Lordstown Motors (RIDE) shares extended declines Thursday after the electric tuck maker said its stock will be delisted from the Nasdaq just days after it filed for Chapter 11 bankruptcy protection.
In a Securities & Exchange Commission filing published Thursday, Lordstown said it had received a de-listing notice from the Nasdaq following its bankruptcy filing earlier this week, adding that its stock will cease trading on July 7.
Lordstown filed for Chapter 11 bankruptcy protection in Delaware on Monday after failing to secure an investment from Taiwan-based electronics group Foxconn, but said it had "significant" cash on hand, and is debt free, and vowed to continue with its normal operations during the restructuring process.
"On June 28, 2023, the Company received written notice from the Listing Qualifications Department of the Nasdaq Stock Market notifying the Company that, as a result of the Chapter 11 Cases and in accordance with Nasdaq Listing Rules, Nasdaq had determined that the Company’s Class A common stock will be delisted from the Nasdaq Global Select Market," Lordstown said. "The Company does not intend to appeal this determination."
Lordstown shares, which once traded as high as $436 when the company had a peak valuation of $3.2 billion, were marked 1% lower in early Thursday trading to change hands at $2.10 each.
Lordstown said Foxconn, the world's biggest smartphone assembler and a key supply chain partner to Apple (AAPL), failed to live up to an agreement to provide $170 million in fund. Foxconn holds an 8.4% stake in the group based on a previous funding around worth around $53 million.
Lordstown's complaint against Foxconn -- formally known as Hon Hai Precision Manufacturing-- alleges that the group, which purchased the truckmaker's Lordstown, Ohio facility at a knock-down price in 2022, acted in "bad faith destroy Lordstown's business" while advancing its own interests.
"As one of the early entrants to the EV industry, we have delivered the Endurance, an innovative and highly-capable EV with significant commercial and retail potential – and had subsequently engaged with Foxconn in a purposeful, strategic partnership to leverage this expertise into a broader EV development platform," said CEO Edward Hightower.
"Despite our best efforts and earnest commitment to the partnership, Foxconn willfully and repeatedly failed to execute on the agreed-upon strategy, leaving us with Chapter 11 as the only viable option to maximize the value of Lordstown's assets for the benefit of our stakeholders," he added. "We will vigorously pursue our litigation claims against Foxconn accordingly."
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