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Lordstown Motors Disclosures Federal Investigation of Last Year’s SPAC Merger

Image Source: Lordstown Motors

Lordstown Motors Corporation (Nasdaq: RIDE), a startup electric truck maker, Federal investigation in progress Merger with Diamond Peak Holdings Corporation, a special purpose acquisition company (SPAC).

A specific issue is the reporting of vehicle pre-orders by Rosetown.

Ohio-based companies Submission of revised prospectus Following an investigation initiated by the US Securities and Exchange Commission earlier this year, the United States Attorney for the Southern District of New York has notified the investigation.

A federal investigation has gone through a difficult period of months as the three-year-old company is about to launch its first model, an all-electric pickup truck called Endurance, in September.

March, featured short seller Hindenburg Research Rosetown executives made a splash with reports accusing consumers and investors of misleadingly receiving more than $ 1.4 billion worth of pre-orders worth $ 1.4 billion for endurance.

The report claimed that Rosetown had exaggerated pre-orders and their overall financial position to raise capital.

Report to SEC Inquiry Comments by key executives made in Lordstown.

Later, an internal investigation confirmed the results of the report, and CEO Steve Burns and Chief Financial Officer Julio Rodriguez resigned in June.

In the latest financial report, Form 10-Q for the March 2021 quarter, Lordstown has revealed that it is suffering from cash flow and there is “significant suspicion” that it will continue to operate for the next 12 months.

Nonetheless, the company never returns to its target production start and wants to raise more capital through asset-backed lending or government lending programs. The Wall Street Journal..

so statement “We are committed to cooperating with regulatory or government investigations and investigations,” Lordstown said on Friday.

The startup also looks forward to closing this chapter so that “our new leadership, and the entire dedicated team, can focus on the production of the first and best full-size all-electric pickup truck, Lordstown Endurance. “.

Lordstown raised $ 675 million in merger last fall $ 1.6 billion..

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Many other newly published EV startups, including Nikola Co., Ltd. And CanoeWe also face close scrutiny from the SEC and other regulators.

In April, the SEC announced that it would begin reviewing and investigating submitted documents. Clearer disclosure of SPAC To make sure investors are not misunderstood. The agency’s announcement follows the dramatic increase in SPAC use and popularity over the past six months.

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Source: Equity news



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