common stock on December 31, 2021, as reported by the Nasdaq Global Select Market.

Further details of our exercisable stock options and stock options outstanding are summarized as follows:

(in thousands except for per exercise prices and years)


				Options Outstanding		Options Exercisable
				Weighted Average	Weighted Average		Weighted Average
Range of			Options	Remaining	Exercise	Options	Exercise
Exercise Prices			Outstanding	Contractual Term	Price	Exercisable	Price
$1.79	—	$1.79	1,787	4.4	$1.79	1,340	$1.79
$4.11	—	$5.69	1,758	9.6	$5.37	—	—
$5.85	—	$11.41	1,475	9.2	$9.51	—	—
$16.22	—	$16.22	78	9.2	$16.22	—	—
$26.77	—	$26.77	1,643	8.3	$26.77	—	—
			6,741	7.8	$10.67	1,340	$1.79

RSUs

We calculate the grant date fair value of RSUs using the closing sale price of our Class A common stock on the grant date, as reported by the Nasdaq Global Select Market. The fair value of the unvested restricted stock units is recognized on a straight-line basis over the respective requisite service period.

The activities of RSUs are summarized as follows:

(in thousands except for fair values)


			Weighted Average		Aggregate
			Grant Date		Intrinsic Value
	Shares		Fair Value		As of 12/31/2021
Outstanding, December 31, 2020		—		—
Awarded		6,414		$8.88
Released		—		—
Forfeited		(152)		$12.65
Outstanding, December 31, 2021		6,262		$8.78		$18,841

*The aggregate intrinsic value is calculated using the market value of our Class A common stock as of December 31, 2021. The market value as of December 31, 2021 was $3.45 per share, which is the closing sale price of our Class A common stock on December 31, 2021, as reported by the Nasdaq Global Select Market.

Total stock-based compensation expense for the years ended December 31, 2021, and 2020, and for the period from April 30, 2019 to December 31, 2019 was $18.7 million, $2.8 million and $0.3 million, respectively. As of December 31, 2021, 2020 and 2019, unrecognized compensation expense was $63.7 million, $2.7 million and $4.4 million, respectively, for unvested options and awards.

CAPITAL STOCK AND EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2021

CAPITAL STOCK AND EARNINGS PER SHARE

CAPITAL STOCK AND EARNINGS PER SHARE

NOTE 7 — CAPITAL STOCK AND EARNINGS 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 196.4 million, 168.0 million and 68.3 million shares of Class A common stock issued and outstanding as of December 31, 2021, 2020 and 2019, 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 year ended December 31, 2021 our share equivalent included 3.8 million options,1.6 million BGL Warrants, and 2.3 million Private Warrants outstanding. For the year ended December 31, 2020 our share equivalent included 5.3 million options,1.6 million BGL Warrants, 6.6 million Public Warrants and 5.1 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 years ended December 31, 2021 and 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)

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 35.1 million 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 year ended December 31, 2021, inclusive of the 0.4 million Commitment Shares, we issued 9.6 million shares to YA and received $49.4 million cash, net of equity issuance costs.

As of December 31, 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 $350 million which is subject to certain limitations as described above.

INCOME TAXES

12 Months Ended

Dec. 31, 2021

INCOME TAXES

INCOME TAXES

NOTE 8 — INCOME TAXES

The reconciliation of the statutory federal income tax with the provision for income taxes is as follows at December 31:

(in thousands except for rate)


	2021		Rate		2020		Rate		2019		Rate
Federal tax benefit as statutory rates	$	(86,177)	(21.0)	%	$	(26,050)	(21.0)	%	$	(2,182)	(21.0)	%
Stock based compensation		(1,004)	(0.2)			192	0.2			21	0.2
Other permanent differences		60	—			32	—			1	—
Research and development credit		(68)	—			—	—			0
State & Local Taxes/ Other		(3,234)	(0.8)			—	—			—
Change in valuation allowance		90,423	22.0			25,826	20.8			2,160	20.8
Total tax benefit	$	—	—	%	$	—	—	%	$	—	—	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided against deferred tax assets when, based on all available evidence, it is considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. The Company cannot be certain that future taxable income will be sufficient to realize its deferred tax assets, and accordingly, a full valuation allowance has been provided on its deferred tax assets.

