0001558370-24-002081 | 10-K | XBRL Viewer

MEZZANINE EQUITY	12 Months Ended
Dec. 31, 2023
MEZZANINE EQUITY
MEZZANINE EQUITY	NOTE 5 — MEZZANINE EQUITY On November 7, 2022, the Company issued 0.3 million shares of Preferred Stock for $100 per share to Foxconn, resulting in gross proceeds of $30 million. In addition, following the parties’ agreement to the EV Program budget and the EV Program milestones and satisfaction of those EV Program milestones and other conditions set forth in the Investment Agreement, Foxconn was to purchase in two tranches, a total of 0.7 million additional shares of Preferred Stock at a purchase price of $100 per share for aggregate proceeds of $70 million. The first tranche was to be in an amount equal to 0.3 million shares for an aggregate purchase price of $30 million; the second tranche was to be in an amount equal to 0.4 million shares for an aggregate purchase price of $40 million. The parties agreed to use commercially reasonable efforts to agree upon the EV Program budget and EV Program milestones no later than May 7, 2023. The completion of the Subsequent Preferred Funding would have provided critical liquidity for the Company’s operations. Since April 21, 2023, Foxconn has disputed its obligations under the Investment Agreement to consummate the Subsequent Common Closing and to use necessary efforts to agree upon the EV Program budget and EV Program milestones to facilitate the Subsequent Preferred Funding. Foxconn initially asserted that the Company was in breach of the Investment Agreement due to the Company’s previously disclosed receipt of the Nasdaq Notice regarding the Bid Price Requirement. As previously disclosed, Foxconn purported to terminate the Investment Agreement if that purported breach was not cured within 30 days. The Company continues to believe that the breach allegations by Foxconn are without merit, and that Foxconn was obligated to complete the Subsequent Common Closing on or before May 8, 2023. Despite the Company taking action to satisfy the Bid Price Requirement as of June 7, 2023, and discussions between the parties to seek a resolution regarding the Investment Agreement, Foxconn did not proceed with the Subsequent Common Closing or any Subsequent Preferred Funding. As a result of Foxconn’s actions, the Company was deprived of critical funding necessary for its operations. On June 27, 2023, the Company filed its Chapter 11 Cases and on that same date the Company commenced the Foxconn Litigation in the Bankruptcy Court seeking relief for fraudulent and tortious conduct as well as breaches of the Investment Agreement and other agreements, the parties’ joint venture agreement, the Foxconn APA, and the CMA that the Company believes were committed by Foxconn. As set forth in the complaint relating to the adversary proceeding, Foxconn’s actions have caused substantial harm to the Company’s operations and prospects and significant damages. See “Foxconn Transactions” above and Note 9 – Commitments and Contingencies for additional information. The Foxconn Litigation is Adversary Case No. 23-50414. The descriptions herein with respect to the Preferred Stock and any rights thereunder do not account for the potential effects of the Chapter 11 Cases or the Foxconn Litigation on the Preferred Stock or any rights thereunder. The Company reserves all claims, defenses, and rights with respect to the Chapter 11 Cases, the Foxconn Litigation, the Preferred Stock, and any treatment of Preferred Stock or other interests held by Foxconn or any other party and the descriptions below do not account for the impact of any relief should it be granted. Under the Proposed Plan, as of the date of this report, we expect the Preferred Stock to remain outstanding and be unimpaired as of the effective date of the Proposed Plan. The Preferred Stock, with respect to dividend rights, rights on the distribution of assets on any liquidation, dissolution or winding up of the affairs of the Company and redemption rights, ranks: (a) on a parity basis with each other class or series of any equity interests (“Capital Stock”) of the Company now or hereafter existing, the terms of which expressly provide that such class or series ranks on a parity basis with the Preferred Stock as to such matters (such Capital Stock, “Parity Stock”); (b) junior to each other class or series of Capital Stock of the Company now or hereafter existing, the terms of which expressly provide that such class or series ranks senior to the Preferred Stock as to such matters (such Capital Stock, “Senior Stock”); and (c) senior to the Class A common stock and each other class or series of Capital Stock of the Company now or hereafter existing, the terms of which do not expressly provide that such class or series ranks on a parity basis with, or senior to, the Preferred Stock as to such matters (such Capital Stock, “Junior Stock”). While Foxconn’s beneficial ownership of our Class A common stock meets the 25% Ownership Requirement (defined below), Parity Stock and Senior Stock can only be issued with Foxconn’s consent. The Certificate of Designation provides that, in the event of any liquidation, dissolution or winding up of the affairs of the Company, the holders of Preferred Stock are entitled, out of assets legally available therefor, before any distribution or payment to the holders of any Junior Stock, and subject to the rights of the holders of any Senior Stock or Parity Stock and the rights of the Company’s existing and future creditors, to receive in full a liquidating distribution in cash and in the amount per share of Preferred Stock equal to the greater of (1) the sum of $100 per share plus the accrued unpaid dividends with respect to such share, and (2) the amount the holder would have received had it converted such share into Class A common stock immediately prior to the date of such event. All holders of shares of Preferred Stock are entitled to vote with the holders of Class A common stock on all matters submitted to a vote of stockholders of the Company as a single class with each share of Preferred Stock entitled to a number of votes equal to the number of shares of Class A common stock into which such share could then be converted; provided, that no holder of shares of Preferred Stock will be entitled to vote to the extent that such holder would have the right to a number of votes in respect of such holder’s shares of Class A common stock, Preferred Stock or other capital stock that would exceed the limitations set forth in clauses (i) and (ii) of the definition of Ownership Limitations. The Certificate of Designation provides that, commencing on November 7, 2023 (the “Conversion Right Date”), and subject to the Ownership Limitations, the Preferred Stock became convertible at the option of the holder into a number of shares of Class A common stock obtained by dividing the sum of the liquidation preference (i.e., $100 per share) and all accrued but unpaid dividends with respect to such share as of the applicable conversion date by the conversion price as of the applicable conversion date. The conversion price currently is $29.04 per share and it is subject to customary adjustments. At any time following the third anniversary of the date of issuance, the Company can cause the Preferred Stock to be converted if the volume-weighted average price of the Class A common stock exceeds 200% of the Conversion Price for a period of at least twenty trading days in any period of thirty consecutive trading days. Foxconn’s ability to convert is limited by clauses (i) and (ii) of the definition of the Ownership Limitations. Upon a change of control (as defined in the Certificate of Designation, Preferences and Rights of the Series A Convertible Preferred Stock filed by the Company with the Secretary of State of the State of Delaware (the “Certificate of Designations”), Foxconn can cause the Company to purchase any or all of its Preferred Stock at a purchase price equal to the greater of its liquidation preference (including any unpaid accrued dividends) and the amount of cash and other property that it would have received had it converted its Preferred Stock prior to the change of control transaction (the “Change of Control Put”). The terms of the Company’s Preferred Stock do not specify an unconditional obligation of the Company to redeem the Preferred Stock on a specific or determinable date, or upon an event certain to occur. The Company notes the Change of Control Put; however, this is contingent on the occurrence of the change of control event, which is not a known or determinable event at time of issuance. Therefore, the Preferred Stock is not considered to be mandatorily redeemable. The conversion of the Preferred Stock is based on fixed conversion price rather than a fixed conversion amount. The value of the Preferred Stock obligation would not vary based on something other than the fair value of the Company’s equity shares or change inversely in relation to the fair value of the Company’s equity shares. Based on these factors, Preferred Stock does not require classification as a liability in accordance with the provisions in ASC 480 “Distinguishing Liabilities from Equity”. The Preferred Stock is not redeemable at a fixed or determinable date or at the option of the holder. However, the Preferred Stock does include the Change of Control Put, which could allow the holder to redeem the Preferred Stock upon the occurrence of an event. As the Company cannot assert control over any potential event which would qualify as a change of control, the event is not considered to be solely within the control of the issuer, and would require classification in temporary equity (as per ASC 480-10-S99-3A(4)). Accordingly, the Preferred Stock is classified as temporary equity and is separated from permanent equity on the Company’s Balance Sheet. The Company believes that the transaction price associated with the sale of the Preferred Stock to Foxconn was representative of fair value and serves as the basis for initial measurement. The Preferred Stock issued by the Company accrues dividends at the rate of 8% per annum whether or not declared and/or paid by the Company (cumulative dividends). In addition, the dividends will compound on a quarterly basis (upon each Preferred Dividend Payment Date (as defined in the Certificate of Designations)) to the extent they are not paid by the Company. The Company records the dividends (effective PIK dividends) as they are earned, based on the fair value of the Preferred Stock at the date they are earned. In addition, the holders of the Preferred Stock participate with any dividends payable in respect of any Junior Stock or Parity Stock. The Company accrued $2.5 million in dividends for the year ended December 31, 2023, and had accrued $2.8 million in aggregate dividends as of such date, which represented the estimated fair value to Preferred Stock with a corresponding adjustment to additional-paid-in-capital common stock in the absence of retained earnings. While the Company concluded above that accretion to redemption value of the Preferred Stock was not required as the Preferred Stock is not currently redeemable or probable of becoming redeemable, it is noted that the recognition of the dividends will not necessarily reflect the redemption value at any time (given the ‘greater of’ language included as part of the determination of redemption value per above). As of December 31, 2023, the Company did not consider change of control to be probable. The Company notes that there is significant uncertainty regarding the effects and outcome of the Chapter 11 Cases and the Foxconn Litigation which may impact the foregoing determination, and that the Company can provide no assurance regarding such determination. The Company reserves all rights with respect to the amounts and the effects of the Chapter 11 Cases and the Foxconn Litigation.

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (343,066)	$ (282,404)

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) $ / shares in Units, $ in Thousands															1 Months Ended	12 Months Ended
	Jan. 04, 2024 USD ($)	Oct. 27, 2023 USD ($)	May 24, 2023	May 22, 2023	Apr. 21, 2023 $ / shares	Nov. 22, 2022 USD ($) $ / shares shares	Nov. 22, 2022 USD ($) $ / shares	Nov. 22, 2022 USD ($) $ / shares	Nov. 22, 2022 USD ($) D $ / shares	Nov. 22, 2022 USD ($) tranche $ / shares	Nov. 07, 2022 USD ($) $ / shares shares	May 11, 2022	Nov. 10, 2021 USD ($)	Jul. 23, 2021 USD ($) shares	Oct. 31, 2021 USD ($) shares	Dec. 31, 2023 USD ($) D $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) shares	Dec. 30, 2022 USD ($)	Aug. 17, 2022 $ / shares	May 07, 2022 USD ($)	Apr. 15, 2022 USD ($)
Business Acquisition
Number of days for filing claim arising \| D																30
Amount of claim																$ 45,000
Net operating loss carryforwards																993,200	$ 629,600
Issuance of Class A Common stock																	2,114
Convertible preferred shares, shares issued \| shares											300,000
Net loss																343,066	282,404
Research and development expenses																$ 33,343	107,816
Proceeds from stock issuance																	$ 2,114
Exchange ratio			0.067
Common stock, par value \| $ / shares																$ 0.0001	$ 0.0001			$ 0.0001
cash, cash equivalents and short-term investments																$ 87,100
Accumulated deficit																1,170,279	$ 827,213
Aggregate liquidation preference																30,000
Claims Reserve																45,000
Domestic Tax Authority [Member]
Business Acquisition
Net operating loss carryforwards																993,200
State and local
Business Acquisition
Net operating loss carryforwards																880,300	372,200
Class Action Lawsuits Alleging Securities Laws Violations
Business Acquisition
Accrued contingency amount																3,000
Claims recognized																$ 3,000
Percentage of net proceeds																25.00%
Retained amount from debtor reorganizations																$ 7,000
LandX asset purchase agreement
Business Acquisition
Total purchase price		$ 10,200
Transaction Fee		$ 2,000
Common Stock
Business Acquisition
Issuance of Class A Common stock											$ 70,000						$ 1
Stock issued in aggregate purchase \| shares																	74,000
Foxconn
Business Acquisition
Number of days to remedy drop in stock price					180 days
Minimum bid price \| $ / shares					$ 1.00
Threshold period for termination of investment agreement if the breach not cured					30 days
Foxconn \| Class Action Lawsuits Alleging Securities Laws Violations
Business Acquisition
Amount paid into debtors reserve (in percentage)																16.00%
Amount paid into debtors reserve																$ 5,000
Contract Manufacturing Agreement \| Lordstown EV Corporation
Business Acquisition
Initial term												18 months
Notice period												12 months
Minimum
Business Acquisition
Exchange ratio				0.33
Maximum
Business Acquisition
Exchange ratio				0.067
Aggregate liquidation preference						$ 30,000	$ 30,000	$ 30,000	$ 30,000	$ 30,000
Equity Funding Agreement With Y A
Business Acquisition
Issuance of Class A Common stock																$ 40,400	$ 40,400	$ 49,400
Aggregate value of shares for issuance														$ 400,000
Stock issued in aggregate purchase \| shares														400,000		0	17,500,000	9,600,000
Equity Funding Agreement With Foxconn
Business Acquisition
Purchase price for sale of assets													$ 230,000
Research and development expenses																	$ 18,400	$ 7,700
Down payments received																						$ 200,000
Proceeds from sale of assets																	100,000	$ 100,000
Total proceeds from sale of assets													257,000
Proceeds from Sale of Assets for Expansion Investments													8,900
Proceeds from Sale of Assets for Reimbursement Payments													$ 18,400
Balance of purchase price																	30,000
Reimbursement payment receivable on closing																	27,500
Reimbursable operating expenses receivable																	18,400		$ 17,500
Reimbursable expansion cost receivable																	$ 10,000
Stock issued in aggregate purchase \| shares															480,000
Proceeds from stock issuance															$ 50,000
Equity Funding Agreement With Foxconn \| Foxconn
Business Acquisition
Threshold period for subsequent common closing from the receipt of written communication \| D									10
Open Market Sales Agreement \| Jefferies LLC
Business Acquisition
Stock issued in aggregate purchase \| shares																0	7,800,000
Proceeds from stock issuance																$ 12,400
Open Market Sales Agreement \| Maximum \| Jefferies LLC
Business Acquisition
Number of shares to be issued \| shares											50,200,000
Investment agreement \| Foxconn
Business Acquisition
Preferred stock, par value \| $ / shares											$ 0.0001
Aggregate value of shares for issuance											$ 100,000
Proceeds from stock issuance							47,300
Investment agreement \| Foxconn \| Common Stock
Business Acquisition
Issuance of Class A Common stock							22,700				70,000
Shares available for issuance (as a percent)								10.00%
Proceeds from issuance of preferred stock							$ 47,300
Stock issued in aggregate purchase \| shares						1,800,000
Shares issued price per share \| $ / shares						$ 26.40	$ 26.40	$ 26.40	$ 26.40	$ 26.40
Investment agreement \| Foxconn \| Preferred stock
Business Acquisition
Issuance of Class A Common stock							$ 30,000
Proceeds from issuance of preferred stock											30,000
Convertible preferred shares, shares issued \| shares						300,000
Aggregate value of shares for issuance											$ 100,000
Shares issued price per share \| $ / shares						$ 100	$ 100	$ 100	100	$ 100	$ 100
Number of tranches of share issue								2		2
Scenario, Plan
Business Acquisition
Warrants to purchase common stock \| shares																130,000
Warrant exercise price \| $ / shares																$ 157.50
Scenario, EV Program Milestone Achievement [Member] \| Maximum \| Foxconn \| Preferred stock
Business Acquisition
Convertible preferred shares, shares issued \| shares						700,000
Scenario, EV Program Milestone Achievement [Member] \| Equity Funding Agreement With Foxconn \| Foxconn
Business Acquisition
Subsequent preferred funding																					$ 70,000
Scenario, EV Program Milestone Achievement [Member] \| Investment agreement \| Preferred stock
Business Acquisition
Proceeds from issuance of preferred stock							$ 70,000
Scenario, EV Program Milestone Achievement [Member] \| Investment agreement \| Foxconn \| Preferred stock
Business Acquisition
Proceeds from issuance of preferred stock							$ 70,000
Shares issued price per share \| $ / shares						$ 100	$ 100	$ 100	$ 100	$ 100
Scenario, EV Program Milestone Achievement [Member] \| Investment agreement \| Maximum \| Foxconn \| Preferred stock
Business Acquisition
Convertible preferred shares, shares issued \| shares						700,000
Scenario, EV Program Milestone Achievement [Member] \| Investment Agreement First Tranche \| Foxconn \| Preferred stock
Business Acquisition
Proceeds from issuance of preferred stock							$ 30,000
Scenario, EV Program Milestone Achievement [Member] \| Investment Agreement First Tranche \| Maximum \| Foxconn \| Preferred stock
Business Acquisition
Convertible preferred shares, shares issued \| shares						300,000
Scenario, EV Program Milestone Achievement [Member] \| Investment Agreement Second Tranche \| Foxconn \| Preferred stock
Business Acquisition
Convertible preferred shares, shares issued \| shares						400,000
Scenario, EV Program Milestone Achievement [Member] \| Investment Agreement Second Tranche \| Maximum \| Foxconn \| Preferred stock
Business Acquisition
Proceeds from issuance of preferred stock							$ 40,000
Subsequent event
Business Acquisition
Amount of claim	$ 45,000

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current Assets
Cash and cash equivalents	$ 87,096	$ 121,358
Short-term investments		100,297
Inventory, net		13,672
Prepaid expenses	4,027	19,510
Other current assets	1,016	1,038
Total current assets	92,139	255,875
Property, plant and equipment, net		193,780
Other non-current assets	30	2,657
Total Assets	92,169	452,312
Current Liabilities
Accounts payable	933	12,801
Accrued legal and professional	12,815	38,398
Accrued expenses and other current liabilities	1,650	17,635
Total current liabilities	15,398	68,834
Liabilities subject to compromise	30,467
Warrant and other non-current liabilities		1,446
Total liabilities	45,865	70,280
Mezzanine equity
Series A Convertible Preferred stock, $0.0001 par value, 12,000,000 shares authorized; 300,000 shares issued and outstanding as of December 31, 2023 and December 31, 2022	32,755	30,261
Stockholders' equity
Class A common stock, $0.0001 par value, 450,000,000 shares authorized;,15,953,212 and 15,928,299 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively	24	24
Additional paid in capital	1,183,804	1,178,960
Accumulated deficit	(1,170,279)	(827,213)
Total stockholders' equity	13,549	351,771
Total liabilities and stockholders' equity	$ 92,169	$ 452,312

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

12 Months Ended

Dec. 31, 2023

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

NOTE 1 – DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Description of Business

Overview

On June 27, 2023, Lordstown Motors Corp., a Delaware corporation, together with its subsidiaries (“Lordstown,” the “Company,” “the Debtors” or “we”), filed voluntary petitions for relief (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).

In connection with the Chapter 11 Cases, we ceased production and sales of our flagship vehicle, the Endurance, and new program development and began a comprehensive marketing and sale process for some, all, or substantially all of the Company’s operating assets in an effort to maximize the value of those assets. Furthermore, we continued our aggressive cost-cutting actions that included significant personnel reductions. On September 29, 2023, we entered into the LandX Asset Purchase Agreement to sell specified assets related to the design, production and sale of electric light duty vehicles focused on the commercial fleet market free and clear of liens, claims, encumbrances, and other interests, and the purchaser assumed certain specified liabilities of the Company for a total purchase price of $10.2 million in cash in a transaction that closed on October 27, 2023 (discussed below under “Sale of Certain Assets to LandX”), and is included under investing activities in the consolidated statement of cash flows. As a result of these actions, the Company has no revenue-producing operations. Our primary operations during the fourth quarter of 2023 and to date in the first quarter of 2024 have consisted of activities associated with completing the Chapter 11 Cases, resolving substantial litigation including retained causes of action and the SEC Claim (subject to formal approvals), claims reconciliation, and preparing for emergence from bankruptcy as contemplated in the Proposed Plan described below. Our remaining assets following the closing of the LandX Asset Purchase Agreement consist largely of cash on hand, the claims asserted in the Foxconn Litigation and that the Company may have against other parties, as well as NOLs.

Upon the date that the Proposed Plan, which remains subject to Bankruptcy Court approval, becomes effective (the “Effective Date”), and subject to the effectiveness of the Proposed Plan, it is contemplated that the near term operations of the Company (also referred to as the “Post-Effective Date Debtors”) will consist of (a) claims administration under the Proposed Plan, (b) addressing the Foxconn Litigation, (c) prosecuting, pursuing, compromising, settling, or otherwise disposing of other retained causes of action, (d) defending the Company against any counterclaims, (e) attempting to realize value, if any, from our NOLs and (f) filing Exchange Act reports and satisfying other regulatory requirements.

In the future, the Post-Effective Date Debtors expect to explore potential business opportunities, including strategic alternatives or business combinations, including those designed to maximize the Company’s tax attributes, including maximizing realization of its NOLs. No assurance can be made that the Proposed Plan will become effective or that we will be successful in prosecuting any claim or cause of action or that any strategic alternative or business combination will be identified and/or would result in profitable operations or the ability to realize any value from the NOLs. See – “Expected Operations Following the Effective Date” and Part I – Item 1A - Risk Factors.

Unless the context indicates otherwise, all shares of the Company’s Class A common stock are presented after giving effect to the 1:15 reverse stock split of the outstanding Class A common stock, which became effective as of 12:01 a.m. Eastern Time on May 24, 2023.

Prior Operations and Cessation of Production and Development

Prior to the consummation of the Chapter 11 Cases, the Company was an original equipment manufacturer (“OEM”) of electric light duty vehicles (“EVs”) focused on the commercial fleet. This included working on its own vehicle programs as well as partnering with third parties, including Foxconn and its affiliates, as the Company sought to leverage its capabilities, assets and resources to more efficiently develop and launch EVs, to enhance capital efficiency and achieve profitability.

In the third quarter of 2022, the Company started commercial production of the Endurance and began to record sales in the fourth quarter of 2022. Engineering readiness, quality and part availability governed the initial timing and speed of the Endurance launch. The rate of Endurance production remained very low in 2023 until June 2023, when management made the decision to file the Chapter 11 Cases and cease production. We sold 38 Endurance trucks to customers, of which 35 have been repurchased from customers as of the date hereof.

Leading up to filing the Chapter 11 Cases and the Foxconn Litigation (each as further discussed below), it became apparent that we would be unable to effectively implement and realize the anticipated benefits of the Foxconn Transactions (as defined below) as Foxconn failed to meet funding commitments and refused to engage with the Company on various initiatives contemplated by the Foxconn Transactions that were essential to sustain ongoing operations. Due to the failure to identify a strategic partner for the Endurance, lack of expected funding and other support from Foxconn (as discussed in more detail below), continuing costs of outstanding litigation and extremely limited ability to raise sufficient capital in the then current market environment, we determined it was in the best interests of the Company’s stakeholders to take aggressive actions to cut costs, preserve cash, file the Chapter 11 Cases and Foxconn Litigation and cease production of the Endurance and new program development. As part of these initial actions, notices were provided to a substantial number of employees under the Worker Adjustment and Retraining Notification Act (“WARN Act”) in May 2023, for job eliminations beginning in the third quarter of 2023. After the filing of the Chapter 11 Cases, we provided additional notices under the WARN Act for job eliminations. As of December 31, 2023, we had 9 employees, all of whom have been terminated or are expected to be terminated on the Effective Date.

The Chapter 11 Cases

On June 27, 2023, (“Petition Date”) the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Bankruptcy Court approved certain motions filed by the Debtors under which they were authorized to conduct their business activities in the ordinary course, including to, among other things and subject to the terms and conditions of such orders: (i) pay employees’ wages and related obligations; (ii) pay certain taxes; (iii) pay critical vendors; (iv) continue to honor certain customer obligations; (v) maintain their insurance program; (vi) continue their cash management system; and (v) establish certain procedures to protect any potential value of the Company’s NOLs.

The Company has also been seeking to use the tools of Chapter 11 to fully, finally, and efficiently resolve its contingent and other liabilities before the Bankruptcy Court and to pursue the Foxconn Litigation, as further discussed below.

