NU RIDE INC. This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the accompanying condensed consolidated financial statements and notes. Forward-looking statements in this MD&A are not guarantees of future performance and may involve risks and uncertainties that could cause actual results to differ materially from those projected. Refer to the "Cautionary Note Regarding Forward-Looking Statements" above and Item 1A. Risk Factors in our Form 10-K/A and this Form 10-Q for a discussion of these risks and uncertainties.
Our mission is to be a catalyst in the world's transition to sustainable energy.
We design, develop, and intend to manufacture the Endurance, the first electric
full-size pickup truck targeted for sale to fleet customers. In addition, we
intend to leverage our technologies by investing in the development additional
all-electric vehicles geared for the commercial market. Located in
Since inception, we have been developing our flagship vehicle, the Endurance, an
electric full-size pickup truck. We introduced the Endurance in
This responsible commercial plan is important for three reasons: 1) to ensure that we provide our fleet customers with the time necessary to experience and then build out the necessary charging infrastructure for larger deployments and for them to gain experience with the Endurance's performance in the real-world; 2) to manage our supply chain challenges prudently, particularly as shortages and COVID impacts persist through the next few quarters; and 3) to fortify our capital position to fully support our commercial launch.
Our goal is to achieve a leadership position as an OEM vehicle supplier to the commercial fleet industry. We intend to do so by focusing on the following strengths:
a highly experienced and proven senior management team with over 100 years of
? collective experience in the automotive and electric vehicle areas from
prominent OEMs, including Workhorse Group, Tesla, Karma,
and
the near-production-ready, strategically located manufacturing
? Complex, that we believe offers significant advantages in terms of the time and
cost necessary to reach full-scale commercial production;
approximately 800,000 square feet within the plant complex allocated for
? in-wheel hub motor and lithium-ion battery pack production and assembly, which
together will account for our propulsion production;
the unique and efficient design of the Endurance incorporating advanced
? technology and engineering, including the use of in-wheel hub motors resulting
in what we believe will be the fewest moving parts of any comparable vehicle
currently available; and
a safe, reliable and efficient vehicle, designed for and targeted to the needs
? of the fleet market, that we believe will offer a significantly reduced total
cost of ownership and compelling value as compared to currently available
alternatives.
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We are also evaluating whether there are opportunities to strategically leverage the value of our facility and technologies through potential relationships with third parties as a means to generate financing and revenues. Such relationships could include, but are not limited to, third parties building vehicles in our facility, us building vehicles for third parties or sales of our technologies, such as battery packs or hub motors, to third parties.
Results of Operations for the three months ended
(in thousands)
Three months ended Three months ended
June 30, 2021 June 30, 2020
Net sales $ - $ -
Operating expenses
Selling and administrative expenses 33,793 5,155
Research and development expenses 76,544 4,786
Total operating expenses 110,337 9,941
Loss from operations (110,337) (9,941)
Other income (expense)
Other income 1,877 2,346
Interest income (expense) 260 (363)
Loss before income taxes (108,200) (7,958)
Income tax expense - -
Net loss $ (108,200) $ (7,958)
Selling and Administrative Expense
Selling and administration expenses increased
Research and Development Expense
Research and development expenses increased
Results of Operations for the six months ended
(in thousands)
Six months ended Six months ended
June 30, 2021 June 30, 2020
Net sales $ - $ -
Operating expenses
Selling and administrative expenses 48,187 8,677
Research and development expenses 168,356 13,254
Total operating expenses 216,543 21,931
Loss from operations (216,543) (21,931)
Other (expense) income
Other (expense) income (17,255) 2,472
Interest income (expense) 387 (364)
Loss before income taxes (233,411) (19,823)
Income tax expense - -
Net loss $ (233,411) $ (19,823)
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Selling and Administrative Expense
Selling and administration expenses increased
Research and Development Expense
Research and development expenses increased
Liquidity and Capital Resources
In 2021, our research and development expenses and capital expenditures have increased significantly over 2020 levels to build capacity and invest in additional products and technologies, and are higher than anticipated due to additional spending needed to (1) complete our beta program, (2) conduct vehicle validation tests, (3) secure necessary parts/equipment for production, and (4) utilize third-party engineering resources. This was due in part to the stress that the COVID-19 pandemic has put on the global automotive supply chain. As we have engaged potential third-party suppliers for certain components, the pricing and/or availability being offered was not consistent with our expectations and timing, so we made a strategic decision to bring development of certain components, such as the frame, in house. While this decision requires more upfront spending and the need for additional funding from future financing, we believe the return on our investments will allow us to control key components and the projected timelines that we establish.
In addition, in order to secure adequate supply of battery cells, we have
agreements with certain suppliers which obligate us to purchase a minimum volume
at approximately
Pursuant to the requirements of the
We had cash and cash equivalents of approximately
We believe that our current level of cash and cash equivalents are not sufficient to fund commercial scale production and the launch of sale of such vehicles. 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 the unaudited condensed consolidated financial statements included in this report.
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In an effort to alleviate these conditions, management is currently evaluating
various funding alternatives and may seek to raise additional funds through the
issuance of equity, mezzanine or debt securities, through arrangements with
strategic partners or through obtaining credit from government or financial
institutions. As part of our funding efforts, on
As we seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at all. Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry. As a result of these uncertainties, and notwithstanding management's plans and efforts to date, there continues to be substantial doubt about our ability to continue as a going concern.
We accepted an invitation from the
Expected Endurance production in 2021 will be limited and we will need additional funding in the near term to ramp for 2022 production and to establish higher volume, sustained capacity and generally to reach full scale commercial production as contemplated by our business plan. In order to manage liquidity, expenditures will continue at a reduced pace and will relate primarily to retooling plans that will allow us to provide the limited capacity by the end of 2021 for testing and certifications and to demonstrate the capabilities of the Endurance to customers and financing sources.
If we are unable to raise additional capital in the near term, our operations and production plans will be scaled back or curtailed and, if any funds raised are insufficient to provide a bridge to full commercial production and generation of sufficient funds from operations, our successful operation and growth would be impeded.
Cash Flows
The following table provides a summary ofLordstown's cash flow data for the period indicated: (in thousands) Six months ended Six months ended June 30, 2021 June 30, 2020 Cash used by operating activities$ (171,374) $ (11,388) Cash (used by) provided by investing activities$ (175,601) $ 2,396 Cash provided by financing activities $ 365,900 $ 585 25 4838-3851-2884.3 Table of Contents
For the six months ended
For the six months ended
Net Cash Provided by Financing Activities
For the six months ended
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of
Recent Accounting Pronouncements
See Note 2 to the condensed consolidated financial statements for more
information about recent accounting pronouncements, the timing of their
adoption, and management's assessment, to the extent they have made one, of
their potential impact on
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