Components of the Company's deferred tax assets are as follows at December 31:


	2021		2020
Deferred tax assets:
Share based compensation	$	2,288	$	436
Intangible assets and other		1,984		—
Research and development credit		136		—
Net operating losses		113,999		27,550
Total deferred tax assets		118,407		27,986
Valuation allowance		(118,407)		(27,986)
Total deferred tax assets, net of valuation allowance	$	—	$	—

The Company had $712.4 million and $131.2 million of net operating losses as of December 31, 2021 and 2020, respectively. No income taxes were paid during 2021, 2020 or 2019.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2021

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 9 — COMMITMENTS AND CONTINGENCIES

The Company has entered into a supply agreement with Samsung to purchase lithium-ion cylindrical battery cells. The agreement provides for certain pricing and minimum quantity parameters, including our obligation to purchase such minimum amounts which total approximately $16.3 million in 2022, subject to change for increases in raw material pricing.

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. As of December 31, 2021, we have not established accruals or reserves as to most of our proceedings. 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 certain of its current and former executive officers including Mr. Burns, Mr. LaFleur, Mr. Post and Mr. Schmidt, and certain of our other current and former 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 January 14, 2022, Karma filed a motion for terminating sanctions (i.e., judgment in its favor on all claims) against the Company and defendant, Darren Post, as a result of Mr. Post’s handling of documents subject to discovery requests. The Company and Mr. Post opposed the request for sanctions. On February 10, 2022, the Court issued a tentative ruling denying Karma’s request for terminating sanctions but ordering Mr. Post and the Company to reimburse Karma for the costs incurred by Karma as a result of Mr. Post’s and the Company’s failure to comply with the Court’s orders, including attorneys’ fees and costs related to the filing of Karma’s motion for sanctions. Karma has yet to file a request for this reimbursement.

On January 27, 2022, the District Court granted the parties’ request to vacate the scheduled case deadlines and August 2022 trial date. Fact discovery is now scheduled to close on July 5, 2022. There are no other case deadlines or a scheduled trial date at this time. A status conference with the District Court has been set for March 7, 2022, at which time we expect case deadlines and a trial date to be established.

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 any 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 and Rule 10b-5 thereunder 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, and plaintiffs filed their opposition on January 17, 2022. 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 14(a), Section 20(a) and Section 21D of 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 of the motion to dismiss in the consolidated securities class action. The motion is fully briefed as of 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 of Section 10(b), Section 14(a), Section 20(a) and 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. Another related stockholder derivative lawsuit was filed in the Delaware Court of Chancery on December 2, 2021 (Cormier v. Burns, et al. (C.A. No. 2021-1049)), asserting breach of fiduciary duties, insider selling, and unjust enrichment, based on similar facts as the federal derivative actions. On January 18, 2022, the defendants filed a motion to stay pending resolution of the consolidated securities class action. The parties do not yet have a schedule for briefing the motion to stay or responding to the complaint. A second related stockholder derivative lawsuit was filed in the Delaware Court of Chancery on February 18, 2022 (Jackson v. Burns, et al. (C.A. No. 2022-0164)), also asserting breach of fiduciary duties, unjust enrichment, and insider selling, based on similar facts as the federal derivative actions. The parties do not yet have a schedule for responding to the complaint. 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.

On December 2, 2020, Detroit Utilities (“DTEL”) filed a complaint with the Trumbull County Common Pleas Court in Warren, Ohio alleging we breached a Utilities Services Agreement due to non-payment for services which totaled approximately $0.2 million allegedly performed by Plaintiff between February 2020 and June 2020. DTEL also claims the breach included a violation of the negotiated termination clause in the Agreement and thus claims a $2.3 million termination penalty was invoked. The parties’ attempt at mediation in August 2021 was unsuccessful. On September 3, 2021, DTEL filed a Motion for Summary Judgement seeking a judgement in the amount of $2.5 million plus interest, for what it claims are unpaid invoices and penalties. On October 1, 2021, Lordstown filed its Opposition to the Motion for Summary Judgement and on October 15, 2021, DTEL filed its Reply in support of its Motion for Summary Judgement. On January 12, 2022, the court granted DTEL’s Motion for Summary Judgement, awarding $2.5 million, plus interest. On January 13, 2022, Lordstown filed a Motion to Stay Execution of Judgement. DTEL opposed the motion on January 24, 2022, seeking $2.5 million, plus interest through the date of the court’s order. Lordstown filed a Notice of Appeal on

February 7, 2022 and is pursuing settlement discussions and, pending final disposition of the matter, the Company has accrued the judgement amount of $2.5 million as of December 31, 2021.