The Bankruptcy Court established October 10, 2023, as the general bar date for all creditors (except governmental entities) to file their proofs of claim or interest, and December 26, 2023, as the bar date for all governmental entities, which was extended until January 5, 2024, in the case of the Securities and Exchange Commission (“SEC”). In addition, the deadline for parties to file proofs of claim arising from the Debtors’ rejection of an executory contract or unexpired lease is the later of (a) the general bar date or the governmental bar date, as applicable, and (b) 5:00 p.m. (ET) on the date that is 30 days after the service of an order of the Bankruptcy Court authorizing the Debtors’ rejection of the applicable executory contract or unexpired lease. Finally, pursuant to the Proposed Plan, the deadline for parties to file administrative claims

against the Debtors (i.e., claims for costs and expenses of administration of the Debtors’ estates, including (i) the actual and necessary costs and expenses incurred after the Petition Date and through the Effective Date of preserving the estates and operating the businesses of the Debtors; (ii) professional fee claims; and (iii) fees and charges payable to the United States Trustee for the District of Delaware (the “U.S. Trustee”)) is 30 days following the Effective Date. Claimants may have the ability to amend their proofs of claim that could significantly increase the total claims, beyond our estimates or reserve. Furthermore, proofs of claim have been filed asserting unliquidated damages or claims in respect of certain indemnification obligations or otherwise, that we may not be able to estimate, or may be materially more than we estimate.

Pursuant to the terms of the Proposed Plan, and subject to its confirmation and effectiveness, a significant amount of the cash on hand as of the Effective Date will be used to settle outstanding claims against the Company, including litigation claims. Pursuant to the Bankruptcy Code, the Company is first required to pay all administrative claims in full. The Proposed Plan also requires that the Company establish a reserve (the “Claims Reserve”) for allowed and disputed claims of general unsecured creditors, inclusive of $3 million the Company would be required to pay into escrow on the Effective Date for the cash portion of the Ohio Securities Litigation Settlement (as defined and discussed below). The aim of the Claims Reserve is to facilitate payment in full, with interest, of such creditors’ allowed claims as contemplated by the Proposed Plan (although there can be no assurance the Company will be able to pay such claims in full with interest). The initial amount of the Claims Reserve is currently anticipated to be approximately $45 million, as agreed upon by the official committee of equity security holders (the “Equity Committee”) and the official unsecured creditors’ committee (the “UCC” and together with the Equity Committee, the “Committees”) and approved by the Bankruptcy Court. The amount of the Claims Reserve is subject to change and could increase materially. The Claims Reserve could also be adjusted downward as claims are resolved or otherwise as a result of the claims resolution process, or as the Claims Ombudsman and the Post-Effective Date Debtors deem appropriate. Furthermore, the amount of the Claims Reserve will be limited to amounts payable for allowed claims of general unsecured creditors but to the extent that the Claims Reserve is insufficient to pay general unsecured creditors in full with interest, such deficiency will be payable from all assets of the Post-Effective Date Debtors, as set forth in the Proposed Plan. There are additional liabilities, including but not limited to administrative claims and claims by holders of our Class A common stock and Preferred Stock among other potential classes of claimants whose claims, if allowed, will not be included in the Claims Reserve.

There can be no assurance regarding the amount of claims that may be allowed for distributions under the Proposed Plan or that such claims will not be significantly greater than may be anticipated which could, in turn, result in the value of distributions to stakeholders being delayed, reduced, or eliminated entirely. Inevitably, some assumptions will not materialize, and unanticipated events and circumstances may affect the ultimate results and total amount of claims against us. Moreover, additional claims may be filed in the Chapter 11 Cases, including on account of rejection damages for executory contracts and unexpired leases rejected pursuant to the Proposed Plan and administrative claims, for each of which the deadlines to file proofs of claim have not yet passed as of the date of this report. Such claims may be substantial and may result in a greater amount of allowed claims than estimated.

No assurance can be made regarding the confirmation or effectiveness of the Proposed Plan, the sufficiency of the Debtors’ assets to provide estimated recoveries to claimants and fund anticipated post-emergence activities. The Post-Effective Date Debtors and the Claims Ombudsman, as applicable, will review and analyze all claims. Pursuant to the terms of the Proposed Plan, which includes certain exceptions, the Claims Ombudsman will have the authority to settle, litigate or otherwise resolve general unsecured Claims against the Debtors. We cannot provide any assurances regarding what our total actual liabilities based on such claims will be. Further, the assets included in this report or in any filing we have made or may make with the Bankruptcy Court may not reflect the fair values thereof during the pendency of or following the Chapter 11 Cases. There remains uncertainty regarding the estimates and assumptions used in the applicable reporting periods, and such values may be higher or lower as a result.

Sale of Certain Assets to LandX

As part of the Chapter 11 Cases, on August 8, 2023, the Bankruptcy Court approved procedures (the “Bidding Procedures Order”) for the Debtors to conduct a comprehensive marketing and sale process for some, all, or substantially all of the Company’s operating assets in order to maximize the value of those assets.

The Debtors’ investment banker, Jefferies LLC (“Jefferies”), and other professionals conducted a comprehensive marketing process for the sale of assets consistent with the Bidding Procedures Order. In connection with that marketing and sale process, the Debtors received a “Qualified Bid” (as defined in the Bidding Procedures Order) from LAS Capital LLC, a Delaware limited liability company (“LAS Capital”) to purchase certain specified assets of the Debtors.

Although the Debtors received several non-binding proposals for the purchase of specified assets, the Debtors through their Boards of Directors, determined that none of these other proposals was a Qualified Bid in accordance with the Bidding Procedures and determined LAS Capital to be the successful bidder under the Bidding Procedures. As a result, the Debtors cancelled the auction in accordance with the Bidding Procedures and proceeded to seek Bankruptcy Court approval of the sale.

On September 29, 2023, the Debtors entered into an Asset Purchase Agreement (the “LandX Asset Purchase Agreement”) with LAS Capital LLC and Mr. Stephen S. Burns, an individual, as guarantor of certain obligations of LAS Capital under the LandX Asset Purchase Agreement. The LandX Asset Purchase Agreement was assigned to LAS Capital’s affiliate, LandX Motors Inc., a Delaware corporation (the assignee and “Purchaser”) and approved by the Bankruptcy Court on October 18, 2023. The closing of the transactions contemplated by the LandX Asset Purchase Agreement occurred on October 27, 2023, at which time the Purchaser acquired substantially all of the assets held for sale of the Debtors related to the design, production and sale of EVs focused on the commercial fleet market free and clear of liens, claims, encumbrances, and other interests, and assumed certain specified liabilities of the Debtors for a total purchase price of $10.2 million in cash. Upon consummation of the sale, Jefferies became entitled to a Transaction Fee (as defined below) of $2.0 million after crediting the Monthly Fees (as defined below) paid to Jefferies since entering into the Engagement Letter. The Transaction Fee was classified within accrued legal and professional on the consolidated balance as of December 31, 2023, and was paid to Jefferies in January 2024 and no further amounts are payable to Jefferies under the Engagement Letter.

The Debtors’ remaining assets following the closing of the LandX Asset Purchase Agreement consist largely of cash on hand, the claims and causes of action asserted in the Foxconn Litigation and that the Company may have against other parties, and the NOLs.

Confirmation of the Chapter 11 Plan and Effective Date

On September 1, 2023, the Debtors filed a Joint Plan of Lordstown Motors Corp. and Its Affiliated Debtors and a related proposed disclosure statement (the “Disclosure Statement”), which were amended and modified on each of October 24, 2023, October 29, 2023, and October 30, 2023. On October 31, 2023, the Bankruptcy Court held a hearing on the approval of the Disclosure Statement and the procedures to solicit votes to accept or reject the Proposed Plan. The Bankruptcy Court announced, among other things, that it would approve the Debtors’ Disclosure Statement and the procedures to be used in connection with the solicitation of votes on the Proposed Plan (the “Solicitation and Voting Procedures”). On November 1, 2023, the Bankruptcy Court entered an order approving the Disclosure Statement and the Solicitation and Voting Procedures (the “Disclosure Statement Order”). After obtaining Bankruptcy Court approval, the Debtors promptly began soliciting votes from their creditors and shareholders for approval of the Proposed Plan pursuant to the Solicitation and Voting Procedures.

After the solicitation process was complete, the Debtors’ court-authorized claims and noticing agent (Kurtzman Carson Consultants LLC) submitted a declaration with the Bankruptcy Court reporting the outcome of voting on the Proposed Plan. The voting results reflected that Classes 3, 7, and 10 accepted the Proposed Plan and Class 8 (holders of 510(b) Claims, described below) rejected the Proposed Plan. No holders of claims in Class 9 voted on the Proposed Plan, and, accordingly, Class 9 was deemed eliminated from the Proposed Plan for purposes of voting and determining acceptance or rejection of the Proposed Plan by such class. Classes 1, 2, 4, 5, and 6 are unimpaired pursuant to the Proposed Plan and deemed to accept it.

On January 31, 2024, the Debtors filed the Second Modified First Amended Joint Plan of Lordstown Motors Corp. and Its Affiliated Debtors (as may be further modified, supplemented, or amended, the “Proposed Plan”). The modifications to the Proposed Plan since the previously filed version incorporated, among other things, a settlement (the “Ohio Securities Litigation Settlement”) of claims against the Debtors and certain directors and officers of the Debtors that were serving in such roles as of December 12, 2023 (the “Ohio Released Directors and Officers”), asserted in, or on the same or similar basis as those claims asserted in, the securities class action captioned In re Lordstown Motors Corp. Securities Litigation, Case No. 4:21-cv-00616 (DAR) (the “Ohio Securities Litigation”). The Proposed Plan also included, as a condition to confirmation of the Proposed Plan, that the SEC approve an offer of settlement (the “Offer”) submitted by the Debtors to resolve the proof of claim filed by the SEC against the Debtors, which, as previously disclosed, was filed in the face amount of $45 million (the “SEC Claim”) as set forth in an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (the “OIP”). We expect the Offer to be considered by the SEC in the near future.

The Debtors have scheduled a hearing with the Bankruptcy Court on March 5, 2024, to consider confirmation of the Proposed Plan and will ask the Bankruptcy Court to enter an order confirming the Proposed Plan (the “Confirmation Order”), which among other things, would authorize the Debtors to effectuate the Proposed Plan, subject to satisfaction or waiver of the conditions precedent to the occurrence of Effective Date set forth in the Proposed Plan. If the Proposed Plan is confirmed, the Debtors will seek to have such conditions satisfied or waived in order for the Effective Date to occur promptly after entry of the Confirmation Order.

The Bankruptcy Code generally provides that the confirmation of a Chapter 11 plan discharges a debtor from substantially all debts arising prior to consummation of such plan. Here, the United States Trustee has objected to the Debtors’ entitlement to a discharge. The objection is expected to be heard at the hearing to consider the Confirmation Order. If the United States Trustee’s objection is overruled, then, with few exceptions, all claims against the Debtors that arose prior to the consummation of the Proposed Plan (i) would be subject to compromise and/or treatment under the Proposed Plan and/or (ii) would be discharged in accordance with the Bankruptcy Code and the terms of the Proposed Plan. However, the outcome and timing of any claims not ultimately discharged is uncertain, and it is possible material costs, penalties, fines, sanctions, or injunctive relief could result from such a matter.

The Proposed Plan, among other provisions:

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provides an orderly structure for distributions to holders of claims of creditors and treatment of equity interests of shareholders (“Interests”),

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incorporates the resolution of claims asserted in the Ohio Securities Litigation and, in connection with the Offer and OIP, by the SEC,

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preserves retained causes of action, including against Foxconn, to be pursued by the Post-Effective Date Debtors,

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seeks to preserve the value of the Company’s NOLs, by leaving preferred and common equity Interests in the Post-Effective Date Debtors in place, and instituting certain trading restrictions, and

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provides that the Post-Effective Date Debtors may engage in such business operations as may be determined by the New Board.

Pursuant to, and subject to the confirmation and effectiveness of, the Proposed Plan, effective as of the Effective Date (i) an ombudsman (the “Claims Ombudsman”) will be appointed to oversee the administration of claims asserted against the Debtors by general unsecured creditors and (ii) a trustee (the “Litigation Trustee”) will be appointed to oversee a litigation trust (the “Litigation Trust”) formed pursuant to the Proposed Plan, which will be funded with certain retained causes of action of the Debtors, as will be determined by the Equity Committee.

We cannot provide any assurances that we will have sufficient cash on hand to provide for the required payments to be made on the Effective Date or to satisfy the Claims Reserve, Post-Effective Date Debtor Amount (as defined below) or other reserves as may be required.

Pursuant to, and subject to the confirmation and effectiveness of, the Proposed Plan, the Debtors will be allocated an amount (the “Post-Effective Date Debtor Amount”) which will be used to fund (a) the fees and expenses of the Post-Effective Date Debtors in performing their duties under the Proposed Plan, (b) expenses of the Claims Ombudsman appointed under the Proposed Plan and (c) future operational expenses of the Post-Effective Date Debtors, as permitted by the Proposed Plan. Pursuant to the Proposed Plan, the Post-Effective Date Amount may be increased from time to time after notice and an opportunity to object is provided to the Claims Ombudsman.

All distributions under the Proposed Plan would come from all assets of the Debtors (including, without limitation, cash generated by or that constitutes the proceeds of assets acquired by the Post-Effective Date Debtors after the Effective Date), which include, but are not limited to, (i) cash on hand as of the Effective Date, (ii) proceeds from the sale of the Debtors’ assets, (iii) proceeds from causes of action retained by the Debtors pursuant to the Proposed Plan, and (iv) insurance proceeds received by the Post-Effective Date Debtors. Subject to the terms of the Proposed Plan, any distributions to classes of claims and Interests will generally be made in order of their respective priorities under the Bankruptcy Code. Specifically, the Proposed Plan provides for the distributions for the claims and Interests in order of priority as follows (with capitalized terms not otherwise defined having the meaning set forth in the Proposed Plan):

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Holders of Allowed Administrative Claims, Allowed Priority Tax Claims, and Allowed Other Priority Claims (each as defined in the Proposed Plan) are to be paid in full in cash before other payments can be made.

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Holders of Allowed Secured Claims (as defined in the Proposed Plan) would either retain their lien on the collateral, be paid in full in cash, or receive the collateral securing such Allowed Secured Claim.

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Holders of Allowed General Unsecured Claims would receive a pro rata share of the Debtors’ cash after all Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Other Priority Claims, and Allowed Secured Claims are satisfied and the Professional Fee Escrow Account (as defined in the Proposed Plan) is funded. If the Debtors have sufficient cash on hand to pay all Allowed General Unsecured Claims plus interest in full, then the holders of the Allowed General Unsecured Claims would also receive post-petition interest on their claim amount at the Federal Judgment Rate. If the Debtors do not have sufficient cash on hand to pay in full such post-petition interest, then the holders of the Allowed General Unsecured Claims would receive their pro rata share of any post-petition interest that can be paid.

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Allowed Intercompany Claims would be reinstated under the Proposed Plan.

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Allowed Foxconn Preferred Stock Interests would be reinstated, which includes that all outstanding shares of Preferred Stock will remain outstanding, subject to the terms of the New Organizational Documents (as defined below). In the event any distribution is to be made to holders of Allowed Foxconn Preferred Stock Interests, such distribution would be from cash remaining after the payment or reserving for the treatment under the Proposed Plan of Allowed Administrative Claims, Allowed Other Priority Claims, Allowed Secured Claims, Allowed General Unsecured Claims, and the Post-Effective Date Debtor Amount (“Post-Effective Date Debtor Cash”). In addition, any such distribution

to Holders of the Allowed Foxconn Preferred Stock Interests would be subject to the backstop obligation under the Ohio Securities Litigation Settlement.

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Allowed Common Stock Interests would be reinstated, which includes that all outstanding shares of Class A common stock remain outstanding, subject to the terms of the New Organizational Documents (as defined below).

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Allowed claims relating to securities actions against the Debtors that are subordinated to General Unsecured Claims by section 510(b) of the Bankruptcy Code (other than section 510(b) Claims that are (i) subject to the Ohio Securities Litigation Settlement or (ii) are claims filed against the Debtors on the same or similar basis as those set forth in the Post-Petition Securities Action (as defined below) (such claims, the “RIDE Section 510(b) Claims”), would receive Class A common stock in an amount calculated pursuant to the formula set forth in the Proposed Plan, after accounting for any recoveries from applicable insurers or other third parties and subject to the Post-Effective Date Debtors’ election to cash out such Class A common stock Interests.

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Allowed claims, if any, against the Debtors on the same or similar basis as those set forth in the putative securities class action filed against the Debtors’ current Chief Executive Officer (Edward Hightower), Chief Financial Officer (Adam Kroll), and Executive Chairman (Daniel Ninivaggi) in the Post-Petition Securities Action (defined below) may recover solely from available insurance coverage from applicable insurance policies until such insurance policies have been completely exhausted. The Debtors dispute the merits of any such claims.

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Allowed claims of the Ohio Securities Litigation Lead Plaintiff (defined below) would receive treatment pursuant to the Ohio Securities Litigation Settlement incorporated in the Proposed Plan (as described below).

Pursuant to the Ohio Securities Litigation Settlement incorporated into the Proposed Plan, the Debtors would pay $3 million into escrow on the Effective Date for the benefit of the putative class members in the Ohio Securities Litigation. In addition, such putative class members would be entitled to receive a portion of any proceeds from litigation and other causes of action being retained by the Debtors following the Effective Date (net of actual reasonable costs incurred in prosecuting such retained causes of action) in an amount equal to the lesser of (a) 25% of such net proceeds and (b) $7 million. Pursuant to the Proposed Plan and Confirmation Order, if entered, the Confirmation Order would constitute a preliminary approval of the Ohio Securities Litigation Settlement. The Ohio Securities Litigation Settlement would be effective on the Effective Date, and the Ohio Securities Litigation Lead Plaintiff, through counsel, would be responsible for pursuing final approval of the proposed settlement thereafter. Members of the putative settlement class would be provided with the option to op-out of the settlement class pursuant to the provisions of the Confirmation Order. See Note 9 Commitments and Contingencies – Ohio Securities Litigation.

In addition, pursuant to the Proposed Plan, a portion of any recoveries from litigation or other causes of action retained by the Debtors that would be owed to putative class members in connection with the Ohio Securities Litigation Settlement would be backstopped by Foxconn through Foxconn’s agreement to permit 16% of any payments made on account of Foxconn’s Preferred Stock, up to $5 million, to be paid into a reserve for the benefit of such class members.

Further, the Proposed Plan contemplates, and includes as a condition to confirmation of the Proposed Plan, that the SEC approve the Offer submitted by the Debtors to resolve the SEC Claim as would be, if approved, set forth the OIP. We do not anticipate seeking confirmation of the Proposed Plan by the Bankruptcy Court until the Offer and OIP are mutually agreed with the SEC and binding. Subject to receipt of necessary approvals and satisfaction of each of the terms of the Offer and the OIP, the Proposed Plan provides that following confirmation and the effectiveness of the Proposed Plan incorporating the Ohio Securities Litigation Settlement, the SEC would withdraw the SEC Claim. Any potential settlement with the SEC or other parties for related securities claims or other matters is subject to significant uncertainty, there can be no assurance as to the timing or outcome of the resolution of these matters, and any settlement or claim amount remains

subject to approval by the Bankruptcy Court and other regulatory approvals, as applicable. The Debtors cannot provide any assurances regarding what the Company’s total actual liabilities based on the SEC Claim, or other claims asserted in the Chapter 11 Cases, will be.

On the Effective Date, the Proposed Plan would provide certain releases to directors and officers of the Debtors that served in the capacity as a director or officer of any of the Debtors at any time from the Petition Date through the Effective Date. As approved by the Bankruptcy Court, the releases would be binding on holders of claims and Interests (a) that affirmatively vote to accept the Proposed Plan or (b) are entitled to vote on the Proposed Plan, vote to reject the Proposed Plan, and check a box on their ballot opting into the releases. The releases are also binding on related parties to those described in (a) and (b) (e.g., affiliates, predecessors, successors, and related parties as set forth in the Proposed Plan), but only to the extent the parties in (a) and (b) have authority to bind such persons or entities to the releases.

In addition, pursuant to, and subject to the confirmation and effectiveness of, the Proposed Plan, the members of the settlement class in the Ohio Securities Litigation will also be releasing parties pursuant to the Proposed Plan and be bound by the release, discharge, and injunction provisions set forth in the Proposed Plan.

The Proposed Plan remains subject to the entry of the Confirmation Order and it could change as a result of amendments, supplements, or other modifications to the Proposed Plan. The Proposed Plan is available, and any amendments, supplements and modifications will be made available, online at https://www.kccllc.net/lordstown/document/list. The information on this website is not incorporated by reference and does not constitute part of this Form 10-K. Further, unless otherwise stated in the Proposed Plan and the Confirmation Order, the Proposed Plan is not binding on any party, including the Debtors, until it is consummated and the Effective Date has occurred. The Proposed Plan may not become effective because it is subject to the satisfaction of certain conditions precedent (some of which are beyond our control), appeal by certain parties that could file notice of appeal with respect to the Confirmation Order, if entered, and is otherwise subject to the risks and uncertainties set forth in the Disclosure Statement, which stakeholders are encouraged to read in its entirety. There can be no assurance that the Confirmation Order will be entered, that such conditions will be satisfied or that such appeals will be dismissed and, therefore, that the Proposed Plan will become effective and that we will emerge from the Chapter 11 Cases as contemplated by the Proposed Plan. The failure of the Proposed Plan to be confirmed and become effective, or any delay thereof, will significantly and adversely affect the likelihood of a Chapter 11 reorganization and could lead to a liquidation.

Expected Operations Following the Effective Date

If the Proposed Plan becomes effective, at the Effective Date the Debtors would emerge from the Chapter 11 Cases and:

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the Foxconn Litigation and other retained causes of action of the Debtors would be preserved and may be prosecuted,

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claims filed in the Chapter 11 Cases would continue to be resolved pursuant to the claims resolution process with allowed claims being treated in accordance with the Proposed Plan,

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distributions to holders of allowed claims and allowed Interests would be made subject to the provisions of the Proposed Plan, and

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the Debtors will continue to conduct business and may enter into transactions, including business combinations, or otherwise, that could permit the Post-Effective Date Debtors to make use of the NOLs, if preserved.

At this time, however, the Debtors do not know what the post-Effective Date operations will include and no assurances can be provided that the Proposed Plan will generate any value for the Company’s post-Effective Date equity holders or that any distributions will be made to such equity holders. See “Risk Factors”, including under the heading “Risks Related to Our Post-Effective Date Operations and Financial Condition.”

On and after the Effective Date, pursuant to applicable non-bankruptcy law and subject to confirmation of the Proposed Plan, the Company and its subsidiaries will maintain their pre-bankruptcy corporate existence, with the Company’s name expected to be changed to Nu Ride Inc., and will be permitted to conduct operations in its discretion, subject to available funding and other factors. Under the Proposed Plan, I. Class A common stock and Preferred Stock would remain outstanding as of the Effective Date and none of the outstanding equity interests of the Company, including outstanding warrants, would be cancelled in connection with the effectiveness of the Proposed Plan.

As of the Effective Date, the Proposed Plan provides that the Company’s second amended and restated certificate of incorporation and amended and restated bylaws would be further amended and restated (as amended and restated, collectively the “New Organizational Documents” and individually the “New Charter” and the “New Bylaws”) to reflect changes sought by the New Board, that include, but are not limited to, a new name for the Company, Nu Ride Inc. and, incorporate terms regarding post-Effective Date indemnification obligations consistent with the Proposed Plan.

At December 31, 2023, the Company had $993.2 million and $880.3 million of federal and state and local net operating losses, respectively, and the Company incurred and may also continue to incur in connection with the Proposed Plan significant NOLs. The Company’s ability to use some or all of these NOLs are subject to certain limitations. To reduce the risk of a potential adverse effect on our ability to use our NOLs for U.S. Federal income tax purposes, the New Charter is proposed to contain, subject to certain exceptions, certain transfer restrictions (the “NOL Restrictions”) with respect to our stock involving any person or group of persons that is or as a result of such a transaction would become a substantial stockholder (i.e., would beneficially own, directly or indirectly, 4.5% or more of all issued and outstanding shares of Class A common stock). Any transferee receiving shares of Class A common stock or Preferred Stock that would result in a violation of such proposed restrictions will not be recognized as a stockholder of the Company or entitled to any rights of shareholders, including, without limitation, the right to vote and to receive dividends or distributions, whether liquidating or otherwise, in each case, with respect to the shares of stock causing the violation.

