Lordstown Motors Reports Second Quarter 2022 Financial Results

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LORDSTOWN, OH (August 4, 2022) – Lordstown Motors Corp. (Nasdaq: RIDE), (“Lordstown Motors” or “LMC”), an original equipment manufacturer (“OEM”) of electric light duty vehicles focused on the commercial fleet market, today released its second quarter 2022 financial results and provided a business update.

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Second Quarter and Recent Business Highlights

1) See “Non-GAAP Measures” below.

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Outlook

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Please refer to “Forward Looking Statements” below.

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Executive Commentary

“Over the past year, we have recruited and developed an experienced senior management team, made significant progress towards launching the Endurance, transitioned to a less capital intensive and flexible business model, established a new vehicle development platform with Foxconn, and raised some additional capital,” said Daniel Ninivaggi, LMC’s Executive Chairman.  “While these were critical foundational steps, we realize that much work remains to be done.  Our immediate focus moving forward will be on completing the successful launch of the Endurance; identifying partners, including other OEMs, to jointly scale the Endurance; defining the first vehicle program under our Foxconn joint venture; securing significant customer support for that program; and earning the support from our investors required to raise the additional capital necessary to execute our business plan,” Ninivaggi continued.

“I am excited by my expanded role as CEO of Lordstown and the joint venture with Foxconn. In Q2, we made significant progress towards our plan to launch the Endurance in Q3 of 2022 and begin sales in Q4. We look forward to getting the Endurance into customers’ hands, as we think they are going to love it.” said Edward Hightower, CEO of Lordstown Motors. “We have also started pre-development work on the first vehicle under our joint venture. Our team is excited to create and launch future products while leveraging the Foxconn EV ecosystem.”

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“We are pleased with the outcome of the quarter. The rigorous program management, disciplined cost controls and intense focus by our team allowed us to end the quarter in a better cash position than planned. We have more runway and will need to raise less capital in 2022 than previously forecasted” said Adam Kroll, Chief Financial Officer of Lordstown. “However, our success and ability to execute our plan remains dependent upon our ability to raise additional capital.”

Second Quarter 2022 results

In the second quarter, we generated an operating profit of $61.3 million, including $120.1 million from the sale of the Lordstown facility, consisting of a $101.7 million gain on sale and $18.4 million in operating expense reimbursement. Excluding the impact of the APA, our core total operating expenses were $58.8 million, of which research and development (“R&D”) and selling, general and administrative (“SG&A”) costs represented $28.9 million and $29.9 million, respectively.

R&D costs included $10.7 million associated with operating the Lordstown facility and producing pre-production vehicles (“PPVs”), $16.7 million for engineering testing and development costs and $1.5 million for Endurance prototype components. Costs associated with operating the

Lordstown facility and manufacturing PPVs decreased 51% versus the first quarter of 2022 as the APA closed on May 11, 2022, resulting in the Company incurring approximately half the plant operating costs in the period. Engineering, testing and development expenses in the second quarter decreased 18% versus the first quarter of 2022. Costs related to vehicle components for building PPVs and testing fell 93%, or $18.2 million, compared to the first quarter of 2022 as we largely completed building PPVs in the quarter.

SG&A was $29.9 million in the quarter, up approximately 15% versus both the first quarter of 2022 and fourth quarter of 2021. These increases were due primarily to a non-cash charge to reflect the net realizable value for inventory, partly offset by lower legal and professional fees.

At the end of the quarter cash on hand was $236 million, approximately $32 million higher than the first quarter of 2022. The change in cash reflects $52.4 million in cash used by operations, which includes $21.6 million for working capital, $18.1 million in capital expenditures roughly half of which was tooling for the Endurance, $87.5 million in proceeds from the plant sale, and $15.1 million from equity issuances.

Please refer to “Forward Looking Statements” below.

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Conference call Information

Lordstown Motors will host a conference call at 8:30 a.m. Eastern Time today (Thursday, August 4, 2022). The call can be accessed via a live webcast that is accessible on the Events page of Lordstown Motors’ Investor Relations website, as well as the investor presentation deck, at https://investor.lordstownmotors.com/. An archive of the webcast will be available shortly after the call.

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About Lordstown Motors Corp.

Lordstown Motors is an electric vehicle (EV) innovator developing high-quality light duty commercial fleet vehicles, with the Endurance all electric pick-up truck as its first vehicle being launched in the Lordstown, Ohio facility. Lordstown Motors has engineering, research and development facilities in Farmington Hills, Michigan and Irvine, California. For additional information visit www.lordstownmotors.com.

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Contacts:

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Investors

Carter W. Driscoll, CFA

IR@lordstownmotors.com

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Media

Colleen Robar

crobar@robarpr.com

313-207-5960

Financial Results

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Lordstown Motors Corp.

Condensed Consolidated Statements of Operations

(Amounts in thousands, except per share data -- Unaudited)

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¹ Research and development expenses for the three and six months ended June 30, 2022 are net of $18.4 million in operating expense reimbursements under the APA.

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Lordstown Motors Corp.

Condensed Consolidated Balance Sheets

(Amounts in thousands except share data -- Unaudited)

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Lordstown Motors Corp.

Condensed Consolidated Statements of Cash Flow

(Amounts in thousands -- Unaudited)

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Lordstown Motors Corp.