Two putative class action lawsuits were filed against former DiamondPeak directors and DiamondPeak Sponsor LLC on December 8 and 13, 2021 in the Delaware Court of Chancery (Hebert v. Hamamoto, et al. (C.A. No. 2021-1066); Amin v Hamamoto, et al. (C.A. No. 2021-1085)). The plaintiffs purport to represent a class of investors in DiamondPeak and assert breach of fiduciary duty claims based on allegations that the defendants made or failed to prevent alleged misrepresentations regarding vehicle pre-orders and production timeline, and that but for those allegedly false and misleading disclosures, the plaintiffs would have exercised a right to redeem their shares prior to the de-SPAC transaction. On January 10 and 18, 2022, the defendants filed motions to dismiss these actions. On February 9, 2022, the parties filed a stipulation and proposed order consolidating the two putative class action lawsuits, appointing Hebert and Amin as co-lead plaintiffs, appointing Bernstein Litowitz Berger & Grossmann LLP and Pomerantz LLP as co-lead counsel and setting a briefing schedule for the motions to dismiss and motions to stay. The motions to stay were fully briefed as of February 23, 2022 and are scheduled for oral argument on February 28, 2022. The motions to dismiss will be fully briefed on April 27, 2022 and are scheduled for oral argument on May 10, 2022.

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

12 Months Ended

Dec. 31, 2021

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 10 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. 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.

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 and $2.6 million during the year ended December 31, 2021 and the period from April 30, 2019 to December 31, 2019, respectively. Additionally, the Company also purchased property from GM for $1.2 million which was recorded to CIP. As of the date of the Closing, 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 2023, 2024 and 2025, 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. As of December 31, 2020, 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.

In November 2020, we pre-paid a royalty payment to Workhorse Group in the amount of $4.75 million. The upfront royalty payment represented an advance on the royalties discussed above but only to the extent that the aggregate amount of such royalty fees exceeded the amount paid upfront. The upfront royalty payment was recorded as a prepaid expense and an other non-current assets as of December 31, 2020 and December 31, 2021, respectively.

During the year ended December 31, 2021, we continued to refine the design of the Endurance and considered 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 1, 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 year ended December 31, 2021.

As of September 30, 2021, Workhorse Group was no longer determined to be a related party.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Dec. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Immaterial Correction of Error	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 year ended December 31, 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 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.
Use of Estimates in Financial Statement Preparation	Use of Estimates in Financial Statement Preparation The preparation of ﬁnancial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, if any, at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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 bank deposit accounts which, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts and 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 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 Topic 718”), which establishes a fair value-based method of accounting for stock-based compensation plans. In accordance with ASC Topic 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. The Company accounts for BGL Warrants as equity as these warrants qualify as share-based compensation under ASC Topic 718.
Income taxes	Income taxes Income taxes are recorded in accordance with ASC Topic 740, Income Taxes (ASC Topic 740). Deferred tax assets and liabilities are determined based on the difference between the consolidated 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.
Recent accounting pronouncements	Recent accounting pronouncements In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 extends the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 amendments were effective for the Company beginning January 1, 2020 and interim periods within fiscal years beginning after December 15, 2020. The Company adopted this guidance in 2020 but determined that there was no material impact on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, and has subsequently issued several supplemental and/or clarifying ASUs (collectively “ASC Topic 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. The Company adopted ASC 842 effective January 1, 2021 using the alternative transition method and elected to apply the new guidance at the adoption date without adjusting comparative periods presented. Comparative information has not been restated and will continue to be reported under accounting standards in effect for those periods. In adopting the new guidance, the Company elected to apply the package of transition practical expedients, which allows the Company not to reassess: (1) whether any expired or existing contracts contain leases under the new definition of a lease; (2) lease classification for any expired or existing leases; and (3) whether previously capitalized initial direct costs would qualify for capitalization under ASC 842. In addition, the Company has elected to apply the practical expedient to combine lease and related non-lease components, for all classes of underlying assets, and accounts for the combined contract as a lease component, as well as the election was made to apply the short-term lease recognition exemption. In transition, the Company did not elect to apply the hindsight practical expedient, which permits entities to use hindsight in determining the lease term and assessing impairment of right-of-use assets. The Company has leases which primarily consist of our Farmington Hills, Michigan and Irvine, California locations. The adoption of ASC 842 resulted in the recognition of a new right-of-use assets and lease liabilities on the balance sheet for all operating leases. As a result of the Company’s adoption on January 1, 2021, the Company recorded operating right-of-use assets and lease liabilities of $3.3 million. As of December 31, 2021, the Company had a right-of use asset and liability totaling $2.2 million.

FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2021

FAIR VALUE MEASUREMENTS

Summary of the net gain (loss) on changes in fair value related to warrants

The following table summarizes the net gain (loss) on changes in fair value (in thousands) related to the Public and Private Warrants:


	Year ended		Year ended
	December 31, 2021		December 31, 2020
Public Warrants	$	(27,180)	$	(17,920)
Private Warrants		15,307		(5,573)
Net loss on changes in fair value	$	(11,873)	$	(23,493)

Summary of the valuation of financial instruments

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)
December 31, 2021
Cash and cash equivalents	$	244,016	$	244,016	$	—	$	—
Public Warrants		—		—		—		—
Private Warrants		485		—		—		485

	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


	Total		Quoted prices in active markets (Level 1)		Prices with observable inputs (Level 2)		Prices with unobservable inputs (Level 3)
December 31, 2021
Cash and cash equivalents	$	244,016	$	244,016	$	—	$	—
Public Warrants		—		—		—		—
Private Warrants		485		—		—		485

	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

PROPERTY, PLANT AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2021

PROPERTY, PLANT AND EQUIPMENT

Summary of property, plant and equipment, net


	December 31, 2021		December 31, 2020
Property, Plant & Equipment
Land	$	326	$	326
Buildings		6,223		6,223
Machinery and equipment		38,608		38,443
Vehicles		465		142
Construction in progress		337,124		56,529
	$	382,746	$	101,663
Less: Accumulated depreciation		—		—
Total	$	382,746	$	101,663

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2021

STOCK-BASED COMPENSATION

Schedule of fair value assumptions


	December 31,		December 31,		December 31,
	2021		2020		2019
Risk-free interest rate	0.39	%	1.59	%	1.73-1.93	%
Expected term (life) of options (in years)	3.86		10.0		10.0
Expected dividends	—	%	—	%	—	%
Expected volatility	50	%	50	%	50	%

Schedule of stock option activity

The activities of stock options are summarized as follows:

(in thousands except for per option values and years)


		Weighted Average					Aggregate
	Number of	Exercise		Weighted Average			Intrinsic Value
	Options	Price		Term (Years)			($000's)
Outstanding, April 30, 2019	—	$	—		—	$	—
Granted	4,436		1.79
Exercised	—		—
Forfeited	(84)		1.79
Expired	—		—
Outstanding, December 31, 2019	4,352	$	1.79		8.9	$
Granted	1,021		1.79
Exercised	—		—
Forfeited	—		—
Expired	—		—
Outstanding, December 31, 2020	5,373	$	1.79		9.0	$
Granted	5,545		14.90
Exercised	(3,559)		1.79
Forfeited	(618)		22.60
Outstanding, December 31, 2021	6,741	$	10.67		7.8	$	2,967
Exercisable, December 31, 2021	1,340	$	1.79		3.2	$	2,224

Schedule of range of exercise prices

Further details of our exercisable stock options and stock options outstanding are summarized as follows:

(in thousands except for per exercise prices and years)


				Options Outstanding		Options Exercisable
				Weighted Average	Weighted Average		Weighted Average
Range of			Options	Remaining	Exercise	Options	Exercise
Exercise Prices			Outstanding	Contractual Term	Price	Exercisable	Price
$1.79	—	$1.79	1,787	4.4	$1.79	1,340	$1.79
$4.11	—	$5.69	1,758	9.6	$5.37	—	—
$5.85	—	$11.41	1,475	9.2	$9.51	—	—
$16.22	—	$16.22	78	9.2	$16.22	—	—
$26.77	—	$26.77	1,643	8.3	$26.77	—	—
			6,741	7.8	$10.67	1,340	$1.79

Schedule of RSUs activity

The activities of RSUs are summarized as follows:

(in thousands except for fair values)


			Weighted Average		Aggregate
			Grant Date		Intrinsic Value
	Shares		Fair Value		As of 12/31/2021
Outstanding, December 31, 2020		—		—
Awarded		6,414		$8.88
Released		—		—
Forfeited		(152)		$12.65
Outstanding, December 31, 2021		6,262		$8.78		$18,841

CAPITAL STOCK AND EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2021

CAPITAL STOCK AND EARNINGS PER SHARE

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

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

(in thousands)

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

INCOME TAXES

Schedule of reconciliation of the statutory federal income tax


	2021		Rate		2020		Rate		2019		Rate
Federal tax benefit as statutory rates	$	(86,177)	(21.0)	%	$	(26,050)	(21.0)	%	$	(2,182)	(21.0)	%
Stock based compensation		(1,004)	(0.2)			192	0.2			21	0.2
Other permanent differences		60	—			32	—			1	—
Research and development credit		(68)	—			—	—			0
State & Local Taxes/ Other		(3,234)	(0.8)			—	—			—
Change in valuation allowance		90,423	22.0			25,826	20.8			2,160	20.8
Total tax benefit	$	—	—	%	$	—	—	%	$	—	—	%