At the Effective Date, the Company would remain subject to the periodic reporting requirements of the Exchange Act; however, the Company will be a “shell company” as defined under the Securities Act and subject to associated limitations under the securities laws. For example, the holders of our securities may not rely on Rule 144, a safe harbor on which holders of restricted securities may use to resell their securities, to sell such securities without registration or until we are no longer identified as a shell company. This will likely make it more difficult for certain investors to resell our Class A common stock. See – Risk Factors. Although the Company has indicated, by checking the applicable box on the cover page of this report, that it is a shell company (as defined in Rule 12b‑2 of the Exchange Act), the Company is engaged and contemplates that it will engage in the following business and operations following confirmation and effectiveness of Proposed Plan: (a) claims administration under the Proposed Plan, (b) addressing the Foxconn Litigation, (c) prosecuting, pursuing, compromising, settling, or otherwise disposing of other retained causes of action, (d) defending the Company against any counterclaims, (e) attempting to realize value, if any, from our tax attributes and (f) filing Exchange Act reports and satisfying other regulatory requirements. Moreover, in the future, the Company may explore and pursue potential business opportunities, including strategic alternatives or business combinations, including those designed to maximize the value of the Company’s assets, including maximizing the value of the Company’s tax attributes and realization of its net operating loss carryforwards and other tax attributes. In checking the applicable box in this report for the purposes of Rule 12b-2 of the Exchange Act, the Company makes no admission and does not concede that it will have no business, no operations, or no or nominal assets following the effectiveness of the Plan.

The Proposed Plan provides for the appointment of new members to serve on the Company’s board of directors (the “New Board”) as of the Effective Date and provides that the New Board is to be selected by the Equity Committee. Additional detail regarding each of the expected members of the New Board and the new Chief Executive Officer and President to be appointed by the New Board, as identified to the Company by the Equity Committee as of the date hereof, is provided under “Executive Officer Expected to be Appointed as of

the Effective Date” and Part II – Item 10. Directors, Executive Officers, and Corporate Governance. The New Board will, among other things, oversee and direct the administration of the Post-Effective Date Debtors’ operations in accordance with the Proposed Plan.

The operation of the Post-Effective Date Debtors, including the evaluation of any new business opportunities, if any, would be undertaken by or under the supervision of the Company’s then current officers and directors. The Post-Effective Date Debtors will be required to satisfy their operating costs from the Post-Effective Date Debtor Amount and any additional proceeds from assets or other amounts, if any, released from the Claims Reserve pursuant to the Proposed Plan. During the twelve months following the date of this report, the Company anticipates incurring costs relating to (a) claims administration under the Proposed Plan, (b) addressing the Foxconn Litigation, (c) prosecuting, pursuing, compromising, settling, or otherwise disposing of other retained causes of action, (d) defending the Company against any counterclaims, (e) attempting to realize value, if any, from our NOLS, and (f) filing Exchange Act reports and satisfying other regulatory requirements. In the future, the Post-Effective Date Debtors expect to explore potential business opportunities, including strategic alternatives or business combinations, including those designed to maximize the Company’s tax attributes, including maximizing realization of its NOLs and other tax attributes. If the United States Trustee is successful in its objection to the Debtors’ entitlement to a discharge under the Bankruptcy Code from substantially all debts arising prior to consummation of the Proposed Plan, this could result in the Proposed Plan not being confirmed or additional material costs, penalties, fines, sanctions, or injunctive relief against the Debtors for claims that are not ultimately be discharged. There can be no assurance as to any additional funding available for the Post-Effective Date Debtors to conduct their post-Effective Date operations, including pursuing any post-Effective Date transaction, and the amount of funding available may be reduced, including in the event that allowed claims against the Company prove to be greater than expected or in the event of an adverse ruling with respect to allowance of Foxconn’s preferred stock Interests. There are no assurances that the Company will be able to secure any additional funding, as needed, or on terms acceptable to it, or that it will have sufficient funding to resolve the Foxconn Litigation, pursue and resolve the retained or other causes of action, or pursue any strategic alternatives.

As of the date of this report, the Company has neither entered into any definitive agreement with any party, nor has the Company engaged in any specific discussions with any potential business combination candidate regarding business opportunities for the Company.

We anticipate that the prosecution of claims and causes of action and the evaluation and pursuit of potential strategic alternatives will be costly, complex, and risky. No assurances can be made that we will be successful in prosecuting any claim or cause of action or that any strategic alternative or business combination would result in profitable operations or the ability to realize any value from the NOLs.

Foxconn Litigation

On June 27, 2023, the Company commenced an adversary proceeding against Foxconn (the “Foxconn Litigation”) in the Bankruptcy Court seeking relief for fraudulent and tortious conduct as well as breaches of the Investment Agreement (as defined below), the parties’ joint venture agreement, the Foxconn APA (as defined below), and the CMA (as defined below) that the Company believes were committed by Foxconn. As set forth in the complaint relating to the adversary proceeding, Foxconn’s actions have caused substantial harm to the Company’s operations and prospects and significant damages. The Foxconn Litigation is Adversary Case No. 23-50414.

On September 29, 2023, Foxconn filed a motion to dismiss all counts of the Foxconn Litigation and brief in support of the same (the “Foxconn Adversary Motion to Dismiss”), asserting that all of the Company’s claims are subject to binding arbitration provisions and that the Company has failed to state a claim for relief. The Debtors believe that the Foxconn Adversary Motion to Dismiss is without merit and, on November 6, 2023, the Company filed an opposition to Foxconn’s Adversary Motion to Dismiss. Foxconn filed a reply in support of the Foxconn Adversary Motion to Dismiss on November 30, 2023. On December 7, 2023, the Debtors and the Equity Committee filed a notice of completion of briefing, which provided that the briefing of the Foxconn

Adversary Motion to Dismiss has been completed and such motion is ready for disposition. Oral argument on the Foxconn Adversary Motion to Dismiss has not been scheduled. The Company currently intends to continue to vigorously oppose that motion and pursue its claims against Foxconn. However, the ultimate determinations regarding the Foxconn Litigation will be made by the New Board and management team if the Proposed Plan is confirmed and becomes effective.

If the Bankruptcy Court denies the Foxconn Adversary Motion to Dismiss, the Post-Effective Date Debtors will continue to prosecute the Foxconn Litigation. Any net proceeds from the Foxconn Litigation may enhance the recoveries for holders of claims and Interests. However, while the Post-Effective Date Debtor Amount includes an estimate of the costs to prosecute the Foxconn Litigation, the actual costs may be significantly higher, which may impair the Company’s ability to pursue the matter. No assurances can be provided as to the outcome or recoveries, if any, of the Foxconn Litigation.

See Note 9 – Commitments and Contingencies – Foxconn Litigation for additional information.

Foxconn Transactions

The Company entered into a series of transactions with affiliates of Hon Hai Technology Group (“HHTG”, either HHTG or applicable affiliates of HHTG are referred to herein as “Foxconn”), beginning with the Agreement in Principal that was announced on September 30, 2021, pursuant to which we entered into definitive agreements to sell our manufacturing facility in Lordstown, Ohio under the Foxconn APA (as defined below) and outsource manufacturing of the Endurance to Foxconn under the CMA. On November 7, 2022, we entered into an Investment Agreement with Foxconn under which Foxconn agreed to make additional equity investments in the Company (the “Investment Agreement”). The Investment Agreement superseded and replaced an earlier joint venture agreement. The Foxconn APA, the CMA and the Investment Agreement together are herein referred to as the “Foxconn Transactions.”

Investment Agreement

Under the Investment Agreement, Foxconn agreed to make additional equity investments in the Company through the purchase of $70 million of Class A common stock, $0.0001 par value per share (“Class A common stock”), and up to $100 million in Series A Convertible Preferred Stock, $0.0001 par value per share (the “Preferred Stock”), subject to certain conditions, including, without limitation, regulatory approvals and, with regard to the Preferred Stock, satisfaction of certain EV Program (as defined herein) budget and EV Program milestones established by the parties. The Preferred Stock funding could only be used in connection with planning, designing, developing, engineering, testing, industrializing, certifying, homologating and launching one or more EVs in collaboration with Foxconn (the “EV Program”). See Note 5 – Mezzanine Equity and Note 6 –Capital Stock and Earnings per Share for additional information regarding the terms of the Preferred Stock and terms of the Investment Agreement.

On November 22, 2022, the parties completed the initial closing under the Investment Agreement, pursuant to which Foxconn purchased approximately $22.7 million of Class A common stock and $30 million of Preferred Stock (the “Initial Closing”). The parties also entered in the Registration Rights Agreement on November 22, 2022, pursuant to which the Company agreed to use reasonable efforts to file and cause to be declared effective a registration statement with the SEC registering the resale of the Class A common stock acquired under the Investment Agreement, including any shares of Class A common stock issuable upon conversion of the Preferred Stock.

The Investment Agreement provided for the second closing of Class A common stock (the “Subsequent Common Closing”), at which time, the Company maintains that Foxconn was required to purchase approximately 10% of the Class A common stock for approximately $47.3 million. The Subsequent Common Closing was to occur within 10 business days following the parties’ receipt of a written communication from the U.S. government’s Committee on Foreign Investment in the United States (“CFIUS”) that CFIUS has

concluded that there are no unresolved national security concerns with respect to the transactions (“CFIUS Clearance”) and subject to satisfaction of the other conditions set forth in the Investment Agreement (which the Company believes were or would have been satisfied). CFIUS Clearance was received on April 24, 2023, which means the Subsequent Common Closing was to occur on or before May 8, 2023. The Company was ready, willing and able to complete the Subsequent Common Closing on a timely basis.

In addition, following the parties’ agreement to the EV Program budget and the EV Program milestones and satisfaction of those EV Program milestones and other conditions set forth in the Investment Agreement, Foxconn was to purchase in two tranches, a total of 0.7 million additional shares of Preferred Stock at a purchase price of $100 per share for aggregate proceeds of $70 million (the “Subsequent Preferred Funding”). The parties agreed to use commercially reasonable efforts to agree upon the EV Program budget and EV Program milestones no later than May 7, 2023.

The completion of the Subsequent Common Closing and the Subsequent Preferred Funding would have provided critical liquidity for the Company’s operations. Since April 21, 2023, Foxconn has disputed its obligations under the Investment Agreement to consummate the Subsequent Common Closing and to use necessary efforts to agree upon the EV Program budget and EV Program milestones to facilitate the Subsequent Preferred Funding. Foxconn initially asserted that the Company was in breach of the Investment Agreement due to the Company’s previously disclosed receipt of a notice (the “Nasdaq Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”), which Nasdaq Notice indicated that the Company’s Class A common stock price dropped below the $1.00 per share threshold set forth in Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Requirement”) and that the Company had a 180-day period to remedy the drop in the stock price. As previously disclosed, Foxconn purported to terminate the Investment Agreement if that purported breach was not cured within 30 days.

The Company continues to believe that the breach allegations by Foxconn are without merit, and that Foxconn was obligated to complete the Subsequent Common Closing on or before May 8, 2023. Despite the Company taking action to satisfy the Bid Price Requirement as of June 7, 2023, and discussions between the parties to seek a resolution regarding the Investment Agreement, Foxconn did not proceed with the Subsequent Common Closing or any Subsequent Preferred Funding. As a result of Foxconn’s actions, the Company was deprived of critical funding necessary for its operations. To seek relief for Foxconn’s contractual breaches and other fraudulent and tortious conduct the Company believes were committed by Foxconn, the Company commenced the Foxconn Litigation.

Closing of the Foxconn APA

On May 11, 2022, Lordstown EV Corporation, a Delaware corporation and wholly-owned subsidiary of the Company (“Lordstown EV”), closed the transactions contemplated by the asset purchase agreement with Foxconn EV Technology, Inc., an Ohio corporation, and an affiliate of HHTG, dated November 10, 2021 (the “Foxconn Asset Purchase Agreement” or “Foxconn APA” and the closing of the transactions contemplated thereby, the “Foxconn APA Closing”).

Pursuant to the Foxconn APA, Foxconn purchased Lordstown EV’s manufacturing facility located in Lordstown, Ohio. Lordstown EV had continued to own our hub motor assembly line, as well as our battery module and pack line assets, certain tooling, intellectual property rights and other excluded assets, and had outsourced all of the manufacturing of the Endurance to Foxconn under the Contract Manufacturing Agreement. Lordstown EV also entered into a lease pursuant to which Lordstown EV had leased space located at the Lordstown, Ohio facility from Foxconn for Lordstown EV’s Ohio-based employees for a term equal to the duration of the Contract Manufacturing Agreement plus 30 days (the “Lease Agreement”). The Lease Agreement was cancelled as of December 31, 2023.

We received $257 million in proceeds related to the sale, consisting of the $230 million initial purchase price for the assets, plus $8.9 million for expansion investments and an $18.4 million reimbursement payment for certain operating costs incurred by us from September 1, 2021 through the Foxconn APA Closing. Foxconn

made down payments of the purchase price totaling $200 million through April 15, 2022, of which $100 million was received in both 2022 and 2021. The $30 million balance of the purchase price and a reimbursement payment of approximately $27.5 million were paid at the Foxconn APA Closing; $17.5 million was attributable to the reimbursement of certain operating expenses reported in research and development and $10 million was attributable to expansion costs. Under the terms of the Foxconn APA, the $17.5 million reimbursement costs were an estimate which upon final settlement was subsequently increased to $18.4 million.

Research and development costs are presented net of the $18.4 million reimbursement of costs under the Foxconn APA for the year ended December 31, 2022. Included in the $18.4 million reimbursement were approximately $7.7 million of research and development costs incurred in 2021. Also, in connection with the Foxconn APA Closing, the Company issued the Foxconn Warrants (as defined herein), which are exercisable until the third anniversary of the Foxconn APA Closing for 0.13 million shares of Class A common stock at an exercise price of $157.50 per share (the “Foxconn Warrants”). In October 2021, prior to entering into the Foxconn APA, Foxconn purchased 0.48 million shares of the Company’s Class A common stock for approximately $50.0 million.

Contract Manufacturing Agreement

On May 11, 2022, Lordstown EV and Foxconn entered into a manufacturing supply agreement (the “CMA” or “Contract Manufacturing Agreement”) in connection with the Foxconn APA Closing. Pursuant to the CMA, Foxconn was to (i) manufacture the Endurance at the Lordstown facility for a fee per vehicle, (ii) following a transition period, procure components for the manufacture and assembly of the Endurance, subject to sourcing specifications provided by Lordstown EV, and (iii) provide certain post-delivery services. Foxconn did not ultimately provide the aforementioned procurement and post delivery services. The CMA was intended to provide us with an almost entirely variable manufacturing cost structure and to alleviate the burden to invest in and maintain the Lordstown facility.

The CMA required Foxconn to use commercially reasonable efforts to assist with reducing component and logistics costs and reducing the overall bill of materials (“BOM”) cost of the Endurance, and otherwise improving the commercial terms of procurement with suppliers. However, we did not realize any material reduction of raw material or component costs or improvement in commercial terms based on Foxconn’s actions. Foxconn was required to conduct testing in accordance with procedures established by us and we were generally responsible for all motor vehicle regulatory compliance and reporting. The Contract Manufacturing Agreement also allocated responsibility between the parties for other matters, including component defects, quality assurance and warranties of manufacturing and design. Foxconn invoiced us for manufacturing costs on a fee per vehicle produced basis, for certain time and materials related to additional work, and to the extent purchased by Foxconn, component and other costs. Production volume and scheduling were based upon rolling weekly forecasts we provided that were generally binding only for a 12-week period, with some ability to vary the quantities of vehicle type.

The CMA became effective on May 11, 2022, and was to continue for an initial term of 18 months plus a 12-month notice period in the event either party seeks to terminate the agreement. In the event neither party terminated the Contract Manufacturing Agreement following the initial term, it would continue on a month-to-month basis unless terminated upon 12 months’ prior notice. The CMA could also be terminated by either party due to a material breach of the agreement and terminated immediately upon the occurrence of any bankruptcy event. The CMA was not part of the assets assigned under the LandX Asset Purchase Agreement.

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. 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.

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. The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

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.

As a result of the factors described below, we have concluded that there is substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of these consolidated financial statements.

On June 27, 2023, the Company and its subsidiaries commenced the Chapter 11 Cases and filed the Foxconn Litigation in the Bankruptcy Court. In connection with the filing of the Chapter 11 Cases, the Company ceased production of the Endurance and new program development. The Company received the Bankruptcy Court’s approval to (a) conduct business activities in the ordinary course, and (b) to undertake a comprehensive marketing and sale process for some, all, or substantially all of the Company’s operating assets in an effort to maximize the value of those assets.

On October 27, 2023, we closed the transactions contemplated by the LandX Asset Purchase Agreement under which we sold material assets related to the design, production and sale of electric light duty vehicles focused on the commercial fleet market free and clear of liens, claims, encumbrances, and other interests, and the purchaser assumed certain specified liabilities of the Company for a total purchase price of $10.2 million in cash. Upon consummation of the transactions under the LandX Asset Purchase Agreement, Jefferies became entitled to a Transaction Fee of $2.0 million that was paid in January 2024.

As a result of these actions, the Company has no revenue-producing operations. Our primary operations during the fourth quarter of 2023 and to date in the first quarter of 2024 have consisted of expenses associated with completing the Chapter 11 Cases, resolving substantial litigation and the SEC Claim (subject to formal approvals), claims reconciliation, financial reporting, and preparing for emergence from bankruptcy as contemplated in the Proposed Plan. Our remaining assets following the closing of the LandX Asset Purchase Agreement consist largely of cash on hand, the claims asserted in the Foxconn Litigation and that the Company may have against other parties, as well as NOLs.

The Company had cash, cash equivalents, and short-term investments of approximately $87.1 million, an accumulated deficit of $1.2 billion as of December 31, 2023, and a net loss of $343.1 million for the year ended December 31, 2023.

If the Proposed Plan becomes effective, at the Effective Date the Debtors would emerge from the Chapter 11 Cases and:

●

the Foxconn Litigation and other retained causes of action of the Debtors would be preserved and may be prosecuted,

●

claims filed in the Chapter 11 Cases would continue to be resolved pursuant to the claims resolution process with allowed claims being treated in accordance with the Proposed Plan,

●

distributions to holders of allowed claims and allowed Interests would be made subject to the provisions of the Proposed Plan, and

●

Further, there can be no assurance that cash on hand and other resources will be sufficient to allow us to conclude the terms of the Proposed Plan, satisfy any remaining obligations related to the Chapter 11 Cases or litigation, claims and investigations, future liabilities or continue to sustain our limited current operations or potential future plans for our operations.

The Company has been subject to extensive pending and threatened legal proceedings and has already incurred, and may to continue to incur, significant legal expenses in defending against these claims. See Note 9 – Commitments and Contingencies to our consolidated financial statements. The Company has also been seeking to use the tools of Chapter 11 to fully, finally, and efficiently resolve its contingent and other liabilities before the Bankruptcy Court and to pursue the Foxconn Litigation and has entered and may in the future enter into further discussions regarding settlement of these matters, and may enter into settlement agreements if it believes it is in the best interest of the Company’s stakeholders.

The Bankruptcy Court established October 10, 2023, as the general bar date for all creditors (except

governmental entities) to file their proof of claim or interest, and December 26, 2023, as the bar date for all

governmental entities, which was extended until January 5, 2024, in the case of the SEC. On January 4,

2024, the SEC filed the SEC Claim. In addition, the deadline for parties to file proofs of claim arising from the Debtors’ rejection of an executory contract or unexpired lease is the later of (a) the general bar date or the governmental bar date, as applicable, and (b) 5:00 p.m. (ET) on the date that is 30 days after the service of an order of the Bankruptcy Court authorizing the Debtors’ rejection of the applicable executory contract or unexpired lease. Finally, pursuant to the Proposed Plan, the deadline for parties to file administrative claims against the Debtors (i.e., claims for costs and expenses of administration of the Debtors’ estates, including (i) the actual and necessary costs and expenses incurred after the Petition Date and through the Effective Date of preserving the estates and operating the businesses of the Debtors; (ii) professional fee claims; and (iii) fees and charges payable to the United States Trustee) is 30 days following the Effective Date. Claimants may have the ability to amend their proofs of claim that could significantly increase the total claims, beyond our estimates or reserve. Furthermore, proofs of claim have been filed asserting unliquidated damages or claims in respect of certain indemnification obligations or otherwise, that may be materially more than we estimate. There is also risk of additional litigation and claims that may be asserted after the Chapter 11 Cases against the Company or its indemnified directors and officers that may be known or unknown and the Company does not have the resources to adequately defend or dispute such claims due to the Chapter 11 Cases. The Company cannot provide any assurances as to what the Company’s total actual liabilities will be based on any such claims.

Pursuant to the terms of the Proposed Plan, and subject to its confirmation and effectiveness, a significant amount of the cash on hand as of the Effective Date will be used to settle outstanding claims against the Company, including litigation claims. Pursuant to the Bankruptcy Code, the Company is first required to pay all administrative claims in full. The Proposed Plan also requires that the Company establish the Claims Reserve for allowed and disputed claims of general unsecured creditors, inclusive of $3 million the Company would be required to pay into escrow on the Effective Date for the cash portion of the Ohio Securities Litigation Settlement. The aim of the Claims Reserve is to facilitate payment in full, with interest, of such creditors’ allowed claims as contemplated by the Proposed Plan (although there can be no assurance the Company will be able to pay such claims in full with interest). The initial amount of the Claims Reserve is currently anticipated to be approximately $45 million, as agreed upon by the Committees and approved by the Bankruptcy Court. The amount of the Claims Reserve is subject to change and could increase materially. The Claims Reserve could also be adjusted downward as claims are resolved or otherwise as a result of the claims resolution process, or as the Claims Ombudsman and the Post-Effective Date Debtors deem appropriate. Furthermore, the amount of the Claims Reserve will be limited to the amounts payable for allowed claims of general unsecured creditors but to the extent that the Claims Reserve is insufficient to pay general unsecured creditors in full with interest, such deficiency will be payable from all assets of the Post-Effective Date Debtors, as set forth in the Proposed Plan. There are additional liabilities, including but not limited to administrative claims and claims by holders of our Class A common stock and Preferred Stock among other potential classes of claimants whose claims, if allowed, will not be included in the Claims Reserve.

Pursuant to the Proposed Plan (which includes certain exceptions), effective as of the Effective Date (i) the Claims Ombudsman will be appointed to oversee the administration of claims asserted against the Debtors by general unsecured creditors and (ii) the Litigation Trustee will be appointed to oversee the Litigation Trust, which will be funded with certain retained causes of action of the Debtors, as will be determined by the Equity Committee.

All distributions under the Proposed Plan would come from the Debtors’ cash on hand and other assets, which would generally be distributed, subject to the terms of the Proposed Plan, to classes of claims and Interests in order of their respective priorities under the Bankruptcy Code. See Note 9 – Commitments and Contingencies for additional information regarding the Proposed Plan and the priority for payment with respect to claims and Interests, the Claims Reserve, the proposed settlement of certain litigation and other litigation matters and contingencies.

Although we have established the reserves described further in Note 9 to pay allowed claims under the Proposed Plan, and although we intend to pay all allowed claims in full with interest as provided by the Proposed Plan, there can be no assurance that the Claims Reserve, the Post-Effective Date Debtors’ other assets or the Post-Effective Date Debtor Amount will be sufficient to do so given the uncertainties and risks of the claims dispute and settlement process. There can be no assurance regarding the amount of claims allowed for distributions under the Proposed Plan or that such claims will not be significantly greater than may be anticipated which, could, in turn, result in the value of distributions to stakeholders being delayed, reduced, or eliminated entirely. The Claims Reserve could also be adjusted downward as claims are resolved or otherwise as a result of the claims resolution process. Inevitably, some assumptions will not materialize, and

unanticipated events and circumstances may affect the ultimate results and total amount of claims against us. Moreover, additional claims will be filed in the Chapter 11 Cases, including on account of rejection damages for executory contracts and unexpired leases rejected pursuant to the Proposed Plan and administrative claims for each of which the deadlines to file proofs of claim have not yet passed as of the date of this report. Such Clams may be substantial and may result in a greater amount of allowed claims than estimated; however, the Company cannot presently estimate a possible loss contingency or range of reasonably possible loss contingencies beyond current accruals. Estimating probable losses requires the analysis of multiple forecasted factors that often depend on judgments and potential actions by third parties.

