Beleaguered electric vehicle startup Lordstown Motors’ stock shares have taken another hit after the company said Monday that CEO Steve Burns and CFO Julio Rodriguez have resigned, just a few weeks after Burns was reassuring investors of the company’s bright future.
Lordstown Motors’ Lead Independent Director Angela Strand was appointed executive chairwoman to oversee the transition until a permanent CEO is found. Becky Roof will service as Interim CFO. Roof has acted as interim CFO at a number of other companies, including Saks Fifth Avenue and Eastman Kodak.
The company, which was founded as an offshoot of former CEO Burns’ other company, Workhorse Group, announced less than stellar first quarter results in May, including news that production volumes would likely be half – from around 2,200 vehicles to just 1,000 – should the company not identify more funding.
The EV startup is one of a growing suite of companies in the transportation space that have gone public via a merger with a special purpose acquisition company (SPAC). The deal, announced last August, gave Lordstown around $675 million in gross proceeds and a market value of $1.6 billion.
Yet, less than a year after the deal was announced, Lordstown told the SEC in a filing that it does not have enough capital to manufacture and deliver the electric pickup, dubbed – note the irony – ‘Endurance.’ “The Company believes that its current level of cash and cash equivalents are not sufficient to fund commercial scale production and the launch of sale of such vehicles,” the filing said. “These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of these unaudited condensed consolidated financial statements.”
While Burns and Rodriguez are the most prominent corporate figures in the shakeup, Lordstown also announced other changes to its executive team Monday. Jane Ritson-Parsons, who was acting as Lordstown Motors interim chief brand officer, was promoted to Chief Operating Officer; and former head of investor relations Carter Driscoll was promoted to Vice President, Corporate Development, Capital Markets and Investor Relations.
Lordstown on Monday also released the results of a report conducted by a special internal committee accusations that the company was faking preorders of its debut electric pickup, in a report by short seller firm Hindenburg Research. Lordstowns’ independent inquiry is separate to an ongoing investigation from the U.S. Securities and Exchange Commission over the allegations.
While the report is “is, in significant respects, false and misleading,” the committee said that the investigation did identify some inaccuracies regarding some statements about the pre-orders. In particular, some entities that made a large number of pre-orders made commitments that were not firm enough to be included in the pre-order disclosures. Overall, the special committees’ findings overwhelmingly reject Hindenburgs’ accusations against the company.