Schedule of deferred tax assets


	2021		2020
Deferred tax assets:
Share based compensation	$	2,288	$	436
Intangible assets and other		1,984		—
Research and development credit		136		—
Net operating losses		113,999		27,550
Total deferred tax assets		118,407		27,986
Valuation allowance		(118,407)		(27,986)
Total deferred tax assets, net of valuation allowance	$	—	$	—

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) $ / shares in Units, $ in Thousands					1 Months Ended			3 Months Ended	8 Months Ended		12 Months Ended
	Nov. 10, 2021 USD ($)	Sep. 30, 2021 USD ($) $ / shares shares	Jul. 23, 2021 USD ($) shares	Oct. 23, 2020 USD ($) $ / shares shares	Oct. 31, 2021 USD ($)	Jan. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($) $ / shares shares	Mar. 31, 2021 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares
Business Acquisition [Line Items]
Proceeds from sale of assets	$ 230,000
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
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
Issuance of common stock, value										$ 18,605	$ 6,368	$ 6,439
Shares issued price per share \| $ / shares				$ 10.00
Proceeds from stock issuance				$ 500,000					$ 7,494		$ 6,368	$ 6,439
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
Warrants outstanding \| shares							13,400,000				3,900,000	13,400,000
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	$ 82,000			$ 82,016	$ 30,692
Common stock issued in recapitalization, net of redemptions and transaction costs				$ 644,600								644,589
Warrant and other non-current liabilities				100,900			101,392				1,578	101,392
Cash received in recapitalization, net of transaction costs				701,500								701,520
Cash and cash equivalents							629,761				244,016	629,761
Accumulated deficit							134,441				544,809	134,441
Net loss										$ 10,391	$ 410,368	124,050
Substantial Doubt about Going Concern, within One Year [true false]											true
Sale Of Assets, First Payment Receivable	100,000
Sale Of Assets, Second Payment Receivable	50,000
Sale Of Assets, Third Payment Receivable	$ 50,000
Equity Funding Agreement With Y A [Member]
Business Acquisition [Line Items]
Common stock issued (in shares) \| shares			400,000								9,600,000
Issuance of common stock, value											$ 49,375
Exchange cap (in shares) \| shares			35,100,000
Proceeds from stock issuance											49,400
Equity Funding Agreement With Foxconn [Member]
Business Acquisition [Line Items]
Proceeds from sale of assets											230,000
Common stock issued (in shares) \| shares		7,200,000
Issuance of common stock, value											50,000
Shares issued price per share \| $ / shares		$ 6.8983
Proceeds from stock issuance		$ 50,000			$ 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
Sale Of Assets, Minimum Cash Balance, Second Period											50,000
Sale Of Assets, Minimum Cash Balance, Third Period											30,000
Scenario, Plan [Member] \| Equity Funding Agreement With Y A [Member]
Business Acquisition [Line Items]
Issuance of common stock, value			$ 400,000								$ 350,000
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					$ 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
Public Warrants [Member]
Business Acquisition [Line Items]
Warrants to purchase common stock \| shares				9,300,000
Warrants outstanding \| shares											0
Private Placement Warrants [Member]
Business Acquisition [Line Items]
Warrants to purchase common stock \| shares				5,100,000
Warrants outstanding \| shares											2,300,000

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	8 Months Ended	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2021	Dec. 31, 2020	Jan. 01, 2021
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Selling, general and administrative expenses	$ 4,526	$ 105,362	$ 31,316
Research and development expenses	$ 5,865	284,016	70,967
Operating right-of-use assets and lease liabilities		$ 2,200		$ 3,300
Revision of Prior Period, Reclassification, Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Selling, general and administrative expenses			2,700
Research and development expenses			$ (2,700)

FAIR VALUE MEASUREMENTS (Details) $ in Thousands, shares in Millions	1 Months Ended		3 Months Ended	12 Months Ended
	Jan. 31, 2021 USD ($)	Dec. 31, 2020 USD ($) shares	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($) shares	Oct. 23, 2020 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value of warrants		$ 101,392		$ 1,578	$ 101,392	$ 100,900
Cash proceeds from exercise of warrants	$ 82,000	$ 30,700	$ 82,000	$ 82,016	$ 30,692
Warrants outstanding \| shares		13.4		3.9	13.4
Measurement Input, Price Volatility [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative Liability, Measurement Input		0.50		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		0.413		1.123	0.413	0.458