Pursuant to, and subject to the confirmation and effectiveness of, the Proposed Plan, the Debtors will be allocated the Post-Effective Date Debtor Amount, which will be used to fund (a) the fees and expenses of the Post-Effective Date Debtors in performing their duties under the Proposed Plan, (b) expenses of the Claims Ombudsman appointed under the Proposed Plan and (c) future operational expenses of the Post-Effective Date Debtors, as permitted by the Proposed Plan. Pursuant to the Proposed Plan, the Post-Effective Date Amount may be increased from time to time after notice and an opportunity to object is provided to the Claims Ombudsman.

During the twelve months following the date of this report, the Company anticipates incurring costs relating to (a) claims administration under the Proposed Plan, (b) addressing the Foxconn Litigation, (c) prosecuting, pursuing, compromising, settling, or otherwise disposing of other retained causes of action, (d) defending the Company against any counterclaims, (e) attempting to realize value, if any, from our NOLs and (f) filing Exchange Act reports and satisfying other regulatory requirements. In the future, the Post-Effective Date Debtors expect to explore potential business opportunities, including strategic alternatives or business combinations, including those designed to maximize the Company’s tax attributes, including maximizing realization of its NOLs.

There can be no assurance as to any additional funding available for the Post-Effective Date Debtors to conduct their post-Effective Date operations, including pursuing any post-Effective Date transaction, and the amount of funding available may be reduced, including in the event that allowed claims against the Company prove to be greater than expected or in the event of an adverse ruling with respect to allowance of Foxconn’s Preferred Stock Interests. Our Preferred Stock terms include a liquidation preference. This preference amount is equal to $30 million, plus accrued dividends. Pursuant to the Proposed Plan, Foxconn’s Preferred Stock will remain outstanding and its rights with respect to its preferred equity, including with respect to any liquidation preference which has or may become due, are unimpaired. We would vigorously oppose any assertion of Foxconn’s entitlement to receive the liquidation preference, but if we would be unsuccessful, an obligation to pay this amount would likely exhaust our available resources and require us to cease operations entirely. There are no assurances that the Company would be able to secure any additional funding, as needed, or on terms acceptable to it, or that it will have sufficient funding to resolve the Foxconn Litigation, pursue and resolve the retained or other causes of action, or pursue any strategic alternatives. Our ability to raise certain forms of capital, particularly the issuance of equity securities, is significantly limited because of the ownership change restrictions required to preserve the NOLs.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates in Financial Statement Preparation

The preparation of ﬁnancial statements in accordance with GAAP is based on the selection and application of accounting policies that require us to make significant estimates and assumptions that affect the reported amounts in the consolidated financial statements, and related disclosures in the accompanying notes to the financial statements. Actual results could differ from those estimates. Estimates and assumptions are periodically reviewed and the effects of changes are reflected in the Financial Statements in the period they are determined to be necessary. The Chapter 11 Cases will result in continuous changes in facts and circumstances that will cause the Company’s estimates and assumptions to change, potentially materially.

We undertake no obligation to update or revise any of the disclosures, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Segment Information

Our chief operating decision maker reviews financial information presented on an aggregated and consolidated basis, principally to make decisions about how to allocate resources and measure our performance. Accordingly, we have determined that we have one reportable and operating segment.

Liabilities Subject to Compromise

As noted above, since filing the Chapter 11 petitions, the Company has operated as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. In the accompanying Balance Sheet, the “Liabilities subject to compromise” line is reflective of our current estimate of the potential allowed asserted pre-petition claims that are not fully secured and that have at least a possibility of not being repaid at the full claim amount in accordance with ASC 852-10 and are subject to change materially based on the proceedings and continued consideration of claims that may be modified, allowed, or disallowed. Refer to Note 9 – Commitments and Contingencies for further detail.

Reorganization Items

Reorganization items of $31.2 million represent the expenses directly and incrementally resulting from the Chapter 11 Cases and are separately reported as Reorganization items in our statements of operations. Of this amount $29.5 million was paid in 2023 and is reflected in operating activities within the consolidated statement of cash flows and the remaining amount is included within accrued legal and professional on the consolidated balance sheet as of December 31,2023. Our reorganization costs are significant and currently represent the substantial majority of our ongoing total operating expenses. These costs are subject to uncertainties inherent in the bankruptcy process and we cannot predict the duration of the Chapter 11 Cases or the extent of the associated costs.

Inventory and Inventory Valuation

During the year ended December 31, 2023, the Company reclassified its inventory to assets held for sale in connection with our Chapter 11 bankruptcy proceedings. Substantially all of the Company’s inventory was specific to the production of the Endurance and was stated at the lower of cost or net realizable value (“NRV”). NRV is the estimated value of the inventory in the context of the Chapter 11 Cases, which is minimal due to its unique nature. In addition to the NRV analysis, the Company recognized excess inventory reserves to adjust for inventory quantities in excess of anticipated Endurance production. As discussed above, the Company ceased production of the Endurance in June 2023. NRV and excess inventory charges totaled $24.1 million for the year ended December 31, 2023, and are recorded within Cost of Sales in the Company’s Consolidated Statement of Operations. No such charges were recognized for the year ended December 31, 2022, as the Company had not yet commenced commercial production of the Endurance.

All of our Endurance inventory was sold pursuant to closing the LandX Asset Purchase Agreement in the fourth quarter of 2023.

Property, plant and equipment

During the year ended December 31, 2023, the Company reclassified its property, plant, and equipment to assets held for sale in connection with our Chapter 11 bankruptcy proceedings. Historically, property, plant, and equipment were stated at cost less accumulated depreciation. Depreciation was computed using the straight-line method over the estimated useful lives of the related assets. Upon retirement or sale, the cost and related accumulated depreciation were removed from the balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repair expenditures were expensed as incurred, while major

improvements that increased functionality of the asset were capitalized and depreciated ratably to expense over the identified useful life.

Long-lived assets, such as property, plant, and equipment were 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 was 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.

Substantially all of our property, plant and equipment was sold pursuant to closing the LandX Asset Purchase Agreement in the fourth quarter of 2023.

Valuation of Long-Lived and Intangible Assets

Long-lived assets, including intangible assets, were 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. Asset impairment calculations required us to apply judgment in estimating asset group fair values and future cash flows, including periods of operation, projections of product pricing, production levels, product costs, market supply and demand, inflation, projected capital spending and, specifically for fixed assets acquired, assigned useful lives, residual values functional obsolescence, asset condition and discount rates. When performing impairment tests, we estimated the fair values of the assets using management’s best assumptions, which we believe would be consistent with the assumptions that a hypothetical marketplace participant would use. Estimates and assumptions used in these tests are evaluated and updated as appropriate. The assessment of whether an asset group should be classified as held and used or held for sale requires us to apply judgment in estimating the probable timing of the sale, and in testing for impairment loss, judgment is required in estimating the net proceeds from the sale. Actual asset impairment losses could vary considerably from estimated impairment losses if actual results are not consistent with the assumptions and judgments used in estimating future cash flows and asset fair values. Changes in these estimates and assumptions could materially affect the determination of fair value and any impairment charge.

For assets to be held and used, including identifiable intangible assets and long-lived assets subject to amortization, we initiated our review whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability of a long-lived asset subject to amortization is measured by comparison of its carrying amount to the expected future undiscounted cash flows that the asset is expected to generate. Any impairment recognized was measured by the amount by which the carrying amount of the asset exceeded its fair value. Significant management judgment is required in this process.

The Company also evaluated the decision to actively market the sale of its long-lived fixed assets in connection with the Chapter 11 Cases, against ASC Topic 360-10-45-9 “Long-Lived Assets to Be Disposed of By Sale.” See Note 4 – Property, Plant and Equipment and Assets Held for Sale for details regarding our impairment assessment and classification of assets held for sale.

Warrants

The Company accounted for its warrants in accordance with the guidance contained in ASC Topic 815-40-15-7D and 7F under which the warrants did not meet the criteria for equity treatment and were recorded as liabilities at their fair value at each reporting period. Any change in fair value was recognized in the statement of operations. As a result of the Chapter 11 Cases, the fair value of the Company’s warrants was deemed to be zero and adjusted accordingly as of June 30, 2023.

Cash, cash equivalents and short-term investments

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. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Our short-term investments consist primarily of liquid investment grade commercial paper, which are diversified among individual issuers, including non-U.S. governments, non-U.S. governmental agencies, supranational institutions, banks and corporations. The short-term investments are accounted for as available-for-sale securities. The settlement risk related to these investments is insignificant given that the short-term investments held are primarily highly liquid investment-grade fixed-income securities.

The Company maintains its cash in bank deposit and securities accounts that exceed federally insured limits. We have not experienced significant losses in such accounts and management believes it is not exposed to material credit risk.

Revenue Recognition

Revenue was recognized when control of a promised good or service was transferred to a customer in an amount that reflects the consideration the Company expects to receive in exchange for the good or service. Our performance obligations were satisfied at a point in time. We recognized revenue when the customer confirmed acceptance of vehicle possession. Costs related to shipping and handling activities are a part of fulfillment costs and are therefore recognized under cost of sales. Our sales are final and do not have a right of return clause. There are limited instances of sales incentives offered to fleet management companies. The incentives offered are of an immaterial amount per vehicle, and there were no sales incentives recognized during 2023.

The Company did not offer financing options therefore there is no impact on the collectability of revenue.

As a result of the Chapter 11 Cases, the Debtors received authorization from the Bankruptcy Court to repurchase all vehicles that were in the possession of our customers. We have repurchased and destroyed all but two of the vehicles that we sold. The repurchase of the vehicles was recognized in SG&A, as a bankruptcy claim settlement. See Note 9 — Commitments and Contingencies and Note 10 — Related Party Transactions.

Product Warranty

The estimated costs related to product warranties were accrued at the time products were sold and are charged to cost of sales which included our best estimate of the projected costs to repair or replace items under warranties and recalls if identified. As a result of the Chapter 11 Cases, the Debtors received authorization from the Bankruptcy Court to repurchase all vehicles that were in the possession of our customers. We have repurchased and destroyed all but two of the vehicles that we sold. The balance of the Company’s outstanding warranty accrual as of the date of purchase was recognized in SG&A, as an offset to the bankruptcy claim settlement expense. Note 9 — Commitments and Contingencies and Note 10 — Related Party Transactions.

Prepaid Expenses

Prepaid expenses include prepaid inventory component purchases, insurance, and information technology subscriptions and licenses. Early in the development stage of the Endurance, we made commitments to purchase inventory component volumes consistent with plans for higher productions and\or minimum order quantities required by suppliers. Given that our anticipated production volumes were not as anticipated and

our decision to cease production in June 2023, and file for Chapter 11 bankruptcy protection, the Company determined it appropriate to impair prepaid expenses and recorded a charge of $6.0 million and $14.8 million for the years ended December 31, 2023, and 2022, respectively.

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, testing and manufacturing costs, along with expenditures for prototype manufacturing, testing, validation, certification, contract and other professional services and costs. Until we commenced commercial release production of the Endurance, late in the third quarter of 2022, the costs associated with operating the Lordstown, Ohio manufacturing facility were included in R&D as they related to the design and construction of beta and pre-production vehicles, along with manufacturing readiness activities. For the year ended 2023, R&D activities also included the costs to support the sale of manufacturing assets and related technology during our bankruptcy process.

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.

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.

Recently issued accounting pronouncements

There are no recently issued, but not yet adopted, accounting pronouncements which are expected to have a material impact on the Company’s Financial Statements and related disclosures.

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Consolidated Statements of Operations
Net sales	$ 2,340	$ 194
Cost of sales	91,550	30,023
Operating Expenses
Selling, general and administrative expenses	54,413	138,270
Research and development expenses	33,343	107,816
Reorganization items	31,206
Impairment of property plant & equipment and intangibles	140,726	111,389
Total operating expenses	259,688	357,475
Loss from operations	(348,898)	(387,304)
Other income (expense)
(Loss) gain on sale of assets	(916)	100,906
Other income	123	788
Investment and interest income	6,625	3,206
Loss before income taxes	(343,066)	(282,404)
Income tax expense	0	0
Net loss	(343,066)	(282,404)
Less preferred stock dividend	2,494	261
Net loss attributable to common shareholders	$ (345,560)	$ (282,665)
Net loss per share attributable to common shareholders
Basic (in dollars per share)	$ (21.67)	$ (20.32)
Diluted (in dollars per share)	$ (21.67)	$ (20.32)
Weighted-average number of common shares outstanding
Basic (in shares)	15,945	13,912
Diluted (in shares)	15,945	13,912

FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2023

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 3 — FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The Company follows the accounting guidance in ASC Topic 820, Fair Value Measurements (“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.

As of December 31, 2022, the Company had short-term investments which were commercial paper that are classified as Level II. The Company had no such investments as of December 31,2023. The valuation inputs for the short-term investments are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets.

The Company has issued the following warrants (with exercise prices shown in pre-Reverse Stock Split amounts): (i) warrants (the “Public Warrants”) to purchase shares of Class A common stock with an exercise price of $11.50 per share, (ii) warrants (the “Private Warrants”) to purchase Class A common stock with an exercise price of $11.50 per share, (iii) warrants (the “BGL Warrants”) to purchase Class A common stock with an exercise price of $10.00 per share, and (iv) the Foxconn Warrants to purchase shares of Class A common stock with an exercise price of $10.50. The BGL Warrants were issued as part of the Business Combination in October 2020 and classified as equity as they qualified as share-based compensation under ASC Topic 718, Compensation – Stock Compensation (“ASC Topic 718”) until they expired in October 2023.

As of December 31, 2023, following the Reverse Stock Split, we had 0.113 million Foxconn Warrants with an exercise price of $157.50, 0.153 million Private Warrants with a strike price of $172.50 and 0.17 million BGL Warrants with a strike price of $150.00 outstanding. The fair value of the Foxconn Warrants was $0.3 million at issuance. The Private Warrants and the Foxconn Warrants were classified as a liability with any changes in the fair value recognized immediately in our consolidated statements of operations. As a result of the Chapter 11 Cases, the fair value of the Company’s warrants was deemed to be zero and adjusted accordingly June 30, 2023. The following table summarizes the net gain on changes in fair value related to the Private Warrants and the Foxconn Warrants:



	Year ended		Year ended
	December 31, 2023		December 31, 2022
Private Warrants	$	254	$	231
Foxconn Warrants		170		153
Net gain on changes in fair value	$	424	$	384

The Private Warrants and the Foxconn Warrants were measured at fair value using Level 3 inputs. These instruments are not actively traded and were valued using a Monte Carlo option pricing model and Black-Scholes option pricing model, respectively, that use observable and unobservable market data as inputs.

Due to the fact that the fair value of the warrants were deemed to be zero at December 31, 2023, no valuations were performed as of December 31, 2023.The stock price volatility rate utilized was 90% for the valuation as of December 31, 2022. This assumption considered 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 rate utilized was 4.237% for the valuation three year ended December 31, 2022.

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, 2023
Cash and cash equivalents	$	87,096	$	87,096	$	—	$	—
Short-term investments		—		—		—		—
Private Warrants		—		—		—		—
Foxconn Warrants		—		—		—		—


	Total		Quoted prices in active markets (Level 1)		Prices with observable inputs (Level 2)		Prices with unobservable inputs (Level 3)
December 31, 2022
Cash and cash equivalents	$	121,358	$	121,358	$	—	$	—
Short-term investments		100,297		—		100,297		—
Private Warrants		254		—		—		254
Foxconn Warrants		170						170

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


	Balance at December 31, 2022		Additions		Settlements		Gain on fair value adjustments included in earnings		Balance at December 31, 2023
Private Warrants	$	254		—		—		(254)	$	—
Foxconn Warrants		170				—		(170)		—

Non-Recurring Fair Value Measurements

During the year ended December 31, 2023, the Company had assets held for sale that had been adjusted to their fair value as the carrying value exceeded the estimated fair value, less disposal costs. The categorization of the framework used to value the assets is Level 3 given the significant unobservable inputs used to determine fair value. As of December 31, 2023, assets held for sale were either disposed of or sold to LandX under the Asset Purchase Agreement which closed in October 2023. Refer to Note 4 – Property, Plant and Equipment and Assets Held for Sale for further detail.

- 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

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2023

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 9 — COMMITMENTS AND CONTINGENCIES

Voluntary Chapter 11 Proceedings, Liabilities Subject to Compromise and Other Potential Claims

On June 27, 2023, the Company and its subsidiaries commenced the Chapter 11 Cases in the Bankruptcy Court. See Part I – Item 1 – “Business – Voluntary Chapter 11 Proceedings.”

Since filing the Chapter 11 Cases, the Company has operated as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code.

The Company received the Bankruptcy Court’s approval of its customary motions filed on June 27, 2023, which authorized the Debtors to conduct their business activities in the ordinary course, including among other things and subject to the terms and conditions of such orders: (i) pay employees’ wages and related obligations; (ii) pay certain taxes; (iii) pay critical vendors; (iv) continue to honor certain customer obligations; (v) maintain their insurance program; (vi) continue their cash management system; and (vii) establish certain procedures to protect any potential value of the Company’s NOLs.

On August 8, 2023, the Bankruptcy Court approved procedures for the Debtors to conduct a comprehensive marketing and sale process for some, all, or substantially all of their operating assets in order to maximize the value of those assets. The marketing process culminated in the Debtors entering into the LandX Asset Purchase Agreement on September 29, 2023, providing for the sale of specified assets of the Company related to the design, production and sale of electric light duty vehicles focused on the commercial fleet market free and clear of liens, claims, encumbrances, and other interests, and assume certain specified liabilities of the Company for a total purchase price of $10.2 million in cash. This transaction closed on

October 27, 2023. See Note 1 – Description of Organization and Business Operations - Description of Business.

The Company has been subject to extensive pending and threatened legal proceedings and has already incurred, and may to continue to incur, significant legal expenses in defending against these claims. The Company has also been seeking to use the tools of Chapter 11 to fully, finally, and efficiently resolve its contingent and other liabilities before the Bankruptcy Court and to pursue the Foxconn Litigation and has entered and may in the future enter into further discussions regarding settlement of these matters, and may enter into settlement agreements if it believes it is in the best interest of the Company’s stakeholders. 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. Legal fees and costs of litigation, settlement by the Company or adverse decisions with respect to the matters disclosed may result in liability that is not insured or that is in excess of insurance coverage and could significantly exceed our current accrual and ability to pay and be, individually or in the aggregate, material to the Company’s consolidated results of operations, financial condition or cash flows, and diminish or eliminate any assets available for any distribution to creditors and Interest holders in the Chapter 11 Cases.

The filing of the Chapter 11 Cases resulted in an initial automatic stay of legal proceedings against the Company, as further described below. On July 27, 2023, the Bankruptcy Court modified the automatic stay that was in effect at the time of filing the Chapter 11 Cases to allow the Karma Action (defined below) to proceed against the Company in the District Court (defined below) and that matter was settled, as further described below.

With respect to the stockholder derivative suits filed on behalf of the Company against certain of its officers and directors and certain former DiamondPeak directors prior to the Chapter 11 Cases, the derivative claims asserted in those suits became the property of the Debtors’ estate. Accordingly, the Company appointed an independent committee of directors to evaluate certain of these claims with the assistance and advice of special litigation counsel. The special litigation counsel recommended and the Board approved the release of certain officers and directors from the derivative claims as part of the Chapter 11 Cases, and the retention of the derivative claims against all other defendants in the Derivative Actions (defined below), as further discussed below.

The Proposed Plan incorporates the Ohio Securities Litigation Settlement with respect to the resolution of the Ohio Securities Litigation and the Offer and OIP with respect to the SEC Claim, which take effect if and when the SEC approves the Offer and OIP and the Proposed Plan is confirmed by the Bankruptcy Court and becomes effective on the Effective Date, as discussed further below.

The Bankruptcy Court established October 10, 2023, as the general bar date for all creditors (except governmental entities) to file their proof of claim or interest, and December 26, 2023, as the bar date for all governmental entities, which was extended until January 5, 2024, in the case of the SEC. On January 4, 2024, the SEC filed the SEC Claim with respect to the matter described under “SEC Matter” below. In addition, the deadline for parties to file proofs of claim arising from the Debtors’ rejection of an executory contract or unexpired lease is the later of (a) the general bar date or the governmental bar date, as applicable, and (b) 5:00 p.m. (ET) on the date that is 30 days after the service of an order of the Bankruptcy Court authorizing the Debtors’ rejection of the applicable executory contract or unexpired lease. Finally, pursuant to the Proposed Plan, the deadline for parties to file administrative claims against the Debtors (i.e., claims for costs and expenses of administration of the Debtors’ estates, including (i) the actual and necessary costs and expenses incurred after the Petition Date and through the Effective Date of preserving the estates and operating the businesses of the Debtors; (ii) professional fee claims; and (iii) fees and charges payable to the United States Trustee) is 30 days following the Effective Date. Claimants may have the ability to amend their proofs of claim that could significantly increase the total claims, beyond our estimates or reserve. Furthermore, proofs of claim have been filed asserting unliquidated damages or claims in respect of certain indemnification obligations or otherwise, that may be materially more than we estimate. There is also risk of additional litigation and claims that may be asserted after the Chapter 11 Cases against the Company or its

indemnified directors and officers that may be known or unknown and the Company does not have the resources to adequately defend or dispute such claims due to the Chapter 11 Cases. The Company cannot provide any assurances as to what the Company’s total actual liabilities will be based on any such claims.

Pursuant to the terms of the Proposed Plan, and subject to its confirmation and effectiveness, a significant amount of the cash on hand as of the Effective Date will be used to settle outstanding claims against the Company, including litigation claims. Pursuant to the Bankruptcy Code, the Company is first required to pay all administrative claims in full. The Proposed Plan also requires that the Company establish the Claims Reserve for allowed and disputed claims of general unsecured creditors, inclusive of $3 million the Company would be required to pay into escrow on the Effective Date for the cash portion of the Ohio Securities Litigation Settlement. The aim of the Claims Reserve is to facilitate payment in full, with interest, of such creditors’ allowed claims as contemplated by the Proposed Plan (although there can be no assurance the Company will be able to pay such claims in full with interest). The initial amount of the Claims Reserve is currently anticipated to be approximately $45 million, as agreed upon by the Committees and approved by the Bankruptcy Court. The amount of the Claims Reserve is subject to change and could increase materially. The Claims Reserve could also be adjusted downward as claims are resolved or otherwise as a result of the claims resolution process, or as the Claims Ombudsman and the Post-Effective Date Debtors deem appropriate. Furthermore, the amount of the Claims Reserve will be limited to the amounts payable for allowed claims of general unsecured creditors but to the extent that the Claims Reserve is insufficient to pay general unsecured creditors in full with interest, such deficiency will be payable from all assets of the Post-Effective Date Debtors, as set forth in the Proposed Plan. There are additional liabilities, including but not limited to administrative claims and claims by holders of our Class A common stock and Preferred Stock among other potential classes of claimants whose claims, if allowed, will not be included in the Claims Reserve.

Pursuant to the Proposed Plan, (which includes certain exceptions) effective as of the Effective Date (i) the Claims Ombudsman will be appointed to oversee the administration of claims asserted against the Debtors by general unsecured creditors and (ii) the Litigation Trustee will be appointed to oversee the Litigation Trust, which will be funded with certain retained causes of action of the Debtors, as will be determined by the Equity Committee.

All distributions under the Proposed Plan would come from the Debtors’ cash on hand and other assets, which would generally be distributed, subject to the terms of the Proposed Plan, to classes of claims and Interests in order of their respective priorities under the Bankruptcy Code. Specifically, the Proposed Plan provides for the distributions for the claims and Interests in order of priority as follows:

●

Holders of Allowed Administrative Claims, Allowed Priority Tax Claims, and Allowed Other Priority Claims are to be paid in full in cash before other payments can be made.

●

Holders of Allowed Secured Claims would either retain their lien on the collateral, be paid in full in cash, or receive the collateral securing such Allowed Secured Claim.

●

Debtors have sufficient cash on hand to pay all Allowed General Unsecured Claims plus interest in full, then the holders of the Allowed General Unsecured Claims would also receive post-petition interest on their claim amount at the Federal Judgment Rate. If the Debtors do not have sufficient cash on hand to pay in full such post-petition interest, then the holders of the Allowed General Unsecured Claims would receive their pro rata share of any post-petition interest that can be paid.

●

Allowed Intercompany Claims would be reinstated under the Proposed Plan.

●

Allowed Foxconn Preferred Stock Interests would be reinstated, which includes that all outstanding shares of Preferred Stock will remain outstanding, subject to the terms of the New Organizational Documents. In the event any distribution is to be made to holders of Allowed Foxconn Preferred Stock Interests, such distribution would be from the Post-Effective Date Debtor Cash. In addition, any such distribution to Holders of the Allowed Foxconn Preferred Stock Interests would be subject to the backstop obligation under the Ohio Securities Litigation Settlement.