Non-GAAP Reconciliation from Operating Expenses (Income) to Core Operating Expenses

(Amounts in thousands -- Unaudited)

In addition to the results provided in accordance with accounting principles generally accepted in the U.S. (“GAAP”), this release includes a non-GAAP measure, referred to as “core operating expenses,” to present operating results on an adjusted basis to eliminate the impact of the closing of the Foxconn APA. The table below provides a reconciliation of operating expenses (income), the most directly comparable financial measure calculated and presented in accordance with GAAP, to the presented non-GAAP financial measure. The Company believes that core operating expenses, when reviewed in conjunction with GAAP financial measures, can provide more information to assist investors in evaluating historical trends and the current period performance. Items may be excluded from GAAP financial measures when the Company believes this provides useful supplementary information to management and investors in assessing the operating performance of our business. However, the Company’s inclusion of these adjusted measures should not be construed as an indication that its future results will be unaffected by unusual or infrequent items or that the items for which it has made adjustments are unusual or infrequent or will not recur. A non-GAAP financial measure should be considered in addition to, and not as superior to or as a substitute for the GAAP financial measures presented in this earnings release and the Company’s condensed consolidated financial statements and other publicly filed reports. In addition, any non-GAAP financial measure the Company provides may not be the same as or comparable to similar non-GAAP measures presented by other companies.

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Forward Looking Statements

This release includes forward looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as "feel," "believe," "expects," "estimates," "projects," "intends," "should," "is to be," or the negative of such terms, or other comparable terminology. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, which could cause actual results to differ materially from the forward-looking statements contained herein due to many factors, including, but not limited to: the need to raise substantial additional capital to execute our business plan, achieve our production targets for the Endurance in 2022 and beyond, achieve scaled production of the Endurance, to continue ongoing operations and remain a going concern, and our ability to raise such funding on a reasonable timeline and with suitable terms; the cost and other impacts of contingent liabilities such as litigation, regulatory proceedings, investigations, stockholder letters and claims and availability of insurance coverage and/or adverse publicity with respect to these matters, which may have a material adverse effect, whether or not successful or valid, on our liquidity position, cash projections, business prospects and ability and timeframe to obtain financing; our limited operating history and our ability to execute our business plan, including through our relationship with Foxconn; our ability to raise sufficient capital in order to invest in the tooling that we expect will enable us to eventually lower the Endurance bill of materials cost, continue design enhancements of the Endurance and fund any future vehicles we may develop; the rollout of our business and the timing of expected business milestones, including our ability to complete the engineering of the Endurance and Foxconn's completion of the conversion and retooling of the Lordstown facility, to establish and maintain appropriate supplier relationships, to successfully complete testing, homologation and certification, and to start production and delivery of the Endurance in accordance with our projected timeline; our ability to successfully identify and implement actions that will lower the Endurance bill of materials cost; supply chain disruptions, inflation and the potential inability to source essential components and raw materials, including on a timely basis or at acceptable cost, and their consequences on testing, production, sales and other activities; our ability to obtain binding purchase orders and build customer relationships; the risk that our technology, including our hub motors, does not perform as expected and our overall ability to deliver on the expectations of customers with respect to the pricing, performance, quality, reliability, safety and efficiency of the Endurance and to provide the levels of service and support that they will require; our ability to conduct business using a direct sales model, rather than through a dealer network used by most other OEMs; the effects of competition on our ability to market and sell vehicles; our inability to retain key personnel and to hire additional personnel; the ability to protect our intellectual property rights; the failure to obtain required regulatory approvals; changes in laws or regulatory requirements or new or different interpretations of existing law; changes in governmental incentives and fuel and energy prices; the impact of health epidemics, including the COVID-19 pandemic, on our business; cybersecurity threats and compliance with privacy

and data protection laws; failure to timely implement and maintain adequate financial, information technology and management processes and controls and procedures; our ability to remain in compliance with our debt covenants, our ability to repay the obligations when due, and the risks associated with having pledged significant assets as collateral for recently obtained indebtedness; and the possibility that we may be adversely affected by other economic, geopolitical, business and/or competitive factors, including the direct and indirect effects of the war in Ukraine. In addition, the transactions entered into with Foxconn are subject to risks and uncertainties. No assurances can be given that we will successfully implement or that we will realize the anticipated benefits from the recently completed transactions with Foxconn, including the contract manufacturing agreement and the joint venture to jointly develop additional EVs for launch. If we are unable to maintain our relationship with Foxconn or effectively manage outsourcing the production of the Endurance to Foxconn, we may be unable to ensure continuity, quality, and compliance with our design specifications or applicable laws and regulations, which may ultimately disrupt and have a negative effect on our production and operations. The success of the joint venture depends on many variables, including our ability to utilize the designs, engineering data and other foundational work of Foxconn, its affiliates, and other members of the MIH consortium to commercialize, industrialize, homologate and certify a vehicle in North America, along with variables that are out of the parties' control, such as technology, innovation, adequate funding, supply chain and other economic conditions, competitors, customer demand and other factors that impact new vehicle development. If we are unable to develop new vehicles for ourselves and potentially other OEM customers, our business prospects, results of operations and financial condition may be adversely affected. We will need additional funding to execute our 2022 business plan and achieve scaled production of the Endurance. As we seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at all. Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, the significant amount of capital required, the fact that our bill of materials cost is currently, and expected to continue to be, substantially higher than our anticipated selling price, uncertainty surrounding regulatory approval and the performance of the vehicle, meaningful exposure to material losses related to ongoing litigation and the SEC investigation, our performance and investor sentiment with respect to us and our business and industry. Additional information on potential factors that could affect the financial results of the Company and its forward-looking statements is included in its most recent Form 10-K and subsequent filings with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement. Any forward-looking statements speak only as of the date on which they are made, and Lordstown Motors undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.