FAIR VALUE MEASUREMENTS - Net gain (loss) on change in fair value (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Net loss on fair value adjustment	$ (11,873)	$ (23,493)
Public Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Net loss on fair value adjustment	(27,180)	(17,920)
Private Placement Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Net loss on fair value adjustment	$ 15,307	$ (5,573)

FAIR VALUE MEASUREMENTS - Valuation of financial instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
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	$ 485	$ 43,877
Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents	244,016	629,761
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, Recurring [Member] \| Private Placement Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	485	43,877
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	244,016	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, 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	$ 485	$ 43,877

FAIR VALUE MEASUREMENTS - Assets, Liabilities, Rollforward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 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	$ 11,873	$ 23,493
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	(15,307)	5,573
Fair Value, Inputs, Level 3 [Member] \| Private Placement Warrants [Member]
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	(15,307)
Derivative liability, ending balance	$ 485	$ 43,877

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Nov. 30, 2019	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Oct. 23, 2020	Nov. 07, 2019
Property, Plant and Equipment
Property, Plant and Equipment, Gross				$ 382,746	$ 101,663
Total				382,746	101,663
Depreciation expense				0	0	$ 0
Purchase of property, plant and equipment	$ 20,000
Capital assets exchanged for equity					23,200
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
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				465	142
Construction in progress
Property, Plant and Equipment
Property, Plant and Equipment, Gross				$ 337,124	$ 56,529
Purchase of property, plant and equipment			$ 1,200

NOTE PAYABLE (Details) - USD ($) $ in Thousands, shares in Millions		3 Months Ended		12 Months Ended
	Oct. 23, 2020	Jun. 30, 2021	Sep. 30, 2020	Dec. 31, 2021	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		$ 38,796
Shares issued upon notes conversion	4
PPP Loan
Debt Instrument [Line Items]
Loan amount						$ 1,000
Loan term						2 years
Debt forgiven		$ 1,000
Interest rate stated percentage						1.00%

STOCK-BASED COMPENSATION (Details) - $ / shares shares in Millions	8 Months Ended		12 Months Ended
	Dec. 31, 2019	Dec. 31, 2019	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized			13
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Minimum exercise price, as a percent of grant date fair value			100.00%
Minimum exercise price, as a percent of grant date fair value, awards to 10% shareholders			110.00%
Expiration period			10 years
Weighted-average grant date fair value (in dollars per share)	$ 1.79		$ 14.90	$ 1.79
Stock options \| Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average grant date fair value (in dollars per share)		$ 1.09	$ 5.76	$ 1.08
Minimum \| Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercisable period			1 year
Maximum \| Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercisable period			4 years

STOCK-BASED COMPENSATION - Weighted average assumptions (Details) - Stock options	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Weighted average assumptions
Risk-free interest rate	0.39%	1.59%
Expected term (life) of options (in years)	3 years 10 months 9 days	10 years	10 years
Expected dividends	0.00%	0.00%	0.00%
Expected volatility	50.00%	50.00%	50.00%
Minimum
Weighted average assumptions
Risk-free interest rate			1.73%
Maximum
Weighted average assumptions
Risk-free interest rate			1.93%

STOCK-BASED COMPENSATION - Stock option activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands		8 Months Ended	12 Months Ended
	Apr. 30, 2019	Dec. 31, 2019	Dec. 31, 2021	Dec. 31, 2020
Number of Options
Outstanding, beginning of period (in shares)			5,373	4,352
Granted (in shares)		4,436	5,545	1,021
Exercised (in shares)			(3,559)
Forfeited (in shares)		(84)	(618)
Outstanding, end of period (in shares)		4,352	6,741	5,373
Exercisable (in shares)			1,340
Weighted Average Grant Date Fair Value per Option
Outstanding, beginning of period			$ 1.79	$ 1.79
Granted		$ 1.79	$ 14.90	1.79
Exercised			1.79
Forfeited		1.79	$ 22.60
Outstanding, end of period		$ 1.79	10.67	$ 1.79
Exercisable (in dollars per share)			$ 1.79
Weighted Average Remaining Contractual Life (in years)
Outstanding	0 years	8 years 10 months 24 days	7 years 9 months 18 days	9 years
Exercisable (in years)			3 years 2 months 12 days
Aggregate intrinsic value, Outstanding			$ 2,967
Aggregate intrinsic value, Exercisable			$ 2,224
Share Price			$ 3.45