●

Allowed Common Stock Interests would be reinstated, which includes that all outstanding shares of Class A common stock remain outstanding, subject to the terms of the New Organizational Documents.

●

Allowed claims relating to securities actions against the Debtors that are subordinated to General Unsecured Claims by Section 510(b) of the Bankruptcy Code (other than Section 510(b) Claims that are (i) subject to the Ohio Securities Litigation Settlement or (ii) the RIDE Section 510(b) Claims would receive Class A common stock in an amount calculated pursuant to the formula set forth in the Proposed Plan, after accounting for any recoveries from applicable insurers or other third parties and subject to the Post-Effective Date Debtors’ election to cash out such Class A common stock Interests.

●

Allowed claims, if any, against the Debtors on the same or similar basis as those set forth in the Post-Petition Securities Action may recover solely from available insurance coverage from applicable insurance policies until such insurance policies have been completely exhausted. The Debtors dispute the merits of any such claims.

●

Allowed claims of the Ohio Securities Litigation Lead Plaintiff would receive treatment pursuant to the Ohio Securities Litigation Settlement incorporated in the Proposed Plan.

As of December 31, 2023, we had recorded $30.5 million as “Liabilities subject to compromise,” in the accompanying December 31, 2023 Consolidated Balance Sheet, which reflects, in accordance with ASC 852, our current estimate of the potential allowed asserted pre-petition claims that are not fully secured and that have at least a possibility of not being repaid at the full claim amount. Under the Proposed Plan, the Company and the Committees have agreed to establish an initial $45 million Claims Reserve for the settlement of General Unsecured Claims. The Claims Reserve may be increased or decreased during the claims resolution process. The ultimate settlement of these liabilities remains subject to further analysis and is subject to the claims resolution process included in the Proposed Plan. The actual amount of allowed General Unsecured Claims may be materially different than the amount recorded by the Company as of December 31, 2023, or the initial Claim Reserve. The amount recorded is also subject to adjustments if we make changes to our assumptions or estimates related to claims as additional information becomes available to us. Such adjustments may be material, and the Company will continue to evaluate the amount and classification of its pre-petition liabilities. Any additional liabilities that are subject to compromise will be recognized accordingly, and the aggregate amount of “Liabilities subject to compromise” may change materially.

With respect to the Ohio Securities Litigation, the Post-Petition Securities Action and any other similar claims for damages arising from the purchase or sale of the Class A common stock, Section 510(b) of the Bankruptcy Code treats such claims as subordinated to all claims or Interests that are senior to the Class A common stock and having the same priority as the Class A common stock. Estimated amounts accrued as of December 31, 2023, by the Company with respect to these securities actions do not reflect this impact of the Bankruptcy Code. The plaintiffs in the Ohio Securities Litigation have reached a settlement with the Debtors, which is documented through the treatment of Ohio Securities Litigation Claims under the Proposed Plan, which settlement remains subject to Bankruptcy Court approval and effectiveness of the Proposed Plan.

“Liabilities subject to compromise” at December 31, 2023, consisted of the following:


	(in thousands)
	December 31, 2023
Accrued vendor claims		23,967
Accrued legal liabilities		6,500
Liabilities subject to compromise	$	30,467

Within Liabilities subject to compromise, as of December 31, 2023, the Company had accruals of $6.5 million for certain of its outstanding legal proceedings and potential related obligations, including the stockholder and securities actions, government claims and indemnification obligations described in more detail in Note 9 – Commitments and Contingencies and may or may not be offset by insurance. As of December 31, 2022, these amounts totaled $35.9 million and were recorded within accrued and other liabilities. The accruals do not include potential legal fees and other costs or obligations that may be incurred by the Company in connection with such matters. The amount accrued as of December 31, 2023, reflects the settlement terms contained in the Proposed Plan for the Ohio Securities Litigation and the Offer and OIP with the SEC, as well as the indemnification claims that are subject to proofs of claim filed by the defendants in the Delaware Class Action Litigation. The accrual does not include potential legal fees and other costs that may be incurred by the Company in connection with such matters. Upon effectiveness of the Proposed Plan, and the releases provided to the Company as part of the Proposed Plan and the SEC’s obligation to withdraw its proof of claim (for which the Company has been advised that the conditions thereto would be satisfied), the Company currently expects its obligations for these matters to be limited to the $3 million it will have contributed into escrow for the Ohio Securities Litigation and a potential indemnification obligation claim of $3.5 million (excluding potential legal fees); provided, however, (a) the Company has not determined whether it will object to some or all of the indemnification claims and these claims are subject to dispute as part of the Chapter 11 claims administration process (b) the Company potentially could have indemnification obligations to individual defendants not released under the settlement (as the treatment of such claims and their amounts are not known, the Company has not recorded any reserve with respect to such obligations), and (c) the failure to obtain the SEC and Bankruptcy Court approvals in a timely manner would have a material adverse effect on the Company and its ability to reorganize under Chapter 11 of the Bankruptcy Code. Additional potential recovery by the plaintiffs in the Ohio Securities Litigation would occur if proceeds are received from litigation and other causes of action being retained by the Debtors following the Effective Date (net of actual reasonable costs incurred in prosecuting such retained causes of action) in an amount of up to $7 million; however, the potential outcome of such matters, and whether any proceeds will be received, cannot be predicted at this time.

With respect to other current and potential legal claims and obligations, the Company continues to evaluate the potential resolution and impact of these matters in light of the applicable provisions of the Bankruptcy Code, indemnification rights and the terms of the Proposed Plan (which in some cases may limit any recovery to available insurance coverage), ongoing discussions with the parties to such matters and other stakeholders, or the actual amounts that may be asserted in claims submitted in the Chapter 11 Cases for indemnification, as these factors cannot yet be determined and are subject to substantial uncertainty. Accordingly, the accrued amount may be adjusted in the future based on new developments and it does not reflect a full range of possible outcomes for these proceedings, or the full amount of any damages alleged, which are significantly higher.

Upon the Effective Date, the Proposed Plan would provide certain releases to directors and officers of the Debtors that served in the capacity as a director or officer of any of the Debtors at any time from the Petition Date through the Effective Date. If approved by the Bankruptcy Court and the Proposed Plan becomes effective, the releases would be binding on holders of claims and Interests (a) that affirmatively vote to accept

the Proposed Plan or (b) are entitled to vote on the Proposed Plan, vote to reject the Proposed Plan, and check a box on their ballot opting into the releases. The releases would also be binding on related parties to those described in (a) and (b) (e.g., affiliates, predecessors, successors, and related parties as set forth in the Proposed Plan), but only to the extent the parties in (a) and (b) have authority to bind such persons or entities to the releases. In addition, pursuant to the Proposed Plan, the members of the settlement class in the Ohio Securities Litigation would also be releasing parties pursuant to the Proposed Plan and be bound by the release, discharge, and injunction provisions set forth in the Proposed Plan.

Although we have established the reserves described above to pay allowed claims under the Proposed Plan, and although we intend to pay all allowed claims in full with interest as provided by the Proposed Plan, there can be no assurance that the Claims Reserve, the Post-Effective Date Debtors’ other assets or the Post-Effective Date Debtor Amount will be sufficient to do so given the uncertainties and risks of the claims dispute and settlement process. There can be no assurance regarding the amount of claims allowed for distributions under the Proposed Plan or that such claims will not be significantly greater than may be anticipated which could, in turn, result in the value of distributions to stakeholders being delayed, reduced, or eliminated entirely. The Claims Reserve could also be adjusted downward as claims are resolved or otherwise as a result of the claims resolution process. Inevitably, some assumptions will not materialize, and unanticipated events and circumstances may affect the ultimate results and total amount of claims against us. Moreover, additional claims will be filed in the Chapter 11 Cases, including on account of rejection damages for executory contracts and unexpired leases rejected pursuant to the Proposed Plan and administrative claims for each of which the deadlines to file proofs of claim have not yet passed as of the date of this report. Such Clams may be substantial and may result in a greater amount of allowed claims than estimated; however, the Company cannot presently estimate a possible loss contingency or range of reasonably possible loss contingencies beyond current accruals. Estimating probable losses requires the analysis of multiple forecasted factors that often depend on judgments and potential actions by third parties.

Insurance Matters

The Company was notified by its primary insurer under the 2020 D&O Program that the insurer is taking the position that no coverage is available for the Ohio Securities Litigation, various shareholder derivative actions, various demands for inspection of books and records, the SEC investigation, and the investigation by the United States Attorney’s Office for the Southern District of New York described below, and certain indemnification obligations, under an exclusion to the policy called the “retroactive date exclusion.” The primary insurer under the 2020 D&O Program has identified other potential coverage issues as well. Excess coverage attaches only after the underlying insurance has been exhausted, and generally applies in conformance with the terms of the underlying insurance. The Company is analyzing the insurer’s position and intends to pursue any available coverage under this policy and other insurance. As a result of the denial of coverage, no or limited insurance may be available to us to reimburse our expenses or cover any potential losses for matters claimed during the coverage period of the 2020 D&O Program, which have been significant. The insurers in the Side A D&O portion of the 2020 D&O Program, providing coverage for individual directors and officers in derivative actions and certain other situations that are claimed during the coverage period of the 2020 D&O Program, have denied coverage, which has cast doubt on the availability of coverage for at least some individuals and/or claims.

Changes in our operations in connection with the Chapter 11 Cases has reduced our need to maintain insurance coverage at previous levels or to carry certain insurance policies. The limited insurance that we carry has expired, in the case of product liability coverage, and other coverage may expire and we may not be able to obtain replacement policies or such policies may only be available at a substantially higher cost or have materially lower coverage amounts, or both. If we reduce or no longer maintain insurance coverage, we may be subject to increased or additional potential losses and liabilities.

Karma Litigation

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 (the “Karma Action”) 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 contained 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 asserted claims for conspiracy, fraud, interstate racketeering activity, and violations of certain provisions of the California Penal Code relating to unauthorized computer access. Karma sought permanent injunctive relief and monetary damages in excess of $900 million based on a variety of claims and theories asserting very substantial losses by Karma and/or improper benefit to the Company that significantly exceed the Company’s accrual with respect to the matter and ability to pay. The Company opposed Karma’s damages claims on factual and legal grounds, including lack of causality and vigorously challenged Karma’s asserted damages.

The District Court initially stayed the Karma Action in light of the automatic stay imposed by the commencement of the Chapter 11 Cases. However, the Bankruptcy Court granted Karma relief from the automatic stay on July 31, 2023, to allow the multi-week trial in the Karma Action to proceed, which trial was scheduled for trial in California beginning on September 12, 2023. On August 14, 2023, the Company and Karma entered into a Settlement Agreement and Release memorializing an agreement to consensually resolve the claims asserted in the Karma Action (the “Karma Settlement Agreement”).

The Settlement Agreement terms include: (i) a $40 million settlement payment by the Company to Karma (the “Karma Settlement Payment”), of which $5 million is allocated to a royalty with respect to the license described in (ii) of this paragraph, (ii) a worldwide, non-exclusive, transferable, royalty-free (except for the full Karma Settlement Payment including the License Payment or Royalty therein (as defined in the Settlement Agreement)), fully paid-up, sublicensable, perpetual and irrevocable license granted by Karma to the Company and any of the Company’s assignees, which license will permit the Company or its assigns to use the intellectual property and technology, including patents, copyrights, software rights, know-how, design rights, database rights, and trade secrets, which Karma alleged in the Karma Action that the Company has misappropriated, (iii) mutual releases, and (iv) dismissal of the Karma Action, with prejudice as to all defendants after the final approval order by the Bankruptcy Court is no longer subject to any appeal. On August 28, 2023, the Bankruptcy Court issued an order approving the Karma Settlement Agreement and the Debtors made the Karma Settlement Payment.

Ohio Securities Class Litigation

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 v. Lordstown Motors Corp., et al. (Case No. 21-cv-760); Romano v. Lordstown Motors Corp., et al., (Case No. 21-cv-994); and FNY Managed Accounts LLC 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 (the “Ohio Securities Litigation Lead Plaintiff”) and Labaton Sucharow LLP as lead

plaintiff’s counsel. On September 10, 2021, the Ohio Securities Litigation 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 a motion to dismiss, which was fully briefed as of March 3, 2022. The Company filed a suggestion of bankruptcy on June 28, 2023, and filed an amended suggestion of bankruptcy on July 11, 2023, which notified the court of the filing of the Chapter 11 Cases and resulting automatic stay. On August 28, 2023, the court denied the pending motion to dismiss, without prejudice, given the notice of the automatic stay, subject to potential re-filing by the Defendants following the lifting of the stay.

Pursuant to the Ohio Securities Litigation Settlement incorporated into the Proposed Plan, if the Proposed Plan becomes effective, the Debtors will pay $3 million into escrow on the Effective Date for the benefit of the putative class members in the Ohio Securities Litigation. In addition, such putative class members would be entitled to receive a portion of any proceeds from litigation and other causes of action being retained by the Debtors following the Effective Date (net of actual reasonable costs incurred in prosecuting such retained causes of action) in an amount equal to 25% of such net proceeds, up to $7 million. Pursuant to the Proposed Plan and upon receipt of the Confirmation Order, the Confirmation Order would constitute a preliminary approval of the Ohio Securities Litigation Settlement. The Ohio Securities Litigation Settlement would be effective on the Effective Date, and the Ohio Securities Litigation Lead Plaintiff, through counsel, would be responsible for pursuing final approval of the proposed settlement thereafter. Members of the putative settlement class would be provided with the option to op-out of the settlement class pursuant to the provisions of the Confirmation Order.

In addition, pursuant to the Proposed Plan, a portion of any recoveries from litigation or other causes of action retained by the Debtors that would be owed to putative class members in connection with the Ohio Securities Litigation Settlement would be backstopped by Foxconn through Foxconn’s agreement to permit 16% of any payments made on account of Foxconn’s Preferred Stock up to $5 million to be paid into a reserve for the benefit of such class members.

There is no guarantee that the Proposed Plan, which incorporates the Ohio Securities Litigation Settlement, will be confirmed by the Bankruptcy Court or become effective. To the extent that the Ohio Securities Litigation Settlement does not become effective, we intend to vigorously defend against the claims. The proceedings are subject to uncertainties inherent in the litigation process.

Derivative Litigation

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. 21-cv-724); Patterson, et al. v. Burns, et al. (Case No. 21-cv-910); and Sarabia v. Burns, et al. (Case No. 21-cv-1010)). The derivative actions in the District Court of Delaware have been consolidated into the action captioned In re Lordstown Motors Corp. Shareholder Derivative Litigation, Case No. 21-00604-SB (the “District of Delaware Derivative Action”). 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 the District of Delaware Derivative Action pending resolution of the motion to dismiss in the Ohio Securities Class Action. On March 7, 2022, the court granted in part defendants’ motion to stay, staying the action until the resolution of the motion to dismiss in the Ohio Securities Litigation, but requiring the parties to submit a status report if the motion to dismiss was not resolved by September 3, 2022. The court further determined to dismiss without a motion, on the grounds

that the claim was premature, plaintiffs’ claim for contribution for violations of Sections 10(b) and 21D of the Exchange Act without prejudice.

The parties filed a joint status report as required because the motion to dismiss in the Ohio Securities Litigation was not resolved as of September 3, 2022. The parties filed additional court-ordered joint status reports on October 28, 2022, January 6, 2023 and April 3, 2023. On April 4, 2023, the Delaware District Court ordered the parties to submit a letter brief addressing whether the Court should lift the stay. On April 14, 2023, the parties submitted a joint letter requesting that the Court not lift the stay. On April 17, 2023, the court lifted the stay and ordered the parties to meet and confer by May 8, 2023, and submit a proposed case-management plan. On May 9, 2023, the court reinstated the stay and ordered the parties to advise the court of any developments in the Ohio Securities Litigation or material changes to Lordstown’s condition. The Company filed a suggestion of bankruptcy on June 27, 2023, which notified the court of the filing of the Chapter 11 Cases and resulting automatic stay; however the ultimate scope and effect of the stay remains subject to further proceedings before the Bankruptcy Court. The court entered an order acknowledging the effect of the automatic stay on June 28, 2023.

Another related stockholder derivative lawsuit was filed in U.S. District Court for the Northern District of Ohio on June 30, 2021 (Thai v. Burns, et al. (Case No. 21-cv-1267)) (the “Ohio Derivative Action”), 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 District of Delaware Derivative Action. On October 21, 2021, the court in the 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 Ohio Securities Class Action. The Company filed a suggestion of bankruptcy on June 28, 2023, and filed an amended suggestion of bankruptcy on July 19, 2023, which notified the court of the filing of the Chapter 11 Cases and resulting automatic stay; however, the ultimate scope and effect of the stay remains subject to further proceedings before the Bankruptcy Court.

As described in more detailed below, an independent committee of directors evaluated certain derivative claims asserted in the Ohio Derivative Action, along with those asserted in the other Derivative Actions (defined below), with the assistance and advice of special litigation counsel.

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. An additional 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. On April 19, 2022, the parties in Cormier and Jackson filed a stipulation and proposed order consolidating the two actions, staying the litigation until the resolution of the motion to dismiss in the Ohio Securities Class Action and appointing Schubert Jonckheer & Kolbe LLP and Lifshitz Law PLLC as Co-Lead Counsel. On May 10, 2022, the court granted the parties’ proposed stipulation and order to consolidate the actions into the action captioned In re Lordstown Motors Corp. Stockholder Derivative Litigation, Case No. 2021-1049-LWW (the “Delaware Chancery Derivative Action,” and together with the District of Delaware Derivative Action and the Ohio Derivative Action, the “Derivative Actions”). In addition, the May 10, 2022, order stayed the consolidated action pending the resolution of the motion to dismiss in the Ohio Securities Class Action. While the Delaware Chancery Derivative Action remains stayed, on June 24, 2022, the plaintiffs filed a consolidated complaint asserting similar claims, and substituting a new plaintiff (Ed Lomont) for Cormier, who no longer appears to be a named plaintiff in the consolidated action. On June 27, 2023, the Company filed a suggestion of bankruptcy, which notified the court of the filing of the Chapter 11 Cases and resulting automatic stay; however the ultimate scope and effect of the stay remains subject to further proceedings before the Bankruptcy Court.

On August 29, 2023, the Board adopted a resolution forming a Derivative Claim Oversight Committee consisting of three directors who were not defendants in any of the Derivative Actions (the “Oversight

Committee”) to evaluate certain of the derivative claims asserted on behalf of the Company in the Derivative Actions (the “Derivative Claims”) and make recommendations to the Board with respect to any prosecution, waiver, release, settlement, disposition, or resolution of such Derivative Claims.

On October 4, 2023, the Bankruptcy Court approved the Company’s application to retain Winston & Strawn LLP (“Winston”) as special litigation counsel in the Chapter 11 Cases (“Special Counsel”) to investigate the facts and circumstances surrounding the Derivative Claims and make recommendations to the Oversight Committee regarding appropriate action with respect to the Derivative Claims. Winston was familiar with the Derivative Claims, having advised the Board in 2022 in evaluating two stockholder derivative demand letters making allegations substantially similar to those asserted in the Derivative Actions. Leveraging that prior work, Special Counsel thereafter conducted a thorough investigation regarding the Derivative Claims and presented its findings, conclusions, and recommendations to the Oversight Committee for review and consideration.

On December 5, 2023, upon completion of the investigation and evaluation of the relative merits of the Derivative Claims as asserted against the Company’s current officers and Board members and the Company’s founder and former CEO Stephen Burns, the Oversight Committee determined, among other things, that there was a low probability of a viable Derivative Claim against any of the directors and officers of the Company that served in such capacity at any time during the pendency of the Chapter 11 Cases (the “Chapter 11 Officers and Directors”), but that there was a potentially viable Derivative Claim against Mr. Burns. The Oversight Committee unanimously adopted the recommendations of Special Counsel and recommended that the Board approve the (a) release of the Chapter 11 Officers and Directors from the Derivative Claims as part of the Chapter 11 Cases, and (b) retention by the Debtors of Derivative Claims against all other defendants in the Derivative Actions (including Mr. Burns), as appropriate, prudent and in the best interests of the Debtors’ estates as determined pursuant to 11 U.S.C. §541.

On December 7, 2023, the full Board met to discuss, among other things, the recommendations of the Oversight Committee with the Oversight Committee, the Company’s management, Special Counsel and the Company’s other advisors (including its legal and financial advisors). Following that meeting, the Board adopted a resolution approving and adopting the recommendations of the Oversight Committee.

DiamondPeak Delaware Class Action Litigation

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); and Amin v Hamamoto, et al. (C.A. No. 2021-1085)) (collectively, the “Delaware Class Action Litigation”). 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 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 the court held oral argument on February 28, 2022. On March 7, 2022, the court denied the motion to stay. On March 10, 2022, defendants filed their brief in support of their motion to dismiss. The motion to dismiss was fully briefed on April 27, 2022, and was scheduled for oral argument on May 10, 2022. On May 6, 2022, defendants withdrew the motion to dismiss without prejudice. On July 22, 2022, co-lead plaintiffs filed an amended class action complaint asserting similar claims. Defendants filed a motion to dismiss the amended class action complaint on October 14, 2022. Plaintiffs’ answering brief and Defendants’ reply brief were due on November 18 and December 9, 2022, respectively. Oral argument on the motion to dismiss was scheduled for January 6, 2023. On January 5, 2023, the defendants withdrew their motion to dismiss. On February 2, 2023, the court issued a case scheduling order setting forth pre-trial deadlines and a date for trial in March 2024. On February 3, 2023, defendants filed their answer to plaintiffs’ amended class action

complaint. On February 7, 2023, plaintiffs served the Company, as a non-party, with a subpoena for certain information, which the Company responded to on February 21, 2023.

On June 9, 2023, the court granted in part and denied in part the plaintiffs’ motion to compel regarding the appropriate scope of the Company’s response to the subpoena. On July 5, 2023, in the Chapter 11 Cases, the Company filed (i) an adversary complaint seeking injunctive relief to extend the automatic stay to the plaintiffs in the Delaware Class Action Litigation, initiating the adversary proceeding captioned Lordstown Motors Corp. v. Amin, Adv. Proc. No. 23-50428 (Bankr. D. Del.) and (ii) a motion and brief in support thereof, seeking a preliminary injunction extending the automatic stay to the Delaware Class Action Litigation. On August 3, 2023, the Bankruptcy Court denied the Company’s preliminary injunction motion. On July 21, 2023, plaintiffs filed a motion for class certification in the Delaware Class Action Litigation, and that motion was fully briefed as of September 18, 2023. The parties have advised the Company that they have reached an agreement to resolve this matter, subject to negotiation of final documentation, and the former DiamondPeak directors have asserted indemnification claims against the Company with respect to a portion of the settlement amount. The amount and treatment of that claim has not yet been resolved. The proceedings remain subject to uncertainties inherent in the litigation process.

SEC Matter

The Company 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. The Debtors have been engaged in settlement discussions with the SEC to resolve potential claims relating to these matters. While these discussions have been ongoing, the deadline for the SEC to file proofs of claim against the Debtors with the Bankruptcy Court was January 5, 2024, which was extended from the general bar date for governmental units to file proofs of claim of December 26, 2023. Prior to such deadline, on January 4, 2024, the SEC filed the SEC Claim with the Bankruptcy Court in the face amount of $45 million on the basis of “monetary remedies for violations of federal securities laws,” as stated in the proof of claim. The Proposed Plan contemplates, and includes as a condition to confirmation of the Proposed Plan, that the SEC approve the Offer and that the Offer be set forth in the OIP. The Offer and OIP remain subject to the SEC’s approval process and Bankruptcy Court approval.

Subject to receipt of necessary approvals and satisfaction of each of the terms of the Offer and the OIP, the Proposed Plan provides that following confirmation and the effectiveness of the Proposed Plan incorporating the Ohio Litigation Settlement, the SEC would withdraw the SEC Claim. Any potential settlement with the SEC or other parties for related securities claims or other matters is subject to significant uncertainty, there can be no assurance as to the timing or outcome of the resolution of these matters, and any settlement or claim amount remains subject to approval by the Bankruptcy Court and other regulatory approvals, as applicable. The Debtors cannot provide any assurances regarding what the Company’s total actual liabilities based on the SEC Claim, or other claims asserted in the Chapter 11 Cases, will be. The failure to obtain such approvals in a timely manner would have a material adverse effect on the Company and its ability to reorganize under Chapter 11 of the Bankruptcy Code.

Indemnification Obligations

The Company has potential indemnification obligations with respect to the current and former directors named in the above-referenced actions, which obligations may be significant and may not be covered by the Company’s applicable directors and officers insurance. Certain directors and officers have already, and may in the future, file claims against the Company for indemnification in existing or future matters. The Company has not conceded that it is liable for some of all of such indemnification claims, and may object to such claims.

Foxconn Litigation

On June 27, 2023, the Company commenced the Foxconn Litigation in the Bankruptcy Court seeking relief for fraudulent and tortious conduct, as well as breaches of the Investment Agreement and other agreements and that the Company believes were committed by Foxconn, which have caused substantial harm to our operations and prospects and significant damages. On September 29, 2023, Foxconn filed a motion to dismiss all counts of the Foxconn Litigation and brief in support of the same (the “Foxconn Adversary Motion to Dismiss”), asserting that all of the Company’s claims are subject to binding arbitration provisions and that the Company has failed to state a claim for relief. The Debtors believe that the Foxconn Adversary Motion to Dismiss is without merit and, on November 6, 2023, the Company filed an opposition to Foxconn’s Adversary Motion to Dismiss. Foxconn filed a reply in support of the Foxconn Adversary Motion to Dismiss on November 30, 2023. On December 7, 2023, the Debtors and the Equity Committee filed a notice of completion of briefing, which provided that the briefing of the Foxconn Adversary Motion to Dismiss has been completed and such motion is ready for disposition. No oral argument has been scheduled on the Foxconn Adversary Motion to Dismiss. The Company intends to continue to vigorously oppose that motion and pursue its claims against Foxconn.

On July 20, 2023, Hon Hai Precision Industry Co., Ltd. (a/k/a Hon Hai Technology Group), Foxconn EV Technology, Inc., and Foxconn EV System LLC filed a motion to dismiss the Chapter 11 Cases or to convert the cases under Chapter 7 of the Bankruptcy Code. The movants alleged that the Debtors filed the Chapter 11 Cases in bad faith, that the Debtors do not have a reasonable likelihood of rehabilitation, and that dismissal or conversion would benefit the Debtors’ creditors. The motion was denied by the Bankruptcy Court on August 29, 2023.

The Post-Petition Securities Action

On July 26, 2023, a putative class action lawsuit was filed against Edward Hightower and Adam Kroll, as the Company’s officers, in the U.S. District Court for the Northern District of Ohio by Bandol Lim, individually and on behalf of other stockholders (Case No. 4:23-cv-01454-BYP) asserting violations of Section 10(b), Section 20(a) of the Exchange Act and Rule 10b-5 thereunder relating to the Company’s disclosure regarding its relationship with Foxconn and the Foxconn Transactions (the “Post-Petition Securities Action”). Each of the two following sets of plaintiffs in the Post-Petition Securities Action filed motions for appointment as lead plaintiff in such action: (i) plaintiffs Bandol Lim, Nico Gatzaros, and Richard Dowell (the “RIDE Investor Group”) and (ii) plaintiffs Andrew Strickland and Joshua Strickland. On November 16, 2023, the Court appointed Andrew Strickland and Joshua Strickland as lead plaintiffs (“Lead Plaintiffs”). Lead Plaintiffs filed an amended putative class action complaint on December 29, 2023 (the “Amended Complaint”). Like the initial complaint, the Amended Complaint alleges violations of Section 10(b), Section 20(a) of the Exchange Act and Rule 10b-5 thereunder relating to the Company’s disclosure regarding its relationship with Foxconn and the Foxconn Transactions. It names Edward Hightower, Adam Kroll, and Daniel Ninivaggi as Defendants (“Defendants”) in their capacities as Company officers and/or directors. None of the Debtors is named as a Defendant in the Post-Petition Securities Action. Defendants intend to move to dismiss the Amended Complaint on or about February 27, 2024; Lead Plaintiffs would be required to file their opposition to the motion to dismiss on or before April 29, 2024; and Defendants would then have the opportunity to file a reply in support of their motion to dismiss by May 29, 2024. Defendants dispute the allegations in the Amended Complaint and intend to vigorously defend against the suit. Separately, each of the members of the RIDE Investor Group filed proofs of claim (the “RIDE Proofs of Claims”) against the Company in the Chapter 11 Cases, purportedly on behalf of themselves and the putative class in the Post-Petition Securities Action, in an unliquidated amount. The RIDE Investor Group has not sought authority from the Bankruptcy Court to file its purported class proofs of claim. The Debtors dispute, and intend to object to, each of the RIDE Proofs of Claim. The Debtors further dispute that the members of the Ride Investment Group have authority to file proofs of claim on behalf of the putative class in the Post-Petition Securities Action. Neither of the Lead Plaintiffs filed proofs of claim in the Chapter 11 Cases. Nor have the Lead Plaintiffs sought authority from the Bankruptcy Court to file class proofs of claim. The general deadline to file proofs of claim was October 10, 2023 at 5:00 p.m. (ET). Messrs. Hightower, Kroll, and Ninivaggi contend that they are insureds under the directors’ and officers’ insurance policies of the Debtors that are currently in effect and have been granted relief from the automatic stay with respect to the Company to seek advancement and payment of expenses

relating to the Post-Petition Securities Action under such policies. The Proposed Plan provides for the treatment of RIDE Section 510(b) Claims to limit recoveries (if any) from the Debtors on account of such claims to available insurance. The Debtors dispute the merits of any such claims.

NHTSA Matters

The Company’s obligations under the Safety Act administered by NHTSA for the vehicles it has manufactured and sold continue in force during the pendency of and following the Chapter 11 Cases. During the Chapter 11 Cases, the Company’s obligations are treated as a claim of the United States government against the Company. If and when the Company completes its Chapter 11 Cases, NHTSA may argue that all applicable Safety Act obligations continue to apply and the post-Effective Date Company would also be responsible for fulfilling any pre-existing Safety Act related responsibilities (e.g., remedying vehicles already under a safety recall). The Debtors received authorization from the Bankruptcy Court to repurchase all vehicles that were in the possession of our customers. We have repurchased and destroyed all but two of the vehicles that we sold (other than the vehicles sold to LAS Capital or its affiliates, for which LAS Capital assumed all warranty, product liability and recall liabilities). However, we cannot predict the extent of the liability that may arise from the Safety Act obligations for vehicles the Company has already manufactured and sold, or any claims that may be asserted by NHTSA.

CAPITAL STOCK AND EARNINGS PER SHARE - Purchase Agreements (Details) $ / shares in Units, $ in Thousands								12 Months Ended
	Nov. 22, 2022 USD ($) $ / shares shares	Nov. 22, 2022 USD ($) $ / shares	Nov. 22, 2022 USD ($) $ / shares	Nov. 22, 2022 USD ($) item $ / shares	Nov. 22, 2022 USD ($) tranche $ / shares	Nov. 07, 2022 USD ($) $ / shares shares	Jul. 23, 2021 USD ($) shares	Dec. 31, 2023 USD ($) shares	Dec. 31, 2022 USD ($) shares	Dec. 31, 2021 USD ($) shares
CAPITAL STOCK AND LOSS PER SHARE
Issuance of Class A Common stock									$ 2,114
Aggregate share purchase price \| shares						300,000
Issuance of Class A common stock									2,114
Beneficial ownership (as a percent)								25.00%
Aggregate liquidation preference								$ 30,000
Maximum
CAPITAL STOCK AND LOSS PER SHARE
Aggregate liquidation preference	$ 30,000	$ 30,000	$ 30,000	$ 30,000	$ 30,000
Common Stock
CAPITAL STOCK AND LOSS PER SHARE
Issuance of Class A Common stock						$ 70,000			$ 1
Stock issued in aggregate purchase \| shares									74,000
Preferred stock \| Foxconn \| Maximum \| Scenario, EV Program Milestone Achievement
CAPITAL STOCK AND LOSS PER SHARE
Aggregate share purchase price \| shares	700,000
Equity Funding Agreement With Y A
CAPITAL STOCK AND LOSS PER SHARE
Issuance of Class A Common stock								$ 40,400	$ 40,400	$ 49,400
Aggregate value of shares for issuance							$ 400,000
Stock issued in aggregate purchase \| shares							400,000	0	17,500,000	9,600,000
Investment agreement
CAPITAL STOCK AND LOSS PER SHARE
Threshold sale of assets as percent of consolidated assets for acquisition proposal						30.00%
Threshold issuance of securities as percent of equity securities for acquisition proposal						15.00%
Threshold beneficial ownership of equity securities for acquisition proposal						15.00%
Threshold consolidated assets representing merger, dissolution or similar transaction for acquisition proposal						30.00%
Investment agreement \| Foxconn
CAPITAL STOCK AND LOSS PER SHARE
Aggregate value of shares for issuance						$ 100,000
Proceeds from sale of equity		52,700
Percentage of common stock to be acquired			10.00%
Issuance of Class A common stock		47,300
Beneficial ownership (as a percent)			25.00%
Investment agreement \| Foxconn \| Prior to CFIUS Clearance
CAPITAL STOCK AND LOSS PER SHARE
Voting rights (as a percent)			9.99%
Investment agreement \| Foxconn \| Prior to Requisite Stockholder Approval
CAPITAL STOCK AND LOSS PER SHARE
Voting rights (as a percent)			19.99%
Investment agreement \| Foxconn \| CFIUS Clearance and Requisite Stockholder Approval
CAPITAL STOCK AND LOSS PER SHARE
Voting rights (as a percent)			24.00%
Investment agreement \| Foxconn \| Minimum
CAPITAL STOCK AND LOSS PER SHARE
Interest on asset purchase restriction			50.00%
Investment agreement \| Common Stock \| Foxconn
CAPITAL STOCK AND LOSS PER SHARE
Issuance of Class A Common stock		$ 22,700				70,000
Stock issued in aggregate purchase \| shares	1,800,000
Shares issued price per share \| $ / shares	$ 26.40	$ 26.40	$ 26.40	$ 26.40	$ 26.40
Proceeds from issuance of preferred stock		$ 47,300
Number of members that can be appointed to board \| item				2
The threshold percent of beneficial ownership for relinquishment of first board seat			50.00%
Investment agreement \| Common Stock \| Foxconn \| Scenario, Plan
CAPITAL STOCK AND LOSS PER SHARE
Beneficial ownership (as a percent)			25.00%
Investment agreement \| Preferred stock \| Scenario, EV Program Milestone Achievement
CAPITAL STOCK AND LOSS PER SHARE
Proceeds from issuance of preferred stock		70,000
Investment agreement \| Preferred stock \| Foxconn
CAPITAL STOCK AND LOSS PER SHARE
Issuance of Class A Common stock		$ 30,000
Aggregate value of shares for issuance						$ 100,000
Shares issued price per share \| $ / shares	$ 100	$ 100	$ 100	$ 100	$ 100	$ 100
Aggregate share purchase price \| shares	300,000
Number of tranches of share issue			2		2
Proceeds from issuance of preferred stock						$ 30,000
Investment agreement \| Preferred stock \| Foxconn \| Scenario, EV Program Milestone Achievement
CAPITAL STOCK AND LOSS PER SHARE
Shares issued price per share \| $ / shares	$ 100	$ 100	$ 100	$ 100	$ 100
Proceeds from issuance of preferred stock		$ 70,000
Investment agreement \| Preferred stock \| Foxconn \| Maximum \| Scenario, EV Program Milestone Achievement
CAPITAL STOCK AND LOSS PER SHARE
Aggregate share purchase price \| shares	700,000
Open Market Sales Agreement \| Jefferies LLC
CAPITAL STOCK AND LOSS PER SHARE
Stock issued in aggregate purchase \| shares								0	7,800,000
Issuance of Class A common stock								$ 12,400
Open Market Sales Agreement \| Jefferies LLC \| Maximum
CAPITAL STOCK AND LOSS PER SHARE
Number of shares to be issued \| shares						50,200,000

FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2023

FAIR VALUE MEASUREMENTS

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



	Year ended		Year ended
	December 31, 2023		December 31, 2022
Private Warrants	$	254	$	231
Foxconn Warrants		170		153
Net gain on changes in fair value	$	424	$	384

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, 2023
Cash and cash equivalents	$	87,096	$	87,096	$	—	$	—
Short-term investments		—		—		—		—
Private Warrants		—		—		—		—
Foxconn Warrants		—		—		—		—


	Total		Quoted prices in active markets (Level 1)		Prices with observable inputs (Level 2)		Prices with unobservable inputs (Level 3)
December 31, 2022
Cash and cash equivalents	$	121,358	$	121,358	$	—	$	—
Short-term investments		100,297		—		100,297		—
Private Warrants		254		—		—		254
Foxconn Warrants		170						170

Schedule of loss on fair value recognized in earnings

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


	Balance at December 31, 2022		Additions		Settlements		Gain on fair value adjustments included in earnings		Balance at December 31, 2023
Private Warrants	$	254		—		—		(254)	$	—
Foxconn Warrants		170				—		(170)		—

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities
Net loss	$ (343,066)	$ (282,404)
Adjustments to reconcile net loss to cash used by operating activities:
Stock-based compensation	7,403	18,826
Loss (gain) on disposal of fixed assets	916	(100,906)
Impairment of property plant and equipment and intangible assets	140,726	111,389
Write-off of prepaid royalty		4,728
Depreciation of property plant and equipment	54,407	8,476
Write down of inventory and prepaid inventory	24,105	48,529
Other non-cash changes	(2,183)	(384)
Changes in assets and liabilities:
Accounts receivables	204	(203)
Inventory	(10,537)	(54,646)
Prepaid expenses and other assets	15,742	10,648
Accounts payable	(11,940)	2,527
Accrued expenses and other liabilities	(12,940)	19,657
Net Cash used in operating activities	(137,163)	(213,764)
Cash flows from investing activities
Purchases of property plant and equipment	(10,152)	(54,567)
Purchases of short-term investments	(32,147)	(100,297)
Maturities of short-term investments	134,203
Investment in Foxconn Joint Venture		(13,500)
Return of investment in Foxconn Joint Venture		13,500
Proceeds from the sale of fixed assets	11,000	39,960
Net Cash provided by (used in) investing activities	102,904	(114,904)
Cash flows from financing activities
Proceeds from notes payable for Foxconn Joint Venture		13,500
Settlement of notes payable for Foxconn Joint Venture		(13,500)
Down payments received from Foxconn		100,000
Issuance of Class A common stock		2,114
Tax withholding payments related to net settled restricted stock compensation		(684)
Proceeds from Equity Purchase Agreement, net of issuance costs		40,438
Net Cash provided by financing activities		206,010
Decrease in cash and cash equivalents	(34,259)	(122,658)
Cash and cash equivalents, beginning balance	121,358	244,016
Cash and cash equivalents, ending balance	$ 87,099	121,358
Non-cash items
Capital assets acquired with payables		200,000
Foxconn investment transactions for class A stock
Cash flows from financing activities
Issuance of Class A common stock		21,724
Foxconn investment transactions for preferred stock
Cash flows from financing activities
Proceeds from issuance of preferred stock		30,000
At Market Offering
Cash flows from financing activities
Issuance of Class A common stock		$ 12,418

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Preferred stock Foxconn investment transactions for preferred stock	Preferred stock	Common Stock Sales Agreement	Common Stock Foxconn investment transactions for class A stock	Common Stock	Additional Paid-In Capital Sales Agreement	Additional Paid-In Capital Foxconn investment transactions for class A stock	Additional Paid-In Capital	Accumulated Deficit	Equity Funding Agreement With Y A	Sales Agreement	Foxconn investment transactions for class A stock	Total
Increase (Decrease) in Temporary Equity [Roll Forward]
Issuance of stock	$ 30,000
Issuance of stock (in shares)	300,000
Accrual of convertible preferred stock paid-in-kind dividends		$ 261
Ending Balance at Dec. 31, 2022		$ 30,261											$ 30,261
Ending Balance (in Shares) at Dec. 31, 2022		300,000											300,000
Beginning balance at Dec. 31, 2021					$ 19			$ 1,084,390	$ (544,809)				$ 539,600
Beginning Balance (in Shares) at Dec. 31, 2021					13,092,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of Common stock				$ 2	$ 1	$ 12,418	$ 21,722	2,113		$ 40,400	$ 12,418	$ 21,724	2,114
Issuance of Common stock (in shares)			518,000	861,000	74,000					17,500,000
Restricted stock vesting								(684)					(684)
Restricted stock vesting (in shares)					219,000
Class A Common stock issued under the Equity Purchase Agreement					$ 2			40,436					40,438
Class A Common stock issued under the Equity Purchase Agreement (in shares)					1,164,000
Accrual of convertible preferred stock paid-in-kind dividends								(261)					(261)
Stock compensation								18,826					18,826
Net loss									(282,404)				(282,404)
Ending balance at Dec. 31, 2022					$ 24			1,178,960	(827,213)				351,771
Ending Balance (in Shares) at Dec. 31, 2022					15,928,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Accrual of convertible preferred stock paid-in-kind dividends		$ 2,494											2,500
Ending Balance at Dec. 31, 2023		$ 32,755											$ 32,755
Ending Balance (in Shares) at Dec. 31, 2023		300,000											300,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of Common stock										$ 40,400
Issuance of Common stock (in shares)										0
Restricted stock vesting								(65)					$ (65)
Restricted stock vesting (in shares)					25,000
Accrual of convertible preferred stock paid-in-kind dividends								(2,494)					(2,494)
Stock compensation								7,403					7,403
Net loss									(343,066)				(343,066)
Ending balance at Dec. 31, 2023					$ 24			$ 1,183,804	$ (1,170,279)				$ 13,549
Ending Balance (in Shares) at Dec. 31, 2023					15,953,000

STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2023

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE 7— STOCK-BASED COMPENSATION

At the Company’s special meeting of stockholders held on October 22, 2020, the stockholders approved the 2020 Equity Incentive Plan (as amended, the “2020 Plan”). The aggregate number of additional shares authorized for issuance under the 2020 Plan was increased from 866,667 to 1.3 million at the 2022 annual meeting on March 21, 2022, and by an additional 533,333 shares at the annual meeting on May 22, 2023. The 2020 Plan provides for the grant of incentive stock options (“ISOs”) or non-qualified stock options (“NQSOs”), collectively “stock options”, restricted stock, restricted stock units (“RSUs”), stock appreciation rights, and performance stock units (“PSUs”), and performance shares intended to attract, retain, incentivize, and reward employees, directors or consultants.

Legacy LMC’s 2019 Stock Option Plan (the “2019 Plan”) provided for the grant of stock options 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 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.

Total stock-based compensation expense for the years ended December 31, 2023, 2022, and 2021, was $7.4 million, $18.8 million, and $18.7 million, respectively. The Company did not grant any awards under its stock plan during 2023. In early 2022, the Company notified employees it would modify awards to accelerate the vesting in conjunction with obtaining full certification and homologation, that enabled us to begin selling the Endurance to customers, so long as it took place prior to December 31, 2022. As a result of the Company achieving the milestone in November 2022, we modified approximately 30 awards covering approximately 93,000 shares of Class A common stock, that resulted in an additional charge of $4.8 million. Our named executive officers did not receive any modifications of their awards. As of December 31, 2023, 2022, and 2021, unrecognized compensation expense was $10.3 million, $33.9 million, and $63.7 million, respectively.

The Severance Agreements the Company has entered into and is expected to enter into with its named executive officers provide that, subject to the confirmation and effectiveness of the Proposed Plan (a) any unvested RSUs and options held by the named executive officers as of the Effective Date of the Proposed Plan will vest in full, (b) PSUs held as of such date by Ms. Leonard and Mr. Kroll will vest in full, while those held by Messrs. Ninivaggi and Hightower will terminate, and (c) vested options will remain exercisable for three months following the named executive officer’s termination dates.

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 option 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 seven to 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. There were no option grants during 2023. 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 2022, and 2021 was, $18.30 per share, and $86.40 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,
	2023		2022		2021
Risk-free interest rate	—	%	2.85	%	0.39	%
Expected term (life) of options (in years)	—		3.11		3.86
Expected dividends	—	%	—	%	—	%
Expected volatility	—	%	77	%	50	%

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 expected life of options granted in 2022 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 expected volatility for 2022 and 2021 were estimated by management given Lordstown’s stock volatility.

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, December 31, 2020	358	$	26.85		9.0	$	—
Granted	370		220.80
Exercised	(237)		26.85
Forfeited	(41)		338.85
Outstanding, December 31, 2021	450	$	158.40		5.18	$	—
Granted	159		39.75
Exercised	(73)		26.85
Forfeited	(44)		234.15
Expired	(97)		247.05
Outstanding, December 31, 2022	395	$	106.80		7.44	$	—
Granted	—		—
Exercised	—		—
Forfeited	(95)		109.81
Expired	(39)		190.92
Outstanding, December 31, 2023	261	$	93.04		5.62	$	—
Exercisable, December 31, 2023	167	$	83.84		4.81	$	—

*The aggregate intrinsic value is calculated as the difference between the market value of our Class A common stock as of December 31, 2023, and the respective exercise prices of the options. The market value as of December 31, 2023, was $1.20 per share, which is the closing sale price of our Class A common stock on December 31, 2023, as reported by the OTC 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
$24.60	—	$26.55	6,444	2.89	$25.29	4,222	$25.66
$26.85	—	$26.85	32,860	3.69	$26.85	32,860	$26.85
$33.75	—	$35.85	23,843	3.46	$35.30	23,644	$35.29
$51.75	—	$51.75	44,387	4.30	$51.75	22,057	$51.75
$61.65	—	$81.75	18,949	7.08	$76.52	13,203	$76.40
$82.65	—	$82.65	46,666	7.65	$82.65	31,112	$82.65
$85.35	—	$85.35	36,846	7.86	$85.35	24,562	$85.35
$87.75	—	$154.65	3,504	1.23	$129.58	3,304	$128.06
$171.15	—	$171.15	33,333	7.45	$171.15	0	$0.00
$243.30	—	$401.55	13,586	1.18	$400.05	12,421	$399.91
$24.60		$401.55	260,418	5.62	$93.04	167,385	$83.84

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 RSUs 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
			Grant Date		Aggregate
	Shares		Fair Value		Intrinsic Value
Outstanding, December 31, 2021		417	$	139.50	$	313,665
Awarded		304		31.80
Released		(262)		143.25
Forfeited		(112)		137.85
Outstanding, December 31, 2022		347	$	43.05	$	—
Awarded		10		3.80
Released		(33)		44.23
Forfeited		(131)		29.63
Outstanding, December 31, 2023		193	$	50.09	$	231,308

*The aggregate intrinsic value is calculated using the market value of our Class A common stock as of December 31, 2023. The market value as of December 31, 2023, was $1.20 per share, which was the closing sale price of our Class A common stock on December 31, 2023, as reported by the Nasdaq Global Select Market.