STOCK-BASED COMPENSATION - Exercisable stock options (Details) - Stock options shares in Thousands	12 Months Ended
	Dec. 31, 2021 $ / shares shares
STOCK-BASED COMPENSATION
Options outstanding \| shares	6,741
Weighted Average Remaining Contractual Term	7 years 9 months 18 days
Weighted Average Exercise Price	$ 10.67
Exercisable, Number of options \| shares	1,340
Exercisable, Weighted Average Exercise Price	$ 1.79
Exercise Price $1.79 - $1.79
STOCK-BASED COMPENSATION
Lower range limit	1.79
Upper range limit	$ 1.79
Options outstanding \| shares	1,787
Weighted Average Remaining Contractual Term	4 years 4 months 24 days
Weighted Average Exercise Price	$ 1.79
Exercisable, Number of options \| shares	1,340
Exercisable, Weighted Average Exercise Price	$ 1.79
Exercise Price $4.11 - $5.69
STOCK-BASED COMPENSATION
Lower range limit	4.11
Upper range limit	$ 5.69
Options outstanding \| shares	1,758
Weighted Average Remaining Contractual Term	9 years 7 months 6 days
Weighted Average Exercise Price	$ 5.37
Exercise Price $5.85 - $11.41
STOCK-BASED COMPENSATION
Lower range limit	5.85
Upper range limit	$ 11.41
Options outstanding \| shares	1,475
Weighted Average Remaining Contractual Term	9 years 2 months 12 days
Weighted Average Exercise Price	$ 9.51
Exercise Price $16.22 - $16.22
STOCK-BASED COMPENSATION
Lower range limit	16.22
Upper range limit	$ 16.22
Options outstanding \| shares	78
Weighted Average Remaining Contractual Term	9 years 2 months 12 days
Weighted Average Exercise Price	$ 16.22
Exercise Price $26.77 - $26.77
STOCK-BASED COMPENSATION
Lower range limit	26.77
Upper range limit	$ 26.77
Options outstanding \| shares	1,643
Weighted Average Remaining Contractual Term	8 years 3 months 18 days
Weighted Average Exercise Price	$ 26.77

STOCK-BASED COMPENSATION - Activities of RSUs (Details) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) $ / shares shares
Shares
AWARDED (in shares) \| shares	6,414
FORFEITED (in shares) \| shares	(152)
ENDING OUTSTANDING (in shares) \| shares	6,262
Aggregate Intrinsic Value
ENDING OUTSTANDING \| $	$ 18,841
Weighted Average Grant Date Fair Value
AWARDED (in dollars per share)	$ 0.0888
FORFEITED (in dollars per share)	0.1265
ENDING OUTSTANDING (in dollars per share)	0.0878
RSU
Weighted Average Grant Date Fair Value
Share Price	$ 3.45

STOCK-BASED COMPENSATION - Expense and Unrecognized (Details) - USD ($) $ in Millions	8 Months Ended	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2021	Dec. 31, 2020
STOCK-BASED COMPENSATION
Stock-based compensation expense	$ 0.3	$ 18.7	$ 2.8
Unrecognized compensation expense	$ 4.4	$ 63.7	$ 2.7

CAPITAL STOCK AND EARNINGS PER SHARE (Details) - $ / shares	8 Months Ended	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2021	Dec. 31, 2020	Oct. 23, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares authorized per Charter		312,000,000
Common Stock, Shares Authorized		300,000,000	300,000,000
Common Stock, Par or Stated Value Per Share		$ 0.0001	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized		12,000,000
Preferred Stock, Par or Stated Value Per Share		$ 0.0001
Common stock, shares issued	68,300,000	196,391,349	168,007,960
Common stock, shares outstanding	68,300,000	196,391,349	168,007,960
Weighted-average number of shares outstanding
Basic (in shares)	68,279,000	180,722,000	96,716,000
Diluted (in shares)	68,279,000	180,722,000	96,716,000
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share equivalents		3,800,000	5,300,000
B G L Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share equivalents		1,600,000	1,600,000
Public Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share equivalents			6,600,000
Private Placement Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share equivalents		2,300,000	5,100,000

CAPITAL STOCK AND EARNINGS PER SHARE - Purchase Agreements (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions			8 Months Ended	12 Months Ended
	Jul. 23, 2021	Oct. 23, 2020	Dec. 31, 2019	Dec. 31, 2021	Dec. 31, 2020
Subsidiary, Sale of Stock [Line Items]
Issuance of common stock, value			$ 18,605	$ 6,368	$ 6,439
Common stock issued (in shares)		50.0
Equity Funding Agreement With Y A [Member]
Subsidiary, Sale of Stock [Line Items]
Issuance of common stock, value				$ 49,375
Exchange cap (in shares)	35.1
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)	0.4			9.6
Equity Funding Agreement With Y A [Member] \| Scenario, Plan [Member]
Subsidiary, Sale of Stock [Line Items]
Issuance of common stock, value	$ 400,000			$ 350,000
Agreement Term	36 months

INCOME TAXES - Reconciliation of the statutory federal income tax (Details) - USD ($) $ in Thousands	8 Months Ended	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Amount
Federal tax benefit as statutory rates		$ (86,177)	$ (26,050)	$ (2,182)
Stock-based compensation		(1,004)	192	21
Other permanent differences		60	32	1
Research and development credit		(68)		0
State & Local Taxes/ Other		(3,234)
Change in valuation allowance		90,423	25,826	2,160
Total tax benefit	$ 0	$ 0	$ 0	$ 0
Rates
Federal tax benefit as statutory rates		(21.00%)	(21.00%)	(21.00%)
Stock-based compensation, rate		(0.20%)	0.20%	0.20%
State & Local Taxes/ Other, rates		(0.80%)
Change in valuation allowance, rate		22.00%	20.80%	20.80%
Total tax benefit, rate		0.00%	0.00%	0.00%

INCOME TAXES - Deferred tax assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets:
Share based compensation	$ 2,288	$ 436
Intangible assets and other	1,984
Research and development credit	136
Net operating losses	113,999	27,550
Total deferred tax assets	118,407	27,986
Valuation allowance	(118,407)	(27,986)
Total deferred tax assets, net of valuation allowance	$ 0	$ 0

INCOME TAXES (Details) - USD ($) $ in Millions	12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
INCOME TAXES
Net operating loss carryforwards	$ 712.4	$ 131.2
Federal income taxes	$ 0.0	$ 0.0	$ 0.0

COMMITMENTS AND CONTINGENCIES (Details) $ in Millions							12 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions	Jan. 24, 2022 USD ($)	Jan. 12, 2022 USD ($)	Sep. 03, 2021 USD ($)	Jul. 09, 2021 lawsuit	May 14, 2021 lawsuit	Dec. 02, 2020 USD ($)	Dec. 31, 2021 USD ($) lawsuit	Dec. 13, 2021 lawsuit	Apr. 16, 2021 item
Lawsuit Alleging Misappropriation Of Trade Secrets [Member]
Loss Contingency, Information about Litigation Matters [Abstract]
Number of company contractors \| item									2
Number of counts in amended complaint \| item									28
Class Action Lawsuits Alleging Securities Laws Violations [Member]
Loss Contingency, Information about Litigation Matters [Abstract]
Number of suits or actions filed \| lawsuit					6
Stockholder Derivative Complaints [Member]
Loss Contingency, Information about Litigation Matters [Abstract]
Number of suits or actions filed \| lawsuit				4
S E C Inquiry Relating To Merger [Member]
Loss Contingency, Information about Litigation Matters [Abstract]
Number of subpoenas received \| lawsuit							2
Detroit Utilities, Utilities Services Agreement [Member]
Loss Contingency, Information about Litigation Matters [Abstract]
Amount of non payment for services						$ 0.2
Penalty for termination of agreement						$ 2.3
Accrued contingency amount							$ 2.5
Litigation settlement amount	$ 2.5	$ 2.5	$ 2.5
Class Action Lawsuits Alleged Misrepresentations [Member]
Loss Contingency, Information about Litigation Matters [Abstract]
Number of putative class action lawsuits filed \| lawsuit								2
Supply Agreement with Samsung and LG Energy Solution
Supply Commitment [Line Items]
2022							$ 16.3

RELATED PARTY TRANSACTIONS (Details) $ in Thousands		1 Months Ended		3 Months Ended	8 Months Ended	12 Months Ended
RELATED PARTY TRANSACTIONS (Details) $ in Thousands	Nov. 07, 2019 USD ($) item	Aug. 31, 2020	Nov. 30, 2019 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2021 USD ($)	Nov. 30, 2020 USD ($)	Oct. 23, 2020 USD ($)	May 28, 2020 USD ($)	Feb. 01, 2020
Related Party Transaction [Line Items]
Purchase of property, plant and equipment			$ 20,000
Amortization						$ 11,111
GM
Related Party Transaction [Line Items]
Related party expense					$ 2,600	$ 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%
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%
Prepaid Royalties							$ 4,750
Number of vehicles subject to royalty \| item	200,000