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2023

STOCK-BASED COMPENSATION

Schedule of fair value assumptions


	December 31,		December 31,		December 31,
	2023		2022		2021
Risk-free interest rate	—	%	2.85	%	0.39	%
Expected term (life) of options (in years)	—		3.11		3.86
Expected dividends	—	%	—	%	—	%
Expected volatility	—	%	77	%	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, December 31, 2020	358	$	26.85		9.0	$	—
Granted	370		220.80
Exercised	(237)		26.85
Forfeited	(41)		338.85
Outstanding, December 31, 2021	450	$	158.40		5.18	$	—
Granted	159		39.75
Exercised	(73)		26.85
Forfeited	(44)		234.15
Expired	(97)		247.05
Outstanding, December 31, 2022	395	$	106.80		7.44	$	—
Granted	—		—
Exercised	—		—
Forfeited	(95)		109.81
Expired	(39)		190.92
Outstanding, December 31, 2023	261	$	93.04		5.62	$	—
Exercisable, December 31, 2023	167	$	83.84		4.81	$	—

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
$24.60	—	$26.55	6,444	2.89	$25.29	4,222	$25.66
$26.85	—	$26.85	32,860	3.69	$26.85	32,860	$26.85
$33.75	—	$35.85	23,843	3.46	$35.30	23,644	$35.29
$51.75	—	$51.75	44,387	4.30	$51.75	22,057	$51.75
$61.65	—	$81.75	18,949	7.08	$76.52	13,203	$76.40
$82.65	—	$82.65	46,666	7.65	$82.65	31,112	$82.65
$85.35	—	$85.35	36,846	7.86	$85.35	24,562	$85.35
$87.75	—	$154.65	3,504	1.23	$129.58	3,304	$128.06
$171.15	—	$171.15	33,333	7.45	$171.15	0	$0.00
$243.30	—	$401.55	13,586	1.18	$400.05	12,421	$399.91
$24.60		$401.55	260,418	5.62	$93.04	167,385	$83.84

Schedule of RSUs activity

The activities of RSUs are summarized as follows:

(in thousands except for fair values)


			Weighted Average
			Grant Date		Aggregate
	Shares		Fair Value		Intrinsic Value
Outstanding, December 31, 2021		417	$	139.50	$	313,665
Awarded		304		31.80
Released		(262)		143.25
Forfeited		(112)		137.85
Outstanding, December 31, 2022		347	$	43.05	$	—
Awarded		10		3.80
Released		(33)		44.23
Forfeited		(131)		29.63
Outstanding, December 31, 2023		193	$	50.09	$	231,308

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2023	Feb. 26, 2024	Jun. 30, 2023
Document and Entity Information [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	001-38821
Entity Registrant Name	Lordstown Motors Corp.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	83-2533239
Entity Address, Address Line One	2300 Hallock Young Road
Entity Address, City or Town	Lordstown
Entity Address State Or Province	OH
Entity Address, Postal Zip Code	44481
City Area Code	234
Local Phone Number	285-4001
Title of 12(b) Security	Class A Common Stock
Trading Symbol	RIDEQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction	false
Entity Shell Company	true
Entity Public Float			$ 34.0
Entity Common Stock, Shares Outstanding		15,953,212
Auditor Name	KPMG LLP
Auditor Firm ID	185
Auditor Location	Cleveland, Ohio
Entity Central Index Key	0001759546
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false

COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands								12 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	Jan. 04, 2024 USD ($)	Oct. 27, 2023 USD ($)	Aug. 14, 2023 USD ($)	Dec. 06, 2022 lawsuit	Jul. 09, 2021 lawsuit	May 14, 2021 lawsuit	Oct. 30, 2020 USD ($)	Dec. 31, 2023 USD ($) D shares	Dec. 31, 2022 USD ($) shares	Aug. 17, 2022 shares	Dec. 13, 2021 lawsuit	Apr. 16, 2021 employee item
Loss Contingency, Information about Litigation Matters [Abstract]
Amount of claim								$ 45,000
Litigation amount sought							$ 900,000
Claims accrued								30,500
Accrued bankruptcy claims and settlements								$ 23,967
Number of days for filing claim arising \| D								30
Claim reserve								$ 45,000
Common Stock, Shares Authorized \| shares								450,000,000	450,000,000	450,000,000
Indemnification obligation agreement
Loss Contingency, Information about Litigation Matters [Abstract]
Accrued contingency amount								$ 3,500
LandX Asset Purchase Agreement [Member]
Loss Contingency, Information about Litigation Matters [Abstract]
Total purchase price		$ 10,200
Transaction Fee		$ 2,000
Accrued and Other Current Liabilities
Loss Contingency, Information about Litigation Matters [Abstract]
Aggregate reserve within Accrued and other current liabilities								6,500	$ 35,900
Lawsuit Alleging Misappropriation Of Trade Secrets
Loss Contingency, Information about Litigation Matters [Abstract]
Number of employees \| employee												2
Number of counts in amended complaint \| item												28
Class Action Lawsuits Alleging Securities Laws Violations
Loss Contingency, Information about Litigation Matters [Abstract]
Number of suits or actions filed \| lawsuit						6
Accrued contingency amount								3,000
Retained amount from debtor reorganizations								$ 7,000
Percentage of net proceeds								25.00%
Claims recognized								$ 3,000
Class Action Lawsuits Alleging Securities Laws Violations \| Foxconn
Loss Contingency, Information about Litigation Matters [Abstract]
Amount paid into debtors reserve								$ 5,000
Amount paid into debtors reserve (in percentage)								16.00%
Stockholder Derivative Complaints
Loss Contingency, Information about Litigation Matters [Abstract]
Number of suits or actions filed \| lawsuit					4
S E C Inquiry Relating To Merger
Loss Contingency, Information about Litigation Matters [Abstract]
Number of subpoenas received \| lawsuit				2
Delaware Class Action Litigation \| Pending litigation
Loss Contingency, Information about Litigation Matters [Abstract]
Number of putative class action lawsuits filed \| lawsuit											2
Karma Relief Case \| Settled Litigation
Loss Contingency, Information about Litigation Matters [Abstract]
Litigation settlement amount			$ 40,000
Allocated to royalty			$ 5,000
Subsequent event
Loss Contingency, Information about Litigation Matters [Abstract]
Amount of claim	$ 45,000

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Dec. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates in Financial Statement Preparation	Use of Estimates in Financial Statement Preparation The preparation of ﬁnancial statements in accordance with GAAP is based on the selection and application of accounting policies that require us to make significant estimates and assumptions that affect the reported amounts in the consolidated financial statements, and related disclosures in the accompanying notes to the financial statements. Actual results could differ from those estimates. Estimates and assumptions are periodically reviewed and the effects of changes are reflected in the Financial Statements in the period they are determined to be necessary. The Chapter 11 Cases will result in continuous changes in facts and circumstances that will cause the Company’s estimates and assumptions to change, potentially materially. We undertake no obligation to update or revise any of the disclosures, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Segment Information	Segment Information Our chief operating decision maker reviews financial information presented on an aggregated and consolidated basis, principally to make decisions about how to allocate resources and measure our performance. Accordingly, we have determined that we have one reportable and operating segment.
Liabilities Subject to Compromise	Liabilities Subject to Compromise As noted above, since filing the Chapter 11 petitions, the Company has operated as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. In the accompanying Balance Sheet, the “Liabilities subject to compromise” line is reflective of our current estimate of the potential allowed asserted pre-petition claims that are not fully secured and that have at least a possibility of not being repaid at the full claim amount in accordance with ASC 852-10 and are subject to change materially based on the proceedings and continued consideration of claims that may be modified, allowed, or disallowed. Refer to Note 9 – Commitments and Contingencies for further detail.
Reorganization Items	Reorganization Items Reorganization items of $31.2 million represent the expenses directly and incrementally resulting from the Chapter 11 Cases and are separately reported as Reorganization items in our statements of operations. Of this amount $29.5 million was paid in 2023 and is reflected in operating activities within the consolidated statement of cash flows and the remaining amount is included within accrued legal and professional on the consolidated balance sheet as of December 31,2023. Our reorganization costs are significant and currently represent the substantial majority of our ongoing total operating expenses. These costs are subject to uncertainties inherent in the bankruptcy process and we cannot predict the duration of the Chapter 11 Cases or the extent of the associated costs.
Inventory and Inventory Valuation	Inventory and Inventory Valuation During the year ended December 31, 2023, the Company reclassified its inventory to assets held for sale in connection with our Chapter 11 bankruptcy proceedings. Substantially all of the Company’s inventory was specific to the production of the Endurance and was stated at the lower of cost or net realizable value (“NRV”). NRV is the estimated value of the inventory in the context of the Chapter 11 Cases, which is minimal due to its unique nature. In addition to the NRV analysis, the Company recognized excess inventory reserves to adjust for inventory quantities in excess of anticipated Endurance production. As discussed above, the Company ceased production of the Endurance in June 2023. NRV and excess inventory charges totaled $24.1 million for the year ended December 31, 2023, and are recorded within Cost of Sales in the Company’s Consolidated Statement of Operations. No such charges were recognized for the year ended December 31, 2022, as the Company had not yet commenced commercial production of the Endurance. All of our Endurance inventory was sold pursuant to closing the LandX Asset Purchase Agreement in the fourth quarter of 2023.
Property, plant and equipment	Property, plant and equipment During the year ended December 31, 2023, the Company reclassified its property, plant, and equipment to assets held for sale in connection with our Chapter 11 bankruptcy proceedings. Historically, property, plant, and equipment were stated at cost less accumulated depreciation. Depreciation was computed using the straight-line method over the estimated useful lives of the related assets. Upon retirement or sale, the cost and related accumulated depreciation were removed from the balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repair expenditures were expensed as incurred, while major improvements that increased functionality of the asset were capitalized and depreciated ratably to expense over the identified useful life. Long-lived assets, such as property, plant, and equipment were 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 was 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. Substantially all of our property, plant and equipment was sold pursuant to closing the LandX Asset Purchase Agreement in the fourth quarter of 2023.
Valuation of Long-Lived and Intangible Assets	Valuation of Long-Lived and Intangible Assets Long-lived assets, including intangible assets, were 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. Asset impairment calculations required us to apply judgment in estimating asset group fair values and future cash flows, including periods of operation, projections of product pricing, production levels, product costs, market supply and demand, inflation, projected capital spending and, specifically for fixed assets acquired, assigned useful lives, residual values functional obsolescence, asset condition and discount rates. When performing impairment tests, we estimated the fair values of the assets using management’s best assumptions, which we believe would be consistent with the assumptions that a hypothetical marketplace participant would use. Estimates and assumptions used in these tests are evaluated and updated as appropriate. The assessment of whether an asset group should be classified as held and used or held for sale requires us to apply judgment in estimating the probable timing of the sale, and in testing for impairment loss, judgment is required in estimating the net proceeds from the sale. Actual asset impairment losses could vary considerably from estimated impairment losses if actual results are not consistent with the assumptions and judgments used in estimating future cash flows and asset fair values. Changes in these estimates and assumptions could materially affect the determination of fair value and any impairment charge. For assets to be held and used, including identifiable intangible assets and long-lived assets subject to amortization, we initiated our review whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability of a long-lived asset subject to amortization is measured by comparison of its carrying amount to the expected future undiscounted cash flows that the asset is expected to generate. Any impairment recognized was measured by the amount by which the carrying amount of the asset exceeded its fair value. Significant management judgment is required in this process. The Company also evaluated the decision to actively market the sale of its long-lived fixed assets in connection with the Chapter 11 Cases, against ASC Topic 360-10-45-9 “Long-Lived Assets to Be Disposed of By Sale.” See Note 4 – Property, Plant and Equipment and Assets Held for Sale for details regarding our impairment assessment and classification of assets held for sale.
Warrants	Warrants The Company accounted for its warrants in accordance with the guidance contained in ASC Topic 815-40-15-7D and 7F under which the warrants did not meet the criteria for equity treatment and were recorded as liabilities at their fair value at each reporting period. Any change in fair value was recognized in the statement of operations. As a result of the Chapter 11 Cases, the fair value of the Company’s warrants was deemed to be zero and adjusted accordingly as of June 30, 2023.
Cash, cash equivalents and short-term investments	Cash, cash equivalents and short-term investments 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. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Our short-term investments consist primarily of liquid investment grade commercial paper, which are diversified among individual issuers, including non-U.S. governments, non-U.S. governmental agencies, supranational institutions, banks and corporations. The short-term investments are accounted for as available-for-sale securities. The settlement risk related to these investments is insignificant given that the short-term investments held are primarily highly liquid investment-grade fixed-income securities. The Company maintains its cash in bank deposit and securities accounts that exceed federally insured limits. We have not experienced significant losses in such accounts and management believes it is not exposed to material credit risk.
Revenue Recognition	Revenue Recognition Revenue was recognized when control of a promised good or service was transferred to a customer in an amount that reflects the consideration the Company expects to receive in exchange for the good or service. Our performance obligations were satisfied at a point in time. We recognized revenue when the customer confirmed acceptance of vehicle possession. Costs related to shipping and handling activities are a part of fulfillment costs and are therefore recognized under cost of sales. Our sales are final and do not have a right of return clause. There are limited instances of sales incentives offered to fleet management companies. The incentives offered are of an immaterial amount per vehicle, and there were no sales incentives recognized during 2023. The Company did not offer financing options therefore there is no impact on the collectability of revenue. As a result of the Chapter 11 Cases, the Debtors received authorization from the Bankruptcy Court to repurchase all vehicles that were in the possession of our customers. We have repurchased and destroyed all but two of the vehicles that we sold. The repurchase of the vehicles was recognized in SG&A, as a bankruptcy claim settlement. See Note 9 — Commitments and Contingencies and Note 10 — Related Party Transactions.
Product Warranty	Product Warranty The estimated costs related to product warranties were accrued at the time products were sold and are charged to cost of sales which included our best estimate of the projected costs to repair or replace items under warranties and recalls if identified. As a result of the Chapter 11 Cases, the Debtors received authorization from the Bankruptcy Court to repurchase all vehicles that were in the possession of our customers. We have repurchased and destroyed all but two of the vehicles that we sold. The balance of the Company’s outstanding warranty accrual as of the date of purchase was recognized in SG&A, as an offset to the bankruptcy claim settlement expense. Note 9 — Commitments and Contingencies and Note 10 — Related Party Transactions.
Prepaid Expenses	Prepaid Expenses Prepaid expenses include prepaid inventory component purchases, insurance, and information technology subscriptions and licenses. Early in the development stage of the Endurance, we made commitments to purchase inventory component volumes consistent with plans for higher productions and\or minimum order quantities required by suppliers. Given that our anticipated production volumes were not as anticipated and our decision to cease production in June 2023, and file for Chapter 11 bankruptcy protection, the Company determined it appropriate to impair prepaid expenses and recorded a charge of $6.0 million and $14.8 million for the years ended December 31, 2023, and 2022, respectively.
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, testing and manufacturing costs, along with expenditures for prototype manufacturing, testing, validation, certification, contract and other professional services and costs. Until we commenced commercial release production of the Endurance, late in the third quarter of 2022, the costs associated with operating the Lordstown, Ohio manufacturing facility were included in R&D as they related to the design and construction of beta and pre-production vehicles, along with manufacturing readiness activities. For the year ended 2023, R&D activities also included the costs to support the sale of manufacturing assets and related technology during our bankruptcy process.
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.
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.
Recently issued accounting pronouncements	Recently issued accounting pronouncements There are no recently issued, but not yet adopted, accounting pronouncements which are expected to have a material impact on the Company’s Financial Statements and related disclosures.

INCOME TAXES

12 Months Ended

Dec. 31, 2023

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)


	2023		Rate		2022		Rate
Federal tax benefit as statutory rates	$	(72,044)	21.0	%	$	(59,305)	(21.0)	%
Stock based compensation		4,073	(1.2)			731	0.2
Other permanent differences		57	—			77	—
Research and development credit		—	—			—	—
Other		(4,515)	1.3			(1,947)	(0.7)
Rate difference		(8,250)	2.4			—	—
State & local taxes		(15,936)	4.6			(672)	(0.1)
Change in valuation allowance		96,615	(28.2)			61,115	21.64
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:


	2023		2022
Deferred tax assets:
Share based compensation	$	1,391	$	2,831
Intangible and other assets		—		745
Inventory		11,059		—
Fixed Assets		—		19,193
Capitalized research and development		20,271	—	13,292
Accruals and other reserves		9,914		7,514
Net operating losses		233,493		135,948
Total deferred tax assets		276,128		179,523
Valuation allowance		(276,128)		(179,523)
Total deferred tax assets, net of valuation allowance	$	—	$	—

At December 31, 2023 and 2022, respectively, the Company had $993.2 million and $629.6 million of federal net operating losses that carry forward indefinitely. State and local net operating losses totaled $880.3 million and $372.2 million for 2023 and 2022, respectively. At end of the 2023, total state net operating losses of $322.3 million will be able to be carried forward 10 years and local net operating losses of $558.0 million will be able to be carried forward between two to five years. No federal income taxes were paid during 2023 or 2022.

- 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
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

CAPITAL STOCK AND EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2023

CAPITAL STOCK AND EARNINGS PER SHARE

CAPITAL STOCK AND LOSS PER SHARE

NOTE 6 — CAPITAL STOCK AND EARNINGS PER SHARE

On August 17, 2022, the Company held a special meeting of stockholders whereby our stockholders voted to amend the Charter to increase our authorized shares of capital stock from 312 million to 462 million, consisting of (i) 450 million shares of Class A common stock and (ii) 12 million shares of preferred stock, each with a par value of $0.0001.

At the 2023 Annual Meeting, the stockholders of the Company approved a proposal to amend the Charter to effect a reverse split of the Company’s outstanding shares of Class A common stock at a ratio within a range of between 1:3 and 1:15, with the timing and the exact ratio of the reverse split to be determined by the Board in its sole discretion. The Board authorized the Reverse Stock Split at a 1:15 ratio, which became effective as of 12:01 a.m. Eastern Time on May 24, 2023, or the Effective Date.

The Company filed the Amendment to the Charter on May 22, 2023, which provided that, at the Effective Date, every 15 shares of the issued and outstanding Class A common stock would automatically be combined into one issued and outstanding share of Class A common stock.

We had approximately 16.0 million and 15.9 million shares of Class A common stock issued and outstanding as of December 31, 2023, and December 31, 2022, respectively, after giving effect to the Reverse Stock Split. As of December 31, 2023, there were 211,666 shares of Class A common stock issuable under equity awards that remain outstanding; however, the vesting and settlement of such awards has been suspended as a result of the Chapter 11 Cases, and if resumed, would result in the issuance of such number of shares (subject to potential withholding of shares for tax purposes that if withheld would not be deemed outstanding). Additional awards with vesting dates after December 31, 2023, and prior to the effective date of the Proposed Plan will also have vesting suspended until such effective date. All equity awards that remain outstanding and have not yet vested as of the effective date of the Proposed Plan will remain outstanding and vest in accordance with their terms and the terms of the Proposed Plan, provided that certain equity awards that were issued to named executive officers shall accelerate in accordance with the Severance Agreements (as defined below) that the Company has entered or is expected to enter into with such named executive officers. All vested options to purchase Class A common stock that remain outstanding as of the effective date of the Proposed Plan will also remain outstanding in accordance with their terms and the terms of the Proposed Plan and any options not exercised within three months of an officer’s or director’s termination of employment or board service with the Company will terminate. We had 0.3 million shares of Preferred Stock issued and outstanding as of December 31, 2023 and 2022. 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.

The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except per share and per share amounts):


		Year ended		Year ended
		December 31, 2023		December 31, 2022
Numerator
Net loss from continuing operations	$	(343,066)	$	(282,404)
Less: Accrual of convertible preferred stock paid-in-kind dividends		2,494		261
Net loss attributable to common stockholders		(345,560)		(282,665)
Denominator
Weighted average number of common shares outstanding		15,945		13,908
Weighted average number of vested shares not yet issued		—		4
Weighted average number of common shares - Basic		15,945		13,912
Dilutive common stock outstanding		—		—
Weighted average number of common shares -Diluted		15,945		13,912
Net loss per share
Net loss per share attributable to common stockholders, basic	$	(21.67)	$	(20.32)
Net loss per share attributable to common stockholders, diluted	$	(21.67)	$	(20.32)

The following outstanding potentially dilutive common stock equivalents have been excluded from the computation of diluted net loss per share attributable to common shareholders for the periods presented due to their anti-dilutive effect.


	Year ended	Year ended
	December 31, 2023	December 31, 2022
Foxconn Preferred Stock	1,128	1,033
Share awards	—	24
Foxconn Warrants	113	113
BGL Warrants	—	110
Private Warrants	154	154
Total	1,395	1,434

Investment Transactions

On November 7, 2022, the Company entered into the Investment Agreement under which Foxconn agreed to make additional equity investments (collectively, the “Investment Transactions”) in the Company through the purchase of $70 million of Class A common stock and up to $100 million in Preferred Stock, subject to certain conditions, including, without limitation, regulatory approvals and, with regard to the Preferred Stock, satisfaction of certain EV Program budget and EV Program milestones established by the parties.

The Company could use any proceeds from the sale of the Class A common stock for general corporate purposes as determined by the Board and the proceeds from the sale of the Preferred Stock was to be limited to funding the EV Program or any substitute or replacement electric vehicle program as agreed to by Foxconn and the Company.

On November 22, 2022, the Company completed the Initial Closing under the Investment Agreement, at which Foxconn purchased (a) approximately 1.8 million shares of Class A common stock at a purchase price

of $26.40 per share (such amount giving effect to the Reverse Stock Split), and (b) 0.3 million shares of Preferred Stock at a purchase price of $100 per share, for an aggregate purchase price of approximately $52.7 million.

The Investment Agreement provided for the Subsequent Common Closing, at which time Foxconn was required, the Company maintains, to purchase approximately 10% of the Class A common stock for approximately $47.3 million. The Subsequent Common Closing was to occur on or before May 8, 2023. The Company was ready, willing and able to complete the Subsequent Common Closing on a timely basis.

In addition, following the parties’ agreement to the EV Program budget and the EV Program milestones and satisfaction such milestones and other conditions set forth in the Investment Agreement, Foxconn was to purchase in the Subsequent Preferred Funding two tranches equal to 0.7 million additional shares of Preferred Stock at a purchase price of $100 per share for aggregate proceeds of $70 million. The parties agreed to use commercially reasonable efforts to agree upon the EV Program budget and EV Program milestones no later than May 7, 2023.

Foxconn has failed to proceed with the Subsequent Common Closing or any Subsequent Preferred Funding. As a result of Foxconn’s actions, the Company was deprived of critical funding necessary for its operations. The Company commenced the Foxconn Litigation in the Bankruptcy Court seeking relief for fraudulent and tortious conduct as well as breaches of the Investment Agreement and other agreements, the parties’ joint venture agreement, the Foxconn APA, and the CMA that the Company believes were committed by Foxconn. As set forth in the complaint relating to the adversary proceeding, Foxconn’s actions have caused substantial harm to the Company’s operations and prospects and significant damages. See Note 1 – Description of Organization and Business Operations – Description of Business and Note 9 – Commitments and Contingencies for additional information.

As previously disclosed, the Investment Agreement also contains the following additional terms with respect to Foxconn’s ownership of the Company’s securities. However, as detailed herein, Foxconn has refused to fulfill its obligations under the Investment Agreement and other agreements, and those breaches and the effect of Foxconn’s actions on its rights and the Company’s obligations with respect to the Company’s securities are among several matters at issue in the Foxconn Litigation.

●

Board Representation: Foxconn would have the right to appoint two designees to the Board subject to the resolution of our dispute with Foxconn and the consummation of the Subsequent Common Closing. Foxconn would relinquish one Board seat if it did not continue to beneficially own shares of Class A common stock, Preferred Stock and shares of Class A common stock issued upon conversion of shares of Preferred Stock that represent (on an as-converted basis) at least 50% of the number of shares of Class A common stock (on an as-converted basis) acquired by Foxconn in connection with the Investment Transactions and would relinquish its other Board seat if it did not continue to beneficially own at least 25% of the number of shares of Class A common stock (on an as-converted basis) acquired by Foxconn in connection with the Investment Transactions (the “25% Ownership Requirement”).

●

Termination of Foxconn Joint Venture: The Company and Foxconn terminated the Joint Venture Agreement, the Note, dated June 24, 2022, issued by Lordstown EV and guaranteed by the Company and Lordstown EV Sales (the “Note”), and all liens on assets of Lordstown EV and the Company. All remaining funds held by the Foxconn Joint Venture were distributed to Foxconn EV Technology, Inc. as a distribution for amounts contributed by it and as a repayment in full of any loans advanced by it to Lordstown EV under the Note.

●

Standstill: Until the date that is the later of December 31, 2024, and 90 days after the first day on which no Foxconn-appointed director serves on the Board and Foxconn no longer has a right to appoint any directors, without the approval of the Board, Foxconn would not (A) acquire any equity securities of the Company if after the acquisition Foxconn and its affiliates would own (i) prior to the Subsequent Common Closing, 9.99% of the capital stock of the Company that is entitled to vote generally in any election of directors of the Company (“Voting Power”), (ii) prior to the time the

Company obtains the approval of stockholders contemplated by Rule 5635 of the Nasdaq listing rules as in effect on November 7, 2022, with respect to certain equity issuances (the “Requisite Stockholder Approval”), 19.99% of the Voting Power, and (iii) at all times following the Subsequent Common Closing and the Requisite Stockholder Approval, 24% of the Voting Power (collectively, the “Ownership Limitations”), or (B) make any public announcement with respect to, or offer, seek, propose or indicate an interest in, any merger, consolidation, business combination, tender or exchange offer, recapitalization, reorganization or purchase of more than 50% of the assets, properties or securities of the Company, or enter into discussions, negotiations, arrangements, understandings, or agreements regarding the foregoing.

●

Exclusivity: Prior to the Subsequent Common Closing, (i) without Foxconn’s consent, the Company had agreed not to (A) encourage, solicit, initiate or facilitate any Acquisition Proposal (as defined below), (B) enter into any agreement with respect to any Acquisition Proposal or that would cause it not to consummate any of the Investment Transactions or (C) participate in discussions or negotiations with, or furnish any information to, any person in connection with any Acquisition Proposal, and (ii) the Company had agreed to inform Foxconn of any Acquisition Proposal that it received. An “Acquisition Proposal” means any proposal for any (i) sale or other disposition by merger, joint venture or otherwise of assets of the Company representing 30% or more of the consolidated assets of the Company, (ii) issuance of securities representing 15% or more of any equity securities of the Company, (iii) tender offer, exchange offer or other transaction that would result in any person beneficially owning 15% or more of any equity securities of the Company, (iv) merger, dissolution or similar transaction involving the Company representing 30% or more of the consolidated assets of the Company, or (v) combination of the foregoing. As discussed herein, the Company sought and received approval from the Bankruptcy Court to pursue a sale of some, all, or substantially all of its operating assets, which resulted in the closing of the transactions contemplated by the LandX Purchase Agreement on October 27, 2023, of which Foxconn received notice and did not object, other than with respect to the cure amount owed to Foxconn in connection with potential assumption and assignment of the CMA. The Company had also agreed that, while the Preferred Stock is outstanding, it would not put in place a poison pill arrangement that applies to Foxconn to the extent of its ownership of shares of Preferred Stock or Class A common stock that it acquired from the Company as of the date such arrangement is adopted by the Company.

●

Voting Agreement and Consent Rights: The terms of the Investment Agreement and Certificate of Designations provide that, until the later of (i) December 31, 2024 and (ii) 90 days after the first day on which no Foxconn-appointed director serves on the Board and Foxconn no longer has a right to appoint any directors, Foxconn agreed to vote all of its shares of Class A common stock and Preferred Stock (to the extent then entitled to vote) in favor of each director recommended by the Board and in accordance with any recommendation of the Board on all other proposals that are the subject of stockholder action (other than any action related to any merger or business combination or other change of control transaction or sale of assets). So long as the 25% Ownership Requirement is satisfied, without the consent of the holders of at least a majority of the then-issued and outstanding Preferred Stock (voting as a separate class), the Company agreed not to (i) amend any provision of the Charter or the Company’s amended and restated bylaws in a manner that would adversely affect the Preferred Stock or increase or decrease the number of shares of Preferred Stock, (ii) authorize or create, or increase the number of shares of any parity or senior securities other than securities on parity with the Preferred Stock with an aggregate liquidation preference of not more than $30 million, (iii) increase the size of the Board, or (iv) sell, license or lease or encumber any material portion of the Company’s hub motor technology and production line other than in the ordinary course of business.

●

Participation Rights: If Foxconn were to complete the Subsequent Common Closing, then after such closing and until Foxconn no longer has the right to appoint a director to the Board, other than with respect to certain excluded issuances, Foxconn would have the right to purchase its pro rata portion of equity securities proposed to be sold by the Company; provided, that the Company is not required to sell Foxconn securities if the Company would be required to obtain stockholder approval under any applicable law or regulation.

The Investment Agreement also contains closing conditions. The Investment Agreement provides for termination by mutual agreement of the parties to amend the Investment Agreement to allow such a termination, and cannot otherwise be terminated by either party following the Initial Closing.

Registration Rights Agreement

On November 22, 2022, the Company and Foxconn entered into the Registration Rights Agreement pursuant to which the Company agreed to use reasonable efforts to file and cause to be declared effective a registration statement with the SEC registering the resale of the Class A common stock issued to Foxconn, including any shares of Class A common stock issuable upon conversion of the Preferred Stock under the Investment Agreement, which was to be filed promptly following May 7, 2023. Foxconn also has customary demand and piggyback registration rights with respect to the shares of Class A common stock issued or issuable under the Investment Agreement, and indemnification rights. The Company filed a registration statement on Form S-3 with the SEC on May 11, 2023; however, has not sought to have the filing declared effective by the SEC in light of the Chapter 11 Cases, the Foxconn Litigation, the delisting of the Class A common stock and other factors.

Sales Agreement and ATM Offering

On November 7, 2022, the Company entered into an Open Market Sales Agreement (the “Sales Agreement”) with Jefferies LLC, as agent (“Jefferies”), pursuant to which the Company could offer and sell up to approximately 50.2 million shares of our Class A common stock, from time to time through Jefferies (the “ATM Offering”). During 2022, Jefferies sold approximately 7.8 million shares of Class A common stock, which resulted in net proceeds of $12.4 million. There were no shares sold in the year ending December 31, 2023. As a result of our delisting from Nasdaq, we do not anticipate any transactions under the ATM Offering in the future.

We entered into an equity purchase agreement (“Equity Purchase Agreement”) with YA II PN, LTD. (“YA”) on July 23, 2021, pursuant to which YA had 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. The Equity Purchase Agreement was terminated on November 22, 2022. During the year ended December 31, 2022, we issued 17.5 million shares to YA and received $40.4 million cash, net of equity issuance costs.

During the year ended December 31, 2023, there were no shares issued to YA under the Equity Purchase Agreement. During the year ended December 31, 2022, we issued 17.5 million shares to YA and received $40.4 million cash, net of equity issuance costs. 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.

CAPITAL STOCK AND EARNINGS PER SHARE - Basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Numerator
Net Income (Loss)	$ (343,066)	$ (282,404)
Less: Accrual of convertible preferred stock paid-in-kind dividends	2,494	261
Net loss attributable to common shareholders	$ (345,560)	$ (282,665)
Denominator
Weighted average number of common shares outstanding	15,945	13,908
Weighted average number of vested shares not yet issued		4
Weighted average number of common shares - Basic	15,945	13,912
Weighted average number of common shares - Diluted	15,945	13,912
Net loss per share
Net loss per share attributable to common shareholders, basic	$ (21.67)	$ (20.32)
Net loss per share attributable to common shareholders, diluted	$ (21.67)	$ (20.32)

STOCK-BASED COMPENSATION (Details) - $ / shares	12 Months Ended
STOCK-BASED COMPENSATION (Details) - $ / shares	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	May 22, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized				533,333
Employee Stock Option [Member]
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%
Weighted-average grant date fair value (in dollars per share)		$ 39.75	$ 220.80
Employee Stock Option [Member] \| Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average grant date fair value (in dollars per share)		$ 18.30	$ 86.40
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized	866,667,000,000
Exercisable period	7 years
Minimum \| Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercisable period	1 year
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized	1,300,000
Maximum \| Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period	10 years
Exercisable period	4 years

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

FAIR VALUE MEASUREMENTS (Details) $ / shares in Units, shares in Thousands, $ in Millions	Dec. 31, 2023 USD ($) $ / shares shares	Dec. 31, 2022
Private warrants
FAIR VALUE MEASUREMENTS
Warrant exercise price	$ 11.50
Strike price per warrant	$ 172.50
Warrants outstanding \| shares	153
BGL Warrants
FAIR VALUE MEASUREMENTS
Warrant exercise price	$ 10.00
Strike price per warrant	$ 150.00
Warrants outstanding \| shares	170
Foxconn warrants
FAIR VALUE MEASUREMENTS
Warrant exercise price	$ 157.50
Warrants outstanding \| shares	113
Public warrants
FAIR VALUE MEASUREMENTS
Warrant exercise price	$ 11.50
Foxconn warrants
FAIR VALUE MEASUREMENTS
Warrant exercise price	$ 10.50
Fair value of warrants \| $	$ 0.3
Volatility
FAIR VALUE MEASUREMENTS
Derivative Liability, Measurement Input		90
Risk Free Interest Rate
FAIR VALUE MEASUREMENTS
Derivative Liability, Measurement Input		4.237

FAIR VALUE MEASUREMENTS - Assets, Liabilities, Rollforward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Gain on fair value adjustments included in earnings	$ (424)	$ (384)
Foxconn warrants
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Derivative liability, ending balance	300
Fair Value, Inputs, Level 3 \| Private warrants
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Derivative liability, beginning balance	254
Gain on fair value adjustments included in earnings	(254)
Derivative liability, ending balance		254
Fair Value, Inputs, Level 3 \| Foxconn warrants
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Derivative liability, beginning balance	170
Gain on fair value adjustments included in earnings	$ (170)
Derivative liability, ending balance		$ 170

STOCK-BASED COMPENSATION - Expense and Unrecognized (Details) - USD ($) $ in Millions		1 Months Ended	12 Months Ended
	Nov. 22, 2022	Nov. 30, 2022	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
STOCK-BASED COMPENSATION
Stock-based compensation expense		$ 4.8	$ 7.4	$ 18.8	$ 18.7
Unrecognized compensation expense			$ 10.3	$ 33.9	$ 63.7
Number of shares modified for awards	93,000,000,000
Share based payment award		30

FAIR VALUE MEASUREMENTS - Valuation of financial instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Foxconn warrants
FAIR VALUE MEASUREMENTS
Fair value of warrants	$ 300
Fair Value, Inputs, Level 3 \| Private warrants
FAIR VALUE MEASUREMENTS
Fair value of warrants		$ 254
Fair Value, Inputs, Level 3 \| Foxconn warrants
FAIR VALUE MEASUREMENTS
Fair value of warrants		170
Fair Value, Recurring
FAIR VALUE MEASUREMENTS
Cash and Cash Equivalents	87,096	121,358
Short-term investments		100,297
Fair Value, Recurring \| Private warrants
FAIR VALUE MEASUREMENTS
Fair value of warrants		254
Fair Value, Recurring \| Foxconn warrants
FAIR VALUE MEASUREMENTS
Fair value of warrants		170
Fair Value, Recurring \| Fair Value, Inputs, Level 1
FAIR VALUE MEASUREMENTS
Cash and Cash Equivalents	$ 87,096	121,358
Fair Value, Recurring \| Fair Value, Inputs, Level 2
FAIR VALUE MEASUREMENTS
Short-term investments		100,297
Fair Value, Recurring \| Fair Value, Inputs, Level 3 \| Private warrants
FAIR VALUE MEASUREMENTS
Fair value of warrants		254
Fair Value, Recurring \| Fair Value, Inputs, Level 3 \| Foxconn warrants
FAIR VALUE MEASUREMENTS
Fair value of warrants		$ 170

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2023	Dec. 31, 2022	Aug. 17, 2022
Consolidated Balance Sheets
Temporary equity par value	$ 0.0001	$ 0.0001	$ 0.0001
Temporary equity shares authorized	12,000,000	12,000,000	12,000,000
Temporary equity, shares issued	300,000	300,000
Temporary equity shares outstanding	300,000	300,000
Preferred stock, share issued	300,000
Common stock, par value	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares authorized	450,000,000	450,000,000	450,000,000
Common stock, shares issued	15,953,212	15,928,299
Common stock, shares outstanding	15,953,212	15,928,299

INCOME TAXES - Deferred tax assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets:
Share based compensation	$ 1,391	$ 2,831
Intangible and other assets		745
Inventory	11,059
Fixed Assets		19,193
Capitalized research and development	20,271	13,292
Accruals and other reserves	9,914	7,514
Net operating losses	233,493	135,948
Total deferred tax assets	276,128	179,523
Valuation allowance	(276,128)	(179,523)
Total deferred tax assets, net of valuation allowance	$ 0	$ 0

PROPERTY, PLANT AND EQUIPMENT AND ASSETS HELD FOR SALE (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Oct. 27, 2023
PROPERTY, PLANT AND EQUIPMENT AND ASSETS HELD FOR SALE
Property, Plant and Equipment, Gross		$ 202,256
Less: Accumulated depreciation		(8,476)
Total		193,780
Impairment charges	$ 133,500	95,600
Loss (gain) on disposal of fixed assets	916	(100,906)
Operating lease impairment loss	$ 1,300	0
LandX asset purchase agreement
PROPERTY, PLANT AND EQUIPMENT AND ASSETS HELD FOR SALE
Purchase Price			$ 10,200
Tooling
PROPERTY, PLANT AND EQUIPMENT AND ASSETS HELD FOR SALE
Property, Plant and Equipment, Gross		160,878
Construction in progress
PROPERTY, PLANT AND EQUIPMENT AND ASSETS HELD FOR SALE
Property, Plant and Equipment, Gross		$ 41,378

STOCK-BASED COMPENSATION - Exercisable stock options (Details) - Employee Stock Option [Member] shares in Thousands	12 Months Ended
	Dec. 31, 2023 $ / shares shares
STOCK-BASED COMPENSATION
Lower range limit	$ 24.60
Upper range limit	$ 401.55
Options outstanding \| shares	260,418
Weighted Average Remaining Contractual Term	5 years 7 months 13 days
Weighted Average Exercise Price	$ 93.04
Exercisable, Number of options \| shares	167,385
Exercisable, Weighted Average Exercise Price	$ 83.84
Exercise Price $1.63 - $1.77 [ Member]
STOCK-BASED COMPENSATION
Lower range limit	24.60
Upper range limit	$ 26.55
Options outstanding \| shares	6,444
Weighted Average Remaining Contractual Term	2 years 10 months 20 days
Weighted Average Exercise Price	$ 25.29
Exercisable, Number of options \| shares	4,222
Exercisable, Weighted Average Exercise Price	$ 25.66
Exercise Price $1.79 - $1.79 [Member]
STOCK-BASED COMPENSATION
Lower range limit	26.85
Upper range limit	$ 26.85
Options outstanding \| shares	32,860
Weighted Average Remaining Contractual Term	3 years 8 months 8 days
Weighted Average Exercise Price	$ 26.85
Exercisable, Number of options \| shares	32,860
Exercisable, Weighted Average Exercise Price	$ 26.85
Exercise Price $1.90 - $2.35 [Member]
STOCK-BASED COMPENSATION
Lower range limit	33.75
Upper range limit	$ 35.85
Options outstanding \| shares	23,843
Weighted Average Remaining Contractual Term	3 years 5 months 15 days
Weighted Average Exercise Price	$ 35.30
Exercisable, Number of options \| shares	23,644
Exercisable, Weighted Average Exercise Price	$ 35.29
Exercise Price $2.39 - $2.39 [Member]
STOCK-BASED COMPENSATION
Lower range limit	51.75
Upper range limit	$ 51.75
Options outstanding \| shares	44,387
Weighted Average Remaining Contractual Term	4 years 3 months 18 days
Weighted Average Exercise Price	$ 51.75
Exercisable, Number of options \| shares	22,057
Exercisable, Weighted Average Exercise Price	$ 51.75
Exercise Price $3.45 - $3.45 [Member]
STOCK-BASED COMPENSATION
Lower range limit	61.65
Upper range limit	$ 81.75
Options outstanding \| shares	18,949
Weighted Average Remaining Contractual Term	7 years 29 days
Weighted Average Exercise Price	$ 76.52
Exercisable, Number of options \| shares	13,203
Exercisable, Weighted Average Exercise Price	$ 76.40
Exercise Price $4.11 - $5.45 [Member]
STOCK-BASED COMPENSATION
Lower range limit	82.65
Upper range limit	$ 82.65
Options outstanding \| shares	46,666
Weighted Average Remaining Contractual Term	7 years 7 months 24 days
Weighted Average Exercise Price	$ 82.65
Exercisable, Number of options \| shares	31,112
Exercisable, Weighted Average Exercise Price	$ 82.65
Exercise Price $5.51 - $ 5.51 [Member]
STOCK-BASED COMPENSATION
Lower range limit	85.35
Upper range limit	$ 85.35
Options outstanding \| shares	36,846
Weighted Average Remaining Contractual Term	7 years 10 months 9 days
Weighted Average Exercise Price	$ 85.35
Exercisable, Number of options \| shares	24,562
Exercisable, Weighted Average Exercise Price	$ 85.35
Exercise Price$5.69 - $5.85 [Member]
STOCK-BASED COMPENSATION
Lower range limit	87.75
Upper range limit	$ 154.65
Options outstanding \| shares	3,504
Weighted Average Remaining Contractual Term	1 year 2 months 23 days
Weighted Average Exercise Price	$ 129.58
Exercisable, Number of options \| shares	3,304
Exercisable, Weighted Average Exercise Price	$ 128.06
Exercise Price $6.84 - $11.41 [Member]
STOCK-BASED COMPENSATION
Lower range limit	171.15
Upper range limit	$ 171.15
Options outstanding \| shares	33,333
Weighted Average Remaining Contractual Term	7 years 5 months 12 days
Weighted Average Exercise Price	$ 171.15
Exercisable, Number of options \| shares	0
Exercisable, Weighted Average Exercise Price	$ 0.00
Exercise Price $16.22 - $ 26.77 [Member]
STOCK-BASED COMPENSATION
Lower range limit	243.30
Upper range limit	$ 401.55
Options outstanding \| shares	13,586
Weighted Average Remaining Contractual Term	1 year 2 months 4 days
Weighted Average Exercise Price	$ 400.05
Exercisable, Number of options \| shares	12,421
Exercisable, Weighted Average Exercise Price	$ 399.91

CAPITAL STOCK AND EARNINGS PER SHARE - Anti-dilutive effect on dilutive net loss per share (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, earnings per share amount	1,395	1,434
Foxconn convertible preferred shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, earnings per share amount	1,128	1,033
Employee Stock Option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, earnings per share amount		24
Warrants issued to Foxconn
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, earnings per share amount	113	113
BGL Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, earnings per share amount		110
Private warrants to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities, earnings per share amount	154	154

MEZZANINE EQUITY (Details) $ / shares in Units, $ in Thousands, shares in Millions						12 Months Ended
	Nov. 22, 2022 $ / shares shares	Nov. 22, 2022 USD ($) $ / shares	Nov. 22, 2022 $ / shares	Nov. 22, 2022 tranche $ / shares	Nov. 07, 2022 USD ($) $ / shares shares	Dec. 31, 2023 USD ($) D $ / shares	Dec. 31, 2022 USD ($)
Business Acquisition [Line Items]
Convertible preferred shares, shares issued \| shares					0.3
Percentage of receive dividends at a rate						8.00%
Temporary Equity Conversion Price \| $ / shares						$ 29.04
Convertible, threshold percentage of stock price trigger						200.00%
Convertible, threshold trading days \| D						20
Convertible, threshold consecutive trading days \| D						30
Beneficial ownership (as a percent)						25.00%
Accrual of Preferred stock dividends						$ 2,500
Liquidation preference per share \| $ / shares						$ 100
Aggregate value of dividends of Preferred Stock						$ 2,800
Series A Convertible Preferred
Business Acquisition [Line Items]
Accrued unpaid dividends (per share) \| $ / shares						$ 100
Preferred stock
Business Acquisition [Line Items]
Accrual of Preferred stock dividends						$ 2,494	$ 261
Maximum \| Preferred stock \| Foxconn \| Scenario, EV Program Milestone Achievement [Member]
Business Acquisition [Line Items]
Convertible preferred shares, shares issued \| shares	0.7
Investment agreement \| Foxconn
Business Acquisition [Line Items]
Beneficial ownership (as a percent)			25.00%
Investment agreement \| Preferred stock \| Scenario, EV Program Milestone Achievement [Member]
Business Acquisition [Line Items]
Proceeds from issuance of preferred stock		$ 70,000
Investment agreement \| Preferred stock \| Foxconn
Business Acquisition [Line Items]
Convertible preferred shares, shares issued \| shares	0.3
Shares issued price per share \| $ / shares	$ 100	$ 100	$ 100	$ 100	$ 100
Proceeds from issuance of preferred stock					$ 30,000
Number of tranches of share issue			2	2
Investment agreement \| Preferred stock \| Foxconn \| Scenario, EV Program Milestone Achievement [Member]
Business Acquisition [Line Items]
Shares issued price per share \| $ / shares	$ 100	$ 100	$ 100	$ 100
Proceeds from issuance of preferred stock		$ 70,000
Investment agreement \| Maximum \| Preferred stock \| Foxconn \| Scenario, EV Program Milestone Achievement [Member]
Business Acquisition [Line Items]
Convertible preferred shares, shares issued \| shares	0.7
Investment Agreement First Tranche \| Preferred stock \| Foxconn \| Scenario, EV Program Milestone Achievement [Member]
Business Acquisition [Line Items]
Proceeds from issuance of preferred stock		30,000
Investment Agreement First Tranche \| Maximum \| Preferred stock \| Foxconn \| Scenario, EV Program Milestone Achievement [Member]
Business Acquisition [Line Items]
Convertible preferred shares, shares issued \| shares	0.3
Investment Agreement Second Tranche \| Preferred stock \| Foxconn \| Scenario, EV Program Milestone Achievement [Member]
Business Acquisition [Line Items]
Convertible preferred shares, shares issued \| shares	0.4
Investment Agreement Second Tranche \| Maximum \| Preferred stock \| Foxconn \| Scenario, EV Program Milestone Achievement [Member]
Business Acquisition [Line Items]
Proceeds from issuance of preferred stock		$ 40,000

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Dec. 31, 2023 USD ($) segment item	Dec. 31, 2022 USD ($)
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Inventory Adjustments	$ 24,105,000	$ 48,529,000
Impairment of prepaid and assets	6,000,000.0	14,800,000
Sales incentives	0
Impairment charges	$ 133,500,000	$ 95,600,000
Number of reportable segments \| segment	1
Number of operating segments \| segment	1
Reorganization items	$ 31,206,000
Payment for debtor	$ 29,500,000
Number of Vehicles Repurchased \| item	2
Cost of sales
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Inventory Adjustments	$ 24,100,000

STOCK-BASED COMPENSATION - Weighted average assumptions (Details) - Employee Stock Option [Member]	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Weighted average assumptions
Risk-free interest rate	2.85%	0.39%
Expected term (life) of options (in years)	3 years 1 month 9 days	3 years 10 months 9 days
Expected volatility	77.00%	50.00%

INCOME TAXES (Details) - USD ($) $ in Millions	12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	$ 993.2	$ 629.6
Federal income taxes	0.0	0.0
Domestic Tax Authority [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	993.2
State and local
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	880.3	$ 372.2
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	$ 322.3
Operating loss carried forward	10 years
Local
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	$ 558.0
Local \| Minimum
Operating Loss Carryforwards [Line Items]
Operating loss carried forward	2 years
Local \| Maximum
Operating Loss Carryforwards [Line Items]
Operating loss carried forward	5 years

INCOME TAXES - Reconciliation of the statutory federal income tax (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Amount
Federal tax benefit as statutory rates	$ (72,044)	$ (59,305)
Stock-based compensation	4,073	731
Other permanent differences	57	77
Other	(4,515)	(1,947)
Rate difference	(8,250)
State & Local Taxes	(15,936)	(672)
Change in valuation allowance	96,615	61,115
Total tax benefit	$ 0	$ 0
Rates
Federal tax benefit as statutory rates	(21.00%)	(21.00%)
Stock-based compensation, rates	(1.20%)	0.20%
Other, rates	(1.30%)	0.70%
Rate difference, rates	2.40%
State & Local Taxes, rates	4.60%	(0.10%)
Change in valuation allowance, rate	(28.20%)	21.64%
Total tax benefit, rate	0.00%	0.00%

CAPITAL STOCK AND EARNINGS PER SHARE (Details)	May 24, 2023	May 22, 2023	Dec. 31, 2023 $ / shares shares	Dec. 31, 2022 $ / shares shares	Aug. 17, 2022 $ / shares shares	Aug. 16, 2022 shares
CAPITAL STOCK AND LOSS PER SHARE
Shares authorized per charter					462,000,000	312,000,000
Common stock, shares authorized			450,000,000	450,000,000	450,000,000
Temporary equity shares authorized			12,000,000	12,000,000	12,000,000
Common stock, par value \| $ / shares			$ 0.0001	$ 0.0001	$ 0.0001
Temporary equity par value \| $ / shares			$ 0.0001	$ 0.0001	$ 0.0001
Exchange ratio	0.067
Common stock, shares issued			15,953,212	15,928,299
Common stock, shares outstanding			15,953,212	15,928,299
Shares issuable under equity awards			211,666
Temporary equity, shares issued			300,000	300,000
Temporary equity shares outstanding			300,000	300,000
Preferred stock, share issued			300,000
Minimum
CAPITAL STOCK AND LOSS PER SHARE
Exchange ratio		0.33
Maximum
CAPITAL STOCK AND LOSS PER SHARE
Exchange ratio